Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 4, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
Articles
News
Notifications
Circulars / Instructions / Orders
FEMA
- 67 - dated
2-1-2013
Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009.
- 68 - dated
2-1-2013
Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards / Combating the Financing of Terrorism (CFT) Obligation of Authorised Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 Money changing activities
DGFT
- 43 (RE: 2012)/2009-2014 - dated
2-1-2013
Modification of SIONs at Sl No.C-1188,1206,1207,1208,1209,1314,1702 and 1971
- 44 (RE 2012)/2009-2014 - dated
2-1-2013
Inclusion of Chapter Offices of FIEO in Appendix-2 of Handbook of Procedures Vol.1.
Highlights / Catch Notes
Income Tax
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Approval u/s 10(23)(C) - the petitioner has not rendered its services directly to the farmers but is rendering its services directly to its clients/agents who are engaged in trading of the certified seeds with profit motive and therefore its activities are not for the "advancement of any other object of general public utility" and hence not for "charitable purpose" - HC
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Deduction u/s 80-I - amalgamation does not come within the scope of 'transfer' as defined in Section 2(47), there is no question of holding that the assessee disentitles the benefit of Section 80-I - HC
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Exemption u/s 54F - failure to comply with the conditions - As in the present case the assessee has voluntarily filed return declaring capital gain in AY 2011-12, therefore, the tax paid in that year would amount to double taxation if the capital gain is also taxed in AY 2008-09. - AT
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Depreciation on the revalued assets - Tribunal did not commit any error in law in allowing the depreciation on the revaluation reserve, which is a prescribed and statutory method of accounting, and by which the book profits do not get reduced, giving any added benefit to the companies including Minimum Alternate Tax (MAT) companies - HC
Corporate Law
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Dishonour of cheque - prosecution u/s 138 - in present case no substantial reasons are made out to interfere with the order of acquittal recorded in favour of the accused and to disturb the double presumption of innocence bolstered as per the judgment in question. - HC
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Joint venture - Concept of bona fide dispute - Winding up petition - Any unsecured claim as soon as it is secured, would debar a winding up proceeding being brought by the creditor, no matter whether the claim was bona fide or not. - HC
Central Excise
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Excise duty payable on fresh mushrooms - The fact that fresh mushrooms classified in the general category under heading 07.02 of the Central Excise Tariff prior to the 2004 amendment have been classified specifically under entry 07095100 in Chapter 7 of the Central Excise Tariff after the 2004 amendment, it cannot be inferred that fresh mushrooms became excisable for the first time after the 2004 amendment to the 1985 Act. - HC
Case Laws:
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Income Tax
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2013 (1) TMI 67
Method adopted in reporting the discounted value of raw material, components and consumable stores - “cost or net realizable value, whichever is less" - Tribunal disapproved method as adopted by assessee - Held that:- There is no dispute that the principle “cost or net realizable value, whichever is lower” is an accepted method of valuation of inventory. There is also no dispute that AS-2 issued by the ICAI are binding on both the assessee as well as the tax authorities under Section 145. Write off factor of 8.5% has not been proved by the assessee - Held that:- The figures which are set out by the assessee in Annexure G show how the assessee arrived at the write off factor. These figures have to be verified by the AO. While therefore holding that the Tribunal was not right in accepting the revenue’s contention in principle, AO is directed to verify the figures furnished by the assessee in support of the write off factor of 8.50% and complete the assessment afresh on this limited issue - in favour of assessee subject to the remit order passed.
