2019-TIOL-2753-HC-KAR-IT

Pr.CIT Vs Bidar Nirmiti Kendra

Whether availability of alternate remedy will be an absolute bar for exercise of extraordinary jurisdiction - NO: HC

Whether Department can initiate recovery proceedings even before the statutory remedy of appeal being available to challenge the order of assessment stands expired - NO: HC

Whether assessee can contend as a matter of right, that Department cannot recover more than 20% of the tax demand - NO: HC

- Revenue's appeal partly allowed :KARNATAKA HIGH COURT  

2019-TIOL-2414-ITAT-MUM

Hindustan Steel India Vs ITO

Whether AO is permitted to make additions limited to extent of bringing gross profit rate on disputed purchases at the same rate of other genuine purchases - YES: ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2019-TIOL-2413-ITAT-MUM

Lotus Ornaments Pvt Ltd Vs DCIT

Whether IUT sales which are not directly exported by the investor out of India, but were sold to other SEZ Units, can be included in export turnover as per the definition provided u/s 10AA - NO: ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2019-TIOL-2412-ITAT-MUM

ACIT Vs Rishabh Steel House

Whether profit from unaccounted purchases can be restricted to 5% of the total value, where the purchases are not in doubt and where the same rate is adopted in the assessee's own case for preceding AY - YES: ITAT

- Revenue's appeal dismissed: MUMBAI ITAT

2019-TIOL-2411-ITAT-DEL

National Safai Karamcharis Finance And Development Corporation Vs ITO

Whether any entity established under a Central or State Act, engaged in upliftment of persons from the SC, ST or OBC categories, or any two of these groups, is entitled to claim exemption u/s 10(26B) - YES: ITAT Whether therefore exemption under this provision can be allowed to an entity working for the upliftment of Safai Karamcharis and manual scavengers, considering that they could fall under the categories of SC, ST or OBC - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

2019-TIOL-2410-ITAT-KOL

ITO Vs Kolkata Reserve Bank Employees Cooperative Credit Society Ltd

Whether section 80P(2)(a)(i) deduction disallowance should be made by netting method if assessee has not only derived its interest income from fixed deposits in nationalized banks but has incurred corresponding interest expenses also - YES : ITAT

- Revenue's appeal partly allowed: KOLKATA ITAT

2019-TIOL-2409-ITAT-HYD

Apsara Bhavana Sai Vs ITO

Whether it is settled law that making an incorrect claim is not tantamount to furnishing inaccurate particulars, so as to invite penalty u/s 271(1)(c), which in fact requires there to be concealment of particulars of income - YES: ITAT

- Assessee's appeal allowed: HYDERABAD ITAT

2019-TIOL-2755-HC-MAD-CT

State Of Tamil Nadu Vs Vaikundam Plantations Ltd

CST - Assessing Officer, upon checking the accounts levied tax on interstate sale of rubber latex to the tune of Rs.3,63,790/- - Appellate Assistant Commissioner (CT), Tirunelveli, allowed the appeals - Appeals by State were dismissed by the Tribunal, therefore, State is in appeal before the High Court.

Held: Question is whether the activities done by the respondent would fall within the definition of sale in terms of the provisions of the General Sales Tax Act – Madras High Court in the case of Kanyakumari District Planter's Association has held that the respondent carrying of business in selling his produce, something more is necessary to be established than pointing out that he systematically raises the produce in his lands, converts it into a marketable commodity and then sells the commodity at a profit in the market; that though there was an amendment to the definition of 'turnover' in Section 2(r) of the GST Act, there was no corresponding amendment to the Central Sales Act, 1956, hence, it was held that the notice calling upon the members of the Kanyakumari District Planters Association to get themselves registered as dealers under the CST Act was without authority and liable to be quashed – Bench notes that a categorical finding has been recorded by the appellate authority that the respondent did not have any selling association or sales office or Marketing Officer and that the enquires received at the estate are attended to and the bills are raised from the Estate, where the orders are received; that the Tribunal held that the fact that the respondent disposed of their own produce from their estate only which is the culmination of the agricultural activities of the respondents; that other than selling their own produce produced in their estate there is nothing to indicate that the respondent have indulged in buying and selling goods to become dealer under the provisions of the CST Act - Tax Case is dismissed and the questions of law framed are answered in favour of the respondent: High Court [para 5, 6, 8, 9]

- Petition dismissed : MADRAS HIGH COURT  

SERVICE TAX

2019-TIOL-2754-HC-DEL-ST

Matrix Cellular (International) Services Ltd Vs UoI

ST - Petitioner seeks a declaration with regard to action of respondent no. 4 as the Additional Commissioner being arbitrary and malicious, illegal and motivated, allegedly by deliberate concealment of material facts - Petitioner also seeks quashing of the SCN dated 23.04.2019 issued by the respondent no. 2 - case of the petitioner is that they filed revised ST-3 return on 26.09.2017 raising the Input Tax credit from Nil to Rs.4,39,44,304/- - petitioner was issued a notice on 23.03.2018 and pursuant to the response received from the petitioner, another notice dated 02.08.2018 was issued under rule 121 of the CGST Rules, 2017 - later, upon receiving responses from the petitioner, a show cause notice dated 23.04.2019 was issued u/s 73 of the CGST Act and when the present petition came to be filed - counsel for respondents submitted that they have merely followed the statutory scheme of first making enquiries and premised on the information gathered, issued the impugned SCN.

