Judgments
Customs, Excise and Service Tax Appellate Tribunal
International Flavours And Fragrances India Pvt. Ltd. vs. Commissioner of GST & Central Excise
MANU/CC/0030/2024
31.01.2024
Service Tax
TDS deposited to IT Department in relation to the payment made to foreign service provider over and above invoice value of services, is not liable to service tax
The Appellant has imported services like testing, auditing, consultancy etc. from outside India against a consideration. Show Cause Notice was issued demanding differential service tax on the TDS paid by them to the Income Tax Department over and above the bill amount. The notice was adjudicated and the demand raised was confirmed by the adjudicating authority. On appeal, Commissioner (Appeals) upheld the same. Against the order impugned, the appellant has filed the present appeal.
The Appellant has imported services from the foreign service provider and paid the consideration as indicated in the invoice. No TDS has been deducted by them from the invoice value. The TDS paid by them was to comply with the provisions of the Income Tax Act. The Appellant submits that, service tax was paid on the gross value as per section 67 without making any deductions towards the "withholding of tax". The amount would not be part of the consideration for the taxable services received by them as per Section 67(1)(a) of the Finance Act, 1994. Accordingly, service tax is not payable on the TDS paid by the appellant on behalf of the foreign service provider.
The issue is no longer 'res integra' as the same issue has already been decided by the Tribunal in the case of Adani Bunkering Pvt. Ltd. Vs. CCE, Ahmedabad wherein the Tribunal has held that, TDS deposited to the Income Tax Department in relation to the payment made to the foreign service provider over and above the invoice value of the services, is not liable to service tax.
The decision cited above is squarely applicable to the present case on hand. By following the ratio of the decision, present Tribunal hold that, the Appellant is not liable to pay service tax on the TDS paid by them on behalf of the foreign service provider. Accordingly, the demand confirmed in the impugned order is not sustainable and set aside the same. The impugned order is set aside. Appeal allowed.
Tags : Demand Confirmation Legality
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High Court of Bombay
SOFT AID Computer Pvt. Ltd. Vs. Amol Narayan Shinde (Neutral Citation: 2024:BHC-AS:4378)
MANU/MH/0525/2024
30.01.2024
Labour and Industrial
An employee has right to withdraw resignation not only before its acceptance but also before the date of actual relieving
The Petitioner-Employer has filed present petition challenging the Judgment and Order passed by the Industrial Court, reversing the decision of the Labour Court and allowing the complaint filed by the Respondent-employee. The Industrial Court has directed the Petitioner to pay lumpsum compensation of Rs. 4,00,000 to the Respondent in lieu of his reinstatement.
Contents of Petitioner’s reply dated 27 September 2019 belie the theory of acceptance of resignation on 4 September 2019. On the contrary, Petitioner took a stand in the reply that Respondent was to be relieved from services from 30 September 2019. However, no communication is brought on record to demonstrate that Respondent was given intimation about acceptance of his resignation or about his proposed relieving from 30 September 2019. The conclusion reached by the Industrial Court about non-acceptance of resignation on 4 September 2019 cannot be seriously flawed.
It is settled law that an employee has right to withdraw resignation not only before its acceptance but also before the date of actual relieving. In the present case, Respondent has expressed willingness to resume duties by not only denying tendering of any resignation but also by stating that "you may handover the signed blank papers to my client". Therefore, no serious error can be traced in the order of the Industrial Court in holding that the resignation was withdrawn.
In ordinary course, after holding that the resignation was partially withdrawn, the Industrial Court could have directed reinstatement with full backwages. However, considering the peculiar facts and circumstances of the case and particularly the unsavory relationship between the parties, the Industrial Court has directed payment of lumpsum compensation of Rs. 4,00,000 in lieu of reinstatement. If the relief of backwages was to be granted in favour of the Respondent, the same would have been much higher than the amount of compensation awarded by the Industrial Court. In that view of the matter, no case is made out for interference by this Court in exercise of jurisdiction under Article 227 of the Constitution of India. The Judgment and Order passed by the Industrial Court to be unexceptionable. Petition dismissed.
Tags : Compensation Direction Legality
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High Court of Delhi
Kanta Goel Vs. Atul Gupta (Neutral Citation: 2024: DHC:617)
MANU/DE/0609/2024
30.01.2024
Banking
Witnesses cannot be allowed to be recalled in a routine manner merely on basis that cross-examination was not properly conducted
In facts of present case, the complainant/Petitioner had filed a complaint against the accused/respondent under Section 138 and 142 of the Negotiable Instruments Act, 1881 for returning of cheque dated 25th March, 2013 for a sum of Rs. 15,10,000 for the reason 'Funds Insufficient' vide return memo.
