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Case Laws
Showing 381 to 400 of 735 Records
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2009 (11) TMI 653
Closing stock on account of unutilized Modvat Credit - AO taking note of the provisions of section 145 A, came to the conclusion that the assessee had not made correct valuation of the closing stock by not including the unutilized Modvat Credit. Resultantly the said sum was added to the value of closing stock an addition was made accordingly - HELD THAT:- Section 145 A has been inserted by the Finance (No. 2) Act, 1998 with effect from 1-4-1999. As per this section value of purchase and sale of goods and inventory is to be made in accordance with the method of accounting regularly employed by the assessee and further adjusted to include the amount of tax, duty, cess etc. actually paid or incurred by the assessee to bring the goods to the place of its location and condition.
As in CIT v. Mahavir Alluminium Ltd. [2007 (11) TMI 41 - HIGH COURT OF DELHI] has held that the unutilised Modvat credit is to tie included in the value of the closing stock and at the same time for the purposes of giving effect to section 145 A, there must necessarily be made a corresponding adjustment in the value of opening stock of that year - we set aside the impugned order on this issue and restore the matter to the file of Assessing Officer for giving effect to the provisions of section 145 A in entirety and not restricting its operation to the value of closing stock alone.
Disallowance of deduction u/s 80HHC - absence of any profit available to the assessee from exports - HELD THAT:- CIT(A) was justified in rejecting the ground of the assessee on the claim of deduction under section 80HHC in the absence of any eligible profit. This ground is, therefore, not allowed.
TP Adjustment - "most appropriate method" for determining of ALP - Internal CUP method as per Revenue or the External CUP method as argued by the assessee - HELD THAT:- The price on which a particular product is available in one country may largely vary from the price prevailing in other countries due to host of factors. The country which is producer of a particular commodity or its raw material may have lower sale price in comparison with the country which is short of such natural resources. Similarly the price may vary from one country to another depending upon climatic conditions and the demand and supply factors. Thus the price charged by an Indian party from UK or Australia may be at much variance with that charged from USA. In such a scenario no valid comparison can be made between the price charged by the assessee from other countries with that from USA, more particularly when we view the quantity exported to USA on wholesale basis with that to other countries in small lots on retail basis. We, therefore, hold that the Internal CUP method is not suitable in the present circumstances.
External CUP method - As this method contemplates comparison of the price charged by the assessee from its AE with that at which the goods are available in the open market in that country from transactions between the unrelated third parties. With a view to determine the price at which such goods are available in the open market in that country, it is sine qua non to consider the price at which such goods are imported by other parties on an average basis. Such an average price should be some realistic price representing the price from the whole or the large part of whole of the imports made in USA of this product and not some isolated or a stray transaction.
The report of Mr. Buhn, as it is, cannot be the sole basis for determining the ALP on comparable uncontrolled price method for the reason that Mr. Buhn is not a Government Agency of USA, who could vouch for the price at which Dicamba is imported in USA from various countries. He, in turn, has relied on certain stray instance of M/s. Albaugh Inc. importing Dicamba from China at CIF value/Lb. technical at 5.44 US$ per Kg. Reliance on such selective data, when he himself is acknowledging that for certain transactions in this lot too, the rate is ‘not known’ and further the price which has been taken note of by him is not substantiated by any Government Agency of USA, cannot be a best guide for the determination of ALP. As such we are not inclined to accept the price shown in the report of Mr. Buhn as representing the correct ALP.
Assessee has placed on the record one Paper book containing additional evidence, which in his opinion has certain data from the Government of USA agency relevant for determining ALP of Dicamba. Since the authorities below have gone by the determination of ALP on the basis of Internal CUP method, which in our considered opinion is not appropriate in the given circumstances, it will be in the interest of justice if impugned order is set aside on this score and the matter is restored to the file of Assessing Officer. We order accordingly and direct him to get the fresh ALP determined from the TPO in the light of our foregoing discussion.
