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2020-TIOL-NEWS-021 | Friday January 24, 2020 |
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DIRECT TAX |
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2020-TIOL-157-HC-MAD-IT
PR CIT Vs A Ramalingam
On appeal, the High Court finds that the tax value involved in the matter is lower than the limits prescribed in Circular No.17/2019 dated 08.08.2019 for the High Court to entertain an appeal. Hence the appeal is dismissed, with the question of law being left open.
- Revenue's appeal dismissed: MADRAS HIGH COURT
2020-TIOL-156-HC-AHM-IT
PR CIT Vs Vishal Engineering and Galvanizers
Whether deduction u/s 37 is allowed in respect of commission paid to persons for referring the names of customers, to introduce potential customers to the assessee, considering that such activity qualifies as service - YES: HC
- Revenue's appeal dismissed: GUJARAT HIGH COURT
2020-TIOL-134-ITAT-DEL
Clearview Healthcare Pvt Ltd Vs ITO
Whether when shares are sold in next financial year at much higher amount after proper due diligence, that to a non resident buyer and there is no case of unaccounted money being brought in garb of share premium, no addition is permited u/s 56(2)(vii) - YES: ITAT
- Assessee's appeal allowed: DELHI ITAT
2020-TIOL-133-ITAT-DEL
DCIT Vs DLF Utilities Ltd
Whether no disallowance u/s 36(1)(iii) on the claim of deduction on interest expenditure is warranted on the grounds that the assessee has not correctly used the amounts borrowed for genuine commercial expediency - YES: ITAT
Whether without demonstrating the manner in which the dissatisfaction has been recorded regarding the disallowance made by the assessee u/s 14(2), the AO cannot invoke Rule 8D in a mechanical manner to recompute the sou motu disallowance - YES: ITAT
- Revenue's appeal dismissed: DELHI ITAT
2020-TIOL-132-ITAT-MUM
Supreme Industries Ltd Vs ACIT
Whether a dubious transaction by the assessee, to forfeit the amount received as an advance for transfer of Capital Asset, warrants a corrective measure by the Revenue by way of reduction of such forfeited amount from the cost of acquisition of capital asset - YES: ITAT
Whether therefore, mere quoting a wrong section will not preclude the Revenue from making a correct disallowance - YES: ITAT
- Assessee's appeal dismissed: MUMBAI ITAT
2020-TIOL-131-ITAT-BANG
State Bank of India Vs DCIT
Whether the assessee cannot be declared as assessee in default u/s 201(1) for interest payment made to an entity which falls within the ambit of section 194A(3)(f) - YES: ITAT
- Assessee's appeal allowed: BANGALORE ITAT
2020-TIOL-130-ITAT- VIZAG
Fusion Voice Solutions India Pvt Ltd Vs ITO
Whether direction of the CIT u/ 263 is liable to be set aside if the issues in revision have not been found prejudicial to the Revenue after making extensive verification during the scrutiny assessment - YES: ITAT
Whether if the incentives paid to the employees take the character of salaries u/s 192, no disallowance is warranted u/s 40(a)(ia) - YES: ITAT
- Assessee's appeal allowed: VISAKHAPATNAM ITAT
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INDIRECT TAX |
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SERVICE TAX
2020-TIOL-165-CESTAT-AHM
IILM Business School Vs CCE & ST
ST - The appellants are engaged in imparting courses such as MBA, PGP programme (industry integrated) - a SCN was issued to the appellants demanding ST on this activity under the head of 'Commercial Coaching and Training' -demand confirmed, penalty imposed - the same was upheld by Commissioner (Appeals), hence appeal to CESTAT.
Held: The appellants themselves are not recognized by law to grant any degree and therefore, the service provided by the appellant qualifies as 'Commercial Coaching and Training' - to claim the benefit of notification no.10/2003-ST dated 20.6.2003, the appellants have to establish that the charge for such services are not paid by the service recipient to the service provider - in the instant case, the O-I-O as well as the impugned order records that the payment has been made to the appellants by the service recipient and thus, the benefit of notification 10/2003-ST is not available -in view of the decision of Tribunal in case of Sri Chaitanya Educational Committee - 2015-TIOL-1175-CESTAT-BANG , the appellants are liable to pay ST on the service provided by them as the appellants are not falling under any category excluded from the definition of 'Commercial Coaching and Training' - relying on the aforesaid decision, the demand of duty, interest and penalty under sections 77 and 78 of the Finance Act, 1994 are upheld -the appeal is consequently dismissed : CESTAT [para 4, 5, 6]
- Appeal dismissed: AHMEDABAD CESTAT
2020-TIOL-164-CESTAT-CHD
Sigma Forging and Forming Pvt Ltd Vs CGST & CE
ST - An industrial plot was allotted to the appellant by the SIPCOT, a Government of Tamil Nadu undertaking, for a period of 99 years; the appellant paid one-time development charge to SIPCOT; that a ST of Rs.17.94 lakhs on the above development charge was also collected; that the appellant filed a claim for refund of the above ST vide its application dated 11.12.2017 on the ground that the same was erroneously collected, etc. - the above refund claim was prompted by the retrospective amendment vide section 104 of the Finance Act, 2017 whereby, the levy and collection of ST on the one-time payment of development charges was exempted and even the refund mechanism was provided thereunder -the Revenue was of the view that any claim for refund was to be made within a period of six months from the date of assent of the President of India (which was on 1.4.2017) and therefore, the appellant's application for refund dated 11.12.2017, which was beyond six months, was barred by limitation as prescribed under section 104(3) - SCN issued - appellant's claim rejected - the same was upheld by the Commissioner (Appeals), hence appeal to CESTAT.
