Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 16, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
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India & South Korea sign MoU to promote business to business contact India must explore possibilities of cooperation in urban transport with South Korea says Deepa Dasmunshi
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RBI Reference Rate for US $ and Euro
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Change in Tariff Value of Crude Palm Oil, Rbd Palm Oil, Others Palm Oil, Crude Palmolein, Rbd Palmolein, Others Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Silver and Gold Notified
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Penalty u/s 271D in respect of section 269SS - The source of funds of the creditors was not from the Bank and introduction of black money cannot be ruled out - no proof was furnished regarding earnings of agricultural income by the creditors - HC
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Whether the assessee was acting as agent of charterer or owner of the ship - it is clear that the appellant was acting as an agent of the owner and not of the charterer - HC
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TP - The benchmarking done by the assessee are based on the interest paid by it on its own borrowings of loan in foreign currency from KEXIM bank and also from State Bank of India - The interest charged by the assessee on the loan given by it to its AE is at arm's length and no further adjustment is required - AT
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Income earned by assessee on sale/purchase of shares and securities through PMS is to be assessed under the head capital gains and not as business income of the assessee - AT
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Short deduction of TDS recovery provisions under section 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes. - AT
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Income from air conditioning and other charges has to be assessed as income from other sources - while computing the income from other sources the assessee will be entitled for deduction of expenses u/s 57 - AT
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Addition of expenses u/s 37(1) - It does not make any difference, whether expenditure is direct or indirect - So long as there exists a nexus of the expenditure with the offence, it will continue to be hit by the Explanation - AT
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Legitimate tax planning is not barred - the conduct of the assessee clearly suggest that his only intention was to create artificial loss by converting investment in stock in trade and setting it off against the bad debts recovered - claim disallowed - AT
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No reason has been assigned for making ad hoc disallowance by the Assessing Officer - the company is a juristic person, no disallowance of personal nature can be made in the case of a company - AT
Customs
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Revocation of CHA License - CHA has resorted to forgery of export documents, which cannot be regarded as minor or inconsequential - AT
Corporate Law
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Trademark infringement - Use of confusingly similar mark - Though the plaintiff neednt prove actual damages suffered by him, it is imperative that the Court while awarding damages considers the averments made in the plaint coupled with an assessment of the extent of damage likely caused or to be caused. - HC
Service Tax
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Works Contract Service - Turnkey Contract - service provided to the Irrigation and CAD Department of Government of Andhra Pradesh - prima facie case is against the assessee. - AT
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Prima facie tax is payable on storage and warehousing from refineries to storage tanks and connecting pipeline to storage tank of SPIC comply - AT
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Cenvat Credit - Just because these advices / Debit notes were not issued by the bank within a period of 15 days from the date of providing the service, the cenvat credit cannot be denied to the appellant - AT
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Whether filling of ash into bulkers/tankers is a separate activity covered under cargo handling as alleged by the Revenue or it is an activity ancillary to the transportation of goods as claimed by the appellant - decided against the revenue - AT
Central Excise
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In the event of the demanded duty having to be paid by the appellant, they would be entitled to CENVAT credit of CVD and SAD paid on the imported parts to the extent of 58% of the duty demand the plea of revenue-neutrality accepted - stay granted - AT
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Valuation of goods - there is substantial difference between the value arrived at on the basis of Valuation Rules and the transaction value and there is no explanation for this difference - stay granted partly - AT
VAT
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Period of liability - UPTT - assessing authority in fact, had passed an order granting remission of the tax since the assessee had not collected tax from its customers - decided against the revenue - SC
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When the Chicory Roots are specifically covered by independent Notification dated 29.1.2001, the contention that it shall be covered by general entry mentioned in any other Notification is not correct - HC
Case Laws:
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Income Tax
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2014 (1) TMI 712
Penalty u/s 271D in respect of section 269SS - Held that:- After 30th of June, 1984 there is a mandate that no person shall accept or take loan or deposit from any person other than an account payee cheque or account payee bank draft, if such loan or deposit exceeds Rs. 20,000 - The burden is on the assessee to prove that there was reasonable cause for receiving cash from various persons - Setting up an industry/business is a long process and it is for the assessee to demonstrate with sufficient material that he required cash urgently to meet his requirements - It was open for him to prove that he had applied for loan and he was awaiting for loan - No such materials are available - In the absence of any proof to show that the transaction was a genuine transaction and that there was a reasonable cause for receiving the amount in cash, the Tribunal was justified in rejecting the contentions of the appellant - The source of funds of the creditors was not from the Bank and introduction of black money cannot be ruled out - There is a clear finding by the assessing officer that no proof was furnished regarding earnings of agricultural income by the creditors Decided against assessee.
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2014 (1) TMI 711
Determination of book profit u/s 115J - Held that:- Following Karnataka Small Scale Industries Development Corporation Ltd., Vs. Commissioner of Income-Tax [2002 (12) TMI 4 - SUPREME Court] - Section 115J, therefore, involves two processes. Firstly, an assessing authority has to determine the income of the company under the provisions of the Income-tax Act. Secondly, the book profit is to be worked out in accordance with the Explanation to section 115J(1) and it is to be seen whether the income determined under the first process is less than 30 per cent of the book profit. Section 115J would be invoked if the income determined under the first section (1) of section 115J gives the definition of 'book profit' by incorporating the requirement of section 25 of the Companies Act in the computation of the book profit. Brought forward loss or unabsorbed depreciation whichever is less would be reduced in arriving at the book profits. Sub-section (2), however, provides that the application of this provision would not affect the carry forward of unabsorbed depreciation, unabsorbed investment allowance, business losses to the extent not set off, and deduction under section 80 J, to the extent not set off as computed under the Income-tax Act - The very object of the provision of section 115J is to tax such companies which are making huge profits and also declaring substantial dividends but are managing their affairs in such a way as to avoid payment of income-tax - Decided in favour of assessee.
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2014 (1) TMI 710
Whether the assessee was acting as agent of charterer or owner of the ship - Held that:- reliance placed on Section 163 of the Act is misplaced - On perusal of the agreement - "charter party" clearly show that 100% freight, less 3.75% commission was payable by charterer to the owner - From the language of this clause read with other relevant clauses, to us, it is clear that the appellant was acting as an agent of the owner and not of the charterer - Having regard to the clauses in the agreement, even the charterer was acting as an agent of the owner and not as an independent charterer within the meaning of Section 172 of the Act - This is evident from the "charter party" agreement, which clearly show that even the so called charterer was also entitled for only commission Decided against assessee.
