2019-TIOL-2465-ITAT-MUM

Harshad Ramaniklal Mehta Vs DCIT

Whether it is unjust for the Revenue to make additions without giving opportunity to the assessee to rebutt the English translation of relevant documents - YES: ITAT

Whether negative burden of proof is on the assessee to prove his status with respect to discretionary beneficiary - YES: ITAT

-Assessee's appeals allowed : MUMBAI ITAT

2019-TIOL-2459-ITAT-DEL

Estee Advisors Pvt Ltd Vs DCIT

Whether MTM losses arising out of contractual obligation existing on reporting date cannot be regarded as contingent in nature and merely because the liability has to be discharged at a future date, the same cannot be regarded so - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

ACIT Vs Industrial Safety Products Pvt Ltd

Whether if excess stock found and noted in stock inspection report prepared by internal team of the assessee does not constitute 'undisclosed income' unearthed as consequence of search, penalty u/s 271AAB cannot be levied - YES : ITAT

- Revenue's appeal dismissed: KOLKATA ITAT

Shubham Vs ITO

Whether once revised return stood filed u/s 139(5) and same was accepted, then it is not open to I-T authorities to take into consideration original return for determining total income in assessment proceedings - YES: ITAT

- Assessee's appeal allowed: PUNE ITAT

Pramod Bansal Enterprises Pvt Ltd Vs ACIT

Whether a property can be made taxable u/s 22 where it is reflected as part of fixed assets and is used only for housing the assessee's security guard and driver without charging any rent - NO: ITAT

- Assessee's appeal partly allowed: JAIPUR ITAT

Pawan Kumar Jain Vs ITO

Whether claim for construction expenses in respect of a boundary wall merits being rejected in totality where the wall is found to exist and receipts issued by three persons involved in its construction, are put forth - NO: ITAT

Whether evidences put forth by the assessee in this regard can be rejected, where the AO is unable to ascertain the true cost of construction due to non-service of summons and also did not obtain expert valuation by DVO - NO: ITAT

- Assessee's appeal partly allowed: JAIPUR ITAT

2019-TIOL-69-NAA-GST

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Applicant has alleged profiteering by the respondent in respect of purchase of flat in the respondent's project ‘Bounty Acres', Tamil Nadu - inasmuch as it is alleged that the respondent had not passed on the benefit of Input Tax Credit availed by him by way of commensurate reduction in the price of the above flat - DGAP in its report has submitted that during the pre-GST period the Input Tax Credit as a percentage of the total turnover was 0.42% and during the post-GST period (July 2017 to August 2018) it was 3.89% and which clearly confirmed that post-GST, the respondent had benefited from additional Input Tax credit to the tune of 3.47% of the total turnover; that accordingly, the profiteered amount was Rs.97,40,448/- which included GST @18%, 12% and 8% on the base profiteered amount of Rs.87,06,553/-; that this amount was inclusive of Rs.33,972/- (including GST @18%) which was the profiteered amount in respect of the applicant; that the construction services were supplied in the State of Tamil Nadu only; that the respondent had sold 119 flats out of which 90 homebuyers had made payments in the post-GST period till 31.08.2018 and the profiteering was computed in respect of these 90 flats only and the profiteering in respect of the remaining 29 homebuyers would be calculated when payments would be received from them; that the respondent had realised an additional amount of Rs.97,06,476/- from the other 89 recipients and who were not applicants in the present proceedings.

Held:  DGAP has in their reports addressed all the objections raised by the respondent and the explanation given by DGAP are correct and can be relied upon - insofar as the contention of the respondent that the credit of VAT paid on inputs had not been considered, the Authority observes that this claim is incorrect since though the respondent had claimed credit of VAT paid on inputs, but they had not discharged any output VAT liability; that the respondents also did not charge/paid VAT in the pre-GST period from the homebuyers; therefore, for determining the profiteering amount, neither the credit of VAT paid on inputs nor the output VAT liability had been taken into consideration by the DGAP and thus the computation made by DGAP is correct - insofar as the submission that the respondent had duly passed on ITC benefit of an amount of Rs.92,38,515/- till the date of submissions to the eligible customers, since the computation of the said amount is not forthcoming, the same cannot be accepted - in fine, the respondent had profiteered by an amount of Rs.97,40,448/- and the same is required to be pass on this amount to the homebuyers (who are identifiable) along with interest @18% within a period of three months - SCN is to be issued proposing imposition of penalty for contravention of the provisions of s.171 of the Act read with rule 133(3)(d) of the Rules - the Commissioners of CGST/SGST, Tamil Nadu are required to monitor this order under the supervision of DGAP by ensuring that the amount profiteered is passed on to all the eligible buyers and a compliance report is to be submitted within a period of four months: NAA