Held: In the decision in the case of M/s.Roop Automotives Ltd. [Service Tax Appeal No.42701 of 2018 - Final Order No.40928 of 2019], this Bench has inter alia concluded that procedure is the handmaid of justice which is meant to serve justice rather than defeat the purpose, following the decision of the Apex Court in the case of JK Jute Mill Mazdoor Morcha Vs Juggilal Kamlapat Jute Mills Company Ltd. in Civil Appeal No.20978 of 2017 dated 30.4.2019 - following the above, the limitation of one year as in section 11B of the Central Excise Act, 1944 would have to be reckoned from 1.4.2017 which is the date on which the assent of the President was received -with the above observations, the matter is remanded to the file of the Adjudicating Authority, who shall verify and pass appropriate orders as per the direction contained at paragraph 11 of the Order of this Bench in Roop Automotives Ltd. in Service Tax Appeal No.42701 of 2018 and then allow if the same is found to be within the time prescribed, with consequential benefits, if any, as per law : CESTAT [para6.1, 6.2, 7]
- Matter remanded: CHENNAI CESTAT
CENTRAL EXCISE
2020-TIOL-163-CESTAT-MUM
CCE Vs Kiran Elastomers Pvt Ltd
CX - Rule 5 of Cenvat Credit Rules, 2004 [Rules] - Grant of refund by the Commissioner (Appeals) of unutilised cenvat credit accumulated against inputs and input services used for goods manufactured and supplied to 100% Export Oriented Unit (EOU) is assailed in this appeal by the Revenue-Department.
Held: Commissioner (Appeals) had observed that the refund sanctioning Authority had wrongly interpreted Rule 5 of the Rules by stating that refund under this rule is permissible only if the goods are exported out of India and in case finished goods are cleared to 100% EOU against CT-3 which is considered as deemed export, refund is not admissible; that such observation by wrong interpretation of notification no. 5/2006-CE (NT) dated 14.3.2006 as superseded by notification no.27/2012-CE (NT) dated 18.6.2012 is erroneous, since the spirit behind Rule 5 of the Rules is to allow refund of cenvat credit against deemed export also, as has been held in various judgments -no irregularity or illegality can be attributed to such an observation made by the Commissioner (Appeals) so as to invoke appellate jurisdiction of this Tribunal - further, this Tribunal in the respondent's own case - 2017-TIOL-4269-CESTAT-MUM for the period prior to period under dispute, had allowed refund to the respondent by holding that there was no significant difference as regards term 'export' for the purpose of Rule 5 of the Rules, during pre and post amendment introduced to Rule 5 in 2012 - hence in carrying forward the judicial precedent set by this Tribunal, the appeal is dismissed and the impugned order is hereby confirmed: CESTAT [para 3, 4]
- Appeal dismissed: MUMBAI CESTAT
2020-TIOL-162-CESTAT-ALL
Shri Krishna Industries Vs CCE
CX- Vide impugned order, Commissioner has confirmed the demand of duties against M/s.Shri Krishna Udyog as also against M/s.Shri Krishna Industries on the allegations and findings of clubbing of clearances and consequently denial of Small Scale Exemption Notification to M/s.Shri Krishna Udyog -in addition, penalties stands imposed upon the said two appellants –Assessee is in appeal - Revenueis also before CESTAT and in their appeal have referred to certain facts leading to miscalculation in the quantification of the demand.
