Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 2, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Central Excise
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01/2016 - dated
1-1-2016
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CE
Seeks to further amend notification No 12/2012-Central Excise dated 17.03.2012 so as to increase the Basic Excise Duty rates on Petrol and Diesel(both unbranded and branded)
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27/2015 - dated
31-12-2015
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CE (NT)
Rules further to amend the CENVAT Credit Rules, 2004
Companies Law
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F. No. 3/76/2015-CL.-II - dated
31-12-2015
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Co. Law
Notification under section 458 of Companies Act, 2013: Delegating of powers to RDs under section 208 of the said Act
Customs
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150/2015 - dated
31-12-2015
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Cus (NT)
Tariff Value Notification in respect of fixation of Tariff Value of Edible Oil, Brass, Poppy Seed, Areca Nut, Gold and Sliver
FEMA
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9(R)/2015-RB - dated
29-12-2015
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FEMA
Foreign Exchange Management (Realisation, repatriation and surrender of foreign exchange) Regulations, 2015
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6(R)/RB-2015 - dated
29-12-2015
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FEMA
Foreign Exchange Management (Export and import of currency) Regulations, 2015
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18(R)/2015 – RB - dated
29-12-2015
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FEMA
Post Office (Postal Orders/Money Orders)
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15(R)/2015 – RB - dated
29-12-2015
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FEMA
Definition of "Currency"
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12R/2015-RB - dated
29-12-2015
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FEMA
Foreign Exchange Management (Insurance) Regulations, 2015
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11(R)/2015-RB - dated
29-12-2015
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FEMA
Foreign Exchange Management (Possession and Retention of Foreign Currency) Regulations, 2015
VAT - Delhi
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F.3(352)Policy/VAT/2013/1210-21 - dated
31-12-2015
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DVAT
Notify that the Form DP-1 shall be submitted online by all the dealers latest by 31/01/2016. The form shall be filed by dealers registered upto 31/10/2015
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Transactions in relation to which permanent account number is to be quoted in all documents - Income–tax (22nd Amendment) Rules, 2015 - Notification
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Certificate under Section 10(23C)(vi) refused - certificate under Section 12A already issued - petitioner institution is established for the sole purpose of imparting education in a specialised field. Hence, the petition is allowed. Certificate under Section 10(23C)(vi) to be allowed - HC
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Determination of taxable income - Best Judgment Assessment u/s 144 - AO failed to collect details by exercising his power in order to determine the fair income of the assessee. He ought to have looked into the earlier and subsequent years details available with the department before determining the income of the assessee. - AT
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Condonation of delay - delay in filing appeal - The assessee, has therefore, not been vigilant in challenging the re-assessment proceedings as well as the penalty proceedings. The assessee’s explanation is common for all the appeals proceedings. - Condonation of delay not allowed - AT
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Disallowance of deduction of interest expenditure from interest Income - there is a director nexus between the interest earned from the company and the interest paid to the bank. Under these circumstances, the interest expenditure, in our opinion, was rightly allowed - AT
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Amount received is in the nature of royalty or not - taxability in India - Section 9(1)(xi) - activity of providing access to its internet by which it provides a gateway that will facilitate call centers to incoming and outgoing calls from India to the people of USA, referred as Cincom Gateway - Is in the nature of royalty - taxable in India - AT
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Reopening of assessment - non-issuance of notice u/s 143(2) - assessment could not be sustained for lack of service of statutory notice u/s 143(2) of the Act - AT
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Condonation of delay in filing of appeal - delay of 3 years - Notice of demand u/s 156 - assessee could not demonstrate that, it was prevented by sufficient cause, in filing this appeal within the time stipulated under the Act. - AT
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Unexplained investment u/s 69B - section 50C is deeming provision, which authorizes the AO to replace the sale consideration with regard to the full value of consideration disclosed by the assessee for the purpose of computing the capital gain - But, this section is of no help while determining the unexplained investment of the assessee. - AT
Customs
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Constitutional right to do business - powers under Customs Act to stop business, search and seizure - Allegation of smuggling of red sanders and certain endangerous species of wild flora and fauna - the Petitioner is free to operate his bank accounts and the sums therein can be released by the banks so as to enable the Petitioner to meet the liabilities in his business activities and in relation to the deals - HC
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Condonation of delay - Tribunal refused to condone the delay - Tribunal has insisted on every day’s delay - The petitioner cannot be said to be grossly negligent or his conduct lacking in bona fides - appeals restored before the tribunal, however costs of ₹ 5000 imposed on the petitioner. - HC
FEMA
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A person resident in India allowed to have a general or life insurance policy issued by an insurer outside India - RBI notifies the regulations / conditions
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Debit cards, ATM cards or any other instrument by whatever name called that can be used to create a financial liability, Notified as ‘currency’. - RBI
Service Tax
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There will be no Levy of service tax on the proposed car lease scheme (of providing vehicles to employees) under Section 66B of the Finance Act, 1994 - applicant is an employer and the applicant is providing some service to its employees by giving an option to all such employees to avail of a car. - AAR
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Cenvat Credit - Capital goods installed in the state of Jammu & Kashmir - services availed in the state of Jammu & Kashmir - there is no ambiguity or confusion exists - credit cannot be allowed - AT
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Cenvat Credit - input services - receipt of advertisements services for promoting the mutual fund - Availment of credit on brokerage fee - credit allowed as eligible - AT
Central Excise
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Distribution of Cenvat Credit exclusive related to one unit - The credit of service tax in respect of services used in the said Rudrapur unit is not available to the appellant's ISD. The order of the lower authorities to that extent, disallowing proportionate credit is upheld - AT
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Method of valuation - Transaction value u/s 4 or MRP based value u/s 4A - manufacture and clearance of chocolates individually weighing 3.9 gms and 14 gms. - putting the individually small pieces into big jar would not make them liable to duty subject to MRP based duty. - AT
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Cenvat Credit - Eligible input services - nexus with manufacturing activity - any services which are considered for pricing of final product, CENVAT Credit should be allowed - AT
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Cenvat credit on construction and maintenance service and outdoor catering/canteen service, prior to the amendment made to the definitions to input services under Rule 2(l) of the Cenvat Credit Rules, 2004 w.e.f. 01-04-2011, is an eligible input servicen - AT
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Maintainability of appeal before the tribunal - in respect of rebate on goods supplied from DTA to SEZ within India, the appeals would not lie to the Appellate Tribunal under clause (b) of proviso to Section 35(1) of the Central Excise Act. - AT