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2009 (11) TMI 652
Cenvat/Modvat - Change in name of Company - denial on the ground that prior permission not taken - Held that: - when the respondent applied for amendment for change in the registration for the change of name, the same was granted without any objection. It means that the Department satisfied with accountal of inputs in RG-23A Part-I and credit involved therein in RG-23A Part-II. In this case, there was no change in the pattern of usage of inputs/capital goods and production of the finished goods. Therefore, the question of taking prior permission does not arise in this case - credit dismissed - decided against Revenue.
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2009 (11) TMI 651
Oppression and mismanagement - bias and mala fide way of allotment of shares by a Managing Director for his own benefit - Held that:- Bereft of legal considerations etc., the act of the management in allotting as many as 2250 shares of the company in favour of two members of the company to the a exclusion of all others by itself can constitute an act of oppression and the question will be as to whether this can be said to be otherwise when tested on the touchstone of the statutory provisions of Section 397 for grant of relief and in the situations as we have mentioned above in terms of clause (a) & (b) of sub-Section (2) of Section 897.
Appeal allowed for modification of the order of the Company Law Board directing company to issue six more shares on the same terms as had been issued earlier along with additional 2250 which had been issued in terms of the Resolution dated 13.12.2002 so that the total additional shares the company is issuing in favour of its existing shareholders becomes 2256 and this is to be distributed equally amongst all the then 8 shareholders that is, at 282 shares each and on the same terms. The shareholders who are getting these shares for the first time to pay the amount within four weeks from today by means of a cheque or draft in favour of the company. The Company to transfer such additional shares in favour of all members within a further 10 weeks from the date of receipt of the amount by the Company.
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2009 (11) TMI 650
Revision application – rebate claim – Held that:- applicant has re-exported the goods under claim of drawback and not under rebate of duty under Rule 18 of the Central Excise Rules, 2002, the applicant has not fulfilled the conditions stipulated in Notification 40/2001-C.E. (N.T.), dated 26-6-01, and no foreign exchange was received, as this is a case of re-export of the goods under claim of drawback. As rebate is an export-oriented scheme to boost the export to earn foreign exchange, Govt. observes, the rebate of CVD is not admissible to the applicant, Revision application is rejected
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2009 (11) TMI 649
Writ - petitioner herein was assessed provisionally on the basis of the investigation done by the designated authority with reference to levy of anti-dumpting duty - petitioner pointed out that when the order had already been made by the Co-ordinate Bench on an identical circumstance, the first respondent should give exemption of duty and take up the appeal on merit - Held that:- mere fact that the Tribunal has not accepted the plea of the petitioner as regards binding character of the Co-ordinate Bench does not mean that the Tribunal had not considered the said contention. While there can be no two opinion as to the binding character of the decision of a Co-ordinate Bench on a another Bench, on any particular issue, yet given the freedom to differ from a decision of Co-ordinate Bench and to refer the same decision to a Larger Bench, no fault can be found on discretion exercised by the Tribunal, writ petition is disposed of
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2009 (11) TMI 648
Whether the Tribunal was justified in allowing Cenvat Credit to the respondent for capital goods used in the power plant when major portion of the electricity generated was sold to the MPEB – Held that:- major portion of the generated electricity from the power plant was sold to MPEB through its grid, however, it cannot be said that capital goods were exclusively used in manufacture of exempted goods (electricity) sold to MPEB as a portion of electricity generated in the power plant is also utilized in manufacture of final products “sponge iron” of the respondent factory, which is leviable to the excise duty and is not exempted goods, Tribunal was justified to hold that respondent was entitled for modvat credit against the capital goods used in the captive power plant of the respondent and Rule 6(4) of the Rules was no bar for denying Cenvat Credit, appeal dismissed
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2009 (11) TMI 645
Revision Application - Foreign currency - illegal import - confiscation and penalty - held that:- a compulsory requirement of making a Custom Declaration Form (CDF) is the legal requirement specifically when the impugned foreign currency involved is more then US $ 5000 ( or equivalent). In this case the applicant has not made any declaration In CDF. - there is no “Independent” documentary evidence so as to confirm that presently seized foreign currency is necessarily from the unspent amount of that particular transaction/visit. Only proper CDF could be the connecting legal document which is very much missing in this case. In absence of such a vital link the entire theory/submissions appears to be an after thought and excuse. - Decided against the assessee.
