Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 18, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Estimation of Income If he knew that the accounts need to be audited by an auditor, definitely, the Company was also aware of the fact that they were expected to file returns - Therefore, inexperience or ignorance cannot be a ground not to file returns. - HC
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Penalty u/s 271B - Failure to get its accounts audited or submitted before due date - contention that the accountant was on leave during the relevat period - penalty confirmed - HC
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Effective date of Order issued u/s 197 for lower deduction tax at source or no TDS Section 197 does not prescribe or state that an order will be effective from the date the order is issued - The statute does not bar the Assessing Officer from issuing the certificate for the financial year - HC
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Whether the machinery purchased under the Textiles Upgradation Fund Scheme (TUFS) and used for embroidery on unembroidered cloth used in textile industry are eligible for higher depreciation of 50% - Held yes - HC
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Service of notice u/s 158BD - change in the address of assessee - Setting aside of an assessment order would not entail setting aside of the show cause notice - The order passed by the Assessing Officer was held to be illegal for want of valid service - The show cause notice, however, has not been held to be invalid and, therefore, subsists - HC
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Provisional attachment - attachment of plots after sale by the assessee - the attachment passed by the Income Tax Authorities would have to be limited to plots owned by SIMS in the lay out and cannot be extended to the plots owned by others, including the petitioners - HC
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Nature of Receipt The subsidy though computed in terms of sales tax deferment or waiver, in essence it was meant for capital outlay expended by the assessee for set up of the unit in case of a new industrial unit and for expansion and diversification of an existing unit - capital in nature - HC
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Penalty u/s 271B of the Income Tax Act Section 12AA of the Act did not exempt any entity from getting the accounts audited if its gross taxable receipts exceed the limit prescribed under Section 44AB of the Act - AT
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Claim of Set off of the brought forward business loss It is only the business loss/es as returned and admitted for the earlier years that would qualify for being brought forward and, set off against the current year's income. - AT
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Since the assessee was the owner of the said main asset, the compensation received by the assessee to the extent attributable to the use of building premises is chargeable to tax under the head "income from house property" while the compensation received for other assets and licences is chargeable to tax under the head "income from other sources" - AT
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Jobbing Activity - where and to the extent the assessee is unable to establish its jobbing activity as falling within the purview of s. 43(5)(c), the same, whether finally resulting in a profit or loss, being speculative by definition, would qualify as a separate and distinct business activity in terms of Explanation 2 to section 28 of the Act. - AT
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Computation of Fair Market Value of the Land as on 1.4.1981 The report of registered valuer being a technical person, cannot be substituted without obtaining any DVOs report or any other report of a technical person - HC
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Low Tax Effect - where returned / computed income is negative - Merely on the ground that even if the Assessing Officer's order is restored, the net result would be a negative income, the issue cannot be treated to be one of academic interest - Appeals restored before ITAT - HC
Customs
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Merchant Overtime Tax Charges (MOT) - whether the Central Excise Officer has discharged his duty in the factory premises of respondent & has functioned as a Customs Officer, as such, MOT is leviable? - Held no - AT
Corporate Law
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The mere expiration of the registration by lapse of time, and the failure of the registered proprietor of the trade mark to get the same renewed, by itself, does not lead to the conclusion that the same can be removed from the register by the Registrar of Trade marks without complying with the mandatory procedure - HC
Service Tax
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Levy of service tax on import of services - date of import or date of payment - service was received prior to 18.4.06 though payment was made after 18.4.06 Therefore, liability would not arise prima facie - stay granted - AT
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CENVAT credit - Nexus of credit with manufacturers of hot briquetted iron and sponge iron - there is merit in the contention of the Revenue that the service tax paid on shipping fee is not an eligible input service - however, stay granted - AT
Central Excise
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Recovery of interest - extended period of Limitation u/s 11A limitation period as prescribed in Section 11A would be applicable for recovery of interest also - AT
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Reversal of cenvat credit on removal of capital goods - Rule 3(5) - Method of Calculating Depreciation Prima facie during period prior to 27.02.10 also, straight line method must be adopted - The appellant therefore have strong prima facie case in their favour - AT
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Option to avail Exemption Notification No.29/2004 or 30/2004 CE yarn manufactured and cleared for export - Department cannot force the assessee to avail a particular exemption Notification. - stay granted - AT
Case Laws:
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Income Tax
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2013 (10) TMI 660
Estimation of Income Held that:- It is well settled that ignorance or innocence of law is no excuse - Once he commenced business of construction in 2000 and if he has receipt of income as seen from the records, he is expected to file returns - If he knew that the accounts need to be audited by an auditor, definitely, the Company was also aware of the fact that they were expected to file returns - Therefore, inexperience or ignorance cannot be a ground not to file returns. Losses Suffered Held that:- Sustaining loss definitely will not entitle an assessee, who is required to file returns, not to file returns - He can show loss and then file returns, the Tribunal was justified in saying it is not a good ground at all. Applicability of Section 44-AD Held that:- The activity carried on by a builder or realtor would not attract the provisions of Section 44-AD and it would rather attract the case where the assessee were to be a civil contractor - The income earned by the Company would be more than the income earned by a civil contractor as opined by the Tribunal - there was no material to substantiate the contention that the project was not completed even upto 5% - All the receipts during this period plus non filing of the returns and disclosure of the receipt of accounts in the search and seizure would clearly show there was no bona fides on the part of the appellant Company in not filing the returns, thus the estimation of profit at 20% from the receipts of the income for the assessment year 2002-2003 is justified Decided against Assessee.
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2013 (10) TMI 659
Maintainability of the Appeal Question of Law Low Tax Effect - Held that:- There is no specific discussion in the order of the tribunal - It is impossible from the appeal paper book to ascertain the actual nature of the controversy and how the questions of law have arisen - appeal dismissed on the ground of low tax effect - it is not possible to ascertain the issues and facts on the basis of appeal paper book Decided against Revenue.
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2013 (10) TMI 658
Penalty u/s 271B - Failure to get its accounts audited or submitted before due date - Whether the cause shown by an assessee would constitute a good cause for the non-compliance in order to avoid him from paying the penalty imposed contention that the accountant was on leave during the relevat period - Held that:- it was a non completion of audit of the accounts of a branch at USA which prevented the head office from submitting the records. It was not possible for the head office in India to complete the accounting and then submit audit report within the time prescribed. But, in this case it was within the reach of the assessee to complete the process of finalisation of accounts and then submit an audit report within the time prescribed which they failed to do. Even other wise on facts, no material is produced by the assessee to substantiate the cause shown by the assessee. Decided against Assessee.
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2013 (10) TMI 657
Re-opening of assessment u/s 147 of the Income Tax Act beyond four years Deduction u/s 80IB of the Income Tax Act Held that:- Since on merit, the Tribunal has upheld the order of the CIT (Appeals), its not dealing with the first question of legality of assessment under section 147/148 does not lead to raising any substantial question of law. When the issue was squarely covered for the assessment year 2006-07, Assessing Officer in assessment year 2007-08 could not have reopened on merit the very ground. The reopening, thus, as already held by the CIT (Appeals), was bad in the eye of law. Decided against the Revenue.
