2019-TIOL-NEWS-036 Part 2 | Tuesday February 12, 2019
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CASE STORIES

ST - Warehouse abroad is a 'place of removal' - Tax paid by appellant on reverse charge basis in respect of warehousing services received in Spain is an 'Input Service': CESTAT

I-T - AO cannot reopen concluded assessment merely on basis of review of documents filed during original assessment: ITAT

 
DIRECT TAX

ACIT Vs A U Financiers India Ltd

Whether the question of sustainability of bad debts u/s 36(1)(vii) is to be considered once if it could be determined that they were not sourced from derivative transactions - YES: ITAT

Whether expenses incurred due to investments in subsidiary is hit by the restrictive provision of section 14A if there are no instances of dividend income from such investments - NO: ITAT

- Revenue's Appeal Partly Allowed: JAIPUR ITAT

Adi Media Pvt Ltd Vs ITO

Whether when there is a categorical finding about the concealment of income, it is a fit case for imposing penalty u/s 271(1)(c) - YES: ITAT

- Assessee's appeal dismissed: DELHI ITAT

Gurucharan Jewellers Vs ITO

Whether a notice for imposing penalty u/s 271(1)(c) becomes invalid if it does not clearly specify whether the assessee furnished inaccurate particulars of income or concealed particulars of income - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

Bharath Kumar Nakka Vs ACIT

Whether when there is no explanation about the money being received, then addition made in this regard is sustainable - YES: ITAT

- Assessee's appeal dismissed: DELHI ITAT

Situ Shastri Vs ACIT

Whether if the party has confirmed the payment and has also shown the purpose for which payment is made which is for raising finance, the same cannot be disallowed merely on presumption by the AO considering it as non-business purpose - YES : ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

Rajnikant Himmatlal Kampani Vs ITO

Whether the onus rests with the Revenue to disprove any claim made by an assessee & the latter cannot be burdened with the responsibility to furnish material which disproves such claim - YES: ITAT

- Assessee's appeals allowed: KOLKATA ITAT

 
GST CASE
2019-TIOL-40-HC-KAR-GST

Global Associates Association of Persons Vs UoI

GST - Petitioner is aggrieved by the Notification 11/2017-CTR and clarification dated 09.01.2018 issued by the respondent-authorities pursuant to Entry 5(b) of Schedule II to the CGST Act, 2017 which envisages levy of tax on construction activities and deeming the value of the land at one-third of the total amount charged - Petitioner argued that irrespective of any action initiated or not by the respondent-authorities, they is entitled to challenge the same and hence the writ petition is maintainable.

Held: Apex Court in the case of Kusum Ingots - 2004-TIOL-117-SC-CX-LB has observed that passing of a legislation by itself does not confer any such right to file the writ petition unless a cause of action arises therefor - Enacting a legislation or issuing Notification/Circular could not confer a right to challenge unless the litigant is affected by the action initiated by the executive in furtherance of such legislation/administrative Circular/Notification more particularly, in taxing statutes - Cause of action is sine qua non for challenging such legislation/Notification/Circular - Writ Court cannot adjudicate upon such matters in vacuum - Adjudication of such issues sans any cause of action would be merely academic, consuming public time de hors the litigants waiting in serpentine queue seeking justice before the courts for the relief/s sought for, arising out of the cause of action - Petitioner involved in construction activity or works contract would not be sufficient to examine the constitutional vires of the Act and the related Notification/Circular unless the cause of action emerges - writ petitions at this stage are premature and deserve to be dismissed as not maintainable: High Court [para 15, 16]

