2020-TIOL-920-HC-KAR-IT

Green Agro Pack Pvt Ltd Vs CIT

On appeal, the High Court observes that the issue at hand is answered in favor of the assessee in its own case for a previous period. Hence it proceeds to answer the question in favor of the assessee.

- Assessee's appeal allowed: KARNATAKA HIGH COURT

2020-TIOL-592-ITAT-DEL

DCIT Vs Miele India Pvt Ltd

Whether expenses incurred on advertisement can be said to have any enduring benefit so as to be treated as intangible assets & the expenditure incurred thereon to be treated as capital in nature - NO: ITAT 

- Assessee's appeal allowed :DELHI ITAT

2020-TIOL-590-ITAT-PUNE

Dr Ranjana S Nargolkar Vs ITO

Whether receipt of the proprietary concern can be considered as professional receipt if assessee is a professional who runs a proprietary concern – YES : ITAT

Whether there is any difference between the professional receipt of individual and professional receipt of proprietary concern if assesse is a medical practitioner and runs a clinic – NO : ITAT

- Assessee's appeal dismissed : PUNE ITAT

Sakharam Bhondve Vs ITO

Whether reinvestment made in the name of assessee alone is eligible for deduction u/s 54F - NO: ITAT

- Assessee's appeal partly allowed: PUNE ITAT

Kavitaben Luhana Vs DCIT

Whether penalty can be imposed u/s 271(1)(c) if there is no undisclosed income found during course of search and no incriminating material is found - NO : ITAT

- Assessee's appeal allowed: AHMEDABAD ITAT

Shankar Gupta Vs ITO

Whether requirement of issuing SCN is a must prior to enhancement of the assessed income as envisaged in Section 251(2) for each and every enhancement and it does not depend on overall outcome of the total income of the assessee - YES : ITAT

- Assessee's appeal allowed: JAIPUR ITAT

SERVICE TAX

2020-TIOL-928-HC-MP-ST

Agrawal Colour Advance Photo System Vs CCE

ST - Following are the substantial questions of law before the High Court - 1. Whether, while providing photography service whether the use of the paper upon which an image is printed using certain consumables and chemicals, being incidental to the provision of service, amount to sale of goods in terms of Article 366(29A)(b) of the Constitution and whether value of photography service shall be determined in isolation of cost of such goods? And,2. Whether the term 'sale' appearing in exemption Notification No.12/03-ST dated 20.06.2003, is to be given the same meaning as given by Section 2(h) of the Central Excise Act, 1944, read with Section 65(121) of the Finance Act, 1994 or this term would also include the deemed "sale" as defined by Article 366(29A)(b) of the Constitution?

Held: In view of the law laid down by the Apex Court in M/s Pro. Lab's case - 2015-TIOL-08-SC-CT-LB ), it can be safely held that photography service, which has both the elements of goods and services is covered under works contract - Thus, in a works contract which involves transfer of property, the provisions as contained in Article 366(29A) of the Constitution are attracted - Therefore, in the light of sub-clause (b) of Clause (29A) of Article 366 of the Constitution, in execution of a works contract when there is transfer of property even in some other form than in goods, the tax on such sale or purchase of goods is leviable - In this view of the matter, after the 46th Amendment, there is no question of dominant nature test applying in photography service and the works contract, which is covered by Clause (29A) of Article 366 of the Constitution where the element of goods can be separated, such contracts can be subjected to sales tax by the States under Entry 54 of List II of Schedule II - Once that is so, value of photographic paper and consumables cannot be included in the value of photography service for the purposes of imposition of service tax - Thus, in the light of the judgment of the Apex Court in M/s Pro Lab (supra), wherein it is held that part of processing and supplying of photographs, photo prints and negatives, which have "goods" component exigible to sales tax is constitutionally valid, it is held that value of photography service has to be determined in isolation of cost of goods such as photography paper, consumables and chemicals with which image is printed, negatives and other material which has "goods" component liable to sales tax - Accordingly, the substantial question of law No.1 is answered in favour of the assessee and against the Revenue - Since the substantial question of law No.1 is answered in favour of the assessee, the substantial question of law No.2, which already stands concluded while dealing with the question of law No.1, is also answered in favour of the assessee and it is held that the term 'sale' appearing in exemption Notification No.12/03-ST dated 20.06.2003 would also include "deemed sale" as defined by Article 366(29A)(b) of the Constitution - impugned orders are set aside and the present appeals stand allowed: High Court [para 19 to 21]