Vide impugned Order, Respondent/accused moved an application under Section 311 of Cr.P.C for recalling of CW-1 (Petitioner) as CW -1 was not sufficiently cross examined with respect to her source of income and financial capacity to extend the loan in question and the Trial Court allowed the said application while observing that though an application under Section 311 of Cr.P.C cannot be filed for filling the lacunas in the case of any of the parties, however, in the present case the cross examination of the complainant is essential for fair adjudication of the present case. Thereafter, the Petitioner filed Criminal Revision against the order and vide impugned Order, the same was dismissed with the observation that recalling of complainant for her recross-examination is essential for the just and proper adjudication this case.
From an overview of the material on record, it is borne out that sufficient opportunity to cross-examine CW-1 was available to the respondent and the same has also been availed by him thrice. The cross-examination of CW-1 stood concluded way back in 2019 but it is only on 20th July, 2022 that the Respondent moved the application under Section 311 of Cr.P.C. for recalling of CW-1 which was after a delay of more than two years and ten months of the cross- examinations.
As far as the contention of the Respondent that, the Petitioner/complainant (CW-1) was not sufficiently and properly cross- examined, on earlier occasions by the previous counsel does not cut much ice as the Supreme Court has time and again cautioned that witnesses cannot be allowed to be recalled in a routine manner merely on the ground that the cross-examination was not properly conducted.
Furthermore, as far as the contention of Respondent that the defence evidence is still to be led and therefore, he may be granted permission to place on record the cross-examination of the complainant in the complaint case, no such permission or liberty is required to be granted as the Respondent can certainly take appropriate steps as per law to place on record the cross examination of the Petitioner done in the Civil Court in the Civil Suit.The impugned order passed by trial Court are set aside. Petition disposed off.
Tags : Witness Recall Legality
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Customs, Excise and Service Tax Appellate Tribunal
K N International Ltd. Vs. Commissioner of Central Excise, Customs& Service Tax
MANU/CN/0017/2024
30.01.2024
Service Tax
Mere failure to pay duty without any collusion, fraud or willful misstatement not sufficient to invoke extended period of limitation
The facts of the case are that the Appellant was engaged by Steel Works Construction Limited (HSCL) and Baghel Infrastructure Private Limited, Reliance Infrastructure Limited, SASAN & HINDALCO etc. for construction related services / works contract services in relation to construction of road, reservoir etc. The Revenue on specific information, undertook scrutiny of records of the Appellant and found short payment of service tax on comparison of amount shown in their ST-3 returns with that in Profit & Loss Account in the respective period from 2009-10 to 2012-13. The Revenue, therefore, demanded service tax of Rs.3,43,97,544 on differential value for the period from 2009-10 to 2012-13. The Appellant contested the Show-Cause-Notice but the demand proposed in the Show-Cause-Notice was confirmed. Being aggrieved, the Appellant has filed the present appeal before the Tribunal.
As regards liability of tax payment by the Appellant where their main contractors have already paid the tax on their behalf, present Tribunal find that, this remained a vexed issue for the assesses for over the period of time. Hence, this was a legal dispute which involved interpretation of law and mala-fide intention or suppression with intent to evade payment of service tax cannot be attributed to the Appellant.
As regards the issue of applicability of extended period of limitation, the Appellant have been regularly filing their ST-3 returns and their records have been regularly audited by the Audit Wing of the Department and they have been complying with audit objection. They have also submitted audit reports and compliance thereof. Further, Adjudicating Authority has not made any observation as to how suppression of facts is invokable when regular Audit of records have been conducted by the Revenue.
The Hon'ble Supreme Court has laid down guidelines for invoking extended period of limitation. The Court has observed that, extended period of 5 years is not invokable, when there is no willful misstatement or suppression involved. Mere failure to pay duty without any collusion, fraud or willful misstatement not sufficient to invoke extended period of limitation.
Further the various Benches of the Tribunal in number of cases from time to time have been unanimous in their findings that Revenue should not invoke extended period of limitation when records of assessee have been audited by the Department. Thus, matter was in the knowledge of the department in 2010 when the first audit was conducted and thereafter regular audit was conducted every year, but the show-cause-notice was issued in 16th October, 2014 without carrying out any investigation and without adducing any new corroborative evidence for invoking any suppression in the show-cause-notice as service tax was also demanded on the exempted services valued at Rs.11,67,04,375 pertaining to construction of PMGSY roads.
