I-T- PCIT must provide cogent evidence to prove excercise of jurisdiction u/s 263 : ITAT

I-T- Disallowance u/s 36(1)(ii) is eligible only for employees who are partners or shareholders : ITAT

I-T- Failure on part of AO to mention amount of income which has escaped assessment or any other important information will result in nullifying notice issued u/s 148 of Act : ITAT

GST - Entertainment of writ petition at the stage of notice would be premature - Doing so would frustrate the tax administration and interdict adjudication process: HC

GST - Cancellation of registration - Maintainability of Petition without exhausting appellate remedy - Petition disposed of by leaving it open to petitioner to approach appellate authority within one week: HC

VAT - If period of limitation is enlarged from 5 years to 6 years, then dealer does not have vested right or accrued interest vis-a-vis reassessment procedure u/s 25 of KVAT Act: HC

ST - Since there is no suppression of fact or any mala fide intention to evade payment of service tax on the part of appellant, demand beyond one year is not sustainable on limitation also: CESTAT

CX - Rule 3(5A) of CCR 2004 - Interpretation of term Removal has been held to mean physical movement of goods from one place to another: CESTAT

CX - When there is no removal of capital goods, provisions of Rule 3(5A) of CCR 2004 cannot be invoked: CESTAT

2022-TIOL-1459-HC-AP-GST

Jayapal Reddy Gudipati Vs Goods And Service Tax Officer

GST -   An order of cancellation of registration is under challenge in the present Writ Petition - Petitioner submits that he is a diet contractor, carrying on contracts with the Government General Hospitals for supply of food to the in-patients at the subsidised price fixed by the State Government - Pursuant to a show-cause notice dated 06.12.2021, the first respondent issued the impugned cancellation order dated 01.02.2022 - It is not in controversy that in response to the show-cause notice, the petitioner did not file any reply/explanation - Counsel for Respondent Revenue submits that having failed to respond to the show-cause notice and having failed to avail alternative remedy as prescribed under the provisions of Section 107 of the CGST Act, 2017 , it is not open for the writ petitioner to maintain the present Writ Petition. Held:  The reality remains that according to Section 107 of the CGST, 2017, any person aggrieved by any decision or order passed under this Act by an adjudicating authority may appeal to such appellate authority as may be prescribed within three months from the date on which the said decision or order is communicated to such person -  For the reasons mentioned in the supporting affidavit and taking into consideration the submissions made by the petitioner, this Court deems it appropriate to dispose of the Writ Petition, leaving it open to the petitioner to approach the appellate authority as per Section 107 of CGST Act, 2017, within a period of one week from the date of receipt of a copy of this order and if such an appeal is filed, the same be considered and appropriate orders be passed by the appellate authority strictly in accordance with rules, within a period of four (04) weeks thereafter - Writ Petition is disposed of accordingly: High Court

- Petition disposed of: ANDHRA PRADESH HIGH COURT

2022-TIOL-1458-HC-ORISSA-GST

Sri Muna Pani Vs State of Odisha

GST - Petitioner challenges the Notices dated 06.08.2022 issued by CT&GST Officer, Angul Circle, Angul for initiation of proceeding under Section 73 of the Act, 2017 pertaining to the periods 2017-18 and 2018-19. Held: Petitioner-contractor is supplier of service which is subject to levy of GST and for that matter ascertainment of liability and correct quantification of tax liability is subject-matter of adjudication by the authorities bestowed with power under the provisions of the GST Act -  The legal position has been succinctly laid down in Jindal Poly Films Ltd. = 2013-TIOL-473-HC-MUM-VAT to say that the fact that the dealer upon whom the tax is imposed, is not in a position to pass on the tax on his consumers has no relevance to the competence of the Legislature - What actually happens is that the seller includes the tax in the price and thus passes it on to the consumer - In effect, by thus passing on the tax to the consumer through the price, the dealer has already collected the tax - The fault for failure to pay the tax or fraudulent evasion in payment thereof lies in the circumstances entirely on the dealer - Going through the impugned notices dated 06.08.2022  ex facie  indicates that the proper officer initiated action under Section 73 of the GST Act for adjudication of appropriate fact and determination of correct figure as there is anomaly in the data available on the WORKS AND ACCOUNTS MANAGEMENT INFORMATION SYSTEM (WAMIS) and the figures disclosed in the return furnished to the CT&GST Organisation in Form GSTR-3B - Under the above premises, there is little scope to show indulgence in the present matter as the petitioner is required to justify his claim made in the returns in Form GSTR-3B prescribed under Rule 61(5) of the GST Rules read with Section 39 of the GST Act  vis-à-vis  data disclosed in WAMIS - It is to be noted that determination of tax liability is the domain of "proper officer" defined under Section 2(91) by exercising powers conferred in Chapter XV of the GST Act - In the instant case, the proper officer has invoked provisions of Section 73 for determination of tax liability of the petitioner and issued the subject Show Cause Notices, therefore, it cannot be said that such notices are invalid or vague - Therefore, meddling at this stage by this Court would be premature and entertainment of writ petition by exercise of power under Article 226 of the Constitution of India would run contrary to the settled principles - The petitioner, in the instant case, has the fullest opportunity to refute allegations, if any, and rebut adverse finding/observations involved in the matter, as discussed above - The petitioner may also raise legal issues as well as factual disputes before the Assessing Officer during the course of proceeding - It is possible for the petitioner to seek further time, if according to him the time given by the authority for filing the reply was required to be extended in order to enable it to collect further material - It cannot, therefore, be said that the notices dated 06.08.2022 under Section 73 are vulnerable -  Considering the fact that the petitioner has ample opportunity to agitate issues before the Assessing Officer, this Court holds that entertainment of the writ petition at the stage of notice would be premature - Doing so would frustrate the tax administration and interdict adjudication process - Writ petition is dismissed: High Court [para 4.11, 4.12, 4.14. 4.15, 5.2, 5.4, 5.15, 5.17, 6]

