TMI Tax Updates - e-Newsletter
October 14, 2013

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. CONDONATION OF DELAY AN EXCEPTION NOT TO BE USED AS ANTICIPATED BENEFIT FOR GOVERNMENT/BUREAUCRATIC NEGLIGENCE

   By: DR.MARIAPPAN GOVINDARAJAN

2. Learning from case of Aryaman Spinners (P.) Ltd - Appeal before CIT(A) is better forum to seek relief than revision petition under section 264 before CIT

   By: DEVKUMAR KOTHARI

News

1. Auction for Sale (Re-Issue) of Government Stocks

2. Consumer Price Index Numbers on Base 2010=100 for Rural, Urban and Combined for the Month of September, 2013

3. Statement of Srikant Kumar Jena on Consumer Price Index

4. RBI releases 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks: June 2013'

5. RBI Reference Rate for US $ and Euro

6. Index Numbers of Wholesale Price in India (Base: 2004-05=100) Review for the month of September, 2013

7. Speech by the Union Finance Minister Shri P.Chidambaram at the Announcement of First Closure of IDFC’s Second Infrastructure Fund in Washington D.C.

8. Text of the Intervention made by the Union Finance Minister P. Chidambaram During Session on ‘Financing for Investment’ at G-20 Finance Ministers’ and Central Bank Governors’ Meeting in Washington D.C.

9. Text of the Oral Intervention made by the Union Finance Minister Shri P.Chidambaram at the Development Committee meeting in Washington D.C.

10. Text of the Intervention made by the Union Finance Minister Shri P.Chidambaram at the IMFC Plenary Meeting in Washington D.C.

Notifications

VAT - Delhi

1. F. 7(400)/Policy/VAT/2011/PF/864-877 - dated 1-10-2013 - DVAT

Dena Bank and Bank of Maharashtra are denotified for collections of VAT/CST dues from the dealers with effect from 15th October, 2013.

Highlights / Catch Notes

Income Tax

• Statements u/s 133A of Income Tax Act Lack Legal Weight Without Oath, Not Considered Valid Evidence.

  Case-Laws - AT : Additions on the basis of statement made u/s 133A - whatever statement is recorded u/s 133A, it is not given any evidentiary value obviously for the reason that the officer is not authorized to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law - AT
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• Income Tax Penalty u/s 158BFA(2): Assessment and Penalty Proceedings Are Distinct; Concrete Proof Needed for Penalty.

  Case-Laws - AT : Penalty under section 158BFA(2) - Assessment proceedings and penalty proceedings are different and independent to each other. The addition or part of the addition could be sustained on the preponderance of probabilities, but in penalty proceeding, some proof is required, to impose penalty on the assessee - AT
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• Court Rules Advances Are Regular Business, Not Deemed Dividends, u/s 2(22)(e) of Income Tax Act.

  Case-Laws - AT : Deemed dividend u/s 2(22)(e) - advances received against the bills raised for the services rendered - no materials to establish that the amount received was not in regular course of trade but in the nature of loan and advance as envisaged u/s 2(22)(e) of the Act - AT
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• Refilling Argon from Cryogenic Tanks Not Manufacturing u/s 80IA; Affects Tax Deduction Eligibility.

  Case-Laws - AT : Deduction u/s 80IA - manufacturing activity or not - process of refilling of argon in cylinders from cryogenic tank is not amount of manufacture - AT
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• AO Must Reassess Penalty Under Sec 271(1)(c) After Tribunal Order as Per Income Tax Act Sec 275(1A).

  Case-Laws - AT : Application of section 275(1A) of income tax for deleting penalty imposed u/s 271(1)(c) - AO so consider the issue of imposition of penalty u/s 271(1)(c) after giving effect to the order of the Tribunal - AT
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• No Penalty for Property Dealer: Section 271(1)(c) Criteria Differ from Quantum Addition in Income Tax Case.

  Case-Laws - AT : Penalty u/s 271(1)(c) - property dealer - addition on account of cash retained - The facts of the case may justify the addition in the quantum case, but the parameters to sustain the penalty imposed under section 271(1)(c) are different, and the assessee is entitled to benefit of doubt - no penalty - AT
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• Appellate Authority's Direction u/s 150(1) Found Unlawful in Assessment Case.

  Case-Laws - AT : Applicability of section 150 - Provision for cases where assessment is in pursuance of an order on appeal, etc. – the direction given by the first Appellate Authority under section 150(1) is not in accordance with law - AT
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• Co-operative bank's interest from SLR and Non-SLR investments is tax-exempt u/s 80P(2)(a)(i) of Income Tax Act.

  Case-Laws - AT : Exemption u/s 80P - co-operative bank - interest income earned on investment out of SLR/Non SLR surplus funds - the interest earned on such deposits is directly attributable to the business of banking and, therefore, exempt under section 80P(2)(a)(i) the Act - AT
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• Assessing Officer Enforces 25% Wage Claim Disallowance Due to Lack of Payment Proof for Both Review Years.

  Case-Laws - AT : Disallowance of part of wages claim – proof of payment of wages - Uniform disallowance of 25% of the amount disallowed by the AO in both the years would meet the ends of justice - AT
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• Loans and advances, including ICDs, not deemed dividends u/s 2(22)(e) of Income Tax Act.

  Case-Laws - AT : Deemed dividend u/s 2(22)(e) – loans and advances - inter corporate deposits - ICDs and the advances to the assessee cannot be treated as deemed dividend at the hands of the assessee - AT
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• Section 14A Exclusion: Not Applicable for Clause (f) in Section 115JB Book Profit Calculation for MAT.

  Case-Laws - AT : Book adjustments u/s 115JB - MAT - provisions of section 14A could not be imported into clause (f) to Explanation 1 to the section 115JB while computing book profit. - AT
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Customs

• Conversion Request Denied: Appellant Failed to Declare Advance Licence Number for DEEC Export Obligations.

  Case-Laws - AT : Export against advance licence - conversion of free shipping bills into DEEC bills - appellant neither in the shipping bill nor in ARE-2 have declared the Advance Licence No. or the fact that exports were in fulfillment of obligations caused by the DEEC Licence - conversion not allowed - AT
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• Tribunal Lacks Jurisdiction to Grant Interest on Interest for Delayed Refunds Under Customs Act, 1962.

  Case-Laws - AT : Claim of Interest on interest on delayed refund - Inasmuch as the Tribunal works within the provisions of Customs Act, 1962, we have no jurisdiction to order interest on interest - AT
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Corporate Law

• High Court Admits Winding Up Petition Despite Attempt to Mislead Company Judge in Debt Recovery Case.

  Case-Laws - HC : Winding up petition - recovery of debt - An effort was made to mislead the Company Judge - The petition for winding up shall stand admitted - HC
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Service Tax

• Appellant's Liability for Service Tax on Foreign Online Database Services u/s 66A Reviewed; Stay Granted.

