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TMI Tax Updates - e-Newsletter
October 10, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Reopening of assessment - Petitioner having participated in the re-assessment proceedings in pursuant to issuance of notices u/s 143(2), the impugned orders were passed u/s 143(3) read with section 147 in accordance with law. - HC
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Liability to deduct tax at source u/s 194LA or u/s 194IA - payments of compensation for acquisition of land - income is exempted in the hands of recipients - No TDS liability - HC
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Additional depreciation on plant and machinery - The provisions of section 32 of the Act do not provide for carry forward of the residual additional depreciation, if any. - AT
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Penalty under section 271(1)(c) - during survey, assessee has made voluntary surrender on account of sundry creditors and returned the additional income in the return of income filed and paid tax thereon - no penalty - AT
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Rejection of books of accounts - It was not the directors of the assessee company who were individually responsible for furnishing the accounts of the respective branches of the company under their control but the company as a whole was responsible to furnish the correct details of income/accounts before the A.O. - AT
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Conversion of capital assets into stock in trade - colourable device - short term capital loss v/s business loss on sale transaction of gold - assessee will be entitled to determine the tax liability as per sec. 45(2) in respect of stock in trade in the year in which it is sold. - AT
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Reopening of assessment - validity of notice - reopening of assessment by the Assessing Officer for the purpose of scrutiny of dividend income, capital loss or household expenses is not permissible. - AT
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Addition made on account of excise duty not included in the closing stock of the finished goods - Though there might be levy under section 3 of the Excise Act, yet neither the rate nor the value would be determinable till the point of time of removal of the excisable goods from the factory premises - No addition - AT
Customs
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Valuation - inclusion of consideration paid for technical information provided - post importation activity – cost is incurred after the importation of the goods - Not to be included - SC
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Denial of benefit of Exemption from SAD - import of pig hair bristles which were exempted from sales tax - benefit of exemption Notification No. 34/98-Cus not available - SC
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Amendment of Invoice – Demand of differential duty – Appellant being EOU eligible to import goods without payment of duty and considering terms of payment and procurement certificate issued by Divisional authorities covering full value, there is no mis-declaration or malafide intention for evasion of duty - AT
Service Tax
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Management, Maintenance or Repair Service – appellant had collected an amount from the prospective buyers in respect of maintenance or repairs form residential units as also the commercial units - Amount not taxable MMR service - AT
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Refund of CENVAT Credit under Rule 5 of CENVAT Credit Rules, 2004 – Credit cannot be denied on procedural lapses and denial of credit on the ground of incomplete address and invoices is unjustified and Appellant is eligible for credit on these invoices - AT
Central Excise
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Recovery of erroneous refund of unutilized cenvat credit - period of limitation - when there is a limitation provided under the notification, the period mentioned under section 11A is not applicable - Issue of SCN beyond 6 months is time barred - AT
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CENVAT Credit - No evidence could be brought on record that the main appellant and its Director were aware that inputs received was as a result of an activity not amounting to manufacture. The demand issued is clearly time barred as extended period is not imposable in this case and no penalties can be imposed upon the appellant - AT
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CENVAT Credit - removal of capital goods after use - removal of cylinders/rollers which are used in printing of packaging materials - demand is restricted to the extent on the value arrived after allowing depreciation - AT
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Duty demand / Reversal of cenvat credit - Bagasse is only an agricultural waste and residue, which itself is not the result of any process. - cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty - SC
Case Laws:
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Income Tax
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2015 (10) TMI 542
Reopening of assessment - depreciation claim on dealer network and vendor network was not dwelt with during the original assessment under Section 143(3) - Held that:- Petitioner did not file any objections to the reasons for the reopening of the above assessments. Thus in the absence of any objection to the reopening, the question of disposing the objections by passing a speaking order before proceeding with the assessment as contemplated by the Apex Court in the case of GKN Driveshafts [2002 (11) TMI 7 - SUPREME Court] does not arise. On the other hand the Petitioner having participated in the re-assessment proceedings in pursuant to issuance of notices u/s 143(2), the impugned orders were passed u/s 143(3) read with section 147 in accordance with law. In this regard, it is worthwhile to refer to the decision of this Court, in the case of “DR. C.M.K. Reddy vs. Settlement Commission and Ors” [2008 (4) TMI 242 - MADRAS HIGH COURT] by following the decisions of the Apex Court in “Jai Narain Parasrampuria vs. Smt. Pushpa Devi Saraf” (2006 (8) TMI 527 - SUPREME COURT OF INDIA) as held having so participated and obtained an adverse order, now it is not open to him to turn around and contend that in the absence of the report of the CIT under s. 245D(1), the order non-suiting the petitioner for settlement is a procedural irregularity and liable to be set aside. The same is hit by the principle of acquiescence. Also as as against the impugned proceedings, the petitioner is having efficacious remedy of appeal under Section 246A of the Act before the Commissioner of Income Tax (Appeals) and without exhausting the same, the petitioner has approached this Court and hence, the present writ petitions are not maintainable - Decided against assessee.
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2015 (10) TMI 541
Penalty under Section 271(1)(c) - whether income of ₹ 40 lakhs in the return of income filed for Assessment year 2001-02 was due to inadvertence/mistake? - Held that:- No particulars of how and why the mistake occurred are forthcoming. Moreover, the appellant assessee had alongwith his original return of income, not paid the full tax attributable to amount of ₹ 40 lakhs. However, alongwith the revised return of income, the assessee paid tax of ₹ 2 lakhs on 12 December 2008. The assessment was completed on 26 December 2008. Till that date the additional tax payable on the amount of ₹ 40 lakhs has not been tendered by the appellant-assessee. It is only thereafter before passing the order of penalty that the appellant paid further tax which was payable on the additional income of ₹ 40 lakhs. Moreover, the immunity available from penalty under clause 2 to Explanation 5 to Section 271(1)(c) of the Act was forsaken by the appellant not honouring the statement made by him under Section 132(4) of the Act. This was on account of not having disclosed the same in the return of income filed only consequent to notice under Section 153A of the Act. We find that all the Authorities have concurrently come to the finding of fact that non disclosure of additional income of ₹ 40 lakhs in the return of income as originally filed consequent to notice under Section 153A of the Act was not bonafide. Penalty confirmed - Decided against the assessee.
