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2018-TIOL-NEWS-188 | Friday August 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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2018-TIOL-1255-ITAT-BANG + Case Story
State Bank Of India Vs ACIT
Whether Bank is liable to TDS on LTC allowance granted to its employees if it is used for travel aboard and comes to the knowledge of the bank with complete facts at at the time of reimbursement of the LTC/LFC bills - YES: ITAT
- Assessee's appeal dismissed: BANGALORE ITAT
2018-TIOL-1254-ITAT-BANG
LK Power Corporation Ltd Vs ITO
Whether to compute gross total income after set off of brought forward losses of PYs is mandatory requirement, in case of any default and no enquiry being done by AO on this aspect, it calls for re-assessment u/s 263 - YES: ITAT
- Assessee's appeal dismissed: BANGALORE ITAT
2018-TIOL-1253-ITAT-DEL
ITO Vs JRD Stock Brokers Pvt Ltd
Whether reassessment on the basis of information received from investigation wing pertaining to accommodation entries is valid, when the same has not been enquired by the AO: NO: ITAT
- Revenue's appeal dismissed: DELHI ITAT
2018-TIOL-1252-ITAT-DEL
Green Range Farms Pvt Ltd Vs DCIT
Whether as per amended provisions of Sec 153C, assessment made is void and invalid if documents seized during search have no bearing on the determination of the income - YES : ITAT
- Assessee's appeal allowed: DELHI ITAT
2018-TIOL-1251-ITAT-HYD
A Naga Srinivas Vs DCIT
Whether without having any new information, re-assessment proceedings on the same material which was considered and accepted during original assessment proceedings is valid - NO : ITAT
Whether on mere repayment of advance received as professional fee, TDS is required to be deducted - NO : ITAT
- Assessee's appeal partly allowed: HYDERABAD ITAT
2018-TIOL-1250-ITAT-HYD
DCIT Vs Aurobindo Pharma Ltd
Whether in the absence of contrary proved by the Revenue following the judgment passed by the Gujarat High Court, weighted deduction on expenditure incurred outside the R & D facility for field trials can be allowed u/s 32(2AB) - YES : ITAT
- Revenue's appeals dismissed: HYDERABAD ITAT
2018-TIOL-1249-ITAT-AHM
DCIT Vs DB Corporation Ltd
Whether claim of exempt income is a pre-condition for the AO to make disallowance of any expenditure linked to such income - YES: ITAT
Whether if assessee makes no such claim, no disallowance is warranted - YES: ITAT
- Revenue's appeal dismissed: AHMEDABAD ITAT
2018-TIOL-1248-ITAT-MUM
Nokoda Granite And Marmo Pvt Ltd Vs ITO
Whether if the Revenue fails to substantiate that the assessment order stood validly served on the assessee, claim of assessee that the assessment order was never served should be accepted and delay in filing appeal should be condoned - YES: ITAT
- Case remanded: MUMBAI ITAT
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INDIRECT TAX |
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SERVICE TAX
2018-TIOL-2473-CESTAT-DEL + Case Story
Yash Motors Vs CCE
ST - Assessee is selling vehicles of M/s Tata Motors to various customers and they are getting such vehicles registered with local RTO on behalf of customers, for facilitating the customers, with regard to getting the vehicle registered with RTO and to cover other minor expenditures relating to such activity, assessee is collecting some amounts from the customers - The Department is of the view that the amount as retained by assessee on account of RTO handling charges is liable to service tax under BAS - Matter is no more res-integra as in case of Arpanna Automotive Pvt. Ltd. - 2016-TIOL-1550-CESTAT-MUM Tribunal has held that helping the purchaser in the matter of registration with RTO cannot be considered as an activity under BAS and therefore, service tax cannot be demanded on the amount retained by assessee in respect of RTO registration fee - Following the said decision of Tribunal, the charges received and retained by assessee from the customers for facilitating RTO registration is not chargeable to service tax under BAS – impugned order set aside and appeal allowed: CESTAT [para 4]
- Appeal allowed: DELHI CESTAT
2018-TIOL-2472-CESTAT-MUM
Adinath Vivruti Dhanawade Vs CCE
ST - Appellant engaged in gardening and cleaning services -Commissioner(A) setting aside demand on ‘gardening services' but confirming on ‘cleaning services'; penalties waived - appeal to CESTAT against confirmation of demand on grounds of time bar.
