2021-TIOL-28-HC-DEL-IT

Pacific Projects Ltd Vs ACIT

Whether dismissal of assessee's appeal on limitation is unsustainable in law, where notice of appeal was not served at its new address despite the assessee having informed the Department about the change of address, due to which the assessee was unable to file appeal within proper limitation period - YES: HC

- Assessee's writ petition allowed: DELHI HIGH COURT

2021-TIOL-27-HC-MAD-IT

Gangotri Textiles Ltd Vs DCIT

Whether voluntary disclosure of income or losses suffered by the assessee earns immunity from penalty proceedings u/s 271(1)(c) – NO: HC.

- Assessee's appeal dismissed: MADRAS HIGH COURT

2021-TIOL-26-HC-MAD-IT

CIT Vs MA Jacob & Company

Whether ITSC can re-open its concluded proceedings by invoking sec. 154 of act so as to levy interest u/s 234B in view of sec. 245I – NO: HC

- Assessees' writ petition allowed: MADRAS HIGH COURT

2021-TIOL-25-HC-MAD-IT

Vaduganathan Talkies Vs ITO

Whether genuineness of a transaction is to be considered while examining whether assessee has violated sec. 40A(3) of IT Act, 1961 – NO: HC.

- Assessees' Appeals dismissed: MADRAS HIGH COURT

2021-TIOL-24-HC-KAR-IT

Pr CIT Vs Dr Ranjan Pai

Whether provision of sec 56(2)(vii)(c) is not attracted when there is an issue of bonus shares as money remains with the company and nothing comes to the shareholders as there is no transfer of the property - YES: HC

- Revenue's appeal dismissed: KARNATAKA HIGH COURT

2021-TIOL-28-ITAT-MUM

Osho Developers Vs ACIT

Whether addition made by the AO can be made for unsold flats, held as stock in trade as income from house property on notional basis as deemed rental income as income from house property - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2021-TIOL-27-ITAT-MUM  

NG Group Vs ITO

Whether interest received from partners and reduced from the closing work in progress can be held as income from other sources - NO: ITAT

- Assessee's appeal partly allowed: MUMBAI ITAT

2021-TIOL-26-ITAT-DEL

Dharam Pal Vs ITO

Whether it is a fit case for remand, where validity of additions framed on account of unexplained cash deposits, has to be ascertained after considering relevant evidence such as Ikrarnama or agreement to sell, which explains the source of such cash - YES: ITAT

- Case remanded: DELHI ITAT

2021-TIOL-25-ITAT-MAD

DCIT Vs SNJ Distillers Pvt Ltd

Whether addition on account of unaccounted cash seized during the search operation fund can be added to the assessee's income in abscence of corrobrative evidence proving the same - NO: ITAT

- Revenue's appeal dismissed: CHENNAI ITAT

2021-TIOL-24-ITAT-MAD

Helios Solutions Ltd Vs ITO

Whether it is a fit case for remand, where an assessee is unable to timely furnish relevant documents necessary for assessment before the AO, on account of natural calamity of heavy rains and consequent flooding - YES: ITAT

- Case remanded: CHENNAI ITAT

2021-TIOL-23-ITAT-PUNE

Mohite Mala Vs ITO

Whether penalty u/s 271(1)(c) can be imposed where additions are framed on estimate basis - NO: ITAT

- Assessee's appeals allowed: PUNE ITAT

2021-TIOL-22-ITAT-BANG

Vijaya Pathina Souhardha Vs ITO

Whether deduction u/s 80P is to be denied to a Co-operative, registered under section 6 (1) of Karnataka Souhardha Co-operative Act 1997 merely because it is not registered under Co-operative societies act 1959 - NO: ITAT

- Assesssee's appeal allowed: BANGALORE ITAT

2021-TIOL-31-HC-ALL-GST

G K Trading Company Vs UoI

GST - Allegation is that I nput Tax credit ( ITC ) is taken on the basis of invoices M/s Glider Traders Private Ltd., whose registration was cancelled several months prior to the date of the alleged invoice -  It is the case of the petitioner that s ince inquiry has already been initiated by the respondent no.5 [Assistant Commissioner (SIB), Commercial Tax, Range-C, Ghaziabad], therefore, the respondent nos. 3 and 4 [Directorate General of Goods and Services Tax Intelligence, Meerut Zonal Unit, Meerut] cannot initiate any inquiry against the petitioner in view of the provisions of Section 6(2)(b) of U.P. GST Act, 2017.

