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2019-TIOL-NEWS-306 Part 2 | Monday December 30, 2019 |
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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DIRECT TAX |
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DCIT Vs Mindset Estates Pvt Ltd
Whether adhoc addition on account of on-money received on sale of flats can be made when seized material does not refer to either assessee or its project and statements recorded during search and relied upon are subsequently retracted - NO : ITAT
- Revenue's appeal dismissed: MUMBAI ITAT
Karur Vysya Bank Ltd Vs ACIT
Whether when the assessee-bank has already furnished PAN of the most of the depositors, there is no case for the Revenue to treat the assessee as "assessee in default' for non-deduction or short deduction of the TDS u/s 194A - YES: ITAT
Whether in such case, the matter warrants remand for fresh verification - YES: ITAT
- Case remanded: BANGALORE ITAT
Whether for valuing the closing stock, it is open to the assessee to value it at cost or market value, whichever is lower for income-tax purposes - YES:ITAT
- Assesse's appeal allowed: MUMBAI ITAT
Pink City Resorts Ltd Vs ITO
Whether income from agricultural produce can be deduced solely based on reports received from the agricultural department - NO: ITAT
- Assessee's Appeal allowed: JAIPUR ITAT
Mini Diamonds India Ltd Vs ITO
Whether the nature of trade is a pre-requisite to determine the rate of profit with respect to bogus purchases - YES : ITAT
- Assessee's Appeal allowed: MUMBAI ITAT
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GST CASES |
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2019-TIOL-2960-HC-JHARKHAND-GST Gulf Ashley Motor Ltd Vs GST
GST - The case of petitioner Company is that it has submitted its Form TRAN-I to claim input tax credit, but the same was not accepted due to the technical glitch in GST portal - The matter was ultimately reported to GST council, and upon the direction of the GST council, the Principal Commissioner forwarded the application of petitioner to the Nodal Officer on 27.3.2019 to look into the matter - The fact remains that the Form TRAN-I of petitioner has not yet been accepted - The Nodal Officer is directed to see that the Form TRAN-I submitted by petitioner is accepted in the portal within the due date, and still due to the technical glitch, if the Form TRAN-I is not accepted in the portal, the form shall be accepted manually and necessary scrutiny shall be made, whether the claim of petitioner is acceptable or not - For acceptance and scrutiny of the Form TRAN-I, the GST authorities and the Nodal officer shall take all steps in accordance with law within the due date: HC
- Application disposed of: JHARKHAND HIGH COURT
2019-TIOL-2959-HC-AHM-GST
Anmol Traders Vs State of Gujarat
GST - The petitioner invited the attention of court to the provisions of sections 5 and 6 of Gujarat GST Act, 2017 - Referring to the same, it was pointed out that the same provides that where a proper officer under CGST Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by proper officer under that Act on the same subject matter - It was pointed out that the authorities under the SGST Act have issued summons to the petitioner under section 70(1) of GST Act dated 29.8.2019 followed by another summons dated 5.12.2019 - It was pointed that in the statement of petitioner recorded by State authorities, question put to the petitioner was as to what was the status of search carried out at the petitioner's business premises by CGST Department and the second question was as to which books of accounts had been seized by CGST Department, in answer to which, the petitioner had replied that all their account books and other record of their business have been seized by CGST Department - It was submitted that, therefore, the authorities under the SGST Act are well aware that the authorities under the CGST Act are investigating the matter - It was submitted that there cannot be two parallel investigations under the State Act as well as the Central Act - Issue Notice returnable on 23rd January, 2020 - By way of ad-interim relief, the respondents are restrained from taking any coercive action against the petitioner pursuant to the impugned inquiry proceedings: HC
- Direct service permitted: GUJARAT HIGH COURT |
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INDIRECT TAX |
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SERVICE TAX
KN Food Industries Pvt Ltd Vs CCGST & CE
ST - The assessee-company manufactures confectionaries falling under Chapter 17 of the CETA 1985 and on behalf of the principal manufacturer, M/s Parle Biscuits Pvt Ltd, in terms of an agreement between the two - The latter procured the raw material and supplied it to the assessee for manufacturing confectionaries, which were then cleared on payment of duty on MRP as declared by M/s Parle - The assessee received job work charges on per kilo basis - In case, the quantum of goods got manufactured was less than standard mutually agreed upon quantum, the assessee was entitled to ex gratia job charges to cover up the loss or deficiencies in normal job charges to be received by the assessee - The Revenue opined that receipt of such ex gratia job charges by the assessee amounts to providing services and so issued SCN raising duty demand for the relevant period - On adjudication, demand with interest and penalty was sustained - Such findings were sustained by the Commr.(A) - Hence the present appeal.
