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2019-TIOL-NEWS-118 Part 2 | Monday May 20, 2019
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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TIOL TUBE VIDEO |
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DIRECT TAX |
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2019-TIOL-1080-HC-MAD-IT CIT Vs Textile Dye Chem Corporation
Whether when sales had been accounted for in the books, then corresponding expenditure on purchase cannot be ignored merely because bills were not produced, if assessee seems to have given justifiable explanation - YES: HC
- Revenue's appeal dismissed: MADRAS HIGH COURT
2019-TIOL-1079-HC-MAD-IT
CIT Vs Rajapalayam Mills Ltd
Whether when the Assessee has not preferred any appeal against the denial of claim made u/s 35(1)(i), then the question of its approval by the Competent Authority for making such claim is irrelevant - YES: HC
- Revenue's appeal dismissed: MADRAS HIGH COURT
2019-TIOL-967-ITAT-BANG
JCIT Vs Flipkart India Pvt Ltd
Whether MA filed without any basis and virtually seeking a review of the order of the Tribunal on a possible hidden transaction which requires examination after lifting the corporate veil on totally new basis of assessment is to be allowed - NO : ITAT
- Revenue's application dismissed: BANGALORE ITAT
2019-TIOL-966-ITAT-MAD
Idea Cellular Ltd Vs ITO
Whether a case should be remanded for necessary verification of data as to treatment of discount offered as commission - YES : ITAT
- Case Remanded: CHENNAI ITAT
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GST CASE |
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2019-TIOL-1089-HC-AHM-GST
Ghanshyamlal And Company Vs UoI
GST – The assessee submitted that a similar question of facts and law was addressed by the coordinate bench in Mohit Minerals Pvt Ltd vs UOI .
Held: Following such ruling, notice issued, returnable on June 19, 2019. Hence order dated April 27, 2019 is stayed: High Court
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Notice issued
: GUJARAT HIGH COURT
2019-TIOL-1088-HC-ORISSA-GST
Safari Retreats Pvt Ltd Vs CCCGST
GST - Petitioners have challenged the action of the respondent whereby they have, without considering the provisions of s.17(5)(d) of the CGST Act have held that the provisions of the CGST Act is not applicable in the case of Construction of Immovable Property intending for letting out for rent - case of the petitioner is that they are mainly carrying on the business activity of constructing shopping malls for the purpose of letting out the same to numerous tenants and lessees; that huge quantities of materials and other inputs in the form of Cement, Sand, Steel, Aluminium, Wires, plywood, paint, lifts, escalators, Air-conditioning plant, chillers, electrical equipment, special façade, DG sets, Transformers, building automation systems and also services in the form of Consultancy, Architecture, legal and professional, engineering etc. are required for the aforesaid construction purpose - Petitioner having accumulated Input credit of GST of Rs.34,40,18,028/- and are desirous of availing and utilizing the same to discharge and pay CGST and Orissa GTA on the rentals received, approached the Revenue authorities - however, the petitioner was advised to deposit the CGST and OGST collected without taking Input credit in view of restrictions placed as per section 17(5)(d) and was warned of penal consequences if it did not do so, hence the writ.
Held: The very purpose of the Act is to make uniform provision for levy, collection of tax, intra state supply of goods and services, both Central or State and to prevent multi-taxation - Contention which has been raised by petitioners keeping in mind the provisions of section 16(1)(2) where restriction has been put forward by the legislation for claiming eligibility for input credit has been described in section 16(1) and the benefit of apportionment is subject to s.17(1) and (2) - while considering the provisions of section 17(5)(d) the narrow construction of interpretation put forward by the department is frustrating the very objective of the Act inasmuch as the petitioner in that case has to pay huge amount without any basis - further the petitioner would have paid GST if it disposed of the property after the completion certificate is granted and in case the property is sold prior to completion certificate, he would not be required to pay GST - But, here he is retaining the property on which he is covered under the GST, but still he has to pay huge amount of GST, to which he is not liable - in that view of the matter, Court is of the considered view that the provision of section 17(5)(d) is to be read down and the narrow restriction as imposed in reading of the provision by the Department is not required to be accepted, keeping in mind the language used in Eicher Motors Ltd. - 2002-TIOL-149-SC-CX-LB the very purpose of the credit is to give benefit to the assessee - in that view of the matter, if the assessee is required to pay GST on the rental income arising out of the investment on which he has paid GST, it is required to have the input credit on the GST, which is required to pay u/s 17(5)(d) of the CGST Act - Prayer (a) is granted, however, Court is not inclined to hold it to be ultra vires as prayed in prayer (b), which prayer is not accepted - Petition allowed to the aforesaid extent: High Court [para 19 to 21].
