2019-TIOL-NEWS-123, Dated: Saturday, May 25, 2019

2019-TIOL-NEWS-123| Saturday May 25, 2019

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Legal Wrangle | International Taxation | Episode 104

DIRECT TAX


	2019-TIOL-1006-ITAT-MUM Thomson Reuters International Services Pvt Ltd Vs ACIT Whether when delay in disposal of appeal is not attributable to taxpayer, then he deserves extension of stay of demand till final disposal - YES: ITAT - Assessee's stay application allowed : MUMBAI ITAT 2019-TIOL-1005-ITAT-DEL Kec-Plr-Kpipl-Jv Vs ITO Whether AO can make disallowance u/s 40A(2)(b) in respect of income which the assessee in his opinion ought to have earned rather than certain expenses incurred - NO : ITAT - Assessee's appeal allowed : DELHI ITAT 2019-TIOL-1004-ITAT-DEL Pooja Gupta Vs Pr.CIT Whether CIT has rightly exercised power u/s 263 if there is lack of inquiry with the perspective for which case is selected for scrutiny by AO - YES : ITAT - Assessee's appeal dismissed : DELHI ITAT 2019-TIOL-1003-ITAT-INDORE Keerti Friends Foundation Vs DCIT Whether denial of exemption u/s 10(23)(iiad) by the Appellate authority by merely relying on AO's findings and without passing a speaking order, merits adjudication afresh - YES: ITAT - Case remanded : INDORE ITAT 2019-TIOL-1002-ITAT-MAD Prakash Shipping Agencies Vs ITO Whether on request of assessee to re-examine issues, if Revenue does not object, the same can be remanded for a fresh examination - YES : ITAT - Case Remanded : CHENNAI ITAT

NAA CASE


	2019-TIOL-34-NAA-GST Director General Of Anti-Profiteering Vs Eldeco Infrastructure And Properties Ltd GST - Anti-Profiteering - Applicant has alleged that the respondent has illegally charged Rs.10,61,460/- as GST on 90% of the basic sale price and Rs.44,227/- as Service Tax on 10% of the basic sale price on the sale of a built up house located in ‘Eldeco Country' project launched by the respondent - it is also alleged that the said ready-to-move-in villa was sold at a base price of Rs.98,28,312/- at the time of execution of agreement on 15.07.2017 but the respondent had charged GST on the base price of Rs.98,28,312/- and the benefit of Input Tax Credit was not passed on to the applicant by way of commensurate reduction in price after implementation of GST. Held: DGAP in its report has stated that the respondent had suo motu computed the benefit of ITC to be passed on @2% of the amount paid by the applicant and other home buyers during the period from 01.07.2017 to 31.08.2018; that the ITC pertaining to the units which were under construction but not sold was provisional ITC which needed to be reversed by the respondent in terms of s.17 of the Act; that prior to 01.07.2017 the respondent was eligible to avail CENVAT credit of Service Tax paid on Input Services but the CENVAT credit on CEX paid on inputs and VAT paid on inputs was not available; that post GST, the respondent was eligible to avail ITC of GST paid on inputs and input services including on the sub-contracts; that the ITC as a percentage of the total turnover that was available to the respondent during the pre-GST period was 0.61% and during the post GST period it was 3.45% and thus the respondent had benefited from an additional ITC to the tune of 2.84% of the taxable turnover; that the profiteered amount had been arrived at by comparing the applicable tax rate and the ITC for the pre-GST period when Service Tax @4.5% and VAT @1% were payable (total 5.5%) with the post-GST period when the effective GST rate was 12% (GST @18% along with 1/3 rd abatement on value) on construction service; that the benefit of additional ITC of 2.84% of the taxable turnover which had accrued to the respondent was required to be passed on to the applicant and other recipients and hence the provisions of s.171 of the Act had been contravened by the respondent; that the respondent had realized an additional amount to the tune of Rs.2,83,026/- from the applicant which included the profiteered amount @2.84% of the taxable amount and GST on the said profiteered amount @12% or 18% and the respondent has also realized an additional amount of Rs.38,99,172/- which included both the profiteered amount @2.84% of taxable amount and GST on the said profiteered amount from the 124 other recipients (90 home buyers and 34 plot owners) who were not applicants in the present proceedings and were identifiable as per the documents; respondent has submitted list of 152 home buyers along with copies of cheques to whom the profiteered amount of Rs.41,82,198/- has been passed along with interest of Rs.6,30,818/-; details of payment made to the applicant viz. profiteered amount of Rs.2,83,154/- along with interest of Rs.61,301/- - Authority notes that the respondent has raised no objection against the computation of the profiteered amount by the DGAP -since the respondent has not only collected extra amount from the buyers but also compelled them to pay more GST on the additional amount realised, it appears to be a deliberate and conscious violation of the provisions of s.171 of the Act and, therefore, offence is punishable u/s 122 of the Act and liable for imposition of penalty - notice to be issued accordingly: NAA - Application allowed: NAA

