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I-T - Once tangible basis has been disclosed for re-opening assessment, it would not be appropriate for writ court to prevent enquiry whatsoever by AO: HC

I-T - Petition filed by a party is not maintainable where it approaches court with unclean hands, having suppressed material facts with intention to impede administration of justice : HC

I-T - Government/Executive cannot make or change law of the land by way of Explanations to Notifications without specific Authority from Legislature to do so : HC

I-T - Expenditure on replacement of dies and moulds are to be allowed as current repairs: HC

I-T - Clarification by ITO cannot add new qualifications beyond provisions of DTVSV Act, 2020 and that clarification can only operate within contours specified in DTVSV Act, 2020: HC

I-T - Interest earned by cooperative society engaged in banking, arising from deposits made with other cooperative banks, is eligible for deduction u/s 80P : HC

I-T - Disallowance u/s 14A cannot exceed exempt income : ITAT

I-T - ALV of property, which could not be let out during relevant year, should be nil as per sec 23(1)(c): ITAT

I-T - Case can be remanded to prove creditworthiness of Directors and genuineness of transactions : ITAT

Service Matter - Not obtaining approval at time of issuing charge memorandum renders such memorandum to be functionally defective & which cannot be validated retrospectively: SC

ST - As per settled law, penalty u/s 73(3) of Finance Act 1994 is not imposable where tax with interest is paid before issuance of SCN, except in cases of suppression or wilful mis-statement: CESTAT

CX - Appeal filed before Commissioner (Appeals) along with pre-deposit, demand amount of said case could not have been adjusted against sanctioned refund, therefore, refund ought to have been paid on the date of sanction itself : CESTAT

CX - In case of non-dutiable goods or exempted goods, even though export was not made under bond, benefit of Rule 6(6)(v) of Cenvat Credit Rules, 2004 cannot be denied and consequently, Rule 6(3)(b) is not attracted: CESTAT

2021-TIOL-265-SC-SERVICE

Sunny Abraham Vs UoI

Service Matter - The appellant herein was appointed as ACIT during the relevant period - The appellant was issued a charge memorandum proposing to conduct an inquiry against him for major penalty under Rule 14 of the Central Civil Services (Classification, Control and Appeal) Rules, 1965 - Subsequently, disciplinary proceedings were commenced against the appellant - The allegations against the appellant pertained to the period when the appellant was posted as ITO in Surat - In this period, the appellant had in collusion with the DCIT, conducted survey proceedings u/s 133A in respect of five group companies owned by a person - The two officers allegedly demanded a sum of Rs 5 lakhs other than legal remuneration from such individual, for setting the matter - It was also alleged that a further sum of Rs 2 lakhs was demanded and the same was accepted by the DCIT concerned - Subsequently, disciplinary action was commenced against the appellant and the DCIT - Charge memorandum was issued to the two officers, but the same was not approved by the Finance Minister - Enquiry Officer was appointed and report was forwarded to the Central Vigilance Commission, which concurred with the report - Such findings were also set aside by the CAT whereas the order of the CAT was set aside by the High Court.

Held -

+ We do not think that the absence of the expression "prior approval" in the aforesaid Rule would have any impact so far as the present case is concerned as the same Rule has been construed by this Court in the case of B.V. Gopinath (supra) and it has been held that chargesheet/charge memorandum not having approval of the Disciplinary Authority would be non est in the eye of the law. Same interpretation has been given to a similar Rule, All India Services (Discipline and Appeal) Rules, 1969 by another Coordinate Bench of this Court in the case of State of Tamil Nadu vs. Promod Kumar, IPS and Another [(2018) 17 SCC 677] (authored by one of us, L. Nageswara Rao, J). Now the question arises as to whether concluded proceeding (as in the case of B.V. Gopinath) and pending proceeding against the appellant is capable of giving different interpretations to the said Rule. The High Court's reasoning, referring to the notes on which approval for initiation of proceeding was granted, is that the Disciplinary Authority had taken into consideration the specific charges. The ratio of the judgments in the cases of Ashok Kumar Das (supra) and Bajaj Hindustan Limited (supra), in our opinion, do not apply in the facts of the present case. We hold so because these authorities primarily deal with the question as to whether the legal requirement of granting approval could extend to ex-post facto approval, particularly in a case where the statutory instrument does not specify taking of prior or previous approval. It is a fact that in the Rules with which we are concerned, there is no stipulation of taking "prior" approval. But since this very Rule has been construed by a Coordinate Bench to the effect that the approval of the Disciplinary Authority should be there before issuing the charge memorandum, the principles of law enunciated in the aforesaid two cases, that is Ashok Kumar Das and Bajaj Hindustan Limited would not aid the respondents. The distinction between the prior approval and approval simplicitor does not have much impact so far as the status of the subject charge memorandum is concerned;

+ The next question we shall address is as to whether there would be any difference in the position of law in this case vis-à-vis the case of B.V. Gopinath (supra). In the latter authority, the charge memorandum without approval of the Disciplinary Authority was held to be non est in a concluded proceeding. The High Court has referred to the variants of the expression non est used in two legal phrases in the judgment under appeal. In the context of our jurisprudence, the term non est conveys the meaning of something treated to be not in existence because of some legal lacuna in the process of creation of the subject-instrument. It goes beyond a remediable irregularity. That is how the Coordinate Bench has construed the impact of not having approval of the Disciplinary Authority in issuing the charge memorandum. In the event a legal instrument is deemed to be not in existence, because of certain fundamental defect in its issuance, subsequent approval cannot revive its existence and ratify acts done in pursuance of such instrument, treating the same to be valid. The fact that initiation of proceeding received approval of the Disciplinary Authority could not lighten the obligation on the part of the employer (in this case the Union of India) in complying with the requirement of sub-clause (3) of Rule 14 of CCS (CCA), 1965. We have quoted the two relevant sub-clauses earlier in this judgment. Sub-clauses (2) and (3) of Rule 14 contemplates independent approval of the Disciplinary Authority at both stages – for initiation of enquiry and also for drawing up or to cause to be drawn up the charge memorandum. In the event the requirement of sub-clause (2) is complied with, not having the approval at the time of issue of charge memorandum under sub-clause (3) would render the charge memorandum fundamentally defective, not capable of being validated retrospectively. What is non-existent in the eye of the law cannot be revived retrospectively. Life cannot be breathed into the stillborn charge memorandum. In our opinion, the approval for initiating disciplinary proceeding and approval to a charge memorandum are two divisible acts, each one requiring independent application of mind on the part of the Disciplinary Authority. If there is any default in the process of application of mind independently at the time of issue of charge memorandum by the Disciplinary Authority, the same would not get cured by the fact that such approval was there at the initial stage;

