Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 22, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Some of the clients do not own up the transactions on anticipating losses - In such situations, the consequential loss incurred by the assessee to honour the commitments is to be viewed as an integral part of carrying on of assessee's business and is, therefore, not liable to be judged as a speculation loss - HC
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Assessment could not be said to be pending before the Assessing Officer even where the time for making an assessment had expired, on the date the assessee filed its application for settlement before the Settlement Commission - HC
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Validity of reopening of assessment u/s 147 - assessee has prepared two balance sheets for this period under consideration. - order of reassessment sustained - HC
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Expenditure on secret commission and specimen distribution - Any secret transaction/payment that is made to secure an unfair advantage, would necessarily be repugnant to law - HC
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Application u/s 80G(5) - The assessee was carrying on the activity of conducting Yoga Camps which constitutes a charitable activity - HC
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Deduction u/s 80P(2)(a)(vi) - toddy tapping - assessees cannot be considered as Co-operative societies engaged in the collective disposal of labour of its members as contemplated u/s 80P(2)(a)(vi) - AT
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Addition on account of sale of units - provisions of section 40A(2)(b) is not attracted merely because partners of Kaypee Developers are also directors of the assessee-company. - AT
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In case of any ship belonging to or chartered by a non resident which carries passenger, livestock, material or goods shipped at a port in India, the provisions of section 172 would apply and no TDS is required u/s 194C - AT
Customs
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Interest is being demanded by the revenue not for the period when the assessments were provisional but for the period post finalization of the assessment - no reason to interfere with the demand for interest made by the revenue - HC
Indian Laws
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Right to information - The law does not contemplate filing of two First Appeals before two different FAAs. Hence, the passing of two different orders by two different FAAs in the same matter is not understandabl - CIC
Service Tax
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Rejection of refund claim on terminal handling charges – there was no ground to reject the refund claim when appellant was claiming refund of service tax that has been paid as port services - AT
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Availment of CENVAT Credit - Excise duty paid on pipes and other materials used in Transportation of goods through pipelines or other conduit services - credit denied - however demand beyond normal period of limitation and penalty set aside - AT
VAT
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Classification of goods - Classification of Air Bubble Film Rolls - Though it has air bubbles having bubble layer, it is nothing but a sheet of poly ethylene. It attracts HSN Code 3920.10.92 - HC
Case Laws:
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Income Tax
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2014 (1) TMI 1091
Whether loss on transaction of shares is speculative loss - Held that:- Decision in Commissioner of Income Tax Vs. Subhash Chand Shorewala [2004 (1) TMI 327 - ITAT DELHI-F] followed - On some occasions, the loss on the share transaction was consequent to a breach of contract by the client and the same could not be said to be speculative loss - Secondly, in certain situations, a broker also acts as a jobber and the jobbing transactions are inherent in the business of share broking and the same is also not to be viewed as a speculative loss. The two facets of the issue relate to: (a) loss as a result of the breach of contract by the clients; and (b) loss suffered on account of jobbing transaction - As regards the loss on account of breach of contract - Following Bhagwan Dass Rameshwar Dayal [1984 (5) TMI 35 - DELHI High Court] - One can visualise a number of situations in which there may be no delivery for various reasons, i.e., because of failure of the party on account of insolvency or frustration, e.g., banning of business or mere breach, i.e., to say non-supply - All these cannot be classified as speculative within the meaning of section 43(5) - A contract which is settled by means of a cross contract is termed as speculative transaction - If the contract is settled for some other reasons by payment of damages or even without payment of damages it may or may not be speculation transaction depending upon the circumstances of the case - If a contract is broken, i.e., for any reasons one party is unable to give delivery order the other party is unable to take delivery, it is a case of breach of contract - The loss suffered by the appellant on account of breach of contract falls outside the purview of speculative transaction. The share trading business on behalf of oneself is known as jobbing - Section 43(5) defines the word speculative transaction, but there are three exceptions to it - The assessed, being in the business of broking, would be facing situations wherein some of the clients do not own up the transactions on anticipating losses - In such situations, the consequential loss incurred by the assessee to honour the commitments is to be viewed as an integral part of carrying on of assessee's business and is, therefore, not liable to be judged as a speculation loss - The share trading business on behalf of oneself is known as jobbing - A transaction carried on by the assessee for sale and purchase of the shares was fully covered by the term 'jobbing' and assessee is entitled for the extension of the benefit of proviso (c) to Section 43(5) of the Act - Decided in favour of assessee.
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2014 (1) TMI 1090
Validity of order passed u/s 245D - Rejection of application for settlement for A.Y. 2007-08, 2008-09 and 2009-10 - Held that:- An assessment would be pending before Assessing Officer when such Assessing Officer has power to take action in respect of those assessment years - The power to take action in respect of the assessment for a particular assessment year, comes to an end, on the expiry of the period under Section 153 of the Act to make an assessment - Assessment could not be said to be pending before the Assessing Officer even where the time for making an assessment had expired, on the date the assessee filed its application for settlement before the Settlement Commission - Decision in CIT vs. Income Tax Settlement Commission [2012 (9) TMI 840 - GUJARAT HIGH COURT] followed - As with effect from 1.6.2007, significant changes were made in the definition of the term "case" defined under section 245A(b) defining the term "case" would cover only those situations where an assessment is pending before the AO or it is still possible for him to pass any order of assessment - There is no reason to interfere with the order of the Settlement Commission dated 15 March 2013 - In view of Section 245HA of the Act, proceedings before the Settlement Commission shall abate under Section 245HA(1)(i) of the Act in respect of those years - Decided against petitioner.
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2014 (1) TMI 1089
Rental income - Held that:- in earlier and subsequent assessment years, the income was treated by the department under the head "Business Income" - There is no change in the facts and circumstances during this year also - Decided against Revenue.