- Petitions dismissed: KARNATAKA HIGH COURT

 
INDIRECT TAX
SERVICE TAX

Alwar Cable Network Vs CCE & CST

ST - The assessee is registered Service provider and they have been filing Service tax returns for other services provided by them namely 'advertising agency services' - Assessee is well conversant about the provisions of Service tax law as they have been complying with the same in respect of other services provided by them - The definition under section 65 (20) has been amended w.e.f. 10.9.2004, wherein multi system operator were also been included in the scope of 'cable operator service' - Service tax is leviable on 'multi system operator' providers since 10.9.04 and as assessee have been providing multi system operator services, they are very much covered under Section 65(20) of FA, 1994 under 'cable operator service' and therefore, assessee should have discharged their Service tax liability with effect since 10.9.2004 - Thus, the activity of assessee is leviable for service tax w.e.f. 10.9.04 and therefore, confirmation of short payment of service tax by lower authorities is legally correct - Since the assessee was very much paying service tax as well as filing the Service tax returns for other services, they cannot claim that they were not aware about the changes that came into effect from 10.9.2004 - It is also matter of record that Shri Mukesh Gupta, partner in his statement has stated that they were aware that service tax is leviable on MSO as the broadcaster such as Star TV, Sony TV, ESPN has been charging service tax from them on the invoices raised by them for providing the signals to them for further transmission as MSO and therefore, it is absolutely wrong on the part of assessee to say that there was confusion because of Circular dated 1.8.2002 - Longer period of limitation is available to Revenue - No infirmity found in the impugned order and same is upheld: CESTAT

- Appeal dismissed: DELHI CESTAT

CCE & ST Vs Aamir Taslim

ST - The assessee entered into MOU with M/s Sahara India for execution of land acquisition work and also entered into a contract/work order for leveling of soil including of gorges/Nallah, removing of shrubs, grass and ruble at Sahara City Homes, Bahraich, with M/s Sahara India Commercial Corporation Ltd. (SICCL) - The enquiry was initiated by officers of DGCEI and recorded various statements of officials of M/s Sahara India and M/s SICCL - Whether service tax is liable to be recovered from assessee under Section 73(1) of FA, 1994 for payments made by M/s SICCL, which were routed through assessee and for leveling of soil including of gorges/nallah, removing of shrubs, grass and ruble at Sahara City Homes and Baharaich - The first issue stands decided by Commissioner (A) by following the Supreme Court order - He has also held that any amount received by assessee from Sahara India would be treated as service and liable to service tax - No infirmity found in the view of Appellate Authority, inasmuch as cost of land can never be treated as value of the services - It stands clearly observed by Appellate Authority that "site formation and excavation and earth moving and demolition service" was introduced in service tax net on 16/06/2005 and the agreement entered between the assessee with M/s Sahara India expected the work to be finished within a period of 2 months, which is much prior to 16/06/2005 - Revenue has not advanced any ground to the finding of Commissioner (A) - No infirmity found in impugned order of Appellate Authority: CESTAT

- Appeals rejected: ALLAHABAD CESTAT

 

 

 

 

CENTRAL EXCISE

Andhra Pradesh Paper Mills Ltd Vs CC, CE & ST

CX - The issue pertains to Cenvat credit attibuted to inputs used to manufacture final products cleared to the assessee's sister unit.

Held : A similar issue was resolved by remanding the matter to the Tribunal for fresh verification - Hence the matter warrants remand in the assessee's own case as well: CESTAT

- Case remanded: HYDERABAD CESTAT

Banco Products India Ltd Vs CCE & ST

CX - The assessee-company was denied Cenvat credit on GTA services, during the relevant period - Hence the present appeals.

Held: The Tribunal settled an identical issue, wherein it remanded the matter since factual aspects as to whether or not the freight element had included in the assessable value, required consideration - Hence the order denying credit in the present case is quashed & the matter is remanded back to the adjudicating authority: CESTAT

- Cases remanded: AHMEDABAD CESTAT

 

 

 

 

CUSTOMS

2019-TIOL-62-SC-NDPS-LB

Varinder Kumar Vs State Of Himachal Pradesh

NDPS - Appellant was apprehended carrying ‘charas' on his scooter in two gunny bags with varying quantities - Trial court acquitted the appellant on grounds of non-compliance with s.100(4) of CrPC with regard to independent witnesses; that there had been non-compliance with sections 50, 52 and 57 of the NDPS Act - High Court reversed the acquittal holding that in view of seizure of contraband from gunny bags, section 50 of NDPS Act had no application; that merely because two independent witnesses were not from the same locality, would not ipso facto amount to violation of Section 100(4), Cr.P.C - appeal to Supreme Court.

