2018-TIOL-NEWS-208 Part 2, Dated: Tuesday, September 04, 2018

2018-TIOL-NEWS-208 Part 2 | Tuesday September 04, 2018

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	GST - Mend and Amend: Technical Session - Dispute Resolution

CASE STORIES

I-T - Taxpayer will no longer be exposed to penalty, once tax along with interest offered by him on undisclosed income stood accepted without further addition: HC

I-T - Chartered Accountant cannot be blamed by assessee for claiming inadmissible expenditure, to duck penalty u/s 271(1)(c): HC

CX - Order of Tribunal should be read in context and in relation to appeal filed by Revenue: CESTAT

DIRECT TAX


	2018-TIOL-1796-HC-AHM-IT Pr.CIT Vs Adani Retail Pvt Ltd Whether if the main issue of addition on which penalty was imposed, is remanded, penalty still survives - NO: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2018-TIOL-1795-HC-MAD-IT CIT Vs Southern Foundation Pvt Ltd Whether the High Court is obliged to consider the substantial questions of law where the tax effect is lower than the prescribed limit in the said CBDT circular - NO: HC - Revenue's appeal dismissed: MADRAS HIGH COURT 2018-TIOL-1425-ITAT-JAIPUR Rajesh Mahawar Vs ITO Whether if the assessee has concealed his business income while filing his original return as well as in the revised return then, his profit has to be estimated on the total receipts - YES: ITAT Whether the CIT(A) can enhance an addition as unexplained cash when the assessee was doing the business since long having some opening cash balance with him - NO: ITAT - Assessee's appeal partly allowed: JAIPUR ITAT 2018-TIOL-1424-ITAT-MUM Carol Info Service Ltd Vs ACIT Whether if the assessee has written off the debt after the debtor has reduced the same then, the assessee can claim such an amount - YES: ITAT - Assessee's appeal partly allowed: MUMBAI ITAT 2018-TIOL-1423-ITAT-MUM DCIT Vs Microworld Software Services Pvt Ltd Whether the AO can impose penalty u/s 271(1)(c) merely because the assessee's claim was disallowed on the basis of difference of opinion - NO: ITAT - Revenues appeal dismissed: MUMBAI ITAT 2018-TIOL-1422-ITAT-MUM Universal Foundary Pvt Ltd Vs ITO Whether valuation of the tenanted properties can be computed on the basis of a notional market value even when, tenancies were controlled by the rent control legislations - NO: ITAT - Case remanded: MUMBAI ITAT

INDIRECT TAX

SERVICE TAX

2018-TIOL-2716-CESTAT-MAD

Logos Construction Pvt Ltd Vs CCE & ST

ST - The assessee company is engaged in construction acitivites - SCNs were issued for two periods, raising demand under Commercial or Industrial construction Service and Works Contract Service - Demands for interest were raised & penalty u/s 77 & 78 were imposed as well.

Held - On-going projects which are of the nature of works contracts prior to 01.04.2007 cannot be taxed under Construction Services or Commercial or Industrial construction Service - Hence demands confirmed under such headings cannot be sustained - Regarding the demand raised under works contract, the same is not contested - However the assessee claimed to have discharged an amount under this category - Hence the duty demand for works contract can be treated as discharged - However interest liability must be discharged if not paid already - Regarding imposition of penalties, it is seen that the issue of taxability of works contract services during the period of dispute was mired in litigation and was resolved only after the Apex Court's decision in CCE Vs. Larsen & Toubro Ltd. - Hence the imposition of penalty is unwarranted: CESTAT (Para 1,5.2-5.4)

- Appeal allowed: CHENNAI CESTAT

CENTRAL EXCISE

2018-TIOL-2715-CESTAT-MAD

Nexus Electro Steel Ltd Vs CCE

CX - Assessee is engaged in manufacture of CRGO core laminations and are registered with Central Excise Department - They were availing the facility of CENVAT credit on inputs, which according to the department was not eligible for the reason that the processes undertaken by assessee, which is merely cutting and slitting of sheets / coils as per customers specifications does not amount to manufacture - The assessee have discharged duty on finished products and have also taken Central Excise registration - The accounts were periodically audited by department - Later, SCN has been issued on the basis of decisions rendered by High Court of Delhi and Supreme Court alleging that the process does not amount to manufacture and therefore the assessee is not eligible for credit - The Board Circular No. 211/08/2005 has clarified that the activity does not amount to manufacture - This clarification is pursuant to Delhi High Court and Supreme Court's decision - Without entering into the controversy whether the activity amounts to manufacture or not, as decided in various cases, Tribunal views that when Board having issued Circular No. 584/21/2001 clarifying that the activity amounts to manufacture and collected excise duty, cannot later turn around and deny the credit alleging that the activity is not manufacture - When the duty has been discharged by assessee for a prolonged period, the department thereafter cannot turn around and deny the credit alleging that process does not amount to manufacture based upon new decisions evolved - Thus, impugned order cannot sustain - Impugned order set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2018-TIOL-2714-CESTAT-KOL

