Recent Case Laws

2018-TIOL-2713-HC-MUM-IT

Pr.CIT Vs Tulip Hospitality Service Ltd
Whether the High Court should entertain an appeal arising from the findings of facts - NO: HC

- Appeals Dismissed : BOMBAY HIGH COURT

2018-TIOL-2712-HC-MAD-IT

MRL Postnet Pvt Ltd Vs Pr.CIT
Whether an order transferring a case of assessment without giving reasons and considering the
objections of the assessee is to be construed as a non-speaking order - YES: HC

- Assessee Petition Allowed : MADRAS HIGH COURT

2018-TIOL-2711-HC-KOL-IT

CIT Vs Sahara India Mutual Benefit Co Ltd
Whether the AO is justified in re-opening the assessment on the grounds discovered in the subsequent assessment - NO: HC

- Revenue Appeal Dismissed : CALCUTTA HIGH COURT

2018-TIOL-2519-ITAT-CHD + Case Story

Preet Land Promoters and Developers Pvt Ltd Vs Pr.CIT
Whether power of revision u/s 263 can be exercised only where no inquiry on matter is done and it is not open to enquire in cases of inadequate inquiry - YES: ITAT

Whether revisional power can be exercised by CIT where AO has wrongly presumed without any basic enquiry that the details filed by assessee are correct - YES : ITAT

- Assessee's appeal partly allowed : CHANDIGARH ITAT
2018-TIOL-2518-ITAT-DEL

Shri Rani Sati Mangaliwala Trust Society Vs CIT
Whether a society established for charitable purposes would lose its character as such merely because some business group or directors in a company, happen to be members of such society - NO: ITAT

Whether such fact can be made grounds to deny registration u/s 12AA to such a society - NO: ITAT

- Assessee's appeal allowed : DELHI ITAT

2018-TIOL-2517-ITAT-DEL

Sharp Mint Ltd Vs DCIT
Whether when no evidence being found during the search process and no remote nexus to determine the claim u/s 80HHC, then the AO has no jurisdiction to revisit the claim in re-assessment u/s 153A - YES: ITAT

- Assessee's appeals partly allowed : DELHI ITAT






INDIRECT TAX




SERVICE TAX

2018-TIOL-3911-CESTAT-HYD

CCE & CC Vs Globe Constructions
ST - SCN was issued to assessee demanding service tax under category of Commercial or Industrial Construction Services on the ground that they had not included the value of free supply of material while arriving at the gross value charged for services rendered and that the assessee is not eligible for abatement of Notfn 01/2006 - Demand confirmed along with interest and also imposed penalties - The First Appellate Authority has arrived at the correct conclusion as to set aside the O-I-A challenged before him - The issue of inclusion of cost of free supply of goods in gross value is decided by Larger Bench of Tribunal in case of Bhayana Builders Pvt. Ltd. holding that cost of free supply of the goods should not be included for discharging the tax liability - Aggrieved by such an order, Revenue Authorities preferred civil appeals in Apex Court and their Lordships in case of Bhayana Builders Pvt. Ltd. 2018-TIOL-66-SC-ST upheld the Tribunals reasoning - It can be seen from relevant paragraphs that the issue is squarely settled in favour of assessee - Accordingly, the impugned order is correct, legal and does not require any interference: CESTAT

- Appeal rejected : HYDERABAD CESTAT

2018-TIOL-3910-CESTAT-MAD

Tuticorin Port Trust Vs CGST & CE
ST - The assessee leased out lands to M/s. NLC Tamilnadu Power Ltd. for setting up for coal based Thermal Power Plant at Tuticorin and collected lease rent for the entire period in advance - They had not paid service tax for leasing the said vacant land - Department was of the view that vacant land being an immovable property would fall within the ambit of renting of immovable property service - SCN was issued proposing to demand service tax on the rent collected along with interest and also for imposing penalties - This issue stands already settled in favour of assessee by Allahabad High Court in Greater Noida Development Authority wherein it was held that in view of exclusion of vacant land from ambit of immovable property prior to 01.07.2010, it cannot be said to be merely clarificatory and retrospective from 01.06.2007 - Further reliance is placed on decision of Delhi Tribunal in New Okhla Industrial Development Authority 2014-TIOL-67-CESTAT-DEL wherein it is held that renting of vacant land is not taxable prior to amendment with effect from 01.07.2010 - Further, the High Court of Allahabad in the case of Greater Noida Development Authority had also held that there is no liability to pay service tax prior to 1.7.2010 for renting of vacant land - Following the decisions, demand cannot sustain: CESTAT