Held: Criminal jurisprudence mandates balancing the rights of the accused and the prosecution - Section 50 of NDPS Act patently has no application since the recovery was not from the person of the appellant but the gunny bags carried on the scooter - Sections 52 and 57 of NDPS Act being directory in nature is of no avail to the appellant - It is very reasonable to conclude that the witness did not appear subsequently because he may have been won over by the appellant - Given the very short span of time in which events took place it is not possible to hold any violation of Section 100(4) Cr.P.C - In any event, no prejudice on that account has been demonstrated - appellant took a defence under Section 313 Cr.P.C. of false implication but failed to produce any evidence with regard to the complaint lodged by him against the C.I.D. department - therefore, there is no reason to come to any different conclusion than that arrived at by the High Court in this regard: Supreme Court [para 7, 8]

Informant as the Investigating Officer - divergent views being taken on the issue with regard to the informant and the investigating officer being the same person in criminal prosecutions, and the varying conclusions arrived at in respect of the same - Individual rights of the accused are undoubtedly important - But equally important is the societal interest for bringing the offender to book and for the system to send the right message to all in the society - be it the law abiding citizen or the potential offender - 'Human rights' are not only of the accused but, extent apart, also of the victim, the symbolic member of the society as the potential victim and the society as a whole - Societal interest, therefore, mandates that the law laid down in Mohan Lal - 2018-TIOL-381-SC-CUS cannot be allowed to become a spring board by an accused for being catapulted to acquittal, irrespective of all other considerations pursuant to an investigation and prosecution when the law in that regard was nebulous - There is a history of previous convictions of the appellant also - Court cannot be oblivious of the fact that while the law stood nebulous, charge sheets have been submitted, trials in progress or concluded, and appeals pending, all of which will necessarily be impacted - The criminal justice delivery system, cannot be allowed to veer exclusively to the benefit of the offender making it unidirectional exercise - A proper administration of the criminal justice delivery system, therefore, requires balancing the rights of the accused and the prosecution, so that the law laid down in Mohan Lal (supra) is not allowed to become a spring board for acquittal in prosecutions prior to the same, irrespective of all other considerations - Held that all pending criminal prosecutions, trials and appeals prior to the law laid down in Mohan Lal (supra) shall continue to be governed by the individual facts of the case - Appeal dismissed: Supreme Court [para 13, 14, 15, 18, 19]

- Appeal dismissed: SUPREME COURT OF INDIA

2019-TIOL-452-CESTAT-DEL

Sriaanshu Logistics Vs CC

Cus - The customs broker license of the appellant has been revoked conforming the contravention on his part of regulations 10, 11 (a) (b) (d) (e) & 11 (m) of CBLR, 2013 - It is assessee's own admission that he had allowed Mr. Narula and Mr. Baruna to use his license for their own clients against monthly commission to be paid to the assessee - The assessee has not produced any evidence contrary to the said statement - The only emphasis about KYC documents being mailed to him by Mr. Narula is not sufficient to satisfy that assessee was otherwise observing his statutory duties - The Apex Court in case of K.M. Ganatra and Co - 2016-TIOL-13-SC-CUS has held that CHA occupies a very important position in custom house - The customs procedures are complicated - The importers have to deal with a multiplicity of agencies i.e. carriers, custodians like BPT as well as the customs - The importer would find it impossible to clear his goods through these agencies without wasting valuable energy and time - The CHA is therefore, supported to safeguard the interest of both the importers and the customs - A lot of trust is pose in CHA by importers/exporters as well as by the Govt. Agencies - To ensure appropriate discharge of such trust the relevant regulations are found - The Apex Court has clarified that any contravention of such obligations even without intent would be sufficient to invite upon CHA the punishment listed in the regulation - Delegation of its function by CHA has been held as a ground for CHA to be responsible for fraudulent activity of the third parties as was also clarified by High Court of Madras in case of Kamakshy Agency - No infirmity found in the order under challenge: CESTAT

- Appeal dismissed: DELHI CESTAT

 
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