2020-TIOL-846-HC-MAD-IT

N Tamilselvi Vs DCIT

Whether it is fit case for remand where any issue raised by the assessee is neither examined by the ITAT nor remanded to the CIT(A), where a similar aspect in respect of the assessee's spouse was remanded for re-consideration - YES: HC

- Assessee's appeal partly allowed: MADRAS HIGH COURT

2020-TIOL-475-ITAT-DEL

ITO Vs Association Of Corporation And Apex Societies Of Handlooms

Whether where a Trust is found not to have indulged in any commercial activities in the preceding AY, then it cannot be said to have done so in the current AY so as to invoke Section 2(15) - YES: ITAT

- Revenue's appeal dismissed: DELHI ITAT

Rungamatee Tea And Industries Ltd Vs DCIT

Whether practice of the assessee for computation of income followed for decades which was accepted by the Department should continue in the current AY as per the doctrine of consistency - YES : ITAT

- Assessee’s appeal partly allowed: KOLKATA ITAT

Century Link Technologies India Pvt Ltd Vs DCIT

Whether it is a fit case for remand to enable the AO to ascertain the nature of expenditure incurred by the assessee and then accordingly apply provisions of Section 32(1) - YES: ITAT

- Case remanded: BANGALORE ITAT

ITO Vs Rahul Mundrey

Whether the AO can re-open the assessment u/s 147 based on vague recording & quashing of such order warrants any interference with - NO: ITAT

- Revenue's appeal dismissed: CHANDIGARH ITAT

RMC Services Vs ITO

Whether depreciation on concrete pump is to be restricted to 15% instead of 40% as claimed by the assessee, considering that the same is not part of commercial vehicle and is fitted by the assessee as per its own convenience - YES: ITAT

- Assessee's appeal partly allowed: CHANDIGARH ITAT

Rajinder Bassi Vs State Of Punjab

GST - Petitioners, who are alleged to have evaded payment of GST of about Rs. 20 crores seek grant of interim bail, mainly on account of the prevelant conditions of spread of COVID-19 virus.

Held: Present case is a case where the allegations against the petitioners are in respect of section 132 of GST Act 2017 which is punishable for a maximum sentence of 5 years and that as per the policy cases of under trials charged with offences punishable for a sentence of up to 7 years could be considered - However, the offence assumes gravity in view of the colossal amount involved in the present case which is Rs. 20 crores approx. and is certainly a factor to be borne in mind while considering the release of the petitioner on interim bail - Infact the allegations are to the effect that the petitioners had forged bills and other documents in furtherance of their designs to cause loss to State Exchequeuer which prima-facie would also attract an offence punishable under section 467 IPC which is punishable with imprisonment for life - primary object of the directions issued by Supreme Court is to protect the health of the prisoners and restrict transmission of COVID-19 by decongestion of prisons - The move certainly cannot be treated as a windfall for all the prisoners even when there is no imminent threat or apprehension within the jail premises as on date as regards spread of pandemic - It has been informed by State counsel that there is no reported case of COVID-19 within jail premises and that the fresh entrants, if any, are lodged separately - Since the Nabha Jail already stands decongested and there is no reported case of COVID-19 within the premises of jail, therefore, keeping in view the nature and gravity of offence and the amount involved, this Court does not deem it appropriate to grant interim bail to the petitioner - bail applications are dismissed - It is, however, clarified that dismissal of application for grant of interim bail shall not have any bearing on consideration of any application for grant of regular bail on merits: High Court [para 8, 9, 11, 13]

- Applications dismissed: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-71-AAR-GST

Moksh Agarbatti Company

GST - Applicant cannot claim ITC in respect of Inputs used for manufacture of Dhoop/purchase of Dhoop which is supplied free with a pack of Agarbatti - applicant cannot also claim ITC in respect of non-monetary incentives like Pressure Cooker given to distributors as sales promotion - applicant is not eligible to avail ITC in respect of insurance and maintenance of motor vehicle purchased for transport of Director and employees: AAR

