2018-TIOL-NEWS-142 Part 2, Dated: Monday, June 18, 2018

2018-TIOL-NEWS-142 Part 2 | Monday June 18, 2018

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	GST Re-Tyred \| Simply inTAXicating

CASE STORIES


	Income tax - Date of reckoning u/s 263(2) is date of making scrutiny assessment & not date of re-assessment: HC ST - As demand was raised on basis of recorded transactions in Books of account, it cannot be said that appellant has suppressed any material fact with intention to evade payment of Service Tax: CESTAT I-T - Assessee cannot be treated to be 'in-default' for not deducting TDS even when, selling prepaid SIM cards, if it has neither paid any commission nor has accrued any income in hands of distributors: ITAT CX -No interest imposition was proposed in SCN and it was also not demanded in adjudication order, therefore, Tribunal could not have held appellant liable to pay interest : CESTAT

DIRECT TAX


	2018-TIOL-224-SC-IT CIT Vs Riverside Farms (P) Ltd Having heard the parties, the Apex Court condoned the delay and dismissed the SLP - Revenue's SLP dismissed: SUPREME COURT OF INDIA 2018-TIOL-223-SC-IT PR CIT Vs Krutika Land Pvt Ltd Whether if the High Court has overlooked the main issue while passing an order, the SC can entertain a SLP filed by challenging such an order - YES: SC - Notice issued: SUPREME COURT OF INDIA 2018-TIOL-222-SC-IT Gruh Finance Ltd Vs DCIT Having heard the parties, the Apex Court held that condoned the delay and directed to issue notice to the parties. - Notice issued: SUPREME COURT OF INDIA 2018-TIOL-221-SC-IT Verma Roadways Vs CIT On hearing the matter, the Apex Court held that there is no ground to interfere with the order to the effect that there was no infirmity in the search and seizure of the assessee, since it is pointed out that on other questions before the High Court there is no discussion, we permit the assessee to move the High Court. - Assessee's SLP dismissed: SUPREME COURT OF INDIA 2018-TIOL-1136-HC-MAD-IT + Case Story Indira Industries Vs PR CIT Whether the date of reckoning u/s 263(2) is not the date of making re-assessment, but rather the date on which scrutiny assessent was conducted - YES: HC Whether a SCN proposing revision of assessment would lack jurisdiction & be invalid where it is issued after two years from the date of reckoning - YES: HC - Assessee's Writ Petition Allowed: MADRAS HIGH COURT 2018-TIOL-1135-HC-ALL-IT Verma Roadways Vs ACIT Whether mere mention of different title in authorization and panchnama, which is prima facie a clerical mistake, is sufficient to hold that proceedings u/s 132(1) were conducted against different person and not assessee - NO: HC - Assessee's appeal dismissed: ALLAHABAD HIGH COURT 2018-TIOL-888-ITAT-BANG KPTCL Vs ITO Whether any fault can be found with the assessee when it being a statutory corporation, treats its employees as State Govt employees under bona fide belief and considers the payment made to retiring employees towards unutilised leave as exempt as per Sec 10(10AA)(i) - NO: ITAT - Assessee's appeals allowed: BANGALORE ITAT 2018-TIOL-877-ITAT-HYD Maximal Finance And Investments Ltd Vs ITO Whether CIT(A) can dispose of an appeal pursuant to a failed attempt to serve a notice of hearing - NO: ITAT Whether without proof of source of investment in the remand report, can the CIT(A) dispose off the matter pertaining to the genuineness and creditworthiness of the investment - NO: ITAT - Case remanded: HYDERABAD ITAT 2018-TIOL-876-ITAT-JAIPUR A Daga Royal Arts Vs ITO Whether disallowance u/s 40A(3) of cash purchases can be made where the assessee establishes identity of the sellers, provides sale deeds & proves expediency for making cash payment - NO: ITAT - Assessee's appeal allowed: JAIPUR ITAT 2018-TIOL-875-ITAT-DEL ITO Vs Times Centre For Media And Management Studies Whether dividend income earned by a trust in violation of Sec.13(1)(d) r.w. Sec.11(5), entails denial of exemption u/s 11 on the entire income of the trust - NO: ITAT - Revenue's appeal dismissed: DELHI ITAT

