2020-TIOL-NEWS-058, Dated: Monday, March 09, 2020

2020-TIOL-NEWS-058 | Monday March 09, 2020

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DIRECT TAX


	2020-TIOL-541-HC-MAD-IT B Kasi Viswanathan Vs ITO Whether the Revenue cannot invoke the provisions of section 147 to review an issue which has already been subjected to scrutiny based on change of opinion - YES: HC Whether if there are other issues in the original assessment order where the assessee's taxable income has escaped assessment due to concealment of material details, the powers of Revenue in terms of Explanation 3 to Section 147 cannot be curtailed - YES: HC - Assessee's writ petition partially allowed: MADRAS HIGH COURT 2020-TIOL-540-HC-AHM-IT Pr.CIT Vs Jay Chemical Industries Ltd Whether disallowance u/s 36(1)(iii) can be made if presumption drawn by Revenue that total term loan received is towards CWIP is not based on any cogent material - NO : HC Whether "steam" produced can be termed as power and would qualify for benefits available u/s 80IA(4) - YES : HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2020-TIOL-539-HC-AHM-IT Pr.CIT Vs Kalpeshkumar B Verma Whether original assessment order can be termed as erroneous or prejudicial to Revenue's interest if no material incriminating the assessee is found during Search and if the AO also conducted thorough enquiry into the matter - NO: HC Whether therefore an order of the Tribunal quashing revisionary order passed u/s 263, warrants interference with - NO: HC - Revenue's appeal dismissed: GUJARAT HIGH COURT 2020-TIOL-538-HC-AHM-IT Precision Wires India Ltd Vs ACIT Whether expenditure on replacement of plant & machinery is revenue expenditure if it is incurred for the object of preserving and maintaining the asset for the purpose of use in the business - YES: HC Whether since the dies & tools need to be replaced often & no capital asset of enduring benefit comes into existence, the expenditure incurred on them is a recurring revenue expenditure - YES: HC - Assessee appeals allowed: GUJARAT HIGH COURT 2020-TIOL-537-HC-AHM-IT Pr.CIT Vs Syamaprakash Nanoo Vaidyan On appeal, the High Court finds there to be no infirmity in the order of the Tribunal, which warrants interference of this court. - Revenue's appeal dismissed: GUJARAT HIGH COURT