Held: [para 10, 12, 14 to 19]

+ The words "subject-matter", "proceedings" and "inquiry" have not been defined either under the State G.S.T. Act or the Union Territory G.S.T. Act or the C.G.S.T. Act. Therefore, these words have to be interpreted in the context of the aforesaid Acts. 

+ The word "inquiry" in Section 70 has a special connotation and a specific purpose to summon any person whose attendance may be considered necessary by the proper officer either to give evidence or to produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensue upon the making of the inquiry or conclusion of inquiry. The process of inquiry under Section 70 is specific and unified by the very purpose for which provisions of Chapter XIV of the Act confers power upon the proper officer to hold inquiry. The word "inquiry" in Section 70 is not synonymous with the word "proceedings" in Section 6(2)(b) of the U.P.G.S.T. Act/ C.G.S.T. Act.  

+ Provisions of Section 70 have been enacted for collecting evidence in matters involving tax evasion which may also lead to confiscation. After inquiry is completed and materials for tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized, by reason of fraud or wilful misstatement or suppression of facts or otherwise are found, then it may lead to demands and recovery under Section 73 or Section 74, as the case may be. 

+ When action for assessment, demand and penalty etc. including action under Section 73 or 74 is taken, that shall amount to "proceedings" referable to Section 6(2)(b) of the Act but the inquiry under Section 70 is not a proceeding referable to Section 6(2)(b) of the Act.

+ Thus, the phrase "subject-matter", or the phrase "on the same subject-matter", used in Section 6(2)(b) of the U.P.G.S.T. Act/ C.G.S.T. Act with reference to any proceedings, means same cause of action for the same dispute involved in a proceeding before proper officer under the U.P.G.S.T. Act and the C.G.S.T. Act.

+ Section 6(2)(b) prohibits  initiation of proceedings by the proper officer under U.P.G.S.T. Act on the same subject-matter where a proper officer under the C.G.S.T. Act has initiated any proceedings on the same subject-matter subject to the conditions specified in the notification issued under sub-Section (1).

+ Section 6(2)(b) of C.G.S.T. Act imposes similar prohibition upon the proper officer under the C.G.S.T. Act. Thus, Section 6(2)(b) of the C.G.S.T. Act/ U.P.G.S.T. Act prohibits initiation of any proceedings on the same subject-matter by a proper officer under the C.G.S.T. Act/ by a proper officer under the State G.S.T. Act, as the case may be, on the same subject-matter. 

+ Section 70 of the U.P.G.S.T. Act or C.G.S.T. Act is part of Chapter XIV which contains provisions for inspection, search, seizure and arrest. Section 70 of both the Acts are  pari materia  which empowers the proper officer under the Act to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry.

+ Thus, Section 6(2)(b) of the C.G.S.T. Act prohibits separate initiation of proceedings on the same subject-matter by the proper officer under the C.G.S.T. Act when proceeding on the same subject-matter by the proper officer under the State Act has been initiated, whereas Section 70 of the U.P.G.S.T./ C.G.S.T. Act merely empowers the proper officer to summon any person in any inquiry.

+ The word "proceedings" used in Section 6(2)(b) is qualified by the words "subject-matter" which indicates an adjudication process/proceedings on the same cause of action and for the same dispute which may be proceedings relating to assessment, audit, demands and recovery, and offences and penalties etc. These proceedings are subsequent to inquiry under Section 70 of the Act.

+ The words "in any inquiry" used in Section 70 of the Act is referable to the provisions of Chapter XIV, i.e. Section 67 (power of inspection, search and seizure), Section 68 (inspection of goods in movement), Section 69 (power to arrest), Section 71 (access to business premises) and Section 72 (officers to assist proper officers).

+ Therefore, proper officer under the U.P.G.S.T. Act or the C.G.S.T. Act may invoke power under Section 70 in any inquiry. Prohibition of Section 6(2)(b) of the C.G.S.T. Act shall come into play only when any proceeding on the same subject-matter has already been initiated by a proper officer under the U.P.G.S.T. Act.