- Appeals allowed: MADHYA PRADESH HIGH COURT

2020-TIOL-728-CESTAT-MUM

V Xpress A Dvn Of V Trans India Ltd Vs CST

ST - The appeal of M/s V Express, a division of M/s V Trans Ltd, impugns the chronologically earlier of two orders and narration of facts therein should suffice for both insofar as the common issue is concerned - In addition, there are two demands representing recoveries made from the recipients of taxable service which, even if not due was, nevertheless, required to be deposited with the exchequer as provided for in section 73A of FA, 1994 - The assessee, as a 'goods transport agency', had been rendering service of 'transportation of goods by road' and demand of Rs. 12,91,54,476 proposed in SCN for the period from 1st November 2009 to 31 December 2011 and of Rs. 1,89,14,385 for 2011-12 was founded on investigations that allegedly was liable as 'courier agency service' taxable under section 65 (105) (f) instead of the acknowledged taxability under section 65 (105) (zzp) of FA, 1994 - According to investigation, the assessee had been discharging tax liability under former head till 31st October 2009 and the subsequent alteration was claimed to be the consequence of circular 104/07/2008-ST - Though both services are, admittedly, taxable, the differential tax arises from the benefit of notfn 35/2004-ST available to providers of 'transport of goods by road service' - Though there is overwhelming emphasis on 'door-to-door' in the circulars relied upon by that authority, this does not, constitute the sole defining distinction between the two rival entries - Doubtlessly, 'time sensitive' is of critical relevance; however, neither of the two SCNs advert to any special treatment accorded to one or more of the several consignments sought to be covered within the taxability as 'courier agency service'; indeed, it would appear that, in the absence of any evidence other than the statements relied upon in the two SCNs, the determination in first adjudication order is founded upon assumptions and presumptions - Such substantial demand of tax from an assessee discharging liability as provider of an ostensibly acceptable taxable service cannot be endorsed on such shaky foundations - The history of the several circulars, as well as the proposition of first adjudicating authority, and of department, that 'time sensitivity' should be perceived in a strict construct when a clarification appears to favour the assessee, does not add to certainty of taxation that is a normative characteristic of imposts - In its attempts to react to alleged subterfuge resorted to for evading the unabated levy, the clarifications lack concrete reliability - This is most apparent in the seesaw assertions of classification - In the circumstances of clarificatory confusion, uncertain conformity with the definition of 'courier agency' in its entirety and inability to discard, with certainty, the claim of being 'goods transport agency', the demand of differential tax is not maintainable - The assessee has acknowledged one of the computations of tax recovered but not deposited - The adjudicating authority, after appropriating the subsequent deposit, along with interest thereon, has concluded as due compliance - No reason found to interfere with that portion of the order - Insofar as the contested amount of Rs. 2,15,772, along with interest thereon, alleged to have been recovered from recipients of service is concerned, no evidence has been presented of not being obliged to comply with section 73A of FA, 1994 - Therefore, no grounds found to interfere with that portion of the order, too: CESTAT

