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2018-TIOL-NEWS-057 | Saturday March 10, 2018
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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DIRECT TAX |
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Vodafone M Pesa Ltd Vs PR CIT
Whether when the AO has insisted on deposit of 20% of tax demand, the CIT can further enhance the quantum of deposit to 50% - NO: HC
Whether therefore, since Assessee's Appeal is pending before the CIT (A), grant of stay till disposal of the appeal is justified - YES: HC - Assessee's writ petition disposed of: BOMBAY HIGH COURT
2018-TIOL-409-HC-MUM-IT
Pr.CIT Vs Chawla Interbild Construction Company Pvt Ltd
Whether non-appearance of concerned parties before the AO to whom payments were made by Assessee, calls for adhoc disallowance - NO: HC
Whether when assessee has discharged his onus towards genuiness of payments made to third parties, the assessee can be held responsible for non-appearance of such parties - NO: HC - Revenue's appeal dismissed: BOMBAY HIGH COURT
2018-TIOL-408-HC-MUM-IT
Pr.CIT Vs Auro Gold Jewellery Pvt Ltd
Whether irrational delay in challenging the self operating order of Prothonotary, deserves condonation, when no explanation is offered by the Revenue for such delay - NO: HC - Revenue's motion dismissed: BOMBAY HIGH COURT
2018-TIOL-407-HC-MUM-IT
Pr.CIT Vs Amritlal Jain
Whether irrational delay in challenging dismissal order of Prothonotary, deserves condonation when no explanation is offered by the Revenue for such delay - NO: HC - Revenue's motion dismissed: BOMBAY HIGH COURT
2018-TIOL-359-ITAT-DEL
Addl.CIT Vs Isolloyd Engineering Technologies Ltd
Whether re -assessment based on materials already available during original assessment proceedings, amounts to mere change of opinion and hence invalid - YES: ITAT - Revenue's appeal dismissed: DELHI ITAT
2018-TIOL-358-ITAT-KOL
ACIT Vs Kanailal Das Mazumdar
Whether additions can be made to assessee's income on account of unexplained investment, if assessee has offered explanation regarding the source of investment as to redemption proceeds of mutual funds made during previous A.Ys - NO: ITAT - Revenue's appeal dismissed: KOLKATA ITAT
2018-TIOL-357-ITAT-MUM
Kores India Ltd Vs ACIT
Whether Department is permitted to review the information available before him during course of regular assessment proceedings, in a second round, in the guise of reopening assessment - NO: ITAT - Assessee's appeal allowed: MUMBAI ITAT
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INDIRECT TAX |
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SERVICE TAX SECTION
2018-TIOL-795-CESTAT-MUM
Nagar Urban Cooperative Bank Ltd Vs CC, CE & ST
ST - Appellant is a Co-operative Bank providing Banking and Other Financial Services - In addition they also provided exempted services - cenvat credit availed in respect of common services used for taxable as well as exempted service – SCN issued in terms of rule 6(3) of CCR, 2004 demanding 8%/6% of the value of exempted service - period April 2008 to March 2011 – demand confirmed, hence appeal to CESTAT – Appellant submitting that Rule 6 was amended retrospectively under the Finance Act, 2010 and which required reversal of credit only to the extent of that attributable to exempted services; that they had reversed the entire credit availed on common input services and, therefore, demand u/r 6(3) cannot be sustained. Held: Appellant had availed cenvat credit on the common input service, out of the total credit except the credit related to the input service specified under Rule 6(5) of CCR, 2004, the entire credit was reversed before issuance of show cause notice - In view of the judgment of this Tribunal in Mercedes Benz India Pvt. Ltd. Vs. CCE, Pune - 2015-TIOL-1550-CESTAT-MUM , the option was available to the assessee to reverse the proportionate credit under Rule 6(3)(ii) in terms of Rule 6(3A) of CCR, 2004 - Accordingly, the demand of 8%/6% in terms of Rule 6(3)(i) cannot be sustained - As regard the cenvat credit retained by the appellant in respect of input service which are specified under Rule 6(5) of CCR, 2004, the said rule provides that no reversal is required even though the part of the service was used for exempted service - impugned order is, therefore, set aside and the appeal is allowed: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT
2018-TIOL-779-CESTAT-MAD
Parveen Travels Pvt Ltd Vs CST