Purbanchal Cement Ltd Vs CCE

CX - Assessee is manufacturing cement and availing the benefit of Notfn 20/2007-CE - In terms of said notfn, refund was being sanctioned to the extent of duty paid from PLA - Thereafter, the concept of value addition was incorporated into it restricting the refund to the extent of percentage of value addition - Thereafter, another Notfn 38/08-CE was issued for providing annualised refund - Assessee claims that the annual differential refund should be computed taking all the commodities together and not category wise as has been done by department - The assessee's method of computation of annual differential refund is not acceptable - Every exemption Notfn exempts excisable goods productwise mentioned therein - Therefore, exemption is required to be quantified excisable goods wise - Paragraph 4 (1), which provides for annual differential refund, does not provide for computation on a different basis - For each category, full refund equal to the duty payable on value addition has been sanctioned, both monthly and annually - If the claim of assessee for additional refund is accepted, then the quantum of exemption and refund for at least one category of goods will be more than duty payable on value addition for the said category of goods, which is in direct conflict with the said exemption Notification, which provides that the quantum of exemption and refund cannot exceed the duty payable on value addition - Matter remanded to the original adjudicating authority to look into the calculation aspect and decide the issue in terms of observation: CESTAT

- Matter remanded: KOLKATA CESTAT

CUSTOMS

2018-TIOL-2713-CESTAT-HYD

Seven Hills Solvents Pvt Ltd Vs CCT

Cus - Assessee had imported bran from Sri Lanka, extracted bran oil from it, sold it and separately sold the de-oiled bran in market - Based on invoices selling de-oiled bran, they filed refund claims for SAD paid on rice bran which were imported - The sale invoices describe the goods as "de-oiled bran" and do not describe the item as "rice bran" - It is the argument of assessee that there is no major distinction between de-oiled rice bran and rice bran and both are used as fodder and both are classifiable under the same category in VAT classification and therefore they are entitled to refund of SAD paid at the time of import - The claim of assessee is that one of these commodities which was sold is the same as imported commodity - This is clearly not the case - The bran which is imported is a distinct commodity than the bran oil and the de-oiled bran and accordingly, the market prices of these three commodities are also different - If de-oiled rice bran, which is sold by assessee is the same as rice bran which were imported by them, there was no reason to specifically describe the goods in their invoices as "de-oiled rice bran" - The price of the de-oiled rice bran is also much lower having been depleted of the oil - The bran oil which was extracted was also sold by assessee separately and at a price much higher than they have imported bran - This case has far more similarities to the case of Proflex Systems 2014-TIOL-1315-CESTAT-AHM in which corrugated sheets were imported but they were sold as Proflex Roofs after making some changes - It is well settled position that the exemption notification is an exception to the general rule and has to be strictly construed - Fiscal legislation should be strictly construed as held by Supreme Court in case of Ranbaxy Laboratories Ltd 2011-TIOL-105-SC-CX - Tribunal is left with no choice but to conclude that rice bran which the assessee has imported has been processed to extract rice bran oil and the de-oiled rice bran is separately sold by assessee - Goods which were imported were not sold but were processed - Therefore, the exemption under Notfn 102/2007-CUS and the consequential SAD refund do not apply in the present case: CESTAT

- Appeals rejected: HYDERABAD CESTAT

NEWS FLASH

Govt notifies annual returns GSTR-9 & GSTR-9A

GST - Govt eases process for Defence Canteens to claim refund

GST - Govt clarifies on scope of principal-agent relationship in context of Schedule 1

Govt clarifies on need for e-Way Bill in case of storage of goods in godowns of transporters

Govt clarifies ITC wrongly availed can be reversed through Table 4(B)(2) in GSTR-3B but only with interest and penalty

CJI sticks to seniority protocol; favours Justice Gogoi as new CJI