  Case-Laws - AT : Whether the appellant is liable to service tax as the recipient of online information and data base access or retrieval service from a foreign based CRS service provider u/s 66A - stay granted - AT
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• Service Tax Demand u/s 73A(2) Not Retroactive; Claims Before April 18, 2006, Unenforceable.

  Case-Laws - AT : Demand of service tax collected but not deposited - Retrospective Effect of Section 73A(2) OR Not - demand under this Section prior to 18.4.2006 would not survive - AT
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• No Penalty Imposed if Assessee Shows Reasonable Cause u/ss 76, 78, and 80 of the Act.

  Case-Laws - AT : Penalty - Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no power to impose penalty in view of Section 80 of the Act - AT
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• Penalty Waived Under Finance Act Section 80 for Revenue-Neutral Service Tax on GTA Services with Cenvat Credit Use.

  Case-Laws - AT : Waiver of penalty - Relief u/s 80 of Finance Act – Payment of service tax on GTA service in cash and taking its cenvat credit by an assessee, eligible to take cenvat credit, was a Revenue neutral exercise - penalty waived - AT
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• High Court to Decide on Challenge Against Show Cause Notice for Residential Complex Construction Tax Service.

  Case-Laws - HC : Challenge to the show cause notice - Taxable service of construction of a residential complex - Objection - petition dismissed - matter to be decided on merit - HC
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Central Excise

• Court Rules Dealer Advertising Expenses Excluded from Product Valuation Due to Lack of Enforceable Agreement.

  Case-Laws - AT : Valuation - inclusion of Expenses incurred by the dealers -There is nothing in their agreements from which it can be concluded that appellants had enforceable legal right against the dealers to insist on incurring of certain amount of expenses on advertisement and publicity of the appellants products - demand set aside - AT
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• Appellant's single appeal deemed valid as original authority sent one order instead of four separate ones.

  Case-Laws - AT : The original authority had dispatched only one order in original and not the four orders in original to the appellants - one appeal filed by the appellant before Commissioner (Appeals) is maintainable and there was no need for the appellant to file four separate appeals against one order in original - AT
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• Fixing Labels on Bathroom Fittings Counts as Manufacturing for Excise; Affects SSI Exemption Eligibility; Goods Released with Fine.

  Case-Laws - AT : Activity Manufacture OR Not – fixing of brand names / labels on bathroom fittings / accessories - deemed manufacture - SSI Exemption - Redemption Fine - the redemption fine imposed for release of the goods is sufficient - stay granted - AT
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• Confiscation and penalties for non-accounting of inputs ruled unsustainable under central excise laws. Key legal interpretation.

  Case-Laws - AT : Confiscation of the Inputs for non accounting – the confiscation of inputs for non-accounted and imposition of penalty is not sustainable. - AT
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• No Penalty for Duty Payment Default u/r 8 (3A) of Central Excise Rules, 2002; Stay Granted.

  Case-Laws - AT : Waiver of Penalty under Rule 25 of the CE Rules - For default of payment of duty under Rule 8 (3A) of Central Excise Rules, 2002 - no penalty can be imposed under Rule 25 - stay granted - AT
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VAT

• Terry and cotton terry knitted towels are tax-exempt under the Third Schedule of TNGST Act, stitching irrelevant.

  Case-Laws - HC : Exemption from sales tax as terry towels/cotton terry knitted towels fall under the Third Schedule to the TNGST Act - titching on edges would not make any difference to deny exemption under the said Entry - HC
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• Court Rules Chemicals in Bleaching and Dyeing Are Taxable as Transfer of Property in Goods for VAT and Sales Tax.

  Case-Laws - HC : Taxability of works contract of Bleaching and dying - The fact that the chemicals used for bleaching is washed away in the process, by itself, would not be a justifiable ground to accept the case of the assessee that there was no transfer of property of any goods. - HC
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Case Laws:

• Income Tax

• 2013 (10) TMI 478
  Additions on the basis of statement made u/s 133A - Addition made on the basis of surrender made at the time of Survey u/s 133A of the Income Tax Act, which was later retracted by the Assessee – Held that:- Retraction has been made by the assessee within his own right and on the basis of facts on record and in the absence of any incriminating document found and therefore, even if the admission has been made on the date of survey that cannot be conclusive and the assessee has the right to prove that such admission made was incorrect – Reliance has been placed upon the judgment of Hon’ble Supreme Court of India in the case of Pullangode Rubber Produce Co. Ltd. vs. State of Kerala And Another reported in [1971 (9) TMI 64 - SUPREME Court], wherein it was held that admission is an extremely important price of evidence but it cannot be said that it is conclusive and it is open to the assessee who made the admission to show that it is incorrect and the assessee should be given a proper opportunity to show that the books of account do not disclose the correct state of facts. Also in view of the decision of Hon'ble Kerala High Court in the case of Paul Mathews And Sons vs. C.I.T. reported in [2003 (2) TMI 25 - KERALA High Court] , where it has been held that whatever statement is recorded under section 133A of the Act, it is not given any evidentiary value obviously for the reason that the officer is not authorized to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law - Also no books of account has been rejected by the A.O. and on one hand, the AO is accepting investment made in the building and on the other hand in the absence of any incriminating document is alleging that the assessee has made undisclosed investment. The AO cannot blow hot and cold in the same breath in this regard – Decided in favor of Assessee.

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• 2013 (10) TMI 477
  Penalty under section 158BFA(2) of the Act - Total undisclosed income under section 158BD was determined at Rs.36,47,355/- by the AO and after allowing appeal-effect by the ITAT, the same was reduced to Rs.15,07,455/- Order of penalty on deceased person – Applicability of section 292B of the Act – Held that:- The assessee has only source of agricultural income, and no other source of income could be established by the department - Since the assessee has only agriculture income, unproved part of the deposits could be arguably claimed to be out of agriculture income only – Facts of the case may justify the part of the addition to the extent of Rs.15,07,455/-, sustained by the Tribunal, but, are not sufficient to justify the imposition of penalty under section 158BFA(2) of the Act Assessment proceedings and penalty proceedings are different and independent to each other. The addition or part of the addition could be sustained on the preponderance of probabilities, but in penalty proceeding, some proof is required, to impose penalty on the assessee - Savings of the assessee from agriculture income have been determined by the Tribunal by fixing certain percentage ranging from 40% to 80% for different years involved in the block period, and that is by way of estimation only. Reliance has been placed upon the judgment of Hon’ble Apex court in the case of Hindustan Steel Ltd. Vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court], wherein it has been held that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. In the present case, only source of income being agriculture and that the credit for past savings from agriculture income, prior to the block period, having not been allowed in the quantum proceedings, and figure of addition having been determined on estimate basis, applying the average rate of 40%, 60% and 80% for working out the figures of savings from agricultural income in different years of block period, and the part of the addition having been sustained by the Tribunal on estimation only, penalty imposed under section 158BFA(2) is liable to be cancelled on merits and is accordingly cancelled. Order of penalty on deceased person – Applicability of section 292B of the Act – Held that:- In the instant case, the legal heir was never impleaded or brought on record - Therefore, it cannot be said that non-mentioning of the name of the legal heir and writing of name of the deceased at the top of the penalty order is merely a clerical error - In this case, the facts of the case leaves to only conclusion that the order imposing penalty was passed on the deceased, and therefore, is null and void, and the penalty on the dead person is liable to be cancelled on this ground alone – Decided in favor of Assessee.