- Writ petition partly allowed: ORISSA HIGH COURT
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INDIRECT TAX |
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SERVICE TAX
2019-TIOL-1445-CESTAT-DEL Emaar MGF Construction Pvt Ltd Vs CCE
ST - The assessee-company is engaged in providing various services including Construction of Complex Service & is registered with the Service Tax commissionerate - The Delhi Development Authority (DDA) was mandated with the development of the Commonwealth Games Village for the XIXth Commonwealth Games being organized in New Delhi between October 03-14, 2010 - The DDA decided to develop a residential facility in the Commonwealth Games Village through PPP model - After bidding process, the assessee was short-listed to implement the construction work - A PDA was entered into between the DDA and the assessee - The residential facility would be used to accomodate athletes and officials and thereafter be disposed off as apartments for residential purposes - The assessee accepted the exclusive development rights for the development of the project and paid an upfront bid amount of Rs 321 Crores - The assessee also entered into an agreement with the DDA where it agreed to absolutely & unconditionally renounce its rights in respect of 333 apartments out of its 2/3rd share in favor of DDA for consideration of about Rs 766 Crores - Such amount was to be paid by the DDA in five instalments - During the relevant period, the assessee was served SCN proposing to raise duty demand of about Rs 173.93 crores u/3 73(2) of Finance Act r/w Section 73(1) of the Act - On adjudication, demand of about Rs 135.18 crores was confirmed with interest u/s 75 of the Act - Equivalent penalty was imposed u/s 78 as well as u/s 77(2) - Such demand had been raised under the head of Construction of Complex Service rendered by the assessee to the DDA - The value of such service has been considered as equivalent to the value of the Appellant's share of flats i.e 2/3rd of the total flats - Hence the present appeal.
Held - Taxability of activity as Works Contract Service - It is the assessee's claim that the activity in question is not Construction of Complex Service and is instead liable to be treated as Works Contract Service - In this regard, it is useful to refer to relevant provisions of the Request For Proposal document - Relevant provisions refer to (A) Project Development Controls; (B) Accommodation Requirements; (C) Minimum Technical Material Specifications; (D) Minimum Material Specifications; and (E) Environment Requirements - The Project Development Controls deals with land area, maximum floor area, maximum ground coverage, maximum height and parking - The Accommodation Requirements relate to the size of the bedrooms, the minimum number of bed rooms to be developed, the specification of the bathroom, living space and telecommunication - The Minimum Technical Material Specifications relate to flooring, walls and counters, finishing wood work/steel work and electrical amongst others - The Minimum Material Specifications relate to the quality of Cement and Reinforcement steel to be used - Hence it is clear that the assessee's responsibility under the PDA included the construction of residential units which necessarily involves supply of material coupled with the provision for work and labour - Hence the activity under the PDA is a composite and indivisible works contracts and cannot be said to be service simplicitor - However, the SCN raised duty demand under CCS - It is clear from the Apex Court's judgment in Commissioner of Central Excise & Customs, Kerala vs Larsen & Toubro Ltd., that a composite Works Contract cannot be taxed under CCS as the latter's scope covers contract of service simplicitor - submission of AR relating to the provisions under GST cannot also be accepted since what has to be examined is the service provided by the Appellant under the provisions of the Finance Act, 1994 - Hence the O-i-O in challenge merits being set aside - Appeal allowed: CESTAT (Para 1-4,21-25)
- Assessee's appeal allowed : DELHI CESTAT2019-TIOL-1428-CESTAT-ALL
Gardenia India Ltd Vs CCE & ST
ST - In the present matter, the appellant challenges the penalties imposed u/s 77 & 78 of the Finance Act r/w Rule 15(2) of the CCR 2004.