- Appeal allowed : CHENNAI CESTAT







CENTRAL EXCISE

2018-TIOL-3908-CESTAT-DEL

Navin Fluorine International Ltd Vs CCE
CX - The assessee, a 100% EOU is procuring their inputs as also capital goods from indigenous manufacturers against CT-3 certificates without payment of duty - However, in some cases, they are procuring the said goods from suppliers on payment of duty and availed the credit of duty paid by suppliers - The dispute relates to availment of credit of said duty - An identical issue was considered by Tribunal in case of M/s Teva API India Pvt. Limited 2018-TIOL-1552-CESTAT-DEL dealing with identical objections raised by Revenue - The Tribunal held that once the duty has been paid by the manufacturer and the goods have been received by 100% EOU, he is entitled to credit of the same - The DGFT policy circular relied by Revenue has got no connection with the availment of credit and cannot be considered to be a bar in availing the same - As such, by relying upon various precedent decisions, the Tribunal held in favour of the assessee - Following the said decision, assessee is entitled to Cenvat credit of duty paid by manufacturer supplier - Accordingly, the demand is set aside along with setting aside of penalty.

Credit in respect of service tax paid by assessee's head office, which is also registered as ISD, stands denied on the ground that such service tax was paid by head office, on reverse charge basis, in terms of provisions of VCES, 2013 - The assessee made a declaration in respect of dues not paid by him during the period July 2009 to March 2012 - As such the service tax, which was required to be paid by head office from July 2009 to March 2012, was not being paid and was ultimately, by taking the benefit of the said scheme, was declared on 30.12.2013 - Inasmuch as Cenvat Credit Rules, 2004 prohibits allowing of credit in case the tax stands paid under suppression or misstatement on the part of the tax payer - The facts clearly leads to the conclusion that tax was not being paid during the relevant period and as such it can be concluded that there was suppression or mis-statement on the part of the assessee, thus leading to non-availability of credit to them - The assessee is entitled to credit and the demand along with penalty is set aside - However the denial of credit of Rs. 21,68,285/- is upheld - As regards penalty in respect of the said demand, the credit was availed by reflecting the same in the Cenvat credit accounts and the issue being a bona fide issue of interpretation of law, no mala fide can be attributed to the assessee, in which case no penalty is imposable - Accordingly, while upholding the confirmation of the said demand along with confirmation of interest, the penalty imposed on the said count is set aside: CESTAT

- Appeal disposed of : DELHI CESTAT

2018-TIOL-3907-CESTAT-HYD

Blue Seas Papers Pvt Ltd Vs CCE, C & ST
CX - The assessee company manufactured Coated paper of three types, namely Coated Front, Coated Back & Coated front and back sides - The issue at hand is whether such paper is classifiable under Central Excise Tariff head 4809 2000 as self-copying paper or under Tariff Heading 4810 as paper coated with kaolin or other organic substances - While the assessee initially classified it under CETH 4809, it later adopted CETH 4810, being a more specific heading - The Revenue did not accept such classification & raised demand for differential amount of duty, with interest u/s 11AB & penalty u/r 25 r/w Section 11AC - On appeal, the Commr.(A) sustained such findings - Held - The Commr.(A) should not have relied on the General Explanatory Notes to the HSN & classification must be decided based on CETH 4809 & 4810 - In the present case, the paper is not printed & is sold in rolls or sheets - Besides, the essential features of self-copy papers are present in this paper in the form it is removed from the factory gate - Merely because it is not printed or the papers are not made in appropriate sets, the product does not cease to be self copy papers - Hence CETH 4809 is a more specific entry for the product in question & the Revenue's classification is correct - However, it must also be noted that there is sufficient ground for the assessee to have felt that the product is classifiable under CETH 4810 - Since the issue pertains to classification, no mala fide intent to evade payment of duty - Hence the penalty merits being set aside: CESTAT (Para 1,6)