- Petition dismissed: ORISSA HIGH COURT

2022-TIOL-1460-HC-KERALA-VAT

Deputy Commissioner-III Vs Prasanthi Cashew Company

Whether when period of limitation is enlarged from 5 years to 6 years, then dealer does not have vested right or accrued interest vis-à-vis reassessment procedure u/s 25 of KVAT Act - YES: HC

- Revenue's appeal allowed: KERALA HIGH COURT

2022-TIOL-1074-CESTAT-AHM

Bhumi Construction Vs CCE & ST

ST - Appellant carried out various works/services in relation to transmission of electricity namely concrete foundation, excavation of pits, establishment and maintenance of site for storage of materials relating to power transmission tower in capacity of sub-contractor - A SCN came to be issued raising demand of service tax along with interest and penalty invoking extended period of limitation of sub-section (1) of section 73 of Finance Act, 1994 - As regard the renting of JCB under category of supply of tangible goods, appellant have collected service tax and paid the same to government exchequer therefore, same is not under dispute on merit - As regard other services, there is no dispute that appellant have rendered services of construction activity for concrete foundation of power transmission lines and establishment and maintenance of site for storage of material relating to transmission tower, all these services which are in relation to setting up of transmission tower for transmission of power - Period involved is 2004-05 to 2008-09, government has issued a notification giving it retrospective effect under notfn 45/2010-ST - Since the period involved is prior to 26th February, 2010 entire period is covered under exemption therefore, demand on services in question except the demand on supply of tangible goods are exempted under Notfn 45/2010-ST - As regard to limitation, appellant has acted as a sub-contractor - Earlier, there were contrary clarifications by government that sub-contractor is not liable to service tax when main contractor is discharging service - Subsequently vide circular dated 23.08.2007, the C.B.E.C has taken a U-turn and withdrawn the earlier stand and clarified that sub-contractor is liable to pay service tax - It is not only the larger bench decision which settled the law but there were contrary circulars of board on the issue of payment of service tax by sub-contractor - There is no suppression of fact or any mala fide intention to evade payment of service tax on the part of appellant, therefore, demand beyond one year is not sustainable on limitation also - Penalties are also set aside: CESTAT

- Appeal allowed: AHMEDABAD CESTAT

2022-TIOL-1073-CESTAT-MAD

Shiv Parvathi Textiles Vs CC

Cus - The only issue that arises for consideration is, whether refund claim of Special Additional Duty (SAD) of appellant was correct - The High Courts of Bombay and Delhi have expressed divergent views and Jurisdictional High Court, in its earlier order, had chosen to follow one of the decisions which was in favour of tax payer - In its subsequent decision in case of CMS Info Systems Ltd. 2022-TIOL-863-HC-MAD-CUS , High Court of Madras has felt it proper to remand the matter back to file of adjudicating authority to await the outcome of SLP filed against the order passed by Bombay High Court in case of CMS Info Systems Limited 2017-TIOL-79-HC-MUM-CUS - The earlier decision in case of HLG Trading appears to have not been brought to notice of High Court and in any case, following the latest decision of Jurisdictional High Court, it is held that matter could be sent back to file of adjudicating authority, who shall follow the directions of High Court and to await the outcome of SLP in case of CMS Info Systems Limited and then pass a denovo order in terms with the decision of Apex Court: CESTAT

- Matter remanded: CHENNAI CESTAT

2022-TIOL-1072-CESTAT-DEL

Simbhaoli Sugars Ltd Vs Additional Director General Directorate General Of Gst Intelligence