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• 2013 (10) TMI 476
  Deemed dividend u/s 2(22)(e) - nature of advances received against the bills raised for the services rendered - accumulated profit - Held that:- Amounts received by the assessee from M/s Ushodaya Enterprises P. Ltd. cannot be treated as deemed dividend under section 2(22)(e) of the Act - CIT(A) has elaborately and exhaustively dealt with the issue by examining all the relevant facts and materials and thereafter has come to the conclusion that the amounts received by the assessee from M/s Ushodaya Enterprises is in regular course of trade, hence, outside the purview of section 2(22)(e) of the Act - Assessing Officer neither in course of the assessment proceeding nor in his remand report has brought any materials to establish the fact that the amount received was not in regular course of trade but in the nature of loan and advance as envisaged u/s 2(22)(e) of the Act - No reason to interfere with the order passed by the CIT(A) in all the assessment years under consideration and uphold the same – Decided against the Revenue.

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• 2013 (10) TMI 475
  Applicability of Rule 8D for computation of disallowance - Disallowance of expenses relating to exempt income u/s 14A of the Income Tax Act – Held that:- Reliance has been placed upon the judgment in the case of Godrej Boyce Mfg Co Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT], wherein it has been held that Rule 8D is applicable only from assessment year 2008-09 – In the present case, assessment years involved in the present appeal are assessment years 2006-07 and 2007-08. Therefore, application of Rule 8D by the authorities below in the assessment years under reference is not correct - Restored this issue back to the file of AO in both the years for passing fresh orders after necessary examination in the light of Judgment of Hon'ble High Court of Bombay in case of Godrej Boyce Mfg Co Ltd. (Supra) – Decided in favor of Assessee.

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• 2013 (10) TMI 474
  Addition u/s 40(a)(ia) of the Income Tax - Addition of Rs. 50,48,001/- under Section 40(a)(ia) of the Act on account of non deposit of Tax Deducted at Source ('TDS') within the time prescribed under Section 200(1) of the Act – Held that:- In view of the retrospective amendment made in Section 40(a)(ia) of the Act providing for deduction in case the amount of TDS is deposited on or before the due date specified in subsection (1) of Section 139 of the Act, addition made is deleted – Decided against the Revenue.

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• 2013 (10) TMI 473
  Deletion of addition made in respect of claim u/s 80HHC pertaining to DEPB – Held that:- Reliance has been placed upon the judgment of the Hon’be Supreme Court of India in the case of Topman Exports [2012 (2) TMI 100 - SUPREME COURT OF INDIA], wherein it was held that entire sale proceeds of Duty Entitlement Pass Book (DEPB) and Duty Free Replenishment Certificate (DFRC) are not to be treated as profit for working out deduction under section 80HHC of the Income Tax Act. It is also held that when DEPB is sold by exporter, his profit on transfer of DEPB would be sale value of DEPB less face value of DEPB (cost of acquisition of DEPB). Further held that face value of DEPB being cash assistance by Government under Section 28(iii-b) of Income Tax Act is not profit, and hence, it cannot be included as “profit” under section 28(iii-d) of the Income Tax Act – Thus, decided against the Revenue.

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• 2013 (10) TMI 472
  Whether ITAT was right in law in directing the assessing officer to examine the matter afresh after taking into account the book of accounts before the assessing officer despite sufficient opportunities and also that ld. CIT(A) – Held that:- Stated by Learned counsel for the respondent-assessee that the Tribunal vide the order impugned herein had remanded the case to the assessing officer to examine the matter afresh after taking into account the books of account of the assessee for the concerned assessment years which will be produced by the assessee – In view of the said statement, the present appeals are disposed of as having been rendered infructuous.

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• 2013 (10) TMI 471
  Applicability of section 263 - Revision u/s 263 - power of CIT – Twin conditions of section 263 fulfilled or not – Held that:- The scrip-wise, date-wise detail were not before the A.O., in the absence of which no meaningful analysis could in fact have been made or carried out by him - It is trite law that an absence or even lack of proper enquiry, so that there has not been proper application of mind in the matter, would lead to a valid assumption of jurisdiction u/s. 263 - No infirmity in the order by the ld. CIT – Decided against the Assessee.

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• 2013 (10) TMI 470
  Classification of head of Income on sale of shares – Chargeable under head Capital gain or Business income – Held that:- There are conflicting decisions of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation - Assessee has shown shares as investment right from the date of purchase and that was shown as such in the balance sheet of the assessee which was filed before the AO - Shares have to be treated as an investment and therefore any profit earned on the sale thereof is to be treated as capital gain – Decided in favor of Assessee.

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• 2013 (10) TMI 469
  Adjustment on account of selection of comparables – Applicability of proviso to Section 92C(2) of the Income-tax Act, 1961 – Held that:- Hon'ble Jurisdictional High Court has also approved the finding of the ITAT that Infosys Technologies Ltd. as well as Satyam Computer Services Ltd. cannot be taken as comparables to the assessee company in assessee’s own case - The CIT(A) has allowed the relief only by excluding these two comparables from the list of comparables taken by the TPO – No infirmity in the order of Commissioner(A) – Decided against the Revenue.

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• 2013 (10) TMI 468
  Deduction u/s 80IA - manufacturing activity or not - process of refilling of argon in cylinders from cryogenic tank – Held that:- Activity of processing and filling argon gas in cylinders does not tantamount to be an activity manufacturing u/s 2(29BA) and therefore, the assessee is not eligible to claim deduction u/s 80 IA of the Act – Reliance has been placed upon the judgment of Apex court in the case of Dy. Commissioner of Agriculture Income Tax & Sales Tax v. Palampadam Plantations Ltd.[ 1969 (2) TMI 127 - SUPREME COURT OF INDIA]. Tribunal had consciously considered all the issues before it and relied upon various decisions of the Hon'ble Apex Court and the jurisdictional High Court and further dissected the activities involved in the processing/manufacturing/ filling of argon gas in cylinders and with the relevant materials on record came to a thoughtful conclusion that the applicant does not deserve the benefit u/s. section 80 IA of Act since it was not carrying on any activity of manufacturing as envisaged under the Act – Decided against the Assessee.