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Claim of refund or suo-moto re-credit - Reversal of excess Cenvat credit wrongly - appellant is entitled to take refund/re-credit of the excess amount Cenvat credit reversed by them - refund claim filed by the appellant are allowed which will regularize the suo-moto Cenvat credit taken by the appellant - AT
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Clandestine manufacture and clearance - The Revenue cannot rest its case on the sole basis of the statements without taking into account the surrounding circumstances. As such in the absence of any reference by the said deponents, to the fact of passing of quality control test about a week ago and in the absence of any admission that the same were not entered with any malafide intention to remove them clandestinely. - AT
VAT
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Constitutional validity of some of the provisions of the Maharashtra Purchase Tax on Sugarcane Act, 1962 - Interpretation - determination of purchase price - valuation - inclusion of expenses - change the structure of taxation - It is not unconstitutional and ultra vires as alleged - HC
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Adjustment of input tax credit - Whether the Hon'ble Tribunal has erred in permitting adjustment of input tax credit arising from Value Added Tax Act to the Central Sales Tax Act - Held Yes - HC
Case Laws:
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Income Tax
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2016 (1) TMI 42
Certificate under Section 10(23C)(vi) refused - certificate under Section 12A already issued - Held that:- It is an admitted position that a certificate under Section 12A of the Act has already been issued in favour of the petitioner and the same has continued till date. Therefore, it is etablished that the petitioner-institution is a charitable trust as far as applicability of the Income Tax Act is concerned. As far as object 3(i) which has been relied upon by Mr Bhatt, learned Senior Counsel, we are of the opinion that by providing training to the individuals as well as those persons who have been sent by the companies to meet the needs of the Indian industry and Commerce and introducing them with new products and informing them about market conditions, etc. would not establish that the petitioner is carrying on such activity which would treat the same as service provided in relation to any trade, commerce and industry. Education does not mean teaching the students only, in the manner and method, the regular schools or colleges adopt to teach. In the progressive world, it is expected from certain institutions that they educate, teach and train persons so that those persons can compete similar experts worldwide. Therefore, we are not in agreement with the submissions made by Mr Bhatt, learned Senior Counsel that the sole object of the institution is not to impart education. By providing latest information and thereafter training to those persons who are already in the field of advertising communication, etc. and in such process if certain persons become super-specialists in particular field and for which the institution is charging fee, we are of the opinion that the case would not fall under proviso to Section 2(15) as submitted by Mr Bhatt, learned Senior Counsel appearing for the respondent. Considering the object of the petitioner institution, we are of the opinion that the petitioner institution is established for the sole purpose of imparting education in a specialised field. Hence, the petition is allowed. Certificate under Section 10(23C)(vi) to be allowed - Decided in favour of assessee
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2016 (1) TMI 41
Determination of taxable income - Best Judgment Assessment u/s 144 - disallowance of depreciation and sundry creditors - Held that:- CIT(A) has restored some of the issues to the AO for verification and allowance to the assessee, particularly with respect to set off of brought forward loss. In the grounds of appeal extracted (supra), the Revenue has pleaded that the ld.CIT(A) has upheld the depreciation of ₹ 1,49,07,251/- but in the computation of income no such deprecation as claimed by the assessee. The claim of depreciation is of ₹ 62,95,561/- only. It is also pertinent to note that the AO has made disallowance out of the sundry creditors. He made ad hoc disallowance at 20%. It is totally unheard. Whether sundry creditors are genuine or not genuine ? How they can be non-genuine to the extent of 20%. In other words, either total sundry creditors are genuine or all the sundry creditors genuine unless pointed out specifically. There cannot be any ad hoc disallowance out of these items. This appears to us that though the assessment was framed under section 144 of the Income Tax Act, according to the best judgment of the AO, but the AO failed to collect details by exercising his power in order to determine the fair income of the assessee. He ought to have looked into the earlier and subsequent years details available with the department before determining the income of the assessee. While he considering all these aspects, we set aside both the orders of the Revenue authorities and restore all the issues to the file of the AO for re-adjudication. The ld.AO shall issue notice to the assessee, and thereafter, determine taxable income of the assessee, if any. - Decided in favour of revenue for statistical purpose.
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2016 (1) TMI 40
Deduction under Section 80-IA - Held that:- In view of the mandatory requirement under Section 80-IA(4)(i)(b) of the Act, the assessee has to necessarily enter into an agreement either with Central Government or State Government or with local authority or any other statutory body for developing Container Freight Station. As found by the Tribunal in the case of A.L. Logistics Pvt. Ltd. (2015 (1) TMI 401 - MADRAS HIGH COURT) even though no specific agreement was required, approval from Government or Government agency is required for claiming deduction under Section 80-IA of the Act. Since these aspects were not examined by the CIT(Appeals), even though a specific issue was raised by the Assessing Officer, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer in the light of the judgment of Madras High Court in A.L. Logistics Pvt. Ltd. (supra). Accordingly, the orders of the lower authorities are set aside and issue of deduction under Section 80-IA of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the issue and find out whether the assessee has obtained any approval or entered into any agreement with Government or Government agency, as in the case of A.L. Logistics Pvt. Ltd. (supra) and thereafter decide the same in accordance with law, after giving reasonable opportunity to the assessee. - Decided in favour of revenue for statistical purposes.
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2016 (1) TMI 39
Condonation of delay - Penalty under section 271(1)(c) and under section 271D - delay in filing appeal - whether it cannot be said that non-filing of the appeal is only due to misplacement of the record but it may also be due to additions agreed to by the assessee? - Held that:- The assessee’s explanations in the assessment proceedings would therefore be the basis for levy of penalty under section 271D. The assessee would, therefore required assessment records to submit its explanation during penalty proceedings under section 271D and therefore the assessee’s contention that the assessment records were not required to represent in 271D proceedings is not sustainable. When the assessee had the assessment records for representing in the proceedings under section 271D, it cannot be said that it was prevented by sufficient cause to file appeal against the order under section 143(3) read with section 147 of the Act or in appeal against the penalty proceedings under section 271(1)(c) due to misplacement of file is not maintainable at least till the proceedings under section 271D got concluded. The assessee did not represent before the A.O. during the penalty proceedings under section 271(1)(c) and has filed the appeal against the same also with delay. The assessee, has therefore, not been vigilant in challenging the re-assessment proceedings as well as the penalty proceedings. The assessee’s explanation is common for all the appeals proceedings. Therefore, the CIT(A)’s order for refusing to condone the delay of 217 days in filing the appeal against order under section 143(3) read with section 147 and 29 days and 81 days in filing of the appeals against the penalty proceedings mentioned above is upheld. - Decided against assessee
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2016 (1) TMI 38
Deduction u/s 35(2AB) denied - Held that:- Since the approval as required u/s 35(2AB) of the Act r.w.rule 6 was not obtained from the prescribed authority, this Tribunal is of the considered opinion that the assessee is not entitled for any deduction u/s 35(2AB) of the Act. Therefore, this Tribunal do not find any infirmity in the order of the CIT(A) and accordingly the same is confirmed. - Decided against assessee.
