2018-TIOL-NEWS-049 Part 2, Dated: Tuesday, February 27, 2018

2018-TIOL-NEWS-049 Part 2 | Tuesday February 27, 2018

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	Legal Wrangle \| GST \| Episode 67

DIRECT TAX


	2018-TIOL-359-HC-KOL-IT PR CIT Vs LGW Ltd Whether Commissioner (Appeals) has independent power & jurisdiction under Rule 46A(4) to consider and admit addition evidences to dispose of the appeal - YES: HC - Revenue's appeal dismissed: CALCUTTA HIGH COURT 2018-TIOL-311-ITAT-MAD DCIT Vs Express Newspapers Pvt Ltd Whether an investment made by the assessee in its subsidiary company for business purpose is to be calculated for disallowance u/s 14A r/w Rule 8D - NO: ITAT Whether Revenue can deny to rely on a decision of the co-ordinate bench merely because the same was pending before the HC - NO: ITAT - Revenue's appeal dismissed: CHENNAI ITAT 2018-TIOL-310-ITAT-MUM Gigaplex Estate Pvt Ltd Vs DCIT Whether when necessary agreements qua joint venture & relinquishing of interest in land, are not furnished before the Department during course of assessment proceedings, then it will amount to failure on the part of assessee to disclose material facts, warranting reopening exercise - YES: ITAT Whether mere irregularities in the documents, is no basis to draw conclusion regards genuineness of any transaction - YES: ITAT Whether when payments made for acquiring interest in land, is not doubted in the hands of payee, there is no basis for the Department to doubt such payments in the hands of payer as non genuine - YES: ITAT Whether a business decision taken between two unrelated parties for purchasing the interest on land from two JV partners, should not be doubted, in absence of any contrary - YES: ITAT - Assessee's appeal allowed: MUMBAI ITAT

INDIRECT TAX

SERVICE TAX SECTION

2018-TIOL-672-CESTAT-MAD

Sri Balaji Agency Vs CCE

ST - Assessee engaged in providing services of cleaning, housekeeping and other general conservancy services to BSNL and Trichy Airport -Department took the view that these services are taxable w.e.f. 16.06.2005 under category of "cleaning activity services" - Assessee contends that they were not aware of tax liability for said services which was introduced only 16.06.2005, for which reason the extended period of limitation should not be invoked - It is not the case that they had approached the department at any time on their doubt whether the activities come under ambit of service tax liability - Therefore invocation of extended period in this case is legally correct and assessee cannot escape on liability for such period.

There is no allegation that assessee have billed or collected service tax amounts from BSNL or AAI - This being so, tax liability should be calculated after extending exemption limits available to small service providers and allowing cum tax benefit on liabilities so arrived at - For limited purpose of recalculating tax liability on these lines, matter remanded to original authority - Penalties imposed under Section 76 & 78 of the Finance Act are an overkill and are set aside - However, no interfere required with the penalty imposed under Section 77 ibid: CESTAT - Appeal partly allowed: CHENNAI CESTAT

CENTRAL EXCISE SECTION

CIRCULAR

excircular1064

Consideration of mega power policy benefits in proportion to the long term PPA tied up in case of provisional mega power projects

CASE LAWS

018-TIOL-677-CESTAT-MUM

Apex Home Appliances Vs CCE

CX - Remission of duty – While rejecting remission claim in denovo proceedings, the adjudicating authority noted that there was no clear indication of the exclusion of the excise duty from the settlement that was to be obtained from insurer – appeal to CESTAT.

Held: In view of the decision in re Barodia Plastics Pvt. Ltd obviating a scrutiny of the extent of the claim for insurance and the limited application of the circular cited on behalf of Revenue, the rejection of remission is without authority of law and is set aside – moreover, appellant has reported the non-availment of credit of duties paid on inputs and competent authority has taken due note of this assertion - appeal allowed: CESTAT [para 3, 7] - Appeal allowed: MUMBAI CESTAT

2018-TIOL-676-CESTAT-MUM

CCE Vs Mahindra Cie Automotive Ltd

CX - CENVAT - Sales are on FOR basis which fact is not contested by Revenue - Respondents continue to remain the owner of the goods in question till the same are delivered at the doorstep of the customer - where the freight charges are incurred by the assessee for delivering the goods in the premises of the customers and in which case the same is included in the value of the goods, the service tax paid on such outward transportation is admissible as credit - Revenue appeal rejected: CESTAT [para 5, 6] - Appeal rejected: MUMBAI CESTAT

2018-TIOL-675-CESTAT-MUM

Mccoy Architectural Systems Pvt Ltd Vs CCE

CX - Appellants are engaged in the activity of fabrication of structure such as skylights, space frames, glazing systems, etc. which are made from metal sheets and glass curtain walls - Appellants carried out fabrication activity across all parts of the country and offered complete structure and execution and installation of the structure - On the fabrication of the structure the department demanded excise duty and also levied penalties on Director – appeal to CESTAT.

Held: Appellants have no workshop to carry out the fabrication like cutting, welding, grinding etc. - They gave the work to a sub-contractor who assembled structure at the customer site - structure constructed at the customer's site has no marketability except to the customer concern – in view of the decisions in Executive Engineer, Fabrication Workshop, MPSEB - 2004-TIOL-671-CESTAT-DEL, Shapoorji Pallonji- 2005-TIOL-75-HC-MUM-CX, where it is held that fabricated material is not excisable goods, no reason to sustain the impugned order – therefore, order set aside and appeals allowed: CESTAT [para 12, 13] - Appeals allowed: MUMBAI CESTAT

2018-TIOL-674-CESTAT-MUM

Mohan Sakharam Survase Vs CCE

CX - Appellant engaged in manufacture of pre-stressed concrete poles for which purpose they sourced the raw material viz. MS Plates/Sheets from various traders and contracted the work to K.A.Jaysinha Reddy – case of the department is that even though the job work fabrication and erection of the pipeline was sub-contracted to K.A.Jaysinha Reddy, the appellant is the manufacturer as ownership of pipes was with them – CE Duty demand confirmed and penalties imposed – appeal to CESTAT.

