2019-TIOL-NEWS-221 Part 2 | Wednesday September 18, 2019
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Legal Wrangle | Corporate Law | Episode 113
 
DIRECT TAX

2019-TIOL-1818-ITAT-MUM

BP Marine Academy Vs DCIT

Whether method of accounting regularly followed by educational academy for giving treatment of fees received from students as income only in the year in which student completed the course, merits acceptance - YES: ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2019-TIOL-1817-ITAT-DEL

Brijbasi Education And Welfare Society Vs ADDL CIT

Whether if primary facts asserted by the assessee for framing of assessment are found to be falsely cooked, it calls for reopening of assessment - YES: ITAT

Whether if the donations received by the charitable trust are only shown in its balance sheet as a general fund, in absence the material in favour of genuineness of such contributions the provision of section 68 gets invoked - YES: ITAT

- Assessee's appeals dismissed: DELHI ITAT

2019-TIOL-1807-ITAT-HYD

Sri Suryadevara Avinash Vs DCIT

Whether reassessment order passed u/s 147 based on incriminating materials found and seized during search is invalid if jurisdiction lies to initiate proceedings u/s 153C of the Act and not u/s 148 of the Act - YES : ITAT

- Assessee's appeal allowed: HYDERABAD ITAT

2019-TIOL-1806-ITAT-MUM

ICICI Securities Ltd Vs Addl.CIT

Whether claim of depreciation on Stock Exchange Card cannot be allowed as such card is not an asset of the nature referred u/s 32(1)(ii) of the Act - YES : ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2019-TIOL-1805-ITAT-CHD

Gajjan Singh Thind Vs ACIT

Whether if income is declared in the validly filed revised return so that there is no income on which tax is sought to be evaded by an assessee, no penalty can be levied u/s 271(1)(c) - YES : ITAT

- Assessee's appeal partly allowed: CHANDIGARH ITAT

2019-TIOL-1804-ITAT-KOL

Kanak Kumar Maloo Vs ITO

Whether circumstantial evidences can override detailed corroborative documentary evidence indicating genuineness of transactions in scrips like contract notes, share certificates and demat statements - NO : ITAT

- Assessee's appeal allowed: KOLKATA ITAT

2019-TIOL-1803-ITAT-BANG

Sivan Securities Pvt Ltd Vs DCIT

Whether in the absence of specific evidence to prove the nature of services rendered as professional services, the request for remand can be accepted - NO : ITAT

- Assessee's appeal partly allowed: BANGALORE ITAT

2019-TIOL-1802-ITAT-PUNE

DCIT Vs Tata Autocomp GY Batteries Ltd

Whether disallowance of administrative Support Services claimed u/s 40A(2)(b) can be allowed by following the decision of assessee's sister concern case, if Revenue has not raised any contrary issue in the appeal - YES: ITAT

- Revenue's appeal dismissed : PUNE ITAT

 
GST CASES

2019-TIOL-2158-HC-MUM-GST

Bai Mamubai Trust Vs Suchitra

GST - The issue at hand in the present suit pertains to the levy of GST in matters where the Court Receiver is appointed by the Bombay High Court under Order XL of the Code of Civil Procedure (CPC) - The plaintiff had filed suit for recovery of possession of three shops, where it carried on a business of running a restaurant - The suit proceeded on the cause of action of trespass - Thereafter, the plaintiff filed Notice of Motion in this suit for interim relief - Thereupon an order was passed, wherein the preliminary issue of limitation was framed and pending determination, a court receiver was appointed as received of the suit premises - Such court receiver was directed to take formal possession of the suit premises & also to not disturb the physical possession of the defendant - The defendant was permitted to retain possession of the suit premises as an agent of the Court Receiver under an agency agreement to be executed with the Court Receiver, on payment of monthly ad-hoc royalty amount - The plaintiff raised concern regarding applicability of GST on such royalty amount - Thereafter, the original order was modified, directing the defendant to pay the royalty amount with applicable GST - The court receiver then filed a report, from which certain issues arose, including - a) whether GST is payable on services rendered by court receiver appointed by the Bombay High Court under Order XL of CPC; b) whether GST -s payable on the royalty or payments under a different head paid by a defendant to the court receiver; c) whether where the plaintiff alleges that the defendant is in illegal occupation of the suit premises, can it be said that there is any supply as per the CGST Act and if if payment of such royalty for retaining possession over the suit premises fell within the ambit of consideration for supply, attracting GST u/s 9 of the CGST Act; d) if any GST is found to be payable, whether the same is payable by the defendant partly in occupation directly, or by the court receiver.