The impugned order holding that the extended period has been correctly invoked, therefore, cannot be sustained and is set aside. Appeal allowed.
Tags : SCN Demand Confirmation
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National Company Law Tribunal
A K Trading Co Pvt. Ltd & Ors vs. Sumit Shukla & Ors
MANU/NL/0072/2024
30.01.2024
Insolvency
Operational Creditor cannot claim parity with Financial Creditors
Present Appeal has been filed against the order passed by the Adjudicating Authority (National Company Law Tribunal) by which order the Adjudicating Authority has allowed application approving the Resolution Plan. The Appellant, an Operational Creditor aggrieved by the plan approval order has come up in present Appeal.
The Appellant submits that, there is a disparity in the payment to the Financial Creditors as well as to the Operational Creditors. Financial Creditors have been paid 13.9% whereas Operational Creditors have been paid only 4.7%. It is submitted that the Operational Creditors who have supplied goods to the Corporate Debtor were entitled payment which is just and equitable.
It has been laid down by the Hon'ble Supreme Court in "Committee of Creditors of Essar Steels India Ltd. vs. Satish Kumar Gupta" that there cannot be parity of payment with regard to different categories of stakeholders. The Appellant who is an Operational Creditor cannot claim parity with Financial Creditors. Even under Section 53 of the IBC, the payments are provided in different ladders and priorities. The amount or percentage to the Operational Creditors cannot be claim to be of the same amount or percentage which has been paid to the Financial Creditors.
The ground on which the Appellant sought to question the order impugned is unsustainable. Insofar as the submission of the Appellant that some Operational Creditors have not received the payment as per the plan, it is always open for the Appellant to approach the Resolution Professional for payments, if the same has not yet been made. Appeal dismissed.
Tags : Resolution plan Approval Legality
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Supreme Court
Ajitsinh Chehuji Rathod vs. State of Gujarat and Ors. (Neutral Citation: 2024 INSC 63)
MANU/SC/0065/2024
29.01.2024
Criminal
Power to record additional evidence under Section 391 of CrPC should only be exercised, when the party making such request is diligent
The instant appeal by special leave filed at the behest of the Appellant accused calls into question the order passed by the High Court rejecting the Application preferred by the Appellant under Section 482 read with Section 391 of the Code of Criminal Procedure, 1973(‘CrPC’).
Power to record additional evidence under Section 391 of CrPC should only be exercised, when the party making such request was prevented from presenting the evidence in the trial despite due diligence being exercised or that the facts giving rise to such prayer came to light at a later stage during pendency of the appeal and that non- recording of such evidence may lead to failure of justice.
Section 118 sub-clause (e) of the Negotiable Instruments Act, 1881 (NI Act) provides a clear presumption regarding endorsements made on the negotiable instrument being in order in which they appear thereupon. Thus, the presumption of the endorsements on the cheque being genuine operates in favour of the holder in due course of the cheque in question which would be the complainant herein. In case, the accused intends to rebut such presumption, he would be required to lead evidence to this effect.
Despite having opportunity, the accused Appellant did not put any question to the bank official examined in defence for establishing his plea of purported mismatch of signature on the cheque in question and hence, present Court is of the firm opinion that the appellate Court was not required to come to the aid and assistance of the appellant for collecting defence evidence at his behest. The presumptions under the NI Act albeit rebuttable operate in favour of the complainant. Hence, it is for the accused to rebut such presumptions by leading appropriate defence evidence and the Court cannot be expected to assist the accused to collect evidence on his behalf.
The Appellant had sought for comparison of the signature as appearing on the cheque through the handwriting expert by filing an application before the trial Court which rejected the same order dated 13th June, 2019. The said order was never challenged and had thus attained finality.
So far as the allegation of the accused appellant that he did not receive the notice under Section 138 of the NI Act is concerned, it would be for the appellate Court while deciding the appeal to examine such issue based on the evidence available on record and thus, there was no requirement for the appellate Court to have exercised power under Section 391 of CrPC for summoning the official from the Post Office and had rightly rejected the application under Section 391 of CrPC. There is no infirmity in the impugned orders warranting interference. Appeal dismissed.
Tags : Provision Applicability Additional evidence
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