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2013 (1) TMI 66
Penalty u/s 271(1)(C) - undisclosed income - advance of Rs. 2,50,000/- shown against the land in his capital account - assessee claimed that this was on account of forfeiture of the earnest money for sale of his plot - Held that:- Assessee's claim of Rs. 2,50,000/- in the capital account based on a similar transaction was accepted by ITAT vide order dated 27.03.2008. That pertained to an agreement entered with one Harish Aggarwal for sale of plot No. 85/104 Khasra No. 16, Village Jandi, Ambala, which transaction did not materialize and the amount of the earnest money received by the appellant-assessee was forfeited. The appellant-assessee had set up an agreement dated 04.07.2002 for that assessment year. That transaction has no relevance to the assessment year 2002-03. The controversy raised on this point is held against the appellant. Though copy of agreement produced by the appellant assessee was entered with Leela Dhar Gupta son of Chandgi Ram, yet the draft of Rs. 2,50,000/- received by the appellant-assessee was prepared from the account of one Deepak Gupta and issued by the Bank. There was of course account of one Leela Dhar in the said Bank, who was contacted by the Department in the enquiry but that Leela Dhar stated that he never entered into such a transaction with the appellant-assessee. The authorities below also took serious note of the fact that there were transactions running into more than 40 crores in the account of said Deepak Gupta. Seriousness of such transaction was under investigation of the Department of Income Tax and ultimately it was found that the Bank has been closed by the Reserve Bank of India because of the shady deals in which the said Bank was indulging. There is no illegality committed by the authorities below in holding that the assessee routed undisclosed income in his capital account as forfeited amount, and thus added the amount in his income for the assessment year in question. The assessee is giving different addresses in the returns and Ward/Circles etc. shown are different and incomplete, there is no evidence of filing these returns as from the photocopy, stamp of the Department is not legible. Further enquiry had revealed that B-29, Som Dutt Chamber, Bhikaji Cama Place, New Delhi, is an incomplete address. The assessee, therefore, cannot say that he had proved the identity of Sh. Leela Dhar Gupta. There was no agreement with Deepak Gupta nor the appellant assessee claimed any direct link with Deepak Gutpa, whose account was under investigation in a separate case. This point is also found against the appellant - When the transaction has not been accepted as genuine, there is no question of taking recourse of Section 51 - against assessee.
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2013 (1) TMI 65
Revision of orders prejudicial to revenue u/s 263 - CIT(A)s revision orders quashed by ITAT - nature of expenses incurred in foreign exchange for the purpose of determining the deduction under Section 10A - Held that:- Before jurisdiction u/s 263 can be exercised, CIT must be satisfied that the order of the AO is prejudicial to the interest of revenue and also erroneous. In the present case, the order of the CIT holds that the order is erroneous as further inquiries were not made. However, no further inquiries were warranted as there was no occasion for the AO to doubt the particulars to examine the same further. Besides, it is undisputed position that the nature of service are such that the services are being provided in India and thereafter merely transmitted to Standard and Poor. Therefore, the foreign exchange expenses relating to travel, professional fees and other matters are not incurred in providing technical services outside India. Further the expenses in foreign exchange have been reimbursed and therefore were not originally included in export turnover by the respondent assessee so as to rework the same. Thus no fault can be found in the order of the Tribunal - no substantial questions of law.
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2013 (1) TMI 64
License fees paid to holding company - whether an allowable expenditure u/s. 37(1)? - the assessee company had itself amortized the said license fee for a period of ten years and further Section 35ABB was applicable to such payment as license fee - Held that:- Operating license fee paid to holding company for the year under consideration, consequently, no enduring benefit is received by the assessee so as to spread the expenditure beyond the period of one year in which the expenditure is incurred. In such a case, there can be no amortization of the expenditure over a period of 10 years. Section 35ABB would have no application in the present case but would apply in respect of the license fee paid by M/s. J.T. Mobiles Ltd. The fact that the respondent-assessee had in its books of accounts spread the expenditure of Rs.115 crores over a period of 10 years and only debited amount of Rs.47.46 crores as expenditure during the year under consideration would not change the nature of the expenditure for the purpose of determining to allow ability of the expenditure for income tax purpose. The Tribunal in the present case has merely followed its earlier order for the assessment year 1997-98 that the entire amount paid as operating license fee was allowed as an expenditure under Section 37(1) which appears to have been accepted by the department as no appeal there from has been preferred by the revenue. In view