+ the allegations against the appellant are serious in nature and ought not to be scuttled on purely technical ground. But the Tribunal in the judgment which was set aside by the High Court had reserved liberty to issue a fresh memorandum of charges under Rule 14 of CCS (CCA) Rules, 1965 as per Rules laid down in the matter, if so advised. Thus, the department's power to pursue the matter has been reserved and not foreclosed. We set aside the judgment of the High Court and restore the judgment of the Principal Bench of the Central Administrative Tribunal delivered on 20th April, 2015 in O.A. No. 1157 of 2014 subject to certain modification on operational part of it.

- Assessee's appeal allowed: SUPREME COURT OF INDIA

2021-TIOL-825-CESTAT-KOL

CCGST & Excise Vs Asian Hotel East Ltd

ST - The assessee was issued an SCN proposing certain tax demand - On adjudication, the demand was confirmed - On appeal, the Commissioner (Appeals) allowed partial relief, where the demand raised under Rule 6 of Cenvat Credit Rules, 2004 was dropped, with the remaining tax demand being sustained - The interest component and penalty was upheld too, with an option to the assessee to pay reduced penalty as per Section 78 of the Finance Act, 1994 - Hence the Revenue's appeal. Held - Regarding the Revenue's appeal on the issue of reversal of Rule 6 of Cenvat Credit Rules, 2004 on the abated value of Restaurant Services by taking the same as exempted services and applying 6% on the value of exempted services so determined to raise the demand of recovery of common Cenvat credit, it is seen that the issue is no more res-integra in view of CBIC's Circular No. 213/3/2019-Service Tax , dated July 05, 2019 wherein it has been clarified by the board that there is no requirement of reversal under Rule 6 of the CCR, 2004 for provision of restaurant services. Thus, the Revenue's appeal to that extent is liable to be dismissed and we order to do so - Regarding imposition of penalty on the service tax paid by the assessee in course of audit before issuance of SCN, the lower authorities erred in sustaining penalty, considering settled principle that when tax is paid along with interest before issuance of SCN (other than cases of suppression or willful mis-statement), the Department cannot issue SCN in terms of section 73(3) of the Finance Act - Hence the Revenue's appeal is dismissed and the order of the Commissioner (Appeals) is modified to extent of deleting the penalty imposed: CESTAT

- Revenue's appeal dismissed: KOLKATA CESTAT

2021-TIOL-824-CESTAT-AHM

Cadila Healthcare Ltd Vs CCE & ST

CX - The refund of appellant was appropriated against confirmed demand - Said confirmed demand order was under challenge in appeal before Commissioner (Appeals) - The dispute was that whether the appellant's payment of pre-deposit through cenvat account is legal and correct for entertaining the appeal - The Commissioner (Appeals) was of the view that the appellant was supposed to make pre-deposit payment in cash - This issue has been taken to Gujarat High Court who vide order 2018-TIOL-1236-HC-AHM-CX held that the appellant's payment of pre-deposit through cenvat in appeal filed before Commissioner (Appeals) is acceptable - With this order, appeal filed before Commissioner (Appeals) along with pre-deposit, demand amount of said case could not have been adjusted against the sanctioned refund, therefore, the refund ought to have been paid on the date of sanction itself - Since the refund was payable on the date of sanction, appellant is entitled for interest from the date of sanction till the date of payment of refund amount - Accordingly, impugned orders are set aside: CESTAT

- Appeals allowed: AHMEDABAD CESTAT

2021-TIOL-823-CESTAT-AHM

Piramal Glass Pvt Ltd Vs CCE & ST

CX - The appellant is engaged in manufacture of Nail Polish bottle and exporting the same along with cap and brush which is procured from open market - The case of department is that since cap and brush though exported is a pure trading activity and not a manufacturing activity in terms of Rule 6(3) of Cenvat Credit Rules, 2004, appellant is required to reverse the proportionate credit attributed to common input service used for clearance of manufactured goods as well as trading goods being the trading activity is exempted service - Since the appellant has not taken cenvat credit, they were neither required to pay duty nor to execute bond for export - This issue has come up before Bombay High Court in Repro (India) Ltd. 2007-TIOL-795-HC-MUM-CX that whether to allow the benefit of Rule 6(6)(v) of Cenvat Credit Rules, 2004; execution of export bond is compulsory or otherwise, the Bombay High Court clearly held that in case of non-dutiable goods or exempted goods, even though export was not made under bond, benefit of Rule 6(6)(v) ibid cannot be denied and consequently, Rule 6(3)(b) ibid is not attracted - Thus, in view of the said judgement, it is settled that even though the goods are exported without bond, the benefit of Rule 6(6)(v) ibid is available to assessee, and consequently, Rules 6(1), 6(2), 6(3) and 6(4) ibid shall not attract - Accordingly, the impugned order is set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT