2021-TIOL-68-SC-IT-LB

Puneet Singh Vs CIT

In writ, the Larger Bench of the Supreme Court finds there to be a delay of 378 days in filing the SLP & that no satisfactory reason is provided for the same. Hence it dismisses the same on ground of delay.

- Assessee's SLP dismissed :SUPREME COURT OF INDIA

2021-TIOL-66-SC-IT-LB

Pr.CIT Vs Ram Krishnan Kulwant Rai Holdings Pvt Ltd

In writ, the Larger Bench of the Supreme Court, upon request of the counsel, permits two weeks' time for filing counter affidavit. Hence it directs that the matter be listed for final disposal after three weeks' time.

- Case deferred :SUPREME COURT OF INDIA

2021-TIOL-193-HC-AHM-IT

Prabhudas Veljibhai Chaudhari Vs Pr CIT

Whether addition on account of revised capital gain under Section 50C can be added to assessee's income, even when his revision petition is barred by limitation - YES: HC

- Assessee's appeal partly allowed: GUJARAT HIGH COURT

2021-TIOL-190-HC-KAR-IT

Sutures India Pvt Ltd Vs CIT

Whether power u/s 263 can be excercised for denying deduction u/s 80IA even when assessee has not filed the audit report - NO: HC

- Assessee's appeal allowed: KARNATAKA HIGH COURT

2021-TIOL-189-HC-MAD-IT

CIT Vs SRA Systems Ltd

Whether deduction u/s 10A and 10B can be given particularly when the concerned unit is formed by splitting up or reconstruction of a business already in existence - YES: HC

Whether interest u/s 234D can be applied retrospectively when there is no clear mention of the same by the legislature - NO: HC

- Revenue's appeal dismissed: MADRAS HIGH COURT

2021-TIOL-188-HC-MAD-IT

CIT Vs J Vinod Kumar HUF

On appeal, the High Court acknowledges the assessee's request to seek settlement of the matter under the Direct Tax Vivad Se Vishwas Scheme 2020. Hence the Court finds there to be no reason to keep the present appeal pending. It also directs the Competent Authority concerned to pass order in respect of the assessee's application under the Scheme.

- Revenue's appeal disposed of: MADRAS HIGH COURT

2021-TIOL-187-HC-KAR-IT

Harman Connected Services Corporation India Pvt Ltd Vs CIT

Whether benefit of exemption for 10 consecutive year as per section 10A can be given to assessee even when assessee did not claim deduction during the initial years of commencement of manufacturing - NO: HC

- Assessee's appeal dismissed: KARNATAKA HIGH COURT

2021-TIOL-172-ITAT-MUM

Irene Edwyn Dmello Vs ITO

Whether interest received on FD can be added as income from other souces when against the mortgage of FD, assessee has availed credit facility from OD A/c which has been utilized for business - NO: ITAT

Whether the loan taken by the assessee can be added to assessee's income when there are divergent stand of the assessee for explaining the same - NO: ITAT

- Assessee's appeal allowed: MUMBAI ITAT

2021-TIOL-171-ITAT-MUM

ITO Vs Techno Broking & Financial Services Pvt Ltd

Whether following order passed by Tribunal in similar facts, CIT(A) has rightly deleted the addition made on account of suppression of profit made by way client code modification as Revenue failed to prove undisclosed income with help of evidence - YES : ITAT

- Revenue's appeal dismissed: MUMBAI ITAT

2021-TIOL-170-ITAT-PUNE

Rohan Developers Vs Pr CIT

Whether a necessary pre-requisite for exercising power of revision u/s 263 is that the original assessment order must be erroneous and prejudicial to Revenue's interests - YES: ITAT

- Assessee's appeal allowed: PUNE ITAT

2021-TIOL-169-ITAT-PUNE

Sant Zolebaba Sansthan Chikhali Vs CIT

Whether grant of registration and the issue of assessment or exemption u/s 11 of the Act are separate and distinct & process of registration u/s 12AA cannot be made an occasion for deciding upon eligibility for exemption u/s 11 - YES: ITAT

- Assessee's appeal allowed: PUNE ITAT

2021-TIOL-168-ITAT-CHD

Joginder Singh Vs ITO

Whether it is a fit case for remand, where assessment order is based solely on statements taken from a third party behind the assessee's back & without permitting the assessee to cross examine the deponent - YES: ITAT

