2020-TIOL-NEWS-038 Part 2, Dated: Friday, February 14, 2020

2020-TIOL-NEWS-038 Part 2 | Friday February 14, 2020

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DIRECT TAX


	2020-TIOL-51-SC-IT PR CIT Vs Supreme Petrochem Ltd In writ, the Apex Court condones the delay and dismisses the Revenue's Special Leave to Petition along with pending applications. - Revenue's SLP dismissed: SUPREME COURT OF INDIA 2020-TIOL-50-SC-IT Parwaz Food Packers Vs DCIT In writ, the Apex Court condones the delay and dismisses the assessee's Special Leave to Petition along with pending applications. - Assessee's SLP dismissed: SUPREME COURT OF INDIA 2020-TIOL-367-HC-AHM-IT Anilukmar Gopikishan Agrawal Vs ACIT Whether writ petition is maintainable if filed on the ground that proceedings initiated by issuance of notice u/s 153C are wholly without jurisdiction - YES: HC Whether sec 153C as amended with effect from June 01, 2015 is applicable to cases where search is initiated prior to that date - NO: HC - Assessee's writ petition allowed: GUJARAT HIGH COURT 2020-TIOL-357-HC-MAD-IT Vasan Healthcare Pvt Ltd Vs PR CIT Whether the assessee is under obligation to exhaust its alternative remedy of adjudication u/s 263, before claiming such invocation of revisionary powers to be beyond jurisdiction - YES: HC - Assessee's petition dismissed: MADRAS HIGH COURT 2020-TIOL-247-ITAT-DEL Improvement Trust Fatehabad Vs ITO Whether rental income of a charitable trust is to be computed under the normal commercial principles, without resorting to the standard computation mechanism u/s 24(a) - YES: ITAT Whether deficit during the assessment year is allowed to be carried forward to the next AY, as the deficit of the earlier years is allowed for set off in the subsequent year - YES: ITAT - Assessee's appeal partly allowed: DELHI ITAT 2020-TIOL-246-ITAT-MUM Amateur Riders Club Vs ACIT Whether when the cancellation of registration u/s 12 by the DIT (Exemp) is set aside, the assessee is eligible for exemption u/s 11, following no material evidence to prove otherwise - YES: ITAT - Assessee's appeal allowed: MUMBAI ITAT 2020-TIOL-245-ITAT-PUNE Dilip Shantilal Jain Vs ACIT Whether value of a property can be pegged at a middle figure after accounting for demolition of any structure which existed on such property & if value as per the valuer is too low - YES: ITAT - Assessee's appeal allowed: PUNE ITAT 2020-TIOL-244-ITAT-JAIPUR Kailash Chand Agarwal Vs ACIT Whether when the shops of the assessee are under the jurisdiction of the PWD, the State PWD rates shall be applicable to estimate the cost of construction - YES: ITAT - Assessee's appeal partly allowed: JAIPUR ITAT

GST CASES

2020-TIOL-365-HC-AHM-GST

Sanjay Trading Company Vs State Of Gujarat

GST - Writ applicant availed the benefit of the interim order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017 - It shall be open for the writ applicant to point out to the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-2950-HC-AHM-GST , paragraphs 99 to 104 to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - Writ application disposed of: High Court [para 4 to 7]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-364-HC-AHM-GST

Swaminarayan Traders Vs State Tax Officer

GST - Writ applicant availed the benefit of the interim order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017 - It shall be open for the writ applicant to point out to the recent pronouncement of this Court in the case of Synergy Fertichem Pvt.Ltd = 2019-TIOL-2950-HC-AHM-GST, paragraphs 99 to 104 to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - Writ application disposed of: High Court [para 5 to 8]

- Application disposed of: GUJARAT HIGH COURT

2020-TIOL-363-HC-AHM-GST

Jai Jawan Jai Kisan Suppliers Vs State Of Gujarat

GST - By an ad-interim order, Court directed the goods to be released upon the writ-applicant depositing an amount of Rs.2,08,250/- - accordingly, applicant availed the benefit of an interim-order and got the goods released on payment of the requisite amount - Bench is now called upon to adjudicate the legality and validity of the order passed by the authority in the Form GST MOV-11 - Two grounds have been raised by the department for the purpose of confiscation of the goods, the first is, that the e-way bill was not generated, and the second is, that it was undervalued - In what circumstances the authority would be justified to invoke Section 130 of the Act for the purpose of confiscation is now explained in detail (in paragraphs 99 to 104) by this Court in the case of Synergy Fertichem Pvt. Ltd = 2019-TIOL-2950-HC-AHM-GST - In view of the aforesaid, this Writ-Application is allowed in part - The impugned order of confiscation in Form GST MOV-11 is hereby quashed and set aside and the matter is remitted to the respondent No.2 for fresh consideration so far as the issue of confiscation is concerned - While considering the issue afresh, the respondent No.2 shall bear in mind the principles laid down in the cited decision - Writ application disposed of: High Court [para 6, 8, 10]

