Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 8, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Additions u/s 68 and 69 - genuineness of foreign gift - donor made contradictory versions about his relationship with the donee. But the sum and substance of his version leads to the fact that there existed no blood relationship between them - additions confirmed - HC
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Common partners in two firms – Set off of losses incurred by one firm from another - both the firms have separate channels, be it of constitution or maintenance of accounts – thus, the loss earned by one firm cannot be pitted or set off against the profits of the other firm - HC
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Speculation business or not – - once a company is categorized as the one carrying on speculation business, an act of segregation needs to be undertaken - the entire loss incurred by the company does not disqualify for set off against profits from other activities - HC
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Disallowance u/s 57 - Principle of consistency - once the interest is allowed in the previous year and if there is no change in the condition then it can be disallowed in the current years’ assessment - HC
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Merely because, the assessee had leasing out the land to its sister concern for establishing RMC Plant with the understanding that the RMC would be supplied to it at concessional rates and on priority basis, does not establish that the assessee had allowed sister concern to use its property for its benefit - AT
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TDS - In the absence of any human intervention for transmitting the DATA through such DATA link satellite link line, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act - AT
Customs
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Classification of ‘Qatar Low Sulphur Condensate’ (Qatar LSC - CTH 27090000 or CTH 27101990 - there is no logical reason with the Revenue not to accept the classification claimed by the appellant on the basis of the documents available on record - AT
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Claim of sale proceeds since the confiscated goods were sold through e-auction by the department - confiscated goods were not redeemed by the appellant despite an option was given - claim rejected - AT
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Penalty on Examiner or Examining Officer of Customs - Allegation of aiding and abetment - The dereliction in duty is not a penal offence committed by him for implicating him along with the offence by the exporters, CHAs and others - AT
Corporate Law
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Entitlement for having shares in the company - Ponds' entire case is bogus - It is an edifice built of straw on a foundation of half-truths, deceit and wholly improper financial duress - HC
Service Tax
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CENVAT credit - delay in availing credit on few invoices - if certain invoices were left out for which credit was not taken earlier then the same can be taken only as per the prescribed procedures and not on any date as per appellant s choice by modifying the records at will. - AT
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Revision of already sanctioned refund claim - Unjust enrichment - revenue is not correct in raising the ground of unjust enrichment as the duty was deposited by the assessee after the adjudication order. - AT
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Rent a cab service - private entrepreneurs supply the buses under hire scheme for operation on the identified intra and inter-state route to Andhra Pradesh State Road Transport Corporation (APSRTC) - - demand of service tax confirmed - AT
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Levy of Service Tax for the activity of designing, engineering and development of dies/tools - prima facie appears to be erroneously categorised as service instead of manufacture. - AT
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Procedure for Surrender and Cancellation of Service Tax Registration. - TRADE NOTICE
Case Laws:
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Income Tax
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2015 (1) TMI 291
Rectification of order u/s. 200A/154 - TDS was not showing in the computers system - Held that:- The AO (TDS) should give appeal effect to these orders within 2 months of receipt of the order immediately by issuing necessary notices u/s. 154 of the Act to the appellant and rectifying the orders as per law. If the rectification is not possible in computer, the Assessing Officer should manually rectify by passing suitable order in a format so that a mass rectification can be completed quickly. The AO (TDS) should give opportunity of being heard to the appellant before rectifying these orders and listening to the grievances of the appellant. AO is directed to decide the issue afresh in accordance with law after providing due opportunity of being heard to the respective assesses. The assesses are at further liberty furnish evidence, if any, to substantiate their claim. Since the assesses have been granted fair opportunity, therefore, the time limit of completion within two months, as directed by the Ld. Commissioner of Income Tax (A), is withdrawn - Following decision of Asstt. Commissioner of Income Tax, Circle 51(1), Versus M/s Unitech Wireless (Tamil Nadu) Pvt. Ltd., & Others [2012 (10) TMI 365 - ITAT, DELHI] - Decided against revenue.
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2015 (1) TMI 288
Deduction u/s 54F - Long term capital gain - assessee submitted his explanation giving details of expenditure incurred on construction, but the Assessing Officer disbelieved it by holding that the assessee has not submitted any evidence relating to credits in the bank accounts, money received on giving plot for development - whether the assessee has invested the capital gains in construction of new house property so as to claim deduction u/s 54F of the Act - Held that:- when the assessee has contended before the Assessing Officer that he has invested the capital gains derived from sale of flats in the construction of the house property without properly verifying the assessee’s contention, the Assessing Officer was not justified in rejecting the claim of deduction u/s 54F of the Act on presumptions and surmises. On a specific query made by the bench, the assessee had produced the municipal tax receipt of the house in question, investment for which was claimed as deduction u/s 54F of the Act. On a perusal of the said receipt dated 24/12/2013 prima facie it appears that a house exists in door No.15-6-190/1/J, against which the assessee has claimed deduction/s 54F of the Act. When the Assessing Officer does not dispute the fact that the assessee has derived capital gains from sale of flat, then the fact that this was utilised for construction of the house cannot be disbelieved, when no contrary material has been brought on record to show that amount was utilised in any other manner. Since, the aforesaid municipal tax receipt was not produced either before the Assessing Officer or before the CIT (A), we direct the Assessing Officer to verify the original municipal receipt and allow the claim u/s 54F of the Act. So far as addition of short term capital gain of ₹ 1,67,000/- is concerned, since the assessee himself has admitted such income, there is no reason to interfere with the same. In view of our above findings, other grounds raised by the assessee have become infructuous and hence dismissed as such. - Decided partly in favour of assesse.
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2015 (1) TMI 287
Receipt of cash as gift from unrelated person - foreign gifts - Whether on the facts and in the circumstances of case, the Hon'ble ITAT was justified in law in accepting the genuineness of gifts at ₹ 9,58,759/- especially when there was no occasion to receive huge gifts from unrelated persons - Held that:- assessee was not having blood relations with any of the donors. The plea taken by the assessee was that they were his family friends and had come forward to help him to set up a MRI Scan Centre. It was found that there was no occasion to make the gifts either by close relations or strangers. Dr. Jagjit Singh, father of donors Gurpreet Kaur and Manpreet K. Sahdev admitted that he had received cash gift from his daughters. It was found unbelievable that instead of giving any gift or monetary help to some charitable organization, a large number of strangers had chosen the assessee to make alleged cash gift running in lacs of rupees. Though, in the report of Assessing Officer submitted on the basis of additional facts and evidence produced by the assessee, the transactions in dispute were not doubted, but the fact remains that the donee was not having blood relations with the donors. - Alleged foreign gifts in favour of the assessee by persons are not genuine. - Decided in favour of Revenue.
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2015 (1) TMI 286
Additions u/s 68 and 69 - genuineness of foreign gift - Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the addition of ₹ 3,16,570/- allegedly received by the assessee as foreign gift - Held that:- cash entries by way of two different foreign cheques amounting to ₹ 3,16,570/- made by one Y.P. Wadhera in favour of the assessee is in dispute. The veracity of the said entry was doubted by the Assessing Officer on the ground that there was no relationship between donor and the donee. It has come on record that both of them were having no blood relations between them. It is a NRI gift from a stranger and it cannot be said to be genuine or valid nor out of love and affection. - here a person residing abroad had sent a gift to a stranger. It has come on record that the donor made contradictory versions about his relationship with the donee. But the sum and substance of his version leads to the fact that there existed no blood relationship between them. It has also been admitted by the donor that he had not gifted any amount to any other person. In this scenario, there was no occasion for him to make the gift and this amount could not have been deleted. - Following decision of Commissioner of Income Tax Versus M/s Udham Singh & Sons, Goraya [2014 (3) TMI 467 - PUNJAB AND HARYANA HIGH COURT] - Decided in favour of Revenue.
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2015 (1) TMI 253
Grant of stay of recovery of the balance amount – Held that:- The petitioner has placed several orders passed by the court, whereby the Court has extended the stay initially granted by the Tribunal till the disposal of the appeal by the Tribunal in exercise of its jurisdiction under Article 226 of the Constitution - there is no bar for grant of such a relief if the Court is of the opinion that the circumstances and the ends of justice so warrant – the same has been decided in Commissioner of Income Tax- II Versus M/s Maruti Suzuki (India) Limited, Income Tax Appellate Tribunal & Another [2014 (2) TMI 1037 - DELHI HIGH COURT] – since the petitioner had already been granted conditional stay by the Tribunal in respect of the appeal and that the Tribunal is in the midst of hearing the appeal, it would be in the interest of justice that the stay order granted by the Tribunal is continued till the disposal of the appeal by the Tribunal –Stay granted.
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2015 (1) TMI 252
Disallowance of interest expenses – Held that:- The Tribunal rightly arrived at the conclusion that M/s. HGPL was going through huge loss and was not in a position to repay the principal amount, leave alone interest - when the AO made an estimation of his own and the grievance of the assessee with regard thereto was partially upheld, then, there was no justification for allowing the assessee's Appeal only in part - the sustainance of ₹ 9,01,98,977/- was deleted - the view taken cannot be termed as perverse as it is in consonance with the documents and materials produced - if the findings of facts are not perverse or vitiated by any error of law apparent on the face of the record, then, the Appeal does not raise any substantial question of law – Decided against revenue.
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2015 (1) TMI 251
Allowability of deduction on netting of interest income u/s 80HH and 80I - Whether the Tribunal is right in holding that netting of interest income should be allowed without considering the fact that interest income should be assessed as income from other sources while computing deduction u/s 80HH and 80I – Held that:- The matter has been already decided in ACG Associated Capsules P. Ltd. v. Commissioner of Income-tax [2012 (2) TMI 101 - SUPREME COURT OF INDIA] wherein, it has been held that ninety per cent of not the gross rent or gross interest but the net interest or net rent, which had been included in the profits of business of the assessee as computed under the head "Profits and gains of business or profession", was to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business – Decided against revenue.