INDIRECT TAX

SERVICE TAX

2019-TIOL-1503-CESTAT-KOL

CST Vs Superintendence Company Of India Pvt Ltd

ST - The assessee is engaged in providing Technical Inspection and Certification Service, Repair and Maintenance Service and export of services - A SCN was issued for recovery along with interest and to impose penalty under section 76, 77 and 78 - As regards to export of Services for period 2003-04 and 2004-05, assessee has submitted a CA certificate which certifies that they had not repatriated any foreign currency out of India during the relevant period - Accordingly, there is no liability on the part of assessee and therefore same is set aside - With regard to export of services for period 2005-06 and 2006-07, as far as the order of Commissioner is concerned, the relief has been allowed on the basis of documents produced such as CA certificate along with Bank Statement, Copies of telegraphic transfer credit advices and corresponding certificates of foreign inward remittances - Therefore, no infirmity found in the order of Commissioner and therefore the appeal filed by Revenue is rejected to that extent - As regards to advances, assessee submitted a CA certificate certifying that they had paid tax on such advance after completion of service - Thus the assessee cannot be held liable to pay tax on such advances as the same would result in double payment of tax - As the major portion of the demand was set aside by O-I-O and the remaining portion of the demand was already paid before the issuance of SCN, thus, no ingredient found of fraud, mis-statement or suppression with the intention to evade payment of Service Tax - Hence, the penalties imposed under Section 76, 77 and 78 of FA, 1994 are set aside: CESTAT

- Assessee's appeal allowed : KOLKATA CESTAT

2019-TIOL-1502-CESTAT-KOL

Transways Vs CST

ST - During period of dispute, assessee has provided the services of Clearing and Forwarding, Transport service and Sales Promotion services mainly to M/s. ACC Ltd and M/s. Everest Industries Ltd. and also transport services to the dealer/Consumer of these companies - The proceedings were initiated vide SCN - The demand has been raised with allegation that there was a considerable difference in service charges shown in audited Balance Sheet and ST-3 returns filed by assessee - The assessee had rendered transport services and C&F services under separate agreements on principal to principal basis and also raised separate invoices - Assessee relied on Tribunal's decision in case of E.V Mathai & Co. - 2003-TIOL-270-CESTAT-BANG - In this case the Tribunal held that transportation charges received by C&F Agent under a separate contract and on the basis of separate bills would not be includible in taxable value for C&F Services - Reliance was also placed in case of Bhagyanagar Services - Assessee provided Transportation services mainly to M/s. ACC Ltd and M/s. Everest Industries Ltd who are liable to pay tax under reverse charge mechanism - The assessee also provided a certificate obtained from the recipient certifying payment of tax by the service recipients - The reconciliation statement submitted by assessee shows that they had paid the taxes as and when the value of taxable service were received by them, which is also evident from the copies of ST-3 returns - Therefore, no justification found for levy of service tax as confirmed by Adjudicating Authority - The impugned order cannot sustain and accordingly it is set aside: CESTAT

- Appeal allowed : KOLKATA CESTAT

CENTRAL EXCISE

2019-TIOL-1500-CESTAT-CHD

R K Metkam Industries Vs CCE & ST

CX - The assessee is in appeal against impugned order for denial of Cenvat credit on the ground that only invoices has been travelled and no goods has been accompanied of the invoices - During the course of hearing, assessee submits that cross-examination of Shri Amit Gupta and Shri Sanjeev Maggu of Leo transporter was allowed and cross-examination of one Shri Sunil was allowed who did not appear for cross-examination, therefore, the statement of Shri Sunil cannot be relied upon - Moreover, the cross-examination of other transporter was not allowed, therefore, there is a gross violation of principle of natural justice - Therefore, the statement of transporter is a crucial evidence which is required to be examined in terms of Section 9D of CEA, 1944 and the same has not been done - In that circumstances, by setting aside the impugned order, the matter is remanded back to the adjudicating authority to follow the provisions laid down under Section 9D of the CEA,1944 and thereafter, to decide the issue to its own merits: CESTAT