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2016 (1) TMI 37
Disallowance of deduction of interest claimed - as per AO neither any income u/s. 56 of the Act had accrued to the assessee nor the interest liability arose in his individual hand, since it has been incurred in the capacity of the director - Held that:- There is no dispute to the fact that the assessee who was a director of the company C.C. Engineers Pvt. Ltd. stood as a guarantor in his capacity as a director and an individual when the cash credit loan was obtained from the Rupee Cooperative Bank Ltd. He had guaranteed the said loan not on behalf of the assessee company, but in his capacity as director and individual for which, his own property was mortgaged to the bank. Since the company defaulted in making the payment, the assessee and other guarantors requested the bank to release the company from loan liability and allow them to take over the said liability personally, subject to payment of certain settlement amount and simple interest thereon. Thus, after taking over the loan of the company, the assessee became liable to the bank for which, the assessee had paid interest to the bank. Simultaneously, the assessee has received interest from the company on the amount of loan that has been transferred from the company to the assessee. Therefore, there is a direct nexus between the interest earned from the company and the interest paid to the bank. Under these circumstances, the interest expenditure, in our opinion, was rightly allowed by the Ld. CIT(A) u/s. 57(iii) of the Act. The decision relied on by the learned Departmental Representative in the case of CIT Vs. Dr. V.P. Gopinathan reported in (2001 (2) TMI 10 - SUPREME Court) is not applicable to the facts of the present case and is distinguishable. In that case, the assessee had earned interest on fixed deposits and has paid interest on loan taken on the security of fixed deposits. The assessee claimed the interest on such loan on fixed deposits as expenditure out of interest income. Under these circumstances, it was held that interest on loan taken by the assessee from the bank on the security of fixed deposits could not be reduced from his income by way of interest on fixed deposits placed by him in the bank - Therefore, this decision, in our opinion, is clearly distinguishable and not applicable to the facts of the present case. Decided against revenue
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2016 (1) TMI 36
Entitlement for benefit of Indo-UK Double Taxation Avoidance Agreement - the assessee filed return of income as representative assessee of a firm of solicitors based in UK, named "Millbank Tweed Hadley and Mccloy". M/s. Zee Telefilms Ltd. had engaged the abovesaid solicitor for its proposed ADR offering. M/s. Zee Telefilms Ltd. paid fees to the solicitors and deduced tax at source of ₹ 70.16 lakhs. Later it filed return of income as a representative of the abovesaid solicitors' firm declaring the total income as nil. Accordingly, the entire amount of TDS deducted by M/s. Zee Telefilms Ltd. was claimed as refund. Held that:- As decided in P and O Nedlloyd Ltd. v. Asst. DIT (International Taxation) [2014 (11) TMI 564 - CALCUTTA HIGH COURT] the benefit of Indo-UK treaty is available to the partnership firm registered in UK even though the firm is not recognised as taxable entity under the taxation provisions of UK. Thus we hold that the assessee is entitled to Indo-UK Double Taxation Avoidance Agreement benefits and accordingly dismiss the appeal filed by the Revenue. - Decided against revenue
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2016 (1) TMI 35
Disallowance under section 14A r/w rule 8D - Held that:- As could be seen during the assessment proceedings, the assessee also furnished a working computing the disallowance under section 14A r/w rule 8D, which worked out to ₹ 18,45,336. The Assessing Officer, in fact, has accepted the disallowance under rule 8D computed by the assessee. Therefore, from the aforesaid facts, it is very much clear that the maximum disallowance which could have been made under section 14A r/w rule 8D, was to the tune of ₹ 18,45,336. However, as is apparent on record, the assessee itself has made a suo–motu disallowance of expenditure to the tune of ₹ 2,49,45,390, which is much higher than the disallowance which could have been made by applying the provisions of rule 8D. Therefore, the assessee having already made disallowance under section 14A, for an amount of ₹ 2,49,45,390, any further disallowance over and above the said amount is not only unreasonable but is against equity, fair play and justice. That being the case, we delete the addition of ₹ 18,45,336, made by the Assessing Officer under section 14A r/w rule 8D. - Decided in favour of assessee
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2016 (1) TMI 34
Amount received is in the nature of royalty or not - taxability in India - Section 9(1)(xi) - activity of providing access to its internet by which it provides a gateway that will facilitate call centers to incoming and outgoing calls from India to the people of USA, referred as Cincom Gateway - whether the consideration paid for the use of such facility is in the nature of royalty as defined under the DTA between India and USA? - India USA DTAA - Held that:- Undisputedly, the impugned payment falls within the definition of ‘royalty’ as defined under the provisions of 9(1)(vi) of the Act. However, since the assessee company is a resident of United States of America, it is entitled to be governed by the provisions of DTAA between India and USA, the term ‘royalty’ was defined in the Article 12(3) of the DTAA From the facilities provided by the American company to the Indian company, which are of the nature of online, analytical data procession, it would be clear that the payment is received as “consideration for the use of, or the right to use design or model, plan, secret formula or process”. The use by the Indian company of the CPU and the consolidated date network of the American company is not merely “use of or the right to use any industrial, commercial or scientific equipment” as envisaged in article 12(3)(b) of the DTA but more than that. It is the use of embedded secret software (an encryption product) developed by the American company for the purpose of processing raw data transmitted by the Indian company, which would also clearly fall within the ambit of article 12(3)(a) of the DTA between India and the USA. In this case, use of Transponder is involved which is not a self contained operating unit. It is in orbit with footprints all over the world so that its location cannot be attributed with reference to location of its customers. Thus the consideration paid is in the nature of royalty within the meaning article 12(3) of DTA between India and USA. - Decided against assessee.
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2016 (1) TMI 33
Addition on account of rental income - CIT(A) deleted the addition - Held that:- In the instant case, it is noticed that the assessee disclosed the income which was on account of rent receivable and the rent received during the year. Therefore, the AO was not justified in making the impugned addition and the ld. CIT(A) rightly deleted the same. We, do not see any valid ground to interfere with the findings given by the ld. CIT(A). - Decided against revenue. Addition on account of grant remaining unspent - Held that:- In the present case, it appears that neither the AO nor the ld. CIT(A) had considered the entries mentioned in income and expenditure account by the assessee, in right prospective. We, therefore, deem it appropriate to set aside this issue back to file of the AO for proper verification and to decide afresh in accordance with law after providing due and reasonable opportunity of being herd to the assessee. - Decided in favour of assessee for statistical purposes.
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2016 (1) TMI 32
Reopening of assessment - non-issuance of notice u/s 143(2) - Held that:- In the present case, it is an admitted fact that the AO did not issue any notice u/s 143(2) of the Act. A similar issue has been decided by the Hon’ble Jurisdictional High Court of Allahabad in the case of CIT Vs Rajeev Sharma reported at (2010 (5) TMI 600 - ALLAHABAD HIGH COURT) wherein by following judgment of of ACIT Vs Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) it has been held that the assessment could not be sustained for lack of service of statutory notice u/s 143(2) of the Act. - Decided in favour of assessee.
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2016 (1) TMI 31
Addition u/s. 68 - bogus share application money/share premium received by the assessee company - CIT(A) deleted the addition - Held that:- The AO has also raised doubts on the genuineness of the share application money on the premises that it is at abnormally high premium, even where the shares of the applicant company are not listed. On this issue it is observed that such features are trigger for further investigation but the matters ends at this point & the AO is enquired to investigate the issue independently and through corroborative evidences and cannot for this fact of abnormal premium the very basis for making addition u/s. 68 The first appellate authority has passed well reasoned order by passing a speaking order. He has also considered various judicial pronouncements and the relevant provisions of law. Substantial evidences were found available on record and the same were properly considered by the ld. CIT(A) impugned order. The learned DR could not be able to rebut the findings elaborately recorded by the ld. CIT(A). We are, therefore, of the view that the impugned order of the ld. CIT(A) does not call for any interference. Therefore, the impugned order is liable to be upheld and the appeal of the Revenue deserves to be dismissed. - Decided in favour of assessee.