ST - Assessee is operating buses for conducting tours and also operating daily day trips to Tirupati and Pondicherry - Department took the view that vehicles operated by assessee are covered by permits issued by Transport authorities under Motor Vehicles Act and the point to point services operated by them would be liable to be classified under category of "tour operator service" - Assessee is conceding tax liability in respect of period October 2005 to March 2007 involving tax liability, however limited to normal period of limitation - The ground touted against invocation of extended period is that they had sent a communication on 10.01.2003 to the Range Superintendent - However, that letter will not help their case since the dispute does not start on that date or even proximate to it but almost three years earlier - This letter therefore cannot then be a good argument for setting aside the demand for period beyond normal period of limitation - Merit found in plea of assessee for grant of cum tax benefit - There is no allegation that assessee had collected service tax from their customers but had not paid the same to exchequer - Issue of taxability in respect of stage carriages/contract carriages and tour operators was mired in confusion during impugned period and only after the judgment of Madras High Court in Secretary, Federation of Bus Operators Association of Tamil Nadu 2003-TIOL-33-HC-MAD-ST, the matter had been settled - Said judgement was appealed to Supreme Court and Supreme Court dismissed the appeal as time-barred - In the event, plea of cum duty benefit is granted - Penalties imposed on assesee under Sections 76 and 78 of FA, 1994 are set aside - However, no interfere required with penalty imposed under Section 77 ibid: CESTAT - Appeals partly allowed: CHENNAI CESTAT
CENTRAL EXCISE SECTION
2018-TIOL-781-CESTAT-AHM
Alcock Ashdown G Ltd Vs CCE & ST
CX - the assessee-company sought refund of 4% SAD paid during import of goods, which were later sold in the domestic market - The refund was sanctioned but was transferred to the Consumer Welfare Fund - The assessee submitted a CA certificate to the effect that the burden of the 4% SAD had not been passed onto the customers - However, the assessee's submissions were rejected - Held - Considered CBEC Circular dated 28.04.2008, addressing the issue of unjust enrichment in refund of 4% SAD - The CA certificate submitted by the assessee was rejected without bringing any contrary evidence on record - Thus, such order is unsustainable: CESTAT (Para 3,6) - Appeal Allowed: AHMEDABAD CESTAT
2018-TIOL-780-CESTAT-AHM
Creative Polyfilm Ltd Vs CCE & ST
CX - Penalty - Assessee imported capital goods and said capital goods has not been installed in their factory, but installed in factory of their sister unit - A SCN was issued to assessee to deny the cenvat credit as it was found that capital goods and inputs were not found in their factory for manufacturing - These goods have not been sent to the sister unit under any challans for job work, the inputs under job work challans and never intimated to the department with regard to the clearances of inputs and capital goods from their factory without reversing the cenvat credit - In that circumstances, assessee is not entitled to avail cenvat credit of these inputs and capital goods, they have rightly reversed the credit alongwith interest - If investigation would not have been conducted at assessee's factory, clearances of these capital goods and inputs would not have come into light - Therefore, it is a clear case of suppression of facts by assessee, therefore, the authorities below has rightly imposed 25% duty as penalty on assessee - Director of assessee was knowing that capital goods and inputs which have been cleared to their sister unit without intimating to department are liable for confiscation, penalty on Shri Jayeshkumar D Mistry is rightly imposed - However, quantum of penalty imposed on Shri Jayeshkumar Mistry is excessively high, therefore, same is reduced to Rs. 2 Lakhs: CESTAT - Appeals partly allowed: AHMEDABAD CESTAT
CUSTOMS SECTION
2018-TIOL-77-SC-CUS
KCF Impex Pvt Ltd Vs CC
Cus – Appellant has deposited a sum of Rs.One Crore in terms of Supreme Court earlier order dated 11.01.2018 and which is the amount which was required to be deposited by the appellant before the CESTAT, non-compliance of which resulted in their appeal being dismissed by CESTAT and which order was affirmed by High Court on 07.08.2017 – since no prejudice will be caused to Revenue if the appeal is disposed of at the notice stage, ordered accordingly – having regard to the deposit made, orders of the High Court and CESTAT set aside and appeal restored before the Tribunal – CESTAT to hear appeal on merits: Supreme Court [para 3, 4] - Appeal disposed of: SUPREME COURT OF INDIA
2018-TIOL-410-HC-MUM-CUS + Story
Parekh Industries Ltd Vs UoI
Cus - FTP - Gold Replenishment Scheme - respondents not to insist on furnishing of a Fixed Deposit/Bank Guarantee by the petitioner and in lieu thereof accept Indemnity Bond: High Court [para 35] - Petition disposed of: BOMBAY HIGH COURT
2018-TIOL-778-CESTAT-MAD
Peeyemes Embroidery Vs CC