- Matter remanded : CHANDIGARH CESTAT

2019-TIOL-1499-CESTAT-ALL

P N International Vs CCE

CX - The assessee is engaged in manufacture and clearance of excisable goods - The dispute is with regard to goods sold to M/s P.N. Saftech Pvt. Ltd. for which Central Excise duty was paid at the rate of 14% - It, however, transpired to them that during the period January 2009 up November 2009, the Central Excise duty had been reduced initially from 14% to 12% and subsequently to 8% by a notfn - This resulted in excess duty payment - It is for this amount that the assessee had filed the refund application - The first reason given by the Adjudicating Authority and the Appellate Authority for rejecting the refund is that it was barred by limitation - The assessee had paid the Central Excise duty on 5 February, 2009 or on subsequent dates - This would be in accordance with Section 11 (B) of the Act - The application seeking refund was filed on 22 January, 2010 - The Adjudicating Authority and the Appellate Authority have taken the date of invoices i.e. 16 January, 2009 as the date from which the period of limitation should begin - Relevant date has been defined in Explanation (B) of Sub-Section 5 of Section 11(B) of the Act - Clause (f) provides that the date of payment in any other case would be the date of payment of duty - This would be the relevant provision since the matter is not covered by any of the preceding sub-clause - Thus, the limitation for filing the refund application would start from the date of payment of duty, which date as noticed above, was 5 February, 2009 or any subsequent date - The refund application was filed by assessee on 22 January, 2010 - It was, therefore, within time - The finding to the contrary recorded by the Adjudicating Authority and the Appellate Authority cannot therefore be sustained - Thus, the order passed by Appellate Authority on 28 November, 2011 is set aside - The amount shall be refunded to assessee with interest in accordance with law at an early date: CESTAT

- Appeal allowed : ALLAHABAD CESTAT

CUSTOMS

NOTIFICATION

dgft19not006

Amendment in import policy of biofuels

CASE LAWS

2019-TIOL-1115-HC-DEL-CUS

Sudhir Kumar Vs DRI

Cus - The foreign currency seized from Petitioner, no longer exists as such - The DRI states on instructions that the said foreign currency has been disposed of by conversion into Indian currency in terms of Section 150 of Customs Act, 1962 - He has produced a copy of the notification dated 14th February 2006 issued by CBEC - It is submitted by both the Customs Department as well as the DRI that the Petitioner should file one more application for release of the Indian rupees equivalent of the foreign currency seized from him - The Court fails to understand why the Petitioner should be made to file repeated applications for this purpose - The orders already passed in the matter are abundantly clear - The Petitioner having complied with his obligations in depositing the redemption fine and penalty, there can be no excuse from the Respondents for not releasing the Indian rupee value of the foreign currency seized from the Petitioner, now that the foreign currency originally seized no longer exists in that form - The Court accordingly directs that the present petition itself will be treated by the Respondents as the application by the Petitioner for release of the Indian rupee equivalent of the foreign currency - The Court finds the plea of petitioner that he should be paid the Indian rupees equivalent by applying the conversion rate to be entirely justified - The Petitioner's calculation of the amount payable after applying the conversion rate for the various foreign currencies held by him at the time of confiscation has been handed over to both the DRI and Customs - The amount payable will be worked out by applying the conversion rate as of today and paid to the Petitioner in the manner prescribed by law i.e. whether by Demand Draft or a Banker's Cheque - If there is any non-compliance with the said directions, it will be open to the petitioner to seek appropriate remedies in accordance with law: HC

- Writ petition allowed: DELHI HIGH COURT

2019-TIOL-1108-HC-MAD-CUS

Vedanta Ltd Vs UoI

Cus - The petitioner imported Copper in unrefined Copper blister and Copper in Copper anode - It then filed an application for ratification of norms in respect of Advance license - The petitioner claimed that it was not liable to pay duty on goods for which SCN was issued, and claimed to have an advance license for these goods too - When the Revenue raised objections, the petitioner approached the Norms Committee.

Held - Considering the ratification by the Norms Committee that Copper in unrefined copper blister and copper in copper anode also falls within one of the listed goods in the advance license issued by the petitioner, it is clear that no Customs duty is payable in respect of these goods - Hence the Revenue cannot levy duty in respect of such goods - The Asst. Commr. concerned must take a final decision in light of the ratification of the Norms Committee under its minutes dated 10.04.2019 - Hence the writ petition is disposed off on these terms: HC

- Assessee's writ petition allowed : MADRAS HIGH COURT

2019-TIOL-1501-CESTAT-DEL

Surendra Industries Vs Commissioner of Central Goods and Service Tax

Cus - The assessee claimed refund of duty paid in excess on Palm Acid Oil imported by it - The Revenue denied such refund on grounds that the assessee failed to produce any documents which proved that duty was paid by them & that its incidence was not passed on.

Held - An identical issue was resolved in the assessee's own case for an earlier period, wherein the matter was matter was remanded to verify relevant documents - Hence the present case too merits being remanded: CESTAT

- Case remanded : DELHI CESTAT