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2016 (1) TMI 30
Condonation of delay in filing of appeal - delay of 3 years - Notice of demand u/s 156 - non serve of notice on the assessee along with the assessment order and computation form challenged - Held that:- The assessee stated in his letter dated 27th January, 2011 addressed to the Commissioner of Income Tax (A) that it was only after it received the order of the Tribunal on 30.7.2010 for the assessment years 2001-02, 2002-03 and 2003-04 the status of the appeal in respect of the instant asstt. Year 2004-05 was examined and it was pointed out that no appeal has been filed, as no notice of demand was received. This statement shows that during the entire interregnum period of more than three years, the assessee has not pursued the matter to obtain the -NIL notice of demand. This period of delay has not been explained. On the argument that an appeal was not filed on the advise of the Chartered Accountant, the only evidence filed is an affidavit of the employee of the assessee. This is a self-serving document as the Chartered Accountant has not corroborated the same. Under these circumstances, we concur with the view of the Ld. CIT(A) that the assessee could not demonstrate that, it was prevented by sufficient cause, in filing this appeal within the time stipulated under the Act. We do not find any infirmity in the order of the Ld.CIT(A). In none of the cases as relied it has been laid down that in each and every case, condonation has to be granted as a matter of rule. Unlike in the cases cited, the basic reason cited by the assessee in this case is found incorrect. Hence there is a factual difference. In this case, the department has produced evidence to prove that notice u/s 156 was dispatched along with the assessment order to the assessee. As already noted the very ground on which the assessee based its entire case for condonation of delay fails and consequently we uphold the order of the first appellate authority and dismiss the appeal of the assessee. - Decided against assessee.
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2016 (1) TMI 29
Unexplained investment under section 69B - Held that:- We have considered the issue in the case of Shri Vishnuprasad S. Agarwal, who was co-owner to the extent of 75% of the plot wherein it has been unanimously held that valuation made for the purpose of stamp duty is an estimated opinion. It can be a corroborative evidence for the help of the AO, but, it cannot be conclusive piece of evidence demonstrating the unexplained investment made by the assessee for purchase of land. Solely on the basis of such estimated opinion, the addition cannot be made. From perusal of record, find that, apart from this estimated opinion, the AO was not possessing any other evidence. As far as reference made under section 50C of the Act is concerned, we are of the view that section 50C is deeming provision, which authorizes the AO to replace the sale consideration with regard to the full value of consideration disclosed by the assessee for the purpose of computing the capital gain. In that situation, the AO would replace the sale consideration disclosed by the assessee by an amount on which stamp duty was paid by the assessee. Therefore, this section is of no help while determining the unexplained investment of the assessee. In view of the above discussion, we are of the view that the learned Revenue authorities have failed to appreciate the facts and circumstances. The assessees have not made any unexplained investment in purchase of plots, and therefore, no additions deserve to be made. - Decided in favour of assessee.
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2016 (1) TMI 28
Reopening of assessment - Held that:- Reason recorded for issuing notice under section 148 clearly indicates that the reopening done without even an allegation that the assessee has failed in its statutory obligation to disclose fully and truly the material facts necessary for the computation of income and as such cannot be held to be valid in law and need to be cancelled on this primary ground only. There is not even an allegation in the reasons that assessee has failed to disclose fully and truly all material facts for the computation of its income. See Minda Industries case [2015 (6) TMI 804 - ITAT DELHI] In the present case both the authorities below have gone wrong in deciding the reopening as valid. However, it is established that that in the present case the issue reopening of assessment is incorrect and invalid. Therefore, quash the orders of the authorities below on this legal issue and decide the same in favor of the assessee.
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2016 (1) TMI 27
Reallocation of expenses incurred amongst Unit-I & Unit- II in proportion to the sales of these units - CIT(A) allowed part relief - Held that:- Given a finding that Assessee has kept separate production record for both the units which indicate the quantitative of raw material consumed and production as per excise law, therefore held that A.O was not justified in re-allocating the expenses in proportion to the sale in both the units. However, with respect to certain other expenses, CIT(A) has noted that the procedure followed by Assessee for allocating the expenses were not logical and without any documentary evidence and with respect to those expenses he had directed to the A.O to apportion the expenses in the ratio of turnover. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) - Decided against revenue
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2016 (1) TMI 26
G.P. addition - CIT(A) reducing the G.P from 30% to 15% - Held that:- CIT(A) and the A.O. have rightly rejected the books of account, because there were discrepancies in the books of account and the purchases were not found to be verifiable. We also in agreement with the ld. CIT(A) on the adoption of GP ratio of 15% as against 30% adopted by the A.O.in A.Y. 2006-07 and GP ratio of 28% as against 30% in A.Y. 2007-08 as against GP rate of 27.18% declared by the assessee based upon the working furnished by the assessee. Accordingly, we uphold the order of the ld. CIT(A) - Decided against revenue Disallowance of foreign export commission - CIT(A) deleted the addition - Held that:- The ld. CIT(A) has concluded that the assessee has engaged foreign commission agent i.e. Sinar Mandiri and has paid foreign export commission under the regulations of RBI through banking channel @ 12% on which copies of invoices were furnished during the appellate proceedings. In our considered opinion, the ld. CIT(A) is quite justified in deleting the disallowance made by the A.O. We find no reason to interfere with the order of the ld. CIT(A) and accordingly we uphold the same - Decided against revenue
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Customs
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2016 (1) TMI 11
Constitutional right to do business - powers under Customs Act to stop business, search and seizure - Allegation of smuggling of red sanders and certain endangerous species of wild flora and fauna - Article 226 of the Constitution of India discloses as to how the Respondents, despite clear legal pronouncements, go on insisting that they can stop the running business activities by freezing the bank accounts of the concerned persons and attaching their movable and immovable properties - Held that:- Confiscation of smuggled goods notwithstanding any change in form is permissible in terms of section 120 reproduced above. By section 121, confiscation of sale proceeds of smuggled goods is permissible. We have no doubt about the legal provisions and the powers vested in the authorities under the Customs Act, 1962. We have referred to the very provisions to which the Hon'ble Supreme Court makes reference. The amount was seized and upon the satisfaction arrived at by the DRI. That should not have been released pending adjudication was the order passed and that too unconditional release of the sum was found to be unsustainable. None prevented the authorities from August, 2015 or at least from the date the Petitioner requested to issue the letter or notice calling upon him to remain present and answer the allegations. The statements now made by Mr. Jetly, on instructions, are after a copy of this Petition was served on the Respondents. We are mindful of the seriousness of the allegations and the rampant smuggling of red sanders. However, we are not directing that the immovable properties which are attached shall stand released from attachment. All that we are taking care of is the grievance of the Petitioner that by these coercive measures his business has come to a standstill. He is unable to make payments nor the act of the Respondents enables the workers and staff of the Petitioner and duly employed by him to earn their livelihood. In these circumstances, we continue the freezing and attachment of the immovable properties subject however to a limited liberty to the Petitioner to deal with the said properties in his ordinary and usual course of business. There will be no transfer, alienation or parting with possession thereof in any manner until an adjudication order in accordance with law is passed. Similarly, the Petitioner is free to operate his bank accounts and the sums therein can be released by the banks so as to enable the Petitioner to meet the liabilities in his business activities and in relation to the deals, which are disclosed in para 10 of the Writ Petition. The Petitioner, therefore, will be able to carry on his day to day business activities and for that purpose, the bank accounts shall be permitted to be operated. Save and except this limited permission and liberty, we are not inclined to accept all the requests as made in the prayer clauses of the Petition. We are mindful of the fact that in such matters an early adjudication serves the larger interest of public.