Held - Status of court receiver - The decision in Shakti International Pvt Ltd holds that the status of the court receiver appointed by the High Court of Bombay, is that of an employee or a department of the High Court and who is subject to the administrative control of the chief justice of the court - Hence the office of the court receiver was held to be an establishment of the High Court and a permanent department of such court - Since the office of the Court Receiver is an establishment of the High Court and a permanent department of the High Court, it is necessarily an adjunct of the Court through which the orders of protection issued by the Court are given effect to - The submission of the Amicus Curiae, that fees of the court receiver fell within Item 2 of Schedule III to the CGST Act, as it is for a service provided by an officer of the court, must be accepted - Hence this service cannot be treated as supply of goods or services within the meaning of the CGST Act - Ergo, the fees or charges paid to the court receiver will not attract GST: HC

Held - GST on estates controlled by court receiver - Pursuant to a reading of Section 82 of the CGST Act, it emerges that the actual issue is the effect of payment of royalty by the defendant to the court receiver as a condition for retaining possession of the suit premises - Although the measure for quantifying a payment of royalty to the Court Receiver may be determined by looking at consideration payable under a contract or arising out of a business relationship, the royalty may still be in the nature of payments towards a potential award of damages or Mesne Profits, and therefore not liable to attract GST - Moreover, although the quantification of royalty towards a claim of damages involves ascertaining the market rent payable with respect to the property alleged to be illegally occupied, the compensation payable does not acquire the character of consideration so as to make the transaction a supply - Also, there can be no resulting contract between the Court Receiver and a litigation arising from an order of the Court - The role of the Court Receiver is only to give effect to an order of the Court - Also, if in giving efect to an order of the Court, the Court Receiver receives payments that would otherwise attract CGST, then, and to that extent, the CGST may be conveniently collected from the Court Receiver under the provisions of Section 92 - However, the effect of appointing the receiver cannot mean that payments which do not attract CGST are now brought within the fold of the Act by notionally importing a contract between the Court Receiver and the Defendant - Therefore, the payment of royalty as compensation for unauthorized occupation of the Suit Premises is to remedy the violation of a legal right, and not as payment of consideration for a supply - It cannot be said that the Defendant’s occupation pursuant to an Order of the Court is a contract involving a ‘supply’ for consideration - In the absence of reciprocal enforceable
obligations, it is incorrect to characterise the Defendant’s occupation of the Suit Premises against payment of royalty as a ‘supply' for 'consideration' on which GST is payable by the court receiver: HC

GST - Supply - Upon perusal of section 7 of the CGST Act and of Schedule I to the CGST Act, it does not appear that the present activity would fall within the ambit of Section 7(c) of the Act read with Schedule I thereto - Hence the issue of whether GST is payable on royalty or payments under a diferent head paid by a defendant (or in a given case by the plaintif or third party) to the Court Receiver in respect of properties over which a Court Receiver has been appointed, is answered in the affirmative, subject to the payment towards royalty or the payment to the Court Receiver is towards or in relation to a ‘supply’ with CGST Act - The issue as to where the Plaintif alleges that the Defendant is in illegal occupation of the Suit Premises: Whether there is any ‘supply’ of services within the meaning of the CGST Act & whether payment of royalty for remaining in possession of the Suit Premises, either during the pendency of the Suit, or at the time of passing of the decree, falls within the defnition of ‘consideration’ for a ‘supply’, is answered in the negative: HC

GST - Liability to pay GST - In the facts of the present case, no GST is payable on the royalty amount paid by the Defendant to the Court Receiver as a condition for remaining in possession of the Suit Premises - Accordingly the changes made in the original order are modified - GST, if any, deposited by the Defendant with the Court Receiver but not paid to the authority concerned shall be adjusted against royalty amounts to be paid by the Defendant to the Court Receiver for the future period: HC

2019-TIOL-2157-HC-DEL-GST

Sales Tax Bar Association Vs UoI

GST - The petitioner filed the present writ on account of difficulties faced in entertainment, processing and allowance of refund claims made u/s 54 of the CGST Act r/w Section 16 of the IGST Act - The petitioner claimed that refunds were not being acknowledged processed and granted as per the Acts and Rules framed thereunder - It is also claimed that the statutory mechanism created for entertaining refund claims is not implemented and that there were some lacunae in the scheme formulated for processing the refund claims.