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2013 (10) TMI 656
Stay of recovery - attachment of bank accounts - Following Precedent Held that:- The orders of the Income Tax Officer (Exemptions) and 19 August 2013 of the Addl. Director of Income Tax (Exemptions) have ignored the directions contained in KEC International Ltd. v/s. B.R.Balkrishnan [2001 (3) TMI 32 - BOMBAY High Court] - besides being cryptic and deserve to be set aside - We are not inclined to remit the matter to the same authorities, because the petitioner has already filed an appeal before the Commissioner of Income Tax (Appeals) and therefore it would be in the fitness of things, if the petitioner is directed to file a stay application before the CIT (Appeals), who should hear and decide the stay application as expeditiously as possible and preferably within three months from the date of filing of the stay application. Interim Arrangement - What interim arrangement is to be made during the pendency of the application before the CIT (Appeals) Held that:- The petitioner shall not withdraw or encash fixed deposit lying with ICICI Bank and another deposit lying with HDFC Bank - The petitioner shall also not withdraw any amount from the petitioner's account with HDFC , but it will be open to the petitioner to convert the amount lying in the saving/current account into fixed deposit - the petitioner will be at liberty operate the petitioner's account with ICICI Bank - In view of the interim arrangement, as a part of interim order, garnishee notices shall remain stayed during the pendency of the stay application before the CIT (Appeals) - No recovery shall be made during pendency of the said application before the CIT (Appeals) and for a period of three weeks, in case the order of CIT (Appeals) is adverse to the petitioner - As per the provisions of section 226(3) (x) of the Income Tax Act,1961, noncompliance by the HDFC Bank and ICICI Bank with garnishee notices on account of operation of this order, shall not be treated as a default on part of HDFC Bank or ICICI Bank.
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2013 (10) TMI 655
Effective date of Order issued u/s 197 for lower deduction tax at source or no TDS whether has retrospective effect or prospective effect - Penalty - Held that:- Section 197 does not prescribe or state that an order will be effective from the date the order is issued - The statute does not bar the Assessing Officer from issuing the certificate for the financial year - the assessing officers take time to dispose of applications moved under Sections 195 and 197 - the order of the tribunal does not require any interference as the certificate/order dated 9th October, 2007 has not been modified or corrected - the deductee was not liable to pay tax and income tax authorities have not suffered any loss or disadvantage there was no justification for imposition of penalty - Penalty cannot be imposed once it is held that the respondent-assessee had acted in terms of the certificate Decided against Revenue. If the certificate was contrary to the circular, it was for the appellant to take steps to rectify the said certificate either under Section 154 or by way of suo motu power of revision under Section 263. An order, which is wrong, cannot be treated as void ab initio till it is corrected or rectified.
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2013 (10) TMI 654
Decrease in gross profit rate - rejection of books of accounts Valuation of Stock Held that:- Valuation of stock of rice had also not been made on any proper method of valuation of stock - Item-wise and quality wise closing stock of rice and paddy had also not been maintained. In short, information supplied by the Assessee was not only deficient in material particulars but the Assessee had also shown its helplessness to provide better particulars demanded by the Income Tax authorities. It is thus clear that record of the Assessee lacked probity and transparency so far as the material information is concerned. Adhoc addition in the income of the Assessee was made because of low Gross Profits declared by the Assessee - the questions framed by the Assessee are only questions of facts and details - these are not questions of law much-less substantial questions of law - An appeal under Section 260-A of the Act, is entertainable only on substantial questions of law - Since no question of law arises for an answer, the appeal is dismissed Decided against Assessee.
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2013 (10) TMI 653
Eligibility for Higher Depreciation - Whether the machinery purchased under the Textiles Upgradation Fund Scheme (TUFS) and used for embroidery on unembroidered cloth used in textile industry are eligible for higher depreciation of 50% Held that:- There is no stipulation by the Government of India or in law that the machinery purchased under TUFS is necessarily to be deployed in "manufacture" or "production", as has been claimed by the revenue - Rather, existence of the words "used in weaving, processing and garment sector of textile industry" appearing immediately after the words "machinery and plant" in Appendix-I of the Rules is not without significance - Even Section 32 of the 1961 Act, to claim depreciation, nowhere restricts user inter-alia of the machinery in 'manufacture' or 'production' - Similarly, conditions of TUFS also do not hedge user of the machinery to activities of manufacture or production only - use of words "processing" and "garment sector" are vibrant enough to include in their fold user of the machinery for any activity in textile industry so as to be eligible to claim higher depreciation. The words depict that the entire process starting from the weaving stage culminating upto the stage of manufacturing of garments is covered in these words. Embroidery is a sort of process on the clothes so as to turn those clothes into different textile products. In short embroidery is one of several processes which are carried out on cloth to make such cloth different products Relying upon CIT v. Sovrin Knit Works [1992 (11) TMI 84 - PUNJAB AND HARYANA High Court] - business of bleaching, dyeing, finishing and embroidery of grey cloth which is not manufactured by the assessee itself but is purchased by it constitutes business of manufacture of producing textiles Decided against Revenue.
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2013 (10) TMI 652
Questions Framed Substantial Question of Law OR Not service of notice u/s 158BD - change in the address of assessee - Held that:- The report leaves no ambiguity that the Assessing Officer was aware that the respondent is not residing at his last known address but surprisingly persisted in ordering service by affixation, at this address - it would be appropriate to clarify that if the revenue is aware that an assessee is not residing at his last known address, an Assessing Officer, would be required to search for the assessee's new address and if still not available, serve the assessee in accordance with procedure for substituted service and publication etc. prescribed by the Code of Civil Procedure - In the absence of any error of jurisdiction of law in the impugned orders, we express our inability to entertain the appeal on the questions of law as set out in the memorandum of appeal but proceed to consider whether questions of law framed by counsel for the revenue in court should be answered. Defect in service of Notice - Whether defect in service would entail setting aside of the show cause notice along with assessment order and in such a situation the CIT(A) or the I.T.A.T should have directed the Assessing Officer to proceed from the stage of service Held that:- Setting aside of an assessment order would not entail setting aside of the show cause notice - The order passed by the Assessing Officer was held to be illegal for want of valid service - The show cause notice, however, has not been held to be invalid and, therefore, subsists - In this view of the matter, while affirming orders passed by the CIT(A) or the I.T.A.T, with respect to illegality of the Assessment order for want of valid service, the matter is remitted to the Assessing Officer to adjudicate the show cause notice afresh from the stage prior to initiation of ex-parte proceedings.