Held: It was only due to the act of payment of service tax before issue of SCN that led to the appellate authority to set aside the penalty, therefore, waiver of penalty cannot be made a ground to set aside the demand for the extended period - appeal rejected: CESTAT [para 4]
- Appeal rejected: MUMBAI CESTAT
2018-TIOL-2471-CESTAT-HYD
Sai Sudhir Infrastructures Ltd Vs CCT
ST- The assessee are providing works contract service, GTA, site preparation and clearance and supply of tangible goods service - On audit, it was found that the assessee did not pay service tax on certain services - Even though the assessee paid interest, duty demand was raised - The adjudicating authority confirmed the demand along with penalty - Hence, the current appeal against the order of Commr. (A) on all other issues except the works contract services.
Held - With respect to raising additional issues at this stage of litigation when the same issues were not mentioned in memorandum of appeal - It is held that that various decisions have been passed by Benches of the Tribunal on this issue, when only trucks are hired to transport goods, no service tax on GTA is payable - Therefore, the additional ground is allowed & following the ratio laid down in Nandganj Sihori Sugar Co. Ltd. vs. CCE, the assessee is not liable to pay service tax on GTA - In addition, the assessee already paid interest in respect of some of the services - Therefore,it is liable to pay interest as applicable on service tax - Next, with regard to payment of service tax for extended period the assessee filed returns without disclosing the full value of the goods services rendered and the service tax payable and service tax paid - It was already registered with the Service Tax Department for rendering these services - Thus, it is expected to disclose the full value of the services rendered which he has not done - There has been suppression of the facts and the extended period of payment is clearly invokable - Therefore, the penalty under section 78 of Finance Act, 1994 is also imposable on the assessee - Hence, the demand of service tax under GTA along with corresponding interest and penalty is set aside - The remaining part of the Order-in-Appeal is upheld : CESTAT (Para 1, 6, 7, 8, 9, 10)
- Appeal partly allowed: HYDERABAD CESTAT
2018-TIOL-2470-CESTAT-BANG
Foretek Marketing Pvt Ltd Vs CST
ST - Assessee provided the service to their foreign principal in getting orders from India for exporting the goods from their country and against such orders service commission was received in convertible foreign exchange - Assessee has satisfied all the conditions as prescribed in Rule 3(2) of Export of Service Rules, because they had provided the services from India and service recipient is situated outside India and assessee has received the payment in convertible foreign exchange - Further, Commissioner (A) has wrongly interpreted the Circular No.111/5/2009-ST - By following the ratio of decisions in Ishida India Pvt. Ltd. 2015-TIOL-1719-CESTAT-DEL, Menon Associates 2014-TIOL-885-CESTAT-DEL, Blue Star Ltd. 2008-TIOL-716-CESTAT-BANG and ABS India Ltd. 2008-TIOL-1500-CESTAT-BANG, services rendered by assessee fall in the definition of 'Export of Service' and therefore, they are not liable to pay Service Tax: CESTAT
- Appeals allowed: BANGALORE CESTAT
CENTRAL EXCISE
2018-TIOL-1567-HC-KAR-CX + Case Story
CCE & ST Vs Bell Ceramics Ltd
CX - Two notifications prescribing the same rate of duty, one with the condition of non-availment of CENVAT and another without any condition - assessee is not required to explain the anomaly but it is for the Central Government to take the responsibility - no malafide can be attributed to the respondent-assessee in claiming such CENVAT credit after removal of the anomaly by the Central Government itself - if two exemption notifications are applicable in a given case, the assessee may claim benefit of the more beneficial notification - no substantial question of law arises - Revenue appeal dismissed: High Court [para 11 to 14]
- Appeal dismissed : KARNATAKA HIGH COURT
2018-TIOL-2469-CESTAT-BANG
SI2 Microsystems Ltd Vs CCE & ST
CX- The assessee aimed to convert its DTA unit into EOU issue at hand was whether the assessee are entitled to utilize the input credit lying unutilized on the date of their conversion from DTA to EOU on 1.12.2006 - A SCN was issued to disentitle the assessee to the credit of input stock held 'as such' or contained in 'work-in-progress' or in 'finished goods' - Furthermore, the Comm. of Central Excise sought to expunge the credit lying unutilized on the date of conversion and sought recovery of credit utilized after conversion to EOU - The credit lying plus education cess on account of conversion was ordered to be expunged but the demand was set aside for lack of jurisdiction - In the meantime, the Commr. (CUS) issued a separate SCN denying CENVAT credit balance and demanding part of the said amount utilized for payment of duty and DTA clearances - In a nutshell, both the authorities held that the manufacturers earned credit when they were DTA units could not utilize the same after conversion of such units into EOU.