Held: Such ex gratia charges are not covered by any of the Acts as described under Section 66E (e) of the Finance Act, 1994 - The Sub-clause mentions various active and passive actions or reactions which are declared to be a service namely; to refrain from an act, or to tolerate an act or a situation, or to do an act - As such for invocation of the clause, there has to be first a concurrence to assume an obligation to refrain from an act or tolerate an act, which is absent in the instant case - As such the present ex-gratia charges made by the M/s Parle to the assessee were towards making good the damages, losses or injuries arising from "unintended" events and did not emanate from any obligation on the part of any of the parties to tolerate an act or a situation and cannot be considered to be the payments for any services - Hence the orders cannot be sustained: CESTAT
- Assessee's appeal allowed: ALLAHABAD CESTAT
ST - The assessee procures purchase orders for M/s Krohne Messtechnik of Germany and various other companies in the group situated outside the country and considering this to be rendering of BAS chargeable to tax and upon the commission of Rs. 3,10,51,208/- received in 2008-09 and 2009-10, the tax liability was sought to be recovered in proceedings initiated against them - The original authority upheld the demand under section 73 along with interest thereon under section 75 of Finance Act, 1994 besides imposing penalty under section 78 - The first appellate authority held the demand to be unsustainable on merit as well as barred by time - It is common ground that the activity of assessee is within the ambit of BAS; the dispute merely pertains to whether the said transactions are exempted as exports - There can be no doubt that an activity for which consideration is received by an entity from outside India in convertible foreign exchange is nothing but export and hence, not liable to tax - In addition to the reliance placed on the decision in re Life Care Medical Systems 2012-TIOL-993-CESTAT-MUM, the relevance of second leg of condition has been cited as support for the view adopted by original authority - Taking cognizance of the subsequent deletion of expression 'and used outside India', the clarification issued by CBEC in circular 111/5/2009-ST has been cited as irrelevant for determination of tax liability of assessee for the disputed period - The grounds of appeal has elaborately dealt with analysis advanced in re Life Care Medical Systems and has also drawn attention to the decision relied upon therein, viz., Microsoft Corpn (I) Pvt Ltd 2009-TIOL-1325-CESTAT-DEL - It is seen that both of these decisions disposed off applications for waiver of pre-deposit and the prima facie view therein is, by no mean, a binding precedent enabling the first appellate authority to discard the decision in re Em Jay Engineers 2010-TIOL-1200-CESTAT-MUM - Furthermore, the grounds of appeal have not ignored of a catena of decisions which sustained the view taken by first appellate authority viz. Blue Star Ltd 2008-TIOL-716-CESTAT-BANG and ABS India Ltd 2008-TIOL-1500-CESTAT-BANG - Thus, it would appear that an overwhelming majority of decisions are in favour of non-taxability and the only decision relied upon in grounds of appeal lack binding precedent - The disputation of these decisions in appeals by Revenue does not disturb the precedential value till disposal by Supreme Court - Furthermore, the final disposal of dispute in re Life Care Medical Systems and re Microsoft Corpn (I) (P) Ltd are not in favour of the stand adopted by Revenue in the present instance - Hence on the first point of determination framed by Revenue authority, no reason found to sustain the appeal.