- Case remanded: CHANDIGARH ITAT

2021-TIOL-167-ITAT-HYD

Elite Recreations & Resorts Pvt Ltd Vs ITO

Whether it is a fit case for remand, where the CIT(A) proceeds to dispose off an appeal without hearing the assessee - YES: ITAT

- Case remanded: HYDERABAD ITAT

2021-TIOL-194-HC-DEL-GST

Ramakrishna Electro Components Pvt Ltd Vs UoI

GST - Writ petition was preferred seeking (i) directions to the respondent no.2 DGGSTI to cancel the DRC-03 dated 7th October, 2020 for reversal of Input Tax Credit; (ii) for quashing of the proceedings dated 7th October, 2020 conducted under Section 67 of the Act, 2017; (iii) for quashing of the attachment order dated 21st December, 2020 vide which State Bank of India (SBI) account at branch Wazirpur Industrial Area, Delhi and ICICI account at branch ITL Tower, New Delhi, of the petitioner were attached; and, (iv) return of the original documents seized under Section 67(2) supra on 7th October, 2020 -  It is inter alia the plea of the Revenue counsel that this petition is not maintainable as an alternate efficacious remedy under Rule 159(5) of the CGST Rules, 2017, of preferring an objection to the Commissioner is available to the petitioner - Petitioner has drawn attention of the Court to the requirement of Rule 159(5) supra, of the objections being preferred within seven days - Petitioner also states that pursuant to the appearance of the Managing Director of the petitioner on 4th  January, 2021 before the authority concerned, the tax value of Rs.85,00,000/- has already been reversed.

Held:

+ This Court in R.R. India Pvt. Ltd. Vs. Union of India - 2020-TIOL-562-HC-DEL-GST  has held the said time limit in rule 159(5) to be directory and not mandatory.

+ Petitioner then seeks to withdraw this writ petition without prejudice to the rights and contentions of the petitioner, to avail of the remedy under Rule 159(5) supra but seeks a time bound disposal of the said remedy.

+ The counsel for the respondents has fairly stated that the objections under Rule 159(5) supra, if any, preferred by the petitioner will be disposed of within four weeks of filing thereof subject, however, to the petitioner responding to the summons issued and submitting all information sought for by the Commissioner under Rule 159(5) supra.

+ As the counsel for the petitioner is agreeable thereto, the writ petition is dismissed as withdrawn, (i) granting liberty to the petitioner to, on or before 22nd January, 2021 prefer objections under Rule 159(5) supra and directing the Commissioner to dispose of the said objections by an order in writing, on or before 22nd February, 2021; and, (ii) by directing the petitioner to, in response to the summons already issued to the petitioner and mentioned in the short affidavits filed by the respondent no.2, along with its objections under Rule 159(5) supra, submit the requisite information/documents, and binding the Managing Director of the petitioner to, appear before the Commissioner in Rule 159(5) supra proceedings on whatever date is given along with all further information, if any, sought and by clarifying that if the petitioner and/or its Managing Director default, the Commissioner in the order to be passed under Rule 159(5) supra to give particulars thereof along with the dates and directions issued for production of further records/information and communication thereof to the petitioner/its Managing Director.

+ Petitioner also states that of the two bank accounts attached of the petitioner, there is a sum of Rs.90,00,000/- odd in the account with ICICI Bank and the account with SBI is an overdraft account and there was no substantial money therein on the date of attachment; that the petitioner requires funds for its day-to-day functioning and for the payment of salaries, emoluments, etc.

+ The respondents cannot have any claim to further overdraft, if any, availed of by the petitioner in the overdraft account with the SBI. 

+ Bench thus deems it apposite to, while disposing of this petition as aforesaid, direct that while the ICICI Bank account and the SBI account with monies therein as on the date of attachment shall continue to be attached till further orders in pursuance to the objections to be filed under Rule 159(5) supra, the petitioner shall be entitled to avail of further overdraft in the SBI account and to withdraw and/or disburse by cheques or otherwise the further overdraft amount so availed of by the petitioner.