GST CASE


	2020-TIOL-49-AAR-GST Vihan Enterprises GST - Applicant has posted the following questions before the Authority for Advance Ruling viz. whether the explanation to Entry no. 234 of Schedule I to 01/2017-CTR shall apply to construction of new 33/220KV Pooling Substation at Badwar, REWA along with associated 220KV DCDS Transmission line and associated feeder bay work on total turnkey basis against bid identification under World Bank Financing for Rewa Ultra Mega Solar Limited; whether value of all the goods supplied under the contract, independent of the Works Contract being executed in the contract shall form part of the Works Contract and taxed as service. Held: In case of Works Contract, the explanation to Entry no. 234 shall apply if and only if the goods, the title in which is/are being transferred during the execution of Works Contract find a place in Entry no. 234 - Works Contract in relation to any of the goods listed in Entry no. 234 where such goods are not part of the Works Contract shall not merit taxation under Entry no. 234 - Separate activities in aggregate form the turnkey contract, but the contract is divisible into independent activities and values of such independent activities are also ascertainable under the contract - Each independent activity has a value assigned to it with detailed list of equipment and materials which form part of the independent contract within the contract: AAR - Application disposed of : AAR 2020-TIOL-48-AAR-GST Vippy Industries Ltd GST - Applicant has sought advance ruling on the confirmation of classification of the product ‘Preparation of a kind used in animal feeding - Bio Processed Meal' - No evidences in support of the applicant's claim that the said product falls under Chapter heading 2309 9090 - as the applicant has failed to submit any evidence to support their claim, they are not entitled to the benefit of Nil rate of duty under 2/2017-CTR: AAR - Application disposed of : AAR 2020-TIOL-47-AAR-GST Vidit Builders GST - Applicant is engaged in the business of real estate developers and is developing a colony by executing Joint Development Agreement with the landowner - after development, local municipal corporation will review and provide completion certificate to the developer who will hand over the colony to the municipal corporation for further maintenance - applicant seeks to know as to whether the said service is covered in paragraph 5 of the Schedule III or classified as Works Contract and its valuation etc. Held: Service provided by the applicant is regarding development of the site which includes civil construction and amenities regarding the site in order to make it for the purpose of residence - Therefore, activities performed by the applicant cannot be classified under Paragraph 5 of Schedule III as the same amounts to supply of services under Works Contract and is liable to be taxed accordingly - rule 31 of the CGST Rules applies in this case and the value of supply is equal to the amount received/receivable by the applicant which is equal to 40% of the amount on which the plots are sold: AAR - Application disposed if : AAR 2020-TIOL-46-AAR-GST Unity Traders GST - Section 17(5) of the CGST Act, 2017 - No ITC of GST paid on Vitrified tiles, marble, granite, ACP sheet, Sheet plates, TMT Tor(saria), bricks, cement, paint and other construction material is admissible when used for the purpose of construction and maintenance of Warehouse - similarly, no credit of ITC is available in respect of GST paid on WCS received from registered and unregistered contractor for the construction and maintenance of the building and so also no credit of ITC is available in respect of GST paid on goods purchased and WCS received during FY 2017-2018 for the purpose of construction and maintenance of warehouse: AAR - Application disposed of : AAR 2020-TIOL-45-AAR-GST Madhya Pradesh Paschim Kshetra Vidyut Vitaran GST - Services received by the applicant (who is engaged in supply and distribution of electricity) from M/s Primeone Work Force P Ltd. of supply of unskilled, semi-skilled and skilled manpower fulfils the requisite criteria mentioned in Sr. no. 3 of notification 12/2017-CTR and is entitled for availing the benefit under the said entry - however, the benefit can be availed only in case where the services mentioned in Sr. no. 3 is received in an area covered under Panchayat limits as the entrusted work is covered under Article 243G of the Constitution and not under Article 243W: AAR - Application disposed of : AAR 2020-TIOL-44-AAR-GST Innovative Clad Solutions GST - Applicant has manufactured and cleared the goods viz. Re-rolled Bimetal Strip 108SP from SEZ unit vide Bill of Entry for home consumption by classifying under HSN 8111 0010 and paying duty as leviable on it - applicant has filed the application before the Authority for clarification in the matter of the classification of the subject goods. Held: Submission of the applicant that their BE is being assessed by the department under CH 8111 0010 and they are paying the Customs duty and IGST as per the rate applicable indicates that the question raised in the present application has already been decided by the department by assessing the goods under HSN 8111 0010, hence as per the provisions to section 98(2) of the CGST Act, the application cannot be entertained as the question raised is already decided in the proceedings in the case of the applicant - application is, therefore, rejected: AAR - Application rejected : AAR 2020-TIOL-43-AAR-GST Swapna Printing Works Pvt Ltd GST - Applicant is engaged primarily in the business of printing seeks a ruling as to whether the activities undertaken by procuring orders from a foreign buyer to print texts and thereafter deliver them to various places in India is a taxable service. Held: Applicant's supply of the composite printing service is taxable under Sl. no. 27(i) of 11/2017-CTR - Circular 11/11/2017-GST dated 20.10.2017 relied upon - ‘recipient' is so defined in s.2(93) of the Act so as to make separation impossible between the person to whom the supply is made and the one liable to pay the consideration - when no consideration is involved, as under clause (c) of the said section 2(93), the recipient can only be the person to whom the service is rendered - the person who receives the supply in India should, therefore, be considered as the recipient, being inseparable from the foreign buyer as far as the applicant's supply is concerned - such supplies cannot be termed as export of services within the meaning of section 2(6) of the IGST Act, 2017: AAR - Application disposed of: AAR 2020-TIOL-42-AAR-GST Newtown Kolkata Development Authority GST - Applicant, a statutory authority constituted under the New Town Kolkata Development Authority Act, 2007 for providing various civic services and amenities within the local area of New Town, Kolkata seeks a ruling as to whether the services it supplies viz. water supply, drainage, sewage, collection, removal and disposal of solid waste etc. is exempt under notification 12/2017-CTR and whether it is liable to be registered. Held: Applicant, NKDA, a statutory authority discharging municipal functions (although not a municipality as required to be constituted under Article 243Q of the Constitution) within the territorial jurisdiction of New Town, Kolkata, is legally entitled to and entrusted by the State Government with the control or management of a local fund as defined in Treasury Rule 6.29 of West Bengal Treasury Rules, 2005 - It is, therefore, a local authority under section 2(69)(c) of the GST Act and entitled to the exemptions available under the exemption notification on the services it supplies - question of liability for registration is not taken up as applicant has not pursued the matter: AAR - Application disposed of: AAR 2020-TIOL-41-AAR-GST Dolphin Techno Waste Management Pvt Ltd GST - Applicant's supply of solid waste management service to the Conservancy department of Howrah Municipal Corporation and sewer cleaning service to the Sewerage and Drainage department of the Howrah Municipal Corporation is exempt from payment of GST under Sl. no. 3 of 12/2017-CTR - since the supply is exempt, the provisions of s.51 and for that matter notification 50/2018-CT dealing with the mechanism of TDS does not apply: AAR - Application disposed of: AAR 2020-TIOL-40-AAR-GST Dipak Kanti Mazumder Dynamic Engineers GST - Applicant's supply of providing conservancy/solid waste management service to Howrah Municipal Corporation is exempt from payment of GST under Sl. no. 3 of 12/2017-CTR - since the supply is exempt, the provisions of s.51 and for that matter notification 50/2018-CT dealing with the mechanism of TDS does not apply: AAR - Application disposed of: AAR