of the above, no substantial question of law arises. Prior period expenses towards PSTN charges and dealers commission - Revenue v/s Capital - - Held that:- The order of the Tribunal dated 29/3/2007 for the assessment year 1997-98 stated that the aforesaid expenses are not pre-operating expenses as the appellant had set up its business much before the commercial launch on 12/1/1998 as evident from the fact that it had started marketing its services, appointing dealers, accepting deposits from subscribers much before the commercial launch. The aforesaid expenses were incurred after setting up of business and allowable as permissible deductions u/s 37 - This order of the Tribunal for assessment year 1997-98 was accepted by the revenue as no appeal there from is filed by the revenue - no substantial question of law arises. Expenditure on foreign travel - Revenue v/s Capital - Held that:- CIT(A) and the Tribunal on examination of the facts concluded that the expenses incurred do not give rise to any enduring benefits but only enables the respondent-assessee to efficiently run its business so as to achieve higher profits hence allowable as a revenue expenditure - no substantial question of law arises
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2013 (1) TMI 63
Approval u/s 10(23)(C) - rejection of application as the activities of the agency were not in the nature of advancement of any objects of general public utility - do not indicate any charitable activity - Held that:- The petitioner was registered under the Andhra Pradesh (Telangana Area) Public Societies Registration Act, 1350 Fasli by Food and Agriculture (EP-II) Department dated 01-06- 1977, the State Government approved the proposal of the Director of Agriculture and directed that the petitioner shall carry on the functions of the certification agency under the Seeds Act, 1966 in the Andhra Pradesh State with effect from 01-06-1977. The objects of the petitioner have already been set out. The petitioner thus certifies the Seeds which meet the minimum seeds certification standards as per Indian Minimum Seed Certification Standards, 1988. Seed growers enter into contract with a society/agent, who approaches the petitioner for certification of the seeds and after securing certification, they sell the certified seeds to the farmers at a market price determined by them. The petitioner collects a fee for providing certification as the process of certification involves technical and scientific evaluation of the seeds although the fee collected by it would be enough to enable it to sustain its activities and may not result in much profit. The term "advancement of any other object of general public utility" used in Section 2 (15) includes all objects to promote the welfare of the public particularly when the object is to promote or protect the interest of a particular trade or industry. The activity of the petitioner which facilitates sale of certified seeds to farmers therefore falls within "advancement of any other object of general public utility" included in the definition of the term "charitable purpose" as defined in Section 2 (15) of the Act but in view of the fact that certification of seeds by the petitioner facilitates trade, commerce or business in the certified seeds by the client of the petitioner, the proviso to the said section would come into operation. Thus the petitioner's activity assists the sale of certified seeds and is "in relation to any trade, commerce or business" and therefore its activity cannot be held to be a "charitable purpose". In this view of the matter the 1st respondent rightly rejected the application of the petitioner for approval under Section 10 (23C) (iv) - the petitioner has not rendered its services directly to the farmers but is rendering its services directly to its clients/agents who are engaged in trading of the certified seeds with profit motive and therefore its activities are not for the "advancement of any other object of general public utility" and hence not for "charitable purpose" in view of second limb of the first proviso to Section 2 (15) - aginst assessee.
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2013 (1) TMI 62
Deduction u/s 80-I - disallowance as per prohibition contained in sub-section 2 of Section 801 - M/s AA Alloys Ltd. a limited company, got amalgamated with the assessee company - Held that:- Both the revenue and the assessee have placed reliance on the decision in the case of SARASWATI INDUSTRIAL SYNDICATE [1990 (9) TMI 1 - SUPREME COURT] which only supports the view canvassed by the assessee and not as canvassed by the revenue. Moreover, in the present case, the income is only of the very assessee and not of the other company namely M/s AA Alloys Ltd., as the said company ceased to be in existence as on 1-4-1994 and there is no income attributable to this company after this date, but industrial dealing part of the assessee company and its profits and gains are to be examined and brought to tax only in the hands of the respondent-assessee company and therefore the assessee while can claim benefit of Section 80-1 , if otherwise eligible, unless it is hit by non-fulfilment of any of the requirement in terms of sub-section (2) of Section 80-I. The amalgamation does not come within the scope of 'transfer' as defined in Section 2(47) and such being the view taken not only by this court, but Madras High Court and also the Supreme Court, there is no question of holding that the assessee dis entitles the benefit of Section 80-I - in favour of assessee.