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2015 (10) TMI 540
Liability to deduct tax at source - payments of compensation to the persons from whom land was acquired in connection with the project - case of the petitioner that, as per the provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and in particular Section 96 therein, there is an exemption envisaged from income tax in respect of amounts by way of compensation received by landowners - Held that:- The provisions under the Income Tax Act, that govern tax deduction at source in connection with payment of amounts as compensation for acquisition of land, is governed either by the provisions Section 194LA or in other cases by Section 194IA. In both these provisions, the liability to deduct tax at source is on any person responsible for paying any sum by way of consideration/compensation to another, in connection with acquisition/transfer of immovable property. It is significant to note that, in neither of these provisions is the mandate of deduction of tax at source qualified by the requirement that the amount paid by way of compensation/consideration should constitute an income of the recepient under the Income Tax Act. Therefore, not impressed with the submission of counsel for the petitioner that the provisions of Section 96 of the 2013 Act would come to his aid in exempting him from the requirement of deducting tax at source from compensation/ consideration amounts paid to persons, from whom immovable property was either acquired or obtained through negotiated purchase. The petitioner, as a person responsible for making payments, contemplated under either Section 194IA or under Section 194LA of the Income Tax Act, would be obliged to deduct tax at source in accordance with the said provisions under the Income - The upshot of the above discussion is that the prayers sought for in the writ petition cannot be granted. The writ petition, therefore, fails and is accordingly dismissed. - Decided against assessee.
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2015 (10) TMI 539
Deduction of the bad debts written off - rejection of claim on the ground that it could have only been made by way of revised return under Section 139(5) - Held that:- The said decision in Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME Court] is in the context of the lack of the power of the AO to entertain a claim for deduction, during assessment proceedings, otherwise than by a revised return. The ITAT is right in without a revised return being filed by the Assessee, there was no such restraint on the CIT (A) during the appellate proceedings. However, while permitting such a claim the CIT (A) ought to have examined whether in fact the bad debts were written off by the Assessee in the first instance in the accounts and then taken into consideration while computing the income. The remand of the matter to the AO for that purpose was, therefore, justified.
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2015 (10) TMI 537
Gains on sale of shares - capital gain v/s business income - Held that:- We find while holding the gains on sale of shares to be capital gains, ld. CIT(A) has given a finding that the facts of the case in the year under appeal are identical to that of A.Y. 05-06 & 07-08 and further during the year under appeal the number of transactions are small, the shares were purchased for investment purpose and were not made out to borrowed funds. Before us, Revenue has not brought any material to controvert the findings of ld. CIT(A). We further find that against the order of Tribunal, the matter was carried by Revenue before Hon’ble High Court and the appeal of Revenue was dismissed by the Hon’ble Gujarat High Court. We further find that the facts of the case relied upon by ld. D.R. are distinguishable and not applicable to the present facts. In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed. - Decided in favour of assessee. Disallowance u/s 14A - Held that:- CIT(A) while upholding the disallowance u/s. 14A made by A.O, has given a finding that during the appellate proceedings, Assessee had not challenged the computation of disallowance and the disallowance made by the A.O was as per provisions of Section 14A read with Rule 8D of I.T. Rules, 1962. Before us, ld. A.R. has not brought any material on record to controvert the findings of ld. CIT(A) and therefore we find no reason to interfere with the order of ld. CIT(A). - Decided against assessee.
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2015 (10) TMI 536
Unexplained cash credits - CIT(A) deleted the addition - Held that:- CIT (A) while deleting the addition in respect of the addition made on account of loan from Ankur Diamond has noted that Ankur Diamond is a creditor for goods of M. Kantilal & Co., of which assessee is a partner and that the amount of credit is fully explained and is only a book entry. However before us no material in the form of evidence like copies of bill, ledger account as appearing in their respective books etc. has been placed on record by assessee which could get support to the findings of Ld. CIT (A). Similarly in respect of deletion of addition of amount received from Megh Mayur Reality Pvt. Ltd., CIT (A) has held that the entry is from sale of land and is fully explained. We however find that apart from other details which could support the findings of Ld. CIT (A) the translated copy of sale deed is not on record. With respect to loan of ₹ 2,00,50,000/- from Dhirubhai Savani, on pursing the copy of Balance sheet of Dhirubhai Savani, which has been placed at page 31 of the paper book, it is seen that the amount is stated to be receivable from “Pravinbhai M. Patel”. There is no material on record to show that whether Pravinbhai M. Patel that is reflected in the Balance sheet of Dhirubhai Savani refers to the assessee or it refers to some other person. Considering the totality of the aforesaid facts and more so the indifferent approach of the assessee, we are of the view that the issue with respect to the addition of the aforesaid parties needs to be reexamined at the end of the Assessing Officer. - Decided in favour of revenue for statistical purposes.
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2015 (10) TMI 535
Disallowance of towards discharge of corporate guarantee obligation - CIT(A) deleted the disallowance - Held that:- As decided in assessee's own case for the assessment year 2004-05 [2009 (8) TMI 782 - ITAT, CHENNAI] giving corporate guarantee was not only one of the objects of the assessee company but the same was given for its subsidiary company and it was in the interest of the assessee company and hence the commercially expedient decision. Under the circumstances, no reason to interfere with the order of the learned Commissioner of Income Tax (Appeals) - Decided in favour of assessee.
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2015 (10) TMI 534
Revision u/s 263 - CIT held that the consideration received under a separate agreement towards sale of fixtures and fittings does not qualify for deduction u/s 54 as according to him the fittings and furnitures are not capital asset u/s 2(14) of the I. T. Act, thus AO has failed to assess the sum under the head “income from other sources” and therefore, held that the assessment order passed is both erroneous and prejudicial to the interests of the revenue - Held that:- As the list of the fittings and fixtures are not part of the record, we are unable to examine the nature of the asset and also as to whether they form part of the flat. The assets in question are fittings and fixtures in the flat. Even if they are not accepted to be part of the flat, whether the income from sale of such assets is taxable in the hands of the assessee as “income from other sources”?. The furniture and fittings are in the nature of personal effects of the assessee held for her personal use and income from such affects is not chargeable to tax. Whether the amount is considered as sale consideration and allowed deduction u/s 54F or excluded from computation and disallowed the deductions, there is no tax effect. Therefore, by not bringing it to tax, there is no prejudice caused to the Revenue. The additional grounds of appeal are accordingly allowed. Since the assessment order is held to be not prejudicial to the interests of Revenue, the revision order u/s 263 is not sustainable and is accordingly quashed. - Decided in favour of assessee.
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2015 (10) TMI 533
Additional depreciation on plant and machinery - Held that:- A perusal of the provisions of section 32 as applicable for the relevant assessment year clearly shows that additional depreciation is allowable on the plant and machinery only for the year in which the capacity expansion has taken place which has resulted in the substantial increase in the installed capacity. In the assessee’s case this took place in the assessment year 2005-06 and the assessee has also claimed the additional depreciation during that year and the same has also been allowed. Each assessment year is separate and independent assessment year. The provisions of section 32 of the Act do not provide for carry forward of the residual additional depreciation, if any. In the circumstances, the finding of the learned CIT(A) on this issue is on a right footing and does not call for any interference. When an allowance which is ordinarily not available under normal commercial principles of accounting, is made specifically allowable, through enactment of certain specific provisions of the Act, it is also a requirement that there should be similar specific provision which shows its applicability every year, unless the context strongly calls for such an interpretation. We are thus of the opinion that CIT(Appeals) was justified in confirming the disallowance of additional depreciation. - Decided against assessee.