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2013 (10) TMI 651
Provisional attachment - attachment of plots after sale by the assessee - Order u/s 281B - Petitioner contended that after selling these plots, they continued to remain in possession of various plots - when they proposed to alienate the plots, they were informed by the Sub-Registrar, the 3 rd respondent, that the documents would not be entertained for registration in view of the attachment order passed by the Income Tax Authorities under Section 281-B of the Income Tax Act, 1961 Held that:- Even if the petitioners present a document for registration in respect of their plots in the subject survey numbers the document is bound to be rejected owing to the attachment order passed by the Income Tax Authorities - the attachment passed by the Income Tax Authorities would have to be limited to plots owned by SIMS in the lay out and cannot be extended to the plots owned by others, including the petitioners - The 3rd respondent would therefore have to undertake identification of the plots in Taj Baba Nagar owned by SIMS and limit the attachment effected under Section 281-B of the Income Tax Act, 1961, to such plots alone - The said attachment can have no effect over the plots belonging to third parties in the said survey numbers Decided in favour of Petitioner.
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2013 (10) TMI 650
Nature of Receipt Capital OR Revenue Receipt - Whether a certain subsidy received by the respondent assessee under the scheme framed by the Government of Haryana under Chapter IV-C of Haryana General Sales Tax Rules, 1975 should be treated as a capital receipt or a revenue receipt Held that:- The subsidy though computed in terms of sales tax deferment or waiver, in essence it was meant for capital outlay expended by the assessee for set up of the unit in case of a new industrial unit and for expansion and diversification of an existing unit - such subsidy was available only to a new industrial unit or a unit undertaking expansion or diversification - Fixed capital investment has been defined as to include various investments in land under use, new construction, plant and machinery etc. - The entitlement was related to percentage of fixed capital investment. Following Sahney Steel and Press Works Ltd. and others v. Commissioner of Income-tax [1997 (9) TMI 3 - SUPREME Court] - The subsidy given was on revenue account because it was given by way of assistance in carrying on of trade or business - the subsidy given was to meet recurring expenses - The subsidies were granted year after year only after setting up of the new industry and only after commencement of production and, therefore, such a subsidy could only be treated as assistance given for the purpose of carrying on the business of the assessee. The character of the receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. In other words, in such cases, one has to apply the purpose test - The point of time at which the subsidy is paid is not relevant - The source is immaterial - The form of subsidy is immaterial - The main eligibility condition in the scheme is that the incentive must be utilized for repayment of loans taken by the assessee to set up new units or for substantial expansion of existing units - it is the object for which the subsidy/assistance is given which determines the nature of the incentive subsidy - The form of the mechanism through which the subsidy is given is irrelevant there was no error in view of the Tribunal Decided against Revenue.
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2013 (10) TMI 649
Penalty u/s 271B of the Income Tax Act Failure to comply with the requirement of tax audit u/s 44AB of the Income Tax Act - Explanation of the assessee to the show cause notice is that the assessee was a statutory body and it was also allowed registration under Section 12AA of the Act by the Commissioner of Income Tax, Bathinda, w.e.f 12.06.2003. The assessee was not under any legal obligation to get its accounts audited in view of the provisions of Section 44AB of the Act Held that:- Assessee had shown receipts of Rs. 12,21,97,171/- in the return filed by it, besides the receipts of Rs. 7,39,80,248/-.Thus, the total receipts of the assessee during the year under considering worked out at Rs. 19,61,77,419/- - As a turnover in the case exceeded Rs. 40 lacs, the assessee was required to get its accounts audited as per the provisions of Section 44AB of the Act. Since the assessee failed to comply with the said provisions, proceedings for imposing of penalty under Section 271B of the Act was initiated - Section 12AA of the Act did not exempt any entity from getting the accounts audited if its gross taxable receipts exceed the limit prescribed under Section 44AB of the Act Decided against the Assessee.
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2013 (10) TMI 648
Claim of Set off of the brought forward business loss Whether Loss of Speculative Business Losses could be set off against the Income from Non-speculative Business Held that:- The law in the matter is clear, and the loss of a speculative business, whether brought forward or for the current year, could not be set off against the non-speculative business income for the current year - The speculative transactions carried out by the assessee constitute a business in itself, and toward which we may refer to Explanation 2 to section 28 of the Act - it is only the loss as assessed that can be claimed for being brought forward and set off - It is only the business loss/es as returned and admitted for the earlier years that would qualify for being brought forward and, set off against the current year's income. The A.O. is directed to examine the assessee's claim for a part of the business income for the current year as arising out of its speculation business - subject to the necessary verification and findings by the assessing authority, we direct a set off in terms of section 73 r/w s. 80 of the Act - The onus to prove its claim would be on the assessee Decided Partly in favour of Assessee.
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2013 (10) TMI 647
Deduction u/s 80IB of the Income Tax Act - SSI unit or not - Assessee is a company engaged in the business of manufacturing and fabrication of plant and equipments, storage tanks and piping etc. and erectioning the same at the site of the customers. Assessee filed its return of income for A.Y. 2005-06 on 25.10.2005 showing total income of Rs. 39,66,727/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) vide order dated 18.12.2007 and the total income was determined at Rs. 73,57,930/- - Held that:- For A.Y. 2004-05, the Assessee was disallowed deduction under 80IB as the Assessee's unit was not considered to be Small Scale Industrial unit - Report of the expert dated 14-6-2007 giving the valuation report of the machinery, equipment/ tools and tackles was not filed by the assessee before the AO and that the contents of the expert's report go to the root of the issue of disallowance made under Section 80IB that whether the assessee was a small scale industrial undertaking, and accordingly, it shall be in the interest of the justice to restore the issue to the file of the AO with direction to decide the same afresh in accordance with law after providing adequate opportunity of being heard to the assessee Decided in favor of Assessee for statistical purpose.
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2013 (10) TMI 646
Addition u/s 68 - Unproved booking amount Held that:- The names, address and PAN of the creditors was known to the Revenue, still the AO has insisted on the assessee to furnish the confirmation and in the absence thereof, he made the addition u/s. 68 of the I.T. Act - assessee has duly discharged its onus - If the AO was not satisfied, he could have summoned the creditor by issuing the notice u/s. 131 of the I.T. Act - AO has not done this exercise the amount received cannot be treated as undisclosed income of the assessee. Addition out of total vehicle expenses - AO has not pointed out as to which of the vouchers were not available - He has made an addition on estimate basis without pointing out the specific shortcomings - when the AO has not been able to point out the specific defects, the addition in this regard is not sustainable - the orders of the authorities below set aside Decided in favour of Assessee.