+ It is further clarified that all contentions remain open to the parties and the petitioner, if remains aggrieved from the order to be passed under Rule 159(5) supra, shall have remedies in law including on the grounds urged in this petition; that if the objections to be filed by the petitioner are dismissed, the attachment to continue till vacated in the appropriate proceedings. [para 14, 16]

- Petition disposed of: DELHI HIGH COURT

2021-TIOL-04-AAAR-GST

Madhurya Chemicals  

GST - AAR has held that  Shatamrut Chyavan is an animal feed supplement [for cattle and ruminants to improve milk & milk fat and increasing resistance to diseases - the subject product increases the nutritional value of molasses, which if fed to the cattle increases the dairy production and its immunity] and is correctly classifiable under heading 2309 9010 and attracts Nil rate of GST in terms of Sl. no. 102 of 02/2017-CTR - Insofar as the second question as to whether the goods falling under TSH 2309 9010 of the Customs Tariff Act can be treated as "waste of sugar manufacture, whether or not in the form of pellets under heading 2303" attracting GST @5% in terms of notification 1/2017-CTR, the AAR discarded the question stating that the same is not in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the appellant i.e. the said question is outside the ambit of section 97(2) of the Act, 2017 and, therefore, need not be answered - Aggrieved with this ruling, the appellant is before the Appellate Authority.

Held:

+ On perusal of the list of components present in the impugned product, which has been produced by the Appellant, it is manifest that besides the molasses, which forms the prime constituent owing to its highest percentage in the said impugned product, there are other ingredients which increases the production of milk, digestion of fodder as well as the immunity of the cattle, and thereby, justifying its status as compounded animal feed. The said fact about the impugned product is also endorsed and validated by the Appellant himself, which is reflected from the leaflet of the impugned product annexed with the appeal memorandum.

+ The impugned product is also advertised, marketed, and sold, as cattle feed, which when fed in certain doses with other fodder to the cattle, like cows, buffaloes, goat, etc., is purported to increase the production of milk from such cattle along with increasing their immunity against the diseases. Thus, it is evident that the impugned product is perceived as cattle food having the aforementioned specific uses. Chapter 23 deals in the "Residues and waste from the food industries; prepared animal fodder". On perusal of the said Chapter, it is observed that the impugned product would aptly be classified under the Chapter Heading 2309 and under the Tariff Item 2309 90 10, bearing the description "compounded animal feed", as the said impugned product has been established as compounded animal feed

+ The explanatory notes clearly explain that molasses, combined with other feeds, do come under heading 2309. The Appellant has contended in his grounds of appeal that the question framed by them is whether their product is falling under 2309 90 10 or 2303. As per HSN, Heading 2303 covers 'Residues of starch manufacture and similar residues, beet pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets' .  

+ The explanatory notes clearly say that molasses is not covered under heading 2303 but under 1703. A larger part of the Appellant's product consists of molasses and molasses itself are covered under heading 1703. Moreover, at (B) mentioned in the HSN Explanatory Note, it clearly says that molasses prepared as animal food fall in heading 2309. Therefore, it is clear that the product of the Appellant does not fall under Heading 2303 but falls under Heading 2309. 

+ The Appellant has, neither in the written submissions nor during the hearing, given any concrete reasons or grounds to support his contention that the product does not fall under Heading 2309 but under Heading 2303. As regards the Appellant's contention that the impugned product is not fed to the cattle in isolation but the same is fed by mixing with the other fodders in fixed prescribed dosage, and thereby, not deserving to be qualified as cattle feed, it is opined that the said fact about the impugned product would not have any bearing, whatsoever, on the status of the said impugned product which remains the "compounded animal feed" having specific use in animal feeding, as discussed above.

+ CBIC Circular No.  80/54/2018-GST , dated 31.12.2018 also supports the above view.

+ As it has been established that the impugned product is an animal feed having specific use, viz. increasing the milk production of the cattle and increasing the immunity of the cattle to fight diseases, and the said impugned product is also known in the market as the cattle feed supplement only, therefore, the said impugned product would be classified as animal feed supplement, and accordingly would merit classification under the Chapter Heading 2309 and under the Tariff Item 2309 90 10, and would not attract any GST in terms of Si. No. 102 of the Notification No. 2/2017-C.T. (Rate) , dated 28.06.2017.