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2015 (1) TMI 250
Revision of taxable income by Commissioner - Market value of property to be taken as ₹ 40/- or ₹ 600/- per square yard u/s 48(ii) – Held that:- Assessee stated that the cost of acquisition is ₹ 600/- per square yard and it was accepted by the AO, after verification, and passed the order of assessment dated 15.01.1997 - assessee categorically stated that the cost was mentioned as ₹ 40/- per square foot, obviously, for the constructed area, and it was mistaken by the Commissioner to be the cost of land per square yard - If ₹ 40/- is the cost in respect of square feet of constructed area, in terms of square yards, it would not only be nine times that figure, but also subject to addition of cost of the land, be it the one, on which the building was constructed or the proportionate open land. When such is the devastating effect of the treating of the figure vis-a-vis square yard instead of square feet, it was basic and fundamental duty of the Commissioner to have shared that information with the respondent and to take his view point in this behalf, into account - However, he straightaway proceeded to pass the order - the sole basis for the Commissioner to revise the order passed by the AO was the information said to have been received by him from the Sub Registrar, the Tribunal asked the departmental representative to furnish a copy for verification - The representative expressed his inability and it ultimately emerged that copy was not furnished even to the department – revenue is not able to point out as to how the order passed by the Tribunal suffers from any factual or legal error – Decided against revenue.
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2015 (1) TMI 249
Common partners in two firms – Set off of losses incurred by one firm from another - Whether the affairs of the two separate and independent firms can be treated as one – Held that:- The assessee firm was constituted under the partnership deed dated 19.01.1988 and its activity is manufacturing and marketing of drugs - The other firm, by name, M/s.Hymavathi Enterprises was registered on 24.02.1989 and its activity is to establish and run hotels - both the firms have been maintaining separate accounts - except that the partners in both the firms are common, there is nothing, which unifies them in law - the facts and figures pertaining to both the firms were furnished separately in the returns - mere fact that the same partners happened to be the partners in two separate firms, does not constitute the basis to treat both the firms as one entity, in the context of submitting the returns - once separate accounts were opened and operated for each of the firms, there is no way, that a common return could have been filed for them - both the firms have separate channels, be it of constitution or maintenance of accounts – thus, the loss earned by one firm cannot be pitted or set off against the profits of the other firm – the order of the Tribunal is upheld – Decided against assessee.
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2015 (1) TMI 248
Order passed by CIT u/s 263 - Erroneous and prejudicial to the interest of the Revenue or not – Held that:- The Tribunal was convinced with the argument because it found that four shareholders of Unisole Infraservices Services Pvt. Ltd. executed an agreement with M/s. Radhakrishna Hospitality Pvt. Ltd. under which all the shares of Unisole Infraservices were purchased - the Tribunal pointed out the fallacy in the conclusion of the Commissioner by referring to the agreement that set out outer and maximum limit of ₹ 20 crores, which the purchaser was willing to pay to the Assessee - the Tribunal rightly concluded that the AO’s view was possible and could not have been interfered with in the revisional jurisdiction – the findings of the Tribunal cannot be termed as perverse or vitiated by any error of law apparent on the face of the record – as such no substantial question of law arises for consideration – Decided against revenue.
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2015 (1) TMI 247
Nature of business carried on by assessee – speculation business or not – Held that:- Assessee submits that the principal activity was making investments and purchase and sale of shares and in that view of the matter, it cannot be treated as a company falling within the ambit of explanation to Section 73 – section 73 makes it clear that any loss, which an assessee is said to have incurred in respect of a speculation business, cannot be set off against the profits and gains from other activities - The only exception is that the loss of such nature can be posted against the income earned from another speculative activity - once a company is categorized as the one carrying on speculation business, an act of segregation needs to be undertaken - the entire loss incurred by the company does not disqualify for set off against profits from other activities - It is only such portion of the loss which is incurred in the speculative activity that gets disqualified. The expression is intended only to segregate the losses, which an assessee may incur from the speculative business on the one hand and non-speculative business on the other hand - It cannot be treated as a provision, directing that only such portion of the loss, which occurs on account of the sale or purchase of shares can be taken into account for the purpose of Section 73 - even the appellant does not dispute that - If it incurs loss on sale of shares, such loss does not qualify for set off against its profits from other activity - it is just un-understandable as to how the loss which is said to have occurred on account of the fall in value of the shares which are very much in its possession deserves to be treated on a higher or better footing – Decided against assessee.
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2015 (1) TMI 246
Interpretation of provisions of section 80HHC – purport of the expression “indirect costs” - Held that:- It is defined under clause (e) of Explanation - the definition is exclusionary, in nature - the expression direct costs is defined in clause (d) and it takes in its fold, the costs attributable to export of trading, including purchase price - when it comes to the question of indirect costs, it is couched in residuary terms, namely, not being direct costs - the definition further makes an indication that the allocation of direct costs shall be in the ratio between export turnover and total turnover - once the costs incurred by an assessee for export of trading is determined, the figure indirect costs, as defined under clause (e) of Explanation, can be derived, just by relating the direct costs to the total costs - the ratio between export turnover over and the total turnover is an important phenomenon that, cuts across the gamut of Section 80HHC of the Act. U/s 80HHC of the Act, the export profits are always determined by taking into account, the profits of the business, not only of the export activity, but also the profits of other activities of the assessee, multiplied by the resultant figure of division by the export turnover by the total turnover - the export profit is derived from the formula of profit of the business export turnover - when the section dissolves the difference between the export activity and non-export activity to such absolute levels, there is no reason why the indirect costs referred to in sub-section 3 (b) of Section 80HHC of the Act must be taken in a restrictive manner - the expression indirect costs occur only in sub-section 3(b) – the view taken by the Tribunal is upheld – Decided against assessee.
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2015 (1) TMI 245
Entitlement for deduction u/s 80IA - plant and machinery used by earlier owner or not - Whether the Tribunal has substantially erred in holding that the assessee is entitled to deduction u/s 80I – Held that:- The Tribunal was rightly of the view that there is no case for the AO to denying the the benefit of deduction u/s. 80I - The new unit in the name of Harsidh Detergents had not set up any business by the previous owner M/s. Harsidh Specific Family Trust who had only purchased some amount of the new plant and machinery intending to start a new undertaking for manufacture of detergent power in the city of Ahmedabad - deduction u/s. 80I is available to the industrial undertaking and not the the assessee and prior to having been over by the assessee, the plant and machinery valuing ₹ 6,92,397/- was in fact never used by the earlier owner viz. Harsidh Specific Family Trust – thus, the Tribunal has rightly observed that the plant and machinery were never used by the earlier owner, therefore, the assessee is entitled to grant deduction u/s 80I – the order of the Tribunal is upheld – Decided against revenue.
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2015 (1) TMI 244
Applicability of provisions of section 145(2) – Validity of addition as suppressed income - Whether in the facts and circumstances of the case, and in light of the provisions of Section 145, the finding reached by the Tribunal in sustaining addition as suppressed income of the appellant is perverse, contrary to the evidence on record, ex facie illegal and such as no reasonable person could have reached – Held that:- The order of the Tribunal rejecting the appeals of the assessee cannot be sustained as the reasonings given by the Tribunal are not germane to the facts - The Tribunal has not appreciated the matter in its proper perspective and the invocation of Section 145(2) of the Act is without any basis - there is plethora of evidence brought out by the revenue authorities in support of the inference that the assessee has systematically indulged in suppression of operation receipts as well as consultation receipts from the patients for both the AY under appeal - This is clearly a case where provisions of Section 145(2) have been rightly invoked and estimate of professional income has been made by the AO by invoking the provisions of sec.145(2) – the Tribunal ought to have relied upon the findings of fact recorded by the CIT(A), which are based on specific evidence brought on record - as regards Payal Medical Stores is concerned, the assessee could not have been assessed u/s.145(2) - thus, the judgment of the Tribunal allowing the appeals filed by the Revenue deserves to be set aside and the orders passed by the CIT(A) in the respective appeals stand restored – Decided partly in favour of assessee.
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2015 (1) TMI 243
Disallowance u/s 57 - Principle of consistency - Whether the interest was rightly disallowed u/s 57(iii) even when the interest on the same borrowing had been allowed as a deduction in the immediately preceding AY – Held that:- Similar issue has been decided in Commissioner Of Income-Tax Versus Sridev Enterprises [1991 (1) TMI 52 - KARNATAKA High Court] wherein it has been held that it would not be equitable to permit the revenue to take a different stand subsequently in respect of the amounts which were the subject matter of previous years’ assessment - once the interest is allowed in the previous year and if there is no change in the condition then it can be disallowed in the current years’ assessment – thus, the order of the Tribunal is set aside – Decided in favour of assessee.
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2015 (1) TMI 242
Confirmation of allowance of interest – Held that:- The Tribunal was rightly in observing that the FAA after examining the facts of the case came to the conclusion that the advances were given by the assessee for the purpose of business - the nexus was not established by the revenue to the effect that the interest bearing fund was diverted for non-business purpose - in similar circumstances, disallowance of interest was deleted by the FAA in the subsequent years – thus, the order of the Tribunal is upheld – Decided against revenue.
