I-T - Purpose of Section 40(a)(ia) is to disincentivize non-deduction of tax at source by disallowing, as deduction, amount paid to resident/payee: HC

I-T - If AO did not have tangible material on record that could have persuaded him to form belief that income otherwise chargeable to tax, had escaped assessment, notice u/s 148 deserves to be quashed: HC

I-T - Time spent by applicant while pursuing review proceedings deserves to be excluded even under principles analogous to Sec 14 of Limitation Act, if he acted in good faith: HC

I-T - Since ROI was filed though after search and seized cash was offered by assessee under then prevailing regime, it is to be treated as the advance tax and thus there is no default in payment of advance tax : HC

I-T- Since loan received from M/s Godavari is routed through regular banking channel and reflected duly in annual accounts not require addition u/s 68 of Act : ITAT

I-T- If assessee is corporate entity then ad hoc disallowance of expenditure without pointing out any specific defect is not permissible : ITAT

ST - SVLDRS, 2019 - Only minor variation in the amount proposed in SCN and amount declared in form SVLDRS-1 - Petitioner entitled for relief under the scheme: HC

GST - SCN is dated 4 th March; reply is to be filed within 30 days but petitioner asked to appear for hearing on 17 th March - Real intention of Department is not to provide fair opportunity to defend their case, but, only to put the petitioner in peril: HC

Cus - Since manufacturing activity undertaken and payment of CE was acknowledged and not disputed, same cannot be questioned by Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled condition for it to be held liable to ADD: Tribunal

ST - Activities of screening cargo through x-ray machines and build-up of cargo for loading onboard aircrafts, fall under Cargo Handling Service as well as under Airport Service - However, as per Section 65A of Finance Act 1994, since Section 65(23) occurs before Section 65(105)(zzm) of the Act, both services will be classifiable under Cargo Handling Service : CESTAT

Cus - Discrepancies between goods imported and their quantity declaring in packaging list - Appellant, a Customs Broker, permitted freight forwarder to upload packaging list on e-Sanchit portal using Appellant's credentials - this is act of negligence, cannot be punished with forfeiture of brokers' license: CESTAT

2023-TIOL-1634-HC-MAD-ST

Sendhamarai Engineering Pvt Ltd Vs Designated Committee

ST - SVLDRS, 2019 - Petitioner challenges the communication dated 08.11.2019 rejecting their application on the ground that quantification of tax dues was not done on or before 30.06.2019 - It is a specific case of the petitioner that the amount that was quantified by the petitioner in the returns filed by the petitioner during the period mentioned more or less matches with the amount that was proposed in Show Cause Notice No.84/19-ST and that there is only a minor variation between the amount proposed in the said Show Cause Notice and the amount declared by the petitioner in Form SVLDRS-1 on 25.12.2019.

Held: The variance in the amount is only Rs.1,93,440/- - Thus, there is quantification by the petitioner based on the audit that was conducted which has culminated in the issuance of Show Cause Notice No.84/2019-ST dated 08.11.2019 - Therefore, the petitioner is entitled for relief under the Scheme - Petitioner undertakes to pay the balance amount together with interest - These writ petitions are allowed - Designated Authority or the authority nominated after the Scheme came to an end is directed to issue Form SVLDRS-3 and Form SVLDRS-4: High Court [para 36, 37, 39]

- Petitions allowed: MADRAS HIGH COURT

2023-TIOL-1633-HC-MAD-GST

Sundar Prabhu Deva Vs State Tax Officer (ST)

GST - Petitioner submits that though the show cause notice, dated 04.03.2023, was alleged to have been issued, the same was not served directly to the petitioner by any other modes of communications such as Post, e-mail, etc. but, was only uploaded in the online Portal; that, therefore, the impugned order is liable to be set aside as the same suffers from violation of principles of natural justice.