+ As regard the second question posed by the Appellant, Appellate Authority agrees with the conclusion drawn by the MAAR that the question does not fall within the purview of Section 97 (2) of the CGST Act. 2017. The question is not in relation to supply of goods or services or both, being undertaken or proposed to be undertaken by the Appellant. The MAAR cannot decide whether a specific product can be said to be a waste of sugar manufacture as the said question is not within the scope of Section 97 of the CGST Act. 2017. Also, the Appellant has not given any rebuttal of the finding of the MAAR that the said question does not fall under Section 97 of the CGST Act, 2017.

+ Order dt. 18.03.2020 of AAR is upheld and appeal is dismissed.

- Appeal dismissed: AAAR

2021-TIOL-67-SC-CX

Pr.CCE Vs Prime Ispat Ltd

CX - Only point of dipute is that when provider of service was to pay only 25% of ST having been paid 100% of ST, 75% of ST should be considered as ineligible for credit - 75% of ST, which is sought to be denied is admittedly paid to Government by provider of service instead of recipient of service - In any case, ST has been discharged and denial of credit on this ground is not sustainable - Hence the order was set aside.

Held - The appellant sought to withdraw the present SLP & hence the same is dismissed as withdrawn: SC

- Revenue's SLP disposed of :SUPREME COURT OF INDIA

2021-TIOL-65-SC-ST

CCE Vs Teknomin Construction Ltd

ST - Appellant entered into contract dated 20.5.2005 with M/s .Hindustan Zinc Ltd. [Hindustan] for production, drilling & associate work in underground Sindesar Khurd Mine - Revenue treating these activities under the category of ‘site formation service' - O-i-O confirming ST demand of Rs.21.58 lakhs - for execution of the subject service, the appellant received certain free supplies from M/s Hindustan who are the recipient of the services as per the contract - impugned order confirming demand of ST of Rs.44.66 lakhs on the value of free supplies which include electricity and other items - The Tribunal held that the activities of services under consideration are to be treated as an activity auxiliary to mining, their contract being indivisible contract - such services are not taxable under the category of site formation and clearance service but they would be covered under the category of mining service, which has become taxable w.e.f. 1.6.2007 only - CESTAT, Delhi in the case of Aravali Construction Co. Pvt. Ltd has held that such services are not covered under the category of site formation and clearance- therefore, ST demand of Rs.21.58 lakhs under the category of site formation service cannot be sustained and is hereby dropped - in the case of free supply made by M/s Hindustan to the appellant, the issue is covered in favour of the appellant by the Larger Bench decision of CESTAT in the case of Bhayana Builders P. Ltd. - in view of the observations of the CESTAT in the case of Bhayana Builders P. Ltd., the demand of ST of Rs.44.66 lakhs confirmed on the free supplies, which includes the value of electricity and other items is not sustainable and is hereby dropped - Hence appeal was allowed.

Held - The appellant filed application for withdrawal of the Civil Appeal being I.A. No.56029 of 2020 - Hence the appeal is dismissed as withdrawn: SC

- Revenue's appeal disposed of :SUPREME COURT OF INDIA

2021-TIOL-64-SC-ST

Spice Digital Ltd Vs CCE

Service Tax - Short Message Peer to Peer (SMPP) service - covered under Business Auxiliary Service - The appellants were providing Short Message Peer to Peer (SMPP) service to various clients but were not paying service tax thereon. The SMPP service inter alia involves sending SMS to customers of their clients on a bulk basis. The said service was provided to a large number of clients and described in their invoices as "charges for short messaging enabling software on per SMS basis and peer to peer and person to person basis". The terms of the agreement make it clear that the SMS which is being sent to the client's subscriber is only on behalf of the client and the appellants cannot send any material on their own. Thus it is amply clear that the service has been rendered by the appellants on behalf of the clients and is therefore clearly covered under the scope of BAS as the appellants have rendered service in relation to provision of service on behalf of the clients - Indeed, Section 67(2) of Finance Act, 1994 allows cum-tax benefit only if the gross amount charged for the service is inclusive of service tax payable - In the light of the admitted fact that the price charged by the appellants did not include any service tax, the cum tax benefit cannot be extended to them - The SCN does not give any clue as to on what basis Revenue expected the appellants to give description of exempted services in the ST-3 Returns when there is no such legal requirement mentioned either in the SCN or in the impugned order - Something positive other than mere inaction or failure on the assessee's part or conscious withholding of information when assessee knew otherwise is required for invoking extended period - Further, with regard to the demand pertaining to July, 2004 to March, 2006 for which the SCN was issued on 04.04.2009, when there had been other SCN issued for subsequent period on 24.10.2007 and 18.09.2008 the allegation of suppression becomes even more untenable - The Supreme Court in the case Nizam Sugar Factory Vs. CCE, held that while issuing second and third Show Cause Notices involving same/similar facts, suppression/wilful mis-statement could not be alleged.