Held - This issue has been settled by various Benches of the Tribunal holding that there was no provision prohibiting an EOU from availing balance of credit when the unit was converted into EOU from DTA - An EOU manufactures goods for DTA clearances & in the absence of provisions requiring the DTA unit to reverse the credit balance at the time of its conversion into an EOU, the credit it had validly earned as a manufacturer continues to be available without any limitation of time or otherwise - Hence, the order challenged is set aside : CESTAT (Para 2, 4, 5, 6)
- Appeal allowed: BANALORE CESTAT
2018-TIOL-2468-CESTAT-MAD
Ashok Leyland Ltd Vs CCE & ST
CX - Assessee is engaged in manufacture of 'Commercial Vehicles' and clear chassis fitted with engine and all the required parts to their dealers/depots - They received duty paid motor vehicle chassis due to various defects - After due scrutiny of returned chassis, assessee undertook certain processes to make them fit for use - When they have taken simple replacement of defect parts they are liable to reverse the re-credit taken upon second clearance of goods which is not in dispute - Regarding various other chassis, claim of assessee is that processes are so elaborate involving dismantling and re-assembling which will be outside the scope of simple reversal of availed credit and make them as fresh clearances of re-manufactured items subjected to valuation and duty liability as relevant at the time of clearance - Admittedly, the affidavit filed by assessee also clearly states that they have undertaken various replacements of components - There is no total dismantling and re-manufacture of impugned goods in the premises of assessee - There is no supporting evidence to that effect - In fact, Tribunal have all the indications to show that only replacement of various components, though critical has been undertaken - These are engine, gear box, steering system, and axles which are no doubt critical components of a motor vehicle - But replacement of such items will not amount to manufacture of motor vehicle - Hence, Tribunal agrees with the lower authority on this aspect regarding application of Rule 16 to clearances made by assessee - Regarding the claim of assessee that certain numbers of returned chassis upon removal of defects have been cleared either on physical exports out of country or to supply to EOU or supply under Notfn 108/95, these products irrespective of the dispute under Rule 16 are otherwise eligible for clearance without payment - These can be verified from the documentary support - Hence the differential credit/duty attributable to said clearances shall not be liable to be paid by assessee - While upholding the differential duty, penalties set aside: CESTAT
- Appeals partly allowed: CHENNAI CESTAT
2018-TIOL-2467-CESTAT-MAD
Chennai Petroleum Corporation Ltd Vs CCE
CX - Assessee is a manufacturer of petroleum products - The products manufactured, inter alia, are Light Diesel Oil (LDO) and Furnace Oil (FO) and stored in storage tanks earmarked for each product - The products are cleared on payment of applicable excise duty - During impugned period, storage tanks were earmarked commonly for LDO and FO - While LDO is classifiable under Chapter Heading no.2710 19 40, FO is classifiable under heading no.2710 19 50 - The ad valorem rate was common for both the products - However, LDO was subjected to specific duty @ 2.5% per litre in addition to ad valorem rate - SCNs were issued to assessee proposing to demand excise duty on LDO so cleared on the ground that LDO was used in manufacture of FO and exemption under Notfn 67/95-CE is not available - Assessee is not disputing the amount of Rs.4.99 crores as per computation laid down by Tribunal - They are aggrieved only in respect of seven transactions in which RTP of FO was more than the LDO - The department views that the negative differential duty which has arisen on account of price scenario, is required to be paid by assessee in terms of section 11D - But the assessee has agitated that when the LDO has been cleared at the price of FO, then higher amount shall be the transaction value and ED computed of transaction value is the actual ED payable - Thus, there is no excess payment of ED to be deposited under section 11D - The excise duty payable on LDO including BED and specific duty is higher than that on FO in impugned seven transactions - Therefore, there is no justification for demanding payment of amount under section 11D.
