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I-T - u/s 221, penalty can be warded off only if assessee shows that default was for good and sufficient reasons: ITAT

I-T - Case can be remanded as assessee failed to furnish source of cash available with creditors: ITAT

I-T - If borrowed funds are utilized for purpose of business, interest paid thereon would be squarely allowable as deduction u/s 36(1)(iii): ITAT

I-T - Depreciation claimed cannot be denied on the ground that plant and machinery of new assets purchased during the year are not put to use : ITAT

I-T - Deduction on account of bad debt is allowed u/s 36(l)(vii) r.w.s. 36(2) by merely writing off debt as irrecoverable in assessee's accounts : ITAT

CX - Duty demand - Mere suppression or mis-statement of facts, if not wilful, would not be a sufficient ground to invoke extended period of limitation: HC

Cus - Merits of refund claim would require a proper determination on facts and, therefore, the second respondent was required to issue proper SCN - communication is not an order: HC

GST - Renting of immovable property - Insufficient material on record - Authority is unable to conclude whether services are entitled for exemption in terms of 12/2017-CTR: AAR

GST - Execution of Mumbai Trans Harbour Link project by MMRDA - Mumbai Port Trust has agreed to transfer certain land and water areas belonging to itself by way of long term lease - Payments received from MMRDA is exempted: AAR

2021-TIOL-295-AAR-GST

Tukaram Pundalik Borade

GST - Applicant seeks a ruling as to whether the services provided by them to Samaj Kalyan Department, State Government of Maharashtra (Social Welfare Department) for residential accommodation of underprivileged girls is exempt from GST? and Whether TDS provisions will be applicable in case where the supply of services is exempt. Held:  Applicant has submitted that the Samaj Kalyan Vibhag of the Government of Maharashtra has taken the immovable property on rent from the applicant to house the girls from the backward class communities which can be considered as a welfare measure undertaken by the Government for the under-privileged section of the society - Other than making this statement, the applicant has not submitted any evidence or submissions to state as to how her/their activities are covered under Article 243G/243W of the Constitution - There are no submissions made to show that the impugned services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution - Even though the applicant is supplying "Pure Services", in light of insufficient material on record, it is not possible for the Authority to find whether the said services are supplied by the applicant by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the Constitution - Held that renting of immovable property services by the applicant is not entitled for exemption under the provisions of Entry No. (3) Of Notification No.  12/2017-CT(R)  - Impugned services supplied by the applicant are liable to tax and, therefore, not exempt - Thus the TDS provisions under the relevant section 51 of the GST Act are applicable in the subject case: AAR

- Application disposed of: AAR

2021-TIOL-294-AAR-GST

Mumbai Port Trust

GST - Government of Maharashtra has entrusted the responsibility of the execution of Mumbai Trans Harbour Link (MTHL) project to the Mumbai Metropolitan Region Development Authority (MMRDA) - Applicant M/s. Mumbai Port Trust has agreed to transfer certain land and water areas belonging to itself and required for the purpose of the said MTHL project, by way of long term lease vide a MOU, to MMRDA, for which Applicant had to demolish its 4 existing sheds at STP yard situated on the said plot of land and decommission Old Pir Pau Jetty / Berth and in respect of such demolition/decommissioning the MMRDA agreed to compensate the Applicant - For grant of such a lease and way leave permission on Applicant's land, MMRDA agreed to make the payments to the applicant - Applicant seeks to know as to whether they are entitled for exemption in terms of notification 12/2017-CTR. Held: ++ For any supply to be covered under Sr. No. 3 of notification 12/2017-CTR, the supply should be in respect of only Pure Services, secondly such Pure Services must be provided to the Central Government, State Government or Union territory or local authority or a Governmental authority [or a Government Entity] and finally such services should be provided by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution. ++ Supply of leasing of immovable properties and water areas within its territory by the applicant to MMRDA is nothing but supply of services - Impugned MOU does not envisage any supply of goods individually or along with the supply of services in the instant case, therefore, pure services are supplied by the applicant to MMRDA - MMRDA is constituted and established by the State Government of Maharashtra with 100% participation by way of Equity or Control to carry out the function entrusted to it by the State Government viz. Preparation of Regional Development Plans, Providing financial assistance for significant regional projects, Providing help to local authorities and their infrastructure projects, coordinating execution of projects and/or schemes in MMR, etc. in the State of Maharashtra and therefore MMRDA is clearly covered under the definition of 'Government Entity' - Impugned pure services supplied by the applicant can be covered under any of the clauses 1, 3, and 4 of the Twelfth Schedule as well as clause 14 of the Eleventh Schedule pertaining to Articles 243W and Article 243G of the Constitution, respectively, "by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243 W of the Constitution." - Applicant is, therefore, entitled to exemption from payment of GST in terms of Entry No.3 of the Notification No. 12/2017-CTR on the considerations viz. Way Leave fees & Lease rent, Compensation equivalent to the amount of Rs.24.48 crores in lieu of demolition of 4 existing sheds at STP yard situated on the said plot of land which is licensed to MMRDA, Compensation equivalent to the amount of Rs.64 crores in lieu of decommissioning of Old Pir Pau Jetty / Berth situated on the said plot of land which is licensed to MMRDA for the purpose of the MTHL project, An amount equivalent to 15% of the Security Deposit, received by MbPT from MMRDA under the name of "Way Lease Agreement Charges", Refundable Security Deposit of Rs.20 Crores, to meet the cost of damages during the execution of work, payable to it by Mumbai Metropolitan Region Development Authority ("MMRDA") in terms of Memorandum of Understanding (MOU) entered into between the MbPT and MMRDA: AAR