MISC CASE


	2020-TIOL-536-HC-JHARKHAND-VAT Ramkrishna Forgings Ltd Vs State of Jharkhand Whether the restrospective amendment introduced in clauses (ii) & (iii) of Section 18(4) of the JVAT Act which provides for availaibility of ITC only in respect of tax paid on CST sales & forfeiture of the balance ITC, is wholly arbitrary & violative of Article 14 of the Constitution of India - YES: HC Whether the State has no competence under the provision of section 94 of the JVAT Act, 2005 to enact a machinery provision for giving retrospective effect to the proviso inserted in clause (ii) & (iii) of sub-section 4 of Section 18 of the JVAT Act, 2005 - YES: HC - Assessee's writ petitions allowed: JHARKHAND HIGH COURT

INDIRECT TAX

SERVICE TAX

2020-TIOL-425-CESTAT-ALL

Pr.CCE Vs Kisan Sahkari Chini Mills Ltd

ST - Respondent is engaged in the manufacture of sugar and molasses - For the purpose of manufacture of sugar, respondent procured sugarcane through various societies formed at district level which controlled the sale of sugarcane by the farmers to the respondent - The said societies also made certain payments to the respondent and which was treated as 'society commission' under 'other income' in the balance sheet - Revenue treated the same as consideration for 'Business Auxiliary Service' and initiated proceedings for recovery of service of Rs.54 lakhs approximately - original authority confirmed the demand but the Commissioner(A) set aside this order and, therefore, Revenue is in appeal.

Held: Under Business Auxiliary Service, commission is treated as consideration when such commission is received for promotion or marketing of sale of goods or for providing service or for providing Customer Care Service or for arranging procurement of goods for the clients - Issue was considered by the Tribunal in the same assessee's case by Final Order No.72905/2018 dated 29/11/2018 and while allowing their appeal it was observed - " … appellant is not engaged in promotion of any sale of goods on behalf of anybody else, nor any service, nor any activity being undertaken on behalf of the clients. Clear meaning of the transaction is that when sugarcane is purchased by the appellant, some amount is received back from the seller of the sugarcane. It clearly means that it is a type of discount. We, therefore, are not satisfied that appellant had provided any 'Business Auxiliary Service." - since the issue stands decided in favour of the respondent assessee, there is no merit in Revenue's appeal - same is, therefore, rejected: CESTAT [para 2, 4, 5]