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2013 (10) TMI 645
Condonation of Delay Held that:- The retrospective amendment has forced the assessee to file these appeals with delay - Explanation 3C to section 43B was introduced by the Finance Act 2006 which becomes operative with effect from 1.4.2006 - The assessee must have filed the appeal within the reasonable time from 1st April 2006. Even after the amendment, the assessee has not filed the appeals within the reasonable time - The reason for delay in filing the appeal after the said amendment is not explained by the assessee - There is distinction between inordinate delay and delay of few days - there was inordinate delay in filing the appeals - the consideration of prejudice to the other side will be a relevant factor so the case calls for a more cautious approach but in the case of few days delay, no such consideration may arise and such a case deserves a liberal approach - No hard and fast rule can be laid down in this regard - There was no bona-fide reasons to condone the delay - The reasons given by the assessee is nothing but negligence and inaction on the part of the assessee which cannot be condoned - The assessee could have very well avoided the delay by the exercise of due care and attention - there exists no sufficient and good reasons for such an inordinate delay Decided against Assessees.
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2013 (10) TMI 644
Classification of Income Income from House Property u/s 22 OR Income from Other Sources u/s 56 Held that:- The compensation received by the assessee under the agreement was essentially for use of her licenses and other assets and there being no business risk assumed by the assessee, the compensation received by her under the agreement was not her business income - one of the assets given by the assessee for use in the restaurant business was building premises and since the assessee was the owner of the said main asset, the compensation received by the assessee to the extent attributable to the use of building premises is chargeable to tax under the head "income from house property" while the compensation received for other assets and licences is chargeable to tax under the head "income from other sources" - As there is no such bifurcation of compensation indicated in the relevant conducting agreement, we direct the assessee to make such bifurcation on some reasonable basis and the A.O. is directed to verify the same and bring to tax the compensation attributable to the use of building premises under the head "income from house property" and for use of other assets and licences under the head "income from other sources". Disallowance of Expenses Held that:- Since it is already held that the receipts under the conducting agreement did not constitute business income of the assessee, the consequential disallowance on account of expenses made by the A.O. is liable to be confirmed - the disallowance is confirmed Decided Partly in favour of Assessee.
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2013 (10) TMI 643
Jobbing Activity - Whether jobbing activity is non-speculative or not Held that:- The law does not provide an exception, in terms of section 43(5)(c), to a member of a forward market or a stock exchange qua non-delivery based transactions for being non-speculative - It is therefore incumbent on such member, to avail the said exception, show that the relevant jobbing or arbitrage transaction was entered into to guard against the loss to which he was otherwise subject, i.e., on account of the transactions entered into in the ordinary course of his business - To put succinctly, the field is not clear, but qualified by the condition of the purpose for which the said hedging transaction/s stands entered into. The jobbing activity forms an integral part of his business - This becomes all the more relevant and pertinent in the present case, as apart from being only toward satisfaction of the mandate of the provision, the loss claimed stands incurred in the jobbing activity itself, i.e., which the law excepts where entered into to guard against an imminent or possible loss that a member stands to incur or suffer in the course of his business - no loss could be incurred on such transactions, which may be so, but only to emphasize that a jobbing transaction could be entered into by a member even independent of and de hors the purpose of safeguarding self against losses that one is susceptible or prone to in the ordinary course of one's business, and in which case it would be speculative - Further, where and to the extent the assessee is unable to establish its jobbing activity as falling within the purview of s. 43(5)(c), the same, whether finally resulting in a profit or loss, being speculative by definition, would qualify as a separate and distinct business activity in terms of Explanation 2 to section 28 of the Act. It would be fit and proper that the matter is restored back to the file of the A.O. to enable the assessee an opportunity to present its case of the jobbing transactions, on which the impugned loss stands sustained by it, as non-speculative in terms of sec. 43(5)(c), and decide the same as per law by issuing definite findings of fact, having regard to the observations made in this order Decided partly in favour of Assessee.
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2013 (10) TMI 642
Computation of Fair Market Value of the Land as on 1.4.1981 Computation of Capital Gain Tax Liability u/s 55(2B) Held that:- No report of the DVO was obtained and the A.O. obtained one sale instance from sub-registrar office but regarding this sale instance assessee Contended that the sale instance is of a faraway place whereas, the sale instance noted by the registered valuer is nearer to the land in question - This contention could not be controverted by the Revenue - the sale instance obtained by the A.O. from sub registrar cannot be adopted because it is related to a land situated at faraway place and moreover, when the assessee has submitted the report of the registered valuer, the same cannot be ignored or substituted without obtaining the report of a technical person viz. DVO or some other technical expert. The report of registered valuer being a technical person, cannot be substituted without obtaining any DVOs report or any other report of a technical person - no such report of any technical person has been obtained by the authorities below - thus for this reason also, the action of Ld.CIT(A) cannot be sustained - the fair market value of the property as on 01.04.1981 as declared by the assessee on the basis of a report of the registered valuer, cannot be disturbed and the same has to be accepted. The entire issue is based on appreciation of evidence - What should have been fair market value of the land as on 1.4.1981 is a pure question of fact - The assessee has based reliance on the report of the registered valuer who had given his opinion on the basis of 4 different sale instances - The Assessing Officer discarded such report and assessed the valuation on the basis of a single sale instances, details of which were available from the office of the Sub-Registrar - When the Tribunal, as a final fact finding authority, has come to certain findings which are purely factual in nature, no interference is called for, no question of law arises Decided against Revenue.
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2013 (10) TMI 641
Low Tax Effect - where returned / computed income is negative - Whether the Appellate Tribunal is right in dismissing the tax appeal of the revenue on the ground of low tax effect - Whether it is necessary to compute with degree of accuracy, declaration of loss made by the assessee in view of the statutory provisions contained in the Act Held that:- Merely on the ground that even if the Assessing Officer's order is restored, the net result would be a negative income, the issue cannot be treated to be one of academic interest - The extent of loss claimed and allowed would be significant for variety of purposes, particularly, for the purpose of set off and carrying forward of such loss - We fail to see how such an issue can be seen as one of low tax effect - In a given case, an assessee may claim large amount by way of loss, which according to him he suffered during the assessment year - The Assessing Officer, while framing the assessment, may come to a conclusion that the loss is much smaller than what is claimed by the assessee - If in the appeal filed by the assessee, the CIT (Appeals) accepts the assessee's claim and sets aside the Assessing Officer's order, and if such order is allowed to stand merely on the ground that further appeal is not maintainable, it would be the CIT's computation of loss, which will prevail for all times to come without further scrutiny, by the higher forum. The order of CIT (Appeals) would achieve finality despite contentious issues being involved and the Revenue's disagreement to the order of the CIT (Appeals) - Eventually if the assessee declares positive income in future years, the claims of carry forward and set off of loss would be judged on the basis of the order passed by the CIT, which order would not have been scrutinized by the Tribunal only on the ground that the appeal was not maintainable - the Appeal of the Revenue is on of low tax effect - Our answer has to be in the negative - For an assessee to claim carry forward and set-off of losses, series of provisions have been made in the Act - It is necessary that loss claimed by an assessee is properly computed - Such declaration of negative income just as declaration of positive income should be allowed to go through the entire gamut of Appeals and Revisions. Boards Circular - Whether by virtue of the Board's circulars issued from time to time, which in view of the Section 268A of Act, have acquired considerable significance, and force the appeal presented to the Tribunal, could be termed as not maintainable Held that:- Circulars of the Board nowhere provide that in case of return of loss automatically per se irrespective of difference in the Assessing Officer's perception and that of the CIT (Appeals) of the computation of loss, further appeal would be shut out - Merely because even as per the Assessing Officer's order, ultimately income of the assessee is negative, the Revenue's appeal before the appellate Tribunal would not be barred by the Board's circular under Section 268A of the Act - the notional tax effect would have to be above the limits prescribed by the Board from time to time for presentation of such appeals - the notional tax effect would be higher than the limits prescribed by the Board in different circulars, the Tribunal committed an error in dismissing the Revenue's appeals as being not maintainable - all tax appeals are allowed. Judgments of the Tribunal under challenge in respective appeals are set aside - All proceedings are remanded to the Tribunal for entertaining appeals on merits and to decide the issues arising in such appeals in accordance with law after issuing notice to the assesses Decided in favour of Revenue.