- Application allowed: NAA

2019-TIOL-67-NAA-GST

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - 71 applicants have alleged profiteering in respect of construction service supplied by the respondent - inasmuch as the applicants submit that they had purchased flats in the respondent's project ‘Floridaa', Haryana and allege that the respondent had not passed on the benefit of Input Tax Credit to them by way of commensurate reduction in prices - DGAP in its report has submitted that the ITC as a percentage of the turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 2.60% and during the post-GST period (July 2017 to December 2018) it was 7.37% and, therefore, the respondent had benefited from additional ITC to the tune of 4.77%; that based on the aforesaid facts, the respondent was required to pass to the recipients, for the period 01.07.2017 to 24.01.2018, the amount of benefit of ITC of Rs.1,03,06,413/- for residential flats and shops which included 12% GST on the base profiteered amount of Rs.92,02,154/-; that for the period 25.01.2018 to 31.12.2018, they were required to pass on ITC benefit of Rs.1,66,71,248/- which included 12% GST on commercial shops and 8% GST on residential flats and thus the total benefit of ITC that was required to be passed to customers during the period 01.07.2017 to 31.12.2018 was Rs.2,69,77,661/- (which included GST @12% and 8%) on base amount of Rs.2,46,06,450/-; that the home buyer and unit no. wise break-up of this amount is computed accordingly; that in respect of the applicants the profiteered amount comes to Rs.11,24,124/- (including GST on base amount of Rs.10,24,023/-) and which is to be returned to the applicants - Respondent submitted that they had passed on the benefit of Rs.2,22,85,626/- to the buyers of flats and commercial shops, which the DGAP disputes inasmuch as the DGAP states that the amount passed to the 86 homebuyers was less by an amount of Rs.76,27,576/- and in respect of 27 commercial shops by an amount of Rs.9,67,826/-; that the excess benefit passed on to some recipients by the respondents cannot be set off against the additional benefit required to be passed on but it can be adjusted against any future benefit that may accrue. Held: Claims being made by the respondents are unwarranted and cannot be accepted - DGAP report is correct - Section 171 of the Act is aimed at ensuring that the recipients get the commensurate benefit, in the form of reduction in prices, in case of any tax rate reduction and/or incremental benefit of ITC which has become available to them due to sacrifice of revenue by the State and the Central Government from their own tax pool to provide accommodation to the vulnerable section of society under the Affordable housing scheme - Section 171 of the Act clearly links profiteering to be a function of each supply of goods or services or both hence, profiteering needs to be computed at the leval of each tax invoice - From a plain reading of s.171 of the Act, it is very clear that the total quantum of profiteering by a registered person is the sum total of all the benefits that stood denied to each of the recipients/consumers individually, therefore, respondent is under a legal obligation to pass on the benefit of ITC to his buyers and he cannot be allowed to appropriate the same - submission by the respondent that they had passed on the benefit of Rs.2,22,85,626/- to the homebuyers and commercial shop buyers has been refuted by the applicants who submit that no ITC benefit has been passed but instead the respondent has charged the extra amount for maintenance and other purposes; moreover, since the documentary proof of ITC benefit passed on to buyers has not been furnished by the respondent and DGAP has not made any mention of the same in its report, the said claim is unacceptable - the total ITC benefit for the period 01.07.2017 to 31.12.2018 of Rs.2,69,77,661/- (which includes GST @12% or 8% on the base amount of Rs.2,46,06,450/-) is required to be paid to the applicants and the other eligible house buyers along with interest @18% - that since the Occupation Certificate has been received on 09.01.2019 and there was no inventory of unsold units left on the date of issue of OC and since the present investigation is conducted only upto 31.12.2018, therefore, any additional benefit of ITC which may accrue subsequently needs to be also passed on to the eligible buyers and in case the same is not done, the applicants and other eligible buyers are at liberty to approach the Haryana State Level Screening Committee for initiating fresh proceedings u/s 171 of the Act -   SCN is to be issued proposing imposition of penalty for contravention of the provisions of s.171 of the Act read with rule 133(3)(d) of the Rules - the Commissioners of CGST/SGST, Haryana are required to monitor this order under the supervision of DGAP by ensuring that the amount profiteered is passed on to all the eligible buyers and a compliance report is to be submitted within a period of three months: NAA