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2015 (1) TMI 241
Cancellation of order of CIT u/s 263 by Tribunal – Held that:- Assessee maintains its books of accounts on the basis of mercantile system of accounting and that export incentives are linked to and springs from the exports made by the assessee - the assessee was justified in including the amount of export incentive and licence premium in the A.Y. 1993-94 and the AO was justified in accepting the revised return filed by the assessee wherein, the sum of ₹ 17,45,430/was included as income of the A.Y. 1993-94 on the basis of assessee having followed the mercantile system of accounting. Calculation of deduction u/s 80HHC – Held that:- Since the deduction claimed by the assessee and accepted by the AO is in accordance with the interpretation of Section 80HHC, the CIT was not justified in setting aside the order of the AO – in Commissioner of Income Tax v. Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India] it has been held that the phrase “prejudicial to the interests of the Revenue” in section 263 of the Act has to be read in conjunction with the expression “erroneous” order passed by the AO every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue – thus, the CIT committed serious error in law in cancelling the order of the A.O u/s.263 – thus, the order of the Tribunal is upheld – Decided against revenue.
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2015 (1) TMI 240
Treatment of 25% of Royalty – Capital expenses or not – Royalty payments made for transfer of technical knowhow for manufacturing process in engineering input scientific and practical information and formula research data design and manufacturing procedure know how raw material data expertise specifications for designing and manufacturing to Herbalife International Incorporate – Held that:- The two provisions have not been looked into by any of the authorities - the provisions disclose that the agreement entered into between the parties provides for renewal automatically - Clause 6.2 makes it abundantly clear that no proprietary interest shall be transferred to the assessee in respect of the files, lists, records, documents, drawings, specifications and other technical information which was furnished to the assessee by the licensor - it cannot be said that the assessee got any enduring benefit in the agreement which is a condition precedent for treating the payment as capital expenditure – thus, the Tribunal passed the order and held the entire amount as revenue expenditure – Decided against revenue.
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2015 (1) TMI 239
DTAA between India and Portugal - Effect of amendment on 30.08.1999 made under Notification No. S.O. 693 (E) – Held that:- A provision has been incorporated in the Indo-Netherlands DTAC by virtue of paragraph 5 of Article 12 of the same, whereby the very same make available clause, which is to be found in the DTAA between India and USA read with the memorandum of understanding connected therewith, has been incorporated into Indo-Netherlands convention by way of amendment on 30.08.1999, by notification No. S.O. 693 (E) - it is evident that the Authority for Advance Rulings had not considered the amendment – thus, the Ruling cannot stand – thus, it is set aside and the matter is remitted back to the AAR for fresh consideration – Decided in favour of assessee.
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2015 (1) TMI 238
Activity charitable or not - existing solely for educational purpose or not - Refusal to grant registration u/s 10(23C)(vi) – whether the assessee society is engaged in charitable/educational activities or not - Held that:- The Society came into existence in the year 1910 and on the land, which was taken for 99 years lease, the petitioner has constructed a building for school - So, it is not correct to say that it is not providing education - no other activity was proved by the Department - the CCIT has already granted exempted u/s 12A/12AA of the Income Tax Act w.e.f. 1.4.2007 – Relying upon AMERICAN HOTEL & LODGING ASSOCIATION EDUCATIONAL INSTITUTE Versus CBDT & OTHERS [2008 (5) TMI 17 - SUPREME COURT OF INDIA] - merely because there are other objects of the society does not mean that the educational institution is not existing solely for educational purpose - the emphasis of the word "solely" is in relation to the educational institution, which is running not for the purpose of making profit and is not in relation to the objects of the society. Applicability of third proviso - Held that:- The requirement mentioned in the third proviso can only be tested after the end of the previous year when income is ascertained and thereafter applied. - The threshold conditions are actual existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application in the standardized form in terms of the first proviso - If the prerequisite conditions of actual existence of the educational institution is fulfilled then the question of compliance with the requirements as spelt out in the other provisos would arise - the facts were not analyzed by the authorities below in a proper manner - the documents which were produced, it appears prima facie contradictory facts, which need further investigation – thus, the order is set aside and the matter is remitted back to the CCIT and direction made to reconsider the application de-novo for exemption u/s 10(23C) (vi) for the AY 2008-09 and onwards strictly on merit – Decided in favour of assessee.
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2015 (1) TMI 237
Denial of grant of renewal u/s 80G(5)(vi) - cancellation of registration granted to the assessee u/s 12AA - Order passed by CIT u/s 80G is beyond the time limit prescribed in Rule 11AA(6) or not – Held that:- While granting the exemption or renewal of exemption u/s 80G(5) of the Act, the role of CIT is limited to look into the nature of activities being carried on by the institution or fund and the violation if any, of the provisions of section 13 of the Act and its various subsections are to be looked into by the AO while deciding the issue of grant of deduction u/s 11 and 12 - CIT while issuing the extension of exemption u/s 80G(5) of the Act has a limited role to play i.e. to see whether the activities of the assessee trust were charitable in nature - assessee was engaged in promoting educational activities by way of running schools, colleges, etc. - The activities carried on by the assessee were purely charitable in nature which entitled it to claim the exemption under section 80G(5) of the Act - merely because, the assessee had entered into an agreement for leasing out the part of its land to its sister concern M/s. ABL for establishing RMC Plant with the understanding that the RMC would be supplied to it at concessional rates and on priority basis, does not establish the case of the CIT that the assessee had allowed M/s. ABL to use its property for its benefit. Relying upon Orpat Charitable Trust Versus Commissioner of Income-Tax [2001 (12) TMI 36 - GUJARAT High Court] - where the assessee was engaged in promotion of educational activities, which with within the domain of being charitable, the CIT at the time of grant of extension of exemption u/s 80G(5) of the Act was not empowered to deny the exemption to the assessee on the ground that it had violated the provisions of section 13(1) - the arrangement entered into by the assessee with M/s. ABL was a beneficial arrangement and was for the purpose of carrying on the activities of the trust by way of construction of the buildings of the educational institutes to be run by the assessee, and where there was benefit to the assessee by way of such arrangement, the same does not establishes that the assessee was not engaged in providing charitable activities i.e. education – thus, the Commissioner is directed to grant renewal of exemption u/s 80G(5). The denial of registration u/s 12A by way of order passed u/s 12AA(3) of the Act was on similar grounds as in the case of exemption denied u/s 80G(5) – thus, the CIT is directed to grant registration u/s 12AA, as at the time of grant of registration, the CIT was only empowered to look into the nature of activities carried on by the assessee and whether the same were charitable in nature and not to look into the applicability of the provisions of section 13(1) - the agreement entered into by the assessee with M/s. ABL was for the benefit of the society and it cannot be the ground for denial of registration to the assessee trust u/s 12A – thus, the CIT is directed to allow the registration u/s 12AA – Decided in favour of assessee.
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2015 (1) TMI 236
TDS u/s 194J - DATA link charges - networks interconnection - Technical or professional services - Held that:- In order to provide managerial, technical and consultancy services, the element of human involvement is necessary – where, there is provision for DATA link and inter-connection facilities, the user utilizes the technical equipments for inter-connection purposes only through technical equipment or gadgets used in the transmission process, but the same does not part take the nature of services of managerial, technical or consultancy nature - merely because, certain technical equipments or gadgets are made available for transmission of DATA link does not establish the case of the Revenue that such services are technical services provided by the service provider to the assessee, which are covered under the provisions of section 194J of the Act. The DATA link charges were paid for utilizing the standard facilities which were provided by the individual service providers by way of use of technical gadgets which were made available vide DATA link satellite link line established from one service provider to be carried over to the other service provider, does not involve technical services as there was only interconnection of the networks to the equipments of other service providers In the absence of any human intervention for transmitting the DATA through such DATA link satellite link line, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act – the order of the CIT(A) is reversed and DATA link charges is held to be not liable for tax deduction at source under the provisions of section 194J - since there was no requirement to deduct tax at source u/s 194J, there was no liability upon the assessee and there was no failure on part of assessee for non-deduction of tax at source and the assessee was not liable to pay interest u/s 201(1A) – Decided in favour of assessee.
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2015 (1) TMI 235
Miscellaneous application – Rectification of mistake apparent on record – Held that:- In the order dated 18/04/2013, there is a typographical error which requires to be rectified as Assessment Year mentioned as 2006-07 instead of AY 2008-09 and it is modified as AY 2008-09. Carry forward and set off u/s 43(5) and 73 – Speculation Business – Held that:- CIT(A) rightly allowed the claim of the assessee by following the judgement of CIT vs. Lokmat Newspapers (P) Ltd. [2010 (2) TMI 94 - BOMBAY HIGH COURT] – The profit on account of sale of shares is ₹ 21949309 and loss on account of sale of shares of ₹ 8237695 – assessee is having business income greater than the income from other sources or capital gain income and hence the income earned by it on account of sale and purchase of shares is to be treated as income earned from speculative transactions as per the provisions of explanation to section 73 - Also such a situation, both the profits as well as losses incurred on account of trading in shares become speculative transactions – Decided in favour of assessee.
