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2020-TIOL-NEWS-049| Thursday February 27, 2020
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DIRECT TAX

2020-TIOL-453-HC-P&H-IT

Venus Industrial Corporation Ltd Vs ACIT

Whether orders of exports processed through services to an agent makes the assessee liable to pay commission of sale to such agent, & making the latter eligible for benefit u/s 37(1) - YES: HC

- Assessee's appeal allowed: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-303-ITAT-DEL

Nigam Computers Pvt Ltd Vs ITO

Whether if the original assessment order is reopened just on the basis of information from the Investigation Wing & without forming the satisfaction to reassess on the basis of independent application of mind by the AO, the proceedings us 147 will become illegal for want of jurisdiction - YES: ITAT

- Assessee's appeal partly allowed: DELHI ITAT

2020-TIOL-302-ITAT-DEL

Samvardhana Motherson International Ltd Vs ACIT

Whether disallowance framed u/s 14A is sustainable if no satisfaction thereto has been recorded by the AO - NO: ITAT

- Assessee's Appeal Allowed: DELHI ITAT

2020-TIOL-301-ITAT-AHM

ACIT Vs Narendra N Thakkar

Whether assessment framed u/s 153C is sustainable where the AO does not record satisfaction in respect of assessee subjected to Search operations - NO: ITAT

- Assessee's appeal allowed: AHMEDABAD ITAT

2020-TIOL-300-ITAT-AHM

Sairang Estates Pvt Ltd Vs ITO

Whether additions framed u/s 68 can be sustained where the assessee has demonstrated the genuineness of transaction & creditworthiness of creditors - NO: ITAT

- Assessee's appeal dismissed: AHMEDABAD ITAT

 
GST CASE

2020-TIOL-462-HC-PATNA-GST

Vishwanath Iron Store Vs State of Bihar

GST - The petitioner was issued SCN in Form DRC-01 u/s 73 of the Bihar Goods and Services Tax Act, raising demand for interest - A certain amount of ITC was held as being inadmissible to the petitioner and interest thereof was demanded - The petitioner claimed that such demand was raised without there being any short fall in payment of tax or cess and so the demand was wholly without jurisdiction.

Held - The petitioner's counsel claimed that the issue at hand in the present case is covered by the decision in M/s Commercial Steel Engineering Corporation Versus The State of Bihar & Ors - Hence it is upto the authorities concerned to examine the issue and benefits if any be made available to the petitioner - A final decision be taken within four weeks' time: HC

- Writ petition disposed of : PATNA HIGH COURT

2020-TIOL-461-HC-PATNA-GST

Gaya Marketing Vs State of Bihar

GST - The petitioner filed the present writ, seeking that an order passed to it under the provisions of the Bihar Goods and Service Tax Act, be quashed - The petitioner claimed that such order was without jurisdiction and contravened the terms of Sections 39, 46, 47 and 50 of the Act - The petitioner also sought the notice in Form DRC-07 proposing duty demand, be quashed - The petitioner claimed that the principles of natural justice had been violated and that the Revenue authorities were obliged to issue notice in Form GSTR-3A, seeking filing of returns within 15 days and it is only on failure of the petitioner to do so, that any action could have been taken against it - The petitioner further claimed that no interest could be demanded from it when no duty was payable by it in the first place .

Held - The subject order does not assign any reasons whatsoever - Besides, prior to passing the order, no opportunity of personal hearing was afforded to the petitioner - As such, there is gross violation of the principles of natural justice - Hence the order merits being quashed - The petitioner is directed to appear before the appropriate officer, who is directed to decide upon the matter afresh, within three months' time: HC

- Writ petition disposed of : PATNA HIGH COURT

 
INDIRECT TAX

SERVICE TAX

2020-TIOL-366-CESTAT-MUM

Asha Transport Vs CCGST

ST - Tour Operator Service - It seems that appellant discharged the duty liability, though belatedly, even before the matter was brought to its knowledge by the respondent Department - The dispute, therefore, remained confined to payment of interest component which appellant claims to have paid but respondent Department denies to have received the same - Both, the show cause notice as well as adjudication orders clearly indicate that appellant had not collected the required service tax from the customers, therefore, it is entitled to cum tax benefits u/s 67 of FA 1994 - This coupled with discharge of service tax liability against services extended to other service receivers for which no duty demand was made by the respondent department, it can be affirmatively stated that there was no intention traceable, in the entire proceeding concerning suppression of fact for the purpose of non-discharge of service tax - Penalty is, therefore, not imposable u/s 78 of FA, 1994 - Appeal allowed: CESTAT [para 5, 6]

- Appeal allowed: MUMBAI CESTAT

2020-TIOL-365-CESTAT-DEL

Chhattisgarh State Civil Supplies Corporation Ltd Vs CCE & ST

ST - Appellant was not liable to pay service tax on transportation of rice as same was exempt from payment of service tax as per Notification No. 25/2012-ST dated 20 June 2012 - time limit prescribed under Section 11B of the Central Excises Act, 1944 is not applicable to the facts of this case in view of Tribunal decision in Hitachi Metals (I) Pvt. Ltd. which relied upon Delhi High Court decision in National Institute of Public Finance & Policy 2018-TIOL-1746-HC-DEL-ST - impugned order set aside and appeal allowed with consequential relief: CESTAT [para 5]

- Appeal allowed: DELHI CESTAT

2020-TIOL-364-CESTAT-HYD

Orange Logisys Pvt Ltd Vs CCE, C & ST

ST - The assessee-company entered into an agreement with a shipping line company to act as its agent for selling space on the latter's ships - For sale of space, the principal has a sales tariff, which it gave to the assessee - The assessee is also at liberty to sell the space after adding some profit on their own over and above the sales tariff and retain the difference as profit - The principal also reimburses to the assessee, brokerage @ 2% on the freight - An SCN was issued proposing to raise duty under BAS, in respect of the amounts received by the assessee for acting as an agent of the principal as they assisted the principal in its business - On adjudication, the demands were confirmed and were proposed to be recovered with interest u/s 75 of the Finance Act and equivalent penalty u/s 78 and penalty u/s 77 - On appeal, the Commr.(A) quashed the penalties imposed u/s 77 & 78 but sustained the demand - Hence the present appeal.

