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2020-TIOL-NEWS-094 | Tuesday April 21, 2020 |
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Dear Member,
Sending following links. Warm Regards,
TIOL Content Team
TIOL PRIVATE LIMITED.
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INCOME TAX |
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2020-TIOL-848-HC-KERALA-IT
PV Thomas Vs CIT
In writ appeal, the division bench of the High Court finds there to be no illegality in the findings of the Single Judge. It also directs that if the assessee does approach the ITAT, the matter be disposed off independent of any observations of this court.
- Assessee's writ appeal dismissed: KERALA HIGH COURT
2020-TIOL-849-HC-KAR-IT
Ingersoll Rand India Ltd Vs CIT
Whether club membership expenditure is in nature of revenue expenditure - YES : HC
Whether in the absence of any mechanism to compute disallowance of expenditure incurred for earning exempt income, ad hoc disallowance can be made - NO : HC
- Assessee's appeal allowed: KARNATAKA HIGH COURT
2020-TIOL-480-ITAT-MUM
DCIT Vs JWC Logistics Park Pvt Ltd
Whether deduction in respect of FDR interest, scrap sales and EDI charges can be allowed in the current AY where such benefit was allowed to the assessee in previous AYs too - YES: ITAT
- Revenue's appeal dismissed: MUMBAI ITAT
Whether there is any need to initiate penalty proceedings when the assessee disclosed the total income arising from sale of property, in the relevant returns - NO: ITAT
- Assessee's appeal partly allowed: BANGALORE ITAT
Raman Singal Vs ADDL CIT
Whether Sec 54F exemption can be claimed in respect of more than one residential house - NO : ITAT
Whether rectification of mistake u/s 154 can be called for only if there is any glaring mistake of fact or law on part of the officer passing the order & cannot be invoked to re-argue the case on merits - YES: ITAT
- Assessee's appeal dismissed: CHANDIGARH ITAT
Ankur Poddar Vs PR CIT
Whether disallowance u/s 14A r/w Rule 8D can be resorted to only where the AO is dis-satisfied with the explanation furnished by the assessee in respect of expenditure incurred for earning exempt income - YES: ITAT
Whether where the AO does not invoke provisions of Rule 8D upon finding the same to be unwarranted in the circumstances of the case, the same is no grounds to invoke revisionary powers - YES: ITAT
- Assessee's appeal allowed: KOLKATA ITAT
Ravi Choudhary Vs ITO
Whether re-opening of assessment is to be resorted to only when the AO records sufficient reasons to infer that taxable income has escaped assessment - YES: ITAT
Whether when conducting such exercise, the AO can rely only on investigation report can record his satisfaction without conducting preliminary inquiry – NO : ITAT
Whether the condition precedent to reopen an assessment that is 'reason to believe' should be that of the AO - YES : ITAT
- Assessee's appeal allowed: KOLKATA ITAT
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GST CASES |
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2020-TIOL-77-AAR-GST
All India Disaster Mitigation Institute
GST - Activities of the applicant relating to disaster prevention, disaster mitigation and disaster management are activities relating to "preservation of environment" - Thus, the activities of the applicant are considered as charitable activities and, hence, activities of the applicant, being registered under Section 12AA of the Income Tax Act, 1961, exempt from tax under the GST Acts, by virtue of Entry No. 1 of the Notification No. 12/2017-Central Tax (Rate) - Consequently, the applicant is not liable to registration in respect of charitable activities relating to preservation of environment which attracts nil rate of GST, by virtue of Section 23(1) (a) of the CGST Act, 2017: AAR