Held - The present proceedings are not adversarial in nature & their purpose is to achieve streamlining of the GST regime and better implementation of laws - Hence meetings should be held between all stakeholders, where the representatives of the petitioner and the Revenue would be present - Thereupon, the issues raised herein as well as those not raised in this petition would be taken up for being resolved, for achieving better administration and implementation of the indirect tax regime - Hence the petitioners are directed to make bullet point presentation of issues in this case and other outstanding issues - The same be circulated amongst the Revenue - A week after, a meeting be arranged at the office of the GST Council, wherein the CEO and/or the Vice President of the GSTN is to be present, along with the Revenue's counsel, an officer of the rank of Commissioner & an Additional Secy - The minutes of the meeting be placed before the court on the next date of hearing - List on 15.10.2019: HC

- Matter listed: DELHI HIGH COURT

2019-TIOL-2155-HC-ALL-GST

Shiv Enterprises Vs State Of UP

GST - Petitioners have challenged the detention order dated 06.06.2019 and penalty notice dated 06.06.2019 broadly on the ground of jurisdiction of respondent Commissioner of State Tax, U.P., Lucknow under the Goods and Services Tax (GST) in seizing the consignment of goods, which were coming from Panipat (Haryana) to Lucknow – Counsel for Revenue submits that in the proceedings based on the impugned notice, final order has been passed under the provisions of CGST Act, 2017 and against the said order, the petitioners have got a statutory remedy of appeal under Section 107 of CGST Act, 2017 and, therefore, the present writ petition filed by the petitioner is not maintainable and is liable to be dismissed.

Held: Fact pertaining to passing of final order has not been disputed by the petitioners - In view of the fact that the final order has been passed against which petitioners have got a statutory remedy of appeal, Bench is not inclined to entertain the present writ petition – It is open for petitioners to avail the statutory remedy - Writ petition dismissed: High Court [para 11, 12, 13, 14]

- Petition dismissed: ALLAHABAD HIGH COURT

2019-TIOL-2154-HC-AHM-GST

India Coke And Power (P) Ltd Vs UoI

GST - Tax on Ocean freight - 8/2017-ITR, 10/2017-ITR - Petitioner invites the attention of the Court to its order passed in the case of Mohit Minerals (P) Ltd. 2018-TIOL-2749-HC-AHM-GST and also its order dated 12.12.2018 whereby the court has granted interim relief directing that no coercive steps shall be taken against the petitioner pursuant to the impugned notification in the meanwhile.

Held: Notice to be issued returnable on 17th July, 2019 and in the meanwhile, no coercive steps shall be taken against the petitioner pursuant to the impugned notification: High Court [para 3]

- Notice issued: GUJARAT HIGH COURT

2019-TIOL-2153-HC-DEL-GST

Krish Automotors Pvt Ltd Vs UoI

GST - Petitioner inter-alia seeks a direction to the Respondents to permit the Petitioner to file the GST TRAN-I manually and allow the credit of Input Tax Credit ("ITC?) of Rs. 1,41,02,394/- claimed in accordance with Section 140 (3) of the CGST Act, 2017, in its online electronic credit ledger for payment of its output liability under the GST laws - Petitioner submits that in view of the maze of compliance due dates they were not able to file the GST TRAN-1 declaration online within time and claim the ITC of the eligible amounts and, therefore, in order to be permitted to manually file the GST TRAN-1, they made two representations dated 8th March and 19th March, 2018 to the jurisdictional GST Authorities, as well as representations dated 20th March, 2018 and 21st March, 2018 to the Ministry of Finance, Union of India and the GST Council respectively; that having no response received from any of the aforesaid authorities, the present petition is filed claiming the above relief.

