2019-TIOL-NEWS-208, Dated: Tuesday, September 03, 2019

2019-TIOL-NEWS-208| Tuesday September 03, 2019

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DIRECT TAX


	2019-TIOL-2024-HC-MUM-IT Travel And Tourism Association Of Goa Vs UoI Whether where the room charges of the hotel room is Rs 1200 or more, the liability to collect expenditure tax on the hotel or the person carrying on such business cannot be diluted just because such room is charged at double occupancy basis requiring division of room tariffs upon two separate individuals - YES: HC Whether the expressions per individual appearing in section 3(1) of the Expenditures Act, 1987 for the purpose of collecting expenditure tax does not mean the individual actually occupying the hotel room on double occupancy basis but rather the individual incurring chargeable expenditure - YES: HC Whether the scheme of Expenditure Act, 1987 ever allowed the interpretation which entitled the hotel or person carrying on the business of the hotel to divide the room tariff by number of beds in single hotel room - NO: HC Whether the chargeable expenditure is computed with reference to the unit of residential accommodation in the hotel and not with reference to the number of persons occupying the hotel room - YES: HC - Assessee's appeals dismissed : BOMBAY HIGH COURT 2019-TIOL-2017-HC-MAD-IT DIT Vs Kshetropasana Whether a charitable trust is legally compelled to fulfill requirements of Sec 11(5) which are albeit not meant for it and are also impossible for performance - NO: HC - Revenue's appeal dismissed: MADRAS HIGH COURT 2019-TIOL-2016-HC-MAD-IT Universal Cold Storage Ltd Vs DCIT Whether bona fides of the parties merit to be examined before proceeding to pass an ex-parte order, in cases of adjournment - YES: HC Assessee's appeal allowed: MADRAS HIGH COURT 2019-TIOL-2015-HC-ALL-VAT Motilal Amresh Chand Vs CCT Whether once entries recorded in the duplicate books of account stand not reconciled from the regular books of account, then it calls for rejection of books - YES: HC - Assessee's revision dismissed: ALLAHABAD HIGH COURT 2019-TIOL-2014-HC-ALL-IT Noida Commercial Cooperative Bank Ltd Vs CIT Whether a prospective amendment clarified by CBDT Circular for a particular provision of Income tax Act, can be applied retrospectively to attach the liability of TDS on taxpayer concerned - NO: HC - Assessee's appeal allowed: ALLAHABAD HIGH COURT 2019-TIOL-1661-ITAT-AMRITSAR HK Gandotra Vs ITO Whether when assessee is well aware of the charge of ‘concealment of income’ against him and abysmally fails to explain the same, merely because notice u/s 274 erroneously explain such charge as ‘furnishing inaccurate particulars of income’, same will not invalidate penalty proceedings - YES: ITAT Whether such defect in the notice only amounts to an irregularity, and is not a jurisdictional defect - YES: ITAT - Assessee’s appeal dismissed: AMRITSAR ITAT 2019-TIOL-1660-ITAT-MUM DCIT Vs Geecee Fincap Ltd Whether when disallowance u/s 14A r/w Rule 8D is made suo-motto by the assessee by applying its own method, it is also mandatory in its part to bring on record before the AO, details of modus operandi adopted by it for making investments, arranging its affairs and managing investments - YES: ITAT Whether therefore, when no such details are filed to prove that the assessee discharged its primary onus, it is justified to remand the matter back to the AO, with direction to assessee to file complete details and modus operandi for making and managing investments to that effect - YES: ITAT - Case remanded: MUMBAI ITAT 2019-TIOL-1659-ITAT-DEL Ideal Hitech Engineering Equipment Pvt Ltd Vs ITO Whether when company owns a premises and uses same as its registered office, then it cannot be said that such premises was vacant so as to charge notional rent u/s 23(1) - YES: HC - Assessee's appeal allowed: DELHI ITAT

MISC CASE


	2019-TIOL-2023-HC-MAD-CT Max Electricks Vs Assistant Commissioner (ST) Whether for the purpose of application for expedient settlement of arrears u/s 5(1) of the Samadhan Act, 2011, a statutory appellate authority created under the TNGST Act is also a creature of sovereign so as to qualify as a Court within the meaning of section 4 of Act, 2011 - NO: HC Whether it is sine qua non for the Commissioner to give reasonable opportunity of showing cause to the assessee before passing an order qua refusal of application u/s 5(1) of the Samadhan Act, 2011 - YES: HC - Assessee's writ petitions allowed : MADRAS HIGH COURT

