TMI Tax Updates - e-Newsletter
October 22, 2013

Case Laws in this Newsletter:

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

Articles

1. CORPORATE COMPLIANCES – FOCUS AREA IN NEW COMPANIES ACT, 2013

   By: Dr. Sanjiv Agarwal

2. SPECIAL AUDIT BEFORE ASSESSMENT UNDER INCOME TAX ACT PROVISONS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Suggestions Invited for the 3rd Tranche of Draft Rules Under the Companies Act 2013 This Phase Covers the National Financial Reporting Authority

2. Tomorrow is the last date for Submitting Suggestions for the 2nd Tranche of Draft Rules Under the Companies Act 2013

3. Reserve Bank Cancels the Licence of Vishwakarma Nagari Sahakari Bank Maryadit, Aurangabad (Maharashtra)

4. RBI Reference Rate for US $ and Euro

Notifications

Customs

1. 24/2013 - dated 21-10-2013 - ADD

Seeks to levy anti-dumping duty on imports of Methylene Chloride, originating in, or exported from the European Union, USA and Korea RP for a period of Six Months

Circulars / Instructions / Orders

FEMA

1. 64 - dated 22-10-2013

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Highlights / Catch Notes

Income Tax

• Assessee's Contractual Shift to Sister Concern Raises Questions Over Unexplained "Commission" for Import License Fulfillment.

  Case-Laws - HC : Sister concern since had a licence for importing the furnace oil, the assessee diverted its contractual obligation for averting the payment of damages, nothing comes on the record to explain as to how the sum termed as “commission“ for performing the contract obligation was needed to be paid to the sister concern. - HC
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• Assessee Fails to Prove Long-Term Capital Gains; Case Sent Back to ITAT for Further Review.

  Case-Laws - HC : Genuineness of long term capital gain (LTCG) – income from undisclosed sources - The onus, which so rested on the assessee-respondent, was never discharged by the assessee- respondent. - matter remanded back to ITAT - HC
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• Court Remands Case on Diversion of Income by Overriding Title for Re-evaluation by Commissioner of Income Tax (Appeals.

  Case-Laws - SC : Diversion of income by overriding title - obligation of attached to income or to its source - trading receipt or not - Matter remanded back to CIT(A) to readjudicate the issue - SC
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• Court Confirms Income Additions for House Property; Taxpayers Need Evidence to Challenge Higher Assessments u/s 23.

  Case-Laws - AT : Annual Ratable Value – income from house property - No assessee would agree for higher taxable income till the evidences, going against him, are collected and confronted to him by the AO - additions confirmed - AT
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• Assessee faces penalties for late tax payment; Section 140A non-compliance leads to default u/s 221(1).

  Case-Laws - AT : Penalty u/s. 221(1) r.w. Section 140A (3) – assessee in default - payment of tax, along with interest, after due dates cannot be considered a sufficient cause for adhering to the provisions of section 140A of the Act - AT
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• Revision of Order u/s 263: Ensuring Compliance with Deduction Rules in Section 80P(4) of Income Tax Act.

  Case-Laws - AT : Revision u/s 263 – deduction u/s 80P(4) - The key words that are used by section 263 are that the order must be considered by the Commissioner to be "erroneous in so far as it is prejudicial to the interests of the Revenue" - AT
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• Section 148 Notice Deemed Abuse of Power Due to Valid Section 68(2) Certificate Under Voluntary Disclosure Scheme 1997.

  Case-Laws - AT : Notice under section 148 - The certificate granted by the Commissioner under section 68(2) of the Voluntary Disclosure of Income Scheme, 1997 is still holding the field - ssuance of notice under section 148 of the Income-tax Act, 1961 is an abuse of the power by Department - AT
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• Non-resident business profits not taxable in India without Permanent Establishment, per Section 195 of Income Tax Act.