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2014 (1) TMI 1088
Validity of reopening of assessment u/s 147 - Held that:- The list of voluntary contributors/donors towards corpus was not enclosed along with the return nor submitted during the assessment proceedings u/s 143(3) - The assessee has not filed declaration issued by the voluntary contributors/donors, who contributed/ donated the amount directly to the corpus - The assessee has failed to comply with the provisions of Sub section (d) of Section 11(1) - On examination of records available with the Department for A.Y.2004-05, it is observed that the assessee has prepared two balance sheets for this period under consideration. The first balance sheet was finalized as provisional on 26/04/2004 which tallied at ₹ 6,40,89,311.16/- and the other finalized on 30/10/2004 which is tallied at ₹ 5,68,33,136.38/- The A.O. has relevant material in his possession to form the belief that certain income chargeable to tax has escaped assessment for the assessment years 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 - The A.O. was having material to form the belief in good faith that there was failure on the part of the assessee to disclose fully and truly the material facts necessary for his assessment - The assessee has reason to believe that there is escapement of income - The necessary conditions for invoking the provisions of Sections 147 and 148, stand satisfied in the facts and circumstances of the case - The AO had valid reasons for issuing notice and the AO was directed to complete the assessment within six months time - Decided against assessee.
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2014 (1) TMI 1087
Unexplained cash credits - Held that:- Decision in COMMR. OF INCOME TAX Versus M/s LOVELY EXPORTS(PVT) LTD [2008 (1) TMI 575 - SUPREME COURT OF INDIA] followed - If the share application is received by the assessee from the alleged bogus shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual amounts in accordance with law, but it cannot be regarded as income of the assessee company - During the course of the assessment proceedings, the assessee made a detailed submission explaining source of the money and had furnished details of the PAN besides examining some of the shareholders on oath - The CIT (A) noted that all the aforesaid persons were assessed to tax and their identity had been established - Decided against Revenue.
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2014 (1) TMI 1086
Expenditure on secret commission and specimen distribution - Held that:- Decision in CIT v. Taraporvala Sons Co. (P) Ltd. [1999 (3) TMI 54 - BOMBAY High Court] followed - In view of the amendment to s.37(1) of the Act by the insertion of Explanation with retrospective effect from the inception of the Act, i.e. 1st April 1962, the matter requires consideration by the Tribunal - Any secret transaction/payment that is made to secure an unfair advantage, would necessarily be repugnant to law - Transaction which is not transparent, offends normal business practice, must suffer scrutiny - The expenditure incurred on secret commissions would necessarily fall within the mischief of the explanation added to Section 37 of the Act. The Tribunal has decided the matter in a sweeping and general manner - The impugned order neither discusses the evidence nor takes into account any other facts and attending circumstances but there is only sweeping reference to its earlier judgments - When neither the incurring of expenditure as a fact under the two given heads has been properly accounted for nor application, in their relation and impact of Explanation added to Section 37 of the Act has been taken into consideration, the impugned order is legally vitiated - The issue has been set aside for fresh adjudication.
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2014 (1) TMI 1085
Payment of GPF, CPF and ESI beyond due date - Held that:- The entire amount was deposited by the respondent-assessee at least on or before the due date of filing of the returns under Section 139 of the I.T. Act - If the amount has been deposited on or before the due date of filing the return under Section 139 and admittedly it was deposited on or before the due date then the amount cannot be disallowed under Section 43B of the I.T. Act or under Section 36(1)(va) of the Act - Decided against Revenue.
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2014 (1) TMI 1084
Application u/s 80G(5) - Held that:- The CIT(A) passed the order of rejection on a sole issue that the assessee was not carrying out all the activities mentioned in the objects clause of the trust - The statute does not require that the assessee should carry out all the activities which are mentioned in the objects clause - The assessee was carrying on the activity of conducting Yoga Camps which constitutes a charitable activity - Any activity which is not of a charitable nature was not being conducted - There is nothing on the record before the Commissioner to doubt the charitable nature of the activity which is being conducted - The Tribunal was justified in allowing the application of the assessee - Decided against Revenue.
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2014 (1) TMI 1083
Deduction u/s 80IB - Held that:- Decision in Commissioner of Income- Tax v. Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT] followed - For special deduction u/s. 80IB(10) of the Act, ownership of property is not a condition precedent - the assessee is entitled to the benefits u/s. 80IB(10) of the Act even where the title of the lands had not passed on to the assessee and in some cases the development permission may also have been obtained in the name of the original land owners - Decided against Revenue.
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2014 (1) TMI 1082
Whether the deficiency u/s 80J be carried over for an indefinite period in view of the provisions of Section 80VVA(4) - As per proviso to sub-section 3 to section 80J - The deficiency or any part thereof cannot be carried forward beyond the seventh assessment year as reckoned from the end of the initial assessment year - While calculating the number of years initial assessment year should be excluded - Decided against Revenue.
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2014 (1) TMI 1081
Exemption u/s 11 r.w Section 12 of the Act – Held that:- The assessees were registered under Section 12A of the Act - assessees are trusts established wholly for the purposes of imparting education - Merely because the assessees made contributions to another trusts, also registered under Section 12A of the Act and because, in some of the years, their revenue was more than their expenditure, despite non-cancellation of their registration under Section 12A of the Act - the assessees are no longer entitled to the registration, it would have been obligatory on its part to bring the same to the notice of the Commissioner for the purpose of de-registration of the assessees. Instead of that, in a most mala fide manner, he assessed the assessees – the order of the CIT(A) upheld – Decided against Revenue.
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2014 (1) TMI 1080
Deduction u/s 80P(2)(a)(vi) - Held that:- The societies have only used the labour of its members in tapping toddy, a naturally available product as all the members were toddy tapping workers - These societies have only generated employment opportunities to its members and they have paid wages to its member-workers in proportion to the quantity of toddy tapped by each of the members - These societies have generated income only through the sale of toddy (not from toddy tapping activity) which is a naturally obtained product – Sale of toddy does not fall in the category of "Collective disposal of labour" - The assessees have not engaged any skill and labour of the members there was not any collective disposal of labour - The toddy tapping is an incidental activity required to be done in order to achieve its main objective of running retail toddy shops – These assessees cannot be considered as Co-operative societies engaged in the collective disposal of labour of its members as contemplated u/s 80P(2)(a)(vi) of the Act – Decided in favour of Revenue.