Government observes that the confiscation of foreign currency under Section 113(d)(l) of the Customs Act, 1962 read with provisions of FEMA (Export and Import of Currency) Regulations, 2000 for violation of Section 77 of the Customs Act, 1962 read with relevant provisions/notifications from RBI and imposition of penalty under Section 114(i) of the Act, ibid cannot be assailed and was rightly adjudged by the lower authorities as per available admissible evidence/facts on record. - however redemption fine and penalty reduced.
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2009 (11) TMI 643
Valuation - Whether the demurrage, wharfage and stock loss charges paid are liable to be included in the assessable value in terms of Rule 9(1)(e) of the Customs Valuation Rules, 1988 - in the case Indian Oil Corporation Limited (2004 -TMI - 46898 - SUPREME COURT OF INDIA) , appeal allowed and set aside the order passed and direct respondent No. 2 not to include the demurrage, wharfage and stock loss charges into assessable value of the appellant, the writ appeal is disposed of
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2009 (11) TMI 641
Duty liability in relation to the goods still lying in the stock - held that:- the factory is in legal existence though actual process of manufacture is not being conducted in the factory at present. - prima facie, it would not be permissible for the authority to insist for payment of duty in relation to such products at this stage. Retrospective amendment - Differential duty in relation to the product - clearance of inputs and capital goods - the inputs were procured prior to 1997, but they were disposed of after 1st April, 2000 and at the relevant time the provisions of Rule 57-AB were in force and not Rule 57F. - held that:- Considering the law, as revealed from Section 131 of the Finance Act which introduced the amendment protecting the rights accrued and the liabilities incurred under the statutory ruling prevailing at the time of insertion of the amendment, obviously would disclose that, the legal provisions prevailing on the date of removal of the goods will have to be understood with reference to the dates on which the goods had been cleared and with reference to the provisions which were in force on such dates. Having so understood, the calculation made in that regard by the Commissioner in the impugned order, prima facie, does not appear to suffer from any infirmity. In that regard, no, prima facie, case has been made out for grant of stay of demand in that respect. - Pre-deposit ordered.
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2009 (11) TMI 640
Demand on the ground that the appellant did not contest the duty confirmation - Before the Commissioner (Appeals) also no serious objection was raised by the Appellant and even the Commissioner (Appeals) has rightly observed in his order that the clandestine removal was admitted by the Appellant in the statement. Based on these observations made by the Commissioner (Appeals), the CESTAT while disposing of the rectification application has observed that it is not open for the Appellant to contend before the CESTAT that the duty demand is wrongly levied - Held that:- no substantial questions of law arises from the order of the CESTAT and hence this Appeal is accordingly dismissed.
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2009 (11) TMI 639
Penalty - penalty for concealment is leviable under section 271(1)(c) if the assessment is based on estimate basis - Held that:- invocation of penal provision, which requires concealment and inaccurate particulars is unwarranted in the facts of the present case. Even in Union of India v. Dharamendra Textile Processors(2008 (9) TMI 52 - SUPREME COURT), Supreme Court has observed that the finding as to suppression or inaccurate particulars in the return are necessary for attracting the penal provision under section 271(1)(c) of the Income-tax Act, 1961. no illegality or irregularity in the order of the Tribunal, so as to warrant interference by entertaining these appeals. tax case appeals are dismissed.