  Case-Laws - AT : TDS u/s 195 - in the absence of the PE in India, the business profit of the non-resident is not taxable in India. - even if it is considered that the payments made to non-resident will fall under Article 22 of the Treaty viz. “Other Income“, then also not taxable in India - AT
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• Director of Income Tax's Inquiry on Charitable Trusts u/s 12AA Extends Beyond Objectives to Activities Assessment.

  Case-Laws - AT : Scope of enquiry made by DIT(E) u/s 12AA regarding the activities of charitable trust – The nature of enquiry would depend on the facts of each case – Contention that scope of the DIT(E) is limited to ascertaining only whether the objects are charitable or not is not acceptable - AT
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• Supreme Court Affirms High Court: 100% EOUs Must Adjust Unabsorbed Depreciation Against Income for Section 10B Exemption.

  Case-Laws - SC : 100% EOU - Exemption u/s 10B - unabsorbed depreciation and unabsorbed investment allowance should be adjusted against the income of the export-oriented business undertaking - order of HC sustained - SC
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Service Tax

• CENVAT Credit Not Allowed for Trading Activities; Reversal Required for Related Credits u/r 6.

  Case-Laws - HC : CENVAT credit - reversal of credit related to trading activity - cenvat credit was not allowable towards trading activity - HC
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• Appellant Wins Stay: Strong Prima Facie Case for CENVAT Credit on Supplementary Invoice for Later Service Tax.

  Case-Laws - AT : CENVAT Credit - supplementary invoice issued for service tax paid later - the appellant have strong prima facie case in their favour - stay granted - AT
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• Court Addresses Error in Final Order on Commercial Coaching Exemption Under Notification No. 9/2003-ST; Options Open for Authorities.

  Case-Laws - AT : Rectification of mistake in final order - Commercial coaching or training services - Exemption under Notification No. 9/2003-ST - all the options before the original authorities open for consideration - AT
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• Court Remands Case for Reevaluation of Freight Reimbursement Valuation in Steamer Agent's Ship Booking Process.

  Case-Laws - AT : Valuation - inclusion of reimbursement of freight - steamer agent - booking of space in the ships belonging to other companies - matter remanded back to pass well reasoned order - AT
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Central Excise

• CESTAT Dismisses Demand for Clandestine Removal Due to Insufficient Evidence; Loose Papers Lacked Relevant Connection.

  Case-Laws - HC : Clandestine removal - CESTAT dropped the demand in the absence of proper evidence - The loose papers only referred to tax and figures and did not relate to cement, which stood cleared by the appellant - condonation application as well as the appeal dismissed - HC
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• Stay Granted for Kaftan Consignment Under Export Scrutiny; Prima Facie Case Found in Appellant's Favor.

  Case-Laws - AT : Diversion of export Goods OR Not – there was a consignment of Kaftans available in the factory which appeared to be covered by the export invoice - the appellant have a prima facie case in their favour - stay granted - AT
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• Refund Claim Denied Due to Unjust Enrichment After Appellant Issued Debit Notes for Cenvat Credit Duty Collection.

  Case-Laws - AT : Refund - there is no dispute that the duty was initially collected by the appellant from their customers, who had also availed cenvat credit and it was only subsequently that debit note were issued the lower authorities have rightly held the refund claim to be hit by the bar of unjust enrichment - AT
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• Transportation Costs Must Be Included in Sale Price for Delivered Goods at Agreed Rate; Exclusion Argument Invalid.

  Case-Laws - AT : Assessable Value – there was no merit in the argument of the appellant that where the goods are delivered at the customers' premises at a pre-agreed rate of transportation, the cost of transportation should be excluded from the sale price to arrive at the assessable value - AT
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• Job Worker Deemed Manufacturer of Waste and Scrap, Not Raw Material Supplier, in CENVAT Credit Case; Stay Granted.