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2014 (1) TMI 1079
Addition on account of sale of units - handing over of some flats without consideration in lieu of services provided by the trasnfree - Valuation - According to AO agreement / transfer is a fabricated/make belief instrument designed to siphon off taxable profits of the assessee-company and thereby to evade legitimate taxes payable. - Held that:- A reading of the agreement shows that in the development of the plot of land there were to be 84 flats and 6 shops - Accordingly SVA Securities Pvt. Ltd. was to be given 20 flats and 2 shops as consideration for grant of development rights, M/s Kaypee developers was to receive 9 flats and 2 shops as consideration for services performed, benefits granted and the balance was to remain with the appellant company as developer - It is logical to presume that each party in the project had involved itself in the project for profits and gains. When the appellant entered the project, the units were given to SVA Securities Pvt. Ltd. at 25% of total units and remaining amount shall be appropriated between the remaining two parties - With the entry of the appellant into the project 75% of the profit would not lie with M/s Kaypee Developers but would be allocated between M/s Kaypee Developers and the appellant in proportion to the work done by them – As M/s Kaypee Developers had been allotted the work of getting all legal and other procedural clearances their share of the project was as described above - It is also seen that M/s. Kaypee Developers had carried out their part of the agreement - The assessing officer has not looked into the case in totality by taking into consideration all the documents involved and the history of the case but has concentrated only on a part of it - Accordingly the assessing officer has arrived at a conclusion as recorded in the assessment order - The AO has not conducted any investigation/enquiry in the case like questioning SVA Securities (P) Ltd, M/s. Kaypee Developers etc - The observation of the assessing officer in his order regarding the applicability of sec 40A(2)(b) of the I.T. Act is based mainly on presumptions and surmises influenced by the fact that the partners of' M/s Kaypee Developers were also directors of the appellant company - No effort has been made to establish that there has been tax evasion by the appellant and that there has been diversion of profit by the appellant - The assessing officer has made no enquiry into the fact whether the work said to be done by M/s Kaypee Developers was actually done or not - Unless this had been done the documents as produced by the appellant to establish "the fact that M/s Kaypee Developers had a major role to play” in the case cannot be discounted or rejected. The appellant had agreed to pay a sum of Rs.1,44,85,000/ that is the value of the units to M/s Kaypee Developers for the services rendered by them - The A.O. has' disregarded the transfer of units by the appellant to M/s.Kaypee Developers and considered their face value as profit of the appellant - The CIT(A) deleted the addition - An addition based on suspicion and presumption cannot survive - The profit from the sale of the units has been declared for taxation by M/s Käypee Developers and has been accepted by the Income Tax Department without any dispute - As the same stands taxed in the hands of M/s Kaypee Developers taxing it again in the hands of the appellant would lead to double taxation of the same amount which is not permissible under the Income Tax Act - Decided against Revenue. Acceptance of additional evidence - Held that:- All details in respect of the said project and services rendered by Kaypee Developers were mentioned in MOU with the assessee and no such additional documents were filed before ld. CIT(A) which could be said to be additional evidence - CIT(A) has considered the facts in its entirety, which the AO failed to consider - Letter of authority given by SVA Securities Pvt Ltd granting permission by CIDCO for change of use of plot are supporting documents/evidence only to establish that M/s Kaypee Developers rendered services in respect of the Project "Mangla" - There is no violation of Rule 46A of the Rules - Decided against Revenue.
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2014 (1) TMI 1078
Non-payment or payment of short fee for filing appeal before ITAT - whether CIT(A) erred in holding that the appellant is not eligible for exemption u/s 11 of the IT Act when the appellant was pursuing the application for registration u/s 12A and when ultimately the assessee was granted registration u/s 12AA of the Act - Held that:- The figure that determines the quantum fees payable and it relates to the quantum of total income computed by the Assessing Officer to which the appeal relates - The income of the assessee relates to income determined by the Assessing Officer, which is more than Rs. 2,00,000 - Being so, the fees payable is 1% assessed income subject to a maximum of Rs. 10,000 - The word 'in the case to which the appeal relates' in clause (a), (b) and (c) of section 253(6) should be understood so as to cover all appeals, which are filed in the case of the assessee where the appeal is filed against the order which is based on quantum of income assessed - In the present case, the appeals are untenably connected with the assessment order, with the total income computed by the Assessing Officer. The assessee may be seeking exemption u/s 11, but, it does not form part of the assessed income as computed by the Assessing Officer and this is sufficient to establish the nexus between the amount of income assessed by the Assessing Officer and also established requisite filing fees - The expression 'in the case to which the appeal relates' have been coined in clauses (a) to (c), it indicates the clear intention on the part of the Legislature to inter-link with the amount of income assessed by the Assessing Officer in case of all appeals, which have related to the amount of assessed income including appeals in penalty for concealment - Residuary clauses introduced as clause (d) with effect from 01/06/1999 takes care of all appeals including the appeals against certain penalties, which have no nexus with the amount of income assessed - If the expression 'case' used in subsequent used to be read as assessment order if the expression 'case', then, for the period prior to 01/06/1999 when clause (d) was inserted no filing fees would be leviable inspite of appeals filed by the assessee against the orders other than assessment orders - The assessee's case does not fall under the purview of section 253(6)(d) of the IT Act - Decided against assessee.
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2014 (1) TMI 1077
Validity of order u/s 263 - Held that:- The Assessing Officer made elaborate inquiry into the matter - The AO has raised many questions vide questionnaire dated 17.03.2009, u/s 142 (1) of the Act - The assessee, vide letter dated 27.10.2009, submitted the details of capital gain earned during the year - On being duly satisfied with the aforesaid details called for from and duly furnished by the assessee, that the Assessing Officer accepted the amount declared under the head of capital gains - This amount was set off against the brought forward capital loss of earlier years - The observations made by the CIT that the assessee showed abnormally high expenditure, that probably the assessee should have declared before trading results, and that the income from sale/purchase of investments should have been declared as business income, are uncalled for - These observations of the ld. CIT are not based on any material and fall in the realm of conjectures and surmise, and do not entitle the provisions of Section 263 of the Act to be invoked so as to revise the assessment order - Decided in favour of assessee.
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2014 (1) TMI 1076
Whether the assessment has been framed on the basis of material seized during the search operation - Held that:- Following ACIT Vs. PACL India Ltd [2013 (10) TMI 520 - ITAT DELHI] - Only where original assessment proceedings are pending on the date of the search or on the date when the reference has been received by the Assessing Officer of the other person from the Assessing Officer of the searched person, the issues outside the scope of search material can be raised as those original assessment proceedings stand merged/abated in the proceedings under Section 153A/153C of the Act - In the case where the assessments are not pending on the date of the search or on the date of receipt of the reference by the Assessing Officer of the other person, then no addition on the issues which pertained to the original assessment can be raised. In respect of all the assessment years under consideration, the assessments were not pending on the date, the search had taken place - No addition can be made while making the assessment for the assessment years under consideration by making the disallowances which is not based on seized material or any incriminating material found during the course of search - Decided in favour of assessee.