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2015 (10) TMI 532
Revision u/s.263 - AO failed to examine the relevant documents/agreement along with the correspondence and other evidences to determine whether the income is chargeable under the provisions of sec.9(1)(vii) read with relevant provisions of the DTAA and the Assessing Officer has not verified the purchase orders along with correspondences with M/s. Tarun Anvil Corporation, USA. - Held that:- Sec.195(1) prescribes that tax has to be deducted while making payment to non-resident, which is chargeable under the provisions of the Act. Therefore, the condition precedent for deduction of tax is that the income must be chargeable under the provisions of the Act. In the present case, the assessee has not produced relevant agreement entered into with that foreign agent to show that they were appointed to act as commission agents outside India in their respective countries. It is seen from the orders of the lower authorities that the assessee has not discharged the burden cast upon it to show the nature of services rendered by non-resident agent. If there are services rendered by non-residents, who have no permanent establishment in India or have any business connection in India, by virtue of which the payment of commission accrued or arose in India then, it is exempted, if the assessee is able to prove that the services were rendered by those non-residents at abroad. In the present case, the assessee has not established the facts on record that the non-resident has rendered services at abroad and there is no business connection in India by producing relevant records, viz., either agreement entered into by the assessee with them or correspondence took between the parties. Without examining these details, we are not in a position to decide the nature of services rendered by the non-resident agent. Therefore, it is appropriate to remit the entire issue back to the file of the AO with direction to the assessee to prove that it was sales commission towards procurement of orders from abroad. Accordingly, the entire issue is remitted back to the file of the AO for fresh consideration and the AO is directed to make necessary enquiry regarding the nature of services rendered by the non-resident agent and the payments made thereof. - Decided in favour of assessee for statistical purposes.
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2015 (10) TMI 531
Addition on account of alleged bogus labour charges - Held that:- It is an undisputed fact that Assessee is engaged in the business of polishing of diamonds on job work basis and the Assessee receives the payment which is credited as its Income. It is also a fact that makes the payment for labour which is treated as an expense. In the present facts we find that though the Assessee has submitted the explanation but has also not fully proved the expenses and at the same time the Revenue has also proceeded to make the disallowance on an estimated basis. We further find that the Assessing Officer had made no enquiry in the case of 2 parties whose addresses were furnished to him. In such circumstances we are of the view that disallowance was rightly made but however considering the facts stated hereinabove we are of the view that the disallowance made by the Assessing Officer is on a higher side. Thus disallowance of ₹ 4 lacs would meet the ends of justice and therefore we accordingly direct the disallowance be restricted to ₹ 4 lacs. - Decided partly in favour of assessee.
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2015 (10) TMI 530
Deduction u/s 80IB(10) - calculation of date of approval - CIT(A) allowed the claim - Held that:- There should not be any dispute that the date of commencement contemplated in section 80IB(10) is the physical date of Commencement of the project. Hence, in our view, the assessing officer was not correct in observing that the date of commencement is to be taken as the date of approval. We have already noticed that the assessee had filed copies of NOC obtained from the Chief Fire officer before the Ld CIT(A) and the same were confronted with the assessing officer. During the course of remand proceedings, the assessing officer has made necessary enquiries with the Fire department and has come to know of the fact that the construction could not be commenced without obtaining the NOC from the Chief fire Officer. We notice that the Ld CIT(A) has duly considered the NOCs issued by the Chief Fire Officer and also the remand report and accordingly held that the construction has commenced after the first day of October, 1998. Since the first appellate authority has endorsed the view expressed by the assessing officer in the remand report, normally the revenue should not get aggrieved by the order passed by Ld CIT(A). Still, the revenue has filed this appeal challenging the finding given by the first appellate authority on the basis of the view expressed by the AO. Hence, we do not find any merit in the ground urged before us in the present appeal. Accordingly, we uphold the order of Ld CIT(A). - Decided against revenue.
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2015 (10) TMI 529
Monetary limit to prefer an appeal - maintainability of revenue appeal which is below the prescribed limit of tax effect - Held that:- On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as that this is a loss case having tax effect more than the prescribed limit, which should be taken into account,or that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, or that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge,or that Board’s order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or that Revenue Audit Objection in the case has been accepted by the Department and the same is under challenge. The learned Standing Counsel for the Revenue is not disputing the fact that the tax effect in the present case is less than ₹ 4 Lakhs and that the assessee's case does not fall within the exceptions specified in Instruction No.1979, dated 27.3.2000. Thus appeals are dismissed as not maintainable. - Decided against revenue.
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2015 (10) TMI 528
Penalty under section 271(1)(c) - surrendered amount in respect of sundry creditors during survey - CIT(A) deleted the penalty - Held that:- It is evident from the record that surrender was made during the course of survey by the assessee and furnished the return of income declaring additional income and paid the tax thereon. Nothing has been brought out on record by the Assessing Officer that the surrender was made when the assessee was cornered by the Assessing Officer. Though the Assessing Officer has mentioned in the order that the additions, on which penalty was levied, were challenged before the ld. CIT(A), but the facts are otherwise. The assessee has made voluntary surrender on account of sundry creditors and returned the additional income in the return of income filed and paid tax thereon. We have also carefully examined the judgment referred to by the parties and we find that it is a case of voluntary surrender by the assessee during the course of survey. Therefore, penalty under section 271(1)(c) of the Act cannot be levied. We have carefully perused the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the issue judiciously in the light of various judicial pronouncements referred to before him. Since no infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. - Decided in favour of assessee.
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2015 (10) TMI 527
Rejection of books of accounts - Estimation of net profit of Bengaluru and Mumbai branch - Held that:- It was not the directors of the assessee company who were individually responsible for furnishing the accounts of the respective branches of the company under their control but the company as a whole was responsible to furnish the correct details of income/accounts before the A.O. In the absence of furnishing of accounts before the A.O., the A.O. will be justified in his action in rejecting the said accounts and making the assessment on estimation basis. Although the A.O. had assessed the income on estimation basis in respect of Mumbai as well as Bengaluru office, but the ld. CIT(A) has observed that so far as the Mumbai office was concerned, properly audited accounts were submitted by the assessee, hence he did not sustain the estimation of Mumbai office. Since no accounts were produced in respect of Bengaluru office, the ld. CIT(A) confirmed the profit/income worked out by the A.O. The ld. Counsel for the assessee could not bring anything before us as to how the estimation of income made by the A.O. in respect of Bengaluru office was wrong. Under these facts and circumstances of the case, we do not find any infirmity in the impugned order of the ld. CIT(A) in sustaining the addition made by the A.O. in respect of Bengaluru office. The appeals filed by the assessee in respect of both the years are dismissed. Revenue has agitated the findings of the ld. CIT(A) that no estimation in respect of Mumbai office could be made by submitting that the books of account of the assessee were rejected in its entirety by the A.O. by invoking the provisions of section 145(3) - In this regard, it is observed that the ld. CIT(A) has held that since the audited accounts in respect of Mumbai office were submitted by the assessee, hence rejection of accounts of Mumbai office without any defects/reasons pointed out therein was wrong. Moreover, the Revenue has also not pointed out any defect in respect of accounts of Mumbai head office of the assessee company. In our view, the ld. CIT(A) has rightly accepted the audited accounts in respect of Mumbai Head office of the assessee company. Hence, we do not find any reason to interfere with the order of ld. CIT(A) in setting aside the estimation of income in respect of Mumbai head office and accordingly dismiss the appeals filed by the Revenue for both the years.