Held: A reading of the agreement between the assessee and the shipping line shows that this is not a case of agreement on a principal to principal basis, but the assessee is appointed as an agent by the shipping lines for rendering service of selling space on their ships - Such activity clearly falls within the ambit of BAS - Besides, the penalties imposed by the lower authorities were quashed by the Commr(A) and the Revenue did not contest the same - In such circumstances, the assessee is liable to pay tax on BAS - Hence the O-i-A merits being sustained and warrants no interference with: CESTAT

- Assessee's appeal dismissed: HYDERABAD CESTAT

 

 

 

 

 

CENTRAL EXCISE

2020-TIOL-363-CESTAT-DEL

Ashirwad Ispat Udyog Vs PR CC

CX - CENVAT credit in respect of the invoices for the period March to April, 1994 was sought to be denied by SCN dated 01.07.1994 - later another SCN dated 28.02.1996 issued to deny credit in r/o same invoices on some other ground - since facts were already in knowledge of department, proceedings time barred - impugned order set aside and appeals allowed with consequential relief: CESTAT [para 8, 9]

- Appeals allowed: DELHI CESTAT

2020-TIOL-362-CESTAT-MUM

CCE & C Vs Skoda Auto India Pvt Ltd

CX - The assessee-company is engaged in manufacturing motor vehicles falling under Chapter 8703 of the CETA 1985 - In the relevant period, the assessee sold motor vehicles through dealers across India - In the Letter of Intent/agreement with the dealers, it is mentioned that the advertisement and sales promotions of Motor Cars would also be undertaken by the dealers - Alleging that in view of the Circular No. 643/34/2002-CX dated 1.7.2002 and Circular No. 681/72/2002-CX dated 12.12.2002, the cost of advertisement incurred by the dealers is includible in the transaction value, SCNs were issued to the assessee proposing to recover differential duty on the revised assessable value with interest and penalty - On adjudication, the Commissioner dropped the proceedings - Hence the present appeal.

Held: Considering the letter of intent, there are no clauses therein from which it can be inferred that any enforceable right is provided to the assessee in relation to advertisement and sales promotion by the dealers - Besides, the Apex Court in Commissioner Vs. TVS Motors Company Ltd observed in relation to pre-delivery inspection charges and after sales service charges that these were not to be included in the transaction value of the goods - Moreover the High Court of Bombay in Tata Motors Ltd. Vs. Union of India also held that such charges are not to be included in the assessable value - Similarly, the Tribunal in Ford India Pvt. Ltd. Vs. Commissioner of Central Excise, Chennai-III held that the cost of advertisement incurred by the dealers cannot be added to the transaction value - The Revenue did not put forth any judgment to the contrary - Hence the Revenue's appeal is devoid of merits: CESTAT

- Revenue's appeal dismissed: MUMBAI CESTAT

 

 

 

 

CUSTOMS

2020-TIOL-361-CESTAT-ALL

Zerogravity Aesthetics Llp Vs CC

Cus - The assessee filed self-assessed BoE on import, declaring the goods as Beauty and Make up preparations and classified the same under CTH 3304 9990 - The BoE was filed at ICD Dadri - The Revenue opined that ICD, Dadri was not the port authorized for importing the goods in question - Hence the goods were confiscated and penalty equivalent to their value, was imposed - Pursuant to the High Court's intervention, the adjudicating authority permitted redemption of the goods on payment of fine - Hence the present appeal contesting such findings.

Held: The Revenue nowhere established that the subject goods were banned for import into India - It need not be examined as to whether the goods were authorized to be cleared at ICD Dadri because the assessee opted to trans-ship the goods at its own cost to ICD Tughlakabad or ICD Patparganj - The Customs Act provided for trans-shipment of imported goods to the ports where import of such goods were allowed - Hence the goods imported by the assessee were not banned goods & so their confiscation merits being quashed - Consequently, no question of redemption fine or penalty arises - Hence these too are quashed - The Revenue is directed to permit trans-shipment of the goods from ICD Dadri to other ICD suitable to the Customs Department, the cost for which would be borne by the assessee - Thereafter, the Customs authorities shall examine the goods for clearance to home consumption: CESTAT

- Assessee's appeal allowed: ALLAHABAD CESTAT

2020-TIOL-360-CESTAT-ALL

CC Vs Akash Trading

Cus - Commissioner (Appeals) set aside the confiscation of the betel nuts on the ground that there is nothing on record to show that the same were not purchased from the local market but were of foreign origin - Support was also drawn from the reply received to an RTI query wherein the Director of the Arecanut Research & Development Foundation, Mangalore has informed that it is not possible to determine the place of origin of betel nuts through a test in the lab - Commissioner(A) also observed that respondents have provided the supplier's name through which the goods were purchased and as betel nuts are non-notified items u/s 123 of the Customs Act, the onus is on the Department to prove that the same are smuggled - Revenue is in appeal before CESTAT.

Held: Identical appeals of the Revenue were considered by the Tribunal and it was held that identical report of M/s Arecanut Research & Development Foundation, Mangalore was not applicable; that in the absence of any evidence of smuggling of goods, their confiscation cannot be appreciated - Revenue appeal dismissed: CESTAT [para 2, 3]

- Appeal dismissed: ALLAHABAD CESTAT

 

 

 

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