Held : On perusal of the show cause notice dated 04.03.2023, which has culminated in the impugned order, dated 01.06.2023, it is seen that in first sentence of last para, the respondent-Department has called forth reply/objections from the petitioner within 30 days and in the very same para, particularly, in three lines above, the petitioner has been asked to appear for personal hearing on 17.03.2023, which itself is much prior to the date fixed for filing reply, which per se would show that the real intention of the respondent-Department is not to provide fair opportunity to the petitioner to defend their case, but, only to put the petitioner in peril - Opportunities alleged to have been granted to the petitioner are not the real ones, but were the opportunities provided at nominal level and the same cannot be construed as fair opportunities - Impugned order dated 01.06.2023 is set aside and the matter is remanded to the first respondent/State Tax Officer for re-consideration - Bank account attachment order is also set aside - Petition allowed: [para 8, 8.1, 9]

- Petition allowed: MADRAS HIGH COURT

2023-TIOL-1050-CESTAT-MUM

JH-Welltec Machines India Pvt Ltd Vs CC

Cus - Appellant is engaged in the manufacture of Plastic Injection Moulded Machines (PIMM) and is duly registered with the Central Excise department - For the purpose of manufacture/assembly of the PIMM, the appellant had imported various parts from M/s Welltec Machinery Ltd., China - Revenue had alleged that the appellant had imported such goods from M/s Welltec Machinery Ltd., China in the guise of " parts and components " with the sole intention to evade anti-dumping duty leviable on import of all kinds of plastic processing or injection moulding machines as per notification dated 12.05.2009, as amended.

Held : In the case in hand, the imported goods were not presented by the appellant in un-assembled condition as alleged by the department for the purposes of convenience of packing or handling or transportation - Rather, the post importation activities do not merely involve assembly of the imported goods, but involved procurement of the essential components/parts for ultimate manufacture of Plastic Injection Moulded Machines (PIMM) in India, the facts of which have also been endorsed by the Chartered Engineers in their respective certificates - The process involved for completion of the manufactured goods since, have taken place post importation of the goods in question, the provisions of Rule 2(a) of GIR shall not be applicable for change in classification of the imported goods and to bring such goods under the purview of Rule 9A ibid, for the purpose of levy of ADD thereon - Impugned order has mainly relied upon the e-mail correspondences and skype conversations made between the appellants and the representatives of the overseas supplier/entities but the subject matter of discussions therein was principally confined to the area of development of manufacturing facility of the product in India etc. - Further, nowhere in such retrieved documents/records, there is any whisper regarding importation of the complete PIMM machine - Thus, Bench is of the view that blind reliance cannot be placed on such documents to conclude that the appellants had imported the complete machine for the purpose of levy of ADD - Held, therefore, that the appellants herein had not imported the complete PIMM in order to fall within the purview of the notification(s) referred supra for levy of Anti-dumping duty (ADD) - Therefore, the adjudged demands confirmed in the impugned order cannot be sustained for judicial scrutiny - Further, it is not the case of Revenue that the appellants did not pay central excise duty on the PIMM manufactured by them in their factory located in Ahmedabad - Since, manufacturing activity undertaken by the appellants and payment of Central Excise duty on such activity was acknowledged and not disputed by the jurisdictional Central Excise authorities, the same cannot be questioned by the Customs department without any clinching evidence that such machine in question was imported into India as such or in un-assembled condition, and no further activities were undertaken thereto to complete the process of manufacture and installation etc. - No merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellants - Therefore, by setting aside the impugned order, the appeals (excepting Appeal No. C/85991/2017) are allowed in favour of the appellants: CESTAT [para 12.6, 13, 14, 15]

- Appeals allowed: MUMBAI CESTAT

2023-TIOL-1044-CESTAT-AHM

Hitachi Life And Solution India Ltd Vs CCE & ST

CX - The issue relates to unjust enrichment, appellant during period 10.05.2012 to 14.05.2012 claimed having paid Excise Duty, sought refund from department as abatement percentage permitted on their product under Notfn 26/2012 was varied from 25% to 35% - The appellant have contended that consequent upon abatement being varied vide Notification, they could not clear goods from factory by claiming higher abatement due to oversight and goods were cleared by them to their depot and not to ultimate consumer as on date of filing refund which inter alia , was rejected on ground of unjust-enrichment and lack of sufficient evidence - They claimed that they have not varied price as was prevailing prior to abatement percentage having been raised by aforesaid notification and therefore the duty in effect was not extra charged from customers - They have also sought to place reliance on C.A certificate - There is nothing on record from the party as to what happened beyond depot and whether apart from itself, all retailers and wholesaler paid higher tax which was the component of higher abatement or whether consumer was less charged by reducing M.R.P, by way of a discount - Since the fixing of MRP has repercussions even under legislations like Legal Metrology Act and change of such MRP once goods are cleared from end of manufacture, is not easy to change - Therefore, it cannot be agreed upon as mentioned by appellant on the basis of evidence made available that they having cleared the goods did not charge the price as per abatement claimed by them from ultimate consumer and also that excess abatement was only on account of excess excise duty, which they alone will have borne the brunt of in case of their above oversight - The onus which is upon the party as per presumption of Section 12B is therefore not discharged - However, it is desirable that department too while working out abatement as per Section 4A(3) should exhibit transparency in its working to indicate what all taxes and to what extent have been taken in to consideration or at least should liberally provide such information to concerned parties - This Court therefore finds no merit in appeal and rejects the same: CESTAT