  Case-Laws - AT : CENVAT Credit - Job work - when the waste and scrap has arisen in the job-worker's premises, the job-worker is the manufacturer of waste and scrap so generated and not the appellant, who is the supplier of the raw material - stay granted - AT
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Case Laws:

• Income Tax

• 2013 (10) TMI 839
  Allowability of commission expense paid to sister concern for its licence for importing furnace oil - Held that:- Sister concern since had a licence for importing the furnace oil, the assessee diverted its contractual obligation for averting the payment of damages, nothing comes on the record to explain as to how the sum termed as "commission" for performing the contract obligation was needed to be paid to the sister concern. Reliance has been placed upon the judgment in the case of Prakash Cotton Mills v. CIT [1993 (4) TMI 3 - SUPREME Court] - In the said case, the assessee had paid statutory due imposed by way of damages or penalty or interest and claimed it as an allowable expenditure under section 37 (1) of the Act. The Supreme Court held that the authority has to allow deduction under Section 37 (1) wherever such examination reveals that the concern impost to be purely compensatory in nature. However, such imports, wherever is found to be of composite in nature, that is partly of compensatory and partly of penal nature, the authority has to bifurcate the two components of the impost and give deduction of that component which is compensatory in nature and refuse to give deduction of that component which is penal in nature – In the present case, appellant has failed to show as to how this amount of commission is compensatory in nature, which would entitle the appellant to avail the benefit of this decision – Decided against the Assessee. Allowance of expenditure amounting 1,65,172/- for sending mangoes to one Narayan V. Thosar through Air Wings – Held that:- Reliance has been placed upon the judgment in the case of Sayaji Iron & Engineering Company v. CIT, reported in [2001 (7) TMI 70 - GUJARAT High Court], wherein it had permitted expenditure in maintenance of vehicles used by the Directors for personal purposes. The Directors’ remuneration includes any expenditure incurred in providing benefit free of charges. The Court reversed the decision of the Tribunal on the ground that the Directors of the assessee company, who are entitled to use the vehicles for their personal use in accordance with the terms and conditions on which they were appointed and the perquisites given to the directors formed part of their remuneration under the Explanation to section 198 of the Companies Act, 1956 for the purpose of determining their remuneration under section 309 of that Act. It further held that once such remuneration was fixed as provided under section 309, it was not possible to state that the assessee incurred the expenditure for the personal use of the Directors. Since it was as per the terms and conditions of service, it must be held as a business expenditure – In the present case, no ground comes forth, nor there is any rationale for such huge business promotion expenditure incurred for supplying mangoes to a particular person, this authority will not come to the rescue of the assessee – Decided against the Assessee.

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• 2013 (10) TMI 838
  Additions u/s 68 - Block assessment - Addition on account of omission to record two zeros instead of three zeros – Held that:- Merely because the assessee made coded entries even for small figures, like Rs.100, Rs.200 etc., that does not mean that the assessee has omitted three zeroes. On the basis of the material available on record, and the statements recorded from the various debtors examined, it is very much clear that what was omitted by the assessee is only two zeroes and not three zeroes. In the absence of any material to the contrary brought on record, the assessing officer is not justified in ignoring the statements recorded from debtors. The statements recorded by the assessing officer clearly establish that what was omitted by the assessee is only two zeroes and not three zeroes. Addition of Rs.1,50,000/- as cash credit from undisclosed sources – Held that:- Remanded the matter to the file of the assessing officer for due verification and decision in accordance with law, after giving reasonable opportunity of hearing to the assessee.

