2020-TIOL-55-HC-AHM-IT

Pr.CIT Vs Kalpataru Power Transmission Ltd

Whether where the income received from sale or transfer of carbon receipts to foreign companies in the relevant AY is only hypothetical in nature, no addition is warranted in the relevant AY without the receipt of actual or real income - YES: HC

- Revenue's appeal dismissed : GUJARAT HIGH COURT

2020-TIOL-55-ITAT-MAD

Aditya Birla Money Ltd Vs DCIT

Whether if the issue of depreciation on office equipments has been decided in assessee's favour in the previous AY, it calls for same outcome in the relevant AY as well - YES: ITAT

- Assessee's appeals allowed: CHENNAI ITAT

2020-TIOL-54-ITAT-DEL

APC Air Systems Pvt Ltd Vs ITO

Whether approval granted by Addl. CIT in a mechanical manner and without application of mind is valid for initiating reassessment proceedings - NO : ITAT

- Assessee's appeal partly allowed: DELHI ITAT

2020-TIOL-53-ITAT-AHM

Jain Jewellers Pvt Ltd Vs ITO

Whether if an identical issue on the genuineness of donation has been decided in favour of the assessee, it calls for allowance of deduction u/s 35(1)(ii) on the ground of uniformity of facts in current AY - YES: ITAT

- Assessee's appeal dismissed: AHMEDABAD ITAT

2020-TIOL-52-ITAT-HYD

Sudhir Kumar Vs DCIT

Whether unless AO comes to conclusion that material seized does not belong to searched person, same cannot be treated as belonging to assessee to assume jurisdiction against him to initiate proceedings u/s 153C - YES : ITAT

- Assessee's appeal allowed: HYDERABAD ITAT

2020-TIOL-51-ITAT-VIZAG

Premji Jivraj Patel Vs ITO

Whether certificate of the Gram Panchayat can validate the construction of a house property where no approval or permission is necessary - YES: ITAT

- Assessee's Appeal allowed: VISAKHAPATNAM ITAT

2020-TIOL-56-HC-MAD-CT

Insap Flexibles And Engineers Pvt Ltd Vs CTO

Whether scope of Review prescribed u/s 37(7)(a) of TNGST Act permits Tribunal to review original order, simply because dealer was later on available to file duplicate Declaration forms to avail concessional rate of tax - NO: HC

- Assessee's petition dismissed : MADRAS HIGH COURT

2020-TIOL-01-NAA-GST

Director General of Anti-profiteering Vs Revital Reality Pvt Ltd

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Reversal of the ITC of a total amount of Rs.1,77,94,573/- has been effected by the respondents even before the Occupancy Certificate/Completion Certificate was issued by the competent authority - above voluntary reversal of credit has been effected only in August 2019 i.e. much after the expiry of the period of investigation by the DGAP i.e from July 2017 to December 2018 - Rule 42 of the CGST Rules lays down the mode of computation of mandatory reversal of the unutilized input tax credits in respect of unsold flats/shops of a real estate project at the time of receipt of completion/occupancy certificate or on the date of first occupancy, whichever is earlier - since this is the only method prescribed for reversal of ITC under the CGST rules, the reversal affected by the respondent has to be viewed as an act which was carried out with malafide intention of denying the passage of benefit of ITC to his customers/homebuyers - it is also a fact that at the time of reversal of credit, a number of units were yet to be sold and occupancy certificate was not yet received which implied that this act of reversal was not only premature but apparently also an afterthought aimed at avoiding the passing on of the benefit of ITC to his customers/homebuyers - importantly, DGAP has calculated the profiteered amount only in respect of the sold units on which GST is being charged by the respondent - therefore, the reversal of ITC by the respondent on his own accord does not alter the computation of profiteering by the DGAP in any manner: NAA