Held: Court has in a series of orders recognized the difficulties faced by tax payers in filing the GST TRAN-1 by 27th December, 2017 - Court is satisfied in the present case that the Petitioner was unable to fill the TRAN-1 Form on account of bonafide difficulties and that, therefore, the Petitioner should be afforded one more opportunity to do so - Accordingly, a direction is issued to the Respondents to permit the Petitioner to either submit the TRAN-1 form electronically by opening the electronic portal for that purpose or allow the Petitioner to tender said form manually on or before 15th October, 2019 and thereafter, process the Petitioner's claim for ITC in accordance with law - Petition is disposed of: High Court [para 5, 10, 11]

- Petition disposed of: DELHI HIGH COURT

2019-TIOL-290-AAR-GST

Deputy Conservator Of Forests

GST - Logging yields timber, firewood etc. but does not yield "agricultural produce" and are more specifically in the nature of "forest produce" and hence is not covered under Entry no. 24 of 11/2017-CTR - Operations of "logging" would attract tax under the GST Act and it is independent of the trees, whether planted by the Forest Department or which grew out of natural regeneration - Transaction is an intra-State supply and attracts CGST & SGST and is independent of where the goods are taken by recipient after supply is completed - Taxable @18%: AAR

- Application disposed of: AAR

2019-TIOL-289-AAR-GST

Bharat Electronics Ltd

GST - Various systems, sub-systems and onboard spares (excluding consumables and raw materials) supplied for use in Warships, Vessels and submarines meant for Indian Navy and Shipbuilders are appropriately covered under Sl. No. 252 of 1/2017-CTR and attract GST @5%: AAR

- Application disposed of: AAR

2019-TIOL-288-AAR-GST

Antrix Corporation Ltd

GST -  Service of leasing of Satellite Transponders (SAC 997319) falls under Entry no. 17(viii) of 8/2017-ITR and is taxable @5% GST as applicable on the supply of like goods (transponder - part of communication satellite) involving transfer of title in goods covered under 8803 9000 in terms of Entry no. 245 of Schedule I of 1/2017-ITR: AAR

- Application disposed of: AAR

 
MISC CASE
2019-TIOL-419-SC-VAT

Tecnimont Pvt Ltd Vs State Of Punjab

Whether the implied powers vested in an appellate authority by Section 151 of CPC and Section 482 of CrPC, are bound by the limitation that they cannot be used to carry out any act which is specifically prohibited - YES: SC

Whether therefore, the findings of the High Court enabling the appellate authority to override the limitation prescribed under the Punjab VAT Act and go against the requirements of pre-deposit, are unsustainable, where based on an incorrect interpretation of a precedent judgment - YES: SC

Whether while it is trite law that relief from the requirement of pre-deposit can be allowed in cases of genuine hardship, nonetheless, such relief cannot be granted by the appellate authority as the same would negate statutory intendment - YES: SC

- Assessee's appeals partly allowed: SUPREME COURT OF INDIA

2019-TIOL-2156-HC-MUM-VAT

Model Infra Corporation Pvt Ltd Vs CCT

On application, the High Court holds that the order passed by the Tribunal is set aside and matter is remanded back to the Tribunal for consideration of assessee's application for condonation of delay in instituting the second appeal on its own merits.

- Case Remanded: BOMBAY HIGH COURT

 
INDIRECT TAX
SERVICE TAX

2019-TIOL-2658-CESTAT-MAD

Handloom Export Promotion Council Vs Pr CCGST & CE

ST - The applications have been filed by Revenue for rectification of mistake apparent on record in respect of Handloom Export Promotion Council 2018-TIOL-3032-CESTAT-MAD - There is indeed an error apparent from the records as pointed out in the Miscellaneous Application for rectification of mistake - The Miscellaneous Applications for rectification of mistake are therefore allowed: CESTAT