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2015 (10) TMI 526
Conversion of capital assets into stock in trade - colourable device - short term capital loss v/s business loss on sale transaction of gold - Why conversion of investment in shares into stock in trade should not be considered as colourable device so as to make it eligible for setting off against other income because if it would have been sold as an investment, then the assessee would have incurred capital loss and as per the provisions of Income-tax Act, capital loss can be set off against capital gains? Held that:- The assessee is legally entitled to convert this capital asset into stock in trade and the taxability of the same is to be determined as per section 45(2) of the I.T. act. Section 45(2) clearly mandates that the chargeability will be determined in the year in which the converted stock in trade is sold and not in the year in which it is actually converted into stock in trade. Therefore, ld. CIT(A) has rightly observed that the issue is premature at this stage and, therefore, he should have dismissed the assessee’s ground of appeal instead of allowing the same because in the year under consideration the assessee could not treat it as a short term capital loss to be carried forward to subsequent years. The short term capital loss/ gain will also be incurred in the year in which the transfer takes place and the computation will have to be made accordingly. The assessee could only keep this amount in the books of a/c under the head ‘miscellaneous assets’ in the balance-sheet and, therefore, we partly modify the ld. CIT(A)’s conclusion and hold that the ground raised before ld. CIT(A) by assessee had to be dismissed and the assessee will be entitled to determine the tax liability as per sec. 45(2) in respect of stock in trade in the year in which it is sold. - Decided partly in favour of revenue.
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2015 (10) TMI 525
Validity of reopening of assessment - non approval from competent authority - accommodation entry receipts - Held that:- Respectfully following the above decision in the case of SPL’S Siddhartha Ltd. [2011 (9) TMI 640 - DELHI HIGH COURT] hold that the assessment reopened with the approval of Commissioner of Income-tax, whereas the statute required the approval of the Joint Commissioner of Income-tax, is not valid. We, therefore, quash the reopening of assessment. Since the reopening of assessment itself has been quashed, the consequential assessment orders passed for the above asstt. years 2002-03 is also quashed. As we have already quashed the assessment orders, the various grounds of appeal raised by the assessee against the additions made by the Assessing Officer need no adjudication. - Decided in favour of assessee.
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2015 (10) TMI 524
Addition on bogus/ceased liabilities under section 41(1)(a) - CIT(A) deleted addition accepting additional evidence - Held that:- With regard to addition of ₹ 15.16 lacs deleted by the CIT(A), we find that the parties to whom the payment of ₹ 15.16 lacs were made by account payee cheques and these payments have been confirmed by the assessee banker Bank of Maharastara and therefore, theses parties are neither bogus nor liabilities of these amounts had ceased. We also find considerable cogency in the submissions of the assessee that regarding the balance amount of ₹ 16.37 lacs, the assessee surrendered the amount before the Ld. CIT(A) as he could not obtain the confirmations from the parties due to his ill health and heart problems as confirmed by the medical certificates and medical reports filed. In view of the above, we find that Ld. CIT(A)’s has rightly deleted the addition of ₹ 15.16 and balance payment of ₹ 16.37 lacs was rightly confirmed by the Ld. CIT(A), which does not need any interference on our part, hence, the same is decided against the Revenue. As per the assessee’s submission the Bank certificate issued by Bank of Maharashtra from Faridabad Branch and Dehradun Branch, the assessee has proved to the satisfaction of the Ld. CIT(A) that payments of RS.15,15,851/- were made by account payee cheques. The assessee had also filed the copy of ledger account and the bills of the parties before Ld. CIT(A) as per details given in the excel sheet which was filed before Hon'ble CIT(A), a copy of which is attached herewith at Page 3-9. The assessee was also having very poor health due to heart problem and was admitted at Kailash Hospital, Noida as per discharge summary and medical reports of the Hospital filed before the Ld. CIT(A). The assessee was not able to attend the work properly for almost 18 months till December 2010. After that it took further two years for him to recover fully and attend to his work on a regular basis, a copy of the discharge summary and medical reports available on record. In view of the above, we are of the considered view that Ld. CIT(A) has not violated the Rule 46-A in admitting the additional evidence from the assessee, as AO has filed the Remand Report on this account - Decided against revenue.
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2015 (10) TMI 523
Rectification of mistake - surrendered income which pertains to jewelry in assessment order u/s 143(3)- Held that:- As replying to question no. 14 of the revenue authorities, the assessee answered that jewellery worth ₹ 4,14,144 is her stridhan which she got at the time of her marriage and on other occasions. The balance jewellery worth ₹ 20 lakh was purchased by her. We further observe that in reply to question no. 15, the assessee submitted that the source of acquisition of jewellery is not explainable but the same may please be treated as her additional income for the year under consideration which has been spent on the purchase of jewellery. In this situation, we observe that the AO wrongly observed that the assessee surrendered income of ₹ 24,14,144/- on account of jewellery as undisclosed income and it was a mistake apparent from record in the light of statement of assessee recorded on oath during the search proceedings on 28.9.2007. Thus we come to a conclusion that the AO as well as CIT(A) were wrong in holding that there is no mistake apparent from record. Per contra, we are inclined to hold that there was a glaring mistake on the face of record in the light of statement of the assessee recorded on oath which could have been rectified by the AO by allowing application of the assessee filed u/s 154 of the Act but the AO as well as CIT(A) failed to grant justified and legal relief for the assessee. Accordingly, orders of the authorities below are set aside and AO is directed to pass appropriate order on the application of the assessee filed u/s 154 of the Act by affording due opportunity of hearing for the assessee. Therefore, the issue is restored to the file of AO with the above direction - Decided in favour of assessee for statistical purposes.
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2015 (10) TMI 522
Reopening of assessment - validity of notice - Held that:- Income-tax Act empowers the Assessing Officer to issue notice under Section 143(2) to verify the correctness of the income or loss disclosed by the assessee. The Assessing Officer has to issue the notice under Section 143(2) within the time limit specified in the said Section. If the Assessing Officer failed to issue the notice under Section 143(2) within the time limit specified in that Section, he cannot issue the notice under Section 148 just for the purpose of ensuring the correctness of the income disclosed or the loss disclosed or to scrutinize certain income or expenses. In view of the above, we are of the opinion that reopening of assessment by the Assessing Officer for the purpose of scrutiny of dividend income, capital loss or household expenses is not permissible. Therefore, the notice issued under Section 148 is quashed and consequentially, the assessment order framed in pursuance to the notice under Section 148 is also quashed. - Decided in favour of assessee.