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Customs
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2015 (1) TMI 262
Classification of Qatar Low Sulphur Condensate (Qatar LSC - CTH 27090000 or CTH 27101990 - exemption under Notification No. No. 21/2002-Cus dated 01.3.2002 read with Notification No. No. 74/2008-Cus dated 04.6.2008 - Held that:- it is apparent that there are overlapping in the nature and properties of Natural Gas Condensates of CTH 2709 and some the synthetic products of CTH 2710. This dispute/ confusion has been internationally accepted by the World Customs Organization, Brussels as per report dated 08.10.1996 of Harmonised Systems Committee on classification of Gas Condensates Chemical Examiner, Kandla in its very first report dated 29.1.2010 certified that the sample tested is pale yellow oily liquid and is comprised of mixture of mineral hydrocarbons. In the same report, he is opining that the sample is of other than petroleum crude and in the same breath he further asks for the literature on the claim of the appellant. When the literature is supplied by the Superintendent, Vadinar Chemical Examiner promptly confirm that samples are of crude Petroleum and are classifiable under SH 2709 of HSN. A chemical analyst dealing with physico chemical testing of petroleum products impulsively could not have said in report dated 29.01.2010. that the goods are other than Petroleum Oil and simultaneously asking for the literature/ related documents when internationally it is accepted that it is difficult to distinguish Gas Condensates of CTH 27.09 and similar synthetic products of CTH 27.10. There could be a situation where report of the Chemical Examiner is palpably wrong. Chemical examiner has given conflicting opinions, therefore, the same can be questioned. chemical examiner can give opinion on the chemical nature of the goods tested but can not suggest whether a Gas Condensate imported by the appellant will be classifiable under 2709 or 2710. The international authorities on classification of Crude Gas Condensate has expressed concern and confusion over the difficulty in distinguishing these products of CTH 2709 from similar synthetic products of CTH 2710. When products of CTH 2709 and 2710 have similar characteristics/ compositions then the only way to entertain a contrary classification adopted by the appellant, was to extend the investigation to the place of origin of the goods. No such enquiry seems to have been made with the supplier which is owned by Govt. of Qatar. It is also not the case of the Revenue that customs documents provided by the appellant at the time of clearance are fake or forged by deliberately given a wrong description. Appellant has argued that the price at which the Gas Condensate is imported tallies with the crude rates as per the established journals of the imported products. There is no evidence on record to indicate that imported goods were of refined category falling under CTH 2910 which fetched higher value in international oil market. Rather there is no case that the imported goods are under valued. It is also difficult to comprehend that the present importer will bring refined products for re-refining of the same again. There is also nothing on record that the supplier of imported goods has done any major processes on the natural product other than those specified in HSN explanatory notes under HSN Heading No. 27.09 - there is no logical reason with the Revenue not to accept the classification claimed by the appellant on the basis of the documents available on record as per their contract dated 11.12.2009 entered with Vitol Asia Pte. Limited, Singapore - Decided in favour of assesse.
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2015 (1) TMI 261
Claim of sale proceeds since since the confiscated goods were sold through e-auction by the department - confiscated goods were not redeemed by the appellant despite an option was given - Held that:- Goods were confiscated by Commissioner of Customs on 05.5.2003 and option was given to the appellant to redeem the same on payment of Redemption fine of ₹ 20 Lakh within 15 days. The redemption fine so imposed by the adjudicating authority was reduced to ₹ 7.5 Lakh as a result of CESTAT's order. In spite of the above modification, appellant did not redeem the goods. Auction of the goods was done after 07.10.2006 after giving a notice to the appellants. The goods confiscated by the Adjudicating authority were not redeemed, within the stipulated time either after Adjudication order or its modification by CESTAT. As per Section 126 of the Customs Act, 1962, the title of the confiscated goods vests with the Central Government and appellant had no claim on such goods and its sale proceeds - Appellant could have a valid claim on the remaining sale proceeds only if he had contested the confiscation of goods in appeal to higher courts and got a favourable verdict. In the absence of any such contest and also not taking redemption of the goods, appellant has no case and the order passed by the first appellate authority is required to be upheld. - Decided against assesse.
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2015 (1) TMI 260
Penalty on Examiner or Examining Officer of Customs - Allegation of aiding and abetment - enabling the exporter to claim huge duty drawback - export of old and used readymade garment in the name of new and fresh garments - Held that:- the ingredients for proving the charge of abetment as required under Section 114(iii) has not been brought out in the show cause notice. The Superintendent has admitted that there was a lot of rush in the STP shed and he could not supervise, as required of him. Further, there is no locus-standi of Ramesh Singh & Sanjay Sharma, who are neither exporter, nor CHA. The reference to call records of telephone is also not a conclusive evidence, as the explanation of the appellant that this mobile phone was used by other staff as well as visiting staff of CHA etc., is not found untrue. The dereliction in duty is not a penal offence committed by him for implicating him along with the offence by the exporters, CHAs and others. The ruling rendered in the case of A.P. Sales (2006 (2) TMI 328 - CESTAT, BANGALORE) is exhaustive and deals with the present situation while the situation in the case of Zaki Anwar (2005 (10) TMI 159 - CESTAT, NEW DELHI) is not distinguishable in the present case and so the findings by this Bench in the case of A.P. Sales (supra). The Apex Court in the case of COSTAO FERNANDES (1996 (2) TMI 137 - SUPREME COURT OF INDIA) has clearly held that the Customs Officer is entitled to protection from under Section 155 read with Section 106 of the Customs Act. The ratio of this judgment would apply to the facts of the case. Penalty under Section 114 (iii) of the Customs Act, 1962 is held not sustainable, as the appellant has neither done anything nor omitted to do any act which act or omission would render such goods liable to confiscation, nor he has abetted in doing or in omission of any act which shall attract penalty provisions on him - Decided in favour of appellant.
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2015 (1) TMI 259
Conversion of shipping bill from free shipping bill to Drawback scheme - C.B.E. & C.’s Circular No. 4/2004, dated 16-1-2004 - Held that:- appellant filed an application under Section 149 of the Customs Act, 1962, to get the shipping bill be amended from free shipping bill to drawback scheme. After going through the Section 149 ibid I find that the amendment can be allowed if the documents produced at the time of export. In this case, the verification report of the exported cars states that the chassis number of the cars in question have been verified from the import documents. Therefore, I do not find any reason to deny the request to amend the shipping bill. Accordingly, the request of the appellant for conversion of free shipping bill to draw back scheme is allowed and the adjudicating authority is directed to implement this order within 30 days of receipt of this order - Decided in favour of assessee.
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2015 (1) TMI 258
Condonation of delay - reasons set-out are that certain documents were sought from the concerned section of the Commissionerate; it took time to receive the same; time was consumed for retrieving information from the EDI System; the regular Commissioner of Customs, ICD, TKD, New Delhi proceeded on training for three weeks; the Commissioner Preventive, New Delhi, the other member of the Committee also went on leave during the same period; the charge of the Commissioner (Preventive), New Delhi was given to Commissioners at Chandigarh & Jammu and this also caused the delay - Held that:- These are usual administrative reasons, which do not explain the long delay of 89 days beyond the period of three months available. As no satisfactory cause is shown, COD is rejected. Consequently, the appeal stands rejected along with the stay application. - Condonation denied.
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2015 (1) TMI 257
Denial of refund claim - Unjust enrichment - Held that:- In the facts and circumstances, the provisions of unjust enrichment is not attracted. It is clear from the copies of the financial statements along with the CA certificate and copy of the challan produced before this Tribunal that the amount has not been passed on and shown as recoverable amount. Thus, the appeal is allowed on merits with consequential relief to the appellants. On production of a certified copies of the order of this Hon’ble Tribunal, the concerned authority will grant refund within a period two months from the receipt of the order, with interest as per Rules. - Decided in favour of assessee.
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2015 (1) TMI 256
Denial of refund claim - payment of duty before arrival of goods - goods never reached India - Held that:- It is a case where duty has been paid when the goods never received which means that the respondent has paid duty which are not required to pay at all. As per Section 27 of the Customs Act, 1962, a person can file a claim for refund which was not required to pay by him. Therefore, in the case of Aman Medical Products Ltd. v. Commissioner of Customs - [2009 (9) TMI 41 - DELHI HIGH COURT] wherein the Hon’ble High Court held that in such case the assessee is entitled to file refund claim of duty which was not required to pay by them. In these circumstances, I do not find any infirmity in the impugned order. The matter is remanded to the adjudicating authority with a direction to consider the refund claim of the respondent in the light of the decision of Aman Medical Products Ltd. (supra) and thereafter pass an appropriate order in accordance with law. - Decided in favour of Revenue.