- Appeal rejected: AHMEDABAD CESTAT

2023-TIOL-1043-CESTAT-HYD

Hyderabad Menzies Air Cargo Pvt Ltd Vs CC, CE & ST

ST - The Appellant-company is a joint venture between M/s GMR Hyderabad International Airport Pvt Ltd and M/s Menzies Aviation Cargo (Hyderabad) Ltd - The Appellant is into the business of operation and maintenance of Air cargo terminal, providing Cargo Handling services in respect of domestic as well as international cargo, transported by air through Rajiv Gandhi International Airport - The Appellant also assists the Customs Department in the clearing of cargo (international) - Based on the intelligence that the Appellant was evading service tax on the services rendered for export cargo by mis-classifying it under 'Cargo Handling Services' (CHS) instead of (i) 'Airport Services' (APS) and(ii) 'Storage and Warehousing Services' (SWS), certain details were called for by the Department - After receiving a list of details of activities of the Appellant and on further enquiry, the Department felt that various services provided by the Appellant were partly falling under SWS and partly under APS and not under CHS, as claimed by them - In view of the same, SCN dated 02.04.2012 was issued demanding service tax under APS and SWS - The Adjudicating Authority, after going through detailed submissions made by the Appellants, came to the conclusion that activities and services rendered by the Appellants were not in the nature of CHS, rather these were in the nature of APS and SWS - Accordingly, the classification proposed in the SCN was held to be appropriate, and entire demand was confirmed with interest and equal penalty under Sec 78 of the Finance Act, 1994 was also imposed - The present appeal was filed to challenge the vires of this Order-in-Original. Held - It is held that two services being screening of cargo through X-ray machines and build-up of cargo in pallets for loading on Aircraft, by ground handling company also fall both under the Cargo Handling service as well as under Airport service - However, by virtue of provisions of Sec 65A, giving the guidance as to classification, as Sec 65(23) occurring earlier than sub-clause (zzm) of Sec 65(105), it is held that these services shall also be classifiable under Cargo Handling service - Accordingly, in view of our findings and observations, there is merit in the Appeal of Appellant/Assessee and accordingly, we allow the Appeal and set aside the Impugned Order - All penalties also stand set aside - As the appeal is allowed on merits, the ground of limitation is left open: CESTAT + Operation and maintenance agreement, entered into between GHIAL and Menzies and Cadence Cargo Pvt Ltd, clearly provides for operation and maintenance of 'cargo terminal'. This requirement, inter alia, requires them to undertake various activities relating to cargo and mail handling, equipment for handling of cargo and providing handling services for cargo. They are also required to prepare customs documentation, customs clearance, place cargo under customs control, present cargo for physical examination. They are also required to handle documentation as well as physical handling of outbound and inbound cargo. The outbound and inbound cargo handling, inter alia, requires accepting of cargo, tally and assembly for dispatch of cargo, preparation of cargo, etc. Therefore, in view of the charges leveled under SCN and upheld by the Order of the Original Authority, as also the submissions made by both the sides, it is apparent that activities from S.No.1-7 would be in relation to handling of cargo in the cargo terminal, for which the services are being provided to exporter/freight forwarder/agent in relation to export-bound cargo; (P 18) + Further, Firstly, Some of the activities like short term storage due to a specific condition, Customs examination, documentation, etc., are the activities which are incidental to their main activity of handling of cargo. The main activity, by virtue of just charging and naming the charges as 'terminal charges' cannot become SWS, in view of the fact that the terminal where the export cargo is stored is not meant principally for storage and warehousing, rather for processing of cargo before it is loaded on aircraft for export. In fact there are