- Appeal rejected: ALLAHABAD CESTAT

CENTRAL EXCISE

2020-TIOL-424-CESTAT-DEL

Accme Urvashi Pumps Engineers Pvt Ltd Vs CCE & CGST

CX - During the relevant period, the DGCEI conducted investigation at the premises of a person, who was charged with passing on inadmissible Cenvat credit on cenvatable invoices through various registered dealers - Based on the statement, an investigation was conducted at the assessee's end, who contented that it received the goods against invoices issued by one M/s Unnati Alloys Pvt Ltd for which the assessee made payment through account payee cheque - The goods transported through one M/s Leo Trans & Logistics which was found non existence during the course of investigation - Such entity was subsequently taken over by another company, which stated to never have transported the goods on behalf of M/s Unnati Alloys Pvt Ltd - Pursuant to investigation, it was alleged that the assessee received no goods but received only cenvatable invoices - The present appeal is filed against such findings.

Held: It is seen that the assessee herein was not issued an SCN and was not cross examined - This shows that the investigation conducted against the assessee is improper - Moreover, the transporters were also not examined at all nor made party to the SCN - In such circumstances, the benefit of doubt goes in favour of the assessee that they have received the goods against cenvatable invoices issued by M/s Unnati Alloys Pvt. Ltd., in question and made payment through account payee cheque - The goods received by the assessee for manufacturing of goods, which has been cleared on payment of duty - Hence cenvat credit merits being allowed to the assessee: CESTAT

- Assessee's appeal allowed: DELHI CESTAT

2020-TIOL-423-CESTAT-AHM

VB Sheth And Company Vs CCE & ST

CX - Refund of any credit can only be granted when it is sanctioned by law and there are specific provisions for it - There is no provision for sanctioning of refund against reversal of credit and thus while the appellants may be entitled to Cenvat credit and may have wrongly reversed the Cenvat Credit, they cannot claim refund of the same - appellants are required to seek Cenvat Credit again if they have wrongly reversed the same - no merit in appeal, hence dismissed: CESTAT [para 4.2, 4.3, 5]

- Appeal dismissed: AHMEDABAD CESTAT

CUSTOMS

2020-TIOL-427-CESTAT-HYD

Sahuwala High Pressure Cylinders Pvt Ltd Vs CC & ST

Cus - Differential duty has been demanded from the appellant in terms of Notification No. 52/2003-Cus dated 31.03.2003 and Notification No. 22/2003-CE dated 31.03.2003 alleging that appellant is liable to pay duty at the rate prevailing at the time of import/procurement of the goods, whereas appellant paid the duty at the rate prevailing at the time of debonding of the unit - appeal before CESTAT.

Held: Said issue has been dealt with by the Tribunal in the appellant's own case in its order passed in the matter of appeal no. C/1412/2011 - 2020-TIOL-426-CESTAT-HYD ] and where it is held that for imported/indigenous capital goods, the appellant is liable to pay duty at the rate prevailing on the date of debonding; that no interest payable in view of notification 132/2004-Cus(NT) ; that Revenue is directed to calculate the duty at the rate prevailing on the date of debonding and if any amount is payable by the appellant, the same is required to be paid within one month - Appeal disposed of : CESTAT [para 3 to 6]

- Appeal disposed of : HYDERABAD CESTAT

2020-TIOL-426-CESTAT-HYD

Sahuwala High Pressure Cylinders Pvt Ltd Vs CC & ST

Cus - Issues are whether appellant is liable to pay duty on the date of debonding of their unit or at the rate of duty prevailing at the time of import?; whether the appellant is liable to pay interest for the intervening period or not?.

Held:

++ As per Section 15(1)(b) of the Customs Act, duty is payable at the time when goods were actually removed from warehouse under Section 68 of the Act - Admittedly, the appellant is a 100% EOU and having letter of permission to work as 100% EOU - As the appellant could not achieve positive NEP, the appellant applied for debonding and at the time of debonding, filed bills of entry which are not in dispute - Therefore, in terms of Section 15 of the Act, the appellant is liable to pay duty at the rate prevailing at the time of debonding - This is also in consonance of Clause 8(3A)/ 8(4A) of the notification 52/2003-CUS which provides that the appellant/ assessee is liable to pay duty at the rate in force on the date of debonding, if unit failed to achieve said positive NFP - Therefore, with regard to the demand of duty of Rs. 74,09,538/-, the appellant is liable to pay duty at the rate of duty prevailing at the time of debonding of the unit, duty is to be calculated accordingly.