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2009 (11) TMI 638
Deduction under section 80-IA - whether assessee is entitled to deduction under section 80-IA of the Income-tax Act, 1961, on interest received from trade debtors and also on interest earned on FDRs - Held that:- interest received from the trade debtors would be entitled to deduction under section 80-IA, but interest earned on FDRs would not be so entitled in view of the judgment in Shri Ram Honda Power Equip (2007 - TMI - 2891 - HIGH COURT, DELHI) Whether assessee is entitled to deduction under section 80-IA of the Income-tax Act, 1961, on the amount of the duty drawback and on the amount received by the assessee on sale of the DEPB and the QBAL licences - incomes would constitute independent source of income beyond the first degree nexus between profits of the industrial undertaking and, therefore, were not to be treated as profits derived from the business of the industrial undertaking eligible for deduction under section 80-IB of the Act - Held that:- Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act, questions are answered in favour of the Revenue [Liberty India (2009 - TMI - 34471 - SUPREME COURT)] Whether the Tribunal was correct in law in allowing deduction to the assessee under section 80-IA of the Income-tax Act, 1961, on the amount of notional credit of customs duty on goods imported for self-consumption - questions are answered in favour of the Revenue [Liberty India (2009 - TMI - 34471 - SUPREME COURT)]
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2009 (11) TMI 635
Bank Guarantee - respondents has filed undertaking that they will deposit the amount of Rs. 17.61 lakh with the same bank from which bank guarantee was issued and encashed by the department - In the event of such deposit, the petitioner undertakes to furnish fresh bank guarantee - officer encashing the bank guarantee will be personally held liable for the preach of the order and circular, Writ petition is disposed of in terms of this order with no order as to costs
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2009 (11) TMI 631
Waiver of Pre-deposit - Tribunal imposed a condition of pre-deposit of Rs. 55,000/- within four weeks and on such deposit, pre-deposit of the balance tax and interest shall stand waived and recovery shall stand stayed - petitioner informed that the time granted by the Tribunal for pre-deposit is expired. Considering the facts and circumstances of the case, the petitioner is given four more weeks to comply with the interim order passed by the Tribunal, failing which the interim order passed by the Tribunal will stand restored.
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2009 (11) TMI 629
Smuggled goods - evidence of complainant is not supported by any independent witnesses - accused were not there at the place of offence when the goods were seized – Held that:- there are serious lacunae in the oral as well as documentary evidence of prosecution, appellant could not bring home the charge against the respondents accused, from the evidence itself it is established that the prosecution has not proved its case beyond reasonable doubt, appeal is hereby dismissed.
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2009 (11) TMI 627
Levy of service tax on services rendered by goods transport operators - According to the petitioner, prior to the introduction of Sections 116 and 117, petitioner had not been served with any demand notice during the period between 16-7-1997 and 15-10-1998 and therefore in respect of that period, the petitioner could not have been mulcted with liability to pay service charges based on the validating provisions introduced by Finance Act, 2000, issue is squarely covered by the decision of the Supreme Court in J.K. Spinning and Weaving Mills’s (1987 -TMI - 42012 - SUPREME COURT OF INDIA) case in favour of the petitioner, That being so, to that extent, the petitioner is entitled to the reliefs prayed for, petitioner is not liable to pay service charges as demanded therein. The original petition is allowed as above.
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2009 (11) TMI 626
Cenvat credit - goods imported, duty credit claimed by the petitioner was declined and the petitioner got the goods released on furnishing bank guarantee - During the pendency of this writ petition, the Director General of Foreign Trade has issued Exts. P17 and P18 clarifying the position, as a result of which, the petitioner is entitled to get duty credit in respect of the goods imported under Exts. - But no notification has been issued in this regard - Held that:- having regard to the fact that the Government of India have issued Exts. P17 and P18,it is not reasonable to require the petitioner to wait until any notification is issued by the Customs Department to get the benefit. no substance in this objection. Writ petition is disposed of.
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2009 (11) TMI 625
Revision Application - confiscation of the impugned goods with option to redeem the redemption fine and penalty - smuggling of diamonds, on the date of interception as well as for the previous occasions, and channelling sale proceeds through unofficial channels - Held that:- Applicant has stated that he has received the advance foreign remittances towards sale proceeds of the said goods from foreign buyer, he was in the business of export of diamonds and the present trip to abroad was in connection with promoting exports. There is also no duty involved in the exports. Govt. is of the opinion that the redemption fine and personal penalty appears harsh being on higher side. Therefore, Government reduces the redemption fine to Rs. 3.50 lakhs and personal penalty to Rs. 1.60 lakhs. Confiscation of Indian currency of Rs. 8500/- it is observed that the applicant was entitled to carry Indian Rs. 5000/- as per Regulation 3(a) of FEMA (Export and Import of Currency) Regulations, 2000 [No. GSR 389(E) FEMA 6/2000-RB, dated 3-5-2000]. Government therefore allow the release of Rs. 5000/- to the applicant. The remaining Indian currency of Rs. 3500/- is allowed to be redeemed on payment of redemption fine of Rs. 1000/- in lieu of confiscation under Section 125 of Customs Act, 1962, Revision Application is disposed off in term of above.