INDIRECT TAX

SERVICE TAX

2019-TIOL-2496-CESTAT-HYD

Asmitha Microfin Ltd Vs CC, CE & ST

ST - The assessee is a Public Limited Company registered as a Non-Banking Finance Company under Section 45 IA of Reserve Bank of India Act, 1934 - They entered into a Guarantee Fee Agreement with M/s Dexia Micro-Credit Fund, Luxembourg, a public limited company registered in that country - As per agreement, Dexia agreed to provide a guarantee to Standard Chartered Bank, London in relation to the amount borrowed by assessee from Standard Chartered Bank, Hyderabad - Pursuant to an audit, a SCN was issued to assessee covering the period April 2009 to March 2012 demanding service tax along with interest on the guarantee fees paid by assessee to M/s Dexia and M/s Cordaid - "Providing Bank Guarantees" is clearly covered by definition of Banking and other Financial Services under Section 65(12) of FA, 1994 - A plain reading of Section 65(12) shows that it covers various services including providing a bank guarantee by a banking company, financial institution or any other body corporate or commercial concern - It is true that Dexia and Cordaid are not banking companies but they have provided bank guarantees through Standard Chartered bank and through Robo, Netherlands, respectively to guarantee the borrowings by assessee - These are not the guarantees provided by a corporation for it's subsidiaries but are pure bank guarantees provided through banks by the service providers - Therefore, on merits, assesee received banking and financial services from abroad and is liable to discharge service tax under reverse charge mechanism - However, demand is for a period April 2009 to March 2012 and the SCN was issued invoking extended period of limitation - The entire demand is under reverse charge mechanism and if the assessee had paid service tax under reverse charge mechanism, they would have been entitled to CENVAT credit of exactly the same amounts - Therefore, the revenue neutrality in this case is evident - It has been well settled at the hands of Apex Court in case of Jet Airways 2016-TIOL-2072-CESTAT-MUM that extended period of limitation cannot be invoked in revenue neutral cases - Therefore, the entire demand is hit by limitation: CESTAT

- Appeal allowed: HYDERABAD CESTAT

2019-TIOL-2495-CESTAT-DEL

Indian Ex Servicemen Welfare Cooperative Society Ltd Vs CCE

ST - The Commissioner (A) have rejected the assessee's appeal on the issue of time bar by observing that there was a delay of more than one month after the expiry of normal period of limitation and he has no power to condone the delay - Even if the assessee's stand that the order was not originally received by them is accepted, the copy of the order was again provided to them under the cover of letter dated 30.04.2012 - As such, even if the letter dated 30.04.2012 is taken as the relevant date the appeal filed in October, 2013 is barred by limitation - It is well settled law that Commissioner (A) has no powers to condone the delay beyond the period of one month provided under the Act - Reference can be made to the decision of Supreme Court in case of Singh Enterprises 2007-TIOL-231-SC-CX - No reason found to interfere in impugned order: CESTAT

- Appeal rejected: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-2494-CESTAT-MUM

Mahindra And Mahindra Ltd Vs CCE

CX - The issue in dispute is categorization of goods that were exported under bond as fully exempt in light of existence of two notifications, one prescribing 'nil' rate of duty and the other a 'concessional rate'- The issue has been considered in Mahindra and Mahindra Ltd 2018-TIOL-603-CESTAT-MUM which followed the judgement of the High Court of Bombay - The order impugned before first appellate authority merely states that the exports shall not be considered as under bond - As the issue stands decided and it is up to the assessee to avail the benefit of a notification that may be beneficial to them, there can be no flaw in the procedure adopted by assessee herein - In view of order of first appellate authority being limited to the declaration that the goods are not exported under bond, the appeals of Revenue are to be dismissed along with those of the assessee: CESTAT

- Appeals disposed of: MUMBAI CESTAT

2019-TIOL-2493-CESTAT-MAD

Lucas Tvs Ltd Vs CGST & CE

CX - The only issue in the case on hand is the denial of CENVAT Credit on GTA Services up to the place of removal i.e., the customer's place - In response to the SCN, the assessee has explained that as per the orders placed by its customers, the deliveries were to be effected at the door of the purchasers i.e., on 'FOR' destination basis - From the same reply, it is noticed that the ownership was with the assessee till the goods reached the doorstep of the purchasers and that it was the assessee who bore the risk of loss or damage during transit and of course, including the freight charges - The decision of High Court of Rajasthan in case of M/s. Mangalam Cement Ltd. 2018-TIOL-2962-HC-RAJ-CX relied upon by the Revenue is decided subsequent to the date of C.B.I.C. Circular, but however, the High Court has not considered the said Board Circular - It is undisputed that the decision of Apex Court in case of M/s. Ultra Tech Cement Ltd. 2018-TIOL-42-SC-CX covers even the post-amendment period, which is binding on all lower authorities - However, as the issue in the case on hand involves delivery on 'FOR' destination basis, which is the trump card of assessee's pleading and which clearly has not at all been discussed by the Adjudicating Authority or even by the First Appellate Authority, the matter is required to be remitted to the file of the First Appellate Authority for the very limited purpose of considering the explanations of assessee filed in response to the SCN and in the light of subsequent Board Circular 1065/4/2018-CX - The Adjudicating Authority shall thereafter consider the said Circular and also the decision of Apex Court in cases of M/s. Roofit Industries Ltd. 2015-TIOL-87-SC-CX and M/s. Ultra Tech Cement Ltd. and also the decision of High Court of Judicature for Rajasthan at Jaipur in case of M/s. Mangalam Cement Ltd. 2018-TIOL-2962-HC-RAJ-CX to the extent the same is applicable to the facts of the case on hand and then decide the claim of CENVAT Credit on GTA - The impugned order is therefore set aside and the matter is remanded for the limited purpose as indicated above: CESTAT