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2015 (10) TMI 521
Addition made on account of excise duty not included in the closing stock of the finished goods - CIT(A) deleted the addition - Held that:- Undisputedly section 145A of the Act was introduced w.e.f. 1.4.1999, therefore, it cannot be invoked for recasting the closing stock of the assessee. It is also an undisputed fact that the assessee has been following similar method of accounting in earlier years and no addition was ever made in the closing stock by the Assessing Officer. Unless and until it is entered on one side of an item of cost, it cannot be taken as a component of the value of the closing stock on the other side. It is also held that levy of excise duty is incomplete inasmuch as assessee under the Excise Act is not required to discharge the liability to pay duty levied upon the manufacture of excisable goods, till such goods are removed from factory premises or from the warehouse. The test to determine as to whether the liability had been incurred or not would be as to whether a corresponding right is available with the excise authority to enforce such a liability. Mere production or manufacture by itself would not be sufficient. Though there might be levy under section 3 of the Excise Act, yet neither the rate nor the value would be determinable till the point of time of removal of the excisable goods from the factory premises, hence, the scheme itself indicates that so far as an assessee is concerned, it incurs liability to pay excise duty only upon both the events taking place, namely manufacture and removal of excisable goods. This position has to be necessarily adopted considering that the duty of central excise is levied and collected on an advalorem basis. In other words, unless and until the value is known, the levy and collection would not be correct and valid. We have also carefully examined the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the impugned issue judiciously in the light of the legal position. Since no specific infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. - Decided against revenue.
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Customs
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2015 (10) TMI 549
Dispute on Transaction value for determination of Import Duty - inclusion of consideration paid for technical information provided - post importation activity – Held That:- it becomes clear that the technical information which was to be provided by the Japanese company to the respondent was for the manufacture of the contract products by the respondent herein, naturally, after the setting up of the plant. This cost is, thus, incurred after the importation of the goods. - Decision made in the case 'Commissioner of Customs, Ahmedabad v. M/s. Essar Steel Limited [2015 (4) TMI 486 - SUPREME COURT] followed – Appeal dismissed against the Revenue.
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2015 (10) TMI 548
Appeal against Judgement and Order passed by High Court - Offence under Section 20 (b) (ii) (C) of the Narcotic Drugs and Psychotropic Substances Act, 1985 – Revenue contended that High Court has fallen into error by converting the conviction from Section 20(b)(ii) (C) to Section 20(b)(ii) (B) of the NDPS Act and criticized the finding recorded by the Division Bench of the High Court stating the same as vulnerable in law – Respondent holds that High Court has rightly converted the offence from Section 20(b)(ii) (C) to Section 8 read with Section 20(b)(ii) (B) of the NDPS Act – Further contended that the reliance on the authorities placed by the High Court cannot be found fault with and discretion exercised by the High Court cannot be regarded as injudicious warranting interference. Held That:- Court did not concur with the decision taken by the High Court that seized item was a commercial quantity hence the conviction recorded by the trial court under Section 20 (b) (ii) (C) is absolutely impeccable - Judgment and order of the High Court is set aside and the Respondents are held guilty - Appeal allowed and judgment is modified – Appeal allowed judgement made in favour of the Revenue.
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2015 (10) TMI 546
Confiscation of goods – import of Silicon Electrical Steel Strip/Scrap originated from old & used dismantled transformer - Commissioner in respective orders directed confiscation of goods under Section 111(d) of Customs Act, 1962 for violation of Provisions of Paragraph 2.17 of FTP (2009-14) and allowed redemption on payment of redemption fine – Held that:- issue involved in present case has been considered by this Tribunal in case of Ansun Systems Consulting (P) Ltd. [2015 (2) TMI 299 - CESTAT KOLKATA] – Since issue is quite significant and considering nature of urgency expressed by both sides and also demurrage is being incurred, therefore, court direct that goods should be re-examined – Impugned Orders are set aside and appeals are remanded to adjudicating authority for deciding issue afresh – Decided in favour of appellant.
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2015 (10) TMI 545
Amendment of Invoice – Demand of differential duty – Appellant filed letter to Customs seeking for amendment of invoice – Adjudicating authority in denovo order, not only rejected request for amendment but confirmed differential duty and confiscated goods and imposed redemption fine along with penalty – Commissioner (A) dismissed appeal for non-compliance of predeposit – Appellant preferred appeal and Tribunal waived predeposit and remanded case to Commissioner (Appeals) to decide case on merit – Commissioner (A) in his impugned denovo order rejected appeal and upheld order of adjudicating authority – Held that:- Appellant being EOU eligible to import goods without payment of duty and considering terms of payment and procurement certificate issued by Divisional authorities covering full value, there is no mis-declaration or malafide intention for evasion of duty – Therefore demand of differential duty is not sustainable – Accordingly, impugned order is set aside to extent of demand of differential duty of customs and appeal is allowed – Decided in favour of Assesse.
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2015 (10) TMI 544
Valuation - Determination of transaction value - Held that:- issue that is raised in these appeals is regarding the valuation of the goods imported. The revenue authorities have rejected the transaction value as declared and sought to enhance the value, while it is a case of the appellant that value declared by them is of contemporaneous imports of similar goods. It was brought to our notice that identical issue in the case of Mark International was remanded back by final order [2015 (9) TMI 1392 - CESTAT MUMBAI]. On perusal of said order which was produced before us, we find it so and note that the matter is remanded back the lower authorities to consider the issue as per the directions given in final order [2015 (9) TMI 761 - CESTAT MUMBAI] - Decided in favour of assessee.
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Corporate Laws
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2015 (10) TMI 543
Approval for Petition of Winding Up under Section 433 & 434 – Petitioner contends that Respondent committed a default in payment of its instalment and other debenture holders – Further contended that notice of Petitioner was cryptically replied by a bare denial of liability and as such Petitioner finds no concrete plan for payment of liabilities – Respondent contested that winding up petition against a company, which is in temporary financial difficulties, ought not to be admitted – Further held that creditors have no absolute right to insist on winding up on grounds of inability to pay debts and instead give time to come out of the momentary financial crisis. Held That:- Delaying the admission of these petitions would not serve the interest of any of the stakeholders as well as the public - Workmen’s dues should be provided for and protected - Resultant prospect of not acting in a timely manner in the face of serious doubts as to commercial viability of the Company and several critical unexplained financial matters - Company petitions are admitted and Respondent is restrained by a temporary order and injunction from disposing of any of its assets and properties or creating any third party rights otherwise than in due course of its business - The Respondent Company is directed to place on record the latest financials of the Company – Allowed and decided in favour of the Petitioner.
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Service Tax
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2015 (10) TMI 578
Management, Maintenance or Repair Service – appellant had collected an amount from the prospective buyers in respect of maintenance or repairs form residential units as also the commercial units - Held That:- No service tax liability arise on the appellant under the category ‘Management, Maintenance or Repair Service' for the amounts collected by them from the prospective flat owners – No penalty is imposed as such under GTA as well as ‘Management, Maintenance or Repair’ Service – Decision in the case of Kumar Beheray Rathi [2013 (12) TMI 269 - CESTAT MUMBAI] followed - Decided in favour of the assessee.