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2014 (1) TMI 709
Disallowance u/s. 14A Held that:- Following assessee's own case for A.Y. 2006-07 - In view of the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] Rule 8D applied by the AO to work out the disallowance u/s. 14A was not applicable to the year under consideration - The said disallowance for the year under consideration, was required to be worked out on some reasonable basis - The working furnished by the assessee for making the disallowance u/s. 14A was fair and reasonable Decided in favour of assessee. Transfer Pricing adjustments held that:- A perusal of the order of the TPO clearly shows that the TPO has proceeded entirely on erroneous facts. In our considered opinion , if an assessing authority proceeds with facts which are remotely connected with the facts in issue and makes up his mind , such order cannot form any basis for higher authorities - The TPO has salvaged the situation by rectifying his order u/s. 154 of the Act - But he has rectified only the financial figures which were wrongly taken by him - The Ld. CIT(A) also erred in not appreciating the facts in their right perceptive - The Ld. CIT(A) completely ignored the fact that the loan of USD 4 million was given by the assessee to its AE in the earlier years - No TP adjustment was done in the earlier year - This year what the assessee has charged is only on the loan brought forward from the earlier year - The Ld. CIT(A) further erred in not considering the second USD loan of Rs. 17 Million in its right perceptive as the loan was repaid during the same year - The loan of USD 4 million was given in earlier accounting year and as per the agreement, the rate of interest was taken at 5% - The fixed rate of interest cannot be accepted to be changed with the subsequent change in LIBOR - As the loan of USD 17 million has been repaid within the year itself, there is no logic in taking the rate for more than 5 years at 6 months LIBOR plus 350 basis point - The benchmarking done by the assessee are based on the interest paid by it on its own borrowings of loan in foreign currency from KEXIM bank and also from State Bank of India - The interest charged by the assessee on the loan given by it to its AE is at arm's length and no further adjustment is required Decided in favour of assessee.
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2014 (1) TMI 708
Purchase and sale of shares through PMS - Nature of income - Held that:- Following assessees own case for A.Y. 2003-04 - PMS Manager was authorized to purchase, acquire, obtain, take, hold, sell, transfer, substitute or change all or any of the investments made on behalf of the assessee - PMS Manager was also authorized to hold all or any of such investment in his name or at his discretion on behalf of the assessee and make every effort to maximize the value of investment - The PMS Manager was required to provide the assessee with quarterly statement of investment - The Tribunal noted that the PMS Manager had sole and absolute discretion to make investment for and on behalf of the assessee and the assessee had no role to play - The assessee had not taken any borrowed funds for placing money with the PMS Manager - The average holding period of the shares was more than two months - The Tribunal accordingly concluded that the income earned from PMS has to be assessed as capital gain - STCG Rs.83,14,515/- earned by assessee and LTCG of Rs.70,39,652/- earned by assessee on sale/purchase of shares and securities through PMS is to be assessed under the head "capital gains" and not as business income of the assessee Decided in favour of assessee. Sale of shares - Income from business or income from capital gains - Held that:- Each case depends on its own facts and circumstances - There are various factors such frequency, volume, and entries in the books of account, nature of fund used, holding period etc which are relevant in deciding true nature of transaction and no single factor is conclusive Following Raja Bahadur Visheshwara Singh. V/s CIT [1960 (12) TMI 12 - SUPREME Court] - The treatment in the books of an assessee will not be conclusive and if the volume, frequency and regularity at which transactions are carried out indicate systematic and organized activity with profit motive then it becomes business profit and not capital gains Whether a particular holding is by way of investment or form part of stock-in- trade is a matter within the knowledge of the assessee and it is for the assessee to produce evidence from the records as to whether he maintained any distinction between shares which are held as investment and those held as stock-in-trade - The important factor is the intention of the assessee at the time of purchase, which has to be gathered from the actual conduct of the assessee while dealing with the shares subsequently and not only on the basis of entry in the books of account. The department accepted the transactions made by assessee of his own for purchase and sale of shares as investment i.e. for assessment years 2003-04, 2004-05, 2005-06 and 2006-07 in the assessment made under section 143(3) of the Act - In the assessment year under consideration the AO has taken a contrary view to the earlier assessment years stating that the assessee is carrying on of his own purchase and sale of shares activities in a systematic and organized way which partake the character of business The finding of the ld. CIT(A) has no merits and particularly when we observe from the period of holding of shares - The LTCG had accrued to the assessee, where the period of holding is more than 24 months and therefore, the order of ld. CIT(A) to treat the said LTCG accrued to the assessee as business income is not supported by facts particularly when there is no purchase of shares by assessee in the assessment year under consideration and said shares were held by assessee for a period of more than 24 months Decided in favour of assessee.
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2014 (1) TMI 707
Withdrawal of matter Held that:- No one appeared on the behalf of the Assessee through letter assessee submitted that they are not interested in perusing the matter and would like to withdraw the appeals Revenue is not having any objection withdrawal allowed.
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2014 (1) TMI 706
Short deduction of TDS Payment of interest to a society - Liability on late deposit f TDS u/s 194A of the Act r.w. Rule 30(1)(b)(i)(1) of the Rules Held that:- The lapse on account of non-deduction of tax at source is to be visited with three different consequences penal provisions, interest provisions and recovery provisions - The penal provisions in respect of such a lapse are set out in Section 271 C - So far as penal provisions are concerned, the penalty is for lapse on the part of the assessee and it has nothing to do with whether or not the taxes were ultimately recovered through other means - The provisions regarding interest in delay in depositing the taxes are set out in Section 201(1A) - These provisions provide that for any delay in recovery of such taxes is to be compensated by the levy of interest. As far as recovery provisions are concerned, these provisions are set out in Section 201(1) which seeks to make good any loss to revenue on account of lapse by the assessee tax deductor - the question of making good the loss of revenue arises only when there is indeed a loss of revenue and the loss of revenue can be there only when recipient of income has not paid tax - recovery provisions under section 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes. In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact - once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. Levy of Interest u/s 201(1A) of the Act Held that:- The interest is a compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes - Following Bennett Coleman & Co Ltd Vs ITO [1984 (11) TMI 58 - BOMBAY High Court] - levy of interest under section 201(1A) is applicable whether or not the assessee was at fault - it is only compensatory in nature it is applicable for the period of the date on which tax was required to be deducted till the date when tax was eventually paid the matter remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (1) TMI 705
Nature of Income received income from house property or income from other sources - Air-conditioning and other charges - Disallowance of property maintenance expenses Held that:- Following Commissioner of Income-Tax, West Bengal I Versus Kanak Investments Private Limited. [1973 (5) TMI 15 - CALCUTTA High Court] - Income from air conditioning and other charges has to be assessed as income from other sources - while computing the income from other sources the assessee will be entitled for deduction of expenses u/s 57 - This aspect of allowability of expenses u/s 57 is required to be examined at the level of AO the order set aside and the matter remitted back to AO for computation of income from other sources Decided partly in favour of Assessee.