Cus - the assessee-company imported 'Barudan Multi Head Computerized Embroidery machine' and declared its value - The Department claimed that a similar machine was imported by another entity, but at a higher value - The assessee conferred with the supplier of the machine and explained the difference in value on account of improvements being made to the machine - The assessee claimed that the machine imported by it had lesser features compared to the improved version - However, the Department determined the value of the machine at a figure higher than that declared by the assessee - Such valuation was later accepted by the Commr.(A) - Held - In support of its contention, the assessee had produced catalogue, explanation of the supplier for the price variation and also outlined the differences between the two models - Further the proforma invoice issued by the supplier tallies with the commercial invoice - The Department neither accepted nor rejected all these evidences placed - Further the difference in valuation may also be due to the five-month gap between the import made by the assessee and the other entity - Hence the valuation order is unsustainable: High Court (Para 1,4) - Appeal Allowed: CHENNAI CESTAT
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MISC CASES |
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2018-TIOL-16-HC-ALL-GST
Seth Prasad Agro Pvt Ltd Vs State Of UP
CGST - Petitioner is aggrieved by the order of seizure dated 11.01.2018 alleged to have been passed u/s 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 – Petitioner is engaged in the business of manufacturing and sale of agricultural implement “Tasla” and was transporting the same from from one state to another when the consignment was intercepted, detained and seized at Varanasi – petitioner submits that since the transaction was an inter-state one, the same is covered by the IGST Act, 2017 and is not liable to be seized under the UP GST Act. Held: Transaction in question is treated to be covered by the IGST Act and the provisions of U.P. G.S.T. Act would not apply, however, a similar provision as Section 129 of the U.P. G.S.T. Act exists in the Central G.S.T. Act as well - Section 20 of the IGST Act provides that the provisions of Central G.S.T. Act would apply in respect of matters of inspection, search, seizure and arrest to the matters covered by the IGST Act - In other words, in the matter of seizure under the provisions of IGST Act the provisions of Central G.S.T. Act such as Section 129 would apply mutatis mutandis - the impugned order of seizure cannot be held to be bad in law - impugned order is to be treated to have been passed under IGST Act read with Section 129 of the Central G.S.T. Act rather than the one passed under U.P.G.S.T. Act – Petitioner further submits that consignment of goods has been seized by treating them to be 'Ghamella' rather than 'Tasla'; that 'Tasla' was exempted from G.S.T. vide notification dated 29.06.2017 and 'Ghamella' has been included in the taxable goods vide notification dated 25.01.2018 and thus, on the relevant date, 'Ghamella' was also an exempted item and the order of seizure is patently illegal – In this view of the matter, counsel for Revenue is directed to seek instructions and file counter affidavit within a month - In the meantime, the goods and the vehicle seized are directed to be released on furnishing indemnity bond as well as security other than cash and bank guarantee of the taxable amount of the seized goods – Matter to be listed for admission / final disposal immediately after expiry of the above period of one month and filing of rejoinder affidvait: High Court - Interim relief granted: ALLAHABAD HIGH COURT
2018-TIOL-15-HC-ALL-GST
Proactive Plast Pvt Ltd Vs State Of UP
GST - Petitioner is aggrieved by the seizure of his goods vide impugned order dated 20.01.2018 passed under Section 129(1) of the UP GST Act, 2017 - Petitioner submits that admittedly the seized goods were in transit from outside the State & therefore, Rule 138 of the Rules framed under the U.P.G.S.T. by a notification dated 21.07.2017 making E-Way bill mandatory would apply only in respect of goods in transit within the State of U.P. and not for goods brought from outside the State. Held: Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on the relevant date under the Central G.S.T and, therefore, prima facie the seizure appears to be illegal - Counsel for Revenue may seek instructions and file counter affidavit within two weeks and matter be listed for admission/final disposal thereafter - since the goods seized are said to be perishable nature, the same are directed to be released along with vehicle subject to the petitioner furnishing indemnity bond and security (other than cash and bank guarantee) in respect of the proposed tax and penalty on the value of the goods shown in the documents accompanying the same: High Court - Interim relief granted: ALLAHABAD HIGH COURT | |
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