2018-TIOL-NEWS-044 Part 2, Dated: Wednesday, February 21, 2018

2018-TIOL-NEWS-044 Part 2 | Wednesday February 21, 2018

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DIRECT TAX


	2018-TIOL-68-SC-IT + Story ITO Vs Dharam Narain Whether deemed service of notice on the authorised representative satisfies the requirements of provisions of Sec 143(2) - YES: SC - Revenue's appeal allowed: SUPREME COURT OF INDIA 2018-TIOL-320-HC-DEL-IT + Story CIT Vs MGF India Ltd Whether if the assessee debits lease equalisation charges in its P&L Account, such an act is in harmony with the statutory requirements of Sec 211(2) of the Companies Act - YES: HC Whether lease equalisation charge is to be treated as adjustment required to be added back while computing book profits u/s 115JA - NO: HC - Revenue's Appeal Dismissed: DELHI HIGH COURT 2018-TIOL-281-ITAT-MUM DCIT Vs Firstsource Solutions Limited Whether no disallowance of interest expenditure is warraned, if surplus funds available with assessee company is more than the value of investments made in subsidiaries and there is commercial expediency in making such investments - YES: ITAT Whether "provision for outstanding expenses" deserves to be allowed, if these expenses have accrued during the year under consideration and provisions are created by making reliable estimates - YES: ITAT Whether any adhoc disallowance can be made in relation to "Meeting and Seminar expenses" merely on presumption regarding presence of personal element - NO: ITAT - Revenue's appeal dismissed: MUMBAI ITAT 2018-TIOL-280-ITAT-KOL ACIT Vs Sri Gobinda Gupta Whether non-deduction of TDS u/s 194C on carriage inward charges merits disallowance u/s 40(a)(ia), when no contractual relationship of assessee with the transporters stood established - NO: ITAT - Revenue's Appeal Dismissed: KOLKATA ITAT 2018-TIOL-279-ITAT-KOL ACIT Vs Prosen Chowdhury Whether a claim of debt can be disallowed by treating it as 'bogus liability', merely by relying upon the reply received from the creditor and disregarding the documentary evidence submitted by assessee - NO: ITAT Whether disallowance made for bogus purchases, deserves to be sustained partly, in case certain percentage of purchases are unverifiable from the bills submitted and explanations given by assessee - YES: ITAT - Revenue's Appeal Partly Allowed: KOLKATA ITAT

INDIRECT TAX

SERVICE TAX SECTION

2018-TIOL-614-CESTAT-DEL

Chanda Bohara Vs CCE

ST - Assessee engaged in activities of providing Multi-level Marketing services for consumer goods belonging to M/s. Fashion Suitings Ltd. - The ST demand has been confirmed on the ground that services provided by assessee to its clients are categorized under taxable category of BAS - Relying on the decision in case of Charanjeet Singh Khanuja 2015-TIOL-1205-CESTAT-DEL , extended period of limitation invoked in this case for confirmation of adjudged demand will not be sustainable under law - Therefore, demand should be confined to normal period - Since Adjudicating Authority had not quantified the service tax liability, payable by assessee within the normal period, matter remanded back to Original Authority for computation of service tax liability within the normal period - There were confusions with regard to payment of service tax on Multi Level Marketing services under taxable category of BAS, benefit of Section 80 ibid should be available to assessee for non-imposition of penalties - Accordingly, penalties imposed by Authorities below under Section 76, 77 and 78 ibid - Appeal is allowed by way of remand to Original Authority for quantification of service tax demand within normal period of limitation - However, penalties imposed against assessee set aside: CESTAT - Appeal partly allowed: DELHI CESTAT

CENTRAL EXCISE SECTION

2018-TIOL-618-CESTAT-MUM

Positive Packaging Industries Ltd Vs CCE

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 -Premium paid on Insurance policies - credit denied and penalty imposed with interest - appeal to CESTAT.