Held: Irrespective of the fact that the appellant Ganesh Builders is the owner of the goods but manufacturing was not carried out by Ganesh Builders and it is admittedly carried out by Reddy, therefore, if at all any demand is to be made, it is from the manufacturer which in the present case is K.A. Jaisinha Reddy, to whom no show-cause notice was issued – Issue covered by LB decision in Thermax Babcox & Wilcox Ltd. 2017-TIOL-4390-CESTAT-MUM-LB wherein it is held that when the goods are manufactured on job work basis, it is the job worker who is the actual manufacturer and liable to discharge excise duty and not principal supplier of the raw material – following the same, impugned order is set aside and appeals are allowed with consequential reliefs: CESTAT [para 4] - Appeals allowed: MUMBAI CESTAT

CUSTOMS SECTION

CIRCULAR

cus_instruction4_2018

Routing of references/requests to FIU-IND through nodal officer

dgft17cir004

Clarification regarding export policy of onions - Removal of Minimum Export Price (MEP) and Letter of Credit (LC)

CASE LAW

2018-TIOL-673-CESTAT-AHM

Paradise Nutrition Inc Vs CC

Cus - the assessee filed bills of entry for a health supplement drink & filed refund claim for SAD paid - The refund was granted by the Original authority on the rationale that the assessee had paid duty & had not claimed benefit of Notfn. - However the same was denied by the Commr.(A) on grounds of unjust enrichment -

Held - Considered the decision of the Delhi High Court in Micromax Informatics Ltd. vs UOI, where it was held that the ratio of the judgment of the Apex Court in Priya Blue and other cases may not apply after amendment w.e.f 08.04.2011, which mandates for self assessment for the bills of entry under EDI Scheme - Following such judgment, the O-i-A in question is unsustainable: CESTAT (Para 5,6) - Appeal Allowed: AHMEDABAD CESTAT

MISC CASES

2018-TIOL-71-SC-SERVICE-LB

Kudrat Sandhu Vs UoI

Service Matter - The Apex Court in an earlier order, directed the interim appointment of Search-cum-Selection Committee (SCSC) for Chairpersons, Judicial Members and Administrative members of various Tribunals - Certain modifications proposed by the Attorney General were accepted, to the effect that all appointments to be made after selection by the interim SCSC would abide by the conditions of service as per the old Acts & Rules - Further held that all the selections made by the interim SCSC & the consequential appointment of all the selectees as Chairpersons, Judicial or Administrative members would be for period as provided in the old Acts & Rules - Another direction was to constitute an interim SCSC for both Judicial & Administrative members - Such SCSC would comprise of Chief Justice of India or his nominee - Chairperson of the CAT & 2 Secretaries nominated by the Government of India - The Chairperson of the SCSC be appointed by the CJI - The Court also directed fixing the term of office of all selectees by the interim SCSC and consequent appointees, at 5 years.

Held - Considered tabular chart submitted by Attorney General, indicating details individually in respect of 19 tribunals - In all cases where the CJI nominated Chairperson of the SCSC for recommending appointment of Chairperson/President/Presiding Officer of any Tribunal, the process would continue based on terms & conditions and eligibility stated in advertisement issued or as notified on directions by the SCSC for determining expression of interest - All recommendations made or to be made by any SCSC for appointing Chairperson or Members, be processed without being affected by the interim order dated Feb 09, 2018: Supreme Court (Para 1,46,18,19) - Case Deferred : SUPREME COURT OF INDIA

2018-TIOL-353-HC-MAD-PMLA

R Yasar Arabath Vs Directorate Of Enforcement

PMLA - The petitioners herein are the sons of a prson against whom an FIR was lodged for alleged offences under the PMLA - The Enforcement Directorate (ED) alleged that the petitioners were in possession of some proceeds of crime - Hence they were served SCN directing provisional attachment of the properties - Later, an order of attachment was passed, seeking to pre-empt any attempt to conceal of dispose of the properties by the petitioners - Hence the present writs.

Held - Considering the attachment order, there is no violation of any kind - The petitioners were given a proper opportunity of being heard - The attachment order was based on reasonable belief that properties in question were proceeds of crime, and to prevent their disposal or concealment - Such order is in conformity with Section 5 of the PMLA - Besides, such order only directs provisional attachment, that too based on offences u/s 120B, 420, 467 & 471 of Indian Penal Code, r/w Sections 3 & 4 of the Explosive Substances Act - Hence no view on merits: High Court (Para 1,4) - Writ Petition Dismissed: MADRAS HIGH COURT

2018-TIOL-352-HC-AHM-VAT

State Of Gujarat Vs Siddheshwari Infrastructure

Whether when assessee has already paid the entire tax amount, which is sufficient payment towards the predeposit, grant of stay from recovery of outstanding tax demand is justified - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT

FLASH NEWS

DGFT removes Min Export Price condition for export of onions w.e.f Feb 2, 2018

Applications invited for posts of TO at WCO Directorate

FM hints at further simplification of GST Compliance

Profits from Major Ports to shoot up from Rs 3K Crore to over Rs 7K crore this year: Gadkari