Held: It is seen that the duty demand was paid before the SCN was issued & it was appropriated upon passing of the O-i-O - The adjudicating authority is silent upon the appellant's contention that in view of the payment of service tax before issuing of SCN, there was no need to issue the SCN - Moreover, the provisions of Section 73(3) mandate that if service tax is paid before issuing of SCN, the proceedings get concluded - Therefore there was no need to issue SCN in respect of the demands confirmed in the O-i-O - Hence the penalties imposed u/s 77 & 78 of the Finance Act 1994 r/w Rule 15 of the CCR are set aside: CESTAT
- Assessee's appeal allowed: ALLAHABAD CESTAT
2019-TIOL-1427-CESTAT-HYD
CCE & C Vs Ushakiron Television
ST - The assessee is registered with Service Tax Department under category of "Business Auxiliary Services" and "T.V. and Radio Programme Production Service" - A SCN was issued to assessee alleging that they had not paid the service tax under "T.V. and Radio Programme Production Service", which they have rendered to M/s UEL - The arrangement in this specific case can be seen from MOU entered into between the assessee and M/s UEL - A plain reading of clauses of MOU shows that the agreement was on principal to principal basis with the assessee retaining the copy rights on programmes produced for UEL and having the liberty to commercially exploit it in whatever manner, offering them to any other TV channels as well - Similarly, M/s UEL was at liberty to source the programmes from any other producers of the programmes also - In respect of the programmes produced by assessee and telecast by M/s UEL, there is a revenue sharing arrangement - There is nothing in this MOU to suggest that assessee was producing programmes on behalf of M/s UEL - There is no evidence of whatsoever that the assessee is producing programmes on behalf of M/s UEL but the evidence in MOU show that they are producing the programmes as a part of joint venture which are telecast and the revenue is shared - These issues have been discussed at length in O-I-O and the demands have been correctly dropped - The argument in the appeal that the department could have continued further investigation to attain the facts of ownership and consideration paid, does not carry their case any further - This only suggests that they could have suspicions about the arrangements made as per the MOU but any possible suspicion which is not brought out in SCN substantiated by evidence cannot form the basis for confirming demand - No merit found in the appeal filed by Revenue: CESTAT
- Appeal rejected: HYDERABAD CESTAT
CENTRAL EXCISE
2019-TIOL-1432-CESTAT-MAD
Bharat Heavy Electricals Ltd Vs CCE
CX - In finalization of provisional assessment, the assessee is eligible for adjustment of excise duty paid against short payment of duty and refund of excess amount, if any, arising upon ultimate adjustment without bar of unjust enrichment being applicable: CESTAT [para 8]
CX - Valuation - While most of the equipments to be supplied were manufactured by appellants and cleared to customers site on payment of duty, certain bought out items (shop made) were procured from third party vendors and sent directly to site of the customers (DTS items) - Appellants were clearing shop made goods on payment of excise duty, however, with respect to DTS items, no excise duty thereon was discharged by the appellants - Once the supplies to these projects were completed, the appellants applied for finalization of provisional assessment and in both finalization orders, the Assistant Commissioner allowed deductions for DTS supplies from assessable value based on values mentioned in the commercial invoices issued by appellants to their customers - Commissioner(A) agreed with the contentions of the department that deduction of value of DTS supplies should be allowed based on vendors invoices to BHEL and not on the basis of commercial invoices issued by BHEL to the customers - appeal to CESTAT.
Held: Identical issue has been decided by the Commissioner of Central Excise (Appeals) Chennai-II in respect of BHEL's Ranipet unit - Contention of the appellant is that subsequent decision of Commissioner (Appeals) allowing deduction based on commercial invoices raised by the appellants on their customers for supply of DTS goods items stands accepted by the department and has attained finality - In the circumstances, the portion of the impugned orders ordering reconsideration of the matter by the original authority whether the bought out items are overvalued is not sustainable - Appeals allowed with consequential relief: CESTAT [para 7.5, 7.6, 9]
- Appeals allowed: CHENNAI CESTAT
2019-TIOL-1431-CESTAT-BANG
CCT Vs Kailash Vahan Udyog Ltd
CX - The assessee-company manufactures Tippers on duty-paid chassis received from M/s Ashok Leyland Ltd - Fully-built motor vehicles are then cleared to the Regional Sales Office - The assessee availed Cenvat credit of duty paid on input goods & services and capital goods - Investigation during the relevant period revealed evasion of duty by means of short-payment of duty on such vehicles cleared to the principal manufacturer by not adopting the correct assessable value as per the Central Excise Valuation Rules 2000 - The assesse paid duty on value given by the principal - Valuation of manufactured goods was brought under ambit of Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 w.e.f. 1.4.2000 - Based on quantification of differential duty short-paid, the assessee paid the differential duty with interest - Later, an SCN was issued proposing to raise duty demand with interest & proposing penalty u/s 11AC r/w Rule 25 of CER 2002 - On adjudication, such demands were confirmed - On appeal, the Commr.(A) held that where assessee deposited duty with interest before issuing of SCN, the penalty was unwarranted & so scrapped the same - Hence the Revenue's appeal.