+ Thus, the words "any proceeding" on the same "subject-matter" used in Section 6(2)(b) of the Act, which is subject to conditions specified in the notification issued under sub-Section (1) means any proceeding on the same cause of action and for the same dispute involving some adjudication proceedings which may include assessment proceedings, proceedings for penalties etc., proceedings for demands and recovery under Sections 73 and 74 etc.

+ There is no proceeding by a proper officer against the petitioner on the same subject-matter referable to Section 6(2)(b) of the U.P.G.S.T. Act. It is merely an inquiry by a proper officer under Section 70 of the C.G.S.T. Act. 

Conclusion:

++ The word "inquiry" in Section 70 has a special connotation and a specific purpose to summon any person whose attendance may be considered necessary by the proper officer either to give evidence or to produce a document or any other thing. It cannot be intermixed with some statutory steps which may precede or may ensue upon the making of the inquiry or conclusion of inquiry.

++ The process of inquiry under Section 70 is specific and unified by the very purpose for which provisions of Chapter XIV of the Act confers power upon the proper officer to hold inquiry. The word "inquiry" in Section 70 is not synonymous with the word "proceedings", in Section 6(2)(b) of the U.P.G.S.T. Act/ C.G.S.T. Act.

++ The words "any proceeding" on the same "subject-matter" used in Section 6(2)(b) of the Act, which is subject to conditions specified in the notification issued under sub-Section (1); means any proceeding on the same cause of action and for the same dispute involving some adjudication proceedings which may include assessment proceedings, proceedings for penalties etc., proceedings for demands and recovery under Section 73 and 74 etc.

++ Section 6(2)(b) of the C.G.S.T. Act prohibits a proper officer under the Act to initiate any proceeding on a subject-matter where, on the same subject-matter, proceeding by a proper officer under the U.P.G.S.T. Act has been initiated.

++ No merit in the present writ petition. Writ petition dismissed.

- Petition dismissed : ALLAHABAD HIGH COURT

2021-TIOL-30-HC-HP-GST

Radha Krishan Industries Vs State of Himachal Pradesh

GST - Allegation of issuance of invoices by fake/fictitious firms without actual movement of goods from the fake firms and availment of ITC - Petitioner seeks quashing the proceedings initiated by the respondent No.3 u/s 83 by provisionally attaching the amount receivable by the petitioner from its customer while issuing Form DRC-22 to M/s Deepak International Limited and to M/s Fujikawa Power  being inter alia , illegal, arbitrary, misconceived, erroneous and even violative of principles of natural justice equity and fair play - Petitioner also seeks issuance of a writ in the nature of mandamus directing the respondent No.3 to revoke the provisional attachment and not to resort to further coercive measures against the petitioner.

Held: Exposition of law is that the Supreme Court [ 2020-TIOL-93-SC-VAT ] has recognised some exception to the rule of alternative remedy, i.e. where the statutory authority has not acted in accordance with the provisions of the Act or in defiance of the fundamental principles of judicial procedure or has resorted to invoke the provisions which are repealed or where an order has been passed in total violation of the principle of natural justice but the High Court will not entertain a petition under Article 226 of the Constitution of India, if efficacious remedy is available to the aggrieved person or where the statute under which the action complained of has been taken in mechanism for redressal of grievance still holds the field - Meaning thereby, that when a statutory forum is created by law for redressal of grievance, a writ petition should not be entertained ignoring the statutory dispensation - Bench is of the considered view that the writ petitioner has not only efficacious remedy, rather alternative remedy under the GST Act, and therefore, the present petition is not maintainable - Importantly, the writ petition filed by M/s GM Powertech , the company against whom same and similar allegations, as have been levelled against the petitioner herein, being CWP No. 5462 of 2020, has not been entertained and the company has been relegated to avail of the alternative remedy vide judgment dated 7.12.2020 - Petition is dismissed: High Court [para 9 to 11]