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• 2013 (10) TMI 467
  Application of section 275(1A) of income tax for deleting penalty imposed u/s 271(1)(c) of the Income Tax Act – concealment of income - additions made on account of transfer pricing adjustments was deleted by the ITAT - Held that:- as per section 275(1A) where the Assessing Officer has passed penalty order before the disposal of appeal against the assessment order by the appellate authority i.e. CIT(A) or ITAT, then, the order imposing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the CIT(A) or the Appellate Tribunal or the High Court or the Supreme Court or the order of revision u/s 263 or u/s 264. ITAT having passed the order in appeal deleting all the additions excepting one, it is the requirement u/s 275(1A) that the Assessing Officer must pass an order giving effect to the order of the Tribunal and only thereafter consider the issue of imposition of penalty u/s 271(1)(c) - Set aside the order passed by the CIT(A) and restore the matter back to the file of the Assessing Officer, who shall consider the issue of imposition of penalty u/s 271(1)(c) of the Act after giving effect to the order of the Tribunal and after duly giving opportunity of being heard to the assessee in the matter.

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• 2013 (10) TMI 466
  Addition on account of bogus expenses - The nature of the business of the assessee is that of government contractor, engaged in road construction, bridge etc. and also a quarry owned by the assessee – Held that:- Assessee has inflated its expenses to a great extent under various heads of the expenses, and has claimed at Rs.50,84,982/- as diesel expenses, and has claimed that it was purchased from M/s.Millan Auto Care. The AO has issued noticed under section 133(6) at the address given by the assessee, but the notice could not be served as the party is not available at the address given by the assessee. The assessee was specifically requested to produce party or furnish its new address on which the notice could be served, but there was no compliance - The AO has recorded that at the address given by the assessee, there is no concern in the name and style of M/s.Millan Auto Care - Disallowed entire diesel expenses claimed to have been incurred by the assessee. Similar defects were found in other claims of expenses of the assessee under various heads of expenses - In the immediately preceding assessment year, the assessee has declared a net profit of 8.8% - Assessee has claimed expenses on the higher side, under various heads of the expenses and not supported by evidences/vouchers, during the year, ends of justice shall be met, if flat rate of 6% net profit is applied to the gross contract receipt of Rs.3.85 crores, without allowing any further deduction on account of depreciation etc. – Decided against the Assessee.

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• 2013 (10) TMI 465
  Penalty u/s 271(1)(c) - property dealer - addition on account of cash retained - assessee is a school teacher and also carrying on Dalali in land transactions on a small scale – Held that:- considering the entire factual matrix of the case, it is quite possible that the assessee for his service rendered in the matter of sale of land on behalf of the owners of the plots of land, may have retained or have intention to retain a part of the cash components received by him for sale of plot of land, as the commission for the services rendered after spending towards various heads of expenses on behalf of the land owners, but there is no evidence or material on record to prove conclusively that the assessee has in fact retained certain part of the cash components as his income. The facts of the case may justify the addition in the quantum case, but the parameters to sustain the penalty imposed under section 271(1)(c) of the Act are different, and the assessee is entitled to benefit of doubt in the absence of any concrete evidence to the contrary, and accordingly, facts of the case do not justify the imposition of penalty under section 271(1)(c) of the Act on the assessee – Decided against the Revenue.

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• 2013 (10) TMI 464
  Applicability of section 150 - Provision for cases where assessment is in pursuance of an order on appeal, etc. – Held that:- Reliance has been placed upon the judgment in the case of Pennar Electronics P. Ltd. [2007 (12) TMI 248 - ITAT HYDERABAD-B] - Resort to sub-section (1) of section 150 of the Act can be taken only in cases where it becomes necessary to make assessment or reassessment or recomputation and such direction must relate to the assessee in question and not any direction or assessment made in appeal, reference or revision or any other assessee or any proceedings in which the assessee in question is not a party – In the facts and circumstances of the instant case, the direction given by the first Appellate Authority under section 150(1) is not in accordance with law – Decided in favor of Assessee.

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• 2013 (10) TMI 463
  Exemption u/s 80P - co-operative bank - interest income earned on investment out of SLR/Non SLR surplus funds - section 80P(2)(d) versus section 80P(2)(a). – Held that:- Reliance has been placed upon the judgment in the case of CIT vs. Andhra Pradesh State Co- operative Bank Ltd [2011 (6) TMI 215 - ANDHRA PRADESH HIGH COURT], wherein it has been held that All the income from banking business referred to under section 80P(2)(a)(i) of the Act would qualify for deduction under the Act - The income earned by the co-operative bank either by deposit of the prescribed percentage of its reserves or by deposit of their surplus funds is exempted. The income from either category of the deposits is certainly attributable to the business of banking. As long as the deposit of the surplus funds in other banks for the purpose of earning interest is not unauthorized or not barred by any of the applicable statutes, the income is certainly attributable to the business of banking. There is no concept of voluntary or non-statutory reserves. When the reserve fund of the society exceeds 25 per cent. of its working capital, the excess could be utilized in the business of the society with the sanction of the Registrar of Co- operative Societies If a co-operative bank derives income by lending money to its members, it being business of banking, is eligible for deduction. The statutory liquidity ratio, cash reserve or reserve fund required to be maintained by a scheduled bank or a co- operative bank under the provisions of the Reserve Bank of India Act, 1934, or the Banking Regulation Act, 1949, are all activities which are part of the business of banking. If section 80P(2)(a) of the Act is given a restrictive meaning as including the interest earned only on the statutory deposits made by a co-operative society, it would amount to supplying a casus omissus and has to be avoided by the court - Investment of funds by banks including the non-reserves is part of banking activities since no bank: would like its reserve funds to remain idle and not earn any interest. Therefore, the interest earned on such deposits is directly attributable to the business of banking and, therefore, exempt under section 80P(2)(a)(i) the Act – Decided against the Revenue.

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• 2013 (10) TMI 462
  Addition by A.O. on the plea of bogus transaction of the assessee – Held that:- There is no material on record to say that the purchases made by the assessee from the said concern were bogus except the general statement recorded by the Department in the case of Shri Rakesh Kumar Gupta, which was later on retracted. In absence of any material brought on record against the submissions made by Shri Rakesh Kumar Gupta in his letter dated 20/12/2009 filed before the AO of the assessee the addition, made in the case of the assessee will be based on presumption only and it cannot be sustained in the eyes of law – Decided in favor of Assessee.

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• 2013 (10) TMI 461
  Disallowance of part of wages claim – proof of payment of wages - Held that:- Ld A.R claimed that the wages are paid on the basis of quantity of cloth manufactured by the weavers, yet the fact remains that the assessee did not furnish any quantity details to substantiate the amount of wages claimed by him – No fault with the tax authorities in entertaining the presumption that there may be a possibility of inflation or bogus claim. It is a well settled proposition that the responsibility to prove the reasonableness lies upon the assessee and in this case, there is a failure on the part of the assessee - AO has compared the ratio of wages claim to the value of yarn consumed in order to determine the reasonableness of the claim. However, it is not be a scientific method to ascertain the reasonableness. While the wages are normally fixed on the basis of inflation index, the rate of yarn would depend upon market forces, quality and variety of yarn etc - At the same time, the assessee has also failed to substantiate the wages claim by furnishing the quantity details - There is justification in disallowing a part of wages claim, so that such disallowance shall take care of inflation or infirmities - Uniform disallowance of 25% of the amount disallowed by the AO in both the years would meet the ends of justice, in all the Assessment years under consideration. - Decided against the assessee.