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• 2013 (10) TMI 837
  Genuineness of long term capital gain (LTCG) – income from undisclosed sources - AO took the view that the assessee could not produce any documentary evidence of purchases of shares except showing the purchases of the shares, in question, in her balance sheet, along with the income tax return - ITAT deleted the addition - Held that:- when a query had been made by the Assessing Officer directing the assessee-respondent to furnish necessary materials to show that the return of income, which the assessee-respondent had filed, was correct, justified and tenable in law, the onus rested on the assessee-respondent to produce necessary materials and convincingly show that the value of the shares, as had been reflected in her annual return of income, had gone as high as the assessee-respondent had claimed. The onus, which so rested on the assessee-respondent, was never discharged by the assessee- respondent. This aspect appears to have escaped the notice of the learned Tribunal - Impugned order suffers from non-application of mind and, therefore, the same needs to be set aside and the appeal, which had been filed before the learned Tribunal, needs to be remanded for being decided in accordance with law.

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• 2013 (10) TMI 836
  Diversion of income by overriding title - obligation of attached to income or to its source - trading receipt or not - deductions made by the sugar Karkhana from the cane price as per the direction of state government - allowability of expenditure u/s 37 - Held that:- Matter is remanded back to the concerned Commissioner of Income Tax (Appeals) in terms of the order of this Court in the case of Deputy Commissioner of Income Tax,. Nahsik vs. Shri Satpuda Tapi Parisar SSK Limited [2010 (1) TMI 117 - SUPREME COURT].

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• 2013 (10) TMI 835
  Disallowance u/s 14A of the Income Tax Act – Held that:- The dividend in case of Nibbana Ltd. is taxable being a foreign company, whereas investments in Pragati Sahakari Bank Ltd. and Alkapuri Arcade Premises Onus Co-op. Society Ltd. were made for business purposes as the assessee purchased the majority shares of the company to control the management, in case of Alkapuri Arcade Premises Onus Co-op. Society Ltd. the investment is only Rs. 1500/- of 30 shares and in case of Pragati Sahakari Bank Ltd. Rs.50,000/-. The investment in shares of Nibbana Ltd. is Rs.3.02 crore which were purchased by the assessee company in the year 1997-98 from ICD loan, which was re-paid in A.Y. 03-04 from own funds, which has been accepted by the Department in preceding years – Expenses allowed – Section 14A, not applicable – Decided against the Revenue.

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• 2013 (10) TMI 834
  Bad debts to be written off u/s 36(1)(vii) of the Income Tax Act – Conditions u/s 36(2) - assessee claimed bad debts for not receipt of brokerage charges but non receipt of margin money also - claim of bad debts towards debts arisen during the current year or earlier year – Held that:- Debt under reference satisfies the condition of section 36(2)(i) in-as-much as the broker only acts as a mediator/intermediary, and the property in the contract belongs to the corresponding principals - Revenue's stand that only the claim to the extent of Rs.27.87 lacs could be claimed thus, i.e., for the current year, on the ground that the debt written off pertains to the current year to that extent, is without merit. What is relevant is not the year to which the debt/s written off pertains, but the year in which the loss in its respect, which is signified by its write off in its accounts as irrecoverable, relates to – Decided in favor of Assessee.

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• 2013 (10) TMI 833
  Change in method of accounting from ‘Project completion method’ to ‘Percentage completion method’ for the assessee, who is in the business of real-estate – Held that:- Assessee has to construct the complete building as per specification over a period of time and receive the purchase consideration from time to time from the purchasers and hand over the possession of the building when the building is fully completed, occupancy certificate is received and it is Only at that time the risks and rewards are transferred to the purchaser - Project completion method followed by the assessee is in order and the action of the department to reject the same and to estimate the income by applying project percentage completion method is not justified – Decided in favor of Assessee.