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2016 (1) TMI 10
Condonation of delay - Tribunal refused to condone the delay - Tribunal has insisted on every day’s delay - Held that:- The Tribunal has insisted on every day’s delay being explained which, in the given facts and circumstances, was not necessary. In one case, the delay occurred because of the petitioner-applicant being unwell and in the second case, it was because of the absence of the applicant from Mumbai. In both cases, the Tribunal should have realised that the petitioner-applicant is a sole proprietor. - The delay was not deliberate or intentional, but for the illness and absence from Mumbai for some business work. The petitioner cannot be said to be grossly negligent or his conduct lacking in bona fides - appeals restored before the tribunal, however costs of ₹ 5000 imposed on the petitioner.
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2016 (1) TMI 9
Waiver of pre deposit - import of goods for use and consumption in manufacturing of final products in 100% EOU - Denial of benefit of notification for non-payment of Customs as well as Excise duty - Held that:- Demand of duty of Customs in this case is on the inputs which were imported by the appellant herein for consumption in manufacturing of goods which are to be exported. We find that the show cause notice is issued to individual on the ground that he is the mastermind and key person who managed the activity of improper imports and diversion to local market under the name of M/s. Omi Textiles. We find that there is no dispute as to the fact that separate proceedings have been initiated against M/s. Omi Textiles for demand of the appropriate Central Excise duty on the finished goods which were diverted to local market instead of exporting the same. It is also undisputed that the issue of imports in this case was shown as consumed for manufacture of finished goods which were to be exported but diverted locally. In our considered view, prima facie there cannot be demand on imports as well as the finished goods manufactured out of such imports. The view expressed by the Bench in the case of Gold Multifab Ltd. (2007 (9) TMI 514 - CESTAT, AHMEDABAD) would be applicable in this case. In view of the foregoing, we find that appellant has made out a case for waiver of the condition of pre-deposit of the amounts involved - Stay granted.
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2016 (1) TMI 8
Waiver of pre deposit - Demand of differential duty - EPCG Scheme - Held that:- EPCG scheme under which the car was imported has time till 2018, that is for fulfilling the export obligations as committed by the appellant. Be that as it may, it is undisputed that the car imported is registered in the name of main appellant who is in the hospitality business. It is also seen from the records that they have been showing revenue accrued in foreign exchange earned by them towards the export obligations committed to the government of India. We also would like to record that in an identical issue, in the case of M/s. Goldfinch Hotels Pvt. Ltd. [2015 (6) TMI 185 - CESTAT MUMBAI], this bench has taken a view which is in favour of the appellant. In our view, as long as the export obligations as committed are met prima facie appellants have made out a case for waiver of pre-deposit of the amounts in question in these stay petitions - Stay granted.
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2016 (1) TMI 7
Denial of duty drawback claim - Held that:- As per 1st proviso to Section 129A(a) of the Customs Act, 1962, the appeal lies to the Government of India and not before the Tribunal - Appeal not maintainable.
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Service Tax
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2016 (1) TMI 25
Levy of service tax on the proposed car lease scheme (of providing vehicles to employees) under Section 66B of the Finance Act, 1994 - applicant is an employer and the applicant is providing some service to its employees by giving an option to all such employees to avail of a car. - Held that:- it is making available a car for the use of the employees during the term of their employment for which it is charging only the car rent which the applicant is paying to the car leasing company from which it has hired the car. It is not charging a rupee more or a rupee less. There is also an option given to the employee to ultimately purchase the car at the end of his employment and the employee would also be under the obligation to purchase the car at the rate which is a written down value. That by itself, can not be an exception. What is relevant is, as to whether a service is being provided by the applicant to its employees which service is "in the course of" or "in relation to" his employment. There can be no dispute that the service of "making available" a car to the employee is being rendered by the applicant. In this context, both the conditions are fulfilled which are conditions in clause (b) of Section 65B (44). Whether the car given for official use, for personal use or use for both will not be making any difference. In view of the clear-cut language of Section 65B (44) (b), we answer the question accordingly. - Not liable to service tax.
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2016 (1) TMI 24
Cenvat Credit - Capital goods installed in the state of Jammu & Kashmir - services availed in the state of Jammu & Kashmir - imporper duty paying document in respect to managerial services availed - Held that:- all the branch offices of the appellant remain separate service providers even if a centralized registration for discharging service tax liability is obtained by the appellant. Accordingly it is held that when branch office (service provider) in Jammu & Kashmir was not required to discharge service tax then all the capital goods installed in the state of Jammu & Kashmir have to be considered ineligible for taking credit. - Credit dened. Regarding input services - As per the above proviso to Rule 6(2) of CCR the Cenvat Credit Rules do not apply to taking of Cenvat Credit of Service Tax. Therefore, Cenvat Credit taken with respect to services availed in the state of Jammu & Kashmir, has been correctly denied to the appellant. - Credit dened. Regarding duty paying documents - managerial services received - Held that:- The words “invoice”, “bill” and “challan” have not been defined in the Service Tax Rules, 1994 but the details contained in such documents have been prescribed in Rule 4A(1) of these rules. Further provisos under Rule 4A(1) any document, whether or not serially numbered with respect to banking services, GTA Services, and Aircraft Operator Services; has been prescribed. From a collective reading of these provisions we are of the opinion that if details prescribed in Rule 4A(1) of the Service Tax Rules, 1994 are available in a document then the same can be considered as an invoice, bill or challan and will be a proper document for availing Cenvat credit under CCR. - Credit allowed. Extended period of limitation - Held that:- an assessee of the stature of the present appellant, having the best legal advise at their command, can not be considered to be ignorant of law. No where in the statutory returns/intimations, submitted to the department and brought on record, that Cenvat Credit of capital goods and services installed/availed in the state of Jammu & Kashmir has been depicted. Appellant never approached the department at any stage that any ambiguity or confusion exists in taking of credit with respect to capital goods/services installed availed in the state of Jammu & Kashmir. - extended period is applicable and penalty, equivalent to the inadmissible credit, imposed upon the appellant is justified. Decided partly in favor of assessee.