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• 2013 (10) TMI 460
  Deemed dividend u/s 2(22)(e) of the Income Tax Act – loans and advances - inter corporate deposits – CIT observed that ICDs received by the assessee cannot be considered along with loans and advances for the purpose of application of the provisions of section 2(22)(e) of the Act. - Held that:- Reliance has been placed upon the judgment in the case of Seamist Properties Pvt. Ltd. vs. ITO [2004 (8) TMI 323 - ITAT BOMBAY-G], wherein it has been held that legislature is clarified in circular issued by the CBIT as at the time of amendment of clause (e) of sub section (22) of sec. 2 is further fortified by the fact that for deduction of tax at source. Sec. 194 provide that such deduction of tax has to be made in the case of the payments of the nature mentioned in clauses (a), (b), (c), (d) and (e) of sub section (22) of Section 2 only in a case where such payments were made to a shareholder - The very fact that the provision for deduction of tax at source and adjustment of tax is only in respect of the payments to the' shareholder would clearly indicate that even after the amendment, the effect of clause (e) of sub section (22) of Sec. 2 would apply only when the payment is made to shareholder - Wherever, the tax is to be deducted at source from a dividend or deemed dividend and the consequential effect of giving effect to such deduction of tax at source, etc., reference was made only to the payments to the shareholder. This would indicate clearly that clause (e) would apply only in case of payments to the shareholder and not to others. In the present case, assessee is not a shareholder of the lender company - Hence, ICDs and the advances to the assessee cannot be treated as deemed dividend at the hands of the assessee – Decided against the Revenue.

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• 2013 (10) TMI 459
  Disallowance of various expenditure - expenses have been mainly disallowed on the ground that these were not commensurate with the income earned - Held that:- This approach is however not legally tenable. Expenses incurred for the purpose of business have to be allowed even if there is no income earned or there is loss in the business. - Decided in favor of assessee. Claim of interest expenses related to earlier years - Held that:- The amount written off of Rs. 5,06,789/- was on account of interest payable to IL FS, the interest had been paid by the assessee in the earlier years but was not claimed as deduction due to dispute with IL FS. CIT(A) has given a clear finding that the dispute has been settled in assessment year 2008-09 and, therefore, the claim was allowable in this year. - Decided in favor of assessee. Book adjustments u/s 115JB - MAT - Whether the statutory disallowance made as per Rule 8D of section 14A in relation to exempt income can be added while computing the book profit - Adjustment to be made to the book profit in terms of Explanation 1(f) of section 115JB Held that:- Relying upon the judgment in the case of Goetze (India) Ltd. v. Commissioner of Income-tax [2009 (5) TMI 615 - ITAT DELHI], it has been held that provisions of section 14A could not be imported into clause (f) to Explanation 1 to the section 115JB while computing book profit. It was also held that only the expenditure incurred in relation to exempt income and debited to P L account can be added while computing the book profit Decided against the Revenue.

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• Customs

• 2013 (10) TMI 458
  Extension of time period - provisional levy of anti dumping duty - Whether the period of six months provided by the Tribunal in its order dated 06.07.2012 while remanding the matter is required to be extended or not - Held that:- it is well accepted principle that where a period is fixed by the Court for doing any act, the Court may in its direction from time to time enlarge such period even though the period originally fixed or granted may expire. If a Court can grant time to do a thing, in the absence of specific provision to the contrary it can also enlarge the same period and there would be inherent powers to extend the time initially fixed by it - time period of six months fixed by the Tribunal was not in accordance with the powers conferred by any statutory act but the same was fixed by the Tribunal in exercise of its inherent jurisdiction and keeping in view the interest of both the sides. Admittedly, when the Tribunal is having the power and jurisdiction to direct the lower authorities to complete the denovo adjudication within a particular period, it has the jurisdiction to extend the said period also on cause being shown by the concerned authorities - there are genuine reasons for not completing the investigations by the Designated Authority and inasmuch as the Designated Authority has already filed its final report and inasmuch as based upon the said report, a notification No. 15/13-Cus (ADD) dated 03.07.2013 already stands issued by the Government of India, we deem it fit to extend the period already granted by the Tribunal by the end of 05.08. 2013 - Decided against the assessee.

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• 2013 (10) TMI 457
  Export against advance licence - conversion of free shipping bills into DEEC bills - What was the documentary evidence available at the time of export – Held that:- On going through the ARE-2 document it was quite clear that nowhere there was an indication that the export was in fulfillment of obligations under an Advance Licence - As already mentioned earlier the shipping bill was also a free-shipping bill and there was no examination in the port since the examination was done by the Range Officer and the seal was affixed by the Central Excise officer - Therefore the contemporaneous record we have was only a free shipping bill and an ARE-2 wherein no declaration regarding advance licence was available and the examination was done by the inspector who did not draw the sample also. The examination was conducted by the inspector would show that the department treated the consignment as one of export without claiming any incentive - He had also observed that as per the existing instruction, the consignment should have been examined only by a Superintendent and the very fact that the examination was conducted by the inspector would show that the department had treated it as a free export without claiming any benefits and under these circumstances, the conversion cannot be allowed - On going through the records I find that during the relevant time instructions required that the Superintendent to conduct examination - Without valid reasons it may not be proper to reject the observation of the Commissioner that the examination by Superintendent was very relevant and necessary in this case. The appellants were engaged in the business of export of electronic goods including EDC terminals also known as Point-of-Sale terminals – Held that:- If the appellants were to mention all the relevant details, the fact that inspector only examined the consignment and therefore appellant cannot be denied the-benefit could have been a view possible - Unfortunately for the appellant neither in the shipping bill nor in ARE-2 have declared the Advance Licence No. or the fact that exports were in fulfillment of obligations caused by the DEEC Licence - Under these circumstances the examination also becomes a relevant factor - Further the drawal sample was also a relevant factor. It may be relevant to take note of the fact that in the earlier instructions the conversion of free shipping bills to a shipping bill/DEEC/DEPB cum drawback was totally not allowable and in 2010, the Board liberalized the whole system of conversion - At the time of liberalizing, the Board took the view that such application 'should be made within 3 months - As already mentioned earlier, I would not like to go into this aspect also since in my opinion it was not required to be considered. Moreover as submitted by the learned counsel in the show-cause notice this was not one of the grounds taken and if the claim were to be rejected on that ground it would be going beyond the show-cause notice - On this ground the issue becomes irrelevant and cannot be considered - the request for conversion cannot be considered and the order rejecting the request was upheld.

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• 2013 (10) TMI 456
  Waiver of pre-deposit of penalty - Importation of Monosodium Glutamate - Held that:- applicant deposited entire amount of duty and the Bank guarantee and the bond are still alive. Therefore, the predeposit of penalty is waived and its recovery stayed till the disposal of the appeal - Decided against assessee.