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• 2013 (10) TMI 832
  Annual Ratable Value – income from house property - Held that:- Facts of the case have to be analysed after considering the principles - Neither before FAA, nor before us, assessee has challenged the finding of fact - In these circumstances if AO decided to adopt reasonable rent for the year under consideration, then, in our opinion, he was justified - To oblige near and dear ones is a common human behavior - Assessee also tried to do the same - It was the result of the sustained investigation of the AO that all the facts came on record - Surrounding circumstances; higher rent of a flat of the same society for the same period, payment of deposits besides the higher monthly rent of the other property, close business relation of the tenant with the assessee-company, consent of the assessee to adopt higher rent;clearly prove that FAA had righty confirmed the orders of the AO – the rent received by the assessee, in the AY under consideration, was abnormally low, as compared to the fair market rent, that it had decided to charge less rent because of some extraneous reasons. No assessee would agree for higher taxable income till the evidences, going against him, are collected and confronted to him by the AO - in the present case also same thing happened - Therefore, considering the peculiar facts of the case under consideration and keeping in mind the ratio laid down by the Hon'ble Apex Court in the case of Commissioner of Income-Tax, West Bengal II Versus Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] and Sumati Dayal Versus Commissioner of Income-Tax [1995 (3) TMI 3 - SUPREME Court] the order of the FAA does not suffer from any legal infirmity – order of FAA upheld – Decided against Assessee. Disallowance of Electricity Expenditure and Society Maintenance Charges – Held that:- Disallowance of professional fees, electricity expenses, society charges, miscellaneous expenses and salary, the AO was directed to allow statutory deduction u/s. 24(a) of the Act under the head "Income from House Property "@ 30% of the ALV - once the standard deduction @30% was allowed no further deduction could be allowed unless same was covered by the provisions of section 24(b) of the Act - the disallowance of electricity expenses and society charges confirmed. No 'commercial' activity was carried out by the assessee - When the basic requirement of carrying out of commercial activity itself is missing question of 'complexity' of such activities does not arise - Bill amount of Electricity expenses was allocated among various cabins that were rented out in a particular month - it is a plain and simple case of receiving rent from the house property owned by the assessee - AO has rightly held that basic ingredients of business were missing in the transactions carried out by the assessee with regard to the property-in-question - the order of the FAA confirmed – Decided against assessee.

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• 2013 (10) TMI 831
  Penalty u/s. 221(1) r.w. Section 140A (3) – assessee in default - Held that:- Assessee did not file any reply before the AO and before the FAA it submitted that because of the mistake committed by the members of the staff tax could not be in time - FAA has clearly held that before him the assessee did not furnish any good or sufficient reason - Words 'Good and Sufficient reason' have not been defined in the Act - beyond control of the assessee can be termed sufficient cause - the assessee had not shown any cause as why it could not pay taxes in time - Assessee is a corporate entity paying tax of lacs of Rupees every year - It is not functioning from a remote village - It is not the case that assessee was facing financial crunch and because of that it could not pay taxes in time. Penalty imposed/confirmed by the AO/FAA is in the nature of additional tax for securing compliance with the provisions of the Act - Penal provisions for non-payment of taxes have been incorporated in the Act, as stated earlier, so that the tax is paid, by the assessees, within the time allowed u/s.140A(1) of the Act - income of an assessee belongs to him, but his right is subject to payment of dues to the Sovereign i.e; taxes - State has all the rights to recover taxes and a make reasonable provision to secure payment of tax on due date - the assessee had not offered any good and sufficient reason for not paying taxes on due dates, so FAA was justified in rejecting appeal filed by it - payment of tax, along with interest, after due dates cannot be considered a sufficient cause for adhering to the provisions of section 140A of the Act - the order of the FAA upheld – Decided against Assessee.

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• 2013 (10) TMI 830
  Revision u/s 263 – Held that:- The assessing officer did not examine about the applicability of provisions of sec. 80P (4) of the Act to the assessee – Following Grasim Industries Ltd. V CIT [2010 (2) TMI 4 - BOMBAY HIGH COURT ] - Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or canceling the assessment and directing a fresh assessment - The key words that are used by section 263 are that the order must be considered by the Commissioner to be "erroneous in so far as it is prejudicial to the interests of the Revenue" - the Ld CIT was justified in passing the impugned revision orders by invoking the provisions of sec. 263 of the Act. Deduction u/s 80P – Held that:- The Ld CIT has directed the AO to withdraw deduction granted u/s 80P of the Act - Hence the AO will not have any other option but to comply with his direction - the order of Ld CIT modified and the AO was directed to examine independently about the applicability of sec. 80P(4) of the Act to the facts of the instant case untrammeled by the observations of Ld CIT and take appropriate decision in accordance with law, after affording necessary opportunity of hearing to the assessee – Decided Partly in favour of Assessee.

