2018-TIOL-NEWS-185 Part 2, Dated: Tuesday, August 07, 2018

2018-TIOL-NEWS-185 Part 2 | 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 - Sub-contract received by so-called assessee-trust from either State Govts or intermediaries to supply food to poor does not amounts to any 'chartiable activity': HC I-T - Educational institution cannot claim Sec 10(23C) benefits if part of objectives is non-educational: ITAT 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-1535-HC-MUM-IT Alfred C Toepfer India Export Ltd Vs ITO Whether a reference as to allowability of deduction u/s 80-O on basis of gross receipts/net receipts, deserves any answer by Writ Court, if the issue under reference is with regard to allocation of expenditure on prorata basis - NO: HC - Assessee's appeal dismissed: BOMBAY HIGH COURT 2018-TIOL-1534-HC-MAD-IT CIT Vs AIG Systems Solutions Pvt Ltd Whether expenses attributable to export of article/software overseas, are equally deductible from export as well as total turnover, for purposes of deduction u/s 10A - YES: HC Whether it is expected from the taxpayer to co-operate with the Department, for purposes of ariving at proper results - YES: HC - Revenue's appeal dismissed: MADRAS HIGH COURT 2018-TIOL-1228-ITAT-DEL DCIT Vs Maharashtra Seamless Ltd Whether if the addition which is the basis for imposing penalty, itself is deleted and does not exist by virtue of appellate authority order, then penalty automatically stands deleted - YES: ITAT Whether action of assessee under bona fide belief is not liable for imposing penalty u/s 271(1)(c) of Act - YES : ITAT Whether disallowance of loss on foreign exchange hedging contract can be a reason for imposing penalty if there are two possible views on treatment of loss and assessee chooses one of such views though not acceptable to the Revenue - NO: ITAT - Revenue's appeal dismissed: DELHI ITAT 2018-TIOL-1227-ITAT-DEL Subhash Sushila Lakhotia Trust Vs ACIT Whether merely on the basis of a hard disc found during the course of search at the premises of third party without any corroborative evidence in support, AO can make addition u/s 69 in the hands of the assessee believing that the assessee has made cash payment from undisclosed source for purchase of property - NO: ITAT - Assessee's appeal allowed: DELHI ITAT