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• 2013 (10) TMI 455
  Penalty u/s 112(a) - Import of Stainless Steel Coils - revenue felt that goods were secondary quality. - Held that:- The stand of the respondents for early closure of the matter was appreciated by the Commissioner and he has shown leniency while imposing redemption of fine and penalty, taking into account other facts like demurrage and detention charges which are also relevant for determination of redemption fine. Further we note that the respondent has already suffered by paying higher rate of duty on the value of prime quality steels whereas if goods were actually of prime quality the incidence where lower or if the goods were seconds then value would have been lower which also would have resulted in payment of lower amount of customs duty. So it is case of double whammy - Decided against Revenue.

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• 2013 (10) TMI 454
  Interest on deposit - Whether the interest is required to be paid to the importer from the date of deposit made by them during the period of investigation or from the date of the Tribunal’s order when the relief was granted to the importer for the first time - Held that:- interest would be payable after the expiry of period of three months from the date of filing refund application as consequent of order of appellate authority in favour of the assessee. - Interest not allowed from the date of deposit. - Decided partly in favor of revenue. Equality between the Government and Citizen - rate of interest on refund @6% and on Demand @12% - Held that:- such an issue cannot be raised before the Tribunal who is working within the four corners of the Act - Decided against the assessee. Claim of Interest on interest - in Shri Jagdamba Polymers Ltd. vs. Union of India [2013 (6) TMI 88 - GUJARAT HIGH COURT], HC directed interest on delayed payment - appellant claimed the similar benefit in its case - Held that:- Inasmuch as the Tribunal works within the provisions of Customs Act, 1962, we have no jurisdiction to order interest on interest - Decided against the assessee.

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• 2013 (10) TMI 453
  Waiver of pre-deposit - Penalty on CHA - Held that:- penalty cannot be imposed both on partnership firm and the partner. The details of involvement of the partnership firm as CHA, can be examined at the time of disposal of appeal. At this stage, the offer made by the ld. Advocate for the applicants seems to be reasonable for hearing of the appeal. Accordingly, the applicant, M/s Gee Pee International, is directed to deposit 20,000/- (Rupees twenty thousand only) - stay granted partly. Decision in the case of COMMISSIONER OF CUSTOMS (E. P.) Versus JUPITER EXPORTS [2007 (6) TMI 2 - HIGH COURT, BOMBAY] followed.

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• Corporate Laws

• 2013 (10) TMI 452
  Winding up petition - recovery of debt - it was contended that respondent failed to Create a mortgage of the residential flat by deposit of title deeds - Convert the bonds into equity shares despite the exercise of option by the Appellant. Consequently, in terms of the letter of restructuring, more particularly Clause 11, the entire debt due under the facility became payable and was recalled by the Appellant. - Single Judge bench rejected winding up application - Held that:- once the Respondent committed a default in complying with the terms and conditions of the letter of sanction, the Appellant was justified in recalling the amount due under the facility. The amount became due and payable on default. There is clearly a debt due and payable which fulfils the mandatory institution of a proceeding for winding up. An effort was made to mislead the Company Judge by filing before the learned Single Judge in Annexure 6, a typed statement that would seem to suggest that collateral security to secure the amount of Rs.3.50 crores was created in respect of three residential properties. As a matter of fact, it is not disputed at the hearing that the title deeds were not deposited with the Appellant. An equitable mortgage cannot be created without the deposit of title deeds and merely on a typed statement. The petition for winding up shall stand admitted and there shall be consequential orders in usual terms for the issuance of an advertisement and publication.

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• 2013 (10) TMI 451
  Sanction of the Scheme of Arrangement - merger - Held that:- In view of the approval accorded by the shareholders and creditors of the Petitioner-Transferee company, affidavit filed by the RD to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under Sections 391 and 394 of the Act. The Petitioner-Transferee company will comply with the statutory requirements in accordance with law. Certified copy of the order will be filed with the Registrar of Companies within 30 days from the date of receipt of the same. In terms of Sections 391 and 394 of the Act, and in terms of the Scheme, the whole of the undertaking, the properties, assets rights and powers of the Demerged Business undertakings of the Demerged company shall be transferred to and vest in the Petitioner-Transferee company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Demerged Business undertakings of the Demerged company shall be transferred to the Petitioner-Transferee company without any further act or deed - order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law; or permission/compliance with any other department which may be specifically required under any law.

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• Service Tax

• 2013 (10) TMI 485
  Transport of goods by aircraft - Waiver of Pre-Deposit – Notification No.29/2005 – Held that:- Revenue assesses the liability in respect of the taxable service specified under Section 65 (105)(zzn) of the Act - The petitioner contended that since under the Customs Act, goods transported outside the territory of India constitute export, baggage of the passengers must be considered as goods since they were carried beyond India to overseas destinations and would constitute export goods falling within the realm of the Notification No.29/2005-ST - Prima Facie case was in the favour of Assessee – Lesser amount of Pre-deposits was ordered to be made – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.

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• 2013 (10) TMI 484
  Waiver of pre deposit - Whether the appellant is liable to service tax as the recipient of online information and data base access or retrieval service from a foreign based CRS service provider u/s 66A - Held that:- since there are conflicting views of different Benches of this Tribunal in respect of same subject matter as applicable to the assessee before it, an arguable case was presented and the Tribunal should have exercised its discretion appropriately, by considering the application for waiver of pre-deposit. petitioner/assessee's contention that the petitioner should not have been called upon to deposit a huge amount as a condition precedent for the hearing of the appeal, in the circumstances, is well founded and this conclusion is fortified by the earlier decisions as well - Following decision of Binani Zinc Ltd. Vs. Asstt. Collector of Central Excise, Cochin [1994 (10) TMI 74 - HIGH COURT OF KERALA AT ERNAKULAM] - stay granted.

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• 2013 (10) TMI 483
  Determination of tax liability u/s 73 - demand of service tax collected but not deposited - Retrospective Effect of Section 73A(2) OR Not - Waiver of Pre-deposit – Held that:- The entire demand of the service tax liability had been worked out under Section 73 of the Finance Act, 1994 based upon the reconciliation of balance sheet figure shown as income under ST-3 returns - appellant was claiming deductions from such figures which had not been properly addressed to by the lower authorities in the order - If a deduction claimed by the appellant was in accordance with the law, it was possible that service tax liability could be less. Section 73A was brought into the statute from 18.04.2006 and hence, any demand under this Section prior to 18.4.2006 would not survive - Post 18.4.2006 the demand needs to be considered according to the provisions under section 73A (2) of the Finance Act, 1994 - Both these issues seem to be not addressed by the adjudicating authority despite being raised before him - the issue needed reconsideration by the adjudicating authority in depth - The appellant should be put to some conditions to hear and dispose the matter by the adjudicating authority – Appellant was directed to submit Pre-deposit of the Duty – upon such submission rest of the duty to be waived till the disposal – Partial Stay granted

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• 2013 (10) TMI 482
  Condonation of Delay – Held that:- According to the affidavit enclosed to the application of COD, the delay occurred because the Manager of the Cochin Unit had resigned and the Manager of Chennai Unit who was looking after the branch made arrangement for filing the appeal in September 2011 but resigned thereafter - the problem has arisen because of genuine administrative and unavoidable difficulties and therefore the COD has to be allowed - At the same time there was negligence on the part of the headquarters itself in not ascertaining whether the appeal has been filed or not - while the COD can be allowed, it cannot be free - the appellant is directed to deposit an amount. Penalty u/s 76 – Power of Commissioner u/s 84 of Finance Act - Held that:- Following CST, Bangalore Vs. Motor World [2012 (6) TMI 69 - KARNATAKA HIGH COURT], Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no power to impose penalty in view of Section 80 of the Act – stay granted.

