2018-TIOL-NEWS-185, Dated: Tuesday, August 07, 2018

2018-TIOL-NEWS-185 | Tuesday August 07, 2018

Dear Member,

Sending following links.

Warm Regards,
TIOL Content Team

TIOL PRIVATE LIMITED.

For assistance please call us at +91-7838594749 or email us at helpdesk@tiol.in.

TIOL TUBE VIDEO



	GST Rebooted \| Episode 9 \| simply inTAXicating

CASE STORIES


	I-T - If consideration of slump sale is to be paid in parts in different AYs, capital gains are to be taxed in the year in which agreement is executed: ITAT ST - Mere fact that Ayurvedic centres are located in resorts, it cannot be concluded that they provide Health & fitness service: CESTAT CX - SCN dated 26.03.2010 covering period March to April 2005 was served to appellant on 17.05.2010 - demand time barred, hence cannot be acted upon: CESTAT

DIRECT TAX


	2018-TIOL-1533-HC-AHM-IT PR CIT Vs Florence Exports Whether an exporter who is operating his business from SEZ unit and carrying on trading activities, shall eligible for exemption u/s 10AA - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-1532-HC-AHM-IT PR CIT Vs Aura Securities Pvt Ltd Whether powers u/s 154 can be exercised only when the mistake which is sought to be rectified is an obvious mistake, which is apparent from the record - YES: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-1226-ITAT-MAD + Case Story TA Taylor Pvt Ltd Vs ACIT Whether even if sale consideration of slum sales is to be received in two or more parts in different AYs, the capital gains should be computed on entire sale consideration in the relevant year in which agreement is executed - YES: ITAT Whether expenses such as finance costs, administrative and other expenses which are necessary to maintain corporate status of assessee can not be disallowed even after slum sale of business division - YES : ITAT Whether manufacturing expenses pertaining to period, after the date of slum sale can not be allowed - YES : ITAT - Assessee's appeal partly allowed: CHENNAI ITAT 2018-TIOL-1225-ITAT-DEL ACIT Vs Jagson International Ltd Whether in the absence of contrary proved by the Revenue, following the order of High Court and Tribunal in assessee's own case, assessee is allowed to exercise option for Tonnage Tax Scheme - YES: ITAT Whether when assessee is able to properly reconcile the receipts and explain the deduction in relation to the amount shown in the P&L account, no addition u/s 69 is called for - YES : ITAT - Revenue's appeal dismissed: DELHI ITAT 2018-TIOL-1224-ITAT-DEL Singhania Alu Foil Containers Manufacturing Co Vs ITO Whether CIT(A) has no powers to enhance income of assessee u/s 251(1)(a) without affording any opportunity of hearing - YES: ITAT - Assessee's appeal partly allowed: DELHI ITAT 2018-TIOL-1223-ITAT-KOL Tewart Holl India Ltd Vs DCIT Whether if amounts withdrawn from NABARD deposit are used for procurement of various machineries within the time frame specified under Tea Development Scheme 2007 then no tax liability on deemed income basis should be imposed on the assessee, merely because entire funds withdrawn could not be spent before the end of relevant FY - YES: ITAT - Assessee's appeal allowed: KOLKATA ITAT