- Application disposed of: AAR

2020-TIOL-70-AAR-GST

Mangaldas Mehta And Company Ltd

GST - Declared or published tariff is relevant only for determination of the tax rate slab - GST Rate for the 'Supply of Accommodation, food and beverage services' would be determined according to declared tariff for the room, and GST at the rate so determined would be levied on the entire amount charged - The rate of GST for other distinguished service provided by applicant shall be determined according to the respective entries of the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, as amended - In case the Restaurant situated in a hotel premises is having declared room tariff of less than Rs.7500/- per unit per day, applicant will be liable to pay GST @ 5% without ITC on restaurant services to the guest who stays at hotel as well as to any outsider who comes just to eat at the restaurant - Applicant is liable to pay GST @ 18% with ITC on airport pickup and drop charges collected from guest under 'Passenger transport services' - In case different room tariff is declared for different seasons or periods of the year, the tariff declared for the season in which the service is provided shall apply - GST Rate would be determined according to declared tariff for the room and GST at the rate so determined would be levied on the amount charged for restaurant services from the guest/customer: AAR

- Application disposed of: AAR

2020-TIOL-69-AAR-GST

Kandla Port Trust

GST - Applicant is not entitled to take credit of input tax charged in respect of (a) purchase of medicines for employees as prescribed by their doctor from outside on contractual basis, (b) Purchase of movable medical equipment at hospital, (c) AMC for repair and maintenance of residential colony and hospitals and school (other than new constructions, ITC for which is blocked u/s 15 of the Act, 2017; (d) Telephones & Mobiles at residence of officers and at hospitals and (e) Caretaking /housekeeping services at Guest House, as the same is not used in the course or furtherance of his business: AAR

- Application disposed of: AAR

2020-TIOL-68-AAR-GST

Aquaa Care Surat Ro Technologies Pvt Ltd

GST - Classification and HSN code of water is 2201 - Since purified water is excluded from Sr. No. 99 of Notification No. 02/2017 -Central Tax (Rate) dated 28-06-2017, it will not be eligible for NIL rate of duty - Selling water in containers is composite supply as the principal activity is selling of purified water only: AAR

- Application disposed of: AAR

2020-TIOL-67-AAR-GST

Gujarat Energy Transmission Corporation Ltd

GST - Cost of construction/erection of Bays/Sub-Stations, Overhead lines and Underground Cables and other charges including Pro-rata charges, supervision charges, proportionate line charges, registration fees and operation and maintenance charges, recovered by GETCO from the consumers, do not form part of the value of supply of service of "Transmission of Electricity" u/s 15 of the Act, 2017 - Applicant is liable to pay GST @ 18% (CGST @9% and SGST@9%) on amount recovered towards cost of the construction, erection, commissioning, or installation of infrastructure for extending electricity distribution network up to the premises of the consumers along with supervision charges under the service category of "Construction Services" (HSN Code- 9954/995423) - GETCO is also liable to pay GST @ 18% (CGST @9% and SGST@9%) on recovery of other charges viz. Pro-rata charges, Proportionate line charges, Registration fees and Operation and maintenance charges etc. under the residual category of services i.e. "999799- Other services nowhere else classified": AAR

- Application disposed of: AAR

2020-TIOL-19-NAA-GST

Director General Of Anti-Profiteering Vs N Rai Delights Llp

GST - Anti-Profiteering - s.171 of the CGST Act, 2017 - Allegation is that the respondent (Franchisee of M/s Subway Systems India P Ltd.) had resorted to profiteering inasmuch as despite reduction in the rate of GST from 18% to 5% w.e.f 15.11.2017 the respondent had increased the base prices of his products and had not passed on the benefit of reduction in the GST rate by way of commensurate reduction in prices, in terms of s.171 of the Act - DGAP has in its report dated 17.09.2019 concluded that the respondent had profiteered by an amount of Rs.1,49,896/-