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2013 (1) TMI 61
Exemption u/s 54F - to be assessed in the year the claim is made OR in the year when the time for completion of house expires - Held that:- Plain reading of section 54F clearly shows that deduction under this section is allowable only in case where the assessee within a period of one year before or two years after the date on which the transfer took place purchases, or has within a period of three years after that date constructed the residential house. No doubt the proviso to sub-section provides that in case the amount of capital gain has been deposited in the specified account as provided in sub-section (4) and the same could not be used for construction then such capital gain would be charged in the previous year in which the period of three years expires from the date of transfer of original asset. The proviso carves out an exception only in those cases where the amount had been deposited in the specified account and could not be used for the purpose of construction. As the money has not been deposited in the specified account, therefore, there is no question of application of the proviso. Not only construction never commenced but the assessee could not show any evidence that the assessee wanted to start the construction. If the tax is allowed to be postponed merely on the basis of purchase of plot then no assessee would pay correct taxes during the year and postpone the payment of taxes by merely purchasing the plot and that cannot be intention of the provisions of section 54F. Therefore, CIT(A) is right in denying the deduction u/s 54F to the assessee. Double taxation of income - Held that:- No doubt as decided in Murlidhar Bhagwandas case (1964 (1) TMI 5 - SUPREME COURT) has held that the Tribunal has no power to give direction in respect of any other year which is not before the Tribunal. However, at the same time there is cardinal principle of taxation particularly in view of the Article 265 of the Constitution that the taxes can be collected only by process of law and therefore, no income can be taxed twice. As in the present case the assessee has voluntarily filed return declaring capital gain in AY 2011-12, therefore, the tax paid in that year would amount to double taxation if the capital gain is also taxed in AY 2008-09. Agreeing with the submissions that the taxes paid in 2011-12 needs to be adjusted against the capital gain liability during AY 2008-09, thus direct the AO to adjust the taxes already paid by the assessee in AY 2011-012 regarding the same capital gain after verification during the current year against the capital gain liability - appeal of the assessee partly allowed
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2013 (1) TMI 60
Arms length price - provision of research and development support services - upward adjustment of Rs. 68,47,532/- to the income - assessee contested against inclusion of the two comparable companies viz. Celestial Labs Ltd. and Biocon Ltd. - Held that:- Celestial Labs Ltd. is engaged in the business of supporting pharmaceutical and biotechnology companies with customised information technology solution. It is mainly engaged in the software development in drug designing tool, bio informatic service and data warehousing. More than 96% of its revenue is from this service which are mostly in the nature of drug designing tools and Sap services. The profile of the company, as highlighted shows that its functions are entirely different from that of the assessee company which is mainly into testing and analytical service in R&D., therefore, it cannot be included for comparability analysis in the set of comparables taken by the TPO. Inclusion of Biocon Ltd - two subsidiary of Biocon Ltd. i.e., Clinigene International Ltd. and Syngene International Ltd. The former company cannot be included at all for the preliminary reason that its related party transaction is approximately 38% of its sales, therefore, it cannot be held to be a fit case for comparison of a controlled transaction with an uncontrolled transaction. Insofar as Syngene International Ltd., this company is again 99% subsidiary of Biocon Ltd. and is engaged as a custom research service provider in the drug development process from discovery to supply of development compounds. From annual report, it is seen that the company has two sets of income - one from contract research fees and sale of compounds. However, in the absence of segmental information regarding contract research and manufacturing activities, it is difficult to analyse its main revenue and profit margin from the contract research work. Thus its functional profile is different with that of the assessee company, hence this company is directed to be excluded from the set of comparables. Various diagnostic companies excluded by the TPO viz. Dolphin Medical Services Ltd., Transgene Biotek Ltd. and N.G. Industries Ltd., that not only the functional profile of these companies are different but the characteristic of the services rendered are also different. Dolphin Medical Services Ltd. is engaged in diagnostic services like CT scan, MRI, colour Doppler, etc., which is entirely different from R&D, testing and analytical services performed by the assessee. Transgene Biotech is engaged in the business of pre-clinical and clinical