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2015 (10) TMI 577
Refund of CENVAT Credit under Rule 5 of CENVAT Credit Rules, 2004 – Assessee holds that refund should not be denied on the grounds of incomplete information given in invoice and Department should take liberal approach in such cases – Further contends denial of credit on the ground that services do not qualify as input services is not sustainable – Respondent contends sub clause (1) of Rule 9 of the CENVAT Credit Rules provides for the details to be contained in the document, without these credit may be wrongly availed, hence rejection is proper – Services provided are not eligible as input service to claim credit – Held That:- Credit cannot be denied on procedural lapses and denial of credit on the ground of incomplete address and invoices is unjustified and Appellant is eligible for credit on these invoices - Appellants are eligible for refund of credit in regard to all the impugned input services except medical services; decision in the case of Coca Cola India (P) Ltd. Vs. CCE Pune III [2009 (8) TMI 50 - BOMBAY HIGH COURT]and CCE, Nagpur Vs. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT ] – Appeal allowed and decided partly in favour of the assessee.
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2015 (10) TMI 576
Demand for Service Tax - Business Auxiliary Service (BAS) - purchase and sale of recharge coupons and Sim cards. - Held That:- CESTAT order issued in respect of several appellants fully covers the issue in Respondent's favour - Judgement of CESTAT takes reference to the judgement of Supreme Court in the case of Idea Mobile Communications Ltd - Found no merit in Revenue's appeal –Decision made in the case of Idea Mobile Communications Ltd Vs. CCE, Cochin [2011 (8) TMI 3 - SUPREME COURT OF INDIA] followed - Decided in favour of the Respondent.
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2015 (10) TMI 575
Waiver of pre-deposit - Appellant provides services of maintenance or repair service and manpower recruitment service and contends that service recipient paid service tax on behalf of the Appellant for the period in issue and it had no intention to evade the tax as such – Held That:- no evidence has been furnished that M/s HSCL paid service tax on behalf of/on account of the appellant. - the issue of invocability of extended period requires detailed analysis which can be taken up only at the time of final hearing but it is a factor to be taken into account at this interlocutory stage. - stay granted partly.
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2015 (10) TMI 574
Waiver of pre-deposit - GTA service – reverse charge - Appellant hires vehicles for transporting goods from the premises of consignors to that of the consignees and affirms the liability of service tax to be paid by the consignor or consignee of the goods in view of Section 68 of the Finance Act, 1994 read with Rule 2 (1) (d) (v) of Service Tax Rules, 1994 – Held That:- Demand of CENVAT Credit rests on appreciation of evidences adduced by both sides – Prescribed amount needs to be deposited within time to waive and recover stay during the pendency of the appeal – Partial stay granted.
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2015 (10) TMI 573
Waiver of Pre-deposit – BAS - nature of amount received - commission or discount on sale of goods – Held That:- Commission received by the Appellant was in relation to the material sold and would not fall within the scope of business auxiliary service - Stay Granted – Decided in favour of the Appellant.
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Central Excise
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2015 (10) TMI 572
Recovery of erroneous refund of unutilized cenvat credit - period of limitation - Export of service - whether notices issued by adjudicating authority for demanding erroneous refund is hit by limitation specified under notification No. 35/2000 or whether general limitation for extended period is covered under section 11A of Central Excise Act,1944 - Held that:- it is clear that the demand of erroneous refund made under this notification shall be within six months from the date of refund. We also find that the adjudicating authority has sanctioned the refund but there is nothing on record to show that the said order has been reviewed whereas we find that the adjudicating authority again issued show-cause notices for recovery of erroneous refund on his own under section 11A. - issue has already been decided by this Tribunal in the case of Shasun Chemicals & Drugs (1995 (3) TMI 284 - CEGAT, MADRAS) and by the Hon’ble Supreme Court in the case of CCE Vs. Raghuvar (India) Ltd. (2000 (5) TMI 40 - SUPREME COURT OF INDIA) wherein it categorically held that when there is a limitation provided under the notification, the period mentioned under section 11A is not applicable. Ratio of this Tribunal order and the Hon’ble Apex Courts judgment are clearly applicable to the facts of the present case and there is no dispute on the fact that the refund was sanctioned under Rule 5 of CENVAT Credit Rules, 2002 in terms of Notification No. 35/2000. Therefore, when such notification clearly stipulates time limit for recovery of erroneous refund the adjudicating authority ought to have demanded erroneous refund within six months, instead the notices were issued beyond six months by invoking section 11A. - Respectfully following the decision of the Hon’ble Apex Court and this Tribunal, the demand of erroneous refund is hit by limitation - Decided in favour of assessee.
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2015 (10) TMI 571
Disallowance of CENVAT Credit - Penalty under Rule 15(1) of the Cenvat Credit Rules - whether main appellant was eligible to take credit on the basis of cenvatable documents showing payment of duty - Held that:- duty paid on the waste kraft paper was accepted by the officer Incharge of the supplier unit M/s. SPPML. Appellant was not expected to know beyond the facts that inputs they received are covered under a valid duty paying documents. The ratio laid down in the above case laws relied upon by the main appellant is squarely applicable to the facts and circumstances of this case. On merit appellant was eligible to take CENVAT credit. On the issue of time bar, it is observed that the show cause notice was issued on 05.04.2010 for the period March 2005 to March 2007. No evidence could be brought on record that the main appellant and its Director were aware that inputs received was as a result of an activity not amounting to manufacture. The demand issued is clearly time barred as extended period is not imposable in this case and no penalties can be imposed upon the appellant. - Decided in favour of assessee.
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2015 (10) TMI 570
Demand of interest - belated payment of differential duty - Held that:- There is no demand of central excise duty as the appellants paid differential duty by self-assessment under Section 11A (2B). The adjudicating authority dealt the issue in detail at para 10 to 15 and clearly held that assessee are covered under sub-section (2B) of Section 11A of Central Excise Act. I find that when appellant could not quantify the value as per CAS, they ought to have opted for provisional assessment. Instead they chose to pay differential duty for every quarter on self-assessment. Once the differential duty is paid it is covered under Section 11A (2B) and interest is automatic. - Further the Hon'ble Supreme Court in the subsequent judgement in the case of CCE Vs International Auto Ltd. (2010 (1) TMI 151 - SUPREME COURT OF INDIA) also upheld that demand of interest under Section 11AB by referring to their order in the case of SKF India Ltd. (2009 (7) TMI 6 - SUPREME COURT). - issue relating to demand of interest on the differential duty paid stands settled by the apex court. By respectfully following the judgement of apex court, I hold that appellants are liable to pay interest demanded in the impugned order - Decided against assessee.