The only issue that remains is that of imposition of penalty - The differential duty became payable as a consequence of order of Tribunal dated 20.11.2008 - The assessee himself has worked out and paid differential duty and only after receiving such intimation of payment of duty, department has issued SCN followed by impugned order - No justification found for imposition of penalty in these circumstances, in which, no allegation of suppression can be sustained against assessee - Penalty is set aside as well as demand freduced rom Rs.5,12,15,699/- to Rs.4,99,78,469/-: CESTAT
- Appeal partly allowed: CHENNAI CESTAT
CUSTOMS
2018-TIOL-2466-CESTAT-MAD CC Vs Lotus Chocolate Company Ltd
Cus - The assessee obtained nine advance licenses under DEEC scheme during the period in dispute - The assessee-company was allowed duty free import of Cocoa Beans and FPK Oil in terms of Customs Notification No.204/92 and 80/1995 with an obligation to manufacture and export Cocoa Butter, Cocoa powder - On audit, it was found by the Revenue that assessee under the licenses fulfilled only part of the export obligation - It was also noticed that no material imported duty free was physically available in the balance stock - Furthermore, it neither manufactured nor exported the resultant product and no stock of FPK Oil was available in the factory - Duty demand was raised - The Commr. (CUS) confirmed the demand with interest & penalty - On appeal, the Tribunal set aside the penalty & imposed personal penalty on MD assessee-company as well as ordered for de novo adjudication - In de novo adjudication, the Commr.(A) dropped duty demand and the entire proceedings - Hence, the present appeal by Revenue.
Held - The Revenue contended that the Commissioner ought to have confirmed duty as well as imposed penalty - But this view is not legitimate as the Commr. in the first round of litigation did not impose any penalty on the assessee-company who imposed penalty only on MD - The Department did not challenge the order before the Tribunal - The Tribunal set aside the penalty imposed on the M.D. and remanded the appeal filed by the assessee-company - Hence, the order challenged is upheld: CESTAT (Para 1, 5)
- Revenue's appeal dismissed: CHENNAI CESTAT
2018-TIOL-2465-CESTAT-ALL
Health Caps India Ltd Vs CC
Cus - The assessee imported Pharmaceutical Gelatin Capsule Grade - It filed bills of entry for clearance of goods - The goods were imported duty free under AAS exemption Notification 096/2009 - However, import of goods was only with permission by Wild Life (Protection) Act 1972, & CITES - As the proceedings was getting delayed the assessee requested for seeking NOC from ADC (Drug Controller) - When the test report was released from ADC it was found that the subject goods do not comply with two requirements of mircrobiological tests - The assessee requested for necessary permission to re-export of material imported by them to the exporter in China and also requested to waive the requirement of SCN - The Adjudicating Authority allowing the re-export of the impugned goods confiscated the subject goods imposed redemption fine with penalty - Hence, the present appeal.
HELD - The assessee-importer is not importing restricted or prohibited goods in violation of the Customs Act - There were every chances of contamination due to non-handling as per the required criteria - Therefore, it is held that there is no mala-fide on the part of the assessee-importer - The certificate of analysis of the load port is produced before the Tribunal, according to which the goods comply with the prescribed specifications and quality - The only irregularity found is that upon test, two of the parameters (biological criteria) were found to non-compliant - Moreover, there was a delay in testing and the samples were drawn by the Customs officers and not by the experts of FSSAI or Staff of Sriram Institute for National Research, Delhi - Hence, the order of confiscation is set aside and penalty deleted: CESTAT (para 2, 5)
- Appeal allowed: ALLAHABAD CESTAT
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MISC CASE |
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