research service for biopharma involved in developing human vaccines and has patent rights of various products and vaccines developed by it. & as is the case of N.G. Industries Ltd. which is also purely a diagnostic and medical company and its services are entirely different from that of assessee. Risk adjustment on account of difference between the risk profile of the comparables - Held that:- As neither the TPO nor the DRP has dealt with the assessee's contentions, thus in the interest of justice the matter needs to be restored back to the file of the TPO, who will examine the assessee's contentions on this score and decide the issue afresh in accordance with the law. Notional addition towards interest on the amount receivable from the A.E. - Held that:- As assessee has no interest liability and it does not have any external borrowings. Even if the payments have been made by the A.E. beyond the normal credit period, there is no interest cost to the assessee. Moreover, there is no such agreement whereby interest is to be charged on such a delayed payment. From the summary of payment submitted by the assessee it is seen that the billing is done on quarterly basis and, accordingly, the payment is being received. Therefore, the delay is not wholly on account of late payment by the A.Es only. Moreover, the T.P. adjustment cannot be made on hypothetical and notional basis until and unless there is some material on record that there has been under charging of real income. Thus, addition an account of notional interest relating to alleged delayed payment in collection of receivables from the A.Es, is uncalled for on the facts of the present case and is, accordingly, deleted. Network access charges - revenue v/s capital - Held that:- The assessee has made the payment for availing e-mail infrastructure like lotus notes accounts for the employees, usage of VPN, network infrastructure excess service which are owned by the parent company and not by the assessee. The assessee is making the payment for using this e-mail infrastructure facilities for communication between employees of the assessee and outside business partners. Such facilities of secured internet facilities, facilitates the day-to-day business operation of the assessee and does not bring into an existence any enduring benefit or creation of a new asset to the assessee. It is not a capital software expenditure as held by the Assessing Officer even though the same has been classified under the head "software expenditure". Thus,such an expenditure is purely revenue in nature and is allowable under section 37(1)
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2013 (1) TMI 59
Claim of depreciation on the revalued assets set off against revaluation reserve and credited to the profit & loss account - whether permissible for computation of income under Section 115J? - Held that:- As per Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets issued by ICAI depreciation is required to be provided with reference to the total value of the fixed assets as appearing in the account after revaluation. However, for certain statutory purposes e.g., dividends, managerial remuneration etc., only depreciation relatable to the historical cost of the fixed assets is to be provided out of the current profits of the company. In the circumstance, the additional depreciation relatable to revaluation may be adjusted against "Revaluation Reserve" by transfer to Profit and Loss Account. Part II of Schedule VI to the Companies Act allows the company to provide the depreciation on the total book value of the fixed assets (including the increased amount as a result of revaluation) in the P/L Account of the relevant period, and thereafter can transfer an amount equivalent to the additional depreciation from the Revaluation Reserve. Such transfer should be shown in the P/L Account separately and an appropriate note by way of disclosure would be desirable. Such a disclosure would appear to be in consonance with the requirement of Part I of Schedule VI to the Companies Act, prescribing disclosure of write- up in the value of fixed asset for the first five years after revaluation. If a company has transferred the difference between the revalued figure and the book value of fixed assets to the "Revaluation Reserve" and has charged the additional depreciation related thereto to its Profit and Loss Account, it is possible to transfer an amount equivalent to accumulated additional depreciation from the revaluation reserve to the Profit and Loss Account or to the General Reserve as the circumstances may permit, provided suitable disclosure is made in the accounts as recommended in this guidance note - The accounting standards prescribed by the ICAI are applicable by virtue of Section 211(3)(c) of the Companies Act, until such time the accounting standards prescribed by the Central Government in consultation with the National Advisory Committee, on Accounting Standards established u/s 210A(1) which are not yet prescribed so far - Thus the Tribunal did not commit any error in law in allowing the depreciation on the revaluation reserve, which is a prescribed and statutory method of accounting, and by which the book profits do not get reduced, giving any added benefit to the companies including Minimum Alternate Tax (MAT) companies - in favour of assessee.