INDIRECT TAX


	SERVICE TAX 2018-TIOL-2436-CESTAT-BANG + Case Story CC Vs Coconut Lagoon Kumarakom ST - Mere fact that the Ayurvedic centres are located in the resorts and sometimes the duration of treatment is for one or two days, it cannot be concluded that the massages or treatments offered by these centres are only for general well-being and not for any therapeutic value - cost of treatment and the ambience of the treatment cannot render such treatments to be non-therapeutic and only for well-being - If some well-to-do patients prefer to have treatment in a better atmosphere/environment and are willing to pay for the same, such treatments cannot be 'for that sole reason', held to be no treatment - It is not the department's contention that the massages and panchakarma and other treatments provided by the respondents are not mentioned in ayurvedic texts - all the required conditions for such treatments to be treated as therapeutic are specified and will fall under the exclusion provided by the Board Circular B11/1/2002-TRU dated 1.8.2002 - Commissioner(A) has rightly held that respondents are not providing services classifiable under ‘Health club and fitness centre'/Health and fitness service - Revenue appeals rejected: CESTAT [para 5.3 to 5.5, 6] - Appeals rejected: BANGALORE CESTAT 2018-TIOL-2425-CESTAT-AHM CCE & ST Vs Sopariwala Exports Pvt Ltd ST- The assessee used certain services like Courier Service, GTA Service as well as Commission paid to the overseas Agents, in relation to export of goods out of India - It claimed refund of the service tax paid on these services under Notification 41/2007-ST for the period in dispute - The refund claim was rejected by the Adjudicating Authority partly - On appeal before the Commr. (A) allowed their appeal - Hence, the Revenue was in appeal. Held - if the services used in the export of goods were not included in the scope of the definition of Notification 41/2007-ST as on the date of export but included subsequently, the refund would be eligible under Notification No. 41/2007-ST - This was held in assessee's own case - However, Revenue's contention that the recent case of Midex Global (P) Ltd. vs CCE Indore & PR Commissioner of Service Tax Del-I vs TT Ltd. wherein it was highlighted that the disputed services were included in the Notification after the export of goods - This aspect has not been considered by the Tribunal - Therefore, the case is remanded for considering the principle of law settled on the issue including the ratio laid down in the TT Ltd.'s case after scrutinizing the facts of the present case - Hence, the order challenged is set aside : CESTAT (Para 2,7) - Matter remanded: AHMEDABAD CESTAT 2018-TIOL-2424-CESTAT-MAD CNC And Company Vs CCE & ST ST - Assessee have discharging service tax under "Commercial and Industrial Construction Service" after availing abatement of 67% from total amount received in terms of Notfn 1/2006-ST - They had filed ST-3 returns accordingly - After scrutinising the work orders, department has concluded that these activities undertaken for construction of site would fall within the category of "Site Formation and clearance, Evocation and Earth Moving and Demolition Service" - The assessee has submitted that they are not contesting the demand or interest - It is clear from the records that the assessee was under a bonafide belief that since the contract was for commercial construction and the site preparation was only a part of that activity, the activities would fall completely under "Commercial and Industrial Construction Service" and they are eligible for abatement - Taking note of this fact and also the earlier order passed by Tribunal in assessee's own case, penalty imposed under Section 78 is unwarranted, same is set aside by invoking the provisions of Section 80 of FA, 1994, as it stood during the relevant period: CESTAT - Appeal allowed: CHENNAI CESTAT 2018-TIOL-2423-CESTAT-MAD Thiraviam Engineering Works Vs CCE & ST ST - Assessee had undertaken restoration and reconditioning of various equipments for power stations - They were also providing the same services on behalf of another company M/s. Quality Engineering - Department views that the assessee is required to discharge duty liability not only in respect of services provided by them on their own account but also that provided on behalf of M/s. Quality Engineering, under category of 'Management, Maintenance or Repair Service' - The services provided by assessee contended to related to generation, transmission and distribution of power - Merit found in the plea of assessee that such services would be exempted from tax liability by virtue of Notfn 45/2010-ST - Similar view has been taken by Tribunal in case of M/s. Pioneer Builders Ltd. 2017-TIOL-3493-CESTAT-HYD - The services provided by assessee in relation to generation, transmission and distribution of power will definitely be exempted from tax liability - However, for the limited purpose of verifying whether all these disputed services rendered by assessee satisfy and fall within the exemption ambit of Notfn 45/2010-ST, the matter is being remanded to the adjudicating authority - Considering the fact that the issue per se was mired in litigation for quite some time, penalties imposed on assessee are set aside: CESTAT - Appeal dismissed: CHENNAI CESTAT CENTRAL EXCISE 2018-TIOL-2429-CESTAT-MUM + Case Story Bhagya Alloys Vs CCE & ST CX – SCN dated 26.03.2010 covering demand period March to April 2005 was communicated/served to the appellant on 17.05.2010 – demand is time barred since issued beyond the period of five years; same cannot be acted upon for confirmation of the adjudged demand – no documentary evidence adduced by department to prove that SCN was served other than on the date claimed by appellant - impugned order set aside and appeal allowed: CESTAT [para 5, 6] - Appeal allowed: MUMBAI CESTAT 2018-TIOL-2428-CESTAT-ALL SVC Superchem Ltd Vs CCE CX- The assessee is engaged in the manufacture of 'Purified Terepthalic Acid' and imported certain raw materials, without payment of duty under the advance license, for consumption in their manufacturing activities - However, due to some reasons the assessee paid duty on the imported duty free raw material - On appeal to the