Held - The appellant filed application for withdrawal of the civil appeals - Hence the appeals were dismissed as withdrawn: SC

- Assessee's appeal disposed of :SUPREME COURT OF INDIA

2021-TIOL-63-SC-ST

CCE & ST Vs Rajasthan State Mines And Minerals Ltd

ST - The issue to be decided is; whether the acquisition of land made by assessee for setting up of thermal power plant by JV company as per the agreement entered with RWPL is to be considered as service after the denial of permission of transfer of land, acquired by the JV company - It is on record that the same has been procured by Government of Rajasthan (GoR) and assigned to the assessee - It is clear that the surface right, which Revenue is contemplating as service, emerges out from the activity of mining operation, as incidental activity - The main activity remains the mining activity, which is nothing but benefit arising out of the land - Therefore, the same cannot be held to be the service per se - It is also on record that initially assessee has only acquired the land for purpose of making it available to the JV company, for the setting up of the power plant to meet acute shortage thereof in the remote area of State of Rajasthan, in the Barmer District - If due to change of policy of Government of India and State Government, the transfer of land acquired was denied mutation to the JV company, by the assessee, will not retrospectively convert the sale into services of renting of immovable property - The identical issue has come up for consideration though in different context regarding sale of 'developmental right' in case of DLF Commercial Project wherein it has been held that the development right is benefit arising out of land and therefore, the same is not chargeable to service tax - There is no element of service involved in the transaction, undertaken by assessee while acquiring the land and transferring the same to the JV company, for setting up of the power plant - Whether the 51% equity stake which has been granted to assessee by the Implementation Agreement, in the JV company, could be treated as 'Business Auxiliary Service' - The activity of grant of 51% share in JV is not covered in any of the sub heading under BAS as defined in Section 65(105) of Finance Act - Even by assuming that the grant of 51% of equity is considered as consideration, for rending of service, the same was granted in year, 2008-09, while the notice has been issued on 18.03.2015, this is even beyond the limit of five years, therefore, the SCN could not have been issued on this count - The demand was held to be not sustainable - Regarding the expenses recovered by assessee on actual basis from BLMCL, the JV company, towards deputation of their employee and related expenses, cannot be categorised under the BAS - Even otherwise the deputation of employee in the JV company cannot be treated as BAS relying on the decision of this Tribunal in case of Punj Llyod Ltd.- The deputation of employee to the JV company cannot be held to be service.

Held - Notice be issued to the parties concerned - Matter be tagged with C.A. No. 9199 of 2019: SC