- Petition dismissed : HIMACHAL PRADESH HIGH COURT

2021-TIOL-29-HC-MAD-GST

TVL G Sankar Timber Depot Vs STO

GST -  Petitioner has challenged the assessment orders on the ground that no sufficient opportunity was granted by the respondent to the petitioner before passing of the impugned assessment orders and the principles of natural justice has been violated - According to petitioner, the show cause notice was issued for the three assessment years in the month of August 2020 and within a short span of time, the impugned assessment orders have been passed, despite the request being made by the petitioner for grant of sufficient time to send the replies and also despite the petitioner requesting for certain documents, based on which the respondent has issued the show cause notice calling upon the petitioner to pay tax -  It is the case of the respondent that the petitioner has submitted fake invoices with regard to the purchases effected by them -  According to the petitioner, the documents sought for by them was furnished to them only on 20.10.2020, whereas the assessment orders have been passed immediately, on 31.10.2020, without giving sufficient opportunity to raise their objections with regard to the documents furnished by the respondent.

Held:  When the petitioner has been seeking for sufficient time for sending a detailed reply and that too when he has sought for documents, which was furnished only on 20.10.2020, the respondent ought to have given some more time to the petitioner to place all his objections with regard to the demand made by the respondent as per the show cause notices, dated 03.08.2020 - However, this Court, considering the huge amount of taxes payable as seen from the impugned assessment orders, this Court will have to put the petitioner on terms, before the impugned orders are quashed and remanded back to the respondent for fresh consideration on merits and in accordance with law - C ourt is of the considered view that the petitioner will have to pay a sum of Rs.3,00,000/- in respect of each of the impugned assessment orders on or before 05.01.2021 and on such payment, the impugned assessment orders shall stand quashed  and the matter remanded back to the respondent for fresh consideration and the respondent shall pass final orders on merits and in accordance with law, after giving adequate opportunity to the petitioner to raise all their objections and also grant them the right of personal hearing within a period of twelve weeks from the date of payment of the conditional amount imposed under this order - Writ petitions are disposed of: High Court  [para 12, 13, 14]

- Petitions disposed of: MADRAS HIGH COURT

2020-TIOL-92-NAA-GST

Director General Of Anti-Profiteering Vs Dev Snacks

GST - Anti-profiteering - Information was received that the respondent had profiteered from the supply of Snacks, by not passing on benefit of reduction in rate of tax from 12% to 5% - In its report, the DGAP noted that the respondent incorrectly calculated the profiteered amount by trying to make it a case of short payment of GST - The DGAP also observed that after 24.11.2017 the effective rate of GST had become nil but the Respondent increased the base price and wrongly charged charged GST @ 5% on the base prices for the period 27.11.2017 to 31.12.2017 - Authority concluded that the respondent had profiteered by an amount of Rs.12,76,306/- and the same was required to be deposited in the Consumer Welfare Fund along with interest @18% -  Moreover, in the process of profiteering, the respondent also issued incorrect tax invoices reflecting the base prices and hence the respondent is liable to face penalty u/r 133(3)(d) of the CGST Rules for offences u/s 122(1)(i) of the CGST Act - SCN was issued on 26.04.2019 to the respondent proposing imposition of penalty u/s 122 of the Act - Respondent submitted that s.122 r/w rule 133(3)(d) should not be invoked and penalty should not be imposed as he had no malafide intention and the mistakes were due to incorrect interpretation of the exemption notification.

Held: From a perusal of section 122(1)(i) of the Act, 2017, it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act -  Since no penalty provisions were in existence between the period 27.11.2017 to 31.12.2017 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 26.04.2019 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA

- Proceedings dropped :NATIONAL ANTI-PROFITEERING AUTHORITY

2020-TIOL-91-NAA-GST

Director General Of Anti-Profiteering Vs Cloudtail India Pvt Ltd

GST - Anti-Profiteering - Allegation is that the respondent has not passed on the benefit of reduction in the GST rate applicable to printing cartridges (HSN 8483) [HP 678 L0S24AA Combo Pack Ink Advantage Cartridges (Black & Tri-color) B00UHG8BFI] from 28% to 18% w.e.f 15.11.2017 and had increased the base price, therefore, there was no reduction in the price (inclusive of GST @18%) charged from recipients - Authority had, based on the report of the DGAP, concluded in its Order no. 16/2019 dt. 07.03.2019 [ 2019-TIOL-16-NAA-GST ] that the respondent had  profiteered by an amount of Rs.10,79,813.28 [Period 15.11.2017 too 31.07.2018] and had directed them to reduce the price of the said product as per provisions of rule 133(3)(a) of the CGST Rules by making commensurate reduction in prices keeping in view the reduction in the rate of tax; to deposit the profiteered amount along with interest @18%; that the respondent is liable for penalty under section 122(1)(i) of the CGST Act, 2017 for issuing incorrect invoices, notice to be issued - A ccordingly,  NAA had issued SCN dt. 11.03.2019 seeking imposition of penalty - Respondent submitted that the said proceedings be kept in abeyance as they had filed Writ Petition challenging the Order 16/2019 (supra).