- Application disposed of: GUJARAT HIGH COURT

MISC CASE

2020-TIOL-366-HC-AHM-VAT

Rituka Impex Vs State of Gujarat

Whether assessee's bank accounts and residence can be subjected to attachment where the attachment order exceeds its limitation as prescribed u/s 45 of the GVAT Act - NO: HC

- Assessee's application allowed: GUJARAT HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-293-CESTAT-DEL

Oriental Insurance Company Ltd Vs CCE & ST

ST - The assessee-company is engaged in providing General Insurance services and is registered with the service tax department for providing the same - The assessee provided insurance services under the Rashtriya Swasthya Bima Yojana Yojana to the State Nodal Agency, Uttar Pradesh - A notfn was issued exempting taxable service specified u/s 65(105)(d) provided by an insurer engaged in the General Insurance Business, to any person for providing insurance under the Yojana from the whole of the service tax leviable u/s 66 of the Act - Hence the service rendered by the assessee under the Yojana was exempt from payment of service tax the assessee paid the tax during the relevant period - The assessee claimed refund of the same - An SCN was issued proposing to reject the refund claim on grounds that the same was filed beyond the prescribed time limit of one year as provided u/s 11B of the CEA - The assessee replied by stating that the service tax was not payable as the Govt had exempted the taxable service from whole of the service tax and so the assessee was entitled to refund of the same since the amount was not due to the Govt - On adjudication, the proposals in the SCN were confirmed - Subsequently, the assessee's appeal to the Commr.(A) was dismissed - Hence the present appeal.

Held - It must be noted that the decision of the Delhi High Court in National Institute of Public Finance & Policy vs Commissioner of Service Tax was rendered after the decision of the Larger Bench of the Tribunal - The Madras High Court in 3E Infotech vs Customs, Excise & Service Tax Appellate Tribunal & Anr. held that when service tax is paid by mistake, a refund claim cannot be barred by limitation u/s 11B of the CEA - Besides, the Delhi High Court in M /s National Institute of Public Finance & Policy clearly held that if service tax was not leviable, but it was paid by mistake, the amount had to be refunded - The Kerala High Court also pointed out that the distinguishing feature for attracting the provisions u/s 11B is that the levy should have the colour of validity when it was paid and only consequent upon interpretation of law or adjudication, the levy is liable to be ordered as refund - When payment was effected, if it has no colour of legality, section 11B is not attracted - Therefore, it is clear that when service tax is not leviable, but it is deposited mistakenly by the assessee, the provisions of Section 11-B of the Act relating to limitation would not be applicable - In the instant case, the Commr (A) has rejected the refund claim of the assessee only for the reason that it was made beyond a period of one year from the date of payment of duty - Hence the assessee is entitled to refund with interest: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2020-TIOL-289-CESTAT-ALL

Shrikant Chaurasia Vs CCE & CGST

CX - The assessee dealt in Tobacco products - Certain goods were seized from the assessee's premises during the relevant period - Samples were drawn and subsequently sent for examination - Thereafter, the goods were confiscated on grounds and it was alleged that the assessee had been manufacturing such products but without obtaining registration - Penalty was imposed as well - On appeal, the Commr.(A) sustained such findings on grounds that the charged were bolstered by statements taken from various persons - Hence the present appeal.

Held: It is seen that though samples were taken of the seized goods but were not sent for chemical examination - Rather, market opinions had been obtained - There is no provision in Central Excise law for determining the chemical composition of goods based on market opinion - The samples should have been sent to the CRCL to seek report on as to whether the same is chewing tobacco - It is further seen that the persons whose statements were relied upon by the Commr.(A), had not been offered for cross examination - Hence it is not proven that the seized goods were chewing tobacco - The O-i-A merits being set aside: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

CUSTOMS

2020-TIOL-294-CESTAT-MUM

Sahil International Vs CC

Cus - The assessee filed BoE for import of goods declared as JBL iPOD dock and claimed classification u/s 77 of the CTH 8518 2200 of First Schedule to the CTA 1975 - On examination, the goods were found to be Audio Systems that were classifiable under CTH 8527 9100 of First Schedule to the CTA 1975 - The revision is not in dispute - The assessee questions the scope for invoking Section 111(m) of the the Customs Act 1962 in relation to particulars in BoE filed for warehousing.