++ With regard to indigenously procured capital goods in terms of Notification No. 22/2003-CE dated 31.03.2003 the clause 8(i) of the notification clearly specifies that the duty is payable at the rate in force on the date of debonding - Therefore, with regard to the demand of differential duty of Rs. 21,03,122/-, we hold that appellant is liable to pay duty at the rate prevailing on the date of debonding, duty is to be calculated accordingly.

++ In terms of Notification No. 132/2004-Cus (NT) dated 25.11.2004 the appellant are not liable to pay interest as held by Tribunal in the case of Business Process Technologies India Pvt Ltd., - 2010-TIOL-275-CESTAT-BANG .

++ Revenue is directed to calculate the duty at the rate prevailing on the date of debonding - If any amount is payable by the appellant, the same is shall be paid within one month [para 12 to 16]

- Appeal disposed of: HYDERABAD CESTAT

2020-TIOL-422-CESTAT-MUM

Anant B Timbadia And Company Vs CC

Cus - Refund - In the balance sheet, although amount of Rs.20 lacs has been shown in the Asset side against the heading ‘deposited with customs' but from that it can't be established that the aforesaid amount was paid by appellant on their own account, which was the specific wordings of the Commissioner while ordering for refund of the amount of co-noticees vide Order-in- Original dated 18.4.2001 and the same attained finality also - Although it is the case of the Appellants that the said amount has been paid by them under duress but it has nowhere mentioned in the letter dated 8.10.2007 or in any other communication by the Appellant to the Department nor any other communication which substantiate the argument of duress has been brought on record - There is a big difference between the meaning of the words from their own account and on their own account - The Appellant has to establish that the amount has been paid by them on their own account which they failed to establish through any of the documentary evidence produced by them - It is true that the revenue, in the Appeal filed by M/s. Kunal Overseas Ltd. before this Tribunal against the Order-in-Original dated 18.4.2001 opposed its request to reduce the pre-deposit amount by the amount of Rs.20 lacs paid by the Appellants herein, but that does not mean that it is the stand of the Revenue or that it has been pleaded by the Revenue that the aforesaid amount of Rs.20 lacs was paid by the Appellant herein on its own account and not on account of the importer - The Appellant has to stand on its own legs and establish that they have paid the aforesaid amount of Rs.20 lacs on their own account, which they failed to establish - impugned order is sustained and appeal is dismissed: CESTAT [para 4, 5]

- Appeal dismissed: MUMBAI CESTAT

HIGH LIGHTS (SISTER PORTAL)

TII

TP - DRP is expected to pass a speaking order with regard to issue of determination of ALP, and not just merely confirm order passed by TPO: ITAT

TP - Determining TP adjustment at nil is sustainable, where TPO neither applies benefit test nor any method of benchmarking transaction as specified u/s 92C: ITAT

TIOL CORPLAWS

Patents Act - If no ground to grant interim injunction pending hearing of suit on merits is found and defendant has already launched their product, application seeking ad-interim injunction against defendants should not be allowed: HC

Arbitration - High Court cannot interfere with discretion of Arbitral Tribunal to recall its order passed u/s 17 application unless it is perverse or contrary to law: HC

NEWS FLASH

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Coronavirus - Five more test positive in Kerala

YES Bank crisis - ED finally arrests Rana Kapoor for not cooperating in investigation

PM gifts his social media accounts to seven women achievers

Coronavirus Scare - New York announces emergency; Death toll shoots up to 19 in USA; Italy reports 235 deaths

Environment-related crimes - CAG puts Rajasthan in dock for accounting over 40% of offences

Anti-CAA statements - Foreign Minister says India getting to know who all are our friends!

3 more Coronavirus confirmed cases found in India - 1 in TN + 2 Ladakh

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NOTIFICATION


	ctariffadd20_005 Seeks to impose anti-dumping duty on imports of 'Chlorinated Polyvinyl Chloride (CPVC) Resin- whether or not further processed into compound' originating in or exported from China PR and Korea RP