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Customs
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2013 (10) TMI 679
Demand of Differential Duty - Concessional Rate of Duty Held that:- The appellants have imported LCD panels with an intention to use the same in the manufacture of their final product and inasmuch as they have not been able to use the same, it had to be held that there was intention on their part to use the panel for the manufacture of television sets and it was the said intention, which was to be taken into consideration for the purpose of concessional rate of duty at the time of import of the goods - The import of the panels first and then re-export of the same panels without using the same, was of no financial benefit to the assessee - Prima facie no differential duty can be demanded from the assessee at the time of re-export of the same - policy was changed subsequently and Rule 7A was introduced in the said Rules allowing re-export of the unutilized imported goods. The appellant at the time of import of the goods claimed the classification under heading 9013 which attract nil rate of duty - The classification was not allowed to be adopted and the same was changed to 8529 - LCD panels were appropriately classifiable under 9013 - there was no stay of the operation of the said order of the Tribunal - If that be so, the appellant was required not to pay even 5% of duty, which they have initially paid at the time of import of the goods - appellant had been able to make out prima facie case in its favour so as to allow the stay unconditionally stay granted.
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2013 (10) TMI 678
Classification - import of Screw/Drag Conveyors and Bucket Elevators - whether parts of Feed Mill Machinery claiming classification under CTH 84361000 and exempted from duty - Waiver of pre deposit - Held that:- Prima facie, Imported goods are not machinery. In view of that the applicant has failed to make out a strong prima facie case for waiver of pre-deposit of entire duty. After considering the submission of both sides, we direct the applicant to deposit a sum of Rs.25,00,000 within a period of eight weeks and report compliance on 6.9.2013. Upon such deposit, pre-deposit of the balance amount of duty shall stand waived and recovery thereof stayed during the pendency of the appeal - stay granted partly.
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2013 (10) TMI 677
Illegal export of Muriate of Potash in the name of Bentonite Powder - Waiver of penalty - Documents for export - Held that:- Section 114AA of the Customs Act, 1962 states that if a person causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, he shall be liable to a penalty. I find that Shri Anjanappa was involved in the documentation presented before the Customs Authorities wherein a false declaration has been made in material particular of the goods. Therefore, I hold that Shri Anjanappa is liable to be penalized under Section 114AA of the Customs Act, 1962 - The detail evidences would be examined in analyzing the involvement of the applicant at the time of disposal of the appeal. In these circumstances, the applicant failed to make out a prima facie case for total waiver of pre-deposit of penalty imposed. Accordingly, I direct the applicant to deposit Rs.25,000 within a period of six weeks from today and on deposit of the said amount, the balance amount of penalty is waived and its recovery stayed during the pendency of the appeal - stay granted partly.
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2013 (10) TMI 676
Fraudulent export - export of red sanders in the name of Readymade garments - waiver of pre deposit - Held that:- case was made out mainly on the basis of the statement and it is noted that the applicant admitted his involvement in his statement during the investigation. Hence the applicant has not made out a prima facie case for waiver of entire amount of penalty. After considering the financial hardship as stated by the learned counsel, we direct the applicant to pre-deposit a further sum of Rs.50,000 within a period of eight weeks and report compliance on 6.9.2013. Upon such deposit, pre-deposit of the balance amount of penalty shall stand waived and recovery thereof stayed during the pendency of the appeal - stay granted partly.
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2013 (10) TMI 675
Merchant Overtime Tax Charges (MOT) - whether the Central Excise Officer has discharged his duty in the factory premises of respondent & has functioned as a Customs Officer, as such, MOT is leviable? - Held that:- It is an admitted position that stuffing work was done in the factory of respondent under the supervision of jurisdictional Central Range Officer during working hours only. The place of working/supervision was at the factory of the respondent which is at Mayapuri. Respondent has pointed out that as per Notification No.14/2002-CE(NT) dated 08.03.2002 as amended by Notification No.22/2002-CE(NT) dated 04.06.2002, the jurisdiction of Delhi II, Range 26 of Central Excise division-V includes Mayapuri Indl. Area Ph.-II where the factory of respondent is located, the services were rendered by the officer within his range only. The same fell within the jurisdiction of the Central Excise Range Officer who supervised the work. Chapter 13 of the CBEC's Customs Manual deals with Merchant Overtime Fee wherein it is provided that if services are rendered by the Customs Officer at a place which is not his normal place of work or a place beyond the Customs area, overtime is levied even during the normal working hours. Thus none of the conditions for levy of MOT is satisfied - Following decision of CCE Vs. M/s. Sigma Corporation India Pvt. Ltd. [2013 (4) TMI 649 - DELHI HIGH COURT] - Decided against Revenue..
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2013 (10) TMI 674
Rectification of mistake - Section 129B - Held that:- on 31.7.2008 the Tribunal passed the final order under Section 129B (1) of the Act and the application were filed on 23.4.2013 - So, there is no provision of the Appellate Tribunal for modification of final order passed under Section 129B (1) of the Customs Act, 1962. However, Section 129B (2) of the said Act empowered the Appellate Tribunal to rectify the mistake apparent from the record within six months from the date of order - Decided in favour of assessee.
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2013 (10) TMI 673
Confiscation - No claim of goods - Held that:- though the appellant has booked seized goods he has not disclosed the address of the person who had come to him with the goods for booking. The imported goods prima facie appear to be of smuggled origin and up till now, the same have not been claimed by anybody. In view of this, this is not a case for total waiver. The appellant are, therefore, directed to deposit an amount of Rs.1,00,000 towards penalty within a period of 4 weeks from the date of this order - Decided against assessee.
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Corporate Laws
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2013 (10) TMI 672
Winding up Petition Report of the Official Liquidator - Held that:- So far as the present report of the OL was concerned, it was noticed that the OL proposed to auction sale certain properties which were presently in the hands of the OL, however in present case also the details regarding the measurement or clarity regarding the title ownership and as to whether there was any encroachment are not available - The aspects have been pointed out by the advocate for OL - though OL had urgency to dispose of the properties in question and the possession had been taken since quite long time and there were no fund available in the account the company, however if the OL provided the task of issuing advertisement then in absence of these details the exercise may not yield any result Several instructions were issued to the OL.