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2016 (1) TMI 23
Cenvat Credit - input services - receipt of advertisements services for promoting the mutual fund - Held that:- adjudicating authority has admitted the fact that the amount incurred on Advertisement is not reimbursed but he held that it is still to be considered as reimbursable and cannot be considered as non-pure agent service. - it is established that role of asset management is not only related to managing the assets but also to implement overall schemes of M/s.SMF. Therefore Revenue's contention that they cannot undertake any advertisement for promoting the schemes is not justified. - as per SEBI Regulations, the prescribed limit of upto 6% is reimbursable from the fund owner and in the present case appellant not claimed any credit on the amount reimbursed from SMF only after exceeding the limit, the expenses on the advertisement cost was duly included in the value of output taxable service and discharged service tax on the gross value. - Credit allowed since it is an eligible input service. Availment of credit on brokerage fee - service tax was paid under reverse charge method - Held that:- Revenue had issued a clarification to the appellant in their letter dt. 3.10.2012 to the appellant that they are eligible for cenvat credit on the service tax incurred and paid by the appellant on brokerage charges. We also find support from the Government advertisement issued by CBEC after the introduction of negative list wherein the Board has categorically clarified that service tax paid on the brokerage commission by Mutual Fund and Asset Management Companies is available as credit for paying service tax on their output services. This advertisement was issued consequent on withdrawal of service tax exemption on brokerage commission w.e.f. 1.4.2015. Therefore, it is evident that when there was no exemption for service tax, the Board had categorically clarified that assessees have to pay service tax under reverse charge and they are eligible for availing credit. - Credit allowed. Duty paying documents - validity - Held that:- respondent is entitled to avail credit of service tax on the basis of credit of service tax on the basis of TR-6 challan. Appellants are eligible for taking credit on the service tax paid by them on brokerage commission and the demand confirmed by the adjudicating authority is liable to be set aside. Since the appellants succeeds on merits, we do not go into the limitation issue. - Decided in favor of assessee.
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2016 (1) TMI 22
Cenvat Credit - GTA service - service tax paid on outward freight charges for delivering the goods from the factory to the customer's premises - Held that:- In view of the decisions of the Hon'ble High Court in the case of Commissioner of Central Excise & Service Tax, LTU, Bangalore Vs. ABB Limited [2011 (3) TMI 248 - KARNATAKA HIGH COURT], the matter is remanded back to the original adjudicating authority for de novo adjudication; the original adjudicating authority will give the appellants sufficient opportunity of providing necessary evidence in the form of documents showing compliance of the conditions mentioned in the Board's Circular No. 97/8/2007-S.T. dated 23.8.2007 to claim Cenvat credit of service tax paid on outward freight charges. - Matter remanded back.
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Central Excise
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2016 (1) TMI 21
Distribution of Cenvat Credit of input services received at Head office - Input Service Distributor (ISD) - credit exclusive related to one unit (which exempted) and distributed to other unit - Held that:- In terms of Rule 7(b), the service tax attributable to service used in a unit 'exclusively' engaged in the manufacture of exempted goods is not available. The expression 'exclusively' appearing in the said Rule relates to the unit and not to the service tax. The unit has to be exclusively engaged in the manufacture of exempted goods meaning thereby that if service tax stands utilized in a unit which is manufacturing exempted as also dutiable goods, the said Rule will have no application. The expression "exclusively" is not associated with the word "service tax" as suggested by the learned advocate. The credit of service tax in respect of services used in the said Rudrapur unit is not available to the appellant's ISD. The order of the lower authorities to that extent, disallowing proportionate credit is upheld. Levy of penalty for wrong utilization of credit - Rule 15(3) of the CENVAT Credit Rules - Held that:- The period involved in the present appeals is April 2006 to April 2010. - The said Rule provided maximum penalty of ₹ 2000/- While confirming the demand of credit, penalty reduced - Decided partly in favor of assessee.
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2016 (1) TMI 20
Method of valuation - Transaction value u/s 4 or MRP based value u/s 4A - manufacture and clearance of chocolates falling under chapter sub-heading 1801.00 individually weighing 3.9 gms and 14 gms. in separate pet jars for sale. - Held that:- the issue is now squarely covered by the judgment of the Tribunal in the case of Swan Sweets Pvt. Ltd. [2006 (1) TMI 269 - CESTAT, MUMBAI] wherein two appeals of the very same assessee were also allowed. - putting the individually small pieces into big jar would not make them liable to duty subject to MRP based duty. - Decided in favor of assessee.
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2016 (1) TMI 19
Cenvat Credit - Eligible input services - nexus with manufacturing activity - input services like, CHA service, Advertising Agency's service, Chartered Accountant's service, Photography Services, Maintenance or Repair service, Stock Broking services, Technical Inspection & Repair service, Stock Broking services, Technical Inspection & Certification Services - Held that:- this bench in the respondent's own case [2015 (11) TMI 100 - CESTAT MUMBAI] had held that any services which are considered for pricing of final product, CENVAT Credit should be allowed. - appeal filed by the Revenue is devoid of merits - Decided in favor of assessee.
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2016 (1) TMI 18
Cenvat Credit - Eligible input services - nexus with manufacturing activity - input services such as canteen, construction, courier, vehicle insurance, mobile bill and security services and other services rendered at their units at Chennai, Assam and Uttarkhand - Held that:- Cenvat credit on construction and maintenance service and outdoor catering/canteen service, prior to the amendment made to the definitions to input services under Rule 2(l) of the Cenvat Credit Rules, 2004 w.e.f. 01-04-2011, is an eligible input service. The demand being held as ineligible cenvat credit of service tax and the penalty imposed is liable to be set aside. - Decided in favor of assessee.
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2016 (1) TMI 17
Maintainability of appeal before the tribunal - whether in terms of clause (b) of proviso to section 35B(1) of the Central Excise Act, appeals against orders relating to rebate on goods supplied to SEZ, will lie to the Appellate Tribunal - Held that:- In the case of Hindustan Petroleum Corpn. Ltd. vs. Commissioner of C.Ex, Mumbai [2013 (12) TMI 1133 - CESTAT MUMBAI] the Tribunal held that appeal against orders on refund in respect of goods supplied to SEZ are not maintainable under proviso (c) to section 35(1) of the Central Excise Act. In the case of Tata Consultancy Services Ltd. vs. Commr. of C.Ex. & S.T (LTU), Mumbai [2012 (8) TMI 500 - CESTAT, MUMBAI] an appeal regarding refund in respect of services supplied to SEZ was entertained by the Tribunal. Also in Commissioner vs. Shree PLA Pvt. Ltd. [2010 (3) TMI 995 - CESTAT BANGALORE] Tribunal decided on appeal relating to 'exports' from DTA to SEZ. In Rohit Poly Product Pvt. Ltd. [2013 (2) TMI 57 - GOVERNMENT OF INDIA] and in Indo Amines Ltd. [2013 (3) TMI 142 - GOVERNMENT OF INDIA] the Joint Secretary (RA) passed Orders-in-appeals against orders-in-appeal in matters relating to rebate on supplies from DTA to SEZ. Reading proviso (b) to section 35B to mean that it includes cases relating to goods supplied from DTA to SEZ is only an inevitable corollary to holding that such supplies may be treated as export. While doing so the legal fiction is not being extended beyond the purpose for which it was created. We hold so because there does not appear to be any intent to treat such deemed exports differently for the purpose of proviso (b) to section 35(1) (sic) of the Act. - in respect of rebate on goods supplied from DTA to SEZ within India, the appeals would not lie to the Appellate Tribunal under clause (b) of proviso to Section 35(1) of the Central Excise Act.