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• 2013 (10) TMI 829
  Deletion of Tuition Fees – Proceedings u/s 133A - Whether The CIT (A) had failed to appreciate the fact that in the statement recorded during the course of survey proceedings u/s.133A of the Act – Held that:- Only evidence of actual fee receipt was only in the form of statement of the assessee recorded during the course of survey proceedings - the Revenue has not made any further investigation in the matter after retraction letter dated 5.12.2006 was filed, as they could have ascertained the quantum of fees from the students - The CIT(A) has also recorded that declaration was made by the assessee within a week itself, and at no stage, statement of any student to the contrary was confronted to the assessee - there is no mistake in the order of the learned CIT(A) in deleting the addition and the order of the learned CIT(A) on this issue is confirmed – Decided against Revenue. Deletion of low household withdrawals – Held that:- The assessee has withdrawn a sum and her husband has withdrawn for Household expenses of the family consisting of husband, wife and two children - The expenses seems to be reasonable, and therefore, no interference in the order of the CIT(A) on this issue is called for – Decided against Revenue. Addition in Admission Fee - The CIT(A) has passed a well-reasoned order on the issue - The CIT(A) has recorded that in the business of education, general practice is to take admission fees or entrance fees separately from the tuition fees, and therefore, on the basis of preponderance of probabilities, sustained the addition made by the AO - there is no material before us to take a contrary view, and accordingly order of the CIT(A) on this issue is confirmed – Decided against Assessee.

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• 2013 (10) TMI 828
  Rejection of books of accounts u/s 145(3) of the Income Tax Act – Computation of G.P. rate on estimation basis - The appellant had shown GP rate at 12.52% in the year under consideration as compared to 11.76% in preceding year, which was 10.7% in A.Y. 04-05. The turnover of the assessee has gone up from Rs. 15.3 Crore to Rs. 22.79 core in the year under consideration compared to preceding year. The appellant had shown increase in the turnover as well as in GP – Held that:- The comparable case cited by the A.O. are having lesser turnover and also were dealing in the different items i.e. assessee is importing and exporting and trading of the diamond as well as the gold jewellery. The case cited by the A.O. are not comparable further he only made the ground for rejection of book result i.e. not maintaining qualitative details of the opening stock, purchase sale and closing stock. As various Co-ordinate Bench had decided that this is not a sufficient ground for rejecting the book result. The A.O. has to bring on record other evidences which support the rejection of book result, which has not been found place in the assessment order - Further, in case of M/s. Dhami Brothers vs. ACIT [2010 (8) TMI 817 - ITAT AHMEDABAD], that there is no requirement of law to maintain qualitative details of each peace of diamond for computing the income. - Decided against the revenue.