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2013 (10) TMI 671
Restoration and Renewal of Trademark u/s 25(4) Bar of Limitation - The respondents did not issue the mandatory notice in form O-3, prior to removing the registered trade mark in question from the register, the removal of the said trade mark from the register was illegal - That being the position, the application to seek its restoration and for renewal of the registered trade mark under Section 25(4) cannot be said to be barred by limitation on the ground that it had not been made within the period of one year from the date of expiration of the last registration of the trade mark. Analysis of Section 25 of the aforesaid Act shows that a trade mark registered under the said Act may be renewed from time to time for periods of seven years each on making of an application and payment of the requisite fee - The application for renewal of the trade mark may be made, not earlier than six months before the expiration of the last registration of the trade mark - If such an application was made, the registration of the trade mark would be renewed, provided the conditions laid down under the Act and the Rules are satisfied. The mere expiration of the registration by lapse of time, and the failure of the registered proprietor of the trade mark to get the same renewed, by itself, does not lead to the conclusion that the same can be removed from the register by the Registrar of Trade marks without complying with the mandatory procedure prescribed in Section 25(3) of the aforesaid Act or read with Rule 67 of the aforesaid Rules - Removal of the registered mark from the register without complying with the mandatory requirements of Section 25(3) of the Act read with Rule 67 of the Rules would itself be laconic and illegal. On the issue of restoration of the trade mark on the register, renewal should not be approached from a penal point of view - If restoration was just, it was bound be made - The delay, if any, had not led to registration of the trade mark in question in favour of any third party - No third party rights have, therefore, been created.
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Service Tax
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2013 (10) TMI 690
Levy of service tax on import of services - date of import or date of payment - Services of technical know-how from parent company - Held that:- prima facie of the view that tax liability should be decided with reference to date of receiving service rather than date of payment of consideration. In this case, service was received prior to 18.4.06 though payment was made after 18.4.06 Therefore, liability would not arise prima facie. So we grant waiver of pre-deposit of dues arising from the impugned order for admission of appeal. There shall be stay on collection of dues during pendency of the appeal - stay granted.
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2013 (10) TMI 689
Demand - Manpower recruitment and supply services - Held that:- applicants have collected the entire amount of tax from the service recipients but had not deposited to government exchequer - Therefore, applicants to deposit entire amount of tax in all the three cases within 8 weeks. Upon such deposit, pre-deposit of interest and penalties is waived and its recovery is stayed during pendency of the appeals.
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2013 (10) TMI 688
CENVAT credit - Business auxiliary service - Whether the input services namely, sale of equity shares would be applicable for the output service of the consulting engineering service, erection, commissioning and installation service, maintenance and repair service etc - Held that:- final product of the applicant namely fertilizer is exempted from the central excise duty. Prima facie, we are not impressed with the submission made by the learned counsel that the sale of equity shares has nexus with the output service. We have also considered the financial hardship as revealed from the balance sheet - stay granted partly.
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2013 (10) TMI 687
Demand - Information Technology Software Services - Held that:- appellant has been paying service tax on output service rendered by them in India. Under these circumstances, the claim of the appellant that in view of revenue neutrality situation, extended period could not have been invoked in this case has to be accepted - where revenue neutral situation exists, extended period may not be invoked - entire amount of service tax for the normal period has been paid - stay granted.
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2013 (10) TMI 686
Stay application - Penalty u/s 78 - Franchise Service - Held that:- Applicant had paid the said amount, when they were not required to pay the service tax on Franchise Service. It is also not in dispute that the said amount had been adjusted in the subsequent period by reflecting in their respective ST-3 returns. Prima facie, we find that the decisions cited by the ld. Advocate are applicable to the facts and circumstances of the present case. In these circumstances, the Applicant could able to make out a prima facie case for total waiver of the dues adjudged. Accordingly, pre-deposit of all dues adjudged is waived and its recovery stayed during pendency of the Appeal - Stay granted.
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2013 (10) TMI 685
CENVAT Credit - Input service - Held that:- Applicant had availed the CENVAT Credit on various inputs and input services and utilized the same in discharging their service tax liability on GTA service for the period from 2005-06 to 2007-08. It is not in dispute that the definition of Output Service has been amended with effect from 01.03.2008, thereby utilization of the said Credit towards payment of service tax liability on GTA service becomes no more permissible - CENVAT Credit on input and input services could be utilized for payment of service tax liability on GTA service and the said ratio is applicable before amendment to the said definition of Output Service. A major portion of the demand is covered by the period prior to March, 2008 - Applicant could able to make out a prima facie case for total waiver of the dues adjudged. - stay granted.
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2013 (10) TMI 684
Penalty u/s 77 and 78 - Work contracts - Held that:- Prima facie, we find that the Applicant Company is a Government of India Enterprise and had rendered services mainly relating to construction of the roads, bridges, dams etc., which fall under the exception clause of the definition of Commercial and Industrial Construction Services. Further, we find that the Applicant were registered with the State Government of Bihar under the relevant Sales Tax Act under the category of Works Contract. In these circumstances, the Applicant could able to make out a prima facie case for total waiver of the predeposit of all dues adjudged. - stay granted.
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2013 (10) TMI 683
Waiver of pre deposit - services relating to pile foundation involving driven cast-in-situ RCC piles, Bored cast-in-situ piles, pre-cast single length RCC piles, pre-case jointed RCC piles etc. for commercial and residential infrastructure. - Held that:- Prima facie, we find that the applicant is not contesting the demand of tax of Rs.1,59,53,404/- excepting for minor calculation of Rs. 22 lakhs. We have also considered that the applicant has collected this amount and retained with them and therefore they are liable to pay the penalty. In view of that, we direct the applicant to make a pre-deposit of Rs.60,00,000/- (Rupees sixty lakhs only) towards tax and further amount of Rs. 30,00,000/- (Rupees thirty lakhs only) towards penalty within a period of eight weeks and report compliance on 10.10.2013. - stay granted partly.
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2013 (10) TMI 682
Restoration of the appeal - Condition for PSU - Held that:- Case of Electronics Corporation of India Ltd. versus Union of India & Ors. [2011 (2) TMI 3 - Supreme Court] where the application was found pending and not in a case where the Committee had considered the application and refused - This is a case where the Committee had considered the application and has refused appeal remedy and therefore, we do not find any merit in the application for restoration of appeal - Decided against assessee.