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Corporate Laws
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2015 (1) TMI 255
Maintainability of the petition - Entitlement for having shares in the company - Scope of Section 111 of the Companies Act – Held that:- It is difficult to see how it could ever have been said that Ponds had become a member or shareholder of Advansys - In order to be a member and shareholder and one holding alleged 7.5 lakh shares, those shares would have had first to have been issued to Ponds, making Ponds a member of Advansys - Absent any such share issue, no rectification of the register of members could have been permitted - If, as it does indeed appear in the present case, all that Ponds could at highest lay claim to, was an agreement for purchase of shares, Ponds would nonetheless first have to file a civil suit for specific performance of such an agreement - It could not bundle that claim for specific performance with an application for rectification of the register - The suit for specific performance was a necessary precursor to a rectification application - the explanation set up by Ponds is no explanation at all - Ponds merely says that it had not indicated that the purpose of the remittance was towards invoices - It has not affirmatively stated what, if any, purpose was stated on that remittance when it originated from NatWest Bank in the UK - It defies credulity that such a substantial amount would have been remitted, without specifying or identifying a purpose, especially given the fact that the transactions and the correspondence between the parties pertained to a large number of interlocking issues. There does not seem to be any indication in the prior correspondence to explain how this figure of £92,500 is actually derived - what that figure actually does achieve is a complete and an explicable match with the reconciliation statement of outstanding invoices - Thus, on the one side, as postulated by Mr. Chinoy, on behalf of Advansys, there is entirely plausible explanation for the remittance - There is the endorsement of the FIRC certificate - The amount can be traced and exactly matched to the invoices in a reconciliation statement sent by Hunjan himself - on the other hand, the case propounded by Ponds, remains in a shadowy, grey area absent all specifics. No concluded agreement, no consideration – Held that:- It could not be comprehended as to how and on what basis, the Company Law Board could have possibly have concluded that there existed such an agreement or that it had been acted upon and fully effected - In order to arrive at that conclusion, the Company Law Board would have had to find as a matter of incontrovertible fact, capable of no other interpretation, that there was such an agreement and that it had been implemented - It is impossible to sustain the finding of the Company Law Board. It is not open to a party to constantly attempt to improve his case in this manner - as against this, there is evidence in the form of buyback agreement dated 1st February 2002 that prima-facie indicates that Tansun would provide loans in the form of capital equipment to Advansys - This explains why Balwani treated the payments from Tansun as loans or advances for manufacturing, and which were latter set off against exports - the buyback agreement also says that the relation between the parties is not that of a joint-venture, a joint undertaking, a partnership or co-ownership - the entire edifice seems to have constructed around the consequence of an inconvenient or awkward audit query, which itself was result of some internal inconsistency or contradiction created by the Ponds, Tansun, Hunjan and Rana - the findings of the CLB that there was a concluded agreement for valuable consideration, is entirely unsustainable. FEMA/FERA Violation – Held that:- There is a material factual error in the Company Law Board's decision where it notes that Advansys being a 100% Export Oriented Unit ("EOU"), it is located in SEEPZ - the material error lies in the fact that while Advansys is a 100% EOU, it is located in Pune - the fact that it was a 100% EOU would not make it a SSI also - thus, even on the respondents' own construct, the automatic route was never available for investment in Advansys - there was no agreement in the first place - there was nothing on which any permission of FEMA could be obtained or, not having been obtained and the provisions of FEMA having been violated could have been compounded. Delay, laches, acquiescence, suppression and bona fides – Held that:- The petition was filed by one Chatrabhuj Mathuradas, a gentleman who surfaced only at the time of affirmation of the petition - He claimed to be a director and shareholder of Ponds - He claimed to have a general power of attorney. This general power of attorney however shows that Mathuradas is merely a "friend" of Hunjan and Rana; that, between them, Hunjan and Rana hold 75% and 25% respectively, i.e., the entirety of the equity in Ponds - They are also the only two directors of the Respondent No.1. In an affidavit in rejoinder, it is admitted that Mathuradas is neither a shareholder nor a director - Hunjan filed an affidavit in rejoinder on 4th October 2012 - He dealt with the issue of delay - He said that 2012 was the first time since 2009, when he had a stroke, that he visited India to attend to this litigation. He then filed an affidavit in sur-sur-rejoinder on 30th October 2012 - In this he attempted to explain several discrepancies as "typographical errors", including the description of Mathuradas as a director and shareholder of Ponds, but now admitting that between 2009 and 2012, he visited India several times - He claimed that the date of 2009 in his affidavit in rejoinder was a typographical error for 2011 - He admitted to having visited India more than once - He was here on five occasions in 2010 and also again in 2012 - this makes matters even worse on the question of delay and laches - If Hunjan was in India in 2010, and more than once, there is certainly no explanation for the delay in filing this petition - How this issue could have been seen in favour of Ponds is baffling - There is absolutely no basis for the Company Law Board's finding that there was delay in approaching it - Hunjan's affidavits shown him to be an Ananias in every respect; no credence whatever could be given to a single word. Indoor Management – Held that:- There was no discussion between the shareholders or directors about this item of business - the correspondence from Johnstone indicates that he, as a relatively late entrant, could not understand how the initial remittance of Copex of £4000 could have been shown as towards share subscription - this is the entire genesis of these two documents - that is the only purpose for which they were issued, i.e., to suit the respondents' internal auditing and accounting purposes - Mr. Bharucha's argument glissades over all these factors, every one of which is of his clients' own making - It is also not without significance that the first draft of these documents emanated from Hunjan, was sent to Balwani, who filled it in having been by then totally subjugated and bent to the financial and commercial will of Tansun, Hunjan and Rana, and sent it back to Johnstone for "approval", with a copy of Hunjan - all of this is in the context of Hunjan's repeated statements that the share certificates were needed "for internal purposes", without "upsetting the apple cart" - That is something that is never satisfactorily explained, and it lies at the core of the dispute. The order dated 14th January 2013 of the Company Law Board is entirely unsustainable - There was no agreement for purchase of shares - Certainly, there was no consideration for it - The Company Law Board had not the power or authority u/s 111 of the Act to hold as it did, effectively decreeing a suit for specific performance and also simultaneously ordering a rectification of the register - the two documents at Exhibits "C" and "D" are not share certificates and do not confer any rights on Ponds - at no point did Ponds make any payment for the shares it claims - the only basis for the claim is of Hunjan's and Rana's own contrivance in incorrectly, or perhaps for other, murkier reasons, showing the initial remittance of £4000 as being toward share subscription in Ponds' own books of account - the relentless audit that followed forced Hunjan and Rana into an intractable position, one from which there was no escape except by badgering and pressuring Balwani into issuing a share certificate to assuage increasingly perturbed auditors - That is the only plausible explanation for Hunjan's repeated assurances that these documents were needed for internal use - Ponds' entire case is bogus - It is an edifice built of straw on a foundation of half-truths, deceit and wholly improper financial duress - Decided in favour of appellant.
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2015 (1) TMI 254
Recourse against arbitral award u/s 34 of the Arbitration and Conciliation Act, 1996 - Difference pertaining to the quantum of deduction on exemption from customs duties and other indirect taxes granted by the Government of India in relation to the project – The Tribunal was of the view that the respondent is entitled to deductions in excess of the amount on the basis of the “actual benefits” accrued to the petitioner on account of exemptions - Held that:- The Award merely seeks to interpret the contractual clauses - in such a situation, the scope of interference by the Court in proceedings under Section 34 of the Act is extremely limited - the Court would interfere with the interpretation of a contractual clause – as adopted by the Arbitral Tribunal, only if the adopted interpretation is such that it goes contrary to the express contractual terms; is such that no reasonable person would adopt, or; is patently perverse or absurd - In National Thermal Power Corporation V R.S. Avtar Singh & Co. and Anr. [2001 (9) TMI 1120 - DELHI HIGH COURT] – it has been held that when the view adopted by the arbitrator is a plausible view, then the court cannot interfere with the decision made. Thus, the court would interfere with the arbitral award, if the interpretation adopted in the making of the award is neither plausible, nor reasonable, and is in conflict with the terms of the contract agreement - If the interpretation adopted by the arbitrator is not the only possible view, it being one of the several plausible views - without any patent illegality in the conclusions drawn by the arbitrator, it is beyond the scope of jurisdiction of this court under section 34 of the Act, to interfere with the award. If the saving on account of payment of taxes and duties exceeds the amount declared by the petitioner (of ₹ 1,290,000,000/- and ₹ 774,000,000/-), such saving on account of taxes and duties has to be passed on to the employer, i.e. the respondent - whether, or not, the petitioner indeed had to bear any amount of indirect taxes as claimed by it, is a matter of detail and would, at the highest, entitle the petitioner to adjustment to that extent - if the arbitrator has applied his mind to the pleadings, the evidence adduced before it, and the terms of the contract, the court would not reappraise the matter as if it were an appeal - Interpretation of contractual terms is a matter within the domain of the arbitrator - even if the interpretation adopted by the arbitrator is not the only possible view, it being a plausible view-without any patent illegality in the conclusions drawn by the arbitrator, it is beyond the scope of jurisdiction of this court u/s 34 of the Act to interfere with the award on the aspect – Decided against petitioner.
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Service Tax
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2015 (1) TMI 293
Demand of service tax - Imposition of penalty - Management, Maintenance or Repair Service - Held that:- Appellants are engaged in supply of products which are used in pharmaceutical industries and which are designed according to the chemicals which are used in pharmaceutical industries and based on the nature of manufacturing process, there is a need to identify which type of product a customer should buy. There is no question of maintenance or repair in respect of the products since the products can only be discarded once the lining of the product is accumulated by the content which is passing through the same. There is no question of repairing or maintaining the same and it has to be thrown out. He relied upon technical opinion given by an analyst. Assessee fairly agreed that this opinion was not before the original authority or the Commissioner (Appeals). It was agreed that the fact that it cannot be repaired at all has not been considered or verified in sufficient details. Thus most important aspect which has a bearing on the classification of service has not been considered in depth. Therefore instead of granting stay and keeping the matter pending, we consider it appropriate that the matter should be remanded to the original adjudicating authority at this stage itself - Decided in favour of assessee.
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2015 (1) TMI 290
Waiver of pre deposit - Advertisement agency services - Receipt of additional incentive amounts from the print media - Held that:- Following decision of P. Goutham and Co. Vs. CST, Ahmedabad [2011 (9) TMI 392 - CESTAT, AHMEDABAD] - there shall be waiver of predeposit and stay against recovery during the pendency of appeal - Stay granted.
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2015 (1) TMI 289
Renting of immovable property - selling of space/advertisement by the appellant-Municipality - Penalty u/s 76, 77 & 78 - Held that:- demand of service tax is for the period from May 2006 to March 2011 on the services of renting of immovable property and selling of space/advertisement by the appellant-Municipality. The learned counsel does not dispute the liability but submits that the appellant being a Municipality was under a bona fide belief that they were not liable to pay and subsequently when the issue was taken up by the department, they were waiting for exemption to be granted by Central Government. He submits that the appellant is not disputing service tax liability which has already been recovered with interest. The only request is that the penalties imposed under Section 76, 77 and 78 of Finance Act, 1994 should be set aside. Having regard to the fact that Government of Andhra Pradesh was trying to get exemption and appellant is a Municipality, we consider that payment of service tax with interest would meet the ends of justice and there is no need for imposition of penalties. Further, we also consider that the appellant has known reasonable cause for non-payment of service tax and therefore, this is a fit case of provision of Section 80 of the Finance Act, 1994. - demand for service tax and interest is upheld - However, penalty is set aside - Decided partly in favour of assessee.