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• 2013 (10) TMI 827
  Notice under section 148 - Voluntary Disclosure of Income as per section 78 (b) - the Assessee applied under the Voluntary Disclosure of Income Scheme, and that the concerned authority after holding that he was eligible under the said Scheme and that section 78 of the said Scheme was not attracted, granted the benefit of the said Scheme and a certificate was issued by the Commissioner under section 68(2) – Held that:- Following Uma Corporation Versus Krishna Prabhakar, Assistant Commissioner of Income-tax And Others [2006 (3) TMI 82 - BOMBAY High Court] and Rafique A. Mallik Vs. DCIT [2006 (8) TMI 147 - BOMBAY High Court] - Once certificate under Section 68(2) has been issued by the appropriate authority, then the AO has no power to cancel the same – in this case also the certificate under Section 68(2) was issued by the CIT and the same was not cancelled or withdrawn by the competent authority, who issued the certificate - There is no provision of law that once the certificate under Section 68(2) is issued then the AO can withdraw or cancel the same - By drawing adverse inference against the assessee, the AO has brought the amount to tax under normal provision of law, which was declared under VDIS Scheme - The AO has no power to hold that the declaration made by the assessee is void ab initio or liable to be cancelled. The certificate granted by the Commissioner under section 68(2) of the Voluntary Disclosure of Income Scheme, 1997 is still holding the field - Revenue also admits that the amount of voluntarily disclosed income cannot be included in the total income of the declarant for any assessment year – there was no justification for the notice under section 148 - issuance of notice under section 148 of the Income-tax Act, 1961 is an abuse of the power by Department – Decided against Revenue.

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• 2013 (10) TMI 826
  TDS to be deducted u/s 195 of the Income tax act – Applicability of section 201 and section 201(1A) of the act - Assessee is engaged in the business of processing of fruit products and exporting the same to the various non-resident customers in Saudi Arabia, Bahrain, Dubai, etc., through its non- resident agents - For the purpose of exports, the assessee had entered into an agency agreement with the non-resident agents to whom the commission was being paid as per the terms and conditions - The commission was being remitted to them in pursuance of the performance as per the said agreements - assessee had not deducted tax at source on the payments made to the non-residents as provided u/s 195 of the Act – Held that:- Payment of market survey fees to a resident of UAE in the present case will fall under Article 7, i.e., 'business profit', in the absence of an article in the India-UAE treaty dealing with 'fees for technical services'. It is a settled principle that business profit of a resident of a contracting state is not chargeable to tax in the other contracting State unless the non-resident carried out the business through a PE in India. In the case on hand, revenue has not established that the non-resident has a PE in India. Hence in the absence of the PE in India, the business profit of the non-resident is not taxable in India. Even if it is considered that the payments made to non-resident will fall under Article 22 of the Treaty viz. "Other Income", then also the payments are not taxable to tax in India since as per Article 22, income of a resident shall be taxable only in that contracting State i.e., UAE and not in India. Payment made to the non-resident was not chargeable to tax in India and, therefore, there was no liability to deduct tax at source in respect of the said payment under section 195 of the Act – Reliance has been placed on the various cases, one of case relied upon is Brakes India Ltd v. DCIT (LTU)[2013 (9) TMI 192 - ITAT CHENNAI] - Assessee's case doesn't fall within the ambit of s. 201 (1) of the Act for all the assessment years under consideration, the question of charging of interest u/s 201(1A) of the Act does not arise – Decided in favor of Assessee.