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2014 (1) TMI 704
Disallowance of interest on term loan Held that:- It is admitted that the term loan was for repair and renovation of the capital asset being industrial shed - The security for the term loan was also the asset itself - The assessee has also capitalized the cost of the repairs and renovations - once the cost of repairs and renovations is capitalized, the interest on the loan taken for the said repairs and renovations cannot be treated as revenue expenditure Decided against Assessee. Disallowance of Interest Nature of Expenses Capital OR revenue expenditure expenses made to capital work in progress Bank commission - Held that:- The assessee has explained the source for the sum - The AO has only on presumption estimated 40% of the cash credit loans to have been used for the repairs and renovations of sheds - Additions cannot be made on presumptions especially when the assessee has produced factual evidence to prove that the balance of the cost in respect of the repairs and renovations were from sister concern Thus, the disallowance as confirmed by the CIT(A) further confirmed. The amount of Rs.1,27,000/- only out of the total of Rs.1,81,288/- relates to the term loan in relation to repairs and renovations of the capital asset - the amount of Rs.1,27,000/- is also liable to be disallowed on the same lines as the amount of Rs.7,35,627/- has been confirmed by the CIT(A) - the order of the CIT(A) modified and the disallowance in respect of the interest on borrowed capital, which is treated as capital expenditure and confirmed as such stands increased by an amount of Rs.1,27,000. Addition made u/s 2(22)(e) of the Act Assessee not a shareholder in the ending company held that:- The CIT(A) has deleted the addition made by the AO by invoking the provisions of section 2(22)(e) of the Act Decided partly in favour of Assessee.
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2014 (1) TMI 703
Recall of order u/s 254 of the Act Mistake apparent from record Held that:- The assessee pointed out that while deciding the issue and coming to the conclusion that the agriculturists had taken loans from him and the amount credited on receipt of loan/ amounts advanced earlier was not proved from the bank account - the Tribunal has mentioned that the cheque no vide which amount was deposited in the bank account and cheaue no. recorded in the books of account did not tally - the assessee pointed out that ITAT had mentioned the bank account no. as cheque no. by mistake and thereafter concluded that cheque nos. did not tally. In the account of Shri Jagdish Prasad, an amount of Rs. 3.00 lacs was deposited on 20-04-2006 vide cheque no.218166 whereas in the assesee's bank account cheqaue no. is 036235 - It is noticed that cheque no. 218166 was wrongly mentioned - this was the bank account no. Similar was the position of Shri Hanuman Prasad there was merit in the submissions of the assessee that while coming to the conclusion that cheques were not tallied and bank account no. was mentioned in place of cheque no. - Since it is a mistake apparent from record, the Misc. Application of the assessee allowed Decided in favour of Assessee.
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2014 (1) TMI 702
Addition of expenses u/s 37(1) of the Act - expenses incurred for the purpose of an offence Purpose of incurring expenses ignored Held that:- The expenditure was incurred as a professional fees to defend two directors of the assessee company who were arrested under NDPS Act on being found guilty of the offences under the relevant sections of the said Act assessee contended that since the two directors were released on bail, it indicated that they were not at fault - no final order on their conviction or acquittal was passed so far - It shows that the charge is still continuing, which is otherwise an offence under the NDPS Act - there can be no reason for allowing deduction towards such an expenditure which has been incurred for the purpose of an offence prohibited by law, covered within the meaning of the Explanation to section 37(1) of the Act - Mandate of the Explanation is crystal clear that, 'any expenditure' incurred for any purpose which is an offence or which is prohibited by law cannot be allowed as deduction - It does not make any difference, whether expenditure is direct or indirect - So long as there exists a nexus of the expenditure with the offence, it will continue to be hit by the Explanation Decided against Assessee. Disallowance on account of discrepancy in ledgers Account Held that:- The AO made disallowance towards the interest income which was not accounted for by the assessee in its books of account - certain details were promised to be filed by HSBC Bank and ICICI Bank, which appear not to have been filed in time matter remitted back to the AO for fresh adjudication - the assessee proposes to file to show that there was no interest income which was not offered for taxation Decided partly in favour of Assessee.
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2014 (1) TMI 701
Disallowance of deduction u/s 80IB(10) of the Act Held that:- The assessee has not honoured the conditions of joint venture agreement - having been failed to submit the bank statement, the assessee could not substantiate its claim that profit had been shared equally between itself and DPMC - the reasons given by the AO are not even remotely connected with the conditions of Sec. 80IB(10) - the AO is fully convinced with the mandatory conditions of Sec. 80IB(10) - the assessee has not honoured the conditions of joint venture agreement than it is for the parties to the agreement to decide whether to go forward with the project or not, by any stretch of imagination, it cannot be a hurdle in allowing the deduction u/s. 80IB(10) of the Act. If the AO was not satisfied with the computation of the profit made by the assessee than nothing prevented him to give his own computation of income - on the contrary the AO has accepted the entire working of the assessee and yet denied exemption - It would not be out of place to mention here that in the case of joint venture partner, DPMC, the claim of deduction u/s 80IB(10) has been accepted by the AO by virtue of assessment order passed u/s. 143(3) of the Act - there is no reason for disallowing the claim of the assessee u/s 80IB(10) of the Act Decided in favour of Assessee.
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2014 (1) TMI 700
Claim of 'office and administrative expenditure' as business expenditure Held that:- The parameters of section 37(1), as any deduction could only be in accordance with the provisions of law, would need to be positively met - The maintenance of corporate existence cannot by itself be a business purpose, though the cost of its maintenance becomes an essential part of the business where business activity is being carried out, and which in a broad manner as including exploring an opportunity for the same - the assessee would be required to exhibit the necessary wherewithal for carrying the business, not only in terms of office space, but also by way of capital, financial and human, (even if by way of the same being available on tap) as we presume it to be engaged only in seeking a business opportunity to exploit its business potential - the same would be required to be established as a fact, and cannot be adopted as a ruse - The matter remitted back to the AO for fresh adjudication Decided partly in favour of Assessee.
