Tax
Used Rails Unfit For Reuse Classifiable As Ferrous Scrap, Not Railway Material For Customs Duty: CESTAT Chennai
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai has held that the classification of used railway rails depends on their condition and usability at the time of import, rather than simply on their original identity as railway rails.Where imported material was extensively rusted, cut, damaged and no longer fit for use as railway material, it was classifiable under Heading 7204 as ferrous waste and scrap, the tribunal ruled. Heading 7302 covers railway or tramway track...
CESTAT Mumbai Sets Aside ₹6.01 Crore Duty Demand Against Navayuga Engineering Over Helicopter Parts
On 22 September, the Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside a Rs. 6.01 crore customs duty demand against Navayuga Engineering Company Limited, holding that helicopter parts used to transport personnel for infrastructure projects qualified as “capital goods” eligible for customs duty exemption. A Bench comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban also held that Navayuga and Krishnapatnam Port Company Limited (KPCL)...
CESTAT Kolkata Sets Aside ₹42.78 Lakh Demand Against Belle Vue Clinic Over Expense Reimbursements
The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 22 September set aside the Rs. 42.78 lakh service tax demand against Belle Vue Clinic for the period October 2010 to March 2015. A Bench comprising Judicial Member R. Muralidhar and Technical Member K. Anpazhakan held that reimbursements towards proportionate common expenses could not be included in the taxable value of services before 14 May 2015, when the law was amended to specifically cover reimbursable...
CESTAT Mumbai Quashes ₹17.39 Cr. Service Tax Demand Against Navnit Motors, Says Incentives Not Taxable
The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 22 September set aside a Rs. 17.39 crore service tax demand against Navnit Motors, an authorised dealer of Maruti Suzuki, BMW and Jaguar Land Rover vehicles, on incentives, discounts and reimbursements received from vehicle manufacturers. A Bench comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban held that the receipts could not be treated as consideration for a taxable service merely...
Income Tax Act | AO Can't Demand 'Negative Evidence' Of No Appeal For Immunity From Penalty: Delhi High Court
The Delhi High Court has held that an Assessing Officer (AO) cannot require an assessee to furnish “negative evidence” to establish that no appeal has been filed against an assessment order while considering an application for immunity from penalty under Section 270AA of the Income Tax Act, 1961.The Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta made the observation while setting aside an order passed by the AO rejecting an application filed by Petitioner seeking immunity from...
Patna High Court Grants Interim Protection To Bihar Power Co. Against ₹29.23 Crore Tax Demand
The Patna High Court on 22 September temporarily protected Bihar State Power (Holding) Company Limited from coercive recovery of an income tax demand of Rs. 29.23 crore. A Division Bench comprising Justices Rajeev Ranjan Prasad and Sunil Dutta Mishra directed the Assessing Officer/Income Tax Appellate Tribunal (ITAT), as the case may be, to consider the company's application for interim protection within six weeks. Until then, no coercive recovery action can be taken against the company. The...
CESTAT Chennai Quashes Royalty Addition To CET Power Solutions' Import Value, Says Sale Nexus Needed
On 22 September, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) set aside the order adding royalty paid by CET Power Solutions India Pvt. Ltd. to its foreign collaborator to the assessable value of imported goods.A Bench comprising Technical Member Vasa Seshagiri Rao and Judicial Member Ajayan T.V. held that royalty paid to a foreign collaborator cannot be added to the assessable value of imported goods merely because the imported components are used to...
Delhi High Court Rejects Challenge To GST Rule Making Supplier Tax Payment A Condition For ITC
The Delhi High Court has rejected a challenge to the constitutional validity of Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act, 2017, which makes payment of tax by the supplier a condition for availing Input Tax Credit (ITC).The Division Bench of Justices Anil Khetarpal and Shail Jain held that the provision has already been upheld by the Supreme Court and that a recipient seeking ITC must establish, through cogent material, that the tax charged on the supply was actually...
Crane Hiring Not Sale, No MVAT If Ownership And Control Remain With Owner: Bombay High Court
The Bombay High Court has ruled that hiring out cranes does not amount to a sale for levy of Maharashtra Value Added Tax (MVAT) when ownership and effective control of the cranes remain with the owner.A Division Bench of Justice Suman Shyam and Justice Advait M. Sethna allowed an appeal filed by Sharma Heavy Lifter. It quashed the Maharashtra Sales Tax Tribunal's order holding the crane-hiring transactions liable to VAT and imposing interest and penalty.“None of the attributes, characteristics...
Patna High Court Upholds CBIC Circulars Assigning 'Proper Officer' Functions Under GST Act To Central Tax Officers
The Patna High Court has rejected a challenge to three CBIC circulars assigning “proper officer” functions to Central Tax officers under the GST law, agreeing with the Bombay High Court's reasoning on the issue.“An analysis of the Notification dated 19.06.2017 and the other two Circulars would lead this Court to agree with the views expressed by the Hon'ble Bombay High Court,” a Division Bench of Justice Rajeev Ranjan Prasad and Justice Sunil Dutta Mishra observed.“Now, in our considered...
Education Cess Refunds Settled Under Earlier Law Cannot Be Recovered Due To Later Change In Law: J&K&L High Court
The High Court of Jammu & Kashmir and Ladakh has held that refunds of Education Cess and Higher Education Cess granted under the law prevailing at the time cannot be recovered merely because the Supreme Court later overruled that position in Unicorn Industries v. Union of India.Justice Sanjeev Kumar and Justice Shahzad Azeem observed that once a subsequent judgment overrules an earlier decision on a point of law, the earlier judgment cannot be reopened or reviewed on that basis. “Once there...
Tax On Services From Foreign Providers Based On Receipt Date, Not Payment Date: CESTAT Chennai
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, has held that the rate of service tax applicable to services received from foreign service providers is determined by the date of receipt, and not the subsequent date of paymentThe later date of payment to the foreign service provider does not determine the applicable rate under the reverse charge mechanism.The bench of Judicial Member Ajayan T.V. and Technical Member Vasa Seshagiri Rao observed, “We accordingly do not...