Held: It is clear from the Explanation attached to s.171 of the Act that an increase or decrease in the cost of a supplier or due to increase in royalty, advertisement charges has no ramification on the amount of profiteering which is computed in line with the provisions of s.171 of the Act - in case a supplier has not passed on the benefit of tax rate reduction by way of commensurate reduction in prices on each of his supplies at the level of each invoice, anti-profiteering provisions will apply to him, irrespective of his costs or whether he makes profits or losses - in any case, payments made by respondent on account of Royalty and Advertisement charges are purely an internal agreement between the franchiser and the franchisee without any connection with the anti-profiteering provisions applicable to the franchisee, i.e the respondent - any benefit of tax rate reduction passed on to a particular recipient or customer cannot be appropriated or adjusted against the benefit of tax rate reduction that ought to accrue to another recipient or customer - every recipient/customer is entitled to the benefit of tax rate reduction by way of reduced prices and s.171 does not offer the respondent to suo moto decide on any other modality to pass on the benefit of reduction in the rate of tax to his recipients - respondent had no ground to increase his prices on the intervening night of 14/15 November 2017 on account of inflation and other factors as he had no data to substantiate the above increase on the above date - while the rate of GST was reduced from 18% to 5% w.e.f 15.11.2017, the respondent increased the base prices of his products immediately thereafter and did not pass on the resultant benefit by a commensurate reduction in the prices of his supplies at any point of time till 31.03.2019, therefore, violation has continued unabated in this case and the offence continues till date, therefore, there is no reason to accept the contention of the respondent that the period of calculation for profiteering should be kept only up to 31.03.2018 - period of investigation i.e. from 15.11.2017 to 31.03.2019 has been rightly taken by DGAP - Authority is charged with the responsibility of ensuring that the benefits are passed on to consumers in line with the provisions of s.171 read with rules 127 and 133 of the CGST Rules, 2017 and the Authority has in no manner interfered with the business choices made by the respondent, therefore, proceedings do not violate the provisions of Article 19(1)(g) of the Constitution as argued by the respondent - quantum of profiteering has been computed as Rs.1,49,896/- by the DGAP and which is correct and can be relied upon - respondent is directed to deposit the profiteered amount in two equal parts each in the Central Consumer Welfare Fund and the Maharashtra State Consumer Welfare Fund as the recipients are not identifiable, along with interest @18% - amount to be deposited within three months and the Commissioner, SGST to submit compliance report within four months - for the contravention, SCN to be issued for imposition of penalty as prescribed u/s 171(3A) of the Act read with rule 133(3)(d) of the Rules, 2017: NAA

- Application disposed of: NAA

SERVICE TAX

2020-TIOL-845-HC-MAD-ST

Sri Kumaran Transport Vs DCCE

ST - During the relevant period, an O-i-O was passed in respect of the assessee, raising duty demand and interest and imposing penalties u/s 70, 77 & 78 of the Finance Act 1994 - On appeal, the Commr.(A) upheld the O-i-O but set aside the penalties - Hence the assessee filed an application seeking refund of the penalties - The present writ was filed seeking that directions be issued to such effect.

Held: As the appellate authority had set aside the penalties while upholding the duty demand with interest - Hence the assessee is entitled to refund of the interest already deposited - The authority concerned is directed to consider the assessee's application seeking refund of the penalty amount, and dispose off the same within four weeks' time: HC

- Writ petition disposed of: MADRAS HIGH COURT

2020-TIOL-609-CESTAT-DEL

Bharat Mines And Minerals Vs CCGST

ST - Refund - Notification 41/2012-ST - Appellant is engaged in export of soap stone which attracts 'NIL' rate of duty and claimed refund of Service Tax paid on certain services duly specified in table to the notification as were consumed in export of excisable goods - department formed an opinion that the rebate has been claimed with respect to such services as are not truly specified in the notification No. 41/2012-ST, specifically, due to the amendment of this notification vide a subsequent notification No. 1/2016 dated 03.02.2016 - Inasmuch as the post export services were held to be the services beyond the place of factory and refund claim was partially rejected - since said order was upheld by Commissioner(A), the appellant is before CESTAT.