Held: Amount of Rs.1,42,631/- along with applicable interest attributable to insurance coverage of family members has been paid and this is not under dispute - for claiming entitlement of credit in respect of tax paid on insurance services to the extent it pertains to its employees, appellant places reliance on the decision of Karnataka High Court in the case of Micro Labs Ltd. [CSTA 1 of 2011 dated 09.06.2011] - following the same, credit is allowed - Appeal allowed: CESTAT [para 4, 5] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-617-CESTAT-MUM

Roofit Industries Ltd Vs CCE

CX - Appellant had failed to appear before the adjudicating authority inspite of being given an opportunity - appeal filed against o-in-o. Held: Neither anybody appear on behalf of appellant or file any adjournment application and which shows that appellant is not interested in pursuing its appeal - Law helps those who are vigilant and not those who sleep over their rights, as per the maxim VIAILATIBUS ET NON DORMIENTIBUS JURA SUBVENIUNT - in view of the above, appeal is dismissed for default: CESTAT [para 2, 3] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-616-CESTAT-MUM

Ravi Dyeware Co Ltd Vs CCE

CX - CENVAT - Tax paid on Input services attributable to trading of goods - appellant has failed to maintain separate set of accounts and is unable to compute the value of input services that was rendered to them for such activity - availment and distribution thereof, is not in accordance with law - even before insertion of Explanation, 'trading' was not eligible service - bar of limitation is also not an acceptable submission - appeal dismissed: CESTAT [para 5] - Appeal dismissed: MUMBAI CESTAT

2018-TIOL-615-CESTAT-MUM

Mallak Specialties Pvt Ltd Vs CCE

CX - Refund - Appellant filed refund of terminal excise duty before the Asstt. Development Commissioner, SEEPZ,however, the same was rejected since the Range Superintendent had not issued a certificate certifying the debit of terminal refund amount – therefore, Appellant re-credited the cenvat amount which was reversed by them at the time of filing of refund application - adjudicating authority, however, ordered for recovery of amount and also imposed penalty holding that suomoto credit is not permissible – appeal to CESTAT since Commissioner(A) upheld the order of original authority.

Held: Reversal of Cenvat credit is not payment of duty and, therefore, provisions of Section 11B of the CEA, 1944 are not applicable and as such the credit is permissible to the Appellant - present case is covered by the decision of the Hon'ble High Court of Madras in the case of ICMC Corporation Ltd. - 2014-TIOL-121-HC-MAD-CX , wherein it has been held that refund claim under Section 11B of the CEA, 1944 cannot be insisted upon for making a reverse entry in the Cenvat account, especially when there is no outflow of fund from the assessee - impugned order is set aside and the appeal filed by the appellant is allowed with consequential relief: CESTAT [para 6, 7, 8] - Appeal allowed: MUMBAI CESTAT

CUSTOMS SECTION

TRADE NOTICE

dgft_trade_notice_24_2017

Information on details of shipping bills in cases where exporters who have inadvertently ticked 'N' (for No) instead of 'Y' (for Yes) in "Reward" column of shipping bills while filing the EDI shipping bills, but have declared the intent in the affirmative (in wordings) in the shipping bill

CASE LAW

2018-TIOL-613-CESTAT-MAD

Balu Enterprises Vs CC

Cus - the assessee-company imported used digital multifunctional Print and Copying Machines - The Department claimed that the same was restricted for import & required a valid license, which allegedly not been produced - The Department enhanced the value of the goods and confiscated them u/s 111(d), with option of redemption fine u/s 125 - Further, a penalty u/s 112(a) was imposed -

Held - Considered judgment of the Madras High Court in CC, Tuticorin Vs. City Office Equipment - Following the same, the imported goods are not restricted item for import - During the relevant period the goods were not restricted and only Section 111(d) was invoked to hold that goods were liable for confiscation - Hence redemption fine & penalty is unsustainable and be set aside: CESTAT (Para 1,5) - Appeal Partly Allowed: CHENNAI CESTAT

FLASH NEWS


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