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• 2013 (10) TMI 481
  Waiver of penalty - Relief u/s 80 of Finance Act – Service Tax on GTA Service – CENVAT credit - Held that:- Payment of service tax on GTA service in cash and taking its cenvat credit by an assessee, eligible to take cenvat credit, was a Revenue neutral exercise - the entire amount of duty along with interest had been paid by the appellant before issue of show cause notice under Section 73 (3) of the Finance Act, 1994, there was no need even to issue a show cause notice - This was a fit case where penalty under Section 80 of the Finance Act, 1994 was not required to be imposed - Accordingly, the appeal filed by the appellant for non-imposition of penalty under Section 76 of the Finance Act, 1994 was allowed – Decided in favour of Assessee.

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• 2013 (10) TMI 480
  Application for Restoration of Appeal – Held that:- Since the Applicant has deposited the directed amount within the stipulated period of 4(four) weeks we recall our earlier order and restore the Appeal to its original number. Miscellaneous Application allowed.

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• 2013 (10) TMI 479
  Failure to furnish periodical returns - Suppression of value of taxable service - Taxable service of construction of a residential complex - Objection to show cause notice not filed - Assessee tendered his manuscript plea, essentially stating that the contract being one on Government land, therefore, he may be excused from paying service tax - Ordered passed against assessee - Assessee instead of filing appeal filed wit petition - Held that:- ends of justice require that the department ought to have the opportunity to prune the materials, by giving the appellant before us an opportunity of being heard. Therefore, we recuse ourselves from finally answering the question as to whether the transaction will fall for coverage under the provisions of the aforenoted statute and leave it to be decided initially, by the competent authority at that level. - matter remanded back.

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• Central Excise

• 2013 (10) TMI 450
  Valuation - inclusion of Expenses incurred by the dealers - Whether the expenses on advertisement and publicity expenses incurred by the dealers, which were borne by them, are to be added to the assessable value of the goods or not – Held that:- Following C.C.E., Surat Vs. Surat Textile Mills Ltd. [2004 (4) TMI 81 - SUPREME COURT OF INDIA] - only when a manufacturer has enforceable legal right against his customers/dealers to insist on incurring of expenses on advertisement, the advertisement expense incurred by the dealers can be added to the assessable value - only when the contract between the manufacturer and dealer envisages incurring of certain expenses by the dealers on advertisement and failure to incur such expenses on advertisement gives a right to the manufacturer to get the advertisements done of his own and recover the expenses from the dealer, the advertisement expenses incurred by the dealer can be added to the assessable value. There is nothing in their agreements from which it can be concluded that appellants had enforceable legal right against the dealers to insist on incurring of certain amount of expenses on advertisement and publicity of the appellants products - Just a Clause in the agreements requiring the dealers to make efforts for promoting sales of the appellant's products cannot be treated as a clause imposing legal obligation on the dealers to incur certain level of expenses on advertisement – orders set aside – Decided in favour of Assessee.

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• 2013 (10) TMI 449
  Admissibility of credit on raw materials – Held that:- Following Sun Pharmaceutical Industries Limited vs. CCE, Vapi,[ 2012 (7) TMI 84 - CESTAT, AHMEDABAD ] - The original authority had dispatched only one order in original and not the four orders in original to the appellants - one appeal filed by the appellant before Commissioner (Appeals) is maintainable and there was no need for the appellant to file four separate appeals against one order in original - the view taken by Commissioner (Appeals) that separate appeals were required to be filed by the assessee is not correct - the issue has been decided in favour of the appellant - the Order-in-Appeal passed by Commissioner (Appeals) is set-aside to the extent it holds that the show cause notice dated 01.12.2011 for Rs. 13,30,173/- was not contested - Decided in favour of Assessee.

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• 2013 (10) TMI 448
  Jurisdiction of the Commissioner (Appeals) – Commissioner (Appeals) has set aside the attachment order issued by the Deputy Commissioner of Central Excise under section 11 of the Central Excise Act, 1944, in terms of the Settlement Commission's final order dated 26/07/2011. - Held that:- Following National Fertilizers Ltd. vs. CCE, Ludhiana [2007 (9) TMI 128 - CESTAT, NEW DELHI ] and CC, Mumbai vs. Dujodwala Industries [2003 (1) TMI 147 - CEGAT, MUMBAI ] - the Commissioner (Appeals) does not have jurisdiction in respect of orders passed by the competent authority under section 11 of the Central Excise Act, 1944 or under 142 of the Customs Act, 1962 - Recovery proceedings under Section 11 of the Central Excise Act, 1944 are not appealable before the Commissioner (Appeals) - the order passed by the Commissioner (Appeals) is without jurisdiction and hence bad in law – order set aside – Decided in favour of Revenue.

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• 2013 (10) TMI 447
  Activity Manufacture OR Not – fixing of brand names / labels on bathroom fittings / accessories - deemed manufacture - SSI Exemption - Redemption Fine – Waiver of Pre-deposit – Held that:- None of the goods seized are covered by Third Schedule to the Central Excise Act, 1944 and as such the appellants activity does not amount to manufacture, and that even if items which were accepted by the appellant as bath room accessories are treated as falling under Heading 73.24 and 74.18 the total value of the goods covered by Third Schedule to the Central Excise Act would be about Rs.1,30,000/- for which the penalty of Rs. 2,00,000/- is too high - the redemption fine imposed for release of the goods is sufficient and as such the requirement of pre-deposit of penalty is waived for hearing of the appeal and recovery thereof is stayed till the disposal of the appeal – the redemption fine imposed for release of the goods is sufficient and as such the requirement of pre-deposit of penalty is waived for hearing of the appeal - Stay granted.