Held: During the course of adjudication, the appellant took a categorical stand that they were getting the goods manufactured on job work basis from M/s.Diamond Steel and produced the relevant documents - while dealing with such documents, the adjudicating authority had observed that such request of the assessee cannot be accepted at the adjudication stage inasmuch as the attention of the investigating authorities was not drawn to the said documents at the time of tendering the statement of proprietor - he further observed that examining the said documents at the adjudication stage would be in contradiction to the tenets of natural justice -no merits found in the above stand of the adjudicating authority -the entire purpose of adjudication is to come to the finding between the allegations and proposals made by the revenue and the defence, pleas and contention raised by the assessee -the assessee is within his right to produce such defence documents, which he considers relevant for countering the allegations of the revenue -it is only after the allegations are revealed in the SCN, an assessee would come to know about the same and would submit his defence -as such, to observe that such defence should have been submitted before the investigating authorities, when the SCN was not even issued, is not only against the settled principles of law but are perverse observation also - as such, on this short ground itself, the Bench deems it fit to set aside the impugned order and remand the matter to adjudication authority for fresh adjudication after giving a proper opportunity to the appellants to put forth their case - inasmuch as, the assessee's appeal stands remanded, the Bench considers it fit to remand the revenue's appeal also, as only a short issue of quantification is involved – it is ordered accordingly -in the result, all the three appeals stand remanded: CESTAT [para 4, 5, 6]
- Matter remanded: ALLAHABAD CESTAT
2020-TIOL-161-CESTAT-AHM
SGI Corporation Vs CC
Cus- In a case of undervaluation of imported "whey protein and other food products", the appellant accepted the enhancement of value on the basis of contemporaneous import price and also waived the SCN - vide O-I-O, the value declared by the appellant was rejected on the basis of contemporaneous import and ordered redetermination of the value of identical goods as per price of identical goods imported retrieved from NIDB Data - goods ordered for confiscation with option of redemption of goods on payment of redemption fine of Rs.18 lakhs, penalty of Rs.1.75 lakh also ordered - on appeal, the Commissioner (Appeals) modified the order reducing the redemption fine from Rs.18 lakhs to Rs.12 lakhs - appeal to CESTAT in the matter of order of confiscation.
Held: Although the appellant had waived the SCN, however, the appellant was not put to notice the intention of the revenue for confiscation of the goods - due to this reason the appellant could not make any defence as regard confiscation of the goods which is consequential to alleged mis-declaration of the value of imported goods -in these circumstances, the original order passed by the Adjudicating Authority is ex-parte order without having on record any representation in defence of the appellant -therefore, since the appellant have raised various grounds and the Adjudicating Authority had no occasion to consider the submission now made before Commissioner (Appeals) as well as before this tribunal, the matter needs to be remanded to the Adjudicating Authority -accordingly the impugned order is set aside except the reduction of redemption fine - the appeal is allowed by way of remand to the Adjudicating Authority for passing a fresh order : CESTAT [para 6, 7]
- Matter remanded: AHMEDABAD CESTAT
2020-TIOL-160-CESTAT-BANG
CC Vs HID India Pvt Ltd
Cus - M/s.HID India Pvt. Ltd. [respondent], a subsidiary of M/s. HID Asia Pacific, are engaged in the sale and distribution of contactless access control chords and readers -they import goods from HID Asia Pacific -as the supplier and the importer are related, Special Valuation Bench (SVB) initiatedproceedings- vide impugned order, Commissioner (Appeals) held that the rejection of transaction value was baseless and the O-I-O was wrong in loading 30% on the declared assessable value - Revenue is in appeal before CESTAT.
Held: The impugned order is very reasoned, logical and maintainable - no cogent reasons have been brought out in the OIO for rejection of declared value; even when it was rejected, the Customs (Valuation) Rules, 1988 [Rules] were not sequentially followed; even then, while following the deductive method, due allowances were not given and correct data was not compared - the OIO proceeds on a curious admixture of Rule 5 and Rule 7 which is nowhere provided for - while invoking Rule 5, no values of contemporaneous imports were taken for comparison; arbitrarily 30% has been loaded without any authority of law under Rule 5 and clearly the OIO transgressed the scope of remand -it is found that the Review Order passed by the Committee of Chief Commissioners states that the impugned order has given the reason for not accepting the invoice value as per Rule 4(3)(a) of the Rules and proceeds to say that as the value cannot be determined as per Rule 5, Rule 6 recourse was taken to Rule 7 - this ground of appeal is contrary to the facts stated therein OIO - the OIO has not at all discussed the non-applicability of Rule 5, Rule 6 in a sequential manner and the applicability of Rule 7 - therefore, the premise on which the appeal is made is factually incorrect and for the reason stated above, no cause has been made by the appellants necessitating to interfere with the impugned order - therefore, the appeal is devoid of any merit and is liable to be rejected -in the result, Revenue appeal is rejected : CESTAT [para 4, 5, 6]
- Appeal of Revenue rejected: BANGALORE CESTAT
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