Held - The O-i-O is based on the finding that the goods were declared as Speaker and that corresponding to such description is Heading No 8518 2200 of the First Schedule to the CTA 1975 - Though the assessee did declare the goods as speaker, the court is unable to perceive how it could foster a wrong impression in the minds of the examining officer - This was not an assessment under the Risk Management System, but is one of physical ascertainment on 'first check' basis - In such circumstances, the finding that the expression 'speaker' did not applu at all to the function of an iPod dock, which in addition to other functions, is also a speaker, cannot be seen as an attempt to mis-lead - Hence there is no reason to sustain the confiscation and imposition of penalty: CESTAT

- Assessee's appeal allowed: MUMBAI CESTAT

2020-TIOL-291-CESTAT-AHM

Texool Wastesavers Vs CC

Cus - The assessee is an SEZ unit, which in the relevant period, had been granted permission to undertake reconditioning of cloth and processing of industrial rags in the Kandla Free Trade Zone, which was later converted to the Kandla SEZ - In the project report submitted, the assessee stated that it would import Crush Packed Clothing which would comprise of Export Surplus of garment manufacturers and surplus of Departmental Stores remaining after clearance sales which were then sold on Kilo basis - The assessee claimed that the reconditioning was to be undertaken in respect of clothing which did not require any repair or recycling and which required ony cleaning, pressing and packing - Garments which required repair would be subjected to alteration, sewing before cleaning & pressing - The project report clearly stated that after re-processing, the goods would be re-exported - The assessee stated that the Development Commissioner had granted permission for manufacture of reconditioned clothing and for processing rags - The assessee imported old and used clothing rags and filed BoE alongwith the foreign supplier's invoice - The consignment was seized on charges that the unused t-shirts were being cleared as old and used clothing rags in the BoE - It was also alleged that the rest of the goods, through comprising of old & used rags, were seized as goods used to hide the unused clothing - Subsequent to remand directed by the Tribunal, the consignment was allowed to be cleared on payment of duty to the SEZ - In the remand proceedings however, the consignment was confiscated and redemption fine was imposed u/s 111(d) & 111(m) respectively, apart from payment of duty on the t-shirts - The assessee's request to re-export the goods was also rejected - Hence the present appeal.

Held - The letter of permission permits the assessee to manufacture of Fiber from Virgin material, Reconditioned Clothing & Rags - Besides, the letter of permission has been granted in terms of Project Report made before the Development Commissioner - The assessee is taking shelter of the proposal in the project report, which it claims has been approved in the letter of permission - That the project report is unsigned and is not addressed to any particular Revenue authority, is not disputed - From the same, it is seen that the assessee was permitted to import garments that are almost new but could be out of fashion in terms of time as far as the country of production is concerned - The entire case of Revenue is based on the allegation that the part of the consignment was almost new and, therefore, it was in violation of the policy - While the BoE describes the goods as old and used clothing rags, in the instant case, the new clothes cannot be called rags - Therefore there is mis-declaration to such extent - Nonetheless, as the goods are covered under the LoP granted by the DC, the assessee is entitled to take the same to the SEZ without payment of duty - Contrary to the facts, the LoP is specifically issued referring to the project report - LoP also permits manufacture re-conditioned clothing - The project report clearly states that some of the reported garments that new and could be out of fashion in terms of time in these circumstances the conclusion of the Commissioner in the impugned order that the said T-shirts are not by letter of permission is mis-placed - Hence the assessee is entitled to clear the goods to SEZ as per the LoP and Rule 27 of the SEZ Rules - Hence the charge u/s 111(m) is not sustainable - As far as charges u/s 111(d) are concerned, confiscation can be ordered only if the goods do not confirm to the test at time of import - Where no testing is done, confiscation u/s 111(d) is not justified - Hence the confiscation, redemption fine & penalties must all fail: CESTAT

- Appeal allowed: AHMEDABAD CESTAT