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2016 (1) TMI 16
Exemption claim - Captive consumption - Cenvat/Modvat Credit - Held that:- No good ground to interfere with the judgment(s) and order(s) passed by the Tribunal [2007 (6) TMI 471 - CESTAT, CHENNAI]. - Decided against Revenue.
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2016 (1) TMI 15
Denial of SSI Exemption - use of brand name on the packing material - Department felt that as the printed cartons with brand name of others are not sold in the market as such these could not be treated as "branded goods" and as such the value of these clearances cannot be excluded in the aggregate value of clearances to arrive at SSI limit - whether or not the value of printed cartons and skin packagings with the brand name of others are to be added in the aggregate value to arrive at SSI exemption in terms of Notification No. 8/2002-CE - Held that:- Supreme Court in the case of Kohinoor Elastics (P.) Ltd. (2005 (8) TMI 115 - SUPREME COURT OF INDIA) overruled the full bench judgment of this Tribunal in the case of Prakash Industries v. CCE [2000 (5) TMI 59 - CEGAT, COURT NO. III, NEW DELHI. The Hon'ble Supreme Court in both the cases cited (supra) held that once the brand/trade name is used in the course of trade of the manufacturer, which is indicating a connection between the goods - manufactured by him and the person using the brand/trade name, the exemption is lost. It was held that in any case, it cannot be forgotten that the customer wants his brand/trade name affixed on the product not for his own knowledge or interest. The customer is getting the brand or trade name affixed because he wants the ultimate customer to know that there is a connection between the product and him. The reasoning of the Hon'ble Supreme Court [2005 (8) TMI 115 - SUPREME COURT OF INDIA] is squarely applicable to the branded cartons involved in the present case. Incidentally it may be noted an amendment has been carried out in the said Notification to deny the exclusion under the category of brand name for products like printed cartons etc. w.e.f. 01/09/2008 only. Considering the above legal position and the Hon'ble Supreme Court's decisions, we find the order by the lower authorities is not sustainable and the same is set aside - Decided in favour of assessee.
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2016 (1) TMI 14
Claim of refund or suo-moto re-credit - Reversal of excess Cenvat credit wrongly - Held that:- It is a peculiar case where the appellant himself has reversed excess Cenvat credit which they want to take re-credit. For this excess reversal of Cenvat credit, only the account books/statutory records are the documents to be verified by the authorities below. This fact has not been disputed, therefore, we hold that appellant is entitled to take refund/re-credit of the excess amount Cenvat credit reversed by them. - refund claim filed by the appellant are allowed which will regularize the suo-moto Cenvat credit taken by the appellant. - Decided in favour of assessee.
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2016 (1) TMI 13
Adjustment of claim of refund with the outstanding dues - The appellant's grievance is that inasmuch as the subsequent orders confirming demands were either appealed against or there was time to file appeals - Held that:- The status of the other appeals is not known. Otherwise, I agree with the learned advocate that such refunds have to be treated separately and should not be adjusted against the pending demands. Inasmuch the matter is almost five to six years old and the orders against which the refunds were adjusted against the demands might have been set aside by the higher appellate forum, I set aside the present impugned order and remand the matter to original adjudicating authority for de novo decision after ascertaining the status of the confirmed demands.
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2016 (1) TMI 12
Clandestine manufacture and clearance of various articles of copper and copper alloys - Finished goods daily stock register (RG-1) was not complete - the officers found copper winding wire scrap lying in gunny bags as also in loose and lump condition in the factory. As the appellant could not explain the source of procurement of the said scrap, which is raw material for the appellant, the same was seized under panchnama - Held that:- The entire case of the Revenue is based upon the initial statements recorded at the time of visit of the officers. It is well settled law that such statements, though, form part of the evidence, have to be taken with a pinch of salt and require further corroboration. The Revenue cannot rest its case on the sole basis of the statements without taking into account the surrounding circumstances. As such in the absence of any reference by the said deponents, to the fact of passing of quality control test about a week ago and in the absence of any admission that the same were not entered with any malafide intention to remove them clandestinely. Regarding source of scrap - the assessee have produced invoices of two persons showing the sale of the scrap on the previous night of the visit of the officers. No enquiries stand made by the Revenue from the said two suppliers of scrap. If the scrap has been received in the factory on the previous day, late night, it cannot be expected to be entered in the records by the next day early morning. Confiscation of the final products and imposition of penalties upon the assessee is neither justified nor warranted - Decided in favor of assessee.
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CST, VAT & Sales Tax
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2016 (1) TMI 6
Constitutional validity of some of the provisions of the Maharashtra Purchase Tax on Sugarcane Act, 1962 - Interpretation - determination of purchase price - valuation - inclusion of expenses - the amendments were carried out from 1st October, 1995 to change the structure of taxation - Held that:- On a reading of the provisions together and harmoniously, we are not in agreement with Mr. Joshi that the tax is on expenses or expenditure and not on purchase of sugarcane. The above provisions have been minutely referred by us together with those enabling recovery of tax. There is a inherent fallacy in the submission of the Petitioners that components which are not germane or relevant to the purchase of sugarcane and the price paid therefor are taken into consideration by the legislature. It is apparent that the term "purchase price" is defined in such a way as to include amounts mentioned in sub-clauses (i) to (iii) of section 2(f-b) of the Act of 1962. Once it is apparent that the components or elements stated therein go into fixation of purchase price and that is the measure for computation of the tax, then, depending upon facts and circumstances in each case, the occupier can point out that not all components or elements are included in the purchase price in his case. That it is only the actual costs which have been taken into account or that they have not included all the heads simply because not all of them form part of the purchase price. Then, it would be open for the Assessing Officer/Commissioner to consider such pleas and material in support thereof. He would, then, compute the tax liability after duly considering them. However, it is the turnover of purchases meaning the aggregate of the amounts of purchase price paid and payable by an occupier, on which tax is levied and collected. The turnover is computed on the basis of the purchase transactions and the price paid for the same. Thus, it would be open for the Petitioners to point out that the turnover of purchases in their case involves payment of purchase price without the elements that are set out in the definition of the term "purchase price" referred above. The computation of the purchase price is indicated so that the tax to be levied and collected is correctly computed. If sum total of the purchases would constitute the turnover and the measure of that would be the amount of purchase price paid and payable by an occupier during the given period, then, it is only to enable the assessment and collection of tax in accordance with law that these provisions have been inserted. Thus, we are in complete agreement with Mr. Sonpal on the legality and validity of the tax. It is not unconstitutional and ultra vires as alleged. Decided against the appellants/ assessee.
