2019-TIOL-NEWS-299, Dated: Friday, December 20, 2019

2019-TIOL-NEWS-299 | Friday December 20, 2019

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Legal Wrangle | Corporate Law | Episode 120

DIRECT TAX


	2019-TIOL-2504-ITAT-DEL DLF Info City Development Kolkata Ltd Vs ACIT Whether even if the interest income comes under the head of income from other sources, netting off of interest expenses is allowable u/s 57(iii) if the nexus between such income & the expenses is apparent - YES: ITAT - Assessee's appeals partly allowed: DELHI ITAT 2019-TIOL-2503-ITAT-DEL Intertec Vs JCIT Whether discrepancies shown to exist in rental income received from leased premises calls for addition in absence of sketch, signature of witness & seal of Excise department - YES: ITAT - Assessee's appeal dismissed: DELHI ITAT 2019-TIOL-2502-ITAT-DEL NTPC Electric Supply Company Ltd Vs DCIT Whether when interest earned on funds granted by the government was utilized towards cost of project approved by Government, then no disallowance is warranted u/s 37(1) - YES: ITAT - Assessee's appeal allowed: DELHI ITAT 2019-TIOL-2501-ITAT-MUM ITO Vs Ramesh Shamji Patel Whether the entire quantum of purchases merit being disallowed on account of being bogus, where the corresponding sales are not in doubt - NO: ITAT Whether in such circumstances, the profit arising from evasion of payment of Sales Tax or VAT from purchases made from the grey market, merits being considered when framing additions - YES: ITAT - Revenue's appeal dismissed: MUMBAI ITAT 2019-TIOL-2500-ITAT-INDORE Hope Textiles Ltd Vs ACIT Whether assessee can claim only statutory interest for unreasonable delay in granting refund and cannot be allowed interest on interest - YES : ITAT - Assessee's appeal dismissed: INDORE ITAT

MISC CASE


	2019-TIOL-2889-HC-KAR-VAT Kumar Engineers Vs CCT Whether Department should not be made to suffer on account of inter se dispute between the assessee and his tax consultant, when EFS Data collected from prescribed authority discloses the turnover of assessee - YES: HC - Assessee's petition dismissed: KARNATAKA HIGH COURT

INDIRECT TAX

SERVICE TAX

2019-TIOL-3602-CESTAT-MAD

Tata Steel Processing and Distribution Ltd Vs Commissioner of GST & CT

ST - The assessee is registered for providing Business Auxiliary Service - They are also engaged in processing of iron and steel sheets on job work basis to M/s. TSL - It was the case of assessee that due to increase in cost of packaging they raised supplementary invoices on the customer M/s.TSL towards differential value and taxable service and had paid service on such charges - The Customer M/s.TSL had rejected request for payment of increased packaging charges raised as per the supplementary invoices - The assessee informed the department that they availed credit of excess amount paid as service tax and other cess as applicable - As abundant caution that the department may reject the credit, assessee filed the refund claim - Same was rejected - On perusal of O-I-O, it is seen that the assessee was given date for personal hearing - Later, as there was no representation, the matter was decided exparte - In appeal, the Commissioner (A) has considered the issue on merits and thereafter rejected the refund claim - However, it is contented by assessee that they had furnished Chartered Account certificate before the Commissioner (A) to adjudge the issue of not having passed on the burden of duty incidence to another person and also that they have paid excess amount in terms of packaging charges - On going through the impugned order, it is seen that Commissioner (A) has not considered the Chartered Accountant certificate alleged to be produced by assessee - Without such documents, the issue of unjust enrichment cannot be decided - In such circumstances, matter is remanded to the original authority who shall consider the refund claim afresh: CESTAT

- Matter remanded: CHENNAI CESTAT

2019-TIOL-3601-CESTAT-BANG

Ingersoll Rand Technologies and Services Pvt Ltd Vs CCE & CT

ST - The assessee-company is registered for providing services under Consulting Engineering, Business Auxiliary Services, Maintenance and Repair Services, Erection, Commissioning and Installation Service and Management Consultant Services - The assessee filed refund claims in respect of unutilized Cenvat credit paid on input services used for providing Consulting Engineering Services exported during the relevant period - SCN was issued to the assessee proposing to reject the refund claims on account of various discrepancies - On adjudication, the refund claims were allowed in part - On appeal, the Commr.(A) also allowed partial relief - Hence the present appeals.