- Application disposed of: AAR
2020-TIOL-76-AAR-GST
Flint Group India Pvt Ltd
GST - Technical Varnish and Medium used in printing industry is correctly classifiable under HSN 3208: AAR
- Application disposed of: AAR
2020-TIOL-75-AAR-GST
Gurukrupa Hospitality Services
GST - On perusal of the copy of the agreement submitted by the applicant, it is evident that the service recipient has engaged the applicant for running of the canteen for their workers / employees - The rates for the meal, snacks, tea have been fixed by the recipient - The menu is required to be decided by the canteen committee of the recipient - It is, therefore, evident that the applicant, who is caterer, is providing service from other than his own premises to the recipient, consequently, the nature of service provided by the applicant is that of "outdoor catering service" and it is not in the nature of service provided by a restaurant, eating joint including mess, canteen - Clarification issued, vide Circular No. 28/02/2018-GST dated 08.1.2018, is not applicable - Up to 25.07.2018, the said supply of services is covered under Sr. No. 7(v) of the Table to the Notification No. 11/2017-Central Tax (Rate) attracting GST @ 18% (CGST:9% + SGST: 9%) and thereafter covered under Sr. 7(i) of the Table to Notification No. 11/2017-Central Tax (Rate) attracting Goods and Service Tax @ 5% (CGST: 2.5% + SGST: 2.5%): AAR
- Application disposed of: AAR
2020-TIOL-74-AAR-GST
Prayagraj Dyeing And Printing Mills Pvt Ltd
GST - Bagasse based Particle Board, which is a composition of 75% of bagasse, 25% of wood particles and 5 kgs of resins, will fall under entry at Sr. No. 137A in Schedule III to the Notification No. 01/2017- Central Tax (Rate) and attract GST rate of 18% (CGST: 9% & SGST: 9%): AAR
- Application disposed of: AAR
2020-TIOL-73-AAR-GST
Superstar Amusement Pvt Ltd
GST - SAC for the supply of amusement services in Amusement Park like merry-go rounds and other rides shall be 99969/999691 and rate of tax applicable to the services will be 18% GST: AAR
- Application disposed of: AAR
2020-TIOL-72-AAR-GST
Universal Import Export
GST - ‘Mango Pulp' is specifically classified under Chapter sub-heading no. 0804 50 40 of Customs Tariff Act, 1975 - However, the classification of item, ‘Mango Pulp' is not specified in GST Tariff, therefore, ‘Mango Pulp' will fall under the residuary entry No.453 of Schedule III of the Notification No . 01/2017 - Central Tax (Rate) dated 28.06.2017 and attracts rate of GST @18% (CGST:9% & GGST: 9%): AAR
- Application disposed of: AAR
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INDIRECT TAX |
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SERVICE TAX
ST - Refund - Appellant claimed refund of service tax paid on transportation of iron ore from the mining site to the appellant's crusher plant, located 6 km away from mining area - appellant paid service tax on the transportation charges on reverse charge mechanism (GTA) - Subsequent to deposit of service tax, the appellant entertained a bonafide belief that the service tax on the impugned transportation services, is not payable in terms of the Exemption Notification No.34/2004-ST and consequently filed three refund applications u/s 11B of the CEA,1944 relating to the period July, 2005 to February, 2008 - claims were rejected on the ground that the exemption notification is not available to the appellant - appeal to CESTAT.