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2014 (1) TMI 1075
Valuation-of-stock found during the survey - Held that:- No admission made in a statement recorded u/s 133A on oath during survey can be relied as evidence against the maker or the assessee - In the immediate two preceding assessment years, the assessee's trading records were accepted by the Department - The closing stock as on 31-03-2007 as accepted by the Department was ₹ 80,01,286/- , the opening stock taken by the assessee of ₹ 80,01,286/- is to be treated as accepted figure - During survey no other incriminating document / loose paper, showing unrecorded purchases or unrecorded expense or sales, was found - There is no corroborative evidence in the possession of the Revenue to substantiate the impugned undisclosed income - The closing stock taken by the assessee at ₹ 2,61,77,707/- as on 31-03-2008 gives gross profit rate of 76.02% - If the closing stock considered by the AO is added in the trading account as on 31-03-2008, the gross profit rate would become 268% and this figure seems to be just impossible to be treated as a gross profit rate under any circumstance in such type of business and particular keeping in view the past history of the assessee. Stock has been increased by tampering the inventory-sheet by changing the quantity of stock items as pointed out by the hand-writing / forensic experts in their reports - The reports of hand-writing experts have not been considered either by the AO or by the ld. CIT(A), although, one such report was obtained by the AO himself - The entire survey proceeding was vide-graphed but despite repeated requests neither a copy of the same was supplied to the assessee nor it was used by the Department - The assessee also got a report from another hand-writing expert - As per the report of the expert appointed by the Department, it has been observed that there are manipulation in the inventory-sheet but thereafter he has qualified those mistakes/ manipulations as bonafide mistakes, by doing so, the expert has exceeded his jurisdiction - Moreover, in the report of expert got by the assessee also, such tampering with the stock inventory have been pointed out - There has been mistakes in taking stock position by the Revenue and the impugned inventory cannot be treated as a sacrosanct document - Certain cuttings and over-writings have been noticed in the inventory sheets - There are mistakes in the inventory which may be intentional or otherwise - The assessee should not be allowed to suffer by the mistakes committed by the survey team. The valuation of the inventory taken on the tag price after reducing the discount and the deduction for gross profit rate or alleged cost price has been worked out after reducing discount and deduction on account of gross profit rate is much higher than the actual sale price of the some items - This shows that neither physical counting of stock nor valuation of stock was done properly, it was based on pure estimation - Discount given @ 20% seems to be on lower side whereas this discount in assessee's case and in the case of other assessees carrying on similar business is between 40% to 50% - If this ratio in taking inventory is applied on all items of inventory, there will be no excess stock. The AO was not having any valid material for making impugned addition except for the statement on surrender which we have held as unreliable in view of the legal position - The entries in the books of account are presumed to be true and correct unless proved otherwise in view of the provision of Section 34 of the Evidence Act, 1881 - The AO has accepted the books of account of the assessee and he has not rejected them, at all - He has even not invoked the provision of 145 (3) of the Act - The declared results should have been accepted without any variation, especially when the assessee's trading results are better as compared to the immediate past year - There are numerous reasons for the rise in the gross profit rate in any year - When the AO accepted lower gross profit rates in the past and in future then this inference is found to be not justified - Rather the AO must be satisfied that in the year of survey, the assessee has been forced to declare much high rate of profit, more than other assessment years. The AO has accepted the trading results declared by the assessee - The working of the stock as per books of account as on the date of survey should have been based on gross profit rate of the year in which survey took place, more specifically on 28-01-2008 after expiry of 10 months of the commencement of the financial year under reference and out of total turnover of around ₹ 2.49 crores the sales of more than ₹ 2.02 crores (more than 81%) had already been shown and declared - The impact of the profit earned on such sales @ 76.02% should have been given to arrive at the actual stock as on the date of survey - The AO should have applied the gross profit rate of 76.02% as against 28.12% - Partly allowed in favour of assessee.
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2014 (1) TMI 1074
Disallowance u/s 40(a)(ia) - Held that:- Following ACIT circle-1, Udaipur Vs. M/s Minpro Industries [2012 (5) TMI 232 - ITAT, Jodhpur] - payments made to C&F agents were reimbursement of expenses incurred by the C&F agents on behalf of the appellant - The C&F Agents have raised separate debit note for reimbursement of expenses incurred by them on behalf of the appellant and separate invoice for the agency charges - Most of the payments to C & F Agents are by way of reimbursement of expenses which were incurred by C& F agents on behalf of the assessee and they did not represent payments for carrying out any work by the agent - Following ACIT Vs. Grandprix Fab (P)Ltd [2009 (10) TMI 659 - ITAT DELHI] - No element of income is embedded in such payment - The appellant has also submitted separate bills for agency commission paid to the C & F Agents and debit note regarding the reimbursement of expenses incurred by the C& F Agents on behalf of the assessee for export of goods which shows that the amount represent reimbursement of expenses to C & F agents and these expenses were incurred for shipping line, concor charges, examination charges, custom sealing charges, unloading, chocking, shifting, labour charges etc. As per Board circular No.723 dated 19.09.1995 - In case of any ship belonging to or chartered by a non resident which carries passenger, livestock, material or goods shipped at a port in India, the provisions of section 172 of the IT Act would apply and no deduction of tax is required as per section 194C of the IT Act. It is also clarified that since the agent acts on behalf of the non- resident ship owners or charterer, he steps into the shoes of the principal and accordingly, provisions of section 194C of the IT Act would not apply in the case of the assessee - Decided against Revenue.
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2014 (1) TMI 1073
Penalty u/s 271(1)(c) - Held that:- It is apparent that the assessee's counsel (Chartered Accountant Firm) has failed to get the record dates and accordingly failed to calculate correct disallowance - The above addition in this regard arose neither because of concealment or furnishing of inaccurate particulars by the assessee, but due to mistake on the part of the assessee's counsel - Following Price Waterhouse Coopers Pvt. Ltd. vs. C.I.T. and Anr. [2012 (9) TMI 775 - SUPREME COURT] - The counsel should have been careful but the absence of due care, in a case such as the present, did not mean that the assessee was guilty of either furnishing inaccurate particulars or attempting to conceal its income - Mensrea was a essential requirement of penalty u/s 271(1)(c) - The imposition of penalty on the assessee was not justified - Decided in favour of assessee.