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2016 (1) TMI 5
Violation of the provisions of the Haryana Value Added Tax Act, 2003 - inclusion of value of land in taxable turnover of builders/developers selling flats/apartments/units and paying VAT under lumpsum scheme - Held that:- It is not disputed by learned counsel for the petitioner(s) that the impugned order dated 14.8.2015 passed by respondent No.3 is an appealable order. Accordingly, we do not consider it appropriate to entertain the writ petitions at this stage. - Writ petition not maintainable - the writ petitions are disposed of by relegating the petitioner(s) to the alternative remedy of appeal.
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2016 (1) TMI 4
Adjustment of input tax credit - Whether the Hon'ble Tribunal has erred in permitting adjustment of input tax credit arising from Value Added Tax Act to the Central Sales Tax Act - Held that:- in the case of the assessee, while resorting to the provisions of subsection (3) of Section 11 of the Act, the Assessing Officer reduced from the input tax credit 4% of branch transfer and once again reduced input tax credit on purchases of fuel to the extent of 4%. This Court in the case of State of Gujarat Vs. Reliance Industries Ltd. (2014 (2) TMI 815 - GUJARAT HIGH COURT), on similar facts, held that from the provisions of sub-section-(3)(b) of Section 11, it is clear that reduction of tax credit had to be applied to any case which satisfies the description contained in sub-clauses (i) to (iii) not every time such description is satisfied. Further, reduction of amount of tax at the rate of 4 per cent is to be done for the taxable goods which fall in any of the three categories contained in sub-clauses (i) to (iii) and not every time a particular class of goods specified fall in more than one categories. Thus, the Tribunal has merely applied the decision of the jurisdictional High Court to the facts of the case and hence, it cannot be said that the impugned order passed by the Tribunal suffers from any legal infirmity, warranting interference. - Decided against Revenue.
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2016 (1) TMI 3
Seizure of truck with goods - Assistant Government Pleader by submitting that the petitioner is only a transporter and that the owner of the goods in question has not come forth and that the respondents apprehend that the owner may not cooperate in the proceedings which may be taken by the respondent authorities - Held that:- Interest of justice would be served if the petitioner’s truck alongwith goods are released, subject to the petitioner depositing the tax amount at the rate of 15% of the value of the goods in question as assessed by the respondents which comes to ₹ 1,50,000/-. Upon such amount being paid, the respondents shall forthwith release the vehicle in question alongwith the goods, without prejudice to any action that may be initiated by the respondents against the owner of the goods in question under the provisions of the Gujarat Value Added Tax Act. Furthermore, with a view to verify as to whether the goods actually leave the State of Gujarat, the respondent authorities may verify with the Bhilad checkpost at the time when the vehicle in question leaves the border of Gujarat and enters into Maharashtra. It is clarified that the amount of ₹ 1,50,000/- that would be deposited by the petitioner would be subject to ultimate outcome of the proceedings that may be initiated by the respondents. In case no proceedings are initiated, it would be open for the petitioner to seek refund of the said amount. - Appeal disposed of.
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Indian Laws
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2016 (1) TMI 2
Petition for release of the petitioner on regular bail during pendency of the trial under Section 22 of the Narcotic Drugs and Psychotropic Substances Act, 1985 ('NDPS Act’) - It is claimed that The petitioner, being doctor by profession, was entitled/competent to possess medicines including Buprenorphine, which has been alleged to be recovered from him - Held that:- Buprenorphine Hydrochloride is a Schedule H drug under the D and C Act and Rules and, though it is a psychotropic substance under the Narcotic Drugs And Psychotropic Substances Act, it is not included in Schedule I to the NDPS Rules. That being the case, its manufacture, possession of sale is not prohibited. As such, there is no contravention of the provisions of the NDPS Rules. Consequently, the offence under Section 8 of the Narcotic Drugs And Psychotropic Substances Act is not made out. Obviously, punishment under Section 22 of the Narcotic Drugs And Psychotropic Substances Act is also not attracted. Accordingly in these circumstances no offence under the Narcotic Drugs And Psychotropic Substances Act is made out, the petitioner would be entitled to bail. Accordingly, he is directed to be released on bail on furnishing a personal bond in the sum of ₹ 50,000/- with one surety of the like amount to the satisfaction of the concerned trial Court.
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2016 (1) TMI 1
Jurisdiction to invoke provisions of SARFAESI Act - Validity of possession notice - whether the first respondent is not entitled to invoke the provisions of the SARFAESI Act; to declare the action taken by the first respondent under the SARFAESI Act, with respect to the assets of the petitioner-Company, as null and void? - Held that:- The words in whose favour security interest is created, in Section 2(zd)(iii), refers to the trustee, and not to the bank/financial institution. As the petitioner has created a charge, on its movable and immovable properties, a security interest is created in favour of the 1st respondent for due repayment of the amount payable, towards the principal and interest, on redemption of the debentures subscribed by LIC, CB. and OBC. As a security interest is created in its favour for the due repayment by the petitioner, of the financial assistance (subscription of debentures) extended by LIC, CB and OBC, and as it holds the security on behalf of banks or financial institutions (CB, OBC and LIC), the 1st respondent fulfils all the conditions stipulated in Section 2(zd)(iii) of the SARFAESI Act to become the secured creditor of the petitioner company. As the debenture trust deed itself stipulates that the security created by the petitioner in favour of the 1st respondent is to be held for the beneficial interest of LIC, CB and OBC, it matters little that the 1st respondent-debenture trustee has not, otherwise, stated that the security is held by it on behalf of banks/financial institutions. The object sought to be achieved by the SARFAESI Act is speedier recovery of NPAs of banks/financial institutions. Debenture holders, which are banks and financial institutions, constitute a class, distinct and apart from other debenture holders, and the speedier remedy, provided by the SARFAESI Act, for recovery of their mounting dues, is to reduce the fiscal burden of these banks/financial institutions created by its huge non- performing assets which is eroding its liquidity. The differentia, between debenture holders which are banks/financial institutions and those which are not, has a rational relation to the object sought to be achieved by the SARFAESI Act which is speedierrecovery of the amounts due to banks and financial institutions consequent on the defaulters account being declared as a non- performing asset. The classification satisfies the requirement of a valid classification under Article 14 of the Constitution and the challenge, to its validity, must fail. While the petitioner has an effective alternate statutory remedy under Section 17 of the SARFAESI Act, against the action taken by the 1st respondent under Section 13(4) of the Act, we see no reason to now relegate the petitioner to the statutory remedy under Section 17 of the Act, as we have dealt with all their contentions and have rejected them as devoid of merits The notice issued by the 1st respondent under Section 13(2), the action taken by them under Section 13(4), and the request made by them to the Chief Metropolitan Magistrate, Hyderabad and Vijayawada under Section 14 of the Act, are strictly in accordance with the provisions of the SARFAESI Act and do not suffer from any illegality. It would be wholly inappropriate, therefore, for us to interdict the action taken by them to recover, from the petitioner-company, the principal and interest due on the redemption of debentures, including by seeking the assistance of the Chief Metropolitan Magistrate, Hyderabad and Vijayawada, under Section 14(1) of the Act, to take possession of the secured assets of the petitioner company. Writ Petition is devoid of merits and is, accordingly, dismissed.
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