- Application allowed: NAA

SERVICE TAX

2019-TIOL-3550-CESTAT-ALL

Highway Hospital Vs CC, CE & ST

ST - The appellants are hospitals engaged in providing 'health services' - During period from 01.07.2010 to 30.04.2011, appellants allegedly provided services covered by Section 65(105)(zzzzo) of FA, 1994 - During the aforesaid period appellant No.1 received an amount of Rs.57,50,915/- from M/s.ICICI Lombard General Insurance Company for providing health services to members of society who were below poverty line under Rastriya Swastha Bima Yojana and therefore they were called upon to show cause as to why Service Tax should not be demanded from them through SCN - The contention raised by appellant that the provisions of health service was of Govt. of India through aforesaid scheme and therefore Service Tax is not liable to be levied - He has further relied on order passed by Madras High Court in case of Arvinth Hospitals 2016-TIOL-2838-HC-MAD-ST - Revenue have submitted that in so far as the definition of said service is concerned as provided under Section 65(105)(zzzzo) of FA, 1994, it is immaterial as to who has paid the premium for insurance - He has further submitted that once the payment for providing service was made directly to the hospital by insurance company then such transaction satisfies definition of said service - The requirement in definition of said service is that the treatment is provided by service provider and payment is made by insurance company directly to service provider, then it satisfies the definition of health services provided under Section 65(105)(zzzzo) of FA, 1994 - Tribunal have also gone through the order passed by Madras High Court and it is noted that the High Court has remanded the matter to the respondent before them to consider the entire issue afresh - The appellants during the relevant period had provided said services and therefore there is no reason to interfere with the impugned orders: CESTAT

- Appeals rejected: ALLAHABAD CESTAT

2019-TIOL-3549-CESTAT-MUM

Harsh Constructions Pvt Ltd Vs CCE

ST - The assessee is engaged in providing works contract service - The department interpreted that since no option under Rule 3 of rules had been exercised by assessee, it should be liable to pay the service tax @ 10.30% - Accordingly, show cause proceedings were initiated against them, seeking for recovery of the short paid service tax amount along with interest and for imposition of penalties - On perusal of relevant ST-3 return available in case file, it is found that the assessee had exercised option for availing the Composition Scheme inasmuch as it had declared the tax payable at 4% - Since the assessee has specifically mentioned about the rate prescribed under Composition Scheme, the same should be considered as compliance in terms of Rules, 2007 regarding availment of the option for Composition Scheme - Besides, no specific format or application has been prescribed either in the statute or by any circular issued by Board, under which the option has to be exercised - Thus, non-filing of specific declaration before opting for the scheme is to be considered as a mere procedural lapse, for which the substantive right provided under statute for payment of composition tax cannot be whittled down - Further, though the assessee had availed cenvat credit of service tax paid on input services, but the same was reversed and the reversal particulars were duly reflected in period ST- 3 returns - Hence, the adjudged demands confirmed on assessee cannot be sustained - Therefore, no merits found in impugned order passed by Commissioner (A): CESTAT

- Appeal allowed: MUMBAI CESTAT

CENTRAL EXCISE

2019-TIOL-3548-CESTAT-MUM

Finlay Mills Vs CCE

CX - The assessee is a composite mill engaged in spinning Cotton yarn from cotton fibres, weaving of grey fabrics and processing of such fabrics - During the relevant period, the assessee availed benefit under Notfn No 14/2002-CE and cleared finished goods on payment of concessional rate of duty - Alleging that the assessee is not eligible to avail benefit of this notification, demand notice was raised for recovery of differential amount of duty - On adjudication, such demand was confirmed with interest & penalty - Such demands were sustained by the Commr.(A) - Hence the present appeal by the assessee.

