2020-TIOL-NEWS-047 Part 2, Dated: Tuesday, February 25, 2020

2020-TIOL-NEWS-047 Part 2 | Tuesday February 25, 2020

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DIRECT TAX


	2020-TIOL-60-SC-IT Pr.CIT Vs Maheshbhai Manilal Shah In writ, the Apex Court condones the delay and directs that notice be issued to the parties. It also directs that the matter be tagged with SLP(C) No.486/2020. - Notice issued: SUPREME COURT OF INDIA 2020-TIOL-448-HC-ALL-IT Dhan Prakash Budhraja Vs CIT Whether concealment of facts while filing the petition of mandamus amounts to playing fraud upon the High Court & leads to automatic dismissal of petition itself - YES: HC Whether without showing the High Court that there is a legal right of the assessee, the petition of mandamus cannot be brought to direct the Revenue to follow its discretionary legal duty - YES: HC - Assessee's writ petition dismissed: ALLAHABAD HIGH COURT 2020-TIOL-290-ITAT-MUM Sanjeev Mukhija Vs DCIT Whether the assessee can be charged with concealment of income or furnishing inaccurate particulars of income, where additional income is declared by assessee in returns and the same is also accepted by the AO - NO: ITAT Whether in such circumstances, no penalty is imposable on the assessee - YES: ITAT - Assessees appeal allowed: MUMBAI ITAT 2020-TIOL-289-ITAT-PUNE Sanjay Digambar Malve Vs ACIT Whether disallowance of interest u/s 14A r.w.r 8D can be made if availability of interest free funds are more than the investments made - NO : ITAT - Assessee's appeal partly allowed: PUNE ITAT 2020-TIOL-288-ITAT-AHM DCIT Vs Gujarat Energy Transmission Corp Ltd Whether any enduring benefit can be said to accrue from the raising of finances so as to fund a specialized job - NO: ITAT Whether therefore, cost incurred on the same can be treated as capital expenditure - NO: ITAT - Revenue's appeal dismissed: AHMEDABAD ITAT 2020-TIOL-287-ITAT-AHM Sew Eurodrive India Pvt Ltd Vs DCIT Whether where deduction on Excise duty reversed by assessee, is allowed in earlier AYs, the same merits being allowed in the current AY as well - YES: ITAT - Assessee's appeal partly allowed: AHMEDABAD ITAT

GST CASE


	2020-TIOL-449-HC-DEL-GST Johnson & Johnson Pvt Ltd Vs UoI GST - Anti-Profiteering - Sanitary Napkins - Petitioner seeks grant of interim relief in the matter of order dated 21 st November 2019 passed by the National Anti-Profiteering authority - Petitioner submits that the respondents have acted unreasonably inasmuch as for the period prior to reduction of GST from 12% to nil w.e.f. 27.07.2018, the DGAP had computed the base price on average basis, however, for the period after the GST rate became nil w.e.f. 27.07.2018, the base price has been worked out item by item - That in respect of several items sold by the petitioner, after the reduction of GST to nil, the price actually fell, however, while computing the profiteered amount such cases have been excluded from consideration. Held: Bench observed that prima facie it appeared that the impugned order needs consideration and the petitioner has been able to make out a strong case for grant of interim relief - Therefore, till the next date, the impugned order is stayed - Matter listed on 24.09.2020 and directions issued that no penalty proceedings would be initiated against the petitioner in the meantime: High Court - Stay granted: DELHI HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-358-CESTAT-MUM

Wonder Cars Pvt Ltd Vs CCE

ST - Issue involved is whether the Handling charges or Vehicle Registration Charges collected by the Appellant from customers over and above the legal charges viz. smart card, vehicle registration fee etc. for getting the vehicle regsistered with RTO authorities are liable to service tax under the category of Business Support Service?

Held: Issue is no more res integra in view of the decision of Tribunal in Appellant's own case on this very issue - 2017-TIOL-2800-CESTAT-MUM wherein it was held that RTO charges and extra charges related thereto does not fall under the support service of business or commerce - Bench finds no reason to deviate from the view taken by the Tribunal in the above matter, therefore, appeal is allowed with consequential relief: CESTAT [para 3, 4]

- Appeal allowed: MUMBAI CESTAT

2020-TIOL-350-CESTAT-DEL

Prakash Associates Vs Commissioner of CGST, Excise Customs

ST - The assessee-company is engaged in collection of toll and royalty on behalf of the State and Central Governments - The Govt floats tender and invites bid for granting right thereof - The consideration is a lump sum amount amount for the given period - The assessee won the bid, and was to pay a fixed bid amount, either in instalments or as lumpsum, for the relevant period - Under terms of the grant, the assessee collects toll or royalty - In such activity, the assessee may either collect more amount than the bid amount and make a profit in the process, or may also incur a loss by collecting lesser amount - The Revenue opined that any surplus amount collected by the assessee would be commission earned for providing toll/royalty collecting service to the Government and as such the assessee was liable to pay tax - SCNs were issued proposing to raise duty demand - The demands were confirmed on adjudication and subsequently confirmed upon appeal.