Held: Bench is of the view that there is no merit in the petition; that the position is not as the one projected by the petitioner, namely, rampant issuance of notices, one after another, without considering the fact that the earlier notices issued to petitioner had been replied - respondents have followed the statutory scheme, the earlier notices were only to make inquiries and it is only the impugned SCN which is a substantive show cause notice to show cause as to why the amount Rs.4,39,44,304/- allegedly wrongly carried forward in the GST electronic credit ledger in GST TRAN-1 statement should not be recovered u/s 73 of the CGST Act along with interest and penalty - There is no jurisdictional error in issuance of impugned SCN - matter is at the stage of examination of the petitioner's response - no interference is called for at this stage - Petition dismissed: High Court [para 8, 9]

- Petition dismissed :DELHI HIGH COURT

2019-TIOL-3477-CESTAT-BANG

ST - The assessee had filed refund claim for period July 2016 to September 2016 seeking refund of unutilized and accumulated CENVAT credit of Service Tax paid on various input services availed by them which were used in providing output services exported without payment of Service Tax under Rule 5 of CCR, 2004 and Notfn 27/2012-CE (NT) - The Original Authority has sanctioned refund of Rs.4,17,82,099/- and rejected the claim of Rs.18,72,960/- - Denial of CENVAT credit on the ground of non-registration is not sustainable in law in view of the decision of Karnataka High Court in the case of mPortal India Wireless Solutions Pvt. Ltd. 2011-TIOL-928-HC-KAR-ST - The said decision has been consistently followed by Tribunal in many decisions therefore the denial of refund on this basis is set aside - As far as second issue is concerned, under the CCR cited supra, the assessee is eligible for CENVAT credit - The Original Authority has not disputed the eligibility of assessee but the Original Authority has only rejected the refund on the ground that the assessee has not debited the same in ST-3 Returns which is factually incorrect finding in view of ST-3 Returns wherein it is clearly debited by assessee - Further, the Commissioner in impugned order has gone beyond the OIO and has examined the eligibility of assessee for CENVAT credit which cannot be sustained - The impugned order rejecting the refund is not sustainable in law: CESTAT

- Appeal allowed: BANGALORE CESTAT

2019-TIOL-3476-CESTAT-DEL

ST - The assessee is channel partner/distributor of SAP (accounting) software, popularly known as ERP software - The software has been developed by SAP India Pvt. Ltd. - The price of software for one business organization is approximately rupees one crore and above - For business purposes, the assessee's staff/engineers are required to travel to the different cities or places where the client is located for implementation, after sale service and also for providing annual maintenance - Vide SCN, pursuant to audit, it appeared to Revenue that the assessee have availed Cenvat credit of ineligible input services being guest house, event management service, air travel agent service and also on capital goods being modular furniture/chairs used admittedly in their offices - So far the event management service is concerned, the same have been received by assessee for jointly hosting the conference/ workshop for canvassing the old and new customers, thus the same is in the nature of sales promotion activity - Accordingly, sales promotion is eligible activity for availing the Cenvat credit - So far the guest house/hotel service is concerned, same have been received in the course of rendering output service and hence, the same is eligible input in business of assessee - Hence, the assessee is eligible for Cenvat credit on this service also - So far the Cenvat on table, chairs/modular furniture is concerned, the issue is covered in favour of assessee by Divison Bench of Tribunal in case of ICICI Lombard General Insurance Co. Ltd. - 2016-TIOL-367-CESTAT-MUM - Accordingly, the same is held to be an eligible input for rendering the output service - Thus, the impugned order is set aside - The interest and penalty imposed on assessee are also set aside: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2019-TIOL-3475-CESTAT-DEL

CX - The assessee-company manufactures mobile phone battery, mobile phone chargers and LED bulb - The issue at hand pertains to Excise duty on mobile phone battery and LED bulb - The Revenue claimed that the assessee is liable to pay 12.5% duty on both items and that the assessee was ineligible to avail exemption as per Notfn No 46 of March 2011, for payment of 2% duty ad valorem and also under Notfn No 50/2012 in respect of LED bulb - SCN was issued to the assessee, whereupon the adjudicating authority rejected the same and raised duty demand - Hence the present appeal.