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2015 (1) TMI 285
Penalty u/s 76, 77 & 78 - Commercial or Construction Services - entire duty liability along with interest was paid before issue of show cause notice - Held that:- Appellant was discharging tax liability up to September 2004 and thereafter stopped making the payment of Service Tax No ST-3 returns was filed by the appellant after September 2004. Once appellant was aware of the fact that service tax on the services provided was paid earlier, it cannot be considered that there was no intention to evade payment of tax by suppression when appellant was not even filing the statutory returns of the tax which he was paying earlier. Accordingly, it is held that penalties under Section 78 of the Finance Act, 1994 is imposable. As per the provisions contained in Section 73 of the Finance Act, 1994, during the relevant period, if an appellant pays the entire service tax along with interest including 25% of the Section 78 penalty then no show cause notice was required to be issued and proceedings are considered as concluded. Where no show cause notice is required to be issued then penalties under Section 76 and 77 of the Finance Act, 1994 also get waived and no show cause notice is required to be issued for imposition of such penalties - Decided partly in favour of assesse.
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2015 (1) TMI 284
CENVAT credit - delay in availing credit on few invoices - cenvatable documents for the earlier period and which was not available in appellant's CENVAT register during the visit of the Audit officers - Misdeclaration of information - Held that:- Appellant cannot take cenvat credit in the CENVAT account on a date earlier than the visit of the audit officers when such credit was not earlier reflected in the CENVAT account. If some credit was admissible on the basis of cenvatable documents existing with the appellant, but credit was not taken, then the same could have only been taken after the date of visit of the Audit officers. It has been correctly held by the first appellate authority that if certain invoices were left out for which credit was not taken earlier then the same can be taken only as per the prescribed procedures and not on any date as per appellant s choice by modifying the records at will. Appeal filed by the appellant with respect to demand of ₹ 4,36,780/- along with interest is therefore, rejected. So far as remaining amount of demand of ₹ 5,80,856/- is concerned, it is observed that appellant gave wrong figures of ₹ 29,86,623/- as cenvat utilisation in the month of April 2004 instead of actual utilisation of ₹ 24,05,767/-. It is observed from the case records that this aspect was agitated before the lower authorities but the same was not properly appreciated by the Adjudicating authority. There is no discussion by the adjudicating authority as to why the revised claim of utilisation of ₹ 24,05,767/- CENVAT credit utilisation is not correct. This aspect of the demand is required to be remanded back to the Adjudicating authority for reconciliation. So far as imposition of penalties upon the appellant are concerned, it is observed that appellant was of the bonafide belief that CENVAT credit could be taken on an earlier date also where cenvatable documents were available with them. In the case of clandestine removal cases are admissible CENVAT credit is abated from the total demand even at the appellate stage. Further demand of ₹ 5,80,856/- is with respect to reconciliation of figures regarding taking of cenvatable credit. On the basis of above factual matrix, penalties under Section 76 and 78 of the Finance Act, 1994 are required to be set-aside under Section 80 of the Finance Act, 1994, even if extended period is invokable - Decided partly in favour of assesse.
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2015 (1) TMI 283
Revision of already sanctioned refund claim - Unjust enrichment - Held that:- It is an admitted fact that the appellant did not pay the tax owing to the fact that the activities undertaken in its client's premises was not confirming to any of the defined taxable services. Further, the appellant had specifically pleaded before the Revisionary authority that no service tax has been collected from its clients. Non-passing of the tax incidence to its client is evident from the fact that the adjudged amount was paid by the appellant on 28.01.2009, pursuant to the adjudication order dated 24.12.2008, wherein it has been held that the appellant is liable to pay service tax under the category of 'Business Auxiliary Service'. Since, the refund claim was lodged pursuant to the favorable Appellate order dated 20.03.2009, which was sanctioned by the original authority upon objective analysis of the facts vis-a-vis the statutory provisions, it is not proper and appropriate on the part of the revisionary authority to deny the benefit of refund on the ground that the service tax incidence has been passed on to any other person. It is observed from the impugned order that no findings have been recorded with regard to the claim of appellant that no service tax has been collected from the clients. - amount paid subsequent to the date of adjudication order cannot be hit by the doctrine of unjust enrichment, and as such, the appellant will be eligible for refund of the amount. In this context, I rely on the decisions of the Tribunal cited by the learned counsel in the preceding paragraph, wherein it has been held that the revenue is not correct in raising the ground of unjust enrichment as the duty was deposited by the assessee after the adjudication order. Upon satisfying himself that the amount paid by the appellant is refundable, the Deputy Commissioner (empowered authority) has passed the order, sanctioning the refund in favour of the appellant. Thus, the refund amount cannot be taken back by invoking the provisions of Section 84 of the Finance Act, 1994, by the authority who is not competent to do so under the Central Excise statute. Therefore, I am of the considered view that refund already sanctioned to the appellant cannot be restored in favor of the revenue. My said view gets support from the decision of the Tribunal in the case of Gujarat State Fertilizers & Chemicals Ltd. (2005 (7) TMI 560 - CESTAT, MUMBAI) relied on by the appellant, wherein it has been held that principles of unjust enrichment not invocable for recovery of amount already granted. - Decided in favour of assesse.
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2015 (1) TMI 282
Rent a cab service - Joint agreement - private entrepreneurs supply the buses under hire scheme for operation on the identified intra and inter-state route to Andhra Pradesh State Road Transport Corporation (APSRTC) - Restriction on hire - Buses with stage carriage permit cannot be hired - Interpretation of definition of 'rent a cab service' - Imposition of penalty - Held that:- appellants who provide the buses are paid on the basis of number of kilometers run per day in the permitted route as per the stage carriage system. Even if the bus runs empty and no passenger travels, APSRTC is bound to pay the amount agreed upon between the two parties per kilometer. Similarly even if the bus runs with double the capacity of passengers and APSRTC makes huge profit, the appellants do not get any benefit whatsoever. In fact the agreement provides that even in case the conductor is not provided by the APSRTC, the driver is required to collect the fare from the passengers but the learned counsel for the appellants did not show any clause where APSRTC is required to make any payment for absence of the conductor. Therefore whatever be the situation, the appellants get only the payment agreed upon per kilometer and nothing more. The nature of agreement here is very very clear that this is not a joint operation. In fact the agreement is one sided. Para 11 (i) provides that in case of any dispute or disagreement between the owner and the officers of the Corporation with regard to the interpretation of the terms and conditions of this agreement, penalties or fines, amounts due, the decision of the Regional Manager of the Corporation shall be final. Here the person who is taking the vehicle determines the dispute between the two parties also. We are unable to understand how this can be considered as joint operation. In this case if the contract between APSRTC and the appellants was illegal and contrary to law, it was for the authorities who enforce Motor Vehicles Act 1988 to take action and ensure that the stage carriage permit issued to the appellants is withdrawn and appellants are visited with penalty, if any, imposable under the law. Apparently State Transport Authorities have not taken any such action. It is not for us to examine this aspect. Our examination has to be limited to examine the facts of case and agreement to arrive at the nature of transaction between the parties to see whether the transaction is covered by the definition of service or not. In fact the agreement itself provides that APSRTC emblem would be embossed on the vehicle. Hiring or renting of cab should be understood to mean that a customer is merely enabled to make use of the vehicle by traveling in the vehicle for the periods provided in the agreement. In fact the agreement entered into between the appellants and the APSRTC is quite clear that APSRTC is hiring the vehicles which have stage carriage permits in the routes specified and they are required to run according to the timings specified by APSRTC. In these cases the intention of hiring the buses itself is to run them as stage carriages in terms of the agreement. After renting or hiring a cab, what should be done with them and how to use them is covered by the terms of the agreement and that is clearly available in the agreements. So long as the agreement provides for utilization of the rented or hired vehicle for the purpose for which it is being used and both the parties understand it as hiring, we cannot import any other meaning from elsewhere. The submission that meaning of ‘hiring or renting’ is mere enablement of the customer for traveling in the vehicle only, in our opinion, does not emerge either from the agreement or from the law. Difference between hiring and renting - Held that:- law makers for the purpose of levy of service tax did not contemplate application of rent-a-cab scheme as envisaged in Motor Vehicles Act for the purpose of levy of service tax. - Where a definition is exclusively meant for motor vehicles which can be hired or rented, the definition itself provides for it. Therefore when words like maxi cab and motor cab are used it means it is applicable only to vehicles which are meant for hire or reward. - even under Motor Vehicles Act legislative intention is that rent and hire or reward are interchangeable. - By adding maxi cab and motor vehicles with capacity to carry more than 12 passengers, Finance Act 1994 clearly deviates from the Motor Vehicles Act which makes rent-a-cab scheme applicable only to motor cab and motor cycles and does not even cover maxi cabs leave alone motor vehicles equivalent of omnibuses. - Decided against the assessee. Decision of High Court of Uttarakhand in the case of Sachin Malhotra and others [2014 (10) TMI 816 - UTTARAKHAND HIGH COURT] - Held that:- Hon’ble High Court was considering the issue for the period prior to 1/6/2007. As mentioned earlier, the definition was amended to include motor vehicles which can carry more than 12 passengers and which cannot be called as motor cab and maxi cab after 1/6/2007. - Therefore it would not be correct to apply the decision of the Hon’ble High Court to the present case. - Decided against the assessee. Demand of service tax confirmed for the period 1/6/2007 onwards - levy of penalty waived - Matter remanded back for quantification - Decided partly in favor of assessee.
