Whether insertion of some figures by the assessee, which are incoherent with some other figures in the I-T return, qualifies as a mistake apparent on record and such error warrants rectification - YES: ITAT

- Case remanded: DELHI ITAT

Whether disallowance on account of liquidated damages is rightly deleted and deduction on provisions of gratuity is rightly allowed in current AY, where similar findings were rendered in assessee's own case in past AYs - YES: ITAT

- Revenue's appeal partly allowed: KOLKATA ITAT

Whether in case there is no exempt income earned by an assessee, then no expenses can be worked out hypothetically for the purpose of disallowance u/s 14A – YES: ITAT

- Assessee's appeal allowed: AHMEDABAD ITAT

Whether activity of developing minor ports in a State is in keeping with advancement of general public utility u/s 2(15) of the Act, and the trust Board engaged in such activity is entitled to exemption u/s 11 - YES: ITAT

Whether the collection of fees which is incidental to the object and purpose of developing mining ports will bar such board from receiving exemption u/s 11 - NO: ITAT

- Assessee's appeal partly allowed: AHMEDABAD ITAT

Whether penalty order merits being set aside where the AO does not mention the specific charge against the assessee between concealment of particulars of income & furnishing inaccurate particulars thereof - YES: ITAT

- Assessee's appeal partly allowed: RAJKOT ITAT

SERVICE TAX

CENTRAL EXCISE

CX - Assessee is engaged in manufacture of Aluminium products and availed Cenvat Credit of Excise Duty paid on various inputs and capital goods received in the factory - On comparing the trial balance with the monthly AR1 figures, the department observed that there is a vast difference in value of scrap reflected in trial balance vis a vis the excise return - A SCN was issued to assessee invoking extended period of limitation, basing on an audit memo dated 17.06.1989, under Rule 9(2), 57S(2)(c) and 57F 18 (a) of CER, 1944, covering a period 1997 to 1998 - Superintendent incharge of factory was in correspondence with the officers of assessee right from 1999 onwards - Two SCNs have been issued during the interregnum and the same have been remanded back from the appellate stages - During pendency of such remand proceedings, the impugned proceedings have been initiated invoking the extended period - This is not legally permissible - Assessee rely upon the judgement of Apex Court in case of Nizam Sugar Factory 2006-TIOL-56-SC-CX wherein it is categorically held that extended period cannot be invoked in subsequent SCN - The SCN and the impugned Order do not survive on limitation: CESTAT

- Appeal allowed: KOLKATA CESTAT

CUSTOMS

Cus - The present writ was filed, seeking that directions be issued to the Customs officer concerned to conduct proper enquiry in respect of raw cashew nuts in respect of the relevant Bills of Lading, based on the representation made by the petitioner - The petitioner also sought that the Revenue officials be directed to not deliver the cargo to the other respondents, being the liner agency.

Held - It is seen that the present writ petition is not maintainable - Hence the petitioner is directed to approach the District Court and seek appropriate relief: HC

- Writ petition dismissed: MADRAS HIGH COURT

2020-TIOL-999-CESTAT-KOL

Paradeep Phosphates Ltd Vs Commissioner of GST, CE & C

Cus - Dispute in the present case relates to refund of excess custom duty, paid by the appellant on imported Rock Phosphate - Dy. Commissioner has categorically held vide his order dt.30.03.2017 that an amount of Rs.1,24,70,514.00 was excess paid by the appellant, but sanctioned only Rs.80,75,302/- and retained the balance amount of Rs.43,95,212.00, on the ground that the same was paid by the appellant not by cash but through the DEPB scrip - Commissioner (Appeals) upheld this order by placing reliance upon the CBEC Circular No. 18/2013-Cus dt.29.04.2013 and, therefore, the importer is in appeal.

Held: The issue for determination is whether excess custom duty paid through DEPB scrip is refundable by cash under the provisions of the Customs Act, 1962 - CBEC Circular dt.29.04.2013, solely relied upon by the Commissioner (Appeals) for denying the refund, has been declared ultra vires by the Delhi High Court in the case of Allen Diesel India Pvt. Ltd. - 2016-TIOL-968-HC-DEL-CUS and by the Madras High Court in the case of Enterprises International Ltd. - 2016-TIOL-2502-HC-MAD-CUS - Besides, the Calcutta High Court in the case of Ronak Optik India has categorically held that where an assessee is entitled in law to refund of tax paid, it is immaterial whether the payment is in cash or by debit of DEPB, and that the right to refund is not lost by reason of the DEPB scheme - following the judgments of the High Courts, the impugned order is set aside and consequently the appellant is entitled to refund of the balance amount of Rs.43,95,212/- which was paid from the DEPB scrip – appeal allowed: CESTAT [para 10 to 12]