Held: There is no defined consideration in the present case as per Section 65(44) of the Financ Act - Consideration is an essential element or pre-requisite in a contract of service - The assessee is not entitled to retain any amount by way of commission, irrespective of the total royalty amount collected - The assessee would incur losses in some years or earn profits in some - Hence the assessee provided no service and entered into business on principal to principal basis - Hence the duty demand is not sustainable: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2020-TIOL-359-CESTAT-MUM

Windals Auto Pvt Ltd Vs CCE

CX - MODVAT - DGCEI gathered information that the appellant had availed Modvat credit on the basis of invoices procured for HR/CR coils/plates/sheets of particular thickness, which are not required for manufacture of their final product i.e. Front Axle - Requirement of 6 mm size of H.R. coils for manufacture of automobile axle was not within the knowledge of the department and the same was subsequently gathered by the officers of DGCEI - Modvat credit amounting to Rs.39,63,167/- disallowed along with interest; penalty also imposed of Rs.33,41,118/- - both, assessee and Revenue are before the CESTAT - assessee against denial of modvat credit and Revenue is in appeal against non-imposition of penalty on the Director of the company - The stand taken by the appellant is to the effect that since the appellant regularly filed RT-12 Returns and the purchase invoices were duly verified by the Range office from time to time,the extended period of limitation cannot be invoked.

Held: Bench does not at all appreciate with the submissions of the appellant inasmuch as the statutory return has not been designed in the way that the same should capture the particular grade/specification of material required for manufacture of the resultant final product - Further, verification of invoice by the jurisdictional Range office is with the objective of ascertainment of correct availment of Modvat credit and not otherwise - Since the officers of DGCEI came to know about the actual requirement of thickness of H.R. Coils in manufacture of final product and thereafter, proceedings were initiated against the appellant within the normal period prescribed under erstwhile Rule 57I of the CER, 1944 read with Section 11A of the Central Excise Act, 1944, Bench is of the considered view that the adjudged demands confirmed in the impugned order by invoking the extended period of limitation can stand for judicial scrutiny - No infirmity found in the impugned order: CESTAT [para 9]

CX - Penalty - Original authority has recorded the findings that Revenue had not made the said Director as respondent during the course of initial show cause proceedings and, accordingly, the Tribunal vide order dated 31.12.2004 had not specifically recorded any findings with regard to imposition of penalty on such Director - Further, in the present appeal petition, the Revenue has also not made such Director as party to the appeal - In absence of non-filing of any specific appeal by Revenue, Bench is of the view that setting aside of proposal for imposition of penalty on the Director cannot be interfered with at this juncture: CESTAT [para 10]

- Appeals dismissed: MUMBAI CESTAT

2020-TIOL-349-CESTAT-MAD

Alstom T And D India Ltd Vs CCE & ST

CX - During the relevant period, an SCN was issued to the assessee in respect of certain input services availed by it, on grounds that the same had no nexus with the manufacture or clearance of final products or with provision of output service by the assessee - The services in question are Group Medical Insurance Policy for employees and their dependants , Manpower Supply and Housekeeping Services, which included ineligible items such as snacks, water, tea, coffee, Pooja, newspaper , Property Consultant Services for arranging residential accommodation , Food bills of employees , Club Membership for golf course , Land/building brokerage services , Land Survey/Floral arrangements/investment advice , Guest House maintenance by M/s. Cleanway Management Systems and Printing and issue of Sodexho passes and rents to employees' flats - It was alleged that such services were intended for the personal consumption of the employees and so were ineligible for Cenvat credit - Hence demands were raised for recovery of credit - Hence the present appeal.

Held: In respect of the issue of availment of Cenvat credit on Group Medical Insurance Policy for employees, the issue has been laid to rest by the High Court of Madras, through its decision in Ganesan Builders Ltd. v. The Commissioner of Service Tax - This decision was also followed by this court in M/s. Schneider Electric India Pvt. Ltd. v. Commissioner of G.S.T. & Central Excise - In light of these precedents it is held that denial of cenvat credit on this service is bad in law: CESTAT

- Assessee's appeal allowed: CHENNAI CESTAT

CUSTOMS

2020-TIOL-348-CESTAT-AHM

Lykis Ltd Vs CC

Cus - The assessee sought conversion of 184 drawback shipping bills into DFIA bills, as against request made to the Commissioner for 204 drawback shipping bills - Such request was rejected by the Commissioner on the sole ground that such request had not been made within three months as prescribed under Board Circular No. 36/2010-Cus dated 23.09.2010, in the sense that the request was made after three months from the date of let Export Order - Hence the present appeal.

Held: From perusal of Section 149 of the Customs Act, it is clear that no time is prescribed for making request for conversion of shipping bills - The assessee's request was denied on grounds that limitation as per Circular No. 36/2010-Cus dated 23.09.2010 was not adhered to - Since the time limit has not been prescribed under the Act, the same cannot be fixed by means of a Circular - Any time limit if at all is prescribed in a Circular, the same is only a procedural requirement - Therefore on this ground of limitation, the application for conversion could not have been rejected, more so when the Circular prescribing the time limit lacks authority of any statutory provision, Act or rules thereof - It is settled law that the time limit prescribed by the Board Circular is not binding as same is not statutory provision in terms of section 149 of the Customs Act 1962 - Hence the assessee is entitled for conversion of drawback Shipping Bills into DFIA Shipping Bills in respect of 184 Shipping Bills - The authorities concerned are directed to issue necessary certificate enabling the assessee to get the DFIA licenses revalidated: CESTAT

- Assessee's appeal allowed: AHMEDABAD CESTAT

HIGH LIGHTS (SISTER PORTAL)

TII

TP - Interest on loan advanced to AE to be determined on basis of rate of interest charged in country where loan is received: ITAT

TP - TPO cannot suggest TP adjustment by including same comparables in preceding AY in absence of change in functional profile of assessee: ITAT

TIOL CORPLAWS

Companies Act - If interim order passed in oppression petition is modified due to changed circumstances in operation of company, such modification cannot be challenged unless proved prejudicial: NCLAT

SEBI - SEBI has rightly given exemption from complying with requirements of Regulations 3 and 4 of SAST Regulations to public sector companies who acquired shares of target company through disinvestment process: SAT