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - DGAP report reveals that ITC as a percentage of the turnover that was available to the respondent during the pre-GST period (April 2016 to June 2017) was 0% and during the post-GST period July 2017 to December 2018 was 2.68% and which confirms that during the post-GST period the respondent has benefited from additional ITC to the tune of 2.68% of his turnover and the same was required to be passed to the applicants no. 1 to 8 and other flat buyers - DGAP has calculated this amount as Rs.3,32,61,809/- on the basis of information supplied by the respondent; which the respondent has not challenged and hence the amount of profiteering computed by the DGAP is accepted as correct - amount to be refunded to the applicants and other flat buyers along with interest @18% from the date when the above amount was profiteered till the date of payment as per provisions of rule 133(3)(b) of the Rules - such amount has to be paid within a period of three months failing which such amount shall be recovered by the Commissioner CGST/SGST concerned as per CGST Act under the supervision of DGAP; compliance to be submitted within four months - as respondent has denied benefit of ITC to buyers of flats being constructed by him in his project 'Supertech Basera', in contravention of s.171(1) of the Act, they have committed an offence for which a penalty is leviable u/s 171(3A) of the Act, notice to be issued in this regard: NAA

GST - Anti-Profiteering - Request of the respondent to adjust the ITC reversed of Rs.1,77,93,573/- against the profiteered amount is not tenable as the expression “profiteered” as explained u/s 171(1) of the Act, 2017 means the amount determined on account of not passing on the benefit of reduction in the rate of tax on supply of goods or services or both or the benefit of additional input tax credit to the recipients by way of commensurate reduction in the prices - what is relevant for the purpose of computation of profiteered amount is the additional availability of ITC in the pre-GST and the post-GST periods and not what is done subsequently which could either be discharging of output GST liability or reversal of ITC - reversal of ITC effected by the respondent on his own accord does not alter the computation of profiteering by the DGAP in any manner - it is apparent that the respondent by his act of reversal of ITC has attempted to deny his customers/homebuyers the benefit of ITC and accordingly the above amount cannot be adjusted as claimed by respondent: NAA

GST - Anti-Profiteering - Respondent has submitted details of the profiteered amount claimed to have been passed by him to all his customers along with sample copies of Journal vouchers issued to the customers to show that the respondent has allegedly passed on ITC benefit of Rs.3,30,91,398/- to his buyers; also furnished copies of 26 Journal Vouchers issued on 06.08.2019 in support - Perusal of the vouchers show that they have been issued on the same date which makes their genuineness doubtful - respondent has neither produced the acknowledgment receipts from recipients nor has furnished tax invoices to prove that he has passed on the above amounts as benefit of ITC - respondent has also not furnished the said details to the DGAP during the course of investigation, hence, there is hardly any doubt that the above records have been prepared by respondent subsequently to mislead the present proceedings: NAA