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2014 (1) TMI 699
Addition on account of disallowance of business promotion expenses Held that:- The CIT (A) has rightly adjudicated the issue of disallowance of business promotion expenses - the assessee is under statutory obligation to prove that the expenditure by way of silver coins is expanded wholly and exclusively for business purposes and not for the personal reasons - The assessee failed to do so Decided against Assessee. Ad-hoc Disallowance of conveyance and general office expenses Held that:- CIT (A) has rightly restricted the disallowance @7.5%, out of the conveyance and general office expenses incurred by the assessee which would meet the both ends of justice Personal element can be seen in general office expenses and some what extent in conveyance expenses - decided against Assessee.
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2014 (1) TMI 698
Disallowance u/s 40(a)(ia) of the Act Payments made to SIDBI towards reimbursement of depute personnel cost - Default in Not deducting TDS u/s 192 of the Act - Held that:- The deputed employees are employed by the SIDBI who paid the salaries as per the terms and conditions after making necessary TDS in accordance with the law in force - The agreement (MoU) between the assessee and the SIDBI allows deputing of the personnel to the assessee for which assessee is under obligation to reimburse the personnel cost - The amount constitutes such personnel costs reimbursed by the assessee - That being the fact of the addition, the question of applicability of section 40(a)(ia) to such payments by way reimbursements do not attract the TDS provisions to the amount Following CIT vs. OCB Engineers [2013 (6) TMI 48 - BOMBAY HIGH COURT] Thus, the CIT (A) has wrongly decided the issue without appreciating the facts of the case and the law in force Decided partly in favour of Assessee. Deletion of disallowance u/s 40(a)(ia) of the Act Late payment of TDS to Government account Held that:- The appellant explained that the TDS amount in respect of expenses have been paid before the due date of filing of return of income - the deduction is allowable where TDS has been paid / deposited before the due date of filing of the return of income - the entire tax deducted at source from the payments made during the period 1.4.2007 to 28.2.2008 was paid by the appellant in Government account till the month of July, 2008 ie well before the due date of filing of income tax return for the year under consideration - The appellant further explained that section 40(a)(ia) of the Act have been amended by Finance Act, 2010 - The TDS made by the assessee was deposited to the Government account before the due date for filing of the return of income - There is no dispute on this fact - the CIT (A) has rightly and reasonably adjudicated the issues and there is no infirmity in the order of the CIT (A) Decided against Revenue.
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2014 (1) TMI 697
Disallowance of valuation loss on conversion of shares into stock-in-trade Held that:- The assessee has not done any trading in the immediate past assessment year nor during the year under consideration - This conduct of the assessee of converting Long term investment into stock in trade is not backed by any commercial prudence or justifiable cause - The assessee has not brought any cogent material evidence on record even subsequent to the year under consideration to show that it has done some trading or business in shares - legitimate tax planning is not barred - the conduct of the assessee clearly suggest that his only intention was to create artificial loss by converting investment in stock in trade and setting it off against the bad debts recovered Thus, the loss on the valuation of stock as on 31.3.2007 is nothing but an artificial loss which deserves to be ignored and the AO has not given any cognizance to this loss - The AO is directed to treat the loss as an artificial loss Decided against Assessee. Deletion made u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules Held that:- Rule 8D is prospective and is applicable with effect from A.Y. 2008-09 Thus, the CIT(A) has rightly held that Rule 8D is not applicable order of the CIT(A) upheld Decided against Revenue.
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2014 (1) TMI 696
Validity of re-opening of assessment u/s 147 of the Act Exemption of Interest on income on RBI relief Bonds u/s 10(15) of the Act - Allowability of exemption of interest income u/s 10(15) of the Act Held that:- Following Director Of Income-Tax (Exemptions) Versus Shardaben Bhagubhai Mafatlal Public Charitable Trust [2000 (9) TMI 45 - BOMBAY High Court] - a discretionary trust in which shares of the beneficiaries were not ascertainable was not a HUF or association of person - the term "individual" did not mean single human being and that it included a body of individuals constituting a unit for the purpose of the Act. The assessment of income in the hands of the trust had therefore to be made in the same manner and to the same extent as it would have been made in the hands of beneficiaries - The beneficiaries were merely recipients of income from trust and had not come together for common purpose for earning income thus, beneficiaries could not be considered as association of persons or body of individuals - assessee trust has to be assessed as an individual who will be entitled for exemption under section 10(15) of the Act Decided in favour of Assessee.
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2014 (1) TMI 695
Tax effect below prescribed limit - Held that:- As per the circular issued by CBDT - An appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case - Decided against Revenue.
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2014 (1) TMI 694
Accrual of income versus Cash receipt - Disallowance on account of Compensation from customers - Shortfall in Minimum Guaranteed Offtake of gas - Delayed payment charges Held that:- The assessee is following cash system as a matter of course or, perhaps, as a matter of convenience, being so uniformly for all customers, and in respect of an item/s of income which is regularly charged thereto, and for which they are contractually bound - in the absence of any details, it is not possible to say as to how much of Rs.78.18 lakhs offered by the assessee as income for the current year on receipt basis is in relation to the current year, toward which the A.O. has estimated a sum of Rs.30 lakhs - Preparation of memoranda accounts would lend clarity in the matter the matter remitted back to the AO for fresh adjudication - the onus to prove its case with reference to uncertainty and its resolution would be on the assessee - the offer of income pertaining to a preceding year/s on cash basis, would not justify non accounting of income for the current year, or even for a preceding year, which though not received, yet stands accrued during the current year - there could be no option for following a mixed system of accounting and, two, the income not offered to tax on accrual basis, would not preclude it being brought to tax on receipt basis (even for an assessee following accrual method) inasmuch as the same falls within the scope of income u/s. 5 of the Act. Deletion of disallowance on account of prior period expenses Held that:- The expenses stand claimed only on the basis of crystallization - Where an expenditure is disputed or indeterminate, liability in its respect, to the extent of dispute, would arise only in the year of resolution of the dispute Decided in favour of Assessee.