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Customs
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2013 (1) TMI 57
Restoration of appeals - appeals dismissed for non-prosecution - Held that:- It has been observed that the non-representation of the appellants is not restricted to 30.03.2012 only. The case has been listed several times earlier on 19.12.2011, 20.01.2012 and 30.03.2012 was given as a last chance. Therefore, it is not a case for non-appearance on single occasion but on several occasions. Therefore, the explanation given by the appellant that they have been out of business since 2005 & engaged an employee who on not receiving his salary did no informed them is not convincing as to why they were not represented on earlier occasions. Since the case has been dismissed for non-prosecution, the applications for restoration should be considered only on cost basis - direct the appellants to pay a cost of Rs.5000/- for each of the appeals to the credit of the Commissioner of Customs (Import), Nhava Sheva within four weeks from today and report compliance on 15.01.2013. On such compliance, the appeals and stay applications shall be restored to their original numbers.
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2013 (1) TMI 56
Extension of time for adjudication - Held that:- Keeping in mind that the issue pertains to the year 1989, the adjudicating authority is directed to dispose of the matter within 30 days from today, failing which appropriate action shall be taken against the adjudicating authority.
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Corporate Laws
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2013 (1) TMI 55
Dishonour of cheque - prosecution for the offence under Section 138 of the Negotiable Instruments Act, 1881 - the accused borrowed Rs.3 lakhs from the complainant and issued cheque towards the discharge of the said liability which got dishonored when presented for encashment - Interfere with the order of acquittal - Held that:- It is on the basis of the admitted facts and evidence that the Magistrate has found the complainant has no capacity at the relevant point of time to lend Rs.3 lakhs to the accused. According to Magistrate a person in dearth of money and who faces imminent danger of attachment of the property from his creditor, cannot be believed to have lent Rs.3 lakhs at a time when attachment steps are pending against him. Also the complainant's claim to advancing a sum of Rs.3 lakhs to the accused without getting any documentary proof is not correct. On the other hand, the Magistrate was prepared to accept the case of the defence version that the cheque was clandestinely procured by the complainant with the help of the then wife of the accused, which is the consistent case of the accused right from issuing the reply to the statutory notice of the complainant. Thus, on an examination of the findings of the court below and the materials and evidence referred it can be seen that there is no perversity or illegality in such finding of the court below so as to interfere with the said finding in appeal. As decided in State of Rajasthan v. Darshan Singh @ Darshan Lal (2012 (12) TMI 877 - SUPREME COURT) only in exceptional cases where there are compelling circumstances and the judgment under appeal is found to be perverse, the appellate court can interfere with the order of acquittal. The appellate court should bear in mind the presumption of innocence of the accused and further that the trial court's acquittal bolsters the presumption of his innocence. Thus in present case no substantial reasons are made out to interfere with the order of acquittal recorded in favour of the accused and to disturb the double presumption of innocence bolstered as per the judgment in question.
