2019-TIOL-NEWS-304, Dated: Friday, December 27, 2019

2019-TIOL-NEWS-304 | Friday December 27, 2019

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DIRECT TAX


	2019-TIOL-2946-HC-MUM-IT Usha Exports Vs ACIT Whether issues already adjudicated upon during original assessment bestow jurisdiction for re-assessment - NO: HC - Assessee's writ petition allowed: BOMBAY HIGH COURT 2019-TIOL-2537-ITAT-MUM ITO Vs Ashiana Home Marts Pvt Ltd Whether addition u/s 68 on account of sale of shares at premium is warranted if investor entities are assessed to tax and assessee has discharged the initial onus of proving identity, creditworthiness of entities and genuineness of transactions - NO : ITAT - Revenue's appeal partly allowed: MUMBAI ITAT 2019-TIOL-2536-ITAT-MUM Tatva Global Environment Ltd Vs ITO Whether disallowance u/r 8D(2)(ii)& (iii) can be made only in respect of net interest, considering those investments which yield dividend income during year even if disallowance falls below disallowance u/s 14A offered by the assessee - YES: ITAT - Assessee's appeal partly allowed: MUMBAI ITAT 2019-TIOL-2535-ITAT-BANG Shiva And Shiva Orthopaedic Hospitals Pvt Ltd Vs ITO Whether on the basis of statement recorded and documents of doctors who are not part of alleged list of contract doctors, any opinion can be formed about actual nature of services rendered by them to the assessee - NO : ITAT - Case Remanded: BANGALORE ITAT 2019-TIOL-2534-ITAT-COCHIN Reenaz Properties Pvt Ltd Vs ACIT Whether transfer of asset by sale of is taxable under the head ‘business income' - YES: ITAT Whether revisionary powers can be exercised u/s 263 if AO fails to conduct inquiry in discerning the impact of certain sections as prejudicial to revenue - YES: ITAT - Assessee's Appeal dismissed: COCHIN ITAT

MISC CASE

2019-TIOL-2945-HC-DEL-VAT

ITD ITD Cem JV Vs CTT

Whether dispute raised by dealer regarding calculation of interest on VAT interest is appealable order u/s 42 of DVAT Act, and hence no writ interference is called for if efficacious remedy is available - YES: HC

- Assessee's petition dismissed: DELHI HIGH COURT

INDIRECT TAX

SERVICE TAX

2019-TIOL-3636-CESTAT-HYD

Greenwood Estates Vs CCT

ST - The assessee-company is engaged in construction of residential complex services - During the relevant period, the assessee entered into two agreements, namely sale deed for sale of undivided portion of the land together with the semi finished portion of the flat, and an agreement for construction with customers after sale - The Revenue issued SCN alleging that on execution of sale deed, the right in property got transferred and hence, construction service rendered by the assessee to the customer under agreement of construction, classifies as WCS u/s 65(105)(zzzza) of the Finance Act 1994 - Duty demand was raised upon adjudication - Hence the present appeal.

Held - It is undisputed that the SCN raised duty demand only on service tax only on the amounts received after sale was completed - Therefore, the amounts received towards sale deed were supposed to not be included in the demand - However, considering the relevant material, it appears that sale deed value has been included while computing the duty demand and when confirming the same - Since the dispute is only regarding the computation of the demand and not any specific point of law, it is fit case for remand to the original authority to recalculate the demand after excluding the sale deed value: CESTAT

- Case remanded: HYDERABAD CESTAT

2019-TIOL-3635-CESTAT-BANG

Target Corporation India Pvt Ltd Vs CCT

ST - Assessee, a SEZ unit is registered as a STPI unit and is engaged in export of Information Technology Software Service, Business Support Service and Consulting Engineering Service to its group company Target Corporation, USA - In order to provide the output service, assessee received and consumed various input services and paid service tax on such input services and thereafter availed cenvat credit of service tax paid on such input service as per the provisions of CCR, 2004 - Since the amount of service tax remained unutilized, assessee filed a refund claim for the entire service tax amounting to Rs. 1,62,09,668/- under Notfn 5/2006 - Same was partly rejected - The only ground for which refund has been rejected is that the assessee has not disclosed the cenvat credit in ST-3 returns - After going through the various conditions set out in the appendix to the Notfn 5/2006 issued under Rule 5 of CCR, 2004 and Rule 4 and Rule 9 of Cenvat Credit Rules, assessee has filed all the necessary documents for claiming the cenvat credit viz. invoices, books of accounts, cenvat credit register which are required as per the various Rules and the Notification to claim cenvat credit but inadvertently he has failed to disclose the same in the ST-3 return which is only a procedural infraction in view of various judgment relied upon by assessee - Under the Notification as well as under the Rule, it has not been categorically provided that non-disclosure of cenvat credit in ST-3 return will disentitle the assessee from claiming the cenvat credit if he is otherwise entitled to - The cenvat credit is a beneficial legislation and it should be construed liberally so as to upheld the letter and spirit of such beneficial piece of legislation and a narrow interpretation would read down the benefit given by legislature and defeat the very purpose of enacting of such beneficial legislation - Therefore, the denial of refund only on the basis of non-disclosure of cenvat credit in ST-3 return is not legally sustainable and therefore, the rejection of refund on this ground is set aside - The Commissioner (A) in the impugned order has observed that the assessee have not submitted any documents to prove their contention that they have rightly availed the cenvat credit - It appears that both the authorities have not examined all the documents which have been filed by assessee in support of their refund claim - The matter is remanded back to the original authority to examine the refund claim on the basis of other documents filed by assessee - Accordingly, both the appeals are allowed by way of remand to the original authority: CESTAT