Held: From a perusal of section 122(1)(i), it is clear that the violation of the provisions of s.171(1) is not covered under it as it does not provide penalty for not passing on the benefit of rate reduction and hence the above penalty cannot be imposed for violation of the anti-profiteering provisions made u/s 171 of the Act - It is further revealed that vide s.112 of the Finance Act, 2019 specific penalty provisions have been added for violation of the provisions of s.171(1) which have come into force w.e.f 01.01.2020 by inserting s.171(3A) of the Act -  Since no penalty provisions were in existence between the period 15.11.2017 to 31.07.2018 when the respondent had violated the provisions of s.171(1) of the Act, the penalty prescribed under sec.171(3A) cannot be imposed on the respondent retrospectively - Accordingly, the notice dated 11.03.2019 issued to the respondent for imposition of penalty u/s 122(1)(i) is hereby withdrawn and the present penalty proceedings are dropped: NAA

- Proceedings dropped :NATIONAL ANTI-PROFITEERING AUTHORITY

2021-TIOL-23-HC-KAR-VAT

OEN India Ltd Vs State of Karnataka

In writ, the High Court disposes off the assessee's petition with directions to make the requisite pre-deposit of duty, following which the assessee's Stay Application would be processed. It also directs that no further action be taken against the assessee in the intervening period.

- Assessee's writ petition disposed of: KARNATAKA HIGH COURT

2021-TIOL-17-CESTAT-BANG

Centum Electronics Ltd Vs CC

Cus -  Appellant, a 100% EOU engaged in manufacture of electronic goods such as hybrid micro circuits, resistors had imported raw materials like fuses, resistors, gold wire, etc., claiming exemption from duty vide Customs Notification No. 52/2003-Cus dated 31.3.2003 applicable to the EOU/EHTP/STP - Said manufactured electronic goods  were cleared at Nil rate of Excise duty to ISRO and BEL who were eligible for exemption from Custom Duties vide Notification No 21/2002-Cus dated 01.03.2002 (for ISRO) and 39/96-Cus dated 23.07.1996 (for BEL) - Revenue alleged that the appellant has wrongly availed the exemption on raw materials imported and used in the manufacture Hybrid Micro Circuits cleared to ISRO and Crystal Oscillators and Crystals cleared to BEL; it was also alleged that the Appellant did not have permission for DTA Clearances - The OIO and OIA confirmed Confiscation of raw materials/inputs valued Rs.2,17,55,817 and redemption Fine of Rs.10,00,000; Customs duty of Rs.53,65,310 along with interest of Rs.1,34,664 and penalty of Rs.2,00,000 while appropriating the amounts already paid - appeal to CESTAT.

Held: 

+  It is clear that the finished goods supplied by the appellants to M/s. BEL and ISRO are exempt from payment of customs duty as well as additional customs duty - Therefore, in terms of proviso to Para 3 of the Notification No.52/2003-Cus and the CBEC Circular No. 54/2004-Cus . dated 13.10.2004, the appellants are required to pay the duty foregone, on the inputs imported duty-free - As held by the adjudicating authority and as upheld by the appellate authority, there is no infirmity in the demand and confirmation of the same. 

+  Appellants contention that if the exemption is conditional, the proviso to para 3 of the Notification 52/2003-Cus is not attracted, is not acceptable as the language of the Notification is clear and in view of the ratio of the decision of Apex Court in the case of Dilip Kumar and Co. - 2018-TIOL-302-SC-CUS-CB . 

+  The appellants have paid duty along with interest. Appellants argument that revenue should have demanded Central Excise Duty has no relevance as it is the customs duty foregone at the time of import of raw material by the appellants that is correctly demanded and confirmed. 