- Application disposed of: AAR

2021-TIOL-2308-HC-KOL-GST

LGW Industries Ltd Vs UoI

GST - Case of department is that the suppliers from whom the petitioners/buyers are claiming to have purchased goods in question are all fake and nonexisting and the bank accounts opened by those suppliers are on the basis of fake documents and petitioners' claim of benefit of input tax credit are not supported by relevant documents and that the petitioners have not verified genuineness and identity of aforesaid suppliers who are registered taxable persons (RTP) before entering into any transaction with those suppliers - Petitioners submit that they have paid the amount of purchases in question as well as tax on the same not in cash and all transactions were through banks and petitioners are helpless if at some point of time after transactions were over, if department concerned finds on enquiries that the aforesaid suppliers (RTP) were fake and bogus and on this basis petitioners could not be penalised unless the department/respondents establish with concrete materials that the transactions in question were outcome of any collusion between petitioners/purchasers and suppliers in question - Petitioners further submit that all the purchases in question invoices-wise were available on GST portal in form GSTR-2A which are matters of record - It cannot be said that there was any failure on the part of petitioners in compliance of any obligation required under statute before entering the transactions in question or for verification of genuineness of suppliers in question - Petitions are disposed of by remanding these cases to respondents concerned to consider afresh the cases of petitioners - If it is found upon considering the relevant documents that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers, the petitioners shall be given the benefit of input tax credit in question: HC

- Matter remanded: CALCUTTA HIGH COURT

2021-TIOL-2307-HC-MUM-CX

Water Resources Development Vs CCE

CX - Facts on record indicate that prior to 1996 the appellant was engaged in the manufacture of gates and hoists that were supplied to the Irrigation Department - By virtue of exemption Notification No. 74/1993, the goods falling under heading 73 and 84 of the Schedule were exempted from payment of central excise duty - On 1.4.1986, the Corporation came to be established and it is thereafter that the demand of central excise duty from 1997-1998 to 1999-2000 came to be raised by issuing show cause notice dated 30.3.2001 demanding CEX duty of Rs.29,17,879/- and imposition of penalty and interest - In view of the fact that the appellant had not obtained necessary registration, the Directorate found it sufficient to invoke the proviso to Section 11A(1) of the said Act - Demand confirmed and upheld by lower authorities, hence the appeal.

Held: Mis-statement or suppression of facts must be wilful on the part of the manufacturer or producer - Mere suppression or mis-statement of facts, if not wilful, would not be a sufficient ground - Satisfaction recorded initially by the Commissioner and then by the Tribunal as regards the intention of appellant to evade payment of central excise duty is without any supporting material on record - In absence of any material whatsoever to indicate wilful suppression of facts with intention of evading duty, the invocation of proviso to Section 11A(1) is totally unjustified - It is open for the appellant to seek refund under Section 11B of the said Act, if so advised - Central Excise Appeal is allowed: High Court [para 9 to 12]