2020-TIOL-998-CESTAT-AHM

Mosaic India Pvt Ltd Vs CC

Cus - Valuation - Fact that the appellant M/s Mosaic India Pvt. Ltd. are related to their supplier M/s Mosaic Crop Nutrition LLC, USA is not under dispute - It is also not under dispute that the relationship between the appellant and the foreign supplier namely M/s MCNL, USA has not influenced their transactions in other imports - The original contract of purchase from M/s MCNLLC, USA was made at 17 December, 2007 and the said consignment was sold on high sea sale basis to MCN (Hongkong) Ltd. on 05/03/2008 at the rate of USD 966/- PMTs - This consignment was further sold on high sea sale basis to M/s Tata Chemicals Ltd. at the rate of USD 968/- PMTs on 04/03/2008 and M/s Tata Chemicals Ltd. cleared the goods by filing Bill of Entry dated 05/04/2008 and declared the price of goods at USD 968/- PMT - The present dispute relates to second contract made between the appellant and the foreign supplier namely M/s MCNLLC, USA - This consignment consisted of 19581 Mts. of DAP and it was sought to be valued at USD 668.75/- PMT for the purpose of section 14 of Customs Act, 1962 - Revenue is seeking to reject the price declared by the appellant in their BOE dated 03/04/2008 by relying on the contemporaneous import price available in the Bill is Entry dated 05/04/2008 filed by M/s Tata Chemicals Ltd - It is apparent that for two consignments supplied by M/s MCNLLC, USA as the same bottom cargo in a single ship the material against one contract is being cleared by M/s Tata Chemicals Ltd. at a value of USD 968/- PMT vide BOE dated 05/04/2008, and another consignment of identical goods which came as same bottom cargo is sought by assessed by the appellant at 668.75/- PMT - SCN dated 13.05.2009 was issued to the appellants proposing to adopt US $ 968/- as the value of the goods imported by the appellants, on the ground that US $ 668.75 declared by the appellants was influenced by the relationship Asstt. Commr. upheld the aforesaid SCN on the ground that in the related party transaction, onus is on the assessee to prove that relationship has not influenced the price as Commissioner(A) upheld this order, importer is in appeal before CESTAT.

Held: Revenue is seeking to rely on sub-rule 3(3)(a) and 3(3)(b)(i) of Rule 3 of Customs Valuation (Determination of value of imported goods) Rules, 2007 - In the instant case, it is seen that the goods imported by M/s Tata Chemicals Ltd. which were identical in nature, from the same supplier and the same country of origin imported at the same bottom cargo from the same port have been assessed at a much higher price - The argument of the appellant is that though the material has been imported as bottom cargo in a single ship they had purchased the same on 17/12/2007 for shipment later in terms of their contract with M/s MCNLLC, USA However, the material imported by M/s Tata Chemicals Ltd. was purchased by Tata Chemicals Ltd. in the month of March, 2008; that the international prices prevailing in the month of December, 2007 approximately corresponded to the price at which they have purchased such goods i.e. USD 668.75/- PMT; that even the consignment imported by Tata Chemicals Ltd. was originally purchased by the appellants from M/s MCNLLC (USA) at a rate of 657 PMT; that the same was sold on high sea sale basis to M/s MCN (Hongkong) Ltd. in the month of March, 2008; that high sea sale price at which they sold the goods to M/s MCN (Hongkong) Ltd. at the rate of USD 966 PMT was the then prevalent international price; that even M/s MCN(Hongkong) Ltd. also sold the said goods to M/s Tata Chemicals Ltd. at the price USD 968 PMT which also corresponded to the prevailing international price of such goods - The data given by the appellants confirms that the duty has always been paid on the price contracted with supplier and such price always corresponded to the prevailing price in the international journals - Para 11 of the SVB order cannot be seen in isolation - The interpretative Rule to the rule 3(3)(a) clearly lays down that "Where the buyer and seller are related, the transaction value shall be accepted provided that the examination of the circumstances of the sale of the imported goods indicate that the relationship did not influence the price" Bench finds that these circumstances exist in the present case and the appellants own imports, other than this, have been assessed on the contract price corresponding to the internationally prevailing prices on the date of contract as reported in international journals - In these circumstances the decision in the case of Dow Chemicals International P Ltd. - 2008-TIOL-440-CESTAT-AHM supports the appellants - No reason to reject the declared value - The impugned order is, therefore, set aside and appeal allowed: CESTAT [para 4, 4.1, 4.2, 4.3]

- Appeal allowed: AHMEDABAD CESTAT

2020-TIOL-984-CESTAT-AHM

Cus - Appeal filed against revocation of Customs Broker Licence and imposition of penalty - Regulation 10(a) of CBLR, 2018 has been invoked alleging that appellant have failed to obtain authorisation from the exporters Appellant argues that they had availed proper authorisation from all the five exporters to act as their customs broker and only after obtaining the said authorisation they filed shipping bills for export cargo on their behalf.