Held: The assessee paid duty with interest before issuing SCN - Hence in view of Section 11A(2) of CEA 1944, no SCN should have been issued as the proceedings are deemed to have concluded, unless any case of suppression of facts with intent to evade payment of duty is made out - The Revenue put forth no material to prove that the assessee suppressed facts with intent to evade payment of duty - Besides, the issue of inclusion of value of chassis supplied free of cost in assessable value of body-built vehicles is always disputed & is pending disposal before the Apex Court - Thus the penalty is rightly quashed as the issue is one of interpretation of provisions: CESTAT
- Revenue's appeal dismissed: BANGALORE CESTAT
CUSTOMS
2019-TIOL-1430-CESTAT-DEL
Girish Kumar Mishra Vs CC
Cus - The assessee, on 14.08.2012, went to the office of Sh. Lalit Gupta, an associate of Hyderabad based CHA M/s Wijeta Impex & Logistics who looking after the work of CHA at Delhi, to collect the NOC from Rakesh Kumar, the G-Card holder of M/s Wijeta Impex & Logistics - It is also apparent that Mr. Lalit Gupta was contacted by Mr. Rajesh @ Deepak Rishi for the export of impugned consignment in container - Requisite documents through e-mail were also sent to said Lalit Gupta during the period 06.08.2012 to 17.08.2012 - When the papers were filed for effecting export that it reflected for 100% examination of container - After receiving the said information that Rajesh @ Deepak Rishi asked for NOC from said Rakesh which got collected by present assessee - Deepak Rishi still got his consignment cleared through M/s Wijeta Impex & Logistics only which was ultimately detained by DRI officers at DTKD - All other witnesses have corroborated the same except that Rakesh Kumar & Pradeep have reflected their doubt about Girish Kumar to be working for Mr. Deepak Rishi @ Rajesh - But Girish Kumar himself in his statement under Section 108 of Customs Act, 1962, as was recorded on 15.10.2012 has acknowledged him to be the employee of Deepak Rishi @ Rajesh & Hemant Sachdeva and about signing the impugned shipping bill - But this evidence though highlight the guilt of Deepak Rishi for whom the assessee was working but is highly insufficient to prove any act of present assessee of conspiracy with said Deepak Rishi for the stuffing of red sanders in impugned assignment except for being the latter’s employee - Without the evidence to prove the intent of assessee about the impugned stuffing and no knowledge for bill of entry, as signed by him, to be false - Liability cannot be fastened on him - Mere signing of bill that too in the capacity of being employee is not sufficient to prove gravest of allegations of improper export - The order under challenge has also observed that assessee acted at the instance of Deepak Rishi - Girish Kumar was in process of enrolling himself as G-Card Holder of M/s Wijeta Impex Logistics - The reference of G-Card holder Rakesh Kumar as used by assessee was also of M/s Wijeta Impex - In the given circumstances, malafide cannot be attributed to Girish Kumar unless and until proved beyond reasonable doubt - Same is miserably missing - The Order of adjudicating authority as far as imposition of penalty upon Girish Kumar is concerned is opined to be based on mere presumptions, conjectures and surmises - Hence, is hereby set aside to the extent of imposing penalty upon assessee: CESTAT
- Appeal allowed: DELHI CESTAT
2019-TIOL-1429-CESTAT-DEL
MC Overseas Vs PR CC
Cus - On 10 October 2018, when the matter was adjourned for 20 November 2018 and thereafter none appeared on behalf of assessee - Moreover, notice sent to the assessee have also return unserved with the remark "no such person" - Assessee is not interested to pursue their appeals, therefore, appeals are dismissed for non-prosecution with the liberty to the assessee to file applications for restoration of appeals, if so desired, within 30 days: CESTAT
- Appeals dismissed: DELHI CESTAT
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