INDIRECT TAX


	SERVICE TAX 2018-TIOL-2435-CESTAT-ALL Third Wave Services Pvt Ltd Vs CCE & ST ST - Issue relates to correct calculation of taxable turnover by assessee who is engaged admittedly in 'Works Contract Service' mainly doing electrical works - The taxability on composite contract/works contract prior to 01.06.2007, was a matter of interpretation and disputed - Same was contested before courts including the Tribunal and finally Supreme Court by its Judgment in case of M/s Larsen & Toubro Ltd. 2015-TIOL-187-SC-ST have laid down that prior to 1st June, 2007 no service tax is payable in respect of composite contract where material and labor work is involved under the 'Works Contract' and there is transfer of material from the contractor to the Principal and further the Sales Tax is also leviable thereon - Assessee also paid Sales Tax/VAT and are also assessed to sales tax by Sales Tax authorities - In this view of matter, the computation of taxable value, in respect of 'Works Contract' is not at all legal, as the material component was calculated also in Sales Tax assessment of assessee - Further, the assessee had filed detailed paper book wherein they have given copy of various documents and copy of invoices, supporting the amount of material component, as they claimed - The matter is remanded to Adjudicating Authority and assessee is also directed to appear before the original authority with their documents/invoices on which they rely upon, within a period of 75 days: CESTAT - Matter remanded: ALLAHABAD CESTAT 2018-TIOL-2431-CESTAT-DEL Vrindavan Dairies Vs CCE & ST ST - Assessee has entered into an agreement with M/s. Banaskantha District Co-Operative Milk Produces’ Union Ltd - In terms of said agreement, they carried out the activity of processing of raw-milk and packaging the same - Department views that the said activity is liable for payment of Service Tax under category of BAS - Identical issue has already been decided by Tribunal in favour of assessee - It has been held by Tribunal that since the activity carried out by assessee amounts to manufacture in terms of specific deeming provisions inserted in Note 6 to Chapter IV of Central Excise Tariff Act - Consequently, there is no justification for levy of Service Tax on the same consideration - Consequently, the demand merits to be set aside - It is required to be recorded that the period under consideration is October, 2012 to March, 2014 - W.e.f. 01.07.2012, the levy of Service Tax was changed to include all services other than the Negative List of Services specified in Section 66D of the Act - The SCN as well as impugned order has discussed the leviability of Service tax only - With reference to provisions, which were in existence prior to 01.07.2012, adjudicating authority does not appear to have paid attention to the fact that the levy of Service Tax has been shifted to a negative list basis - Even under the new provisions w.e.f. 01.07.2012, the activity undertaken by assessee is specified under negative list in Section 66D (f) - Consequently, there is no justification for demand of Service Tax even for the period subsequent to 01.07.2012, even though, the relevant Notfn 34/2012-ST has since been rescinded: CESTAT - Appeal allowed: DELHI CESTAT CENTRAL EXCISE 2018-TIOL-2434-CESTAT-AHM Cema Electric Lighting Products India Pvt Ltd Vs CCE & C CX - During the period April 2007 to March 2009, various input services have been used by assessee in their trading activity of manufactured products - They have availed CENVAT Credit of Rs. 15,16,580/- on these input services attributable to trading activity - The department denied the credit alleging that trading activity is an exempted service, hence, credit is not admissible - The contention assessee is that under insertion of an explanation to the definition of exempted service prescribed by Rule 2(e) of CENVAT Credit Rules w.e.f. 01.04.2011, trading activity has been included in the scope of definition of exempted service - Thus, the said explanation cannot be retrospectively applicable - Following the judgment of Tribunal in case of Franke Faber India Ltd. 2017-TIOL-353-CESTAT-MUM* and Marudhan Motors* *2016-TIOL-2576-CESTAT-DEL* no merit found in the impugned order, consequently, same is set aside: CESTAT - Appeal allowed: AHMEDABAD CESTAT 2018-TIOL-2433-CESTAT-MAD Hindustan Unilever Ltd Vs CCE & ST CX - Dispute relates to availability of Cenvat credit of service tax paid on job work Godown rent, Electricity charges/ Job work godown charges, Godown rent, Diesel purchased for Gen-set and Diesel purchased for job work, DG hire charges and loading and unloading charges at job worker's premises - One of the disputed service is Factory Compliance (Employees services) - Said services stand availed by assessee in respect of compliance with their statutory industrial obligations like payment of ESI and PF, renewal of licence and obtaining permission, through a private agency called Aparajitha Corporate Services - In as much as welfare of employee that too under the statutory obligation is a part of running the factory, same has to be held as associated with the manufacturing activities - Accordingly, same is held to be eligible input services and assessee is entitled to benefit of Cenvat credit of service tax paid on the same - One of the services involved is Packing Roof leak arresting Service - The arresting of leakage of water and air in the cooling tunnel used by assessee, during the rainy season, so as to protect the materials and products stored in godowns, is an activity relatable to manufacturing process - If materials are spoiled, they would not be in a position to be used for manufacture of final products - The blocking of such leakages to prevent the rain to seep in the stored materials is definitely an activity relatable to manufacturing process and as such has to be held as cenvatable - Accordingly, this activity allowed to be eligible input services and assessee is entitled to benefit of Cenvat credit of service tax paid on the same - Impugned orders set aside: CESTAT - Appeal allowed: CHENNAI CESTAT 2018-TIOL-2432-CESTAT-DEL Ajay Mehra Vs CCE, C & CGST CX - Assessee is manufacturer/ Director of firm engaged in manufacture of CP bath fitting - During search, it was found that they are engaged in purchase of document, evidencing the payment of Central Excise duty to avail inadmissible Cenvat credit without receiving any input on payment of consideration in paid in cash - It is undisputed fact that goods seized by department happened to be imported goods which were not accounted for in the books of account of assessee - After perusal of Rule 25 and of CER, 2002 and 2 (d) of CEA, 1944, it is clear that provisions contained therein are applicable only to excisable goods - In other words these provisions cannot be extended to imported goods without mentioning the charge in SCN about the provisions of Customs Act made applicable to Central Excise matters vide Notfn which is not the case here - It is on record that the goods seized and confiscated are imported goods and therefore the provision of these Rules 25/26 is not applicable to the seized imported consignment - It is not coming from order as to whether the assessee has availed Cenvat credit on goods - If that is so, provisions of Cenvat credit Rule also cannot be attracted to the seized goods: CESTAT - Appeal allowed: DELHI CESTAT CUSTOMS NOTIFICATIONS ctariff18_058 CBIC hikes BCD to 20% on apparel, carpets & certain other textile products ctariff18_057 CBIC notifies rate of duty for Screw or Sim socket & other cellphone components 13/2018-Customs (NT/CAA/DRI) CBIC appoints common authority to adjudicate SCNs issued to certain parties by DRI CASE LAW 2018-TIOL-2430-CESTAT-KOL CC Vs Sail Cus - The assessee-company is a government-owned PSU - It imported certain material for making synthetic tracks for improving sports facilities offered by it - The Department opined that the assessee is not entitled for exemption under Notfn No 146/94-Cus on such imports as it did not fulfil the requisite conditions for the same - The Department claimed that the National Sports Authority of India, being the competent authority, had not issued a certificate to the assessee. Held - Considering the clarification issued by the CBIC in Circular No. 70/2002-CUS dated-25/10/2002 stating that material for Synthetic tracks are artificial and permissible under Notification No. No. 146/94-CUS, the conditions for availing exemption stand satisfied - No merit in Departmental appeal: CESTAT (Para 1,4,5) - Appeal dismissed: KOLKATA CESTAT

FLASH NEWS


	DRI dismantles syndicate in smuggling of FC; US Dollar worth Rs 6.2 crores seized at IGI Airport