Held - It is not disputed that the duty rate on mobile phone battery, in absence of exemption notification, would be 12.5% - It is because of the General Exemption Notfn dated March 01, 2011 that the assessee claimed that the duty payable would be 2% ad valorem - Perusal of the Entry in Sr No 132 indicates that parts, components and accessories namely, battery chargers, PC connectivity cables, memory cards and hands-free headphones of mobile handsets would be subjected to 2% ad valorem excise duty - Considering the nature of the excisable goods, there is no doubt that they qualify as accessories only and have no relation to parts or components, because it cannot be doubted that battery chargers, PC connectivity cables, memory cards and hands free headphones of mobile phones are not parts or components of mobile handsets and are accessories - If that is so, mobile phone battery is part or component of mobile handset, because without a battery, the mobile handset cannot function - In such circumstances, the adjudicating authority erred in concluding that cellphone battery was not entitled to benefit under General Exemption Notfn dated March 01, 2011 - The penalty imposed cannot be sustained - Moreover, as the assessee is not contesting the findings recorded in respect of Excise duty on LED bulbs, the same is not dealt with here - The issue of limitation also need not be addressed as it is held that the Revenue unjustifiably denied benefit of General Exemption Notfn for imposing duty on mobile phone battery: CESTAT

- Assessee's appeal partly allowed: DELHI CESTAT

2019-TIOL-3474-CESTAT-AHM

CX - The assessee-company manufactures Recycle Polyester Staple Fiber through recycling route falling under chapter sub heading 55032000 of the CETA, 1985 - It used Plastic Scrap or Plastic Waste including waste polyethylene terephthalate bottles for manufacture - It purchased Pet flakes and yarn waste for manufacture of Popcorn which was manufactured in its own factory - The assessee availed exemption from duty on clearance of their finished goods under Sr No 70A of Notfn No 01/2011-CE for the relevant period - w.e.f. 11.07.2014, the assessee availed exemption under Notfn No 01/2011-CE by paying duty @ 2% - The manufacturer of the same product also has option of paying duty @ 6% with cenvat credit as per Sr No 172A of Notfn No 12/2012-CE which was omitted w.e.f. 01.03.2013 - During the period of dispute, the assessessee was issued SCN alleging that the assessee produced final product using raw materials like PET Bottles scrap/PET waste & scrap - The assessee was also using other raw material waste like yarn waste/scrap, popcorn etc - The Revenue claimed that the assessee used popcorn made from textile waste as raw material, whereas the condition notified is that such goods should be made from plastic waste and so, exemption is not available to the assessee - It was also alleged that the assessee availed exemption by suppressing the fact of usage of polyester waste falling under Chapter 55 - Hence the Revenue proposed to deny the exemption and raised duty demand with interest - Penalty u/s 11AC was also proposed to be imposed - Such demands were confirmed on adjudication - Hence the present appeal by the assessee.

Held - The exemption in question is available to finished goods if they are manufactured using plastic waste - It is seen that the assessee brough yarn waste and converted it into popcorn - It is also seen that what has been tested by the Man Made Textile Research Association is Polyester Popcorn and even the CIPET report is about PET waste - The IIT report is also about popcorn considering it to be plastic waste - However, the fact remains that Yarn waste was brought by the assessee and converted into Popcorn - The assessee also pleaded that the small use of popcorn in manufacturing finished goods would not debar it from availing exemption - In such circumstances, it is fit case to remand the matter to the adjudicating authority to decide the case afresh by considering the reports of various institutes, as relied on by the assessee and also consider the case that small use of popcorn from yarn waste would not debar the assessee from exemption - The percentage of small quantity of yarn waste as claimed by the assessee was not ascertained, which is necessary to determine eligibility for exemption: CESTAT

- Case remanded: AHMEDABAD CESTAT

CUSTOMS

2019-TIOL-3473-CESTAT-MUM

Cus - The appeals pertain to the eligibility for benefit of notfn 19/2000-Cus (NT) r/w notfn 26/2000-Cus intended for implementation of Indo Sri Lanka Free Trade Agreement for import of 'visicoolers/ refrigerated display cabinets' - The assessee has raised the issue of want of jurisdiction for officers of DRI to issue SCN which, under section 28 of Customs Act, 1962, lies within the exclusive purview of 'proper officer' - The High Court of Delhi had in Mangali Impex - 2016-TIOL-877-HC-DEL-CUS , invalidated SCNs issued by officers of DRI - There is no doubt that operation of judgment of High Court of Delhi in re Mangali Impex has been stayed by Supreme Court pending disposal of the appeal - Nevertheless, the pendency of appeal against the said decision of High Court of Delhi is not sufficient to disallow the plea of jurisdiction raised before this Tribunal - A disposition of the issue on merit against the assessee without touching upon the issue of jurisdiction which, if ultimately decided against Revenue, would saddle them with a detriment that should never have been - On the other hand, postponement of decision on merit is not to the detriment of Revenue - Owing to this distinction of consequences, the Tribunal has been deferring the determination of such disputes, on merit, by remanding the matter back to the original authority for awaiting a finality on jurisdiction - This would best serve the ends of justice - The impugned order is set aside and the matter is remanded back to the original authority to decide upon its jurisdiction to adjudicate the SCN: CESTAT

- Matter remanded: MUMBAI CESTAT