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2014 (1) TMI 693
Addition made u/s 68 of the Act - Onus to prove - The initial burden is upon the assessee to prove the identity of share subscribers and once the identity is proved, in case of bogus investment, addition can be made in their individual capacity and not in the case of the company - even the identity of such shareholders is not proved, thus, the initial onus has not been discharged by the assessee especially when the assessee was confronted with the finding of the commission (Inspector), summons/notices returned unserved and the addresses given by the assessee itself that too at four places were found to be fictitious - The assessee has not given satisfactory evidence to discharge the onus - It has merely given the names of fictitious parties and this is not a sufficient compliance Decided against Assessee. Disallowance made out of telephone expenses Held that:- The Assessing Officer made ad hoc disallowance of Rs. 1 lac out of total expenses - no reason has been assigned for making such ad hoc disallowance by the Assessing Officer - the company is a juristic person, no disallowance of personal nature can be made in the case of a company Decided against Revenue.
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Customs
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2014 (1) TMI 691
Import of forgings and castings - Exemption under Notification No.39/96-Customs, dated 23.07.1996 - Confiscation of goods - Held that:- Petitioner is a public sector undertaking which is in the field of manufacturing aircraft and helicopters which are required for the defence of the country. Admittedly, they had the benefit of green channel facility for more than a decade by which all the imported goods were taken out from the customs barriers without any objections, to the place of manufacture. Now a dispute has arisen regarding some items which are imported as to whether they would fall under the exemption or not - it is appropriate to permit the clearance of the goods on provisional assessment basis by executing appropriate bond. It is submitted that executing a bank guarantee is exempted in respect of public sector undertaking, more so, in the nature of defence undertaking - The respondents are directed to clear the goods on provisional assessment basis on petitioner executing a appropriate bond in respect of the duty levied - Decided in favour of assessee.
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2014 (1) TMI 690
Confiscation of goods - Attempt of smuggling of gold - Imposition of penalty - Assessee sought for release of goods - Held that:- Gold smuggled by the petitioners is liable to be confiscated under the relevant provisions of law and that steps are being taken to issue show cause notice to the petitioners, for which itself, the respondents are having 'six months' time - out that there are rival claims for the gold smuggled by the petitioners, and that the actual position can be revealed only by way of adjudication proceedings - Decided against assessee.
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2014 (1) TMI 689
Stay application - Demand of differential duty - Held that:- prima facie case for the appellant against the demand of differential duty of Rs. 1,98,194/-. The demand of duty is, admittedly, on machinery for preparing cattle feed, which is prima facie classifiable under Heading 8436 and sub-heading 8436 10 00 of the First Schedule to the Central Excise Tariff Act as claimed by the assessee and not under Heading 8438 of the Tariff Schedule as proposed by the Revenue - Stay granted.
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2014 (1) TMI 688
Revocation of CHA License - Forfeiture of Security Deposit under Regulation 22(7) of CHALR, 2004 - Forgery of documents - Export of goods without license - Quantum of punishment - Held that:- Partner of the appellant firm who forged the signatures of Shri Damle has clearly admitted in his statements dated 4-4-2008, 7-4-2008 and 19-9-2008 that he had forged the initials of Shri Damle in the export documents submitted to the customs authorities. Further the letter dated 15-3-2008 from the Asst. Drugs Controllers Office clearly says that the signature/initial of Shri Damle appearing on the export documents appeared to bear forged signature and they had given no clearance/NOC to the exporter with respect to the export of the impugned goods, namely, Zoledronate. Thus the statement of Shri Ketan Adhia coupled with the reply of the Asst. Drugs Controllers office clearly establishes the fact that the signature of Shri Damle appearing in the export invoices is fake and hence forged. There has not been any retraction of his statements by Shri Ketan Adhia. appellant has not adduced any evidence to show that the statement of Shri Ketan Adhia, a partner of the CHA firm was not voluntary or was not truthful. If that be so, the appellant on first available opportunity would have retracted the statement. They have not done so - statement given by Shri Ketan Adhia has to be accepted as an admissible evidence and due weightage has to be given to the said statement - CHA cannot commit all kinds of violations in respect of export transactions and claim that no loss has been caused to the exchequer - exporting firm did not have a manufacturing license for undertaking the export of the said item from the Food and Drugs Administration. If that is so, the goods are prohibited goods for the purpose of export and by exporting such prohibited goods, the Foreign Trade Policy would get violated. If prohibited goods are allowed to be exported, it badly damages the reputation of the country as an exporter and such action would cause severe economic disadvantages to the nation. The proceedings under the Customs Act is for violation of the provisions of the Customs Act, while CHALR, 2004 deals with the conduct of the CHA. If there are serious lapses on the part of the CHA, he is liable for the penal consequence as provided for in the law. In the present case we find that the CHA has resorted to forgery of export documents, which cannot be regarded as minor or inconsequential - Following decision of Jasjeet Singh Marwaha v. Union of India [2009 (2) TMI 57 - DELHI HIGH COURT] - Decided against appellant.
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2014 (1) TMI 687
Waiver from pre-deposit - Stay of recovery - Exemption under Notification No. 34/2006 - Held that:- Notification No. 34/2006 grants exemption to goods cleared under SFIS subject to the condition that the duty is debited in the SFIS certificate issued to the recipient by the competent authority. In other words what is exempt is only payment of duty in cash. The duty liability has to be discharged by debiting in the SFIS certificate - clearances under Notification No. 34/2006 cannot be equated with exempted goods. Thus, prima facie, we find that the appellant has made out a strong case in their favour for waiver of pre-deposit of the dues adjudged - Stay granted.