Held: Miscalleneous applications filed under rule 10 of the CESTAT Procedure Rules, 1982 seeking incorporation of additional ground are allowed since they have substantial bearing on the main appeals - Upon going through the relevant documents, such as, the contract between the appellant and the raising contractors, the monthly bills raised by them on the appellant, the transit pass in 'Form-G', issued by the mining authority for the purpose of payment of mining royalty, and transportation of iron ore from the mines site, the Bench notes that the contractors have not issued any other document in the name of the appellant, for the purpose of transportation of iron ore, which can be termed as a consignment note, as stipulated under Rule 4B of the Service Tax Rules, 1994 - As per the legal principles decided by different benches of Tribunal and relied upon by the appellant, the activities of transportation of iron ore in the present case, therefore, do not fall under the GTA service in terms of Sec.65(105)(zzp) of the Finance Act, 1994, nor the raising contractors fall under the definition of 'GTA' as defined under Sec.65(50b) of the said Finance Act - impugned orders are set aside and appeals are allowed with consequential relief: CESTAT [para 14 to 16]
- Appeals allowed: KOLKATA CESTAT
ST - Free services provided by appellant to customers who purchased cars from them - Revenue has presumed that the appellant had collected an amount of Rs.625/- per service - Said figure of Rs.625/- is not forthcoming from any records - demand confirmed along with interest and penalty on presumptive amount is not sustainable - appeal is allowed: CESTAT [para 2, 3]
- Appeal allowed: ALLAHABAD CESTAT
CENTRAL EXCISE
CX - Appellant has been classifying "Nimbooz" under Chapter Sub-heading No. 2202 9020 and claiming exemption under Sl. No. 24 of Notification No. 1/2011-CE - Revenue entertained a view that "Nimbooz" manufactured and classified by the appellant did not fit into the general description under the Chapter sub-Heading for "fruit pulp or fruit juice based drink" but is a packaged nimbu pani and hence is nothing but a "Lemonade" which is classifiable under 2202 1020 - duty demanded for the period 01.03.2009 to 31.03.2013 along with applicable interest and penalty - allegations upheld by CCE, therefore, appeal before CESTAT.
Held: Issue regarding classification of "Nimbooz" is no more res integra as the same has been laid to rest by the decision of the Larger Bench of Allahabad Tribunal in the appellant's own case and wherein it is held that the classification declared by the appellant under the Chapter sub-heading 2202 9020 is correct and hence the Revenue is not justified in reclassifying "Nimbooz" as "Lemonade" under Chapter sub-Heading 2202 1020 - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 4, 5]
- Appeal allowed: CHENNAI CESTAT
CX - Issue involved is whether the appellants are entitled for Cenvat Credit in respect of Input Services namely Clearing Service, Life Insurance Services (For Employee), and Mandap Keeper Service etc.
Held: On the same service, for the period prior to 01.04.2011, the Cenvat Credit has been allowed by this tribunal vide Order No. A/12297-12298/2017 dated 01.09.2017 - as the issue is no longer res integra, impugned order is set aside and appeal is allowed: CESTAT [para 5, 5.1, 6]
- Appeal allowed: AHMEDABAD CESTAT
CUSTOMS
Cus - The appellant- Importer namely M/s Pax Technologies were engaged in import of goods namely Point of Sale Devices (POS) and Mobile Point of Sale Devices (MPOS) - Based on an intelligence that the goods were being imported by suppressing actual value of goods, the department intercepted the consignments imported against two Bills of Entry dated 08/01/2016 - On examination, it was found that the goods were not only undervalued, but were mis-classified and imported in violation of relevant Foreign Trade Policy (FTP) provisions too - Tribunal found it appropriate to ask the Chief Commissioner of Customs to enquire about the systemic failure with regard to clearances of Mobile Point of Sale equipments under various Bills of Entry - It is found that the clearing agents were aware as to the description that was to be given to a consignment to avoid examination of the cargo from the Risk Management Module (RMS) - Tribunal is also surprised to note that in some of the Bills of Entry, the Risk Management Module (RMS) gave examination of the package of the cargo, but still in these cases also the consignment were cleared in spite of the huge mis-declaration with regard to its description, classification as well as the value of imported items - This indicate that there exist a deep malaise in the system of examination and clearance of the cargo - The Chief Commissioner is advised to revisit the standard operating procedure in this regard to ensure that the system is enabled to take care of the instances where a blatant mis-declaration is avoided by the importers to bye-pass the Risk Management Module - The Chief Commissioner of Customs is directed to consider whether it should be necessary to cause a vigilance enquiry to determine how the consignments were cleared when there were so many mis-declaration in description as well as classification of the imported Mobile Point of Sale equipments - There is no infirmity in the order-in-original: CESTAT
- Appeals dismissed: DELHI CESTAT
Cus - Whether the appellant M/s.Agarwal Metals & Alloys [AMA] had undervalued the goods i.e. various types of Aluminium scrap imported by them?