CX - The appellant units (at Chilwaria and Simbhaoli) are engaged in the manufacture of sugar, molasses and distillery products, which are dutiable - The other appellant Sh. Gurmit Singh Mann is the Chairman-cum-Managing Director of the appellant company - Simbhaoli Sugars have got one unit at P.O. Chilwaria, District Bahraich (U.P.) (hereinafter referred to as SSL, Chilwaria or the appellant-I) and the other unit is located at Simbhaoli (hereinafter referred to as SSL, Simbhaoli or the appellant-II) - Both the appellant units are equipped with power plant (co-generation plant) within their factory company unit, electricity is generated by use of steam and for fuel baggase is used - The steam produced in the power plant (boiler house) is used partly by the appellant unit for running the plant and machinery and part of the steam goes to the turbine in the power plant for generating electricity - Part of the electricity is captively used in the manufacturing of sugar molasses etc., by the appellant and surplus electricity is wheeled to U.P. Power Corporation Limited (UPPCL), against consideration - The electrical energy is covered under CETH 27160000 and is chargeable to Nil rate of duty - The facts of the appeal filed by Chilwaria and Simbhaoli units of the appellant company M/s Simbhaoli Sugars Ltd., are similar and involve identical issue.

Held - in the erstwhile Central Excise Rules, 1944 or the Central Excise Rules, 2002, the manufacturer of excisable goods was required to pay duty on the goods removed from the factory or the bonded warehouse - The sale of goods or transfer of ownership of the goods from the seller to the buyer, is not the criteria to cast duty liability on the manufacturer/seller of excisable goods - What is important is the physical removal of excisable goods from the factory of the manufacturer: CESTAT

+ We note that in the case of CCE, Raipur Vs. Bhilai Steel Plant - 2017-VIL-01-CESTAT-DEL-CE, the respondent under a comprehensive business restructuring plan and to streamline the production / power generation related activities, transferred the ownership of their captive power plant installed within their factory to M/s Bhilai Electric Supply Company Ltd. (BESCL) under an agreement. Under the agreement, the respondent delivered all movable and immovable properties including building, works, plant and machinery to M/s BESCL. A deed of lease was also executed to effect the transfer of leasehold interest in the lands / immovable properties used by the captive power plant. The Department took a view that since the respondent and M/s BESCL are separate legal entities, the inputs and capital goods which were transferred by the respondent to M/s BESCL, stood removed and the respondent was required to pay an amount equal to the duty of excise leviable on the inputs and capital goods installed in the captive power plant on which CENVAT / MODVAT was taken, in terms of rule 3(4) of CCR, 2004. The Department relied on registration of M/s BESCL as a separate factory with the Chief Inspector of Factories, Chhatisgarh, and took a view that the transfer is liable to be termed as removal. The Tribunal took note of observations of the Supreme Court in the case of J.K. Cotton Spinning & Weaving Mills (supra) wherein the meaning of the word "removal" was examined and interpreted as physical movement of goods from one place to another; (P 43)

+ We find that the Tribunal has also applied the interpretation of the term "removal" as given by the Apex Court in the case of J.K. Spg. & Wvg. Mills in the transactions involving leasing of plant and machinery as a whole. In the case of Dalmia Cements (Bharat) Ltd., Vs. CCE, Tiruchirapalli - 2008 (224) ELT 484 (Tri-Chen.) , the assessee set up power plant in their factory premises and also took CENVAT credit of duty paid on inputs and capital goods received in the factory for the purpose of setting up of power plant. Subsequently, the assessee leased out the entire power plant to another entity M/s Keshav Power Pvt. Ltd. (KPPL) under a lease deed for a period of 10 years. The Department raised duty demand on the assessee on the ground that by leasing out the power plant with ancillary equipments to another entity, the assessee removed the capital goods and in terms of rule 3(5) of CCR, 2004, the assessee was liable to pay an amount equal to credit taken on such inputs and capital goods. The Tribunal held that there was no physical removal of capital goods as such from the factory in as much as the capital goods had, by the time the power plant was leased out, lost their separate identity, having become integral part of the power plant. By citing these reasons, the Tribunal held that the provisions of rule 3(5) of CCR, 2004 were not applicable and set aside the impugned order. In appeal, the Madras High Court in CCE, Tiruchirapalli Vs. CESTAT, Chennai - 2015-TIOL-1539-HC-MAD-CX upheld the Tribunal's order holding that rule 3(5) only speaks about removal of goods under the cover of invoice referred to in rule 9 on inputs or capital goods on which CENVAT credit has been taken. The High Court found that there was no removal of goods under the cover of invoice as provided in rule 9 of CCR, 2004 and there was nothing in rule 3(5) to invoke the deeming fiction of removal, as applied by the adjudicating authority. (P 45)

+ In view of our aforementioned findings and observations, particularly in view of the ruling of Madras High Court in the case of Dalmia Cement (supra), which have been accepted by the CBIC as clarified in the Circular No. 1063/2/2018-CX , we hold that in the facts and circumstances of the present case, there is no removal of capital assets/power plant. As There have been no removal, the provision of Rule 3(5A) of Cenvat Credit Rules are not attracted. Accordingly, we allow these appeals and set aside the impugned order. The appellant shall be entitled to consequential benefits in accordance with law. (P 52)

- Appeals allowed: DELHI CESTAT