Held - The Commr.(A) rejected the refund claims on certain services on grounds of there being no direct nexus between input and output service - Such findings are not legally sustainable - The assessee relied on several precedent judgments wherein all these services were held to be input services and have nexus with the output service - Hence the denial of refund for lack of nexus is unsustainable - Hence the assessee is entitled to refund on these input services - The assessee is also entitled to refund of cenvat credit on CICS, Company Secretary and Public Relation Management Service, being essential for rendering output service - Besides, the refund was rejected for non-production of documents - Hence the matter is remanded to the original authority for examining such documents produced in support of the refund claims - Regarding denial of refund based on debit notes in which the amount paid and services received are not clear - It is held that debit note is a valid document for claiming cenvat credit u/r 9 of CCR 2004 - Further, denial of refund on procedural irregularities such as invoice not containing the address of the assessee, is also unsustainable because the assessee is engaged in export of services and such input services are essential for rendering output services - To such end, the matter warrants remand: CESTAT

- Case remanded: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-3600-CESTAT-HYD

CCE Vs NIIT Bis Ltd

CX - The assessee is engaged in providing various types of IT solutions relating to geographical information systems and were operating as joint venture of ESRI Inc. USA and NIIT India - Since year 2000, they were operating from Parwanoo in State of Himachal Pradesh which is covered by area based exemption under Notfn 50/03-CE - The activity undertaken by assessee was to receive GIS data through satellite pictures of various landmass or through downloaded software, or hardcopy of photographs and convert input data into digitalized data by using software - Such digitalized data was further replicated by assessee on CDs for use by the end user - The digitalized content written on CDs was cleared as goods and such goods are covered by provision of Central Excise Act, 1944 - With effect from 13.3.2006, assessee obtained exemption from Central Excise duty under Notfn 50/03-CE - It appeared to Revenue that though the assessee had purchased 19 computers in 2005-06, they had not undertaken specified expansion as required by said notification - It appeared to Revenue that out of 19 computers, 15 computers were used for such activity which was not covered by the provisions of Central Excise Act and only for 4 computers were installed for replication of data on CDs which was the activity covered by CEA, 1944 - Therefore, assessee was issued with SCN proposing denial of exemption availed by them for the period from April, 2010 to September, 2011 and recovery of Central Excise duty - For the earlier period in their own case, this Tribunal has dropped the demand against assessee holding that the assessee is entitled to avail the benefit of Notfn 50/03-CE - Therefore, no infirmity found in impugned order and the same is upheld: CESTAT

- Appeal dismissed: HYDERABAD CESTAT

2019-TIOL-3599-CESTAT-MUM

Walchandnagar Industries Ltd Vs CCE

CX - The assessee is engaged in manufacture of Boilers - During the disputed period, the department had gathered information that the assessee had wrongly availed the exemption benefit provided under Notfns 3/2001 and 6/2002 inasmuch as parts of boilers were cleared from the factory by describing the same as "Boilers in parts" - Upon detailed investigation into the matter, a SCN was issued to assessee - An identical issue regarding denial of benefit of notfns came up before the Tribunal in respect of the same projects for whom the assessee had executed the orders in the present dispute - Upon examination of the factual aspects, the Tribunal vide order - 2018-TIOL-100-CESTAT-MUM has categorically held that the benefit of both the notifications should be available to the assessee - Besides, in the said order, the Tribunal has also held that suppression of facts cannot be alleged against the assessee, justifying invocation of extended period of limitation - Since, the adjudication order passed in confirming the proposed duty demand in the notice dated 30.03.2005 was set aside by Tribunal, it cannot be said that the department is justified in invoking the extended period of limitation for confirmation of the adjudged demands in the present case - Thus, the charges of suppression or wilful misstatement cannot be levelled against the assessee justifying issuance of SCN beyond the normal period provided under Section 11A ibid - Therefore, the impugned order upholding confirmation of adjudged demand beyond the normal period of limitation cannot be sustained - Accordingly, the appeal is allowed in favour of assessee on the ground of limitation alone: CESTAT

- Appeal allowed: MUMBAI CESTAT

CUSTOMS

2019-TIOL-3598-CESTAT-MUM

GMR Infrastructure Ltd Vs CC

Cus - The appellant filed BoE for clearance of goods described as Electronic Sensor Paver Vogel Model 1800-2 with AB 600-2-TV for laying bituminous pavement upto 9 meters along with multiplex big SKJ and its accessories and declared value of the same - The appellant classified the item under CTH 84306100 and claimed exemption under Notfn No 621/2002-Cus dated 01.03.2002 as amended - On adjudication, the exemption was denied on grounds that the appellant was the sub-contractor and did not figure in the main contract between GHVPL and NHAI - It was also observed that the exemption was in respect of Electronic Paver Finisher (with sensor device) for laying Bituminous pavement 7 mtr size and above - The appellant's appeal against such findings were dismissed by the Commr.(A) - Hence the present appeal.

Held - The issue at hand stands resolved by the Apex Court through its decision in Gammon India Ltd wherein it was held to be well settled principle that a provision providing for an exemption has to be construed strictly - It was also held that in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption - Moreover, the Apex Court in Dilip Kumar & Co reiterated the principle of strict construction of notification and also that in case of ambiguity, ambiguity has to be construed in favour of the Revenue - In light of such precedents, the issue is settled squarely against the appellants - While the appellants do not contest the same, they relied on subsequent clarification issued by the Joint Secretary (TRU) clarifying that benefit of similar exemption notification would be admissible to the constituents of the consortium - However, such submissions are negated, in light of the findings of the Apex Court in Ratan Melting & Wires Industries - Considering such precedent cases, the appeal is liable to be dismissed: CESTAT

- Assessee's appeal dismissed: MUMBAI CESTAT