- Assessee's appeal allowed : MUMBAI CESTAT

2020-TIOL-725-CESTAT-DEL

Paharia Construction Company Vs CCE

ST - The assessee seeks the quashing of the order dated 24 July, 2014, by which the demand of service tax has been confirmed with penalty and interest - The period of dispute is from 1 April, 2007 to 30 June, 2013 - The Assessee as a sub-contractor claims to have carried out certain works under a Work Order issued by M/s ZEC - A SCN was issued mentioning therein that during the audit, it was observed that assessee had provided services to ZEC as a sub-contractor but had neither filed the ST-3 Returns nor paid service tax - The extended period of limitation was also invoked stating that the assessee had not deposited the applicable service tax wilfully and suppressed the facts deliberately with an intention to evade payment of service tax - The assessee submitted that the question of law as to whether a sub-contractor is liable to pay service tax, even if the main contractor has discharged the service tax liability on the activity undertaken by sub-contractor in pursuance of a contract, has now been resolved by a Larger Bench of Tribunal in Melange Developers Private Limited 2019-TIOL-1684-CESTAT-DEL-LB - Prior to the decision of Larger Bench in said case, there were conflicting decisions of Tribunal regarding liability of a sub-contractor to pay service tax - Such being the position, it cannot be said that the assessee had suppressed the material facts from the Department with an intent to evade payment of service tax in view of Continental Foundation Joint Venture 2007-TIOL-152-SC-CX - The audit of records of assessee for the period September, 2006 to March, 2010 was conducted by Internal Audit of Department on 13 and 14 September, 2010 and an Internal Audit Report was issued on 14 December, 2010 incorporating audit paragraphs relating to non payment of service tax - The SCN was, however, issued on 18 April, 2013 after period of two years and four months of the issuance of Internal Audit Report - The Department kept quiet for over two years and four months before issuing of the SCN - Therefore, the Department was not justified in invoking the extended period of limitation - The demand of service tax, imposition of penalty and interest for any period beyond the period of one year prescribed under Section 73 of the Act, therefore, cannot be sustained - Matter remanded to the Commissioner to determine the service tax liability and the imposition of penalty and interest if any, within the normal period - The issue as to whether penalty or interest should also be imposed for the normal period shall be determined after giving an opportunity of hearing to the assessee: CESTAT

- Appeal allowed: DELHI CESTAT

CENTRAL EXCISE

2020-TIOL-727-CESTAT-AHM

Nayara Energy Ltd Vs CCE & ST

CX - Appellant is entitled to avail credit of duty paid on Welding Electrodes, Welding filler wire, Materials used for railway line, M.S. Gratings/G.I Coated Gratings, Construction chemicals as all the items were used exclusively in relation to manufacture of final product in the appellants manufacturing unit - Impugned order is set aside and appeal is allowed: CESTAT [para 4, 5]

- Appeal allowed : AHMEDABAD CESTAT

2020-TIOL-726-CESTAT-AHM

Yahska Polymers Pvt Ltd Vs CCE

CX - A SCN was issued to assessee alleging that they have availed credit on invoices issued by M/s Laxmi Dye Chem and M/s Harshlaxmi Chemisolv without receipt of inputs - Said allegations of non receipt of goods are based upon the diary/ note books seized from said two concerns - Further the statements of authorised persons of said two concerns as well as authorised persons of the assessee have also been relied upon to show that no inputs were received by them - In case of assessee, the statement of transporter has also been relied upon to show that no goods were consigned to M/s Yahska - However, no investigations has been conducted to ascertain from the parties to whom the inputs were allegedly actually sold by M/s Laxmi Dyechem and M/s Harshlaxmi Chemisolv to ascertain the actual position - The SCN is absolutely silent about the investigation at the end of alleged actual recipients who allegedly received the goods without cover of invoice - On the other hand, the records and documents maintained by assessee concerns showing receipt of inputs in their premises, accounting of same, utilisation of such inputs in manufacture of finished goods and clearances thereof on payment of duty and the said vital fact has not been disputed by any evidence - No evidence in the form of any cash coming back to the assessee after payment of consideration through banking channels towards purchase of inputs from M/s Laxmi Dyechem and M/s Harsh Laxmi Chemosolv has been found - Only on the basis of diary/ note books seized from third party or the statements, it cannot be said that the assessee did not receive the goods - The input output ratio of assessee has not been challenged - Pertinently in absence of investigation at the end of actual recipients, the allegation of availing credit by assessee only on the basis of invoice without actual receipt of goods cannot be allowed to sustain - Thus, no reason found to demand and recover Cenvat credit from both the assessees: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

CUSTOMS

2020-TIOL-724-CESTAT-MUM

Satprakash Goyal Vs CC

Cus - Application filed seeking rectification of mistake in the order of the Tribunal dated 05.06.2018 which dismissed their appeal for non-prosecution - Appellant had authorized his daughter, Ms. Aruna Rathi, to appear for and on behalf of him - authorised representative submitted that the appellant is a chronic patient and admitted to hospital time and again and that the appellant has no means to deposit the amount directed by the Tribunal in its order dated 04.12.2013; that in the fourth modification order, no notice has been served on him, therefore, the appellant could not attend the hearing, accordingly, the order be recalled and remodification application be restored and hearing be fixed on any date - AR submitted that this is a dilatory tactic on the part of the appellant to avoid compliance of the stay order dated 04.12.2013.