Held - After going through the findings arrived at in the impugned order and considering the comparison chart showing comparison of prices of goods imported by the Appellant herein viz. AMA, Sunland Metal and Baheti Metal produced by the Counsel during the PH, the Bench is of the considered view that the present case is squarely covered by Order No.A/11871-11874/2019 dated 1.10.2019 passed in the case M/s.Sunland Metal (supra) as the allegation and evidence relied upon in both the cases are similar in nature -the adjudicating authority has proceeded to re-determine the value of imported aluminium scrap on the basis of the DGOV circular without considering and overlooking the contemporaneous data available before it on record -it is a settled law that if the declared value is to be rejected, in that case the Customs Valuation Rules, 2008 [CVR] has to be applied sequentially i.e. Rule 5 and 6 is to be applied -if the value of contemporaneous goods are available, the same shall be basis for redetermination of value, as held by Apex Court in the case of South India Television (P) Ltd. - 2007-TIOL-126-SC-CUS–it is noted that in the case of Sunland Metal, prices declared by Baheti Metal reported as Pushpak Metal has been accepted by the department and the same was relied upon to reject the redetermination of value in the case of Sunland Metal - the order of Pushpak Metal has been accepted by the department and the CBEC and the same goes on to show that the price declared by them has been found to be correct -once the said price has been accepted to be true and having found that prices of AMA, the appellant herein, are identical to the prices declared by both Sunland Metal and Baheti Metal (reported as Pushpak Metal), the Bench has no hesitation in holding that the impugned order re-determining the value of imported scrap on the basis of DGOV circular and by overlooking the contemporaneous data is required to be set aside– the value declared by the AMA, being similar to the contemporaneous import data mentioned above has to be upheld -the adjudicating authority in the present case has confirmed the demand on the basis of the LME price as stated in the DGOV circular supra - the Tribunal, in the case of Sunland Metal, after considering the various case laws and communication/clarification given by the CBEC/ISRI, has held that LME price cannot be the basis for redetermination of value of scrap -in view of the settled law, the statements of co-appellants and other witnesses cannot be relied upon or the same cannot be the sole basis to confirm the charge of undervaluation as the same is contrary to documentary evidence which is in the form of contemporaneous import price -the allegation that the excess amount over and above the invoice price was paid through hawala transaction is equally baseless and there is no evidence of any hawala transaction to prove the said allegation –since the witnesses failed to appear for cross-examination, their statements cannot be relied upon -the Bench is in agreement with the plea of the Appellant that value shown in the insurance policies, cannot be a ground to enhance value, as such value might have been shown to get a higher amount of compensation in the event of goods getting lost or destroyed - apart from the insurance policy, no other independent evidence is on record to establish the fact that the goods covered under the said policies were under-valued -hence, adoption of insurance value for alleging under-valuation is not proper -the adjudicating authority has wrongly placed reliance on the report given by First Secretary (Trade), Embassy of India, Brussels – the Bench is in agreement with the submission of Appellant that the invoices and supporting documents with the report has no relevance as the same were not authenticated and relates to transaction between two different parties of which the Appellant is not a party of -further, it is also found that in respect of 166 Bills of Entry, value was already enhanced at the time of assessment and hence further proposal to re-enhance the value when the earlier assessment order has attained finality, since no appeal/review was filed against such order, is not sustainable -coming to the issue raised by the Appellants that no additional duty of Customs is payable in respect of scrap as these are not manufactured product, it is observed that the same has been held by this Tribunal in favour of the Appellant in the case of Sunland Metal in para 12 of the order and hence the Appellant herein is entitled for all reliefs/exemption associated with the assessment -since the Bench is deciding the appeals on merit, the Bench is not addressing the issue of limitation and the same is kept open -in view of the above, the demands confirmed against AMA, confiscation of goods and penalties imposed upon AMA is not sustainable -for the herein viz. AMA, Sunland Metal and Baheti Metal produced by the Counsel during the PH, the Bench is of the considered view that the present case