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Corporate Laws
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2014 (1) TMI 686
Copyright and trademark infringement - Applicability of Act - High Court permitted the plaintiff to amend the plaint - Jurisdiction of High Court - Held that:- for the purpose of invoking the jurisdiction of the court in a composite suit, both the causes of action must arise within the jurisdiction of the court which otherwise had the necessary jurisdiction to decide all the issues. However, the jurisdiction cannot be conferred by joining two causes of action in the same suit when the court has jurisdiction to try the suit only in respect of one cause of action and not the other - If the impediment is sought to be removed by inserting an incidental provision, there cannot be any doubt the court could be entitled to pass an interim order, but the same by no stretch of imagination can be extended to a cause of action which is founded on separate set of facts as also rights and liabilities of a party under a different Act. Provision contained in Section 134 of the 1999 Act, would not come to the aid of the plaintiff. Although, the 1999 Act was enacted on 30th December, 1999, it came into force on 15th September, 2003 vide S.O. 1048(E), dated 15th September, 2003, published in the Gazette of India, Extra., Pt. II, Sec. 3(ii), dated 15th September, 2003. Since the suit in this case was filed on 19th March, 2001, it would be adjudicated under the 1958 Act. The 1958 Act does not contain a provision similar to the provision contained in Section 62(2) of the 1957 Act. Parliament being aware of the provisions of the 1957 Act still did not incorporate the same in the 1958 Act. Therefore, it can not be read into the 1958 Act by implication. The High Court had correctly concluded that the suit of the plaintiff (appellant) was a composite one. Plaintiff has filed the suit on 19th March, 2001, but the 1999 Act was not enforced till 15th September, 2003. In our opinion, the High Court has passed the order in exercise of its discretionary powers taking into consideration the entire facts and circumstances of the case. The discretion exercised by the High Court can not be said to be either erroneous or perverse. It has been exercised only to avoid multiplicity of litigation. The defendant (respondent) could not dispute that in so far as suit predicated on the Copy Right is concerned, the Court at Kottayam is having requisite jurisdiction in view of the provisions of Section 62(2) of the Copy Right Act. Therefore, had the suit been filed for violation of copy right alone, the Court at Kottayam could validly entertain the same. By permitting the plaintiff to amend the plaint so as that the suit will be maintainable before the District Court, Kottayam, no error was committed by the High Court - Decided against appellant.
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2014 (1) TMI 685
Trademark infringement - Use of confusingly similar mark - Held that:- Lease deed entered into by the plaintiff for acquiring on lease a commercial premises in South Delhi for the purpose of running a branch restaurant under the trademark. The defendants restaurant is also situated at a mall in South Delhi. Consequently, the use of the impugned mark by the defendant is likely to create confusion and is likely deceive people. There has been no explanation forthcoming from the defendant as to why the impugned mark was adopted by the defendant. It is hard to believe that the defendant which is itself in the business of restaurant and hospitality management, would not have been aware of the plaintiffs trademark and restaurant. It appears that the defendant adopted the impugned mark with malafide intention to free ride on the goodwill of the plaintiff. This act of the defendant is likely to dilute the mark of the plaintiff and lead to loss of goodwill. Furthermore, the plaintiff risks losing reputation if the defendant does not uphold the standard of service as offered by the plaintiff as a consumer is likely to be deceived into believing that the goods offered by the defendant actually belong to the plaintiff. Though the plaintiff neednt prove actual damages suffered by him, it is imperative that the Court while awarding damages considers the averments made in the plaint coupled with an assessment of the extent of damage likely caused or to be caused. The plaintiff avers that it found out about the proposed launch of the defendants restaurant in May 2008. This Court vide order dated 19.12.2008 granted an exparte injunction in favour of the plaintiff and restrained the defendant from using the mark THE NOODLE HOUSE. Keeping in view the short duration between the filing of the suit and grant of injunction, in addition to the fact that the plaintiff has not placed anything on record to establish whether the defendants restaurant was launched at all, this Court is not inclined to award damages - Decided in favour of Appellant.
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FEMA
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2014 (1) TMI 692
Complaint under section 56 of the FERA - Notice u/s 61 not served - Held that:- respondents maintain in their counter affidavit that Opportunity Notices in terms of Section 67 of FERA were issued to petitioners and the documents relied upon in the complaint in question were supplied to petitioners - The stand of petitioners that there was no intentional or wilful default on their part also raises a triable issue which cannot be determined while exercising inherent jurisdiction of this Court under Section 482 of Cr.P.C. and that too, at the threshold of these proceedings - averments made in paragraph No. 2 (vii) & (viii) of the complaint in question prima facie justify continuance of proceedings arising out of this complaint. Pertinently, prosecution of petitioners in the instant Complaint is for contravention of substantive provisions of this enactment i.e. Section 14, 16 & 18 (3) of FERA read with Central Government's Notification No. F-1/67/EC/73-1 & 3 both of 1st January, 1974. So, this question as well as the question of vicarious liability is left open to be considered at the stage of framing of charge/Notice under Section 251 of Cr.P.C., as the case may be - petition is disposed of with liberty to petitioners to urge the pleas taken in this petition on the afore-noted limited extent before the trial court at the stage of framing of charge/Notice, while not commenting upon the merits, lest it may prejudice either side - Decided in favour of Appellants.
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Service Tax
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2014 (1) TMI 722
Waiver of pre-deposit of CENVAT Credit - Held that:- inputs and capital goods that have been claimed to be used in or in relation to the provision of services made by the applicant we find that prima facie, the services received and utilized in providing output services, fall under the category of input services and CENVAT Credit would be available. However, admissibility of CENVAT Credit on inputs viz. bars, rods, cements, etc. and other capital goods used in the construction of building, which was ultimately given on rent, prima facie, not admissible to CENVAT Credit for providing services of renting of immovable property - Prima facie case not in favour of assessee - Stay granted partly.
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2014 (1) TMI 721
Works Contract Service - Turnkey Contract - whether service provided to the Irrigation and CAD Department of Government of Andhra Pradesh are classifiable under the head "works contract service" - invocation of extended period of limitation - penalty imposable u/s 76, 77 & 78 - Held that:- activities undertaken by the company in execution of turnkey project awarded by the State Government were classified as works contract service under Section 65(105)(zzzza) of the Act. The activities undertaken by the appellant are admittedly similar and the same are prima facie to be classified under the same heading. In other words, the appellant has no prima facie case against the impugned demand of service tax and the connected penalties - Following decision of Ramky Infrastructure Ltd., Satya Murthy, Maytas and Nagarjuna Construction Co. Ltd. Versus Commissioner of Service Tax [2012 (6) TMI 165 - CESTAT, Bangalore] - Stay granted partly.
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2014 (1) TMI 720
Waiver of Pre-deposit u/s 73(2) of Finance Act, 1994 Held that:- The applicant was paying the service tax for "Storage and Warehousing Service" provided to SPIC for imported Naphtha, for which, M/s. IOC Ltd., collected handling charges - the physical handling of the SPIC procured Naphtha viz. unloading, storage and pumping through to SPIC premises was made by IOC, both during the lease period and after the lease period and all the procedures are same and SPIC, who imported Naphtha directly which was also stored in the main tank - service tax was paid on storage and warehousing of imported Naphtha thus, tax is payable on storage and warehousing from refineries to storage tanks and connecting pipeline to storage tank of SPIC comply - IOC Ltd. has to store the Naphtha safely as per safety regulation - the applicant failed to make out a prima facie case for waiver of pre-deposit of the entire amount - the applicant is directed to deposit a sum of Rupees Seventy Five Lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal partial stay granted.