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2014 (1) TMI 1072
Penalty u/s 271(1)(c) - Held that:- All the details of the payments made by assessee to its sub-contractors have been disclosed in the return(s) filed but the disallowance has been made on the basis of particulars filed by assessee as the assessee failed to deduct TDS - Penalty u/s 271(1)( c) of the Act is leviable only if the person has concealed the particulars of his income or has furnished inaccurate particulars of such income as per the expression used in Clause (c) of sub-clause (iii) of section 271(1) of the Act - The offence of concealment is direct attempt to hide an item of income or derive thereof from the department to avoid payment of tax liability as per the provisions of Act - There should be an attempt on the part of the assessee to conceal the facts relating to its income or furnishing inaccurate particulars of income to avoid payment of tax - In assessee's case, nothing has been stated or brought on record by the department that the assessee had hidden the facts from the revenue authority or the details of payment received from the contractor or of payment made to sub-contractor - Nor there is any facts brought on record by the department that the payments claim to have been made by the assessee to sub-contractor and /or payments of rent were in any way bogus or inflated - Following CIT V/s Reliance Petroproducts (P.) Ltd [2010 (3) TMI 80 - SUPREME COURT] - If the assessee has not concealed any material fact or the factual information given by him is not found to be incorrect, he will not be liable for imposition of penalty u/s 271(1)(c) of the Act, even if the claim made by him is unsustainable in law provided he substantiated the explanation offered by him or explanation even if not substantiated, is found to be bonafide - The provision of section 40(a)(ia) are deeming provision which creates legal fiction and that legal fiction cannot be extended beyond the disallowance of expenditure - It cannot be applied for invoking the provisions of section 271(1)(c) of the Act for levying penalty for concealment of income or furnishing inaccurate particulars of income - Decided in favour of assessee.
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Customs
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2014 (1) TMI 1071
Demand of interest - Provisional assessment of goods - Held that:- interest which is being demanded from the petitioner is not for the period 18 March 1996 to 7 November 1997 i.e. the period for which the goods continued to be provisionally assessed. On 7 November 1997, the adjudication order was passed confirming two demand notices dated 2 May 1997, demanding an amount of ₹ 2,08,103/. The petitioner failed to pay the same within the period of 3 months from the date of the order dated 7 November 1997. In terms of Section 28AA of the said Act as existing at the relevant time an importer (petitioner) was liable to pay interest on the confirmed duty demanded, in case, the duty demanded was not paid within 3 months from the date of order confirming the duty demand under Section 28 of the Act - interest is being demanded by the revenue not for the period when the assessments were provisional but for the period post finalization of the assessment - no reason to interfere with the demand for interest made by the revenue on the petitioner - Decided against assessee.
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2014 (1) TMI 1070
Invocation of bank guarantee - Confiscation of imported aircraft - Imposition of redemption fine - Jurisdiction of Court - Commissioner customs is located at Kolkata - Held that:- Merely because the bank happens to be within the territorial jurisdiction of this Court, it cannot be said that any part of any cause of action has arisen within the territorial jurisdiction of this Court. The situs of the Bank at Mumbai is no part of the cause of action seeking to restrain the Commissioner of Customs, Kolkata from encashing its Bank Guarantee. Thus it cannot be said that any part of the relevant cause of action has arisen in Mumbai for the purpose of Article 226(2) of the Constitution of India - the Court may refuse to exercise its jurisdiction on the ground of forum convenience. In this case the contesting respondent viz. Commissioner of Customs is at Kolkata and therefore it would not be appropriate for this Court to exercise jurisdiction , even if it is assumed that this Court has jurisdiction - Decided against Petitioner.
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2014 (1) TMI 1069
Revocation of CHA License - Forfeiture of entire amount of security deposit - Misdeclaration of goods - Held that:- M/s. Raju Doshi (HUF) is a IEC holder who let the IEC to Shri Abdul Rahim, importer for importation of the goods. But in the invoice as well as import documents, M/s. Raju Doshi (HUF) is shown as the importer and from the importer M/s. Raju Doshi (HUF) the appellant has obtained proper authorisation as required under Regulation 13(a) of the CHALR, 2004. As held by the Tribunal in P.P. Dutta (2001 (9) TMI 148 - CEGAT, NEW DELHI) that at the time of clearance if the authorisation is not asked by the customs officer and bills of entry has been duly signed by the appellant same is implied that the appellant has obtained authorisation from the importer. Therefore we hold that the charge levelled against the appellant under Regulation 13(a) stands not proved. With regard to charge under Regulation 13(d), we find that no discrepancy was found by the authorities in the documents filed by the appellant therefore question of advice does not arise and description shown in the bill of entry matches with the documents like invoice, packing list, when there is no discrepancy then it is not required for the appellant to bring it to the customs authorities. Further, in this case, only at the time of examination it was found that some fire works apart from the goods in the bill of entry which is not proved by the authorities was in the knowledge of the appellant. Therefore, in the absence of any evidence on record that appellant was having knowledge of misdeclaration, charge under Regulation 13(d) also stands ‘not proved’ - Decided in favour of appellant.
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2014 (1) TMI 1068
Import of Laptops - Benefit of Notification No. 94/96-Cus., dated 16-12-1996 - Lack of evidence of evidence of export - Imposition of penalty - Held that:- respondent has not disputed the duty liability and have already discharged the same. Therefore, the question of eligibility for the benefit of Notification No. 94/96 or otherwise does not arise - respondent were able to show that these laptops which were imported by them were leased from foreign companies and had been issued to the individual employees. Because these laptops developed some fault when the employees had gone abroad they had left it with the foreign company who had leased the same and subsequently all these laptops were imported as one consignment. Accepting this submission on the basis of records and also taking note of the fact, that even the original adjudicating authority had also taken a view that the serial numbers and identification numbers of the laptops tallied with the ones which were leased by the employer - Decide against Revenue.