specific storage and warehouse facility, either public or private, under customs provisions itself, which can be inside cargo terminal or outside, where the goods can be stored subject to certain condition(s). In this case it has not been alleged that they are operating any such warehouse. Therefore, the activities being provided by the Appellant for a consideration, both in the name of terminal charges as well as demurrage charges, would be covered within the scope of CHS. The scope of rival service i.e., SWS would not be an appropriate classification as contended by the Revenue; (P 19) + In view of the analysis of their actual activities and the scope of the said services, the Revenue has primarily relied on notification issued by Airport Authority of India dated 13.06.2003, wherein, they have explained the meaning of 'terminal storage and processing charges'. Merely by resorting to what they felt and what they were recovering as 'Terminal storage charges' would not make this Appellant also a warehouse keeper. The scope of the service has to be determined in terms of express wordings of that classification in Finance Act & Rules, and not in terms of nomenclature used for collecting the revenue for the services provided to the service recipients, in this case, exporter/freight forwarder/agent. In fact, the same notification also indicates that charges can be collected by the authority or any authorized cargo handling agency for various services (emphasis supplied). This precisely supports the contention that the activity being performed by the Appellant is that of 'Cargo Handling Agency' for which they are collecting certain charges in the name of terminal storage processing charges. Therefore, Commissioner was not correct in holding the activities as covered from (S.No.1-7) under SWS; (P 20) + Another aspect which is relevant is that in any cargo or freight terminal, where goods are received and processed for export, the area in which this is required to be done is called Customs area, notified by Revenue. Within the customs area all the activities of loading, unloading, storage, examination, etc., being done by authorized person only, known as customs cargo service provider (CCSP). These activities are regulated by Customs Area Regulations 2009. A plain reading will also suggest that cargo handling activities are performed before the cargo is exported. Thus such activities are in the nature of handling of cargo only; (P 21) + In so far as the activities relating to S.No.8 & 9, it is observed that these are required for safe passage of export cargo in the Aircraft. These are required to be done in terms of certain mandatory requirements and on specific request from Airlines for safe and easy movement of cargo and its loading and unloading in the Aircraft. These two activities are neither charged to the customers using the terminals, nor are these directly related to the activities concerning CHS. Here, the amount is being collected from the Airlines to whom specific services are being provided as per their requirement. The scope of APS as it existed even prior to its amendment in 2010, includes services provided to Airlines as well as for cargo and passenger baggage handling such as security, transit facilities, landing charges, parking charges etc. It is an admitted fact that services are provided to the Airlines on their specific request and not at the behest of the exporter/freight forwarder/agent. Therefore, these services appear to be classifiable under the category of APS; (P 22) + However, we find that prior to 01.07.2010, when proviso was added to Sec 65(105)(zzm), Airport service is read as - service provided to any person, by Airport authority or by any other person, in any airport or civil enclave. Further, prior to 01.07.2010, we find that Cargo Handling service as defined under Sec 65(23) of the Finance Act includes also activities like loading, packing in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport, and cargo handling service incidental to freight, but does not include handling of Export cargo or passenger baggage or mere transportation of goods. We find that the activities as aforementioned in S.No. 8 & 9 are also squarely covered under the definition of Cargo Handling service; (P23)