Turning to the interpretation of rule 3(2) of Export of Service Rules, 2005, the issue stands settled by decision of High Court of Bombay in SGS India Pvt Ltd 2014-TIOL-580-HC-MUM-ST and an identical view taken by majority in dispute of Microsoft Corporation (I) Pvt Ltd 2014-TIOL-1964-CESTAT-DEL - Furthermore, the final decision in Life Care Medical Systems 2016-TIOL-1007-CESTAT-MUM has also followed the above two decisions to hold that the issue is no longer res integra - The second point for determination framed by Revenue also fails - Appeal of Revenue is not sustainable: CESTAT
- Appeal dismissed: MUMBAI CESTAT
CENTRAL EXCISE
CX - Perusal of record shows that since the filing of appeal till date there is no single appearance of assessee except the repeated written request of adjournment - Today's absence coupled with the observation for the conduct of assessee is sufficient to opine that assessee is not interested in pursuing the impugned appeal - Therefore, the appeal deserves dismissal for want of prosecution - Support drawn from the case law of Supreme Court in case of Ram Siromani Tripathi & Ors. 2019-TIOL-63-SC-MISC-LB: CESTAT
- Appeal dismissed: DELHI CESTAT
CX - The assessee is engaged in manufacture of chemicals and cleared the finished goods under ARE-1 to the "developers" of SEZ, without payment of duty on the strength of letter of undertaking issued in terms of Rule 19 of CER, 2002 - Since the assessee did not maintain separate records as provided under Rule 6(2) of CCR, 2004 and did not pay the amount equal to 10% of value of exempted goods in terms of Rule 6(3) ibid, the department initiated show cause proceedings against the assessee, seeking for recovery of an amount along with interest and for imposition of penalty - The issue arising out of the present dispute is no more res integra in view of the judgments in Sujana Metal Products Ltd. 2011-TIOL-1173-CESTAT-BANG, Fosroc Chemicals (I) Pvt. Ltd. & ors 2014-TIOL-1609-HC-KAR-CX and Ultratech Cement Ltd. 2014-TIOL-1506-CESTAT-MUM - By considering the provisions contained in SEZ Act and the Rules, various judicial forums have held that the amendment made in Rule 6(6)(i) in 2008 has to be construed as retrospective in nature and the benefit of amendment should be extended to the goods cleared to a developer of SEZ for the authorized operations - In view of the well settled position of law, no infirmity found in the impugned order passed by adjudicating authority: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2019-TIOL-2958-HC-DEL-CUS
Polyglass Acrylic Manufacturing Pvt Ltd Vs ACC
Cus - The petition has been preferred for getting a refund claim which this petitioner has deposited with the respondent - The goods in question are polyester clothes - According to respondent, this case is about the classification of goods - The petitioner had deposited a duty of Rs.5,34,521.13 on the basis of valuation of Rs.27,22,160/- whereas as per respondent the duty leviable on this petitioner comes to Rs.47,57,416/- - The calculation details have been mentioned by respondent in O-I-O and in the O-I-A - In view of aforesaid O-I-A, a fresh sample drawn by respondent is to be re-tested - Thus, fresh O-I-O will have to be passed by respondent and therefore till then no refund can be granted to this petitioner - As the respondent has yet to pass an order on the basis of retesting as directed by Commissioner (A), court is not going much into the details of the case - The dispute in question is still alive and pending with the respondent for its final order - There is no substance in petition at this stage and the same is, therefore, dismissed: HC
- Writ petition dismissed: DELHI HIGH COURT
2019-TIOL-2957-HC-DEL-CUS
Raju Sharma Vs UoI
Cus - The first petitioner was intercepted by Customs officers before he was about to board a flight to Dubai - Search of his person led to discovery of Indian currency of about Rs 4 lakhs and 40 Dirhams - Whilst the foreign currency was returned, being within permissible limits for carriage abroad, the Indian currency was seized since the petitioner was unable to furnish any document for it - Such currency was seized u/s 110 of the Customs Act on belief that it was liable to confiscation u/s 113 of the Act r/w provisions of the FEMA - Subsequently on adjudication, it was held that the Indian currency to the extent it exceeded the permissible limit of Rs 25000/- was liable for confiscation - Besides, as the first petitioner was found to be carrying the currency at the behest of the second petitioner, penalties were imposed on both petitioners u/s 114 of the Act - Later, the Commr.(A) held that even in case of prohibited goods, redemption could be permitted u/s 125 of the Customs Act and that no occasion arose for interfering with the discretion exercised by the adjudicating authority in allowing redemption of currency - Later, such O-i-A was quashed by the Revisionary authority on grounds that redemption of currency ought not to be granted to the first petitioner as he was only a carrier of currency and not its owner - Hence the present petition.
Held - The reading of the O-i-O reveals that the adjudicating authority did not indicate that option to redeem the currency had been granted to the first petitioner - The O-i-A clarifies upon the matter by observing that being the owner of the currency, its redemption could be granted to the second petitioner - In such circumstances, it cannot be understood how the Revisionary Authority set aside the order, holding that redemption of the currency could not be granted to the first petitioner - All that the revisionary authority was required to do was to substitute the directions by permitting redemption of the currency to the second petitioner - There was no occasion to set aside the O-i-A wholesale and in the process render the currency irredeemable even by the second petitioner - Hence the order of the revisionary authority is quashed while the O-i-A is sustained: HC
- Writ petition disposed of: DELHI HIGH COURT | |
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