- Appeal allowed: BOMBAY HIGH COURT

2021-TIOL-2306-HC-MAD-CUS

Virbac Animal Health India Pvt Ltd Vs UoI

Cus - Refund - Petitioner has challenged the communication dated 06.12.2019, whereby their refund claim is sought to be rejected on the ground that DRI, Mumbai had stated that payment was made by the petitioner voluntarily after they admitted that concessional rate of duty was availed wrongly and accordingly based on the request of the petitioner to conclude the matter, same was closed by respondent u/s 28 of the Customs Act, 1962 by a letter dated 03.07.2019. Held: Impugned communication cannot be construed as an order - It was incumbent on the part of the respondent to issue a proper show cause notice to the petitioner to show cause as to why refund claimed should not be rejected - The documents filed indicates that the imports were made by the petitioner long before the amounts were paid by the petitioner pursuant to DRI Investigation - The amounts paid during the investigation have to be treated as amount paid "under protest", therefore, the question of filing an appeal against the respective Bills of Entry cannot be countenanced - In any event, merits of the refund claim of the petitioner would require a proper determination on facts and, therefore, the second respondent was required to issue proper SCN to the petitioner giving the reasons why refund claim filed should not be rejected - Rejection of the refund claim of the petitioner merely based on an intra-departmental communication is not sufficient - There is no other option but to remit the case back to the second respondent - SCN to be issued within 60 days and order to be passed after personal hearing within 30 days - Writ petition stands allowed: High Court [para 7 to 9]

- Matter remanded: MADRAS HIGH COURT

2021-TIOL-822-CESTAT-MAD

R Pandi Vs CCGST & CE

ST - The issue involved is as to whether the independent contractor carrying out manufacturing activity in the premises of service recipient would amount to supply of man power and recruitment services - The issue has already been decided by Tribunal vide the orders in G. Ramakrishnan & Others 2019-TIOL-2875-CESTAT-MAD , Arul Prakasam 2021-TIOL-628-CESTAT-MAD and K. Balakrishnan and other 2021-TIOL-560-CESTAT-MAD - Accordingly, the issue is no longer res integra - Following the said orders of Tribunal, impugned order is not sustainable and same is set aside: CESTAT

- Appeals allowed: CHENNAI CESTAT

2021-TIOL-821-CESTAT-AHM

Seagull Cooling Pvt Ltd Vs CCE & ST

CX - Appellant is engaged in manufacturing of excisable goods, i.e., Air Conditioners and parts thereof - Case of department is that the goods which have been cleared by appellant are having essential characteristic of complete air conditioner therefore, is liable to special excise duty whereas, contention of appellant is that the goods cleared by them are parts and does not have essential characteristic of air conditions and hence the special excise duty is not liable to be paid - The issue is squarely covered by Tribunal's decision in appellant's own case which was passed by relying upon the board's circular dated 25.9.2002 therefore, issue is no longer res-integra - The Principal Commissioner ought to have dropped the demand as legal issue involved has been settled in favour of appellant in Tribunal's Order dated 3.8.06 - Adjudicating authority has not discussed about the nature of assembly cleared by appellant that whether the assemblies have contained all the six items mentioned in board circular or otherwise which was claimed by appellant therefore, matter needs to be reconsidered only on this point - If it is found that if one or more items specified in board circular is absent in assembly supplied by appellant, same shall not be considered as complete air conditioner whereas, the goods shall be considered as parts of air conditioner accordingly, there shall not be any levy of special excise duty - Since the matter is of very old period of 2003, the de novo adjudication process may be completed within a period of three months: CESTAT

- Matter remanded: AHMEDABAD CESTAT

2021-TIOL-820-CESTAT-CHD

Brakes India Pvt Ltd Vs CCGST

CX - The appellant is engaged in manufacture of motor vehicle parts namely brakes assembly; they have 8 manufacturing units; out of which, three units located at Padi, Polambakkan and Gurgaon are engaged in manufacture of various parts like show assembly, servo sub-assembly, TMC assembly, wheel cylinder assembly and caliper sub-assembly; these goods are cleared to their Gurgaon unit on payment of excise duty under stock transfer invoices - Department issued a SCN proposing to deny Cenvat credit alleging that the credit of duty paid on inputs received from their sister concern under stock transfer invoices, is not admissible under Rule 7(4) of Cenvat Credit Rules, 2001/2002 and that the said inputs are not purchased - Rule 3 of Cenvat Credit Rules which provides for eligibility criteria of Cenvat credit does not discriminate between purchase and procurement - The only pre-condition appears to be receipt of input or capital goods in factory of manufacture - Karnataka High Court in case of Karnataka Soaps & Detergents Ltd. has upheld the view that Rule 7 ibid which is more towards laying down the procedure cannot take precedence over Rule 3 ibid - In view of the decision in case of Exide Industries Ltd. , impugned order does not stand the scrutiny of law - The same is set aside: CESTAT

- Appeal allowed: CHANDIGARH CESTAT