SERVICE TAX

2020-TIOL-54-CESTAT-HYD

Oren Hydrocarbons Pvt Ltd Vs CC, CE & ST

ST - The assessee is a manufacturer of Barite powder - They receive the raw material, crush it into powder and transport it to their Chennai unit from where it is exported - During investigation, it was found that the assessee was not discharging service tax under reverse charge mechanism on GTA services which they have availed for transporting the goods - The assessee prayed for benefit of exemption notfn 34/2004 which was not allowed to them - They further contended that the benefit of exemption notfn 41/2007-ST which was available to services used for export of goods was also not given to them - Thirdly, they contested the invocation of extended period of limitation - As far as the first issue is concerned, this exemption is available only in cases where the gross amount charged for consignments transported in goods carriage does not exceed Rs.1,500/- or gross amount on individual consignment transported in goods carriage does not exceed Rs.750/- - This notification was interpreted in case of Bellary Iron & Ores Pvt Ltd - 2010-TIOL-704-CESTAT-BANG - Tribunal concur with the views expressed by Tribunal that this exemption is available only when the aforesaid two conditions are met - There is nothing on record to show that either of these two conditions has been met in the present case - Coming to the second issue of exemption notfn 41/2007-ST, this notification exempts services which are used for export of goods - GTA services were availed for transporting goods from their Kodur unit to Chennai - Thereafter, the Chennai unit in turn exported the goods - While this transportation may be in relation to export of goods, there is no sufficient evidence to show that this transportation is actually for export of goods - Secondly, the exemption notification does not provide the exemption straightaway but is subject to certain conditions and available by way of refund of service tax paid on the specified services used for export of goods - This does not automatically allow the assessee to NOT pay service tax which they were liable to pay - For this reason, no force found in the argument of the assessee that they are entitled to the benefit of this exemption notification - As regards to invocation of extended period of limitation, assessee was fully aware of their liability to pay service tax on GTA services and had indeed obtained registration for the same services received in their Chennai unit but had not done so, in respect of Kodur unit - Therefore, assessee cannot plead ignorance about their liability to pay service tax and take registration and follow the appropriate procedures - The extended period of limitation has been correctly invoked - The impugned order is correct and calls for no interference: CESTAT

- Appeal rejected: HYDERBAD CESTAT

2020-TIOL-52-CESTAT-CHD

Verma Brothers Vs CCE & ST

ST - Appellant is engaged in Construction Service and the refund claim filed is with regard to Construction Service provided to the Government for building of MES - The said service was exempted from service tax vide entry number 12(a) of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 - However, the said entry was withdrawn vide Notification No. 06/2015-ST dated 01.03.2015 which was effective from 01.04.2015, but, on the assumption that the date of notification is 01.03.2015, the appellant paid service tax for the period March 2015 and later on the refund claim was filed on 07.11.2016 - Refund claim was rejected as time barred - appeal to CESTAT.

Held: It is an admitted position in the facts of the case that during the period March 2015, the service provided by the appellant to MES was exempt from payment of ST - therefore, the amount paid by the appellant is not ST - in that circumstances, the time limit prescribed under Customs Act or Central Excise Act is not applicable and the time limit prescribed as per the decision of the Apex Court in the case of Anam Electrical Manufacturing Co. - 2002-TIOL-650-SC-CUS is applicable i.e. 3 years - admittedly, the appellant has filed refund claim within 3 years from the date of payment of the ST - in that circumstances, the refund claim filed by the appellant is not barred by limitation and the same view has taken by the High court of Delhi in the case of National Institute of Public Finance & Policy - 2018-TIOL-1746-HC-DEL-ST - therefore, the appellant is entitled to claim refund of the amount paid for the period March 2015 - in these terms, the impugned order qua rejecting the refund claim of the appellant as time barred is set-aside - in result, the appeal is allowed : CESTAT [para 7 8, 9]

- Appeal allowed: CHANDIGARH CESTAT

CENTRAL EXCISE

2020-TIOL-53-CESTAT-AHM

Magicrete Building Solutions Pvt Ltd Vs CCE & ST

CX - During the relevant period, an SCN was issued to the assessee proposing to deny cenvat credit in respect of labor services, on grounds that the service provider is registered for private security agency service - It was also alleged that the labor service is not used in or in relation to manufacture of final product in terms of Rule 2(l) of the CCR - On adjudication, one of the charges, namely use in relation to manufacture of final product, was dropped - However, credit was denied on charges that the service provider is registered under different heading whereas the assessee had received labor service - It was also pointed out that there were discrepancies of address in the input service invoices - On appeal, the Commr.(A) sustained such findings - Hence the present appeal.