Settlement Commission, it permitted the assessee to pay duty liability in installments - After payment of last installment the assessee took the credit on the deposited amount - The Revenue opined that the deposits were made in terms of order of Settlement Commission, which were final order not appealable before any higher Appellate Forum, and was based on the appellants prayer for settling the dispute, the appellant was not entitled to the credit of the duty was paid - A SCN was issued for recovery of credit wrongly availed - During the proceedings, the assessee reversed the Cenvat credit in toto - In respect of interest, as it was not utilized by them they were not liable to payment of interest - On appeal , the CCE disallowed the Cenvat credit imposing penalties along with interest - Hence, the present appeal against confirmation of the interest and imposition of penalty. Held - The assessee availed credit which was duly reflected by them in their accounts as also in the ER-1 returns thus indicating absence of any mala fide on their part - In such a scenario, the issue is of bona fide misundertsanding of legal interpretation - Therefore, the penalty is deleted - In case the credit availed is reversed before utilization, no interest liability would arise - This follows from the Karnataka HC's decision of Commissioner of Central Excise vs. Bill Forge Pvt. Ltd. - Hence, the penalty as well as interest is set aside - The demand for credit already reversed is confimed as not challenged: CESTAT (Para 2, 5, 6, 7, 8) - Appeal partly allowed: ALLAHABAD CESTAT 2018-TIOL-2427-CESTAT-MAD Wabco India Ltd Vs CCE CX - The assessee is a manufacturer of automotive brake appliances and received services namely 'Management Consultancy Services, Share Registry services, Advertising services and Chartered Accountant Services - These services were common to all the four units of assessee company - The invoices were raised by service providers on assessee’s factory ie. Ambattur - The assessee paid the service tax and availed Cenvat credit on the same -The demand is confirmed on the ground that the assessee has not obtained ISD registration and has not distributed the Cenvat credit proportionately to the other units - The said issue is decided in case of Dashion Ltd. *2016-TIOL-111-HC-AHM-ST, where in the High Court of Gujarat observed that when the full records were maintained and the irregularity, if at all, was procedural and when it was further found that the records were available for Revenue to verify the correctness, assessee cannot be denied from the entire Cenvat credit availed for payment of duty - Said decision has been accepted by Department vide its Circular dated 16.02.2018 referred by assessee - In such an event, demand cannot sustain: CESTAT - Appeal allowed: CHENNAI CESTAT 2018-TIOL-2426-CESTAT-MAD CCE Vs Wheels India Ltd* CX - Assessee is engaged in manufacture of wheels and components for cars, tractors and earth movers and had availed CENVAT credit of service tax paid in relation to lease rentals for windmills situated outside their factory - Department views that said credit is not eligible for the reason that windmills are situated outside the factory and that electricity generated is not directly received in factory of assessee - The issue whether credit availed on service tax paid for lease rentals for windmills is eligible or not has been decided by Larger Bench of Tribunal in case of Parry Engineering and Electronics P. Ltd. 2015-TIOL-3059-CESTAT-AHM-LB* -* Said view was maintained by High Court of Bombay in case of Endurance Technology Pvt. Ltd. *2015-TIOL-1371-HC-MUM- ST* - The Tribunal in case of M/s. Hinduja Foundries Ltd. has followed the said decisions and held the issue in favour of assessee - Commissioner (A) has rightly set aside the demand - Impugned order is upheld: CESTAT - Appeal dismissed: CHENNAI CESTAT CUSTOMS 2018-TIOL-2422-CESTAT-MAD Quick Systems Vs CC Cus - the Department received an intelligence tip-off that a consignment of cellphones was imported & cleared in contravention of the provisions of the Customs Act - A consignment imported by the assessee-company was intercepted by the DRI - Chinese branded cellphones of different make & models were found - Further, some goods carried fake trademarks, which is in contravention of Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 - Also for some cellphones in retail packages, the mandatory labelling requirement had not been fulfilled as required under Legal Metrology (Packaged Commodities) Rules, 2011 - The cellphones were confiscated u/s 111(d) with option of redemption fine u/s 125 of the Act - Penalties were imposed as well. Held - Confiscation for non-conformity with rules for labelling is upheld as the goods had to be imported with such labelling - However penalty imposed for this reason is reduced - Penalty imposed on the CHA is set aside as there is no evidence showing complicity, abetment or omission with regard to such imports: CESTAT (Para 1,6,7,9) - Appeals partly allowed: CHENNAI CESTAT 2018-TIOL-2421-CESTAT-MAD Reliance Communications Infrastructure Ltd Vs CC Cus - the assessee-company filed claims for refund of SAD under Notfn No 102/2007-Cus - Such claims were rejected on various grounds - Later the Commr.(A) too rejected the claims stating that the invoices did not bear the endorsement that the Cenvat credit is not admissible - Also that the invoices did not show that goods were sold. Held - The issue at hand stands settled in the assessee's own case before the High Court of Delhi wherein it was held that transfer of right use of goods being deemed sale, then the discharge of VAT would suffice for eligibility of refund - Besides, in the present case, the invoices clearly show that the assessee specifically stated to have not passed on the Cenvat credit - Hence the assessee is eligible for refund & the same cannot be denied: CESTAT (Para 3,7.1,8) Appeals allowed: CHENNAI CESTAT

MISC CASES

2018-TIOL-1531-HC-AHM-VAT

State Of Gujarat Vs Ambika Scrap Recycling Pvt Ltd

Whether the Tribunal is permitted to go beyond the scope of appeals and delete the penalty on merits, even when the subject matter of appeal is limited to failure of pre deposit - NO: HC

- Case remanded: GUJARAT HIGH COURT