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2014 (1) TMI 719
Demand of service tax - Consulting Engineers service - Payment of royalty - Held that:- appellant received technical know-how from M/s. from M/s. Corrocoat Ltd., UK, for which they have paid royalty. The technical know-how was for the purpose of manufacture, use and sale of products in India by the respondent and the information provided was a relatable to the production process, format and technology. Accordingly, the appellant paid royalty for the technical know-how received - supply of technical know-how does not come within the ambit of "Consulting Engineer's Service - Following decision of BST Ltd. Vs. CCE, Cochin, [2006 (5) TMI 445 - CESTAT BANGALORE], CCE & ST, Bangalore Vs. Molex (India) Ltd., - [2007 (4) TMI 48 - CESTAT,BANGALORE] & CCE, Bangalore Vs Mico Ltd., - [2007 (5) TMI 191 - CESTAT, BANGALORE] - Decided against Revenue.
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2014 (1) TMI 718
Eligibility of the banking services Held that:- The services are integrally connected with the manufacturing business of an assessee and hence have to be treated as covered by the expression "activities relating to business" in the definition of input service as given in Rule 2(1) of the Cenvat Credit Rules thus, the services availed by the appellant from the bank are eligible for cenvat credit. Validity of the documents - the debit advices issued by the bank for different periods contain the name and address of the bank, service tax registration no, period during which services were provided, the nature of the service, amount charged for the services along with service tax and education cess - Thus, the debit advices issued by the bank on the basis of which cenvat credit has been taken, contain all the information which is required to be included in an invoice - the debit advices have to be treated as valid documents for cenvat credit - Just because these advices were not issued by the bank within a period of 15 days from the date of providing the service, the cenvat credit cannot be denied to the appellant following Vimal Enterprises Vs. Union of India [2005 (7) TMI 111 - HIGH COURT OF GUJARAT AT AHMEDABAD] - the cenvat credit cannot be denied to an assessee for faults for which he is not responsible Decided in favour of Assessee.
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2014 (1) TMI 717
Stay application - Demand of service tax - Consideration towards GTA service in question has already been deposited - Held that:- when the consideration was received by appellant and that was shared between the appellant and the truck owner that was again sought to be taxed as commission receipt from Business Auxiliary Service provided. It is surprising, how appropriation of income shall make the appropriation liable to tax since the consideration for service provided is only subject to taxation - Stay granted.
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2014 (1) TMI 716
Demand of service tax - Classification of service - whether filling of ash into bulkers/tankers is a separate activity covered under cargo handling as alleged by the Revenue or it is an activity ancillary to the transportation of goods as claimed by the appellant - First rule of most specific nature of service to fall under specific activity prescribed by law under Section 65A(2)(a) is answer to the question. Looking to the scope of the activity carried out by the respondent as depicted in work order and that was examined by the learned Commissioner (Appeals) we are of the view that factual circumstances of the case does not permit to disagree with the first appellate order - Decided against Revenue.
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2014 (1) TMI 715
Waiver of pre-deposit - Management Consultancy Service and Goods Transport Agency service - Service of implementing of Micro Irrigation system - Held that:- appellant is a nodal agency for implementation of Micro Irrigation system by the Government of Gujarat. We also find that the said system is centrally sponsored scheme. If that be so, Boards circular clearly clarifies that there is no rendering of services for implementation of such centrally sponsored schemes. In our view, the appellants have made out a prima facie case for waiver of the amounts involved. Accordingly, we allow the application for waiver of pre-deposit of the amounts involved and stay the recovery thereof till the disposal of the appeal - Stay granted.
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2014 (1) TMI 714
Waiver of pre deposit - Rent-a-Cab Service - Held that:- No prima facie case for the appellant. The nature of activity undertaken by them coupled with the terms of the relevant contract indicates that they were providing their buses to the KSRTC for hire charges. Prima facie, the activity would be covered by the definition of rent-a-cab service given under Section 65 of the Finance Act, 1994. In any case, this service is more specific than supply of tangible goods service referred to by the learned Consultant. We are also not impressed with the plea of limitation and that of financial hardships at this stage - Conditional stay granted.
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2014 (1) TMI 713
Waiver of pre deposit - Franchisee agreement - Receipt of SIM cards/recharge coupons with specified face value; while delivering such SIM cards/recharge coupons, BSNL has undisputedly paid Service Tax on the face value - Held that:- The BSNL documents and communications from BSNL to the applicant prima facie indicate that it is a case of rendering of services by BSNL to subscribers and the applicant is an intermediary in reaching the services to the subscribers. Undisputedly the entire amount including the amount given as discount/commission to the applicant stands taxed at the hands of BSNL. In view of the above, we hold that the applicant has made out a prima facie case for waiver of the dues as per the impugned order. Accordingly, we waive pre-deposit of dues and stay recovery thereof till the disposal of the appeal - Stay granted.
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Central Excise
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2014 (1) TMI 684
Affixation of MRP on goods cleared Waiver of Pre-deposit Held that:- The arguments need to be examined in detail, which exercise is not possible at stay stage assessee offered to submit an amount of Rs. 10 lakhs as pre-deposit which is accepted upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 683
Denial of Cenvat credit Goods used for supporting structures to the plant and machinery Waiver of Pre-deposit Held that:- Held that:- Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - the invocation of extended period will have to be considered in great detail and that may not be possible at this stage - prima facie, in view of the conflicting decisions during the relevant time, the appellant can be said to have made out a case for waiver of pre-deposit - the appellant has not deposited the interest on the CENVAT credit - the appellant is directed to deposit Rupees Five lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 682
Enforceability of the Writ made to High Court - Goods cleared to another EOU in DTA - Waiver of Pre-deposit - Value of deemed exports to be included as value of exports or not - Held that:- It is seen from the order of the Honble High Court that the prayer in the writ petition was for staying further proceeding in the present appeal - The interim stay was granted and is still continuing - In view of the interim order of the Honble High Court, the stay application is allowed.