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2013 (10) TMI 681
CENVAT credit - Nexus of credit with manufacturers of hot briquetted iron and sponge iron - Held that:- The shipping fee has been paid for the usage of tugs and barges for the transportation of the goods from the high seas to the jetty. If the service has been provided by an outside agency and not by the appellant themselves, the question of taking Cenvat credit by the appellant of the service tax paid by the provider such services would not have arisen at all. Therefore, there is merit in the contention of the Revenue that the service tax paid on shipping fee is not an eligible input service as defined in Rule 2(l) of the Cenvat Credit 2004. Merely because the appellant had undertaken the operation of the tugs and barges, it cannot be said that such services would be an eligible input service as defined in Rule 2 (l) of the Cenvat Credit Rules, 2004. However, this issue will have to be examined in depth at the time of final disposal of the appeal. Inasmuch as in appellant's own case for the previous period, credit has been allowed without examining the issue in detail, at the interim stage of stay, I grant waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - stay granted.
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Central Excise
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2013 (10) TMI 670
Clandestine Removal of Pan Masala - Recovery of Duty - Waiver of Pre-deposit - Held that:- The Applicant had installed nine such machines clandestinely without intimating the department and used to manufacture the said products - demand notice was issued to them for recovery of duty on the goods manufactured by using this nine machines and cleared clandestinely without payment of duty - the evidences are in the form of admitted statements of the Managing Director, the employee of the company and also other corroborative evidences which establish the clandestine removal of goods without payment of duty - The Applicant has indulged in manufacture and clearance of Pan Masala without payment of duty from their premises during the relevant period - Keeping in view the interest of Revenue, the Applicant to deposit 50% of the duty confirmed excluding the amount already deposited upon such deposit rest of the duty to be waived till the disposal Partial stay granted.
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2013 (10) TMI 669
Fraud in relation to export - Waiver of Pre-deposit of Penalty Applicability of Rule 26(2) of CE Rules Waiver of Pre-deposit Held that:- The adjudicating authority has recorded that the owner of M/s Shivshakti Textiles was constantly interacting with the appellant - Shri Sanjay Tiwari and Mr.D.S. Walia were known to each other and were engaged themselves in trying to create documents for export - All the legal arguments needs to be gone into detail vis-a-vis the role attributed to the current appellant, which can be done only at the final disposal of appeals the appellant was directed to submit the amount as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.
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2013 (10) TMI 668
CENVAT Credit non receipt of inputs - Waiver of Pre-deposit - Benefit of Cenvat credit of duty paid on various iron and steel inputs shown to have been received by them and utilized in the manufacture of final product is in question Held that:- Investigation showed that vehicle numbers as reflected in the invoices issued by the dealer were of two-wheeler and as such it was not possible to transport huge iron and steel materials in the said two wheelers - There is also a statement of dealer admitting that only the invoices were issued and no corresponding inputs were delivered Prima Facie the appellant does not have a good case so as to dispense with the condition of pre-deposit of duty and penalty the applicant was directed to deposit 50% 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 667
Exemption under Notification No.67/95-CE Captive Consumption clearance to SEZ unit - Waiver of Pre-deposit - Whether clinkers manufactured and consumed captively in the manufacture of cement is eligible for exemption from payment of duty under Notification No.67/95-CE Held that:- as per the proviso to notification No.67/95, benefit of captive manufacture exemption is not available to inputs used in or in relation to the manufacture of final products exempt from the whole of duty of excise or additional duty of excise thereon or chargeable to nil rate of duty other than those cleared to a unit in free trade zone or to a 100% EOU or to a unit in a Electronic hardware Technology Park, or to a unit in a Software Technology park or under notification No.108/95-CE while the clinker is not one of those enumerated in the list, is allowed Pre-deposit of duty and penalty is waived and recovery stayed till disposal of the appeal stay granted.
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2013 (10) TMI 666
Authorization by the committee of commissioners Held that:- One of the Commissioners has not put the date and only signed - it cannot be inferred that both the Commissioners had not signed on the same date Following COMMISSIONER OF CENTRAL EXCISE, KANPUR Versus UFAN CHEMICALS [2013 (5) TMI 703 - ALLAHABAD HIGH COURT ] - there are no statutory rules prescribing that Commissioners will sit on same day at same time and take the decision about authorization - the preliminary objection raised by the respondent is without any basis. Penalty u/s 11AC Held that:- The first ground that mere shortage of finished product without any cogent evidence of clandestine removal is not sufficient to allege clandestine removal and second ground of setting aside of penalty is that the entire disputed amount of duty was paid before issue of show cause notice - As regards the first ground that the evidence on record is not sufficient to prove clandestine removal - stock taking had been done in presence of the Authorised Signatory of the Assessee and at that time, no objection has been raised about manner of stock taking and on the contrary, the Authorised Singatory had accepted the shortage and had accepted that the goods might have been removed from the factory by the staff of factory without issue of invoices and without payment of duty. The respondent at this stage, cannot allege that there was no shortage - looking to the quantum of shortage the only conclusion which can be drawn, is that the goods found short have been removed without payment of duty and without invoices and as such no other evidence is required - Following Union of India Vs. Rajasthan Spinning & Weaving Mills Ltd. 2009 (5) TMI 15 - SUPREME COURT OF INDIA - penalty u/s 11AC would be mandatory even if the disputed amount of duty had been paid prior to the issue of show cause notice - the order setting aside the penalty u/s 11AC on the company is not sustainable and has to be set aside -the order-in-original passed by the Asstt . Commissioner is required to be restored Decided in favour of Revenue. Penalty u/s 26 of CE Rules - Penalty u/s 26 of the Central Excise Rules, 2002 on authorized signatory of the respondent company, there is no evidence on record to prove that he was knowingly involved in removal of the goods without payment of duty and, therefore, penalty on him under Rule 26 is not called for - Decided in favour of Assessee.
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2013 (10) TMI 665
Recovery of interest - extended period of Limitation u/s 11A Whether the limitation period prescribed under Section 11A is applicable for recovery of interest on wrongly taken cenvat credit or not - Held that:- In HINDUSTAN INSECTICIDES LTD. Versus COMMR. OF C. EX. & SERVICE TAX (LTU) [2013 (3) TMI 456 - CESTAT NEW DELHI] it was held that, limitation period as prescribed in Section 11A would be applicable for recovery of interest also - recovery of interest on duty is subject to limitation period prescribed under Section 11-A - Prima facie the appellant have prima facie case on merits - imposition of penalty also does not appear to be warranted - the requirement of pre-deposit of interest demand and penalty is waived for hearing of the appeal and recovery stayed till the disposal of the appeal - Stay granted.
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2013 (10) TMI 664
Cenvat Credit - Shortage of Goods Waiver of Pre-deposit - Revenue was of the view that the verification revealed shortages of 317.112 MT of Pig Iron vis-a-vis the balance recorded in RG23A register on which the Cenvat Credit involved Held that:- The stock taking had been done in the present of the appellants the Excise Clerk and at that time he had accepted the said shortages - There is nothing in the record to show that the quantity of the Pig Iron in the stock had been determine only by eye estimation and not by actual weighment - this is a point of fact which can be decided only at the time of the final hearing - the appellant are directed to deposit an amount - On deposit on the amount the requirement of pre-deposit of balance amount of Cenvat Credit demand, interest and penalty shall stand waived for hearing of the appeal Partial stay granted.