Held - There is no dispute that whatever was mentioned in the invoice was received by the assessee and the same was used in its manufacture, on account of which credit cannot be denied - Regarding classification, it is subject matter of the service provider - The classification cannot be disputed in the hands of the service recipient, as follows from the decision in Newlight Hotels & Resorts Ltd - Hence on this count, credit cannot be denied - Regarding the discrepancies pointed out in the service invoice issued by the service provider regarding incorrect address, there is no charge in the SCN regarding such discrepancy - Hence the adjudicating authority cannot traverse the scope of the SCN as the assessee was never put to notice about the new issue raised in the O-i-O - As it is undisputed that the service received by the assessee was used in manufacture, nonetheless, any error in mentioning the address will not result in denial of credit - Hence the O-i-A merits being set aside: CESTAT

- Assessee's appeal allowed: AHMEDABAD CESTAT

CUSTOMS

2020-TIOL-45-HC-KERALA-CUS

Assistant Commissioner of Air Customs Vs Soman Kochuraman

Cus - The respondent, along with his wife and two minor children, had travelled from Sharjah, UAE to India on 28.6.2004 -the petitioner carried in his registered baggage four articles of spare parts [declaring Rs.50,000/- as the value] for a car that he had earlier imported to India for his personal use - these items were declared as part of the baggage - he claimed the benefit of the total duty free baggage allowance that was individually admissible to each of the family members - however, the respondent was allowed to claim a duty free baggage allowance of upto Rs.25,000/- only and resultantly, the respondent had to pay duty on the remaining value of Rs.25,000/- and further was subjected to a penalty and fine - vide impugned order, the Single Judge held that the inclusive definition of family under Rule 2(iv) of the Baggage Rules, 1998 [Rules]could not be ignored while applying the limits of permissible baggage allowance to passengers, who constituted the family of the respondent - he further held that inasmuch as the spare parts did not come within the excluded category of goods under Annexure I of the Rules, the same had to be treated as bona fide baggage for the purposes of the Rules - the impugned orders of the Customs authorities were, therefore, quashed and the petitioner held entitled to a refund of the duty, fine and penalty paid by him - Revenue before High Court.

Held: The duty free baggage allowance that is permitted under the Rules to a passenger cannot be clubbed with the duty free allowance permitted to another passenger even if he/she falls within the definition of the family of the first passenger - the items in question were contained in the baggage of the petitioner, and the invoices in respect of the spare parts showed the petitioner as the person to whom the spare parts were sold - therefore, the petitioner could not have contended for a pooling of the baggage allowance permitted in respect of his wife and children to enhance the limit of duty free baggage allowance that was admissible to him in his capacity as a passenger under the Baggage Rules - the finding of the single Judge on this issue is, therefore, set aside - the spare parts in question were intended for use in a vehicle imported by the petitioner earlier and put to personal use of the petitioner - under the said circumstances, and in view of the fact that the items of spare parts were not excluded for carriage in baggage under Appendix I of the Baggage Rules, the finding of the single Judge that the said items of spare parts constituted bona fide baggage is upheld - thus, the Writ Appeal is allowed to the extent of setting aside the finding of the single Judge that the limit of baggage allowance limited to the petitioner could be pooled with the limits of duty free baggage allowance permitted to the other passengers of his family for the purpose of computation of duty liability under the Customs Act, 1962 - this Court does not, however, disturb the finding of the single Judge with regard to the bona fide nature of the baggage carried by the petitioner, as also the finding that the petitioner will not be liable to any fine or penalty since the duty liability of the petitioner in the instant case appears to have resulted from an erroneous understanding of the provisions of the Baggage Rules -the Writ Appeal is disposed of as above : HIGH COURT [para 3, 4]