+ Regarding the imposition of redemption fine and penalty, Bench finds that goods have been cleared after due filing of documents before the authorities. The goods have been cleared well before the issuance of show-cause notice. Goods were not physically available for confiscation. Further, the import of raw material, on which duty was demanded, was allowed by the customs authorities. 

+ Show-cause notice seeks to invoke the provisions of warehousing saying that the imported bonded goods have been removed without payment of duty - such an argument is quite out stretched. The mistake or lapse on the part of the appellant is that they have not repaid the duty foregone on the imported raw materials at the time of clearance of duty-free final goods in the DTA. The proper course of action, in such violations, is to recover duty along with interest. Duty has been paid along with interest on being pointed out. 

+ Confiscation and imposition of penalty are not warranted in the instant case.

+  Appeal is partly allowed by setting aside confiscation, redemption fine and penalty. Duty demanded which is paid along with interest is, however, upheld.  [para 18 to 20]

- Appeal partly allowed : BANGALORE CESTAT

2021-TIOL-14-CESTAT-BANG

Bhoruka Extrusions Pvt Ltd Vs CC, CE & ST

CX - Appellant wanted to sell the Aluminium Extrusion business since they were not able to run the same effectively and, therefore, availed the services of M/s Singhi Advisors for identifying a buyer for the specific business division, undertaking adequate negotiations and following due diligence - M/s Singhi Advisors were also fully responsible for providing Transaction strategy; assistance in preparing information memorandum; identification and short listing of potential investors/partner; negotiation on value, structure and terms of transaction and completion of the transaction - On completion of the service and based on the service provider's advise, the Aluminium extrusion business of BAL was sold to BEPL (fully owned by YKK Holdings, Japan) on a slump sale/going concern basis; the sale was that of the unit and not that of the shares of the company - CENVAT credit of Rs.61,80,000/- availed on Advisory services was disallowed on the ground that the same cannot be termed as directly or indirectly used in relation to manufacture of final products as the said service is related to sale of business of M/s Bhoruka Aluminium Ltd. to M/s YKK Holding, Japan and hence not directly or indirectly connected to the manufacture of final products; that ‘activity relating to business' has been deleted from the list of eligible ‘input service' during Budget 2011 effective 01.04.2011; that the ‘advisory service' rendered by the service provider neither gets covered under the definition of ‘Legal service' as defined in sub-rule (cca) of rule 2 of STR, 1994 nor the said service can be related to ‘financing'.

Held:  Commissioner rejected the appellants claim that the service availed from M/s. Singhi Advisors is in the nature of legal services - Bench finds that the Commissioner though correctly analysed the provisions of the CCR 2004, comes to a conclusion that the service availed by the appellants is in relation to business activities rather than manufacture of final products - Crucial point to be noted here in this case is whether or not the services availed by the appellant are input services to be eligible for credit in terms of Cenvat Credit Rules - The nomenclature and the classification of services is secondary - Just because the appellants could not classify the service availed under a particular head, it does not take away the substantial right of the appellants to avail the credit if it is otherwise permissible under the rules - Definition of input service, even after the amendment carried out in 2011 is an all-encompassing definition - Input service is defined to be any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal - The intent of the appellant as seen from the correspondence available on record is not to wind up the company - The intent was very clear to sell or transfer the business, obviously the manufacturing activity, to any person or company who would manage the manufacturing activity i.e., to produce and sell the goods - Therefore, in a wider perspective the efforts of the appellants were in the direction of continuation of manufacture of final products and their removal from the factory - Therefore, Bench finds that the services availed by the appellants are covered by the substantive definition of input service as enshrined in Rule 2(l) of CCR, 2004 - The inclusive definition gives certain illustrations and explains and expands the scope of the definition given in the substantive portion of the definition - It is incorrect and legally not tenable to say that if the service is not covered in the inclusive definition, credit of the same is not admissible - The admissibility of credit, the dutiability of final products is not altered depending on the owner of the activity of manufacture or service as the case may be - In the instant case, the services availed by the appellants were in relation to continuation of the manufacturing activity and, thus, cannot be held to be for an independent business of the appellants which has no connection with the impugned manufacturing activity - In view of the same, the services availed by the appellants, from M/s. Singhi Advisors, Mumbai are squarely covered by the definition of input service - Definition of input service is wide and the appellants are in their right to avail the impugned credit - Since the credit is admissible to the appellants,  other issues raised by the appellants do not require any consideration - Appeal is allowed with consequential relief: CESTAT [para 10 to 12]