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2014 (1) TMI 1067
Confiscation of goods - Imposition of redemption fine - Held that:- Section 125 of the Customs Act authorizes confiscability of the goods. Once there is a confiscation of goods without being absolutely confiscated, redemption fine ought to have been imposed in lieu of confiscation and option was required to be given to the importer of the goods to pay such fine and redeem the goods so confiscated. Learned Commissioner was of the view that when the respondent deposited duty, there should not be redemption fine. Such a proposition is not sanction of law. Quantum of such fine depends on various factors and judiciously determined. Therefore, there is no escaping conclusion that redemption fine is not imposable - redemption fine of Rs. 25,000/- is imposed to reduce the litigation of 2007 - Decided partly in favour of Revenue.
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Corporate Laws
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2014 (1) TMI 1066
Appointment of arbitrator by court - Dispute over final settlement entered between parties - Appellant contends that they signed settlement deed under duress and coercion - Whether the Petitioner was made to sign the settlement deed, indemnity bond and affidavit dated 11th April 2011 under duress and coercion - Held that:- it appears to the Court that the answer to that question will necessarily involve examination of witnesses as well as the documents in light of their depositions. Since it is not possible for the Court to conclusively hold at this stage that the Petitioner’s plea is “an afterthought, make-believe or lacking in credibility”, the appropriate course would be to permit the parties to raise this as one of the first issues to be decided in the arbitral proceedings - Arbitrator to be appointed by the Court will first determine whether there was a full and final settlement of the Petitioner’s claims as contended by the Respondent, or whether the settlement deed, indemnity bond and the affidavit were executed under duress and coercion as contended by the Petitioner. Depending upon the answer to the said issue, the learned Arbitrator will proceed further to consider the claims of the Petitioner - Decided in favour of Petition.
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Service Tax
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2014 (1) TMI 1102
Demand of service tax - Business Auxiliary Service - Commercial Training or Coaching Centre Services - Held that:- Prima facie demand towards Business Auxiliary Service is unsustainable in view of the decision in Paul Merchants Ltd. vs. CCE, Chandigarh (2012 (12) TMI 424 - CESTAT, DELHI (LB)). In so far as the demand under the head ‘Commercial Training or Coaching Centre Services is concerned, activities of the petitioner/ appellant prima facie fall under Section 65(105) (zzzc) read with Section 65(26) and 65 (27) of the Act and hence no case is made out for interdiction of the pre-deposit or for grant of stay in respect of this assessed liability - Conditional stay granted.
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2014 (1) TMI 1101
Demand of service tax - Penalty u/s 78 - Held that:- Appellant does not deny its liability - service is a taxable service chargeable to tax with reference to its value then such value shall in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him. As the petitioner/appellant has charged his customers for the service provided during the relevant period in issue, prima facie, the liability to remit service tax does not appear to be contingent on receipt of the amount by the service provider - prima facie, no case is made out for grant of waiver of pre-deposit - Stay denied.
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2014 (1) TMI 1100
Denial of Cenvat credit - Outdoor catering service provided to the workers, staff and other people of the factory – Waiver of Pre-deposit - Held that:- Prima facie, the applicant is liable to pay tax on employees contribution - the applicant is directed to deposit a further amount of Rupees three lakhs ten thousand 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 1099
Waiver of pre deposit - service tax liability - Management Consultancy Service and Goods Transport Agency service - services of implementing of Micro Irrigation system in the State of Gujarat - 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, Board’s 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 appeal - Stay granted.
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2014 (1) TMI 1098
Rejection of refund claim on terminal handling charges – Charges not mentioned in the Notification list - Whether or not the service tax paid on terminal handling charges is refundable under notification No. 41/2009 – Held that:- Even if the service provider is having only registration of one service, the exporter under notification No. 41 of 2007 is entitled to refund of the service tax paid and used for export of goods and that no verification of registration certificate of the service provider is necessary -nowhere from the records, it is coming out that service tax was paid by the service provider under business support services - Relying upon CST. Ahmedabad Vs. Riddhi Siddhi Cluco Biols Ltd. [2011 (8) TMI 187 - CESTAT, AHMEDABAD] - there was no ground to reject the refund claim when appellant was claiming refund of service tax that has been paid as port services – Decided in favour of Assessee.
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2014 (1) TMI 1097
Waiver of pre-deposit - Business Auxiliary Services - Held that:- appellant has been taking a consistent stand before the lower authorities that such moulds are used by them in manufacturing of glass bottles, which would indicate that the charges which are paid by them were in respect of services rendered towards their final product and used in the manufacturing activity. It is also seen that the appellant is taking a consistent stand that even if the service tax liability is paid the same is available as credit, as the said moulds are used for manufacturing of glass bottles on which appropriate Central Excise duty liability is discharged. We find prima facie case that the appellant need not discharge service tax on such development charges paid by them to upcountry manufacturers of moulds - impugned order needs to be set- aside and the matter be restored in the file of first appellate authority to its original number, with directions to consider the issue afresh and decide the appeal on merits without insisting on any pre-deposit from the appellant - Decided in favour of assessee.