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2014 (1) TMI 681
Manufacture and clearing of dutiable as well as non-dutiable goods No separate accounts maintained - Waiver of Pre-deposit Held that:- Prima facie, the appellant did not maintain separate accounts in respect of plastic crates, and if that be so, they were liable to pay 5% of the value of the crates (excluding taxes) in terms of Rule 6(3) of CENVAT Credit Rules, 2004 - the appellant is directed to deposit an amount of Rupees thirty lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 680
Additional activity undertaken by appellant on contract basis Waiver of Pre-deposit Held that:- The production register for job-work does not appear to reflect number of sacks produced at all - The register shows receipt, issue and balance and receipt quantity and the issue quantity and the balance - The register does not have any indication of the production of sacks manufactured nor appellants have any evidence to show that sacks were manufactured by them on job work basis - the honest mistake commited in maintenance of stock register etc. was frankly admitted by the Managing Director of the respondent-assessee - There is no finding to the effect that there was a fraud or willful mis-statement or suppression of facts - it is very clear that the notice was issued after expiry of the period of limitation - the appellants have not been able to make out a prima facie case in their favour appellant directed the appellants to deposit an amount of Rupees Ten lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 679
Activity amounts to manufacture or not - Affixation of brand name on imported Automobile Parts Waiver of Pre-deposit Held that:- Notification No. 2/2006 (Entry No. 97) was clear enough and hence it cannot be argued that the appellant had reason to misunderstand the said entry - Prima facie, the extended period of limitation was not invoked in this case without a firm footing - in the event of the demanded duty having to be paid by the appellant, they would be entitled to CENVAT credit of CVD and SAD paid on the imported parts to the extent of 58% of the duty demand the plea of revenue-neutrality accepted Thus, the Pre-deposits waived till the disposal Stay granted.
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2014 (1) TMI 678
Valuation of goods - Price adopted for sale less than the assessable value - Value arrived at on the basis of raw material costs plus conversion charges Waiver of Pre-deposit Held that:- The agreement copy was provided to the department only after a request was made and investigation was taken up - even after giving relief for cost of scrap sold by the appellant by the Commissioner, the total value of goods cleared when Valuation Rules are adopted increases substantially - the basis for value given by the appellant is also not very clear since inasmuch in the statement for calculation of value, the total value of goods cleared does not work out to Rs. 7.63 crores as done by them, because there are two entries of raw materials returned/transferred to SBSPL by the appellant, which creates confusion. There is no clarity as to whether the transaction value represents the full value or not; whether the job charges, raw materials costs have been correctly worked out or not and the stand taken by the appellant has also been confusing and there is lack of clarity - initially by not giving the agreement copy certain important factors could not be seen/verified - there is substantial difference between the value arrived at on the basis of Valuation Rules and the transaction value and there is no explanation for this difference - the appellant has not been able to make out a prima facie case in their favour - the appellant directed to submit Rupees ten lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 677
Waiver of Penalty Duty and Interest already paid Consignment of Diesel seized - Held that:- According to the procedure laid down under Notification No. 45/2001-CE (NT), the exporter is required to execute a bond for export to Nepal and is also required to submit the proof of export to the said officers - In case of failure to export, the exporter is required to pay the duty alongwith interest - the goods were not under their control for effecting the export and they have already complied with the conditions of the bond executed by them before the Central Excise Authorities Thus, pre-deposits waived till the disposal Stay granted.
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2014 (1) TMI 676
Waiver of Duty, Interest and Penalty - Tax on intermediate product Sugar syrup captively consumed in the manufacture of biscuits Held that:- Interest of justice would be met by granting stay of further proceedings on the condition that the petitioner deposits entirety of the duty component excluding the interest and penalty components upon such submission rest of the amount to be stayed till the disposal Partial stay granted.
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2014 (1) TMI 675
Clandestine removal of goods for export - Intimation through D3 not being made by assessee on goods when received back - Waiver of Pre-deposit Held that:- The applicant had not followed the procedure in respect of the manufactured goods received in the factory Thus, the applicants failed to make out a case for total waiver of amount - The applicants are directed to deposit 25% of the amount as pre-deposit upon such submission rest of the duty to be stayed till the disposal partial stay granted.
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CST, VAT & Sales Tax
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2014 (1) TMI 724
Period of liability - Whether the assessee is entitled for an exemption from payment of tax for a period of six years or for a period of five years in view of the location of the industry - Held that:- if an industrial unit has obtained an eligibility certificate for exemption from trade tax under the exemption scheme which was in force upto 31.03.1990 and no act of forgery or cheating has been committed in obtaining the certificate or if no conditions of the certificate is violated, then even if the Commissioner has cancelled the certificate in exercise of his powers under Section 4A (3) of the Act, then also the outstanding amount prior to the date of cancellation or modification would be remitted unless the unit has not realized the tax from its customers. The aforesaid circular is binding on the authorities under the Act as noticed by a Constitution Bench of this Court in the case of Collector of Central Excise, Vadodra vs. Dhiren Chemical Industries [2001 (12) TMI 3 - SUPREME COURT OF INDIA] - State Government in exercise of its powers has issued a circular which, in our opinion, is binding on the assessing authority. If that is so even after cancellation of the eligibility certificate in the case of the respondent unit, the said unit can certainly claim remission from payment of tax provided it had not realized the same from its customers - assessing authority in fact, had passed an order granting remission of the tax since the assessee had not collected tax from its customers - Decided against Revenue.
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2014 (1) TMI 723
Assessement of Base production - Whether turnover of the base production in accordance with clause (6) of the Notification No. 1093 dated July 27, 1991 has to be taken up for the whole of the assessment year - Held that:- Following decision of Commissioner Of Trade Tax, UP. Versus Malviya Chemical And Pharmaceutical Private Limited [2007 (11) TMI 397 - SUPREME COURT OF INDIA] - Decided in favour of assessee. Whether Notification No. 7038 dated 31.1.1985 as amended by Notification No. 595 dated 10.4.1999 will cover the tax liability in respect to Chicory Roots or it is Notification No. 306 dated 29.1.2001 - Held that:- Chicory Roots are specifically mentioned in the Notification dated 29.1.2001 while the Notification dated 31.1.1985 as amended by Notification No. 595 dated 10.4.1999 contain a general entry with respect to fresh roots. It is well settled that a special provision shall prevail over a general provision. When the Chicory Roots are specifically covered by independent Notification dated 29.1.2001, the contention that it shall be covered by general entry mentioned in any other Notification is not correct - Decided in favour of assessee.
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