- Appeal allowed: BANGALORE CESTAT

2021-TIOL-13-CESTAT-DEL

Religare Finvest Ltd Vs CCGST

ST - The issue pertains to reversal of credit by assessee rendering Banking and other Financial Services in terms of Rule 6 (3B) of CCR, 2004 - The perusal of Rule makes it clear that it require reversal of Cenvat Credit availed on inputs and input services used for provision for output service of Banking and Other Financial Services in each month but to an amount equal to 50% of such credit availed - The Adjudicating authority below has acknowledged the reversal of credit by assessee - However has held that reversal is not the equivalent to 50% of total credit as is required under Rule 6 (3B) of Cenvat Credit Rules in some of the months and, accordingly, to the extent of short reversal, the demand has been confirmed - Admittedly, at the time of filing Service Tax Returns after each six months, the short reversal of few of such months has been made good - Not only this, it is also an admission on part of department that due to deposits made at the time of filing Service Tax returns the reversal becomes more than 50% - Thus, the issue stands squeezed to the effect as to whether adjustments of payment is permissible despite the mandate of monthly reversal of Cenvat Credit for an amount equal to 50% of credit availed - A conjoint reading of Rules make it clear that the adjustments of excess reversal of credit with short reversal and vice versa to that extent is statutorily permissible - This observation when clubbed with admitted fact of excess reversal of Cenvat Credit by assessee though at the time of filing the return is sufficient to hold that the allegation of authority below and findings against assessee are not sustainable - The adjustment made towards the monthly service liability in subsequent month of filing the return by assessee cannot be denied to him - The Principal Commissioner is opined to have formed a very rigid opinion on a rigid technical ground while confirming the demand despite acknowledging the excess reversal of Cenvat Credit amount by assessee - Further, once there is an excess payment, malafide intention that too of tax evasion cannot be alleged qua the assessee - No doubt the period of one year of serving SCN stands extended to 5 years had there been the intent to evade tax or there is suppression of tax but from the discussion, it is apparently clear that there is no evasion of tax /duty, no question of intent to evade at all arises - Admittedly entire Ledger Accounts duly supported by CA Certificate were submitted by assessee to the authorities, the question of suppression of facts that too willful does not at all arises - Mere failure to pay tax is not a justification for imposition of penalty as has been held by Delhi High court in Bharat Hotels Limited 2018-TIOL-178-HC-DEL-ST - The imposition of penalty by the adjudicating authority below is also held to be baseless and to be in ignorance of acknowledged/ admitted excess reversal of Cenvat Credit - Adjudicating authority has miserably ignored the statutory principles permitting adjustment of monthly payments during a subsequent month - The order under challenge is hereby set aside: CESTAT