- Application allowed: CHENNAI CESTAT

2019-TIOL-2657-CESTAT-DEL

J P Singhal And Company Vs CC

ST - Assessee is in appeal against impugned order confirming service tax demand under different categories of services - As regards to supply of tangible goods, if bunk house is created at plot at site with various components and accessories, the same cannot be subjected to levy of service tax under supply of tangible goods service - Since the assessee did not produce any proof of documentary evidence to show that such bunk house was created at site, matter is remanded to the Adjudicating Authority - As regards to Renting of immovable property, assessee submits that the amount debited towards such service in Cenvat Credit Account has not been considered by Original Authority while adjudicating the dispute - Therefore, matter is remanded to the Original Adjudicating Authority for proper factual finding - With regard to supply of manpower, since there is no specific finding with regard to payment made by assessee, matter is remanded to the Original Authority for necessary verification - As regards to Commercial & Industrial Construction Service, the adjudicating authority has travelled beyond the scope of SCN inasmuch as it had proposed for confirmation of demand under 'CICS', whereas the demand was confirmed under "Site Formation Service" in the adjudication order - Change in classification of service in adjudication order is not proper and justified - Thus, the demand is set aside - The Revenue assailed the impugned order on the ground that the word "suppression" has not been mentioned in operative part of the order - Since the Original Authority has invoked the proviso to Section 73 (1) of FA, 1994 and imposed penalty under Section 78 of the said Act, mere non-mentioning the word "suppression" will not deprive the Revenue for which the appeal cannot be preferred before the Tribunal - Therefore, the appeal filed by Revenue is dismissed: CESTAT

- Appeals disposed of: DELHI CESTAT

 

 

 

CENTRAL EXCISE

2019-TIOL-2656-CESTAT-ALL

Continental Chemicals Ltd Vs CCE

CX - The assessee is engaged in manufacture of Detergent Powder which is being exported by them - Assessee filed a refund claim which was initially rejected by Original Adjudicating Authority - On appeal, the Commissioner (A) upheld the order of Original Adjudicating Authority - On going through the provisions of Section 11-BB, it is noted that proviso to said Section lays down that where the refund application stands made before the date on which Finance Bill, 1995 receives the assent of the president and is not refunded within 3 months from such date, the assessee shall be paid interest under said Section from the date immediately after three months from such date, till the date of refund of such amount - The Commissioner (A) has merely rejected the claim of interest on the sole ground that the provisions of Section 11-BB were introduced in the Act only w.e.f. 26 May, 1995 and as the application for refund was made on 29.12.1989, the same would not apply to the said refund application - He has not bothered to read the entire provisions of Section 11-BB which also includes the proviso - The revenues interest liability would start accruing after the expiry of period of 3 months from 26 May, 1995 - The issue stands decided by Supreme Court's decision in case of Ranbaxy Laboratories Ltd. 2011-TIOL-105-SC-CX wherein it is observed that the liability of revenue to pay interest under said Section would commence from the date of expiry of 3 months from the date of receipt of the application for refund - The impugned order is set aside and matter remanded to Original Adjudicating Authority for calculation of interest to be paid to the assessee: CESTAT

- Matter remanded: ALLAHABAD CESTAT

2019-TIOL-2655-CESTAT-ALL

Sugandhi Snuff King Vs CC, CE & ST

CX - The assessee-company was engaged in manufacturing flavored/branded chewing tobacco/Zarda classifiable under Chapter 24 of the CETA 1985 - Based on a belief that the assessee was engaged in clandestine manufacture & clearance of Excisable goods without payment of duty, the officers of the DGCEI searched the assessee's factory as well as other locations - The stock of raw material and final products were verified, whereupon stock of different perfumery compounds was found short - The partner in the manufacturing unit was unable to explain the shortage in the perfumery compounds - The Revenue officers opined that the same must have been used by the assessee in manufacture of final product which was cleared in a clandestine manner - The Revenue also conducted searches at office of the rail parcel booking, whereupon it was found that the goods found at the railway station were not covered under proper invoices - Inquiries were also made at the end of the railway agents and at the end of the transporters, who in their statements, admitted to having transported goods without bills - The Revenue officers also visited the premises of a company engaged in manufacturing printed corrugated cartons, which also admitted to not having issued any invoice in the assessee's name - Based on such statements and searches, the Revenue opined that the assessee was engaged in clandestine manufacture and removal of Zarda - SCN was issued proposing to raise duty demand - On adjudication, a part of the duty demanded was dropped - Penalties were imposed as well - Hence the present appeal.