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2013 (1) TMI 54
Joint venture - Concept of bona fide dispute - Winding up petition - Winding up proceeding at the instance of an unsecured creditor - Section 434(1)(b) of the Companies Act, 1956 Appellant agreed to sell its P&M, vehicles and all other equipments arranged for the said project to the respondent – Respondent defaults - Appellant issued a statutory notice of demand – Respondent contended that in absence of “No Objection Certificate” being issued by the appropriate authorities enabling to register the vehicles in their name – In first appeal held that company was unable to disclose any bonafide defense therefore giving opportunity to the company to secure the claim by way of a Bank Guarantee – Respondent furnished bank guarantee Issue:- Whether the Judge was right in relegating the parties to suit even after holding that the company could not demonstrate a bona fide defence Held that:- The statutory notice of demand was replied to by the company. The company put up a defence. Learned Judge was not satisfied, even then he wanted to give an opportunity to the company to show their bona fide. It is rather an extension of the benefit which the company could otherwise avail under the statutory provisions. The company duly availed such benefit and secured the claim. Any unsecured claim as soon as it is secured, would debar a winding up proceeding being brought by the creditor, no matter whether the claim was bona fide or not. The duty of the Court of Appeal is to see whether discretion is properly and judiciously exercised by the Learned Judge. If the result of the test is positive interference is not warranted. We cannot substitute our independent views on the controversy sitting in a Court of Appeal. It is nobody’s case that the discretion was used perversely or de hors the Statute. Appeal decides against appellant
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FEMA
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2013 (1) TMI 58
Whether High Court, exercising the power u/s 407 of Cr.P.C. read with Article 227 and 235 of the Constitution of India is competent to take decision that cases under FERA/FEMA shall be tried by a Special Judge – Whether State Government has absolutely jurisdiction to authorize Special Judge to try cases under FERA Act 1973 - Petitioner argued that there was no necessity to transfer the case, filed under FERA before C.J.M., to the Special Judge – Held that:- Having perused Section 407 Cr.P.C. and Article 227 and 235, I have no hesitation to hold that this Court either in the administration side or in the judicial side has absolute jurisdiction to transfer any criminal cases pending before the one competent court to be heard and decide by another court within the jurisdiction of this Court. This Court has absolute jurisdiction in administration side as well as in judicial side to transfer any pending criminal case from one competent court to another competent court, therefore, merely because impugned notification dated 17.05.2002 got to be issued pursuant to the decision of Full court dated 25.04.2002 shall have no adverse effect on the jurisdiction of Special Judge hearing the Fodder Scam cases to try the present criminal complaint under the FERA. In favour of respondent
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Service Tax
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2013 (1) TMI 71
Interest for late payment of service tax - Held that:- The Deputy Commandant, the appellant herein before the Bench wants to withdraw the appeal as they have already paid the amount due to the Government of India as confirmed by a receipt for the payment. Since the amount of Rs.38,247/- confirmed as interest by the lower authorities has already been paid the appeal dismissed as withdrawn as requested by the appellant.
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2013 (1) TMI 70
Rejection of refund claim - service tax collected by the landlord for renting the premises was illegally collected and therefore required to be refunded - Held that:- As correctly pointed out by the D.R. that the issue involved in this case is a question which has been addressed by retrospective amendment to the provisions of Section 65(105)(zzzz), i.e. to any person, by any other person, by renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce By Finance Act, 2010, this section has been retrospectively amended to hold that it will have effect from 01.06.07 and it has held that service tax liability is correctly charged and collected by the authorities - against assessee.
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2013 (1) TMI 69
Differential service tax liability based upon the reconciliations of the balance sheet figures and the ST-3 returns - period 2005-06 to 2006-07 - Held that:- Both the lower authorities have only recorded that the appellant had submitted reconciliation while it is the claim of the appellant that they had filed the entire set of documents. At this juncture, unable to proceed ahead on this matter as the adjudicating authority has recorded the submissions made by the appellant in one small paragraph wherein nothing is mentioned about submission of the records while the first appellate authority has recorded that there is nothing new which has been submitted while not giving the details which were submitted. Thus another opportunity should be given to the appellant to produce the documents before the lower authorities and try to convince them regarding the eligibility to deduction claim by them in their reply to the show cause notice.
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2013 (1) TMI 68
Wrong abatement claimed under Notification No. 15/2004-ST - Held that:- As seen from the records that the appellant has not agitated the issue of eligibility of abatement of 67% on the materials supplied by them for rendering Repair and Maintenance Services to ONGC before the adjudicating authority & have raised this point before the first appellate authority. Thus interest of justice demands that appellant should be allowed to raise this point before the adjudicating authority in order to get an order on the merits of the issue - direct the appellant to deposit an amount of Rs. 1,00,000/- within a period of four weeks from today and report compliance to the adjudicating authority on 16.01.2013.
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Central Excise
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2013 (1) TMI 52
Stay petitions against the waiver of pre-deposit - Held that:- the issue involved in this case is regarding clearances of Submersible Water Pumps without BIS certificates. As the main appellant has deposited an amount of Rs. 5 Lakhs as against the duty demand of Rs. 10,28,274/- confirmed by the adjudicating authority and upheld by the first appellate authority, thus Revenue's interest is secured when almost 50% of the amount of duty liability involved has been deposited by main appellant. Set-aside the impugned orders and remit the matter back to the first appellate authority to reconsider the issue afresh, without further insisting on any pre-deposit from any of the appellants.