INDIRECT TAX

SERVICE TAX

2018-TIOL-1871-CESTAT-AHM

Lallubhai Amichand Ltd Vs CCE

ST - Assessee filed refund claim on 29.12.2014 under Notfn 41/2012-ST in respect of service tax paid on taxable services utilized for export of goods made during the period from 2008-2009 to 2012-2013 - Said service tax refund claimed by them was in fact paid by challans during year 2013-2014 under VCES as having not discharged the service tax liability - Both the lower authorities have held that the refund claims are hit by limitation as per the provisions of Notification and as also under the statute - Said notfn permits an assessee to file the refund application of service tax paid on various services utilized for manufacturing of goods and exporting the same and it also provides for filing of refund claim within a period of one year from the date of export of goods - Assessee had exported the goods in year 2008-2009 to 2012-2013 and the service tax liability on commission paid to foreign national was not discharged by assessee during period in question - It is to be noted that service tax liability on commission paid to foreign national was to be discharged under reverse charge mechanism from 18.04.2006 and liability to discharge the service tax was not complied by assessee as soon as he remitted the commission to foreign nationals - The refund claim filed by assessee of the amounts paid when they complied with VCES scheme take the advantage of abatement on interest and penalty under said scheme - First Appellate Authority was correct in holding that the refund claims filed by assessee was hit by limitation - Impugned order is correct and legal and does not suffer from any infirmity: CESTAT - Appeal rejected: AHMEDABAD CESTAT

2018-TIOL-1870-CESTAT-DEL

Niranjan Lal Agarwal Vs CCE

ST- The assessee, an individual filed an appeal before the Tribunal for claim of refund of service tax with interest on delayed refund of amount deposited- The Tribunal directed the refund of the pre-deposit, however, the order was not implemented - Thereafter, an application was filed before the Revenue and the application was partly allowed directing refund of service tax but the interest was withheld - The Commr.(A) rejected the appeal, hence the present appeal.

Held - Where an appeal is decided in favour of the assessee, he is entitled to refund of the amount deposited alongwith interest at prescribed rate from the date of making such deposit to the date of refund in terms of Section 35FF of the CEA, 1944- Therefore, the interest is to be paid from the date of payment of amount till the date of refund of such amount: CESTAT (Para 2, 4, 5) - Appeal Allowed: DELHI CESTAT

2018-TIOL-1869-CESTAT-DEL

Utility Powertech Ltd Vs CCE

ST- The assessee- company( a JV of BSES & NTPC) engaged in the business of providing supply of electrical goods and services -Keeping in view the nature of activities provided the assessee did not pay ST as they were entitled for the exemptions and the deduction of value of material and taxability of service - The Department took a view that this was a case of non-payment of ST and issued SCN raising duty demand along with imposition of penalty - The Commr. (A) in order-in-appeal has upheld the adjudged demand - Hence, the present appeal.

Held - The taxable services provided by the assessee falls under management maintenance & repair, manpower recruitment and supply agency and cleaning activity - While the demand was confirmed by the Revenue Authorities, the proper bifurcation of services under specific heads has not been done - Moreover, the ST liability has not been properly quantified with regard to the specific heads of service - Therefore, the proceedings initiated by the Department are quashed and matter is remanded for de novo adjudication : CESTAT (Para 2, 6, 7) - Matter Remanded: DELHI CESTAT

CENTRAL EXCISE

2018-TIOL-1867-CESTAT-DEL

Mahendra Mukim Vs CCE & ST

CX - Assessee engaged in manufacture of H.B Wire and Welded/Hexagonal Wire Mesh, which attracts central excise duty - During search, shortage of finished goods as well as raw materials were found - In his statement, Shri Mahendra Shantilal Mukim, Director stated that all the transactions were as per law - At the same time, a statement of Shri Sanjay Dugar, employee, was recorded, who stated that the transactions are taxable and the goods were sold to one of the customers, Shri Ashwin Sharma - On the basis of seized material, Department has made out a case of clandestine removal - Shri Ajay Singh has refused to come to attend the cross examination - He has already stated the facts in his original statement and later, he stated that he fears injury form affected parties - Duty demand is made on search conducted at the business premises of assessee from where unaccounted goods were found - From the papers seized from Shri Ajay Singh and his statement, it is evident that he has supplied the raw materials to assessee as per details - So when Shri Ajay has refused to attend the cross examination, duty demand should be confined on basis of raw materials seized from assessee’s business premises - It is evident that assessee is involved in evasion of central excise duties - The value of clearances of unaccounted finished goods were made - Hence, no reasons found to interfere with impugned order: CESTAT - Appeals dismissed: DELHI CESTAT

CUSTOMS

CIRCULAR

cuscir19-2018

RFID sealing extended to transport of goods for deposit/removal in/from warehouse - CBIC prescribes detailed procedure effective 1st August