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• 2013 (10) TMI 446
  Confiscation of the Inputs for non accounting – Held that:- Even if the same were not correctly accounted for in the appellants record, there is no provision for confiscation of such unaccounted inputs under Rule 25 and imposition of penalty on this count - the Tribunal in the case of Unimark Remedies Ltd. vs. CCE, Vapi [2005 (6) TMI 197 - CESTAT, MUMBAI ] - for non-accounted of inputs confiscation of inputs and imposition of penalty is not sustainable - the confiscation of inputs for non-accounted and imposition of penalty is not sustainable. Confiscation of the Finished goods – Held that:- There was no actual weighment, there may be some variation between the estimated weight and the recorded weight and, as such, in my view, the confiscation of finished goods and imposition of penalty on this count - neither the seized inputs nor the seized finished goods are liable for confiscation, there is no justification for penalty under Rule 26 of the Central Excise Rules, 2002 is also not sustainable. There was no excess of stock of inputs finished goods, that the weight of the finished goods as well as inputs has been determined by eye estimation and, as such, there was no weighment, that Tribunals in the case of Hans Metals Pvt. Ltd. vs. CCE, Kanpur [2006 (3) TMI 364 - CESTAT, NEW DELHI ] - confiscation of the alleged excess stock of finished goods is not sustainable, when the weight had been determined by eye estimation without actual weighment, that in any case major portion of the value of the confiscation goods is of inputs in respect of which there is no provision for confiscation - order set aside – Decided in favour of Assessee.

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• 2013 (10) TMI 445
  Taking of Higher Proportionate Credit - service tax paid on Advertisement Services pertaining to their unit at Kadi, Mehsana and also a unit of the same appellant situated in Jammu & Kashmir. – Waiver of Pre-deposit – Held that:- The 50% of the disputed credit has already been reversed vide Entry No. 4375 and the reversal made by the appellant should be considered as a sufficient deposit for the purpose of granting stay against the balance amount due – Stay granted.

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• 2013 (10) TMI 444
  Waiver of Penalty under Rule 25 of the CE Rules - Following CCE & Cus. Vs. Saurashtra Cement Limited [2010 (9) TMI 422 - GUJARAT HIGH COURT] - penalty for delay in payment of duty cannot be imposed under Rule 25 of the Central Excise Rules, 2002 – For default of payment of duty under Rule 8 (3A) of Central Excise Rules, 2002 and no penalty can be imposed under Rule 25 - the appellant has made out a prima facie case for the waiver of pre-deposit of amount of penalty till the disposal of appeal – stay granted.

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• 2013 (10) TMI 443
  Cenvat credit on Special Countervailing Duty – credit denied on the ground that inputs were never received in the factory premises - Waiver of Pre-deposit - Held that:- The entire amount of cenvat credit taken along with interest and 25% of the penalty imposed, have already been paid and the appellants are contesting the issue on merits - The payments already made by the appellant are considered sufficient for the purpose of admitting the appeals for disposal - stay against recovery of balance amounts involved in the appeals is granted till the disposal – stay granted.

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• 2013 (10) TMI 442
  CENVAT credit - duty paying documents - endorsement on the back of the bill of entry (BE) without issuing invoices – Waiver of Pre-deposit - Held that:- The endorsement on bills of entry by M/s. Hero Exports instead of issuing a separate invoices does not advance Revenue’s case - endorsements made by M/s. Hero Exports on the reverse of bill of entry which clearly give all the particulars as also the specifications etc. which are necessary for the purpose of availment of credit - even if the Revenues stand as regards the violation of notification No. 53/03 and 90/06 are accepted at this prima facie stage, availment of credit by Hero Ecotech Ltd. would be violation of those customs notification and cannot have any reflection on availment of credit by the manufacturers who has admittedly paid the duty on the final product - deposit of Rs. One crore in that case can be deemed to be a deposit out of total denied Cenvat credit – stay granted. Extended Period of Limitation – Held that:- E-bikes which are dutiable during the relevant period were specifically exempted vide notification No. 25/08 with effect from 29.4.08 - At that point of time, appellant as having credit in their credit account, for which the Revenue raised the show cause notice, seeking reversal of such credit - Revenue was aware of the availment of credit in respect of parts of the e-bikes when it issued the show cause notice for reversal of credit on the final product becoming exempted - prima facie show cause notice issued invoking the longer period of limitation was barred by limitation – Decided in favour of Assessee.

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• 2013 (10) TMI 441
  Delayed payment of duty - Delay of six days – Penalty - Revenue was of the view that the appellant was required to pay duty on each consignment without availing Cenvat credit as required under sub-rule (3A) of Rule 8 for defaulting period - Held that:- Following SOLAR CHEMFERTS PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-I [2011 (6) TMI 640 - CESTAT, MUMBAI] - default on the part of the assessee would only attract interest and penalty under Rule 27 - once the defaulted amount is paid, the payment made through Cenvat become proper even if it is paid before the date on which defaulted amount is paid, there is no case for demanding the duty paid through Cenvat credit to be paid again through cash/PLA - the appellant would be liable to pay the interest which the lower authorities would quantify - The penalty reduced to Rs. 5,000/- in terms of Rule 27 – Decided in favour of Assesssee.

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• CST, VAT & Sales Tax

• 2013 (10) TMI 487
  Exemption from sales tax as terry towels/cotton terry knitted towels fall under the Third Schedule to the TNGST Act - The claim made by the assessee was rejected by the Assessing Officer on the ground that terry towel cloths were folded over and stitched on both sides and it was only a stitched article liable to tax – Held that:- Reliance has been placed on the decision of the Hon'ble Supreme Court reported in the case of Commissioner of Central Excise, Chennai-II Commionerate v. Tarpaulin International [2010 (8) TMI 2 - SUPREME COURT] - Mere stitching on both edges would not make the goods in question as falling under the First Schedule for taxation - Department had already accepted the case of the assessee during 2007 for the assessment years 1992-93 and 1995-96. The Revenue does not dispute the fact that what was sold herein is the same goods, for which, the assessee was entitled the benefit of exemption for the assessment years 1992-93 and 1995-96 - Stitching on edges would not make any difference to deny exemption under the said Entry – Decided in favor of Assessee.

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• 2013 (10) TMI 486
  Taxability of works contract of Bleaching and dying - transfer of property - Held that:- The fact that the chemicals used for bleaching is washed away in the process, by itself, would not be a justifiable ground to accept the case of the assessee that there was no transfer of property of any goods. The very fact of the yarn being bleached by a chemical process, by applying the chemical, will clearly point out that there is transfer of property of the chemical, hence, bleaching contract attracts sales tax as in the case of dyeing contract, when the chemicals are purchased from outside the state - Following decision of Apparels and Handloom Exporters Association and others Vs. State of Tamil Nadu and others [2001 (9) TMI 1114 - MADRAS HIGH COURT] - Decided in favor of revenue.

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• Indian Laws

• 2013 (10) TMI 488
  Refusal in Granting Succession Certificate – Releasing the amount of arrear pension and other reliefs - Whether a certificate issued by the Administrator General can be equated with a succession certificate issued by a Court of law – Held that:- There is no doubt that the procedure required for issuing succession certificate is much elaborate in nature - Notice has to be served on the rival claimants - But a certificate issued by the Administrator General is on affidavits only - The certificate issued by the Administrator General under section 29 of the Act cannot be equated with that of a certificate issued by the Administrator General - There was no lack of logic in the insistence of the respondents upon a succession certificate from a Court of law - If the law requires a succession certificate to be obtained from a competent Court of law that cannot be short-routed by obtaining a certificate under section 29 - it cannot be said that the authorities had unjustly insisted on a succession certificate –Decided against Petitioner.

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