Held: The appellant had produced authorisation during enquiry and Shri Sagar Thakkar, authorised person of the appellant in his reply during the statement stated that they had obtained authorisation - While the facts mentioned in the impugned order may be sufficient to raise suspicion about receipt or genuineness of the authorisation but it is not sufficient to hold that no authorization was received - In view of above, Bench is unable to hold the charge made under Regulation 10(a) of the CBLR - As regards the allegation made under Regulation 10(d) of CBLR, 2018, Bench finds that Adjudicating Authority has not countered the arguments given by the appellant - There is no evidence cited by the Adjudicating Authority to establish that the appellant had any pre-knowledge of the nature of cargo - The statement on which the Adjudicating Authority has relied on, has not been provided to the appellant and, therefore, the impugned order cannot be upheld as the charge has been confirmed on the basis of said statement consequently, the allegations made under Regulation 10(d) of CBLR, 2018 are set-aside and the issue is remanded to the Adjudicating Authority for fresh decision, after providing the copy of the said statement to the appellant - CBEC Circular 9/2010 also specifies that KYC is to be done on the basis of documents and not by physical visit of the client's premises - Bench is, therefore, unable to uphold the invocation of Regulation 10(n) and the same are dropped: CESTAT [para 10, 10.1, 10.3]

Cus - Limitation - It is seen that the offence was committed at Mundra Port and the officer Incharge for starting procedure under CBLR was Principal Commissioner of Customs, Kandla - Impugned order clearly states that offence report along with order-in-original dated 26.02.2019 was received on 26.03.2019 from the Additional Commissioner (CBS), Customs House Mundra vide letter dated 15.03.2019, outlining the role of the Customs Broker in the case of export of cheap quality goods - The proceedings in the instant case were initiated on 21.05.2019 - The entire defense of the appellant is that the offense was committed in 2017 and the show cause notice was issued much prior to the date of initiation of proceedings under CBLR - A perusal of Regulation 17 clearly shows that the period of limitation starts when the Principal Commissioner of Customs or Commissioner of Customs receives the offense report and which in the instant case is 26.03.2019 - In view thereof there is no delay in initiation of proceedings: CESTAT [para 10.4, 11]

- Matter remanded: AHMEDABAD CESTAT

Cus - The assessee is engaged in the manufacture and export of Polypropylene (PP) Bags and Twisting Yarn ('finished goods') - During the period April 2009 to March 2012, assessee had procured its principal input i.e. Polypropylene from two different sources - Since the assessee had made DTA sales of its finished goods during the said period, a SCN was issued seeking recovery of ADD foregone on the Polypropylene imports from ADD jurisdictions on the premise that these were used in manufacture of finished goods cleared in DTA - The charging section for imposition of ADD is Section 9A(1) of Customs Tariff Act and the notifications issued thereunder - However, Section 9A(2A) of Customs Tariff Act which specifically deals with an EOU starts with a non obstinate clause and over-rides the charging section 9A(1) - The entire demand is based on the laws of averages/proportionate consumption basis and no other tangible or appreciable evidence has been adduced in support of the charge/levy - The adjudicating authority records that an issue register for Polypropylene procured from ADD jurisdictions was maintained by assessee but denies their contention of having maintained separate records, which is not well founded - Payment of excise duty on the finished goods under S. No. 2 of Notfn 23 as opposed to S.No. 3, which would have otherwise conferred greater benefit to the assessee, is a prerogative of assessee and cannot be faulted with as it is a conditional exemption - More-so, when it is undisputed that assessee had sourced Polypropylene from non-ADD jurisdictions including imports from SEZ and was therefore not in a position to meet the condition attached to S.No. 3 of Notfn 23 - Therefore, no negative inference can be drawn out of discharge of excise duty liability on finished goods and in any event, it cannot be said to conclusively establish that the assessee had not maintained separate records in respect of inputs imported from ADD jurisdiction - The difference cited between the table and the issue register for ADD materials submitted by assessee with respect to "Issues to Production" and "closing stock", was only on account of difference in methodology adopted for reflection of closing stock in the table vis-à-vis the register and the same stands duly reconciled and certified in terms of C.A. certificate - Similarly, the macro-comparison of available stock of Polypropylene from Non ADD jurisdictions vis-à-vis DTA clearance during 2009-10 & 2010-11 by the adjudicating authority also suffers from apparent infirmities and Tribunal concur with the assessee that DTA clearance of finished goods prior to 30 July 2009 i.e. the date of imposition of ADD could not have been considered and the stock of Polypropylene as at the date of introduction of ADD could not have been ignored in doing such macro comparison - The ratio of decision of High Court in the Malwa Cotton Case 2010-TIOL-148-HC-P&H-CX rendered specifically in the context of an EOU only covers the case at hand for want of any appreciable proof or evidence to support the levy of ADD as the entire demand is based on assumptions and presumptions: CESTAT

- Appeal allowed: KOLKATA CESTAT

TII

I-T - Payments received does not constitute an income and cannot be termed as FTS as no services have been rendered and assessee has merely made payment to 3rd parties on behalf of branch of CIPL and subsequently raise invoices on CIPL: ITAT

I-T - Whether when taxpayer has undertaken bundle of international transactions with its AE and same has been benchmarked by applying combined approach, no segregation is called for: ITAT

TIOL CORPLAWS

Companies Act - When absolute discretion lies in law with pawnee to sell shares, Court cannot substitute it with its own discretion: HC

Trademarks act - Use the ‘Y.R. Jindal' by defendant will not constitute violation of mark 'INDAL' as to some extent it distinguishes its goods from that of plaintiff: HC