Held: Department formed an opinion that the rebate has been claimed with respect to such services as are not truly specified in the notification No. 41/2012, specifically, due to the amendment of this notification vide a subsequent notification No. 1/2016 dated 03.02.2016 - The post export services are held to be the services beyond the place of factory - perusal of the notification and the amendment thereof makes it clear that any service which is being received by an exporter of goods and are used for the export of goods and the service tax thereof has been paid, the refund thereof can be claimed provided that the services are rendered at a place which is neither factory nor any other place or premises of production or manufacture - It is abundantly clear that the question of the service being rendered pre or post export has no significance - Bench is not convinced with the findings of the adjudicating authority below who have created a concept of pre and post export/clearance services - impugned order is a result of wrong interpretation of the relevant notification, hence same is set aside and appeals are allowed: CESTAT [para 8 to 12]

- Appeals allowed: DELHI CESTAT

2020-TIOL-608-CESTAT-AHM

Deep Construction Company Vs CCE & ST

ST - The issue involved is that; whether the assessee is entitled for interest on refund from the date of deposit made during investigation and subsequently demand was dropped and refund arose - The lower authorities granted interest from the date of order by which the demand was set-aside - Assessee have challenged that portion of order to which the interest was not granted i.e. from date of deposit till the date of the order - As regards the case of Riba Textiles Limited, respectfully considering the same, identical issue has been considered by Division Bench in case of Petnonet LNG Limited 2018-TIOL-3265-CESTAT-AHM and this very bench has already given view in a department's appeal against the same impugned order - Therefore, following the same, interest is payable under Section 35FF wherein there is no provision for payment of interest on refund from the date of deposit - Hence, rejection of interest held by Commissioner (A) is upheld: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

CENTRAL EXCISE

2020-TIOL-841-HC-AHM-CX

Trinetra Texturisers Pvt Ltd Vs CCE & ST

CX - Appellants are in the business of manufacturing Texturized Yarn - At the end of the inquiry, the Department came to the conclusion that the appellant was guilty of clandestine removal of the goods manufactured in the factory premises - demand was confirmed - in the first round of appeal, the Tribunal observed that the Commissioner was not justified in rejecting the certificates which were produced by the appellants with regard to the production capacity of the machine; thus it was indirectly conveyed by the Tribunal that the burden is upon the Revenue to look into the production capacity of the machine and determine the liability accordingly - in denovo proceedings, the Commissioner took the view that as the machine which had been installed in the factory premises was not in the working condition, it was not possible for the Department to examine the production capacity and, therefore, the burden upon the Department stood automatically discharged; that the demand of duty is proper and hence confirmed - in appeal, the CESTAT observed that the assessee had failed to produce the machines for the trial run and in such circumstances, the Revenue correctly decided the case on merits, holding that determination of production capacity of machines installed in other premises would be a futile exercise, as it woud not give a correct picture of production capacity of the assessee; the appeal was rejected, hence assessee is in appeal before the High Court.

Held: Tribunal has passed the impugned order without any application of mind ignoring the position of law - It was not expected of the Tribunal to pass such an order - In fact, the impugned order passed by the Tribunal in the second round of the litigation is something defying the order passed by the Tribunal in the first round of the litigation - Tribunal completely overlooked the fact that in the first round of the litigation, the remand was on the very same issue and, therefore, there was no question of taking the view that it would be a futile exercise - It is expected of the Department to know the position of law - When the position of law is abundantly clear that such examination of the machine can be undertaken at some other place, the Department should have agreed to do so - Having not done so, the Department now cannot take shelter of the order passed by the Tribunal, which is not tenable in law - By now, this litigation is almost two decades old and it will be too much for this Court to once again remand the matter for the very same exercise, which could have been undertaken a decade back - Bench, therefore, declines to accept the vociferous submission of the Revenue counsel that the appellants should not be permitted to have an undue advantage as the same would lead to a huge loss to the Revenue - principle of law discernible from the cited decisions is that the case of the Department of clandestine manufacture and removal of the goods should be looked into having regard to the production capacity of the machine, installed in the factory premises - For any good reason, if the Department was unable to arrive at any final conclusion with regard to the production capacity of the machine on account of the same not in a working condition, then the Department owed a duty to examine the machine of similar type, which might have been installed in any other factory premises - This is what Rule 173(E) of the Rules, 1944, provides for - The principle of law, in this regard, is that the burden will be upon the Department to show that the entries in the Registers, etc. match with the production capacity of the machine - Bench is convinced that the impugned order of the Tribunal is not sustainable in law - At the cost of repetition, Bench states that it could have remanded the matter once again but, for the obstinate attitude of the Department - impugned orders passed by the Tribunal are hereby quashed and set aside - both the Appeals succeed and are hereby allowed: High Court [para 19, 20, 37 to 39, 45, 46, 48, 49]