HELD - The issue at hand is as to whether or not the assessee is eligible for benefit under Notfn No 14/2002-CE - Such issue stands settled by the Apex Court's judgment in Sports & Leisure Apparels Ltd. Vs. Commissioner of Central Excise - It was held therein that benefit of rate of duty be allowed without insisting on any documentary proof for payment of duty - Also if the manufacturer wants to avail credit of duty paid on inputs or capital goods on actual basis, duty paying documents would have to be produced as required under the CCR - It was also held that the Explanatory Note clarified that those who did not want to avail Modvat facility were allowed to clear the goods without payment of any excise duty. It is in this context that the authorities were asked not to insist upon any documentary proof for payment of duty and this was transported into the notification, in the form of Explanation II - It thus became clear that when Explanation II states that the duty shall be deemed to have been paid even without production of documents evidencing payment of duty thereon, it was clearly meant that no duty was required to be paid by the manufacturers of knitted garments - Thus, it had been held that exemption Notfn 14/2002-CE created legal fiction which is the precise purpose for adding the explanation and that it is settled law that a fiction created by a provision of law is to be given due play and must be taken to its logical conclusion - In light of such findings, the O-i-A in challenge merits being quashed: CESTAT

- Assessee's appeal allowed: MUMBAI CESTAT

2019-TIOL-3547-CESTAT-MAD

Cavinkare Pvt Ltd Vs CCE

CX - The assessee-company manufactures dairy products - It manufactured flavored milk among other things, which the assessee classified under CETA 22029030 of CETA 1985 - It later changed the classification to 04049000 - The Revenue opined that the former classification is correct that the goods in question were dutiable under MRP basis and assessable as per Notfn No 49/2008-CE (NT) as amended by Notfn No 11/2011-CE (NT) dt. 24.03.2011 r/w Rule 8 of CCR 2002 - SCN was issued to the assessee and the proposals were confirmed upon adjudication - Hence the present appeals.

Held - The issue at hand stands settled by the decision of the Tribunal in Nestle India Ltd. Vs CCE Ltd., New Delhi wherein it was held that such flavored milk items were classifiable under Tariff Item 0404 90 00 of the CETA 1985 - Following the findings laid down therein, it is held that the items in question are classifiable under Heading 0404 of CETA, being the classification favored by the assessee: CESTAT

- Assessee's appeal allowed: CHENNAI CESTAT

CUSTOMS

2019-TIOL-3546-CESTAT-BANG

Kaaizeen Meditech Pvt Ltd Vs CC

Cus - The assessee has been regularly importing the Catheter from Trivandrum Airport during period 23.11.2005 to 17.03.2011 and has been paying Customs Duty and no objection was raised by the Department during these six years regarding any violation made by assessee - The Notfn 146 E issued by Department of Health was not in the knowledge of assessee as well as Customs officials and no objection was raised against assessee - Subsequently, after the expiry of six years, a SCN was issued proposing confiscation of goods and also proposing penalty under Section 112 and 117 of the Act - The Original Authority after considering the submissions of assessee has observed that there was no mis-declaration on the part of assessee while filing the Bill of Entry and that finding has not been disturbed even by the Commissioner (A) - Further, the Department issued another SCN demanding short payment of duty on certain items but in the said SCN also, no allegation was made that the assessee is not entitled to import through Trivandrum Airport - Once the Customs authorities has come to the conclusion that there is no mis-declaration and there is no suppression of facts by the assessee in filing Bill of Entry which was accepted by Department, then invoking the extended period of limitation is not justified because there was no intention to evade payment of duty - The imposition of penalty on assessee by Original Authority was not justified in view of the fact that there was no mis-declaration on the part of assessee during the last six years when he was regularly importing the said item and the Customs had raised no objection whatsoever regarding any mis-declaration - Further, enhancing the penalty from Rs.5,55,000/- to Rs.15,00,000/- without any justification and without giving any reasons is also not tenable in law and therefore the impugned order is set aside: CESTAT

- Appeal allowed: BANGALORE CESTAT