Held - The Revenue's case is based entirely on statements of various persons, recorded during investigations, which in turn are relatable to the entries made in their records and who have not been offered for cross-examination - As no examination in chief has been done by the adjudicating authority, the statements rendered must be kept out of consideration - If they are not referred to, nothing remains with the Revenue in terms of evidence against the assessee - The requisite evidence to uphold the findings of clandestine removal were subject matter of various decision of the courts, whereupon it is clear that the findings of clandestine removal cannot be based on flimsy grounds leading only to doubts - Clear & clinching evidence establishing the suspicion of clandestine activities is necessary, considering the serious nature of such charges - Statements of buyers based on their memory are per se insufficient to establish such charges, where not corroborated by any other evidence - The entire case of the Revenue is based upon statements, which in turn are explanation for various entries in the records maintained by the respective deponents - In case of clandestine removal, the goods must first be manufactured, which further requires raw materials - Apart from shortage of one of the perfumery compounds, which too had been explained by the assessee, there is no evidence of procurement of excess raw materials used in the manufacture process - There is no evidence showing excess procurement of the main raw material, namely raw tobacco - It is difficult to understand how a huge quantity of Zarda was manufactured without procuring the main raw material or other raw materials - No investigations were made at the end of the persons associated with the actual manufacture, so as to establish manufacture of excess quantity of Zarda - No incriminating documents were revealed from the assessee's possession - The Revenue also made no efforts to identity the buyers to whom the goods had been sold - In light of such inconsistencies, the allegation of clandestine manufacture & clearance of goods cannot be sustained: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

 

 

 

 

CUSTOMS

2019-TIOL-418-SC-CUS-LB

ITC Ltd Vs CCE

Cus - Question involved is whether in the absence of any challenge to the order of assessment in appeal, any refund application against the assessed duty can be entertained?

Held:

Order of self-assessment is an order of assessment as per section 2(2) of the Customs Act, 1962 and as such it is appealable in case any person is aggrieved by it - There is a specific provision made in s.17 to pass a reasoned/speaking order in the situation, in case on verification, self-assessment is not found to be satisfactory, an order of re-assessment has to be passed under section 17(4) - Section 128 of the Act has not provided for an appeal against a speaking order but against ‘any order' which is of wide amplitude -  Provisions under section 27 cannot be invoked in the absence of amendment or modification having been made in the bill of entry on the basis of which self-assessment has been made - In other words, the order of self-assessment is required to be followed unless modified before the claim for refund is entertained under section 27 - Refund proceedings are in the nature of execution for refunding amount - It is not assessment or re-assessment proceedings at all - While processing a refund application, re-assessment is not permitted nor conditions of exemption can be adjudicated - Re-assessment is permitted only under section 17(3), (4) and (5) of the amended provisions and similar was the position prior to the amendment - it will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under section 27 - 

Reasoning employed by the High Courts of Delhi and Madras does not appear to be sound - It is apparent from provisions of refund that it is more or less in the nature of execution proceedings - It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise - Scope of the provisions of refund under section 27 of the Customs Act, 1962 cannot be enlarged and it has to be read with the provisions of sections 17, 18, 28 and 128 -  Upon considering the overall effect of the provisions prior to amendment and post-amendment under Finance Act, 2011, Bench is of the view that the claim for refund cannot be entertained unless the order of assessment or self-assessment is modified in accordance with law by taking recourse to appropriate proceedings and it would not be within the ken of section 27 to set aside the order of self-assessment and reassess the duty for making refund; and in case any person is aggrieved by any order which would include self-assessment, he has to get the order modified under section 128 or under other relevant provisions of the Act - Resultantly, order passed by the CESTAT is to be upheld and that passed by the High Courts of Delhi [2016-TIOL-978-HC-DEL-CUS] and Madras to the contrary deserves to be and are hereby set aside - Applications for refund were not maintainable - Appeals are accordingly disposed of: Supreme Court Larger Bench [para 43, 44, 46, 47, 48]

- Appeals disposed of: SUPREME COURT OF INDIA

2019-TIOL-2654-CESTAT-MUM

General Mills India Ltd Vs CC

Cus - The issue pertains to classification of 'granola bars' - Clearance of imported goods was sought under heading 1905 9090 of First Schedule to CTA, 1975 - The assessing authority classified the goods under heading 1904 9000 - There is no estoppel against raising classification disputes in a subsequent import and that, in the absence of clear finding that the approved classification is the sole option, precedent does not, of itself, bind in disposal of a subsequent dispute - There are further sub-categories within it corresponding to the four sub-headings and that the proposal of assessing officer, as upheld by first appellate authority, was to bring it under the residuary category - The composition of bars comprises various products and that the oats used are subsumed in final product which are known as 'granola bars' representing not the grain that it contains but the composition as a whole - The alteration of character is a consequence of baking after mixing which is substantively different from adding to pre-cooked or prepared grain - It would, therefore, not be appropriate to fit the imported goods under category of cereals or prepared food in the absence of coverage by the residuary entry - Furthermore, it is seen that the first appellate authority has, instead of justifying the classification adopted by the assessing authority, canvassed thereon for the rejection of the classification claimed by the importer - This detracts from being in accord with the mechanism of re-classification - It is essential for the proposed classification to be demonstrated as being more apt than the claimed classification - As the lower authorities have failed to do so, the findings thereon are also not tenable: CESTAT