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2009 (11) TMI 621
Revision u/s 263 - Valuation of property - annual value - revision u/s 263 - Held that:- the municipal authorities have fixed the valuation at a higher figure than the rent receivable. This valuation fixed by the corporation can be taken as the sum for which the property can be reasonably let out. Even though in the earlier years the valuation of Rs. 42,000 has been accepted by the Revenue authorities, the same being in violation of law, such an error cannot be permitted to be perpetuated. Reconciliation of profit - The perception of the CIT that the profit is low prompted him to issue show-cause notice to the assessee. Profit before taxation of the company as a whole for the year under consideration is Rs. 3,303.42 lakhs as compared to Rs. 3,561.15 lakhs for the immediate preceding year. Thus, there is a fall in profits by Rs. 257.73 lakhs. On the other hand, the total revenue has increased from Rs. 1,93,946.48 lakhs to Rs. 2,19,195.88 lakhs. - Held that:- The AO in the present case did not find anything startling in the marginal drop in profits and for that reason the CIT held his order to be erroneous. This is not envisaged under s. 263 of the Act. - The various points noted by him are mere illustrations which according to him should have been looked into by the AO. As a matter of fact, while dealing with the aspect of profits, the CIT has not been able to show a single error in the order of the AO. - Revision us/ 263 set aside.
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2009 (11) TMI 619
Deduction under s. 80-IB - excise duty refund - CIT(A) has treated the refund of excise duty as revenue receipt but not derived from Industrial Under and denied the benefit of deduction u/s 80IB - Held that:- In the present case, firstly, the assessee collects the excise duty from the customers and after collection it makes the payment, to the Excise Department. In the third step, the Excise Department refunds the excise duty to the assessee - The learned CIT(A), after appreciation of the factual position of the present case and on examination of the scheme applicable to the State of J&K, recorded specific finding that excise duty refund has swelled the profit of the assessee and, thus, rejected the contention of the assessee Before analyzing s. 80-IB, as a prefactory note, it needs to be mentioned that the 1961 Act broadly provides for two types of tax incentives, namely, investment linked incentives and profit linked incentives. Chapter VI-A which provides for incentives in the form of tax deductions essentially belong to the category of 'profit linked incentives' - According to the assessee(s), DEPB credit/duty drawback receipt reduces the value of purchases (cost neutralization), hence, it comes within first degree source as it increases the net profit proportionately - Supreme Court, in the case of Liberty India (2009 -TMI - 34471 - SUPREME COURT ) - held that the incentives under ss. 80-IA and 80-IB of the Act, must be from the generation of profits (operation of profits 'derived from the industrial undertaking) - It was, further, held that the words "derived from" as appearing under s. 80-IB of the Act, are narrower in connotation as compared to the words "attributable to". By using the expression "derived from", Parliament intended to cover sources not beyond the first degree nexus or source whether the income was 'derived from' industrial undertaking, as against income from other sources irrespective of the question whether such source was inextricably connected with the business activity of the assessee - the expression "derived from" has been judicially defined by the Hon'ble Supreme Court, having regard to the text and context of the statutory provisions of s. 80-IB of the Act. In view of this, expression "derived from" cannot embrace incidental income such as excise duty refund and interest subsidy, as the same do not have first degree nexus with the 'operational profit' derived from the industrial undertaking itself - Held that: the impugned receipts, in the form of excise duty refund and interest subsidy are not eligible for deduction under s. 80-IB - Decided against the assessee
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