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2015 (10) TMI 569
CENVAT Credit - removal of capital goods after use - removal of cylinders/rollers which are used in printing of packaging materials - Held that:- The Rule 3(4) of CCR 2002 has been amended by notification No.13/03-CE (NT) dt.1.3.2003 where the provisions were inserted for removal of inputs and capital goods removed as such and stipulates where the amount equal to the credit availed on such inputs or capital goods is to be paid by the manufacturer. Rule 3 (5A) was also introduced w.e.f.16.5.2005 wherein specific provisions have been inserted that if the capital goods are cleared as waste and scrap, the manufacturer shall pay an amount equal to the duty leviable on transaction value. There is no dispute on the fact that these rollers are capital goods used and worn out. These goods were not cleared as such as held by the department but these are used and worn out. Once the engravings are worn out, it cannot be used in printing of material unless the engravings are redone which involves detailed processing of enameling, melting etc. which amounts to manufacture. The appellants have also cleared the goods in equal proportion to dealers also. - In the present case demand of reversal of entire credit on used and worn out capital goods cleared is not sustainable as these goods are cleared as such but used and worn out Rollers. Accordingly the demand is restricted to the extent on the value arrived after allowing depreciation. The ld. Advocate also submits that appellants have already paid duty in excess as per transaction value. I hold that since the appellants have discharged duty as per the transaction value on the goods declared it as scrap, the differential duty, if any, is demandable to the extent on the value of capital goods after allowing depreciation as held by the Hon’ble Madras High Court [2010 (10) TMI 424 - MADRAS HIGH COURT] and Tribunals Larger Bench (2013 (12) TMI 82 - CESTAT CHENNAI). Appellants already paid excise duty as per the transaction value and if the depreciation value is taken into account and if it results in excess payment, no amount is payable by appellant and the appellants are not entitled for any refund. Adjudicating authority is directed to re-quantify the amount after allowing depreciation value only to this extent Appellants shall produce all the relevant details before the original authority - Decided in favour of assessee.
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2015 (10) TMI 568
Availment of benefit of Notification dated 01.03.1986 - fraudulent evasion of excise duty - Held that:- both the Adjudicating Authority and the CEGAT, have considered the entire evidence, in arriving at a finding that M/s S.N. Wires was the dummy unit of M/s S.N. Industries and the consumption of electricity by unit M/s S.N. Wires, the arrangements of borrowing, work of purchase on raw material and the integrated manufacturing of the products, clearly established that the two units situate in the same premises, are not separate, but are functionally integrated, of which the returns have been filed, to claim exemption, fraudulently, for evading the excise duty. - Decided against assessee.
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2015 (10) TMI 567
Challenge to the show cause notice - SCN propose to deny the CENVAT Credit prior to the date of registration while demand duty for such period - Duty demand u/s 11A(5) read with Rule 14 - Held that:- No doubt that this Court would not have ordinarily entertained the petition which challenges the showcause notice. In ordinary course,the parties could have been directed to file reply to show cause notice and adjudicating authority could have been permitted to take decision in accordance with law. However, it is noticed that the show cause notice expressed in contravention of the statutory provision, this Court could not have been powerless under the article 226 of the Constitution of India to entertain a petition challenging the show cause notice, which is exfacie illegal. Show cause notice is issued on the premise that the Petitioners were not entitled for obtaining cenvat credit amounting to ₹ 20,78,77,048/. In effect the showcause notice proceeds on the premise that the cenvat credit sought to be credited by the petitioner prior to the date of registration was inadmissible in law. The showcause notice therefore demands as to why the said amount should not be recovered from the Petitioner and as to why interest and penalty should not be levied. Perusal of Section 32 M would reveal that the very order of settlement passed under Section 5 of Section 32F shall be conclusive as to the matters stated therein and no matters covered by such order shall be reopened in proceedings. The only exception is that it can be done save as provided in this chapter. Nothing has been pointed out by the learned Counsel for the Revenue, which would permit the issue which is already concluded by the order passed by the learned Settlement Commission to be reopened again. - Interim relied granted.
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2015 (10) TMI 566
Duty demand / Reversal of cenvat credit - Bagasse - Manufacture - generation of electricity - whether Bagasse which emerges as residue/waste of sugarcane is subjected to excise duty or not - Held that:- It could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. - Since it is not a manufacture, obviously Rule 6 of the Cenvat Rules, 2004, shall have no application as rightly held by the High Court. - Since Bagasse is held not to be result of any manufacture - Decided against Revenue.
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2015 (10) TMI 565
Imposition of penalty - whether penalty under Rule 173Q of CER 1944 is relatable to non-demanding of interest under Section 11AB - Supreme Court dismissed the appeal filed by Revenue against the decision of High Court [2003 (11) TMI 597 - KARNATAKA HIGH COURT]; wherein High Court rejected the petition as non maintainable.
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2015 (10) TMI 564
Denial of refund claim - Interest - High Court granted refund and interest - Appeal pending before tribunal - Held that:- even CEGAT has since decided the appeal and dismissed the same thereby affirming the order of refund. We are also informed that the interest amount has since been paid to the respondent. In view thereof, nothing remains to be adjudicated in the appeal - Decided against Revenue.
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2015 (10) TMI 563
Classification - Import of polyester fabric (Untextured) - Assessee classified under 5407 6190 Revenue under 5407 5290 - Supreme court dismissed the appeal filed by Revenue against the decision of High Court [2011 (9) TMI 599 - Punjab and Haryana High Court]; wherein High Court held that Chemical Examiner has been examined as a witness, who has deposed that the procedure prescribed for examination of yarn has not been adopted. Tribunal findings based on facts no question of law arises.
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2015 (10) TMI 562
Refund of Education Cess - Exemption under Notification No.32/99-CE dated 8-7-1999 - Supreme Court dismissed the appeal filed by Assessee against the decision of High Court [2011 (8) TMI 1096 - GAUHATI HIGH COURT] wherein high Court held that Education Cess on goods is not exempted under Notification No.32/99-CE dated 8-7-1999 and that CENVAT credit on Education Cess can be utilised under the CENVAT Credit Rules, 2004 only towards payment of Education Cess.
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2015 (10) TMI 561
Waiver of pre deposit - Delay in payment of duty - Violation of provisions of Rule 8(3A) of Central Excise Rules, 2002 - Penalty u/s 11AC – Availment of CENVAT Credit - Supreme Court dismissed the appeal filed by assessee by granting another 8 weeks time to comply with the order of high Court [2014 (11) TMI 422 - ALLAHABAD HIGH COURT]. High Court in the impugned order held that Provisions of Rule 25 of the Rules were attracted since there was an intent to evade the payment of duty. For these reasons, prima facie, we are of the view that no substantial question of law would arise in the appeal.
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2015 (10) TMI 560
Inclusion of value of deemed export - Whether value of deemed export is required to be excluded while determining FOB value of export for the purpose of computation of value of the Exim Policy – Supreme Court dismissed the appeal filed by the Revenue against the decision of High Court [2014 (2) TMI 57 - GUJARAT HIGH COURT]; wherein High Court held that clearances made by one 100% EOU to another 100% EOU which are deemed exports are to be treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contemplated under the provisions of Rule 5 of the Cenvat Credit Rule, 2004.