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2015 (1) TMI 281
Waiver of pre deposit - Rent-a-cab service - Utilization of service in SEZ - Held that:- services were used within SEZ and therefore the procedure followed by the appellant in providing the service without payment of service tax is not correct. This is because the exemption to SEZ units for the services utilized is by way of refund and therefore initially tax has to be paid. Bulk of the demand is for the extended period and the amount within the normal period could not be ascertained. On going through the records, we found for the year 2010-2011, the amount involved is about ₹ 6,15,000/- and having regard to the facts and circumstances and in view of the fact that the exemption is available but by way of refund, extended period may not be invocable. Therefore, in our opinion, if the appellant deposits the amount payable for the normal period that would be sufficient - Partial stay granted.
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2015 (1) TMI 280
Waiver of pre deposit - Banking & Other Financial Services - Held that:- Services provided by the appellant are beyond the scope of Section 65(12)(a)(ix) of the Finance Act, 1994 to cover the same in the category of taxable service of ‘Banking & Other Financial Services’ - On prima facie observation, there shall be waiver of pre-deposit during pendency of the appeal. - Stay granted.
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2015 (1) TMI 279
Waiver of pre deposit - Security Agency Services - Held that:- Prima facie, the services provided by the State of Rajasthan through the Superintendent of Police, Udaipur, pursuant to the enabling provisions of Section 46 of the Rajasthan Police Act, 2007 to various firms, persons, organizations, the income received by way of fee so received by the State of Rajasthan being remitted to the Government treasury constitutes income of the State derived as a consequence of performance of statutory functions. As such, the services are prima facie excluded from the scope of taxable “Security Agency Services” in view of C.B.E. & C. Circular No. 89/7/2006-S.T., dated 18-12-2006 and Circular No. 96/7/2007-S.T., dated 23-8-2007 as amended by Circular No. 98/1/2008-S.T., dated 4-1-2008. Further whether a Union taxation measure may tax income of the State of Rajasthan in view of Article 289 of the Constitution also requires to be considered at the final hearing of the appeal. - Stay granted.
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2015 (1) TMI 278
Waiver of pre deposit - Service or manufacture - Held that:- Levy of Service Tax for the activity of designing, engineering and development of dies/tools, prima facie appears to be erroneously categorised as service instead of manufacture. We therefore grant waiver of pre-deposit in full and stay all further proceedings pursuant to the adjudication order as confirmed by the appellate Commissioner, during pendency of the appeal. No coercive steps shall be taken for recovery of the assessed demand, pending disposal of the appeal. - Stay granted.
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2015 (1) TMI 277
Waiver of pre deposit - Real Estate Agent - Held that:- Prima facie the transaction does not appear to constitute real estate agent service as defined in Section 65(105)(v) read with Section 65(88) and 65(89), which provisions define the expression “real estate agent” and “real estate consultant” respectively. There is therefore no uniform pattern in respect of interlocutory orders in similar matters. We therefore proceed on the basis of our prima facie view that the service rendered by the petitioner/assessee is not a taxable service falling under Section 65(105). Accordingly, we grant waiver in full of pre-deposit and stay all further proceedings pursuant to the adjudication order as confirmed by the impugned Order-in-Appeal, pending disposal of the present appeal - Stay granted.
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2015 (1) TMI 276
Waiver of pre deposit - Information Technology Software services - Held that:- Appellant has discharged the Central Excise duty on such software manufactured/prepared by them on payment of appropriate Central Excise duty. Under Chapter 8523 80 20, “Information Technology Software” is indicated as a commodity falling under Central Excise Tariff and by the deemed fiction of the Chapter Note and the Supplementary Note, the product becomes manufactured item. If that be so, discharge of Central Excise duty by the appellant itself would indicate that the appellant has correctly followed the law. Department’s contention that the appellant is liable to pay Service Tax, prima facie, seems to be misconception of the said definition. We find that the appellant has made out a case for waiver of pre-deposit of the amounts involved. Accordingly, the application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof is stayed till the disposal of appeal. - Stay granted.
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Central Excise
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2015 (1) TMI 296
Waiver of pre-deposit - Classification of goods - Invocation of extended period of limitation - Held that:- show cause notice which invokes extended period for demanding duty from them is incorrect as the declarations filed by the appellant in 2001 categorically record that product name and the process of manufacture. Be that as it may, we find that he issue is arguable one subsequent to the amendment in Chapter sub-headings from 01.03.2005, wherein 8 digit Chapter headings were brought into books. In order to appreciate whether the appellant’s product would fall under Chapter heading 28352500 or other heading, the issue needs to be gone into detail which can be done only at the time of final disposal of the appeal. In our view, the demand of duty within limitation period from the date of issuance of show cause notice needs to be secured by way of ordering pre-deposit on the appellant. - Conditional stay granted.
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2015 (1) TMI 295
SSI exemption - Notification No.10/2013-CE (NT) dt. 02/08/2013 - exemption in respect of plastic bottles - Held that:- notification provides that plastic containers and plastic bottles meant for use as packing material by the person whose brand name on such goods is affixed would be eligible for credit from 16/06/2003 to 26/02/2010. In this case, the period covered by the show-cause notice is from July 2006 to March 2010. As regards the month of March, 2010, there is no difference of opinion between the parties that the assessee is eligible for the SSI exemption for that month also - Decided in favour of assesse.
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2015 (1) TMI 294
CENVAT Credit - rent-a-cab tour operator and air travel agent - lower authorities have held that such services cannot be held to be a cenvatable inputs services and have accordingly denied the credit - Held that:- All the activities involved in the present case are Cenvatable credit input services. As such, I set aside the impugned order and remand the matter to the original adjudicating authority for verification of the invoices / bills etc. and to decide the availability of Cenvat credit accordingly - Following decision of Hindustan Coca Cola Beverages (P) Ltd. vs. CCE Hyderabad [ 2009 (6) TMI 474 - CESTAT, BANGALORE], CCE, Vadodara vs. Haldyn Glass Gujarat Ltd. [2009 (1) TMI 188 - CESTAT, AHMEDABAD] and CCE Raipur vs. Beekay Engg. & Castings Ltd. [2009 (6) TMI 96 - CESTAT, NEW DELHI] - Decided in favour of assesse.
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2015 (1) TMI 292
CENVAT Credit - Credit on capital goods/black rods/bars used for making bright bars - Nexus with manufacturing activity - Held that:- AS the issue is no longer res intergra in the light of this Tribunal in the case of Ajinkya Enterprises (2013 (6) TMI 610 - CESTAT MUMBAI) which has been affirmed by the Honble Bombay High Court therefore, we hold that the appellant is entitled for Cenvat credit. Accordingly, the impugned order is set aside - Decided in favour of assesse.
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2015 (1) TMI 272
CENVAT Credit - Non Supply of pet coke - Bogus invoices - Denial of cross examination request - Held that:- entire issue is based on appreciation of evidence and the materials on record. The issues are primarily in the realm of factual findings. Even if the case of the department, as put forth before us through the Senior Counsel was that no samples were drawn on 26.4.008, it remains established that thus no chemical analysis of the materials seized from the purchasers of the goods was available on record. If, on the other hand, the presumption as drawn by the Tribunal that such samples were drawn but the test reports were not placed on record is correct, the situation would be much worse for the department. In either case, the materials at the end of the purchasers could not be established through any reliable evidence of not being pet coke. Right from the beginning the assessees had been asking for cross-examination of large number of the witnesses whose statements the department sought to rely upon. There were as many as 24 such witnesses. The assessee had also asked for the cross examination of the chemical analyzer of the laboratory carrying out the test report. After a long period of time of about two years, the Commissioner rejected such request. It may be that in a given situation, cross-examination of a witness may be declined after recording proper reasons. However, when the Commissioner mechanically declined cross-examination of the witnesses whose statements were relied upon and when the Tribunal found that this would have a material effect on the conduct of the inquiry, we see no reason to interfere with the factual findings of the Tribunal. - Decided against Revenue.
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2015 (1) TMI 271
Waiver of pre deposit - Classification of the product ‘Di Calcium Phosphate - Animal Feed Grade - chapter 23 or chapter 28 - Precedent decision distinguished - Held that:- Tribunal has not delved into the aspect as to whether the assessee in the case of M/s. Sudeep Pharma Ltd. [2015 (1) TMI 296 - CESTAT AHMEDABAD] was in any manner not similarly situated to the petitioner when it was the specific case of the petitioner that identical controversy was involved and that the petitioner was similarly situated to the said assessee. On a perusal of the show-cause notice issued in the case of the petitioner as well as in the case of M/s. Sudeep Pharma Ltd., a copy whereof has been placed on record, it is apparent that the controversy involved in both the cases was identical. In the order passed in the case of M/s. Sudeep Pharma Ltd., the Tribunal has not discussed on the aspect of financial hardship. The learned counsel for the respondents is not in a position to point out any notable difference in the case of the petitioner and in the case of M/s. Sudeep Pharma Ltd. Under the circumstances, the above referred decision of the Supreme Court in the case of Vishnu Traders v. State of Haryana (1993 (11) TMI 230 - SUPREME COURT) would be squarely applicable to the facts of the present case. The Tribunal, therefore, was not justified in discriminating between the petitioner and the other assessee by directing the petitioner to pre-deposit an amount which is much more than in other cases. Under the circumstances, adopting the same approach as in the case of Sudeep Pharma Ltd., the Tribunal ought to have directed predeposit of an amount of ₹ 8.5 lakhs. The impugned orders being contrary to the law laid down by the Supreme Court in the case of Vishnu Traders v. State of Haryana [1993 (11) TMI 230 - SUPREME COURT], therefore, cannot be sustained - Decided partly in favour of assessee.