- Matter remanded: BANGALORE CESTAT

CENTRAL EXCISE

2019-TIOL-3634-CESTAT-MUM

Saertex India Pvt Ltd Vs CCE

CX - The dispute pertains to the availment of CENVAT credit which was sought to be recovered along with interest thereon and the imposition of penalty of like amount under section 11AC of CEA, 1944 r/w rule 15(2) of CCR, 2004 - The assessee had not taken credit of duty paid on inputs used for manufacture of 'stitch bonded glass fibre fabrics' as clearly established in findings of adjudicating authority and in which the credit, subsequently taken on 20th September 2007 during investigation, has been appropriated along with the further payment of Rs. 11,79,334/- - It is, thus, amply clear that CENVAT credit had been availed by an approximate formulaic calculation without item wise ascertainment of utilization of inputs for manufacture of exempted products - The CENVAT credit available on such inputs had been taken and duly utilized for discharge of the demand - The additional liability to the extent of Rs. 11,79,366/- for which CENVAT credit was not available also reinforces the hypothesis that, had the principle of non-availment of CENVAT credit on non-dutiable goods been followed, even this amount would not have been due - In the circumstances of discharge of liability under rule 6(3) of CCR, 2004 by availment of appropriate CENVAT credit, it would appear that the differential recovery of Rs. 11,79,366/- should sustain - The imposition of penalty should be restricted to the amount held as recoverable and not to the quantum of liability for which CENVAT credit of inputs used in exempted materials was availed - Discharge of this liability of Rs. 11,78,366/- would render the assessee eligible for reduction provided in law if made within 30 days - The demand to the extent of CENVAT credit that had not been availed on inputs used for manufacture of exempted goods but entitled, subject to discharge of liability at the prescribed rate under rule 6(3) CCR, 2004, is not deniable - The Director of the company would not have derived any particular benefit or have been aware of the requirements of the rules - No evidence has been brought on record of any intention on the part of the Director to evade any liability or of having taken any steps to facilitate such evasion - The impugned order was justified in dropping the proceedings against Shri PKC Bose: CESTAT

- Assessee's appeal allowed: MUMBAI CESTAT

2019-TIOL-3633-CESTAT-MUM

Nashik Forge Pvt Ltd Vs CCE

CX - Issue involved in the present appeal is whether for the default in making payment of monthly liability of duty during the period May 2008 to September 2008, the Appellant would be debarred from utilising CENVAT Credit for the period thereafter i.e. from July 2010 to June 2011.

Held: Issue of utilisation of CENVAT Credit post default in monthly payment of duty under Rule 8(3A) of CER, 2002 is no more res integra - The relevant portion, which debars utilisation of such credit, has been struck down by the Hon'ble Gujarat High Court in Indsur Global case - 2014-TIOL-2115-HC-AHM-CX - in view of the aforesaid precedent, no merit in the impugned order - Consequently, the same is set aside and the appeals are allowed with consequential relief: CESTAT [para 5, 7]

- Appeals allowed: MUMBAI CESTAT

CUSTOMS

2019-TIOL-2947-HC-MAD-CUS

HI Fasn Leather Products Company Vs JCC

Cus - The assessee is in appeal against impugned order - 2019-TIOL-1891-CESTAT-MAD of Tribunal upholding the order passed by lower authorities and dismissing the appeals of assessee with regard to redemption fine and penalty imposed on Shipping Bills for export of "Cow Crunch Upper Finished Leather" made by assessee - Rejection of prayer for retesting after a long period on the part by the Tribunal cannot be faulted - Even though the assessee obtained a Report from same Institute on 22.10.2009, the product description shown in that Report viz., "Cow Lining Leather Colour: OLIVE (KISSEL)(IV)(1)" is also not the same as the export of goods in question which is subject matter of the present case viz., 'Finished Leather' - The Report dated 16.10.2009 relied upon by the Revenue, gives the description of the sample is "Cow Softy Upper Leather (Crunch) Colour: OLIVE (VI)(1)(E)" - A mere difference of description of goods in these two Rep orts given by CLRI itself, as obtained by the Revenue and Assessee, cannot be fatal to the reliance placed by the Revenue on the said Report dated 16.10.2009 which pertained to the confiscated goods only - The court do not find any force in the contention raised by assessee that on the basis of report adduced by assessee before the Tribunal vide dated 22.10.2009, though obtained shortly after the report dated 16.10.2009, the Tribunal was required to direct a retest - Obviously the sample goods sent by assessee for testing was not from the lot of the goods exported or goods confiscated by the Revenue in question - Therefore, obviously the report obtained by Revenue Authorities from the sample taken from the confiscated export goods vide Report dated 16.10.2009, was more reliable rather than the Report dated 22.10.2009 produced by assessee - Therefore, the rejection of prayer by Tribunal for retesting of the sample in question, especially after a long period of about 9 years was justified - Therefore, the findings of Tribunal in upholding the imposition of redemption fine and penalty cannot be said to be wrong: HC

- Appeals dismissed: MADRAS HIGH COURT

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