CASE LAW

2018-TIOL-1868-CESTAT-DEL

Bhushan Aggarwal Vs CC

Cus - M/s Bhatinda Ceramics Private Limited was a factory engaged in manufacture of ceramic goods - They filed shipping bills for export of two container loads of ‘pin insulator’ - One container was for export to Malaysia whereas the other was meant for Dubai, UAE - The investigations conducted by DRI revealed that goods contained in the two containers were fraudulently replaced partially with red sanders wood at Gill Resorts, Sudhar - The custom formalities at the ICD, Ludhiana were carried out by CHA M/s Sunrise Freight Forwarders and containers were subsequently intercepted by DRI, Mundra Port at Gujarat and were found to contain the contraband concealed within the ceramic goods - The investigation further revealed that the container was being transported from the factory of M/s Bhatinda Ceramic by M/s Panesar Transport Company, when the same was diverted at Sudhar and goods replaced.

The DRI has carried out elaborate investigation into the working of the entire syndicate comprising of Sh. A. T. Maideen, Sh. C. Sekhar and Sh. N. C. Chalathambi who were engaged in the illegal export of red sanders wood - The DRI officers have recorded the statement of Sh. A. T. Maideen on several consecutive dates i.e. 27th, 28th and 30th November, 2011 and he has retracted only the statement recorded on 27.11.2011 but not the other statements - It is settled position of law that the retracted statement does not lose its relevance as evidence in departmental proceedings unless sufficient materials are available to take on record, that such statement has been forcibly taken from the accused, as has been held by High Court of Kerala in case of K. P. Abdul Majeed 2014-TIOL-2646-HC-Kerala-Cus and Shri Shakthi & Ors. 2011-TIOL-1576-CESTAT-MAD.

According to the modus-operandi admitted, red sanders was purchased by Sh. A. T. Maideen from Andhra Pradesh and supplied to Sh. N. C. Chalathambi and Sh. Sekhar and stored at their godown at Delhi - From such godown the contraband is illegally exported through various ports - It is admitted by Sh. N.C. Chalathambi and Sh. Sekhar also that red sanders stored in the godown was meant for illegal export and further that the red sanders wood found in the containers of export consignment in fact originated from godown at Delhi - Syndicate has been carrying out such illegal export repeatedly and Sh. A. T. Maideen has also been booked in earlier smuggling cases and imprisoned under COFEPOSA repeatedly - The Indian currency of Rs. 8.5 lakhs has been admitted to be the sale proceeds and illegal exported goods.

No infirmity found in order passed by adjudicating authority confiscating the red sanders wood seized from the godwon at Delhi for the purposes of illegal export - Likewise the Indian currency seized has also been rightly confiscated - For the acts of omission and commission on the part of the three persons whose role is very well documented in the DRI investigation and amplified by the adjudicating authority in the impugned order, no infirmity found in the imposition of penalties on S/Shri A. T. Maideen, Sh. N. C. Challathambi and Sh. C. Sekar: CESTAT - Appeals rejected: DELHI CESTAT

MISC CASE

2018-TIOL-49-HC-ALL-GST

Multiplex Cinevision Pvt Ltd Vs State Of UP

GST - the petitioner company is engaged in construction of entertainment facilities such as multiplex theatres - Under the U.P. Entertainments and Betting Tax Act, 1979, a scheme was formulated permitting multiplex owners to collect & retain entertainment tax - Under such scheme, the petitioner was permitted to retain such entertainment tax so as to recover cost of construction - Upon implementation of GST, the U.P. Entertainments and Betting Tax Act was repealed, with a saving clause that it would not effect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act, provided that the tax exemption granted under the repealed Act by any notification had not been rescinded or revoked by a fresh notification on or after the enforcement of GST - Hence the petitioner claimed that since its right to collect entertainment tax had not been repealed, it was still entitled to collect the same.

Held - the respondents are given one month's time to file counter-affidavit - Following the same, the petitioner is given two week's time to file rejoinder - Matter listed for disposal in July 2018: HC - Case Deferred: ALLAHABAD HIGH COURT

2018-TIOL-1131-HC-MAD-CT

State Of TamilNadu Vs Bharath Paper Conversions

Whether when there is no ambiguity under the statute in terms of the definition of the good purchased against Form XVII declaration, revision application filed by challenging such definition is justified - NO: HC - Revenue's Revision application dismissed: MADRAS HIGH COURT