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2015 (1) TMI 270
Power of Tribunal to extend stay beyond the period of 365 days - Speaking order - Held that:- as such on expiry of maximum period of 180 days, the assessee - orig. appellant is required to submit application for extension of stay each time after completion of 180 days and the learned Tribunal is required to consider the individual case and pass a speaking order whether the delay in not disposing the appeal is attributable to original appellant - assessee or not and if it is found that the original appellant - assessee in whose favour the stay has been granted is not cooperating in early disposal of appeal and/or the delay in disposing appeal is attributable to the original appellant - assessee, the learned Tribunal is not required to extend the stay more particularly considering the provisions of section 35C( 2A) of the Central Excise Act. - Matter remanded back to Tribunal Tribunal should consider decision of [2014 (7) TMI 738 - GUJARAT HIGH COURT] to decided the matter - Decided in favour of Revenue.
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2015 (1) TMI 269
Delay in sanctioning of refund claim - Interest on refund claim - Whether appellant is eligible to interest under Section 11BB of the Central Excise Act 1944, on the sanctioned and paid refund claim starting from three months from the date of making refund application to the payment of refund amount - Held that:- In view of the law laid down by the Hon'ble Apex Court in Ranbaxy Laboratories Ltd Vs UoI [2011 (10) TMI 16 - Supreme Court of India] and the provisions of Section 11BB, there is no provision under Section 11BB of the Central Excise Act 1944 that relevant date for determining the rate of interest will be postponed in any eventuality. As per these provisions, interest payment accrues from the expiry of three months from the date of refund applications made under Section 11B(1) of the Central Excise Act 1944. - Decided in favour of assesse.
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2015 (1) TMI 268
CENVAT Credit - outdoor catering and medi-claim insurance services - outdoor catering service was received in the head office - Medi-claim insurance service, is provided only to the retired employees - Held that:- even in the head office manufacture related activities take place and therefore the entire credit cannot be denied. As regards insurance the issue is covered by the decision of the Hon’ble High Court of Karnataka in the case of Stanzen Toyotetsu India Pvt. Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT]. Even though the premium is paid in respect of retired employees, it is paid according to the agreement entered into with the employees during their service period. Therefore a conclusion arises that obligation arose when the employees rendering the service and contributing to the manufacturing unit of the appellant. - Stay granted.
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2015 (1) TMI 267
Clandestine removal of goods - Penalty u/s 11AC - Maintenance of production records - Held that:- entire case of the Revenue is based upon some production records maintained by the respondents. The respondents have explained the purpose for maintenance of such records as also the fact that they cannot be taken as the final production inasmuch as the percentage yield differs on day-to-day basis and the plant production can never be achieved. Apart from the said production records, which are being contested by the respondents, there is virtually no other evidences on record indicating any excess manufacture of final product or the clandestine removal of the same. The appellate authority has rightly observed that the factum of non-variation of the stock on the date of visit of the offers carry a lot of weightage to support the respondents’ stand that they were not indulging in any clandestine activity. - In the absence of any other evidence to reflect upon the clandestine activity of the respondents, I fully agree with the findings of the commissioner (Appeals) that the demands cannot be confirmed against the respondents - Decided against Revenue.
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2015 (1) TMI 266
Refund claim - exemption under Notification No. 506/86, dated 24-12-1986 - refund claim was sanctioned but was transferred to the Consumer Welfare Fund - Unjust enrichment - capital goods not in the possession of the appellant at the time when the Commissioner (Appeals) passed the order in 2004 - Held that:- In this case the only reason for denial of the refund claim is that these capital goods were not in the possession of the appellant in 2004. It is admitted fact that these capital goods were procured in 1989 and if the formula of depreciation is adopted by the department is applied to these capital goods, the life of the capital goods is ten years only. Admittedly, in this case the ld. Commissioner (Appeals) observed after 15 years of the procurement of those goods that these capital goods are not in possession of the appellant. On the other hand, he is holding that these capital goods have been used by the appellant and not sold. As these capital goods were in possession of the appellant till they were obsolete and destroyed, therefore, the observation of the Commissioner (Appeals) that capital goods are not in the possession of the appellant is not sustainable. Accordingly, it is held that bar of unjust enrichment is not applicable to the facts of this case - Decided in favour of assessee.
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2015 (1) TMI 265
Exemption under Notifications 8/96, 4/97 and 5/98 - reversal of the value of 8% of the exempted goods cleared during the impugned period - Held that:- In this case, the Revenue is not disputing that the respondent has cleared the exempted goods on payment of duty @ 15% and the Revenue is asking to reverse an amount equal to 8% of the value of the impugned goods. As duty has been discharged from the demand asked by the Revenue, therefore, as held by the Hon’ble Bombay High Court in the case of CCE, Pune-III v. Ajinkya Enterprises reported in [2012 (7) TMI 141 - BOMBAY HIGH COURT], wherein it was held that if duty paid on the clearance of the goods which did not amount to manufacture, therefore the duty on inputs is not required to be reversed. Following the same analogy in this case, I also held that although the goods have been manufactured from the common inputs but they have been cleared on payment of duty, therefore the reversal of value of 8% of the goods is not required. Accordingly, I do not find any infirmity in the impugned order and the same is upheld - Decided against Revenue.
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2015 (1) TMI 264
Clandestine removal of goods - physical stock - entire stock was considered only on eye estimation basis - no physical verification actually done - Penalty under Section 11AC read with Rule 25 - Held that:- charges of clandestine removal are required to be established by tangible and corroborative evidence and mere confessional statement of employee is not sufficient. I also find that it is admitted fact that the respondent was not having Weigh Bridge in their factory premises. As such their contention that the raw materials/finished goods accounting was done only on eye estimation basis is to be accepted inasmuch as there was no record that the goods were taken outside the factory for weightment purposes. There is no weighment slip produced by the Revenue. No buyers stands identified by Revenue to suggest clandestine removal of their final products. Further as rightly observed by the Commissioner (Appeals) that there is no evidence of excessive consumption of electricity, flow back of funds, extra use of labour etc. As such, I find no infirmity in the order passed by the Commissioner (Appeals). - Decided against Revenue.
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2015 (1) TMI 263
Applicability of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - whether goods manufactured by appellant which is an organ of Punjab State Electricity Board cleared to that Board shall attract provision of Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Held that:- enquiry was made from Revenue as to whether the goods manufactured by the appellant were in any way used in the production or manufacture of any other article liable to excise duty, answer is negative. Therefore without dilating the matter further, relying upon the principle laid down by Apex Court in the case of PCC Pole Factory v. CCE - [2003 (10) TMI 53 - SUPREME COURT OF INDIA], we notice that applicability of Rule 8 does not arise in the context of present case - Decided in favour of assesse.
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CST, VAT & Sales Tax
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2015 (1) TMI 275
Prayer relating to raising of the attachment and release of the bank accounts - Attachment of bank account – Recovery of sales tax dues by Department – Held that:- The Petitioners claim that they are not dealers under either of the Maharashtra Value Added Tax Act, 2002 and the Central Sales Tax Act, 1956 - the figure as derived have not been confirmed in its entirety by the ACST(Investigation)-15, Mumbai - the Accounts with the Banks, which are added as Respondents 4 to 8, shall be released from attachment, provided the Petitioners maintain the balance or the sum of ₹ 10,00,00,000/- in their Bank Account with the ICICI Bank Ltd. – decided partly in favour of petitioner.
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2015 (1) TMI 274
Rejection of Rectification Application - Vitiated by error of law apparent on the face of record or not – Held that:- The Tribunal did not force the Petitioner to argue the application for waiver of the deposit or stay - It is the Petitioner who moved such an application in the pending Appeal and apprehending that there would be recovery by coercive means - the Tribunal has, in scaling down the amount from ₹ 1,34,42,440/- to 50,96,660/-, exercised its discretion reasonably and judiciously – it is the Petitioner who repeatedly questioned a discretionary and equitable interim order by seeking to rectify it - if the initial exercise undertaken by the Tribunal was not faulty, then, its refusal to review the interim order cannot be termed as arbitrary – the jurisdiction is equally discretionary and equitable – Decided against petitioner.
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2015 (1) TMI 273
Waiver of pre-deposit - Whether Tribunal was justified in directing the assessee to deposit 20% of the disputed amount payable under Delhi Sales Tax Act and Central Sales Tax Act and 10% of the disputed penalty as a pre-condition for hearing of the appeals on merits – Held that:- The disputed amounts pertain to the Financial Years 1997-98 to 1999-2000 - the proceedings have remained pending for over a decade and the assessee cannot be blamed and was not responsible for the same - the appellant is not in a position to pay the amounts because of the change in circumstances and their weak financial position/condition - in the cases filed by Calcom Electronics Ltd., the appellant relies upon ST-35 forms of ₹ 6,21,91,904/- from their sister concern Calcom Vision Ltd., the other appellant - the question of pre-deposit had earlier become the subject matter of an order passed by the Tribunal in the case of Calcom Electronics Ltd. for the FY 1997-98, 1998-99 and in the case of Calcom Vision Ltd. for the FY 1997-98 - The said deposits as directed were made - The financial position of the appellant company, rather weak and any harsh condition would put them in difficulty as the appeals would not be heard and decided on merits but dismissed on the ground of non-payment of pre-deposit – thus, the order of the Tribunal is modified as Calcom Electronics Ltd. is directed to deposit a consolidated amount of ₹ 10 lacs, which will be deposited in two instalments - Partial stay granted.
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