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2014 (1) TMI 1096
Availment of CENVAT Credit - Excise duty paid on pipes and other materials used in Transportation of goods through pipelines or other conduit services - The department took the view that GSPL was not entitled to take CENVAT credit of duty paid on pipes etc., as the same were neither inputs nor capital goods for them because the pipes were inputs or capital goods for the EPC contractors and the pipeline system (on which no duty or service tax was paid, the same being immovable property) alone was relevant for the services rendered by GSPL. Besides, credit taken in respect of input services used by the contractors and the credit of service tax paid by the contractors was denied to GSPL on the ground that neither CENVAT duty nor service tax was payable on immovable property. Whether conditions prescribed in the Notification No. 12/2003-S.T., have not been contravened by the appellant - Held that:- Appellant is not using pipes for providing any output service but have supplied it for construction of pipeline to the EPC contractor. Being a free supply material, if the value of the same is not included in the pipeline system by the output service provider, question of availment of credit also does not arise. The definition of input service also does not help the appellants to get the credit of duty paid on pipes. The definition requires the input services to be ‘‘used for” providing an output service and it cannot be said that the inclusion clause helps them to take credit of service tax paid by the EPC contractor we are not able to find any provision which allows them to take credit of duty paid on pipes and also service tax paid on construction of pipeline system. A conscious decision was made by the appellant and the EPC contractor to avail the benefit of Notification No. 12/2003 especially in the case of appellants, they had also taken a legal opinion. Once a choice is made the consequence of the choice also inevitably follows and has to be suffered. - Decided against the aassessee. Bar of limitation - Held that:- taking a view that assessee did not furnish additional information to the department and filing returns in the proforma prescribed giving the information required to be given does not mean full disclosure, would be total injustice to the assessees. Suppression of facts would arrive only when facts which are required to be disclosed according to the provisions of statute are not disclosed or there should be deliberate withholding of information - extended period in this case was not invocable and therefore duty demand beyond the normal period can be confirmed. Whether penalty is imposable and if so provision of Section 80 can be invoked for not imposing penalty - Held that:- After an assessee takes a view that this is similar to the situation where a contractor is appointed to erect plant and machinery for a big factory and a production of plant and machinery are purchased by the principal and given to the contractor and purchased by the contractor himself, if credit can be availed by the principal, a similar facility would be available to the appellants - When there is fraud, evasion of duty by misstatement or suppression of facts, merely because a letter has been written seeking clarification does not mean extended period cannot be invoked. In the facts and circumstances of this case, we feel that appellants did entertain a bona fide belief and therefore even if it is assumed that there was a misstatement or suppression of facts, the provision of Section 80 which provided for non-imposition of penalty are applicable. Appellants are not eligible for CENVAT credit of duty paid on pipes during the normal period of limitation. Therefore appellant would be liable to payback the CENVAT credit availed of duty paid on pipes with interest within the normal period of limitation which will be worked out by the departmental authorities and intimated to them. The demand for extended period is set aside. Penalties are also set aside - Decided partly in favour of assessee.
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2014 (1) TMI 1095
CENVAT Credit - Supply of Tangible Goods Services - Held that:- appellant is a person liable to Service Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules. Revenue is also relying on Rule 5 of Taxation of Services (Provided from Outside India and Received in India) Rules. We find that Rule 5 refers to availing of Cenvat credit and not to utilization of credit. We are therefore of the view that the finding of the Commissioner not treating the appellant as output service provider, is not correct - Decided in favour of assessee.
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2014 (1) TMI 1094
Demand of service tax - Port services - Handling of export cargo - Penalty imposed u/s 76 - What is covered under the Port Services under Section 65(82) is a taxable service rendered in a Port area. If the handling of cargo is excluded from the scope of a taxable service, it cannot come within the purview of Port Service as defined. This is the view taken by the Hon’ble High Court of Karnataka in the case of Konkan Marine Agencies (2008 (3) TMI 285 - HIGH COURT KARNATAKA ). Therefore, there is merit in the claim of the appellant that the Service Tax liability is not attracted in respect of export transactions. However, the matter needs verification at the adjudicating authority’s end. Therefore, we remand the matter back to the adjudicating authority to verify the particulars submitted by the appellant in this regard and satisfy himself that the amounts collected by the appellant pertain to handling of export cargo - Decided in favour of assessee by way of remand.
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2014 (1) TMI 1093
Waiver of pre deposit - Whether service tax under the above head can be levied at all and collected from the appellant inasmuch as each building which was constructed with self-contained facilities consists of only 12 dwelling units - Held that:- first item of demand pertains to residential complexes constructed by the appellant for the Government of Andhra Pradesh. Each building consists of 12 dwelling units. There are several such buildings constructed by the appellant in the same place for the Government - The second and third items of demand are under the head “management, maintenance or repair service”. It is submitted by the consultant for the appellant that these demands pertain to maintenance/repairs of a Government hospital and a Government college - period of demand in the instant case is comprised in the above period for which management, maintenance or repair of non-commercial Government buildings were exempted from levy of service tax - Stay granted.
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Central Excise
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2014 (1) TMI 1065
Rectification of mistake - Matter was remanded to the adjudicating authority after taking into consideration the main issue of dutiability of furnitures - Assessee contends that remand should be an open remand - Held that:- matter has been remanded to the adjudicating authority to decide afresh. In view of this, in the last line of the order where it has been written that “appeal is allowed by way of remand in above terms" it should be read as the "appeal is remanded by keeping all the issues open - Decided in favour of assessee.
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2014 (1) TMI 1064
Waiver of pre-deposit – Held that:- As per the worksheet a comparative account of the particulars of the demand raised by the Commissioner in the earlier round and those of the demand - the appellant was entitled to the benefit of Notification No.8/1997-CE and Notification No.2/1995-CE – Appellant offered to deposit Rupees Two lakhs as pre-deposit – Further Five lakhs Rupees ordered 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 1063
COREX gas emitted during the manufacture - Waiver of Pre-deposit – Whether the gas could be classified as carbon monoxide under sub-heading 2811 24 90 of the CETA Schedule and was chargeable to duty - Held that:- Following JSW STEELS LTD. Versus COMMISSIONER OF C. EX., BELGAUM [2010 (2) TMI 527 - CESTAT, BANGALORE] - the demand is entirely within the normal period and, therefore, there is no reason why the appellant should not be directed to pre-deposit the duty - the appellant directed to pre-deposit the entire amount of duty as pre-deposit – Stay not granted.
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2014 (1) TMI 1062
Denial of cenvat credit – Capital goods used in the setting up of plant - Waiver of Pre-deposit – Held that:- The procurement of capital goods and inputs by the appellant and JSWEL and utilisation in setting up of the power plant were intimated to the department - The factum of availment of CENVAT credit on such capital goods and inputs was disclosed to the department through ER-1 Returns filed from time to time – Thus, there was no suppression of facts which can be attributed to the appellant - prima facie case on the ground of limitation, against a major part of the demand confirmed against the appellant – the appellant is directed to pre-deposit an amount of Rupees Nine lakhs ninety thousand 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 1061
Clandestine manufacture and removal of goods - Waiver of Pre-deposit - Held that:- The evidence gathered by the department is not enough to substantiate the case of clandestine removal - Appellant failed to made out a prima facie case in their favour - the assessee offered to made a pre-deposit of Rs. 2,00,000 which is too inadequate to meet the purpose – the appellant directed to made a deposit an amount of Rupees Five lakhs as pre-deposit – upon such submission rest of the amount to be stayed till the disposal – partial stay granted.