is squarely covered by Order No.A/11871-11874/2019 dated 1.10.2019 passed in the case M/s.Sunland Metal (supra) as the allegation and evidence relied upon in both the cases are similar in nature -the adjudicating authority has proceeded to re-determine the value of imported aluminium scrap on the basis of the DGOV circular without considering and overlooking the contemporaneous data available before it on record -it is a settled law that if the declared value is to be rejected, in that case the Customs Valuation Rules, 2008 [CVR] has to be applied sequentially i.e. Rule 5 and 6 is to be applied -if the value of contemporaneous goods are available, the same shall be basis for redetermination of value, as held by Apex Court in the case of South India Television (P) Ltd. 2007-TIOL-126-SC-CUS –it is noted that in the case of Sunland Metal, prices declared by Baheti Metal reported as Pushpak Metal has been accepted by the department and the same was relied upon to reject the redetermination of value in the case of Sunland Metal - the order of Pushpak Metal has been accepted by the department and the CBEC and the same goes on to show that the price declared by them has been found to be correct -once the said price has been accepted to be true and having found that prices of AMA, the appellant herein, are identical to the prices declared by both Sunland Metal and Baheti Metal (reported as Pushpak Metal), the Bench has no hesitation in holding that the impugned order re-determining the value of imported scrap on the basis of DGOV circular and by overlooking the contemporaneous data is required to be set aside– the value declared by the AMA, being similar to the contemporaneous import data mentioned above has to be upheld -the adjudicating authority in the present case has confirmed the demand on the basis of the LME price as stated in the DGOV circular supra - the Tribunal, in the case of Sunland Metal, after considering the various case laws and communication/clarification given by the CBEC/ISRI, has held that LME price cannot be the basis for redetermination of value of scrap -in view of the settled law, the statements of co-appellants and other witnesses cannot be relied upon or the same cannot be the sole basis to confirm the charge of undervaluation as the same is contrary to documentary evidence which is in the form of contemporaneous import price -the allegation that the excess amount over and above the invoice price was paid through hawala transaction is equally baseless and there is no evidence of any hawala transaction to prove the said allegation –since the witnesses failed to appear for cross-examination, their statements cannot be relied upon -the Bench is in agreement with the plea of the Appellant that value shown in the insurance policies, cannot be a ground to enhance value, as such value might have been shown to get a higher amount of compensation in the event of goods getting lost or destroyed - apart from the insurance policy, no other independent evidence is on record to establish the fact that the goods covered under the said policies were under-valued -hence, adoption of insurance value for alleging under-valuation is not proper -the adjudicating authority has wrongly placed reliance on the report given by First Secretary (Trade), Embassy of India, Brussels – the Bench is in agreement with the submission of Appellant that the invoices and supporting documents with the report has no relevance as the same were not authenticated and relates to transaction between two different parties of which the Appellant is not a party of -further, it is also found that in respect of 166 Bills of Entry, value was already enhanced at the time of assessment and hence further proposal to re-enhance the value when the earlier assessment order has attained finality, since no appeal/review was filed against such order, is not sustainable -coming to the issue raised by the Appellants that no additional duty of Customs is payable in respect of scrap as these are not manufactured product, it is observed that the same has been held by this Tribunal in favour of the Appellant in the case of Sunland Metal in para 12 of the order and hence the Appellant herein is entitled for all reliefs/exemption associated with the assessment -since the Bench is deciding the appeals on merit, the Bench is not addressing the issue of limitation and the same is kept open -in view of the above, the demands confirmed against AMA, confiscation of goods and penalties imposed upon AMA is not sustainable -for the same reason, the penalty imposed upon co-appellants namely Shri Samir Agarwal, ShriVipulAgarwal and Ramesh Kumar H. Jain is also not sustainable – thus, the impugned order is set asideand all the appeals allowed : CESTAT [para11, 11.1, 11.2, 11.4, 11.5, 11.6, 11.7, 11.8, 11.9, 11.11, 11.12, 12]
- Appeals allowed: AHMEDABAD CESTAT
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HIGH LIGHTS (SISTER PORTAL) |
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