-Notice issued :SUPREME COURT OF INDIA

2021-TIOL-62-SC-ST

CST Vs Pernod Ricard India Pvt Ltd

ST - The assessee is engaged in manufacture, sale and marketing of various brands of Indian Made Foreign Liquor (IMFL) and alcoholic beverages in India - They were getting the goods manufactured from various entities, which possesses the necessary liquor manufacturing licence from respected state governments - The department views that the assessee has either provided 'Business Auxiliary Service' to various bottlers by entering into contracts or the assessee has provided 'Franchisee Service' as mentioned under Section 65(105)(zze) of FA, 1994 - The matter is no longer res integra as the demand of service tax under category of Franchisee Service as the same has been settled in case of M/s Diageo India Pvt Ltd - Since the facts of this matter are similar to the one decided by said decision of Tribunal, after following the same, it is held that the demand under category of 'Franchisee Service' confirmed by adjudicating authority is not legally sustainable - So far, as the demand of service tax amounting to Rs. 14,75,497/- is concerned, same has been confirmed only on the two grounds that some of the invoices on which the cenvat credit was availed, was in the name of one of the branch of assessee which was not registered with Service Tax department or where the invoices were in the name of the Seagram Manufacturing Pvt Ltd. - It is a matter of record that Seagram Manufacturing Pvt Ltd has been merged with assessee's firm and therefore, on the invoices which are in the name of Seagram Manufacturing Pvt Ltd, legally cenvat credit of the service tax on such invoices cannot be denied to assessee as both the entities have merged together - The CCR, 2004 do not provide that input service needs to be received in the premises of output service provider, therefore, the cenvat credit cannot be denied on this ground also - The calculation of cenvat credit is calculated only on the basis that the assessee has not confirmed to limit of 20% as provided under Rule 6(3)(c) of CCR, 2004 on monthly basis - The utilization of cenvat credit for financial year 2005-06 and 2006-07 comes to 13.71% and 9.85% respectively - The percentage of utilization of cenvat credit is less than 20% as provided under Rule 6(3)(c) of CCR, 2004 and therefore no violation of Cenvat Rules found on this issue - No merit in order, therefore, set aside.

Held - Notice be issued to the parties - Reply be filed within four weeks from today and thereafter, rejoinder affidavit, if any, be filed within two weeks - Matter be listed for hearing after six weeks' time: SC

-Case deferred :SUPREME COURT OF INDIA

2021-TIOL-61-SC-ST-LB

CST Vs Ceebros Properly Development

ST - The assessee is engaged in providing Construction Service - During audit, it was noticed that assessee have entered into an agreement with M/s. Shyamala Pictures and Hotel (P) Ltd. (land owner) for construction of a residential complex and commercial complex - As per the agreement, the land owner handed over the land to assessee for the purpose of construction of commercial and residential complex - It appeared to department that said activities undertaken by assessee are taxable under category of "Commercial or Industrial Construction Service" and construction of "Residential Complex Service" (RCS) - Issue as to whether a composite contract involving provision of service as well as transfer of property in goods could be covered under CICS and RCS from the date of introduction of service tax levy on such services stands finally settled by Supreme Court in case of L&T Ltd. 2015-TIOL-187-SC-ST - The very same issue is also squarely covered by recent decision of this Bench in the assessee's own case - Following the same, the subject order was set aside.

Held - Matter be listed after two weeks' time: SC LB

-Case deferred :SUPREME COURT OF INDIA

2021-TIOL-57-CESTAT-MAD

Indian Overseas Bank Vs CCE & ST

ST - The issue arises for consideration is, whether the assessee is eligible to avail Cenvat Credit of Service Tax paid by them for the services provided by Insurance Corporation for insuring the deposits of public with the banks - This very same issue was referred to Larger Bench and vide order in case of M/s. South Indian Bank 2020-TIOL-861-CESTAT-BANG-LB , the Larger Bench of Tribunal had held that credit is eligible on the service tax paid on such premiums - Following the same, impugned order cannot sustain and same is set aside: CESTAT

- Appeal allowed: CHENNAI CESTAT

2021-TIOL-56-CESTAT-AHM

Panoli Intermediate India Pvt Ltd Vs CCE & ST

CX - The appellant is engaged in manufacture of Chemicals namely Dichloro Nitro Benzene and availing Cenvat Credit in respect of certain inputs and input services - During the process of manufacture Sulphuric Acid also comes into existence - They were clearing such Sulphuric acid to manufacturers of fertilizers by availing benefit of Procedure Chapter X (Cleared at Nil Rate of Duty) - Revenue is of the opinion that since common inputs and input services have been used for generation of Sulphuric Acid and no separate records were maintained, the assessee is liable to pay 5% on the value of clearances of Sulphuric Acid cleared under exemption Notfn 4/2006-CE in terms of Rules 6(3) of Cenvat Credit Rules - The issue is no longer res integra as there are large number of judgments by High Courts and CESTAT holding that upon removal of Spent Sulphuric Acid, an assessee is not required to reverse any amount under Rule 6(3)(b) of Cenvat Credit Rules, 2004 - Identical issue was decided by Tribunal in case of Nirma Limited 2011-TIOL-1027-CESTAT-AHM - The said decision has been approved by High Court of Gujarat - The impugned orders cannot be sustained: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

2021-TIOL-55-CESTAT-DEL

Interglobe Aviation Ltd Vs CC