Held: Tribunal had directed pre-deposit 10% of the penalty imposed on the appellant - The representative of the appellant was heard today at length and once again the plea of financial difficulty of the appellant and his sickness was repeated - same was all along being considered by the Tribunal and such request has been rejected in the respective modification applications - Consequently, Bench does not find merit in the present miscellaneous application titled as ROM application, hence, the same is dismissed: CESTAT [para 6]

- Application dismissed: MUMBAI CESTAT

Overseas Warehousing Pvt Ltd Vs CC

Cus - Assessee was appointed as Custodian under Section 45 of Customs Act, 1962 for operating a "Custom Cargo Service Provider" under HCCAR, 2009 - A case was booked against M/s Golden Enterprises challenging the classification of goods imported and quantum of duty payable on said goods - The goods imported by importer were detained/ seized by Custom Authorities - The importer was given the option to take provisional release of the seized goods, however importer chose not to avail the same and goods continued under detention/ seizure - Custom issued two letters dated 14.05.2018 and 16.05.2018 specifically asking the assessee not to create third party liability in the case and to settle the matter amicably specifically mentioning that the said consignments were subject matter of contempt proceedings in the High Court and decision of High Court should be awaited before further proceeding in the matter - Ignoring the directions and instructions contained in said letters, assessee proceeded to auction the goods without even intimating to Custom Authorities and also without seeking concurrence from the importers - Thus, department proceeded against assessee alleging that by auctioning the goods they have contravened the provisions of regulation 5 and 6 of HCCAR for which action was warranted in terms of Regulation 11 and 12 ibid - Undisputedly, assessee has by his action of auctioning the goods which were in his custody acted without putting the importer to notice and without informing/ seeking permission from Custom Officer has contravened the provisions of Section 48 of Customs Act, 1962 - The issue in relation to misconduct of assessee has been adjudged and he has been found responsible for acting beyond the scope of the authority conferred on him in terms of approval granted under Section 45 and HCCAR - However, the issue that needs to be considered is whether this act is enough to hold the appellant as habitual offender as has been held by the adjudicating authority for revocation of the permission granted under Section 45 to operate as custodian - Appellant is AEO and for that reason he was not required to give any security for bond executed - If that is so, the finding recorded by Commissioner as habitual offender, is contrary to AEO status conferred on assessee - Commissioner has also failed to take note of certain correspondences between the custom authorities, assessee and the importer while adjudging the case against assessee - Order passed by commissioner without recording findings in respect of these correspondences relied in their defence by assessee has been passed in violation of principle of natural justice - The matter is remitted back to the adjudicating authority for fresh consideration - Since the duty in respect of the goods in custody of the custodian if not cleared for home consumption as provided for by in terms of Section 47, needs to be paid by the custodian, amount of Rs 25 lakhs deposited by assessee in escrow account to be maintained with the Custom Authority will continue to be in deposit in the said escrow account till finalization of these proceedings in remand - Since the matter is in relation to revocation of approval granted under Section 8 and Section 45 of Customs Act, 1962, Commissioner should as far as possible decide the issue in de novo proceedings within six month of the date of receipt of this order: CESTAT

- Matter remanded: CHANDIGARH CESTAT

TP - Commission rate when computing ALP of corporate guarantee given by assessee to lender of non-resident AE, merits being fixed @ 0.5% and not above: ITAT

TP - Company operating as BPO or KPO can be adopted as comparable to company engaged in providing Information Technology enabled Services: ITAT

TIOL CORPLAWS

Specific Relief Act - Plaintiff cannot seek injunction that it is exclusive dealer of defendant to sell products based on oral agreement as such agreement is unenforceable under Specific Relief Act: HC

Arbitration and Conciliation - Release of PBGs can not be granted as Corporate Guarantee or post dated cheques cannot be considered as an alternative for PBGs: HC