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2013 (1) TMI 51
Excise duty payable on fresh mushrooms - Whether fresh mushrooms were excisable goods under the Schedules to the 1985 Act prior to the 2004 (Amendment) Act or for the first time with effect from 28th February 2005, after the 2004 amendment to the 1985 Act ? - Held that:- In view of chapter note 1 to Chapter 7 of the 1985 Act (prior to its amendment by 2004 Act), it is crystal clear that edible mushrooms, whether dried or fresh, were covered under Chapter 7 of the 1985 Act. Rate of excise duty payable on dried mushrooms under Chapter Heading 07.01 as well as the rate of excise duty on fresh mushrooms under Chapter Heading 07.02 were Nil. DTA clearances of fresh mushrooms effected by the assessee a 100% EOU - Held that:- The argument of the Revenue was rejected by the Commissioner of Central Excise (A) by holding that even if fresh mushrooms were excisable and covered under Chapter 7 of the Central Excise Tariff, in view of the Nil rate of duty, the Revenue was not justified in demanding excise duty equivalent to customs duty in respect of DTA clearances of fresh mushrooms effected by the assessee. Thus, the Commissioner of Central Excise (A) while accepting the contention of the Revenue that fresh mushrooms were excisable, held that in view of the Nil rate of duty, the Revenue was not justified in demanding duty equivalent to customs duty in respect of DTA clearances of fresh mushrooms effected by the assessee, a 100% EOU. Therefore, the argument of the Revenue that the fresh mushrooms were not excisable prior to the 2004 amendment to the 1985 Act is unsustainable. Argument of the Revenue that by the 2004 amendment to the 1985 Act, fresh mushrooms were made excisable for the first time with effect from 28th February 2005 is also unsustainable, because, the said amendment was brought about with a view to convert the existing six digit entries in the schedule to the 1985 Act to eight digit entries on par with the entries in the schedule to the Customs Tariff Act and not with a view to bring in new goods within the purview of excise. This was further clarified by issuing notification No.1 of 2005-CE dated 24th February 2005 and Trade Circular No.808/2005 dated 25th February 2005 - The fact that fresh mushrooms classified in the general category under heading 07.02 of the Central Excise Tariff prior to the 2004 amendment have been classified specifically under entry 07095100 in Chapter 7 of the Central Excise Tariff after the 2004 amendment, it cannot be inferred that fresh mushrooms became excisable for the first time after the 2004 amendment to the 1985 Act. Whether the AO was bound by the decision of Commissioner of Central Excise (A) rendered prior to the 2004 amendment to the 1985 Act - Held that:- It is well established principle of judicial discipline that the orders passed by the higher appellate authorities must be followed unreservedly by the subordinate authorities. Once the decision given by the higher appellate authority is accepted by the Revenue, then, it is not open to the AO to doubt the correctness of the order passed by the appellate authority and must follow the appellate order as decided in Jindal Dye Intermediate Limited V/s. Collector of Customs [2006 (4) TMI 128 - SUPREME COURT OF INDIA] - in favour of the assessee
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2013 (1) TMI 50
Non deposit of Pre deposit - appellant has been harping upon that they had filed a miscellaneous application for modification of order of pre-deposit - this is second round of litigation before the Tribunal - Held that:- On scrutiny of the records of the ea, hence, the claim of the appellant that out come of the modification application was not heard and was not intimated seems to be incorrect. As regards the claim of appellant that they have complied with the stay order and deposited the entire amount of duty, it is found that the said amount was deposited by him on 22.03.2012 i.e. after the dismissal of the appeal by the first appellate authority. There is nothing on record to show that appellant has approached to this Tribunal for extension of time for complying with the order of pre-deposit - FAA was correct in not deciding the appeal for non compliance with the order of pre-deposit from the Tribunal.
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