- Appeal allowed: HYDERABAD CESTAT

2023-TIOL-1042-CESTAT-AHM

Durga Link Logistics Pvt Ltd Vs CC

Cus - Based on an intelligence input, goods covered under Shipping Bills filed by one M/s Batra Enterprises were examined by the SIIB Department at ICD Tughlakabad Port - The bills had been filed through the Appellant, being a Customs Broker - The procedure followed in this case was that the Appellant (Customs Broker) would file Shipping Bills online through the Indian Customs EDI System, along with supporting documents such as invoice, packing list on the portal (e-Sanchit) and copies of these documents would be filed at Customs House - The scanned copies of the documents filed on e-Sanchit aid the officers in processing the shipping bill quickly without having to refer to the physical copies in the docket - It was the Department's case that the Appellant allowed the freight forwarder to use the Appellant's credentials to file the documents on behalf of the Appellants, and that the freight forwarder uploaded documents stating inflated qualities of pan masala when the actual documents filed in the docket shared lower quantities - The Revenue alleged that this manipulation was carried out for claiming excess refund of IGST - Difference was observed in the amount declared from the weight and amount in the packing list - Those investigations were received in the Office of Commissioner of Customs (Airport & General), New Delhi through Assistant Commissioner of Customs (SIIB), ICD-Tughlakabad (Exports) - Later a copy of Order-in-Original No. 59/2021 dated 26.10.2021 in the matter was also received - Based upon the observations/findings therein and the statement of Director of appellant dated 02.07.2021 acknowledging them to be responsible for any mistake committed by Shri Pran Shanker Jha who had filed the impugned shipping bills that the Show Cause Notice No. 04/2022 dated 19.01.2022 was served upon the Appellant - It was alleged that the Appellant by non-filing of shipping bills of the exporter, by not checking the correctness of information i.e. the mis-declaration of weight of pan masala in all three of the shipping bills, being the custodian of file has neglected its duties by non-uploading the proper documents, has failed to discharge his duties as customs broker - He was alleged to have contravened Regulation 10(a), 10(b), 10(d), 10(e), 10(j), 10(k) and 10(q) of Customs Brokers Licensing Regulations, 2018 (herein after referred as CBLR, 2018) - Accordingly, the license of the Appellant with the validity till 31.03.2031, was proposed to be revoked and the penalty was proposed to be imposed - The said proposal has been confirmed vide the order under challenge. Held - It is observed that the correct invoice/packing list was not uploaded on e-sanchit by the CB but by the freight forwarder who the CB allowed to use his credentials - He could not satisfactorily answer about the change in the invoice, the violation has been confirmed - It is observed that there is nothing on record to show that the Appellant refused access to or concealed or removed or destroyed the whole or any part of the documents related to impugned shipping bills - There is sufficient evidence on record to show that G-Card holder of the Appellant had deposited the docket file to the scanning Department of the export shed who otherwise is the custodian of the said docket file and not the customs broker as has wrongly been alleged - Neither the G-Card Holder nor the FCard holder of Appellant were aware about having different packing list in the file retained in the office of the Appellant than the one as was sent to export shed as docket file. There is no allegation in the show cause notice that up to date records were not being maintained by the Appellant. - With respect to his cooperation with the customs authority, it is coming apparent that he only ensured the presence of Mr. Saurabh Batra, the partner of the exporter, their employee including Ms. Aakansha Mishra and the freight forwarder i.e. Shri Pran Shanker Jha. He got his authorized representatives Mr. Prasanta Kumar Samanta, the F-Card holder and Mr. Om Prakash Kashyap, the G Card holder examined not once but on several occasions, Hence we find that violation of regulation 10(j), 10(k) and 10(q) has wrongly been confirmed - Therefore, the charge of contravention of Regulations 10(d), 10(j), 10(k) and 10(q) of CBLR, 2018, does not stand - However, the charge of contravention of Regulations 10(a), 10(b) and 10(e) is sustained - These violations are observed to be the consequence of negligence on part of the Appellant custom broker - Depriving him of his livelihood is held to be disproportionate in the light of given findings - Hence, we are of the opinion that ends of justice would be met if the order of forfeiting security deposit and imposing penalty is upheld and as far as the order of revocation of license is concerned, the same be set aside: CESTAT + We observe that violation of this regulation has been confirmed based on the fact that two set of invoices were found. One in the records with the appellant and another in the docket file with the customs house. But appellant did not make any effort to find out the reason for issuance of different set of invoices for the same shipment. We observe that the appellant has submitted that shipping bills were filed as per the invoice cum packing list provided by the exporter. The mistake has already been acknowledged by the exporter to be a clerical mistake at the end of his Accountant namely, Ms. Aakansha Mishra. The same cannot be attributed to the appellant. We hold that these submissions are insufficient to justify the two packing lists for the same shipment. Irrespective the appellant had no mens rea to support the exporter for availing inadmissible export incentive but the fact remains is that once there cannot be two different documents as that of packing list with different description of the goods, it was the incumbent duty of the customs house agent to diligently check the veracity about the same. There is nothing on record about any such exercise of due diligence by the appellant. Hence, we do not find any infirmity with the violation of 10(e) has been confirmed against the appellant.

- Appeal partly allowed: AHMEDABAD CESTAT