- Assessee's appeal partly allowed : HYDERABAD CESTAT

2018-TIOL-3906-CESTAT-CHD

Eon Electrics Ltd Vs CCE
CX - The assessee is engaged in manufacture of MCB, HRC Fuse, RCCB, RCBO, DB, CFL and MCCB and had availed exemption under Notfn 50/2003-CE - There is no dispute that assessee was having a unit at plot no. 12 and were shifting the machinery to their unit at plot no. 9 from the unit at plot no. 12 - The Revenue officers visited the unit at plot no. 9 and found that assessee was clearing goods without payment of duty from there - From the statements of employees of assessee, it was concluded by Revenue that production was going on at plot no. 9 from 12.05.2004 - Accordingly, while allowing the benefit of exemption to assessee post 19.09.2004, a SCN was issued by Department demanding duty from period prior to 19.09.2004 on the ground that the assessee did not file declaration before their first clearance from new unit - Assessee is not contesting the issue of clearance of goods before 19.09.2004 from new unit and in that scenario too, non-filing of declaration will not disentitle them from availment of exemption under Notfn 50/2003-CE - The legal position with regard to acceptance of belated declaration for purpose of availing exemption under Notfn 50/2003-CE is already settled and filing of late declaration can not deprive them of the benefit of exemption in this regard especially since they have been found to be eligible for the said notification as evident from the fact that post 19.09.2004, benefit of notification is already being allowed to them by the Department - The issue of nature of declaration was also decided by Tribunal in case of M/s Forging Machinery Manufacturing Company 2017-TIOL-4388-CESTAT-CHD - In that case, the issue was examined to the context of Notfn 9/2003-CE wherein the assessee was required to file their declaration, similar in nature to the Notfn 50/2003-CE before first clearances - By following the same, belated filing of declaration will not disentitle the assessee from availment of exemption under Notfn 50/2003-CE - The intention to evade duty on the part of assessee has not been clearly established - Hence, the extended period cannot be invoked in this case: CESTAT

- Appeal allowed : CHANDIGARH CESTAT



CUSTOMS

2018-TIOL-2714-HC-KOL-CUS

CC Vs Shardha Traders

Cus - The issue in this appeal does not pertain only to valuation - The substantial question of law, which arises is; When mixed questions of law are involved and one of them involves valuation of goods, which Court is to hear the appeal - Does the High Court have the power to determine whether there is any dominant issue, involved in the appeal other than valuation and if it has the jurisdiction to decide it, decide it itself along with other issues including valuation or to hold that it does not have the jurisdiction to determine the same - When more than one issue is involved and one of them is valuation of goods, should the High Court refrain from exercising its jurisdiction over the matter - The appeal is admitted on the said substantial questions of law: HC

- Appeal admitted : CALCUTTA HIGH COURT

2018-TIOL-3917-CESTAT-MUM + Case Story

Nilkamal Ltd Vs CC

Cus - Furniture [CH 9403] is assessed to duty as 'unit' and not by weight, therefore, loading the invoice price on pro rata basis to the extent of excess weight of the furniture noticed during the physical examination is unsustainable in law - Noticing excess weight at the time of physical verification of the import by the Customs authorities, cannot, in any manner, change the transaction value disclosed in the proforma invoices, which has not been disputed by the Revenue - Impugned order set aside and appeals allowed with consequential relief: CESTAT [para 6]

- Appeals allowed : MUMBAI CESTAT

2018-TIOL-3905-CESTAT-KOL

Blackstone Overseas Pvt Ltd Vs CC
Cus - The appellant company is engaged in exporting Ferro Silicon (FeSi) - They procured FeSi from the local market or imported from Bhutan and the goods are traded in local market or exported - The DRI initiated an investigation that the appellant company availed Export incentive-DEPB Scheme and Draw Back during period 2008-09 to 2012-13, mis-declaring the same as of Indian Origin in the export documents, alleging that the exported FeSi were actually of third country origin - Appellant no. 2, one of the Director of exporting company in its statement stated that they were not aware that export incentive was not available on Bhutanese goods as those were purchased in Indian Rupees - It is further stated that as soon as they came to know that the export incentive was not available on export of goods of third country origin, they had returned the entire amount of export incentive received on FeSi as they are not sure about the country of origin of FeSi purchased from the local market - It is seen from the Adjudication Order that assessee had paid the amount against the export incentive - Consideration the fact that DGFT authorities had already imposed penalty upon the appellant, the penalty imposed on appellant company is not warranted - Further, after going through the statements and the conduct of appellant no. 2 in so far as they have returned the incentive immediately, the penalty imposed under Section 114 (iii) on the appellant no. 2 are waived: CESTAT


- Appeals disposed of : KOLKATA CESTAT