- Matter remanded: CHENNAI CESTAT

2019-TIOL-2492-CESTAT-KOL

CCGST & CE Vs Tide Water Oil Company India Ltd

CX - The assessee is engaged in business of manufacturing lubricants, oil and allied products on which central excise duty is being paid - They are availing the benefits of CENVAT Credit as per CCR, 2004 - The dispute in hand arose due to the difference in CENVAT credit figures in the two returns filed by assessee i.e., monthly ER-1 returns vis-a-vis the annual ER-4 return - In ER-4 returns, the alphabet 'E' with decimals have appeared at multiple places which can only be attributed to the system error, a fact not controverted by the Revenue and therefore, no negative inference can be drawn against the assessee merely based on the data contained in ER-4 return - The Commissioner has made a categorical finding that the assessee has duly submitted the CENVAT Credit Register at the adjudication stage which corresponds to ER- 1 return and therefore, the Credit figures disclosed in said ER-1 return have to be accepted as sacrosanct without any demur - The Credit amount accounted in CENVAT Credit Register have to be considered as has been held in the decision of this Tribunal in Chandigarh Network System Pvt Ltd - In view of the same, no reason found to saddle the assessee with the demand of CENVAT Credit, as has been rightly held by Commissioner in the impugned order by setting aside the duty demand - In so far as the issue whether the matter should be remanded back to the original authority is concerned, the whole proceeding is hit by limitation inasmuch as the SCN was issued on 16.10.2014 for the impugned period 2010-11 - Since the proceedings have been initiated on the basis of statutory returns, this is not a case of suppression and therefore demand cannot survive on limitation also: CESTAT

- Appeal partly allowed: KOLKATA CESTAT

CUSTOMS

2019-TIOL-2491-CESTAT-MUM

Asian Paints Ltd Vs CC

Cus - Appeal lies against impugned order which has upheld the order of original authority - The original authority had been requested for an order of assessment, in imports effected against ten bills of entry, on clearance of 'titanium dioxide CR-50 grade' after rejecting declared value of US $1940 per metric tonne, evidenced purchase order for substitution with contemporaneous price of US $ 2100 per metric tonne and, in the absence of any satisfactory response, adopted for assessment - It is found from the decision of Tribunal in Vyapar Industries Ltd that the proceedings therein had been invalidated for non-availability of contemporaneous import and price when proceedings were initiated - The gap in evidence for enhancement of value was made available only subsequent to issue of O-I-O - Moreover, there is no reference to said contemporaneous import price in discussion and findings which would have sufficed to demonstrate that the importer had been put on notice about the said price - Therefore, proceedings for re-determination of assessable value is not in compliance with the principles of natural justice - The assessee had not been placed on notice about the availability of contemporaneous import prices or the details pertaining to those imports - An assessment order is no substitute for SCN or adequate for compliance with the principles of natural justice - Therefore, the impugned order is set aside and matter is remanded back to the original authority to furnish the copies of documents and other evidence to enable a proper defence of allegation of mis-declaration: CESTAT

- Matter remanded: MUMBAI CESTAT

2019-TIOL-2490-CESTAT-ALL

Industrial Exim Pvt Ltd Vs CC

Cus - All the appeals relate to valuation of aluminium scrap imported by assessee during the relevant period - The value of same was enhanced by assessing officer based upon the NIDB data - The transaction value declared by importer does not stand rejected by lower authorities on the basis of any evidence indicating the same to be incorrect - The officers merely rejected the same and enhanced the value on the basis of NIDB data - The Supreme Court in their recent decision in case of Sanjivani Non-Ferrous Trading Pvt. Ltd. 2018-TIOL-447-SC-CUS have upheld the Tribunal decision laying down that without rejecting the transaction value, NIDB data cannot be resorted for the purpose of enhancement of value - As such, no merits found in impugned order passed by Commissioner (A) - Accordingly the same is set aside: CESTAT

- Appeals allowed: ALLAHABAD CESTAT

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