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2013 (10) TMI 663
Reversal of cenvat credit on removal of capital goods - Rule 3(5) - Method of Calculating Depreciation Waiver of Pre-deposit - Whether during prior to 27.02.10 for calculating the depreciation @ 2.5% for each quarter of a year or part thereof only written down method could be adopted - The provisions of proviso to Rule 3(5) during the period prior to 27.02.10 cannot be interpreted on the basis of the wordings of the proviso as the same stood w.e.f. 27.02.10 - During period prior to 27.02.10, no method for calculating depreciation @ 2.5% per quarter on part thereof was prescribed, the same could be calculated by adopting any method - when two interpretation of statutory provision are equally possible, the interpretation which is beneficial to the Assessee which should be adopted - Prima facie during period prior to 27.02.10 also, straight line method must be adopted - The appellant therefore have strong prima facie case in their favour - The requirement of pre-deposit of Cenvat Credit demand, interest and penalty waived for hearing of the appeal and recovery stayed - stay granted.
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2013 (10) TMI 662
Option to avail Exemption Notification No.29/2004 or 30/2004 CE yarn manufactured and cleared for export - Waiver of Pre-deposit - Whether the applicant have option to avail the Notification No. 29/2004-CE where the rate of duty is 4% and the appellant have not availed input duty credit - Exemption Notification No. 29/2004-CE is an unconditional exemption which prescribes a rate of duty of 4% advelorum - Held that:- There is no condition in the notification that for availing of the exemption prescribing concessional rate of duty of 4% adv., input duty Cenvat Credit must be availed - The condition of non-availment of input duty Cenvat Credit is for nil duty under Notification No. 30/2004 - this does not mean that an assessee not availing input duty credit cannot avail the exemption under Notification No. 29/2004-CE, as this is an unconditional Notification - When an assessee does not avail of input duty credit, he has option to pay 4% duty under Notification No. 29/2004-CE and also the option to clear his goods at nil rate of duty under Notification No. 30/2004-CE and when two exemption Notifications are available to an assessee, he can always opt for the Notification which is most beneficial for him and in this regard the Department cannot force the assessee to avail a particular exemption Notification. Looked at from this point of view, the Departments stand is incorrect. During the period of dispute the appellant was clearing the goods by availing full duty exemption as well as on payment of duty, the capital goods cannot be treated as having been used exclusively in the manufacture of exempted goods and Cenvat Credit in respect of the same cannot be demised - the Appellant have a strong prima facie case in their favour - the requirement of pre-deposit of Cenvat Credit demand, interest and penalty waived for hearing of the appeals and recovery stayed till the disposal of the appeals stay granted.
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2013 (10) TMI 661
CENVAT Credit - Eligibility to avail CENVAT Credit of Service Tax paid by the telephone service provider of the landlines which are installed at the residence of employee Held that:- There was no reason to deny such credit to the assessee, as the employees in whose residences the telephone lines are installed are undisputedly were working employees of the assessee - Following M/s SEMCO ELECTRIC PVT LTD (UNIT-II) Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2011 (6) TMI 238 - CESTAT, MUMBAI] and H. E. G. LTD. Versus COMMISSIONER OF C. EX., RAIPUR [2010 (10) TMI 357 - CESTAT, NEW DELHI ] - the order denying the CENVAT Credit to the appellant is unsustainable and liable to be set aside Order set aside Decided in favour of Assessee.
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CST, VAT & Sales Tax
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2013 (10) TMI 691
Demand - Non maintenance of opening stock inventory - Held that:- No justifiable ground to differ from the order of the Sales Tax Appellate Tribunal, being it based on facts. But, however, on equal time addition made by the Sales Tax Appellate Tribunal towards probable omission is concerned, we however agree with the contention of the assessee that when the Sales Tax Appellate Tribunal had accepted the case of the assessee on the subsequent accounting of the inter-State transaction, we do not find any justifiable ground to uphold the further addition towards probable omission - Decided in favour of assessee.
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Indian Laws
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2013 (10) TMI 680
Status of a Person - whether NRI or not - eligibility for admission in Post Graduate Medical Course (PG Medical Course) - Applicability of provisions of determination of NRI under the Income Tax Act, 1961 as well as under the relevant provisions of the Foreign Exchange Management Act, 1999 (the FEMA) - Held that:- The definition of word NRI was amended by the respondent/College whereby it included the provisions of the FEMA also, the petitioners, who are residents of India, as rightly pointed out by the respondent, have followed a devise to go out of country for work for some time on work permits that too as sales clerk, after having graduated in medicine, only with a view to get themselves admitted in NRI quota for admission in P.G. Medical course. The decision taken by the respondent/College is violative of the principles of natural justice, on considering the record of the petition, the respondent/College had published only a provisional merit list, which does not create any indefeasible rights in favour of the petitioners and the respondent/College has authority to scrutinize the basis on which the petitioners have claimed NRI status - it is of the duty of the respondent/College to properly scrutinize such applications, as the Apex Court in the case of P. A. Inamdar and others Versus State of Maharashtra and others [2005 (8) TMI 614 - SUPREME COURT ] has emphasized that genuine NRI should get benefit of such quota. In the academic years 2011-12 and 2012-13, the respondent/College has considered similarly situated students and have granted admission in P.G. Medical course, however, even if such mistake is committed by the respondent/College, which is not in accordance with the ratio laid down by the Apex Court in P.A.Inamdar case - the petitioners cannot claim any equity - The respondent has rightly relied upon the ratio laid down by the Apex Court in the case of Union of India Vs. International Trading Co. [2003 (5) TMI 480 - SUPREME COURT OF INDIA]. The genuineness of the status of NRI is to be scrutinized and examined by the respondent/College in its true letter and spirit - It is a fact that NRI quota is a reserve quota and, therefore, the respondent/College is duty bound to see that only genuine NRI gets admission in such quota and it should not be a devise to get out of turn admission by way of a backdoor entry as the same would affect other meritorious students, who are otherwise eligible - At the cost of repetition, in facts of these petitions well qualified medical graduates went to UAE, opted for post of clerks/salesman on a paltry salary and stayed there for hardly six months, without any intention to back clearly exhibits the method adopted is not but a devise to get claim NRI status and obtained admission, by a back door entry as other on merits it is not possible to get it. In light of this factual position, the petitioners cannot be considered as bona fide NRIs. The decision of non-inclusion of the petitioners names in the final merit list is the subject matter of these petitions and no further aspects are being considered by this Court - the respondent/College should go to the root of the matter and should also inquire whether person claiming to have obtained job and have entered into a contract with the company situated outside India are genuine or not - The respondent/College has to find out whether the student is a bona fide NRI or not the decision taken by the respondent/College is legal and proper and the same does not require any interference of this Court in its jurisdiction under Article 226 of the Constitution of India Decided against Petitioner.
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