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2015 (10) TMI 559
MRP Valuation or transaction value - Clearances of tiles - institution buyer - industrial consumers - appellant is discharging duty on these tiles as per the provisions of Sectin 4A - revenue demanded duty on the basis of transaction value under Section 4 - Supreme Court after condoning the delay dismissed the appeal filed by the Revenue against the decision of Tribunal [2014 (6) TMI 453 - CESTAT MUMBAI]; wherein tribunal held that discharge of duty liability tiles supplied in retail packages to real estate developers / developers, etc. has to be made under Section 4A of the Central Excise Act, 1944. Therefore the impugned demands are not sustainable in law.
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2015 (10) TMI 558
Clandestine removal – retraction of statements - Demand on the note books and pen-drive recovered from the premises of third party, who was a dealer of assessee – Lack of evidence - Whether the Customs, Excise & Service Tax Appellate Tribunal, was correct in holding that evidences collected by Departments are admissible evidences only for one offence while the same set of evidences only for one offence while the same set of evidence are insufficient to establish another offense - Supreme Court after condoning the delay dismissed the appeal filed by the Revenue against the decision of High Court [2014 (5) TMI 606 - GUJARAT HIGH COURT]; wherein High court held that in the case of clandestine removal of excisable goods, there needs to be positive evidences for establishing the evasion, though contended by the Revenue. In absence of any material reflecting the purchase of excessive raw material, shortage of finished goods, excess consumption of power like electricity, seizure of cash, etc., the Tribunal noted and held that there was nothing to bank upon except the bare confessional statements of the proprietor and of some of the persons connected with the manufacturing activities and such statements were retracted within no time of their recording.
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2015 (10) TMI 557
Non maintenance of separate accounts for the inputs used in dutiable goods and exempted goods - Whether assessee was required to pay an amount equal to 8% or 10% of the value of the exempted goods as the common input (Hydrochloric Acid) used for the manufacture of both dutiable goods (Gelatin) and exempted goods (Di-Calcium Phosphate) - Supreme Court after granting leave in all SLPs held that the issue invloved has already been decided by the decision of Union of India & Ors. v. M/s. Hindustan Zinc Ltd. [2014 (5) TMI 253 - SUPREME COURT] hence Court dismissed the appeals.
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2015 (10) TMI 556
Demand of duty - Manufacturing activity stopped due to hardship - Inability to pay excise duty - Invocation of Section 11A - Imposition of Compounded levy of tax - Supreme Court after condoning the delay dismissed the appeal filed by the Revenue against the decision of High Court [2014 (1) TMI 1335 - MADRAS HIGH COURT]; wherein High Court held that assessee had come under the compounded levy scheme with effect from 1997 and when they switched over to this, the credit lying unutilised, be in the inputs or in the final products, lapsed in terms of sub-rule (17) of Rule 57F - assessee has availed the benefit of a specially compounded levy scheme - therefore question of adjustment of the modvat credit as against the liability under Rule 96ZP, does not arise.
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2015 (10) TMI 555
Maintainability of appeal - non compliance of pre deposit order - Clandestine removal of goods - Assessee being director of company - Responsibility of assessee - Supreme Court after condoning the delay did not find reason to entertain the petition filed by assessee and hence dismissed the appeal - Court however, granted time of 2 months to make the deposit. The Petition was filed against the decision of High Court [2014 (4) TMI 380 - ALLAHABAD HIGH COURT]; wherein High Court held that Appellant, being the Director of the Company, cannot be absolved from the responsibility of such clandestinely removal of the goods. Prima facie, the material, on record, is against the appellant.
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2015 (10) TMI 554
Denial of exemption claim - Applicability of Rule 57CC - Supreme Court dismissed the appeal filed by the Revenue holding that the appeal is covered against the decision of Union of India & Ors. v. M/s. Hindustan Zinc Ltd [2014 (5) TMI 253 - SUPREME COURT]. The appeal was filed against the decision of High Court [2009 (2) TMI 800 - BOMBAY HIGH COURT]; wherein High court has held that questions of law raised in this application have already been decided by this Court against the revenue by its Judgment (Rallis India Ltd. v. The Union of India & Ors.) [2008 (12) TMI 46 - HIGH COURT BOMBAY ] and hence issue became academic.
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2015 (10) TMI 553
Clandestine removal of goods - Penalty u/s 11AC - Supreme Court after hearing the parties dismissed the appeal filed by the assessee but by extending the time period to make the pre deposit. The appeal was filed against the decision of High Court [2015 (1) TMI 714 - CHHATTISGARH HIGH COURT]; wherein High Court held that Tribunal has allowed the application of Shri Goyal on the basis that nothing brought to its notice about the active involvement of Shri Goyal, which is not the case so far as Shri Dave was concerned. There is justification for passing different orders.
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2015 (10) TMI 552
Supply of stores for Consumption on board a vessel of the Indian Navy - Benefit of notification 64/95-CE - Supreme Court after hearing the parties dismissed the appeal filed by the assessee filed against the decision of Tribunal [2014 (2) TMI 324 - CESTAT MUMBAI]; wherein tribunal held that HPCL is not the supplier of the goods to the Indian Navy but IOCL. Therefore, HPCL cannot acquire the status of supplier of stores to the Indian Navy which is the requirement of the notification.
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2015 (10) TMI 551
Valuation - inclusion of freight where goods delivered at the customer’s premises at pre-agreed freight - transaction value under section 4 - freight charges were shown in the invoices and collected by the appellant from his customers - determination of place of removal - Supreme Court after hearing the parties did not find any reason to entertain the appeal ans hence dismissed the appeal filed by the assessee against the decision of Tribunal [2015 (9) TMI 461 - CESTAT MUMBAI]; wherein tribunal remanded back the matter since after factually verifying claim of the appellant, matter will have to be examined with reference to Sections 4 and 2(h) of the Central Excise Act.
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2015 (10) TMI 550
Recovery of demand from successor of Unit - Priority of dues - Liability under the provisions of Excise Act and State Financial Corporation Act - Whether liability arises in law (de-hors the stipulation in Sale Deed /Agreement of Sale) having regard to the legal provisions contained in the Excise Act and State Financial Corporation Act - Supreme Court after condoning the delay was convinced that the order of which review has been sought does not suffer from any error apparent warranting its reconsideration, hence dismissed the same. The appeal was filed by the Revenue against the decision of Supreme Court [2013 (8) TMI 540 - SUPREME COURT]; wherein Court held that The statutory dues were in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture - The expressions in the Sale Deed as well as in the Agreement for purchase of plant and machinery talks of statutory liabilities “arising out of the land” or statutory liabilities “arising out of the said properties” (i.e. the machinery) - it was only that statutory liability which arises out of the land and building or out of plant and machinery which is to be discharged by the purchaser - Excise dues were not the statutory liabilities which arised out of the land and building or the plant and machinery - Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property.
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