- Appeal disposed of: KERALA HIGH COURT

2020-TIOL-51-CESTAT-DEL

Tanmay Global Logistics Vs CC

Cus - The assessee is in appeal against impugned order whereby their CHA licence have been revoked alongwith forfeiture of security deposit of Rs. 5 lakhs - The assessee, CB/CHA firm is a partnership having partners namely Dewang Manesh Shah and Mrs. Madhu Gaur - Another CB – M/s S. M. Wairkar had filed a Bill of Entry on behalf of importer, M/s Apollo Enterprises - The Proprietor of M/s Apollo Enterprises is Mr. Shantaram Kajrekar - Revenue on the basis of intelligence that parts of branded LED TV were being imported in the name of M/s Apollo Enterprises without declaring the brand name and actual value and other specifications of the goods in the bill of entry filed for customs clearance directed the said CHA or the custom broker to furnish all the relevant import documents - It was revealed that the said bill of entry have been filed as per the instruction of one Shri Samir Shah, Proprietor of M/s Pankit Forwarders - There is no case of connivance of assessee CHA with the actual importer of the goods namely Shri Ashok Purohit - There is no allegation by the Revenue that the assessee CHA received any extra remuneration, than the normal remuneration for filing the bill of entry under dispute - The assessee CB /CHA have erred in not receiving the KYC documents directly from the hands of the IEC holder - Shri Shantaram Kajrekar - Further, as the documents were received through Shri Samir Shah relative of partner, there was an element of trust - Thus, there is some element of inadvertance on the part of the assessee CHA - Under the circumstances, there is no case of malafidely filing the bill of entry under collusion and /or connivance, with the said Shri Ashok Purohit or Shri Samir Shah - The punishment of revocation is too harsh and disproportionate - Accordingly, the order of revocation is set aside - So far as the forfeiture of security deposit is concerned, the same is reduced to Rs. 1,00,000/- - The period of CB licence of assessee shall be extended for the period it remained in revocation: CESTAT

- Appeal partly allowed: DELHI CESTAT

2020-TIOL-50-CESTAT-MUM

Aquatech Systems Asia Pvt Ltd Vs CC

Cus - Assessee have been importing goods from their principals M/s Aquatech International Corporation USA and the case of their imports was registered with special valuation branch (SVB) - They applied for periodical review of SVB order along with the relevant affidavits and declarations - They submitted that there was no change in the terms and conditions of agreement/ invoicing pattern since the time when order dated 29.03.2006 was passed, so their relation was not influencing the transaction value of the imported goods - Adjudicating authority has in his order dated 14.01.2013, ordered for enhancement of invoice value by 10% under Rule 7A of Valuation Rules 1988/ Rule 8 of Valuation Rules, 2007 and also for addition of royalty charges to value of imported goods in terms of Rule 9(1) (c) of Valuation Rules, 1988 and 10(1) (c) of the Valuation Rules, 2007 - Assessee have in their appeal challenged both the additions made - Though these findings and addition were challenged by assessee in their appeal before the Commissioner (A), Commissioner (A) has not recorded any finding in his order in this respect - Hence matter for consideration of additions as ordered by adjudicating authority under Rule 7A of Valuation Rules 1988/ Rule 8 of Valuation Rules 2007 needs to be remanded back to Commissioner (A) for consideration of the issue - Assessee have given the explanation of clause in Royalty agreement which clearly shows that value of imported goods is included in "project value" and royalty has been paid on the project value determined inclusive of the value of imported goods - Thus in terms of the law laid down by Apex Court in case of Matsushita Televisions - 2007-TIOL-64-SC-CUS , the conditions for addition of royalty charges as laid down in Rule 9 (1)(c) of Valuation Rules, 1988 are satisfied - No merits found in the submissions of assessee in relation to addition of royalty charges in value of imported goods in terms of Rule 9 (1) (c) of Valuation Rules, 1988/ Rule 10(1)(c) of Valuation Rules, 2007 - Assessee have in their appeal and during arguments relied upon various decisions of Tribunal holding that Royalty Charges cannot be added to the value of imported goods - Tribunal do not dispute the preposition laid down in the said decisions but in terms of decision of Apex Court, the issue of addition of Royalty Charges will be dependent on the terms and condition of Royalty agreement - In the decisions referred by assessee, Tribunal has after examining the terms of agreement in those cases concluded that in facts of that case royalty charges could not have been added: CESTAT

- Appeal partly allowed: MUMBAI CESTAT