- Appeals allowed: GUJARAT HIGH COURT

Zedex Clothing Pvt Ltd Vs UoI

CX - The assessee-company is engaged in manufacture of trousers in the name of M/s Zedex Clothing Ltd - It claimed to procure inputs from the DTA as well as 100% EoU - The assessee avaled CENVAT credit on the duty paid invoices of the inputs and capital goods received under provisions of CCR 2004 - Upon audit, it was found that the assessee wrongly availed credit for the relevant period in respect of service tax paid on the commission agents for sale of finished goods - It was claimed that the assessee availed credit in excess of what was admissible to it - Accordingly, an SCN was issued proposing to recover the credit so availed, by invoking Rule 14 of CCR 2004 r/w Section 11A(5) of the CEA 1944 - As the assessee did not submit any reply to the SCN, the original adjudicating authority passed an ex parte order confirming the proposals in the SCN - The Tribunal later dismissed the assessee's appeal against the O-i-O on grounds of limitation - Hence the present appeal.

Held - The Tribunal considered the day of passing of the order as well as the date on which a copy thereof was delivered to the assessee, whereupon it found that the assessee had been unable to explain the 15 month delay in filing appeal - Hence factual findings recorded by the Tribunal do not warrant any interference with: HC

- Assessee's appeal dismissed: GUJARAT HIGH COURT

CUSTOMS

2020-TIOL-607-CESTAT-BANG

MIV Logistics Pvt Ltd Vs CC

Cus - Handling of Cargo in Customs Areas Regulations, 2009 [HCCAR] – Exemption from payment of Cost Recovery Charges [CRC] - vide impugned order, the Commissioner has directed the appellant to pay the pending dues of CRC for the period from 1.1.2016 till 31.3.2018 along with applicable interest within three months from the date of the impugned order, failing which the appellant's appointment as Customs Cargo Service Provider [CCSP] would be cancelled without any further notice as per the provisions of HCCAR and also imposed a penalty of Rs.50,000/- on the appellant under Regulation 12(8) of the HCCAR for contravention of the provisions of Regulation 5(1)(iii), 5(2), 5(3) and 13 of the HCCAR – appeal to CESTAT.

- Appeal disposed of: BANGALORE CESTAT

Sandvik Asia Pvt Ltd Vs CC

Cus - Valuation - Inclusion or otherwise of royalty in the transaction vlaue u/r 10(c) of Custom Valuation Rules, 2007 - Issue in the present case stands settled in favour of the assessee importer as per the Tribunal CESTAT-Mumbai's order dated 01.05.2015 and which order has been accepted by the Department as no further appeal was filed - following the same, impugned order is set aside and appeal is allowed: CESTAT [para 4]

- Appeal allowed: AHMEDABAD CESTAT

TII

TP - In view of famous legal maxim Lex Non Cogit ad impossibilia, assessee cannot be expected to provide that information of comparables which is not available in public domain: ITAT

TP - It is fit case for remand, where CIT(A) dismisses an appeal on grounds of limitation, without considering that appeal was delayed on account of late receipt of order against which appeal was filed: ITAT

TIOL CORPLAWS

Prevention of Corruption Act - After filing of charge sheet by CBI and complaint by Enforcement Directorate, further investigation is pending in both cases, release of petitioner at this stage even on interim bail is not warranted: HC

Arbitration and Conciliation - Petition seeking appointment of Arbitrator based on original deed executed between disputing parties, is maintainable iF supplementary deed only alters few clauses and there is no novation of original partnership deed: HC