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2014 (1) TMI 1060
Clandestine removal of ingots – Waiver of pre-deposit – Held that:- The issue is not free from doubt and needs to be gone into detail as to how the lower authorities have come to conclusion that the appellant has cleared the aluminum ingots from his factory premises clandestinely - whether the duty liability is worked out by the lower authorities is in consonance with law or not, which can be done only at the time of final disposal of appeals - the appellant has already deposited an amount of Rs.4 lakhs, further the appellant directed to deposit further an amount of Rupees Three 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 1059
Reversal of CENVAT Credit – Credit availed on common inputs – Waiver of Pre-deposit – Held that:- Bagasse an intermediate by-product arises during the manufacturing of sugar, there is no need to reverse 5% of the value of Bagasse – Following Manakpur Chini Mills Versus CCE., Allahabad [2012 (7) TMI 474 - CESTAT, NEW DELHI] - the appellant has made out a case for waiver of pre-deposit of the amounts involved – Pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 1058
Activity manufacture or not – Zinc dross and ash emerges during manufacture of galvanized sheets – Effect of amendment of Definition of excisable goods u/s 2(d) of Central excise act - Waiver of Pre-deposit – Held that:- Following KEC INTERNATIONAL LTD. Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I [2012 (12) TMI 426 - CESTAT, NEW DELHI] - Zinc dross and ash manufactured and cleared was chargeable to duty – the duty would be recoverable only for the normal limitation period along with interest – Appellant directed to deposit Rupees Sixty 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 1057
Entitlement for benefit of Notification No. 89/95 – Fatty acids emerges during the refining of vegetable oil – Waiver of Pre-deposit – Held that:- Relying upon ADINATH DYEING AND FINISHING MILLS Versus COMMR. OF C. EX., LUDHIANA [2005 (7) TMI 114 - HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH] and the Board’s circular - The Board has issued a circular dated 30.03.2012 floating the survey for issuance of notification in terms of Section 11C - the appellant has been able to make out a prima-facie case for waiver of condition of pre-deposit – pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 1056
Non-compliance of Conditions of Notification No.83/94 – Declarations not filed - Waiver of Pre-deposit – Held that:- The applicant had cleared the goods without the undertaking of the raw material supplier and there is contravention of Notification No.83/94-CE - Assessee failed to show any evidence in this regard – thus, the applicant failed to make out a prima facie case for waiver of pre-deposit of entire amount - the applicant is directed to deposit a sum of Rupees One lakh 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 1104
Classification of goods - Classification of Air Bubble Film Rolls - Classification under HSN Code - Held that:- if under a particular classification of HSN Code this particular commodity falls under them, such HSN Code alone would be applicable. If it is with reference to the functional value of the commodity which cannot be classified under any classification without reference to any particular commodity, then residuary clause has to be applied - Except sacks and bags, none of the description of other items are not even nearer to the product in question. The product herein though basically used for packing of goods, this is not the normal packing material used generally, unless the goods for which it is used is fragile or breakable. This is only to avoid damage being caused to the goods depending upon the nature of goods. If goods are otherwise air bubble film rolls are not used. Therefore, though this is used as a packing material for goods, it cannot be termed as packing material in general. With reference to HSN Code 3920, we have to see whether the product in question gets attracted to any of the classification under HSN Code 3920 with reference to a particular product. None of the products referred to under this HSN Code 3920 indicates Air Bubble Film Rolls. Then we have to refer to the component used for making the Air Bubble Film Rolls, i.e., poly ethylene granules. HSN Code 3920.10 refers to polymers of ethylene sheets of poly ethylene. Though it has air bubbles having bubble layer, it is nothing but a sheet of poly ethylene. It attracts HSN Code 3920.10.92. In other words, the eight digits 3920.10.92 is attracted under classification 3920.10 under HSN Code 3920 - Decided in favour of assessee.
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2014 (1) TMI 1103
Amount of penalty reduced to 25% for late fining of VAT return by the tribunal - Entitlement of 75% of the amount which has been paid earlier while restoring registrations - Held that:- as such they are not disputing their liability to pay the amount which they have deposited as penalty for late submissions of the returns. It is submitted that as such no formal order has been passed by the authority levying/imposing the penalty under the Act/Rules. He has stated at the bar, under the instructions from the respective clients, that the amount, which the respective dealers opponents herein have deposited while restoring the registration, may be treated as penalty for late submissions of the returns. However, a formal order may be directed to be passed by the appropriate authority to impose/levy the penalty of the same amount. He has also requested to permit the respective dealers-opponents herein to withdraw the appeals, which they preferred before the appellate tribunal. He has also stated at the bar that as such the respective dealers opponents herein are satisfied with the amount, which have deposited, which may be treated as penalty and they shall not challenge the quantum of penalty for which a formal order may be passed - respective dealers-opponents herein have agreed that the amount, which they have already deposited while restoring their registrations, be treated as penalty and they have accepted the said amount as penalty and only formal order of imposing penalty is to be passed by the appropriate authority within the stipulated time - Decided in favour of Revenue.
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Indian Laws
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2014 (1) TMI 1092
Right to information - Held that:- sub-section (3) can be invoked when RTI application is to be transferred from one ‘public authority’ to another ‘public authority’. However, this Commission has interpreted this sub-section to mean that RTI applications can be transferred by one PIO to another PIO within the same public authority. This interpretation has been made for practical reasons - it is permissible for a CPIO to transfer RTI application of part thereof to another CPIO within the same public authority - CPIO can transfer the RTI application in entirety or in part. We expect the queries to be self speaking. If so, the ‘subject matter’ thereof becomes irrelevant - As per Section 5(2), APIO is empowered only to receive RTI applications and then transmit them to the CPIO concerned. On the other hand, CPIO is empowered not only to receive RTI applications directly but also to respond to them. Hence, the functions of the CPIO and APIO are distinct and not co-equal. If FAA in PHQ is the FAA of competent jurisdiction, then he is required to decide the first appeal on merits. But if FAA/PHQ is not the jurisdictional FAA, then he or anybody on his behalf can transfer the first appeal to the jurisdictional FAA - An FAA can transfer the first appeal to another FAA if he does not have jurisdiction over it and the transferee FAA has territorial jurisdiction in the matter - Only one First Appeal can be filed from the order of the CPIO. The law does not contemplate filing of two First Appeals before two different FAAs. Hence, the passing of two different orders by two different FAAs in the same matter is not understandable - Decided in favour of appellant.
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