- Appeal allowed: MUMBAI CESTAT

2019-TIOL-2653-CESTAT-DEL

Jaiswal Import Cargo Services Ltd Vs CC

Cus - The assessee is a Customs Broker with Shri Pawan Kumar Jaiswal as one of its Directors - Department observed the violation of Regulation 11(d) and (e) of CBLR, 2013 on the part of assessee in case of import of assorted birthday candles by M/s. Ess Enn Impex importer through M/s. S. Guha Sarkar & Co. Ltd. vide Bill of Entry - Whether the assessee failed to inform the correct classification about impugned birthday candles to the importer intentionally and as such, the license has rightly been revoked - This Bench also has physically examined the similar goods as was directed to be produced, the G-Card Holder, Shri Kuber Nath Rai had a bonafide belief for the impugned goods to be assorted birthday candles simplicitor as the earlier two consignments had also been cleared rather on the basis of reports of Customs officers acknowledging the goods to be assorted birthday candles only - Assessee admittedly has no concern with the interecepted consignment - He rather admittedly was the CHA for said two previously cleared consignments - The adjudicating authorities have gone beyond the limit while cancelling the Custom Broker Licence of M/s. Jaiswal Import Cargo Services Limited whose consignment were never intercepted nor ever got examined by CFSL/PESO simply because his G-Card Holder was same as was for M/s. Guha Sarkar & Co. Ltd. whose consignment was intercepted - Question of cancellation of licence because of subsequent interception of consignment of similar goods is held to be highly unjustified which otherwise stands barred by principle of estoppel - No doubt, the CHA is a link between the Customs Authorities and the importers and CBLR Regulations imposes obligation upon them which have to be taken as mandatory but law is also settled that not any and every infraction of CHA Regulations either Regulation 13 or elsewhere leads to the revocation of license rather in line with a proportionality analysis and only grave and serious violation justify revocation - As it was held by this Tribunal in case of Ashiana Cargo Services 2014-TIOL-1042-HC-DEL-CUS , the Tribunal further clarified that revocation of licence under Rule 20(1) can only be justified in the presence of aggravating factors that allow infraction to be labelled grave - It is the presence of mensrea to act fraudulent or an act of corruption due to intentional violation of CBLR Regulations with an intent to evade duty which invites the punishment as that of cancellation of CB Licence - This punishment cannot be proportionate to the mere absence of due diligence - As far as M/s. Jaiswal Import Cargo Services Limited is concerned, there is nothing on record to even show the absence of due diligence on their part - Thus, no reason appears for the cancellation of assessee's CHA license - The penalty is also opined to be far beyond the proportion - Hence, same is also held liable to be set aside: CESTAT

- Appeal allowed: DELHI CESTAT

 
HIGH LIGHTS (SISTER PORTALS)
TII

TP - If taxpayer has not filed addendum to transfer pricing agreement before TPO, it is not possible for such officer to pass valid order of assessment: ITAT

TP - Differences in business module and fluctuating margins calls for exclusion of such entity for purposes of comparison: ITAT

TP - Transfer pricing adjustment in respect of international transaction merits to be restricted to MAP resolution agreed between parties: ITAT

I-T - There is no requirement to deduct tax at source in case of reimbursement of expenses: ITAT

TIOL CORPLAWS

PMLA, 2002 - Copying and pasting contents of CBI chargesheet in order confirming provisional attachment order is not valid order of judicial member: Tribunal

FEMA, 1999 - No violation of Forex law is warranted if inward remmitance for which valid FIRC exist is used for purchase of immovable property by non-resident staying in India for more than 182 days: Tribunal

 

 

 

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Legal Wrangle | Direct Tax | Episode 111
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