- Appeal allowed: DELHI CESTAT

2021-TIOL-12-CESTAT-KOL

Ashirwad Foundries Pvt Ltd Vs Commissioner of CGST & CE

CX - The assessee is engaged in manufacture of CI castings - Major raw materials for manufacture of CI castings are Pig Iron, Hard Coke and Lime Stone - A search was conducted by officers of Anti-Evasion Unit at the factory premises of assessee - It was found that purchases have been made directly or through dealer namely M/s.Hari Om Udyog and M/s.Maa Parwati Engineering & Casting against manufacturers' invoices - Based on investigation, a SCN was issued alleging wrong availment of Cenvat Credit and for recovery of the same along with interest and for imposition of penalty - During course of search at the factory premises of assessee, neither incriminating documents were recovered nor any shortage/excess of raw materials/finished goods were found by officers of the anti-evasion - The employees of assessee in their statements have clearly stated that they have physically received the goods and utilized in manufacture of their final products - The statement recorded under Section 14 of CEA, 1944 cannot be relied upon as evidence unless the provisions of Section 9D of CEA, 1944 has been followed as has been held by judgement passed by High Court of Chhattisgarh in case of Hi-Tech Abrasives Ltd. which is binding on Tribunal in view of principle of judicial discipline - Since no examination-in-chief has been conducted by adjudicating authority, therefore the statements of witnesses are inadmissible in evidence and are eschewed from evidence - There is no evidence adduced by department to show any flow back of money in SCN - The department is not disputing the fact that the dealers raised invoices giving all particulars required to be given under the provisions of Cenvat Credit Rules in respect of materials supplied to assessee - There is no evidence in SCN that the assessee has procured raw material from some other alternate source - Ffurther, assessee has paid Central Excise duty of Rs.8.94 crores approximately on its finished goods and certain goods have also been exported - This clearly shows that the assessee has physically received the goods and utilized in manufacture of its finished goods - The investigation conducted by department at the end of transporter by searching the vehicles from the site 'www.vahan.nic.in' is an evidence which cannot be relied upon inasmuch as by the said evidence, the department is fastening the liability against assessee, especially when the department could have investigated from the concerned State RTO in order to get the details of the truck owners - This exercise has not been done in present case, thus, the said evidence cannot be relied upon in order to deny the lawful credit availed by assessee - The department has not investigated at the end of the broker also, inasmuch as they have also not discharged the burden of proof - The department is duty bound to investigate and bring on record cogent and positive evidence, which is absent in present case - Merely deposit of money at the time of investigation would not amount to acceptance of any allegations as mentioned in SCN - It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest - The impugned order cannot be sustained and is accordingly set aside: CESTAT

- Appeal allowed: KOLKATAT CESTAT

2021-TIOL-11-CESTAT-KOL

Swarup Mondal Vs CC

Cus - The assessee is in appeal against impugned order on the grounds; imposition of penalty under Section 112 of Customs Act, 1962 upon assessee without satisfying principle conditions of such provision is bad in law & the proceeding of adjudication without supplying the relied upon documents is bad in law - The impugned order without supplying relied upon documents along with SCN and finalizing adjudication of matter w.r.t. the assessee was bad in law- However, the Adjudication Order has already merged in two separate O-I-A with respect to different noticee - Pertinent to observe that there is no appeal against O-I-A - Since such order setting aside penalty upon said noticee has reached its finality, no fresh proceeding against such noticee can be drawn at this stage - Ideally, the orders imposing penalty upon assessee and confirming the same by Appellate Authority are required to be quashed on the ground of violation of principles of natural justice, but as held by High Court, an alleged wrong doer cannot be allowed to go scot free on such ground alone - Similarly, the right of noticee in getting the relied upon documents and appropriate opportunity of defence upon maintaining the principles of natural justice cannot be denied - It is needless to say that a reasonable opportunity of submission of reply to the SCN after going through the relied upon documents and an opportunity of personal hearing will be granted to the assessee by the original Adjudicating authority before the matter is decided denovo - The present remand is restricted to the present assessee only and it does not affect the orders already passed in connection to other noticee in the proceeding - Since the matter pertains to a seizure affected on 13.3.2018 by Customs authority, it is expected that the Adjudicating authority will take all endeavour to re-adjudicate the matter as expeditiously as possible without allowing any unnecessary delay: CESTAT

- Matter remanded: KOLKATA CESTAT

TII

TP - CIT can excercise his power of revision u/s 263 based on such a report which is subsequently filed or withdrawn : HC

TP - Stay on recovery of duty demanded merits being allowed where the assessee pays more than 90% of the duty demanded & where the assessee's appeal could not be disposed of in a timely manner due to a Tribunal Bench not having been constituted at that time : ITAT

I-T- payment made by the assessee for outright purchase of Intellectual Property Rights and not towards royalty, does not attract provisions of Section 40(a)(ia) in respect of a claim for depreciation : ITAT

TIOLCORPLAWS

NCLAT - Financial Creditor who under buyback agreement does not pay full agreed consideration to Corporate Debtor can allege default on part of Corporate Debtor : NCLAT

SEBI Act - Denial of right of hearing is violative of principles of natural justice embodied u/Art. 14 of the Constitution and sec. 28A of SEBI Act r/w secs. 220 to 227, 228A, 229 and 232 of IT Act r/w Second and Third Schedules to IT Act and IT Rules : SAT