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• 2013 (10) TMI 825
  Addition u/s 40A (3) – Cash payment made on purchase of land - Held that:- The CIT(A) failed to consider the submissions of the assessee that payment in cash was made through the agent for the purpose of buying of land - the payment was made to the agent who was required to make payment in cash for purchase of land on behalf of assessee is dealt with by the ld. CIT(A) - CIT(A) nowhere in his order has adverted to and decided this submission of the assessee - the decision of CIT(A) on this issue is not justified, the same is hereby set aside - this being legal issue, the same is restored back to the file of AO to verify the claim of the assessee that the payment was made to the agent for the purpose of buying the land and the person to whom the sale consideration was handed over in cash was acting as an agent to the assessee 0 The AO is directed to decide this issue afresh in the light of the provisions of Rule 6DD(k) of the IT Rules, 1962 – Decided in favour of Assessee. Disallowance of Expenses – Unaccounted Income Disclosed – Held that:- It cannot be said that these expenses were incurred in respect of this income declared by the assessee in the course of survey - This cannot also be inferred that the assessee in claiming any deduction in respect of amount which was declared by the assessee during the course of survey thus proviso to section 69-C of the Act is not applicable in respect of these expenses - it is also required to be examined regarding the source of these expenses because if these expenses are not recorded in the books of accounts and the same is already paid, then its source of payment requires explanation - the issue should go back to the file of AO for fresh decision - the order of the CIT(A) on this issue and restore this matter back to the file of AO. Addition as profit on sale of records – Unaccounted Expenditure – Held that:- No separate addition was made by the AO in this regard and no material facts had been brought on record by him in respect of actual sale of plots and profit - In the absence of any evidence having been brought on record by the AO regarding actual sale and actual profit, no such addition is justified - the observation of the AO that this amount might have been utilized for the purpose of incurring expenditure made out of books is on the basis of conjectures and surmises - the addition is not called for because no evidence has been brought on record by the AO regarding actual sale of plots - Decided in favour of Assessee. Enhancement made by CIT (A) – Held that:- The enhancement was made by the CIT (A) on this basis that the amount declared by the assessee in the course of survey was in respect of expenses incurred by the assessee out of undisclosed sources but in the books of accounts the assessee had not accounted for the expenses but the assessee has accounted for the income only and the same was shown as cash in hand which was used subsequently for other purposes - on this issue also, the matter requires re-examination - the basis of accounting for these expenses has to be examined because the same may be accounted for by debiting to some capital asset and in that situation, the enhancement is not justified – Decided in favour of Assessee.

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• 2013 (10) TMI 824
  Scope of enquiry made by DIT(E) u/s 12AA regarding the activities of charitable trust – Held that:- After insertion of section 12AA w.e.f. 1.4.1997, the DIT(E) is empowered to enquire about the activities of the assessee before passing the order. There may be cases where application is made after the commencement of activities by the assessee trust. In such cases the DIT(E) is justified to enquire about the activities. However, where no activity is commenced, the question of making any enquiry regarding any activity by the DIT(E) would not arise. The nature of enquiry would depend on the facts of each case – Contention that scope of the DIT(E) is limited to ascertaining only whether the objects are charitable or not is not acceptable – Decided against the Assessee. Exemption u/s 10(22) of the Income Tax Act for educational institution – Held that:- Legislative intent disclosed in section 10(22) wherein it has been clearly provided that income of any educational institute cannot be exempted unconditionally if such institution also exists for deriving of profit. According to this provision, if any educational institution is running on commercial basis then income of such educational institution cannot be exempted from taxation. However, such institution can claim exemption u/ss. 11 and 12 as element of profit is not excluded by the Legislature - 75% of the income is to be applied for charitable purposes itself shows that element of profit is not excluded from the definition of charitable purpose for the purpose of sections 11 and 12. Because some profit has been earned by an educational institution registration u/s. 12AA cannot be denied so long as provisions of sections 11, 12 and 12AA are complied with. Whether on the facts and in law, the registration u/s. 12AA of the Act can be refused to the assessee – Held that:- When societies/trusts are created with the sole object to advance the cause of education but if such objects coupled with the motive to earn profits, then such institution will not be entitled to exemption under section 10(22), since in such cases cannot be said to exist solely for the purpose of education. Therefore, registration under section 12A/12AA would not be relevant by itself for claiming exemption under section 10(22) though the same would be relevant for claiming exemption under sections 11 and 12. Therefore, where education is imparted by an institution with the purpose of profit i.e., by running the schools/colleges purely on commercial basis, the assessee would not be entitled to exemption under section 10(22) but such case may be considered for exemption under section 11 if the conditions imposed by the Legislature are satisfied – Decided in favor of Assessee.

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• 2013 (10) TMI 823
  100% EOU - Exemption u/s 10B - Adjustment of the unabsorbed depreciation against the income from other sources - "Whether, Tribunal is right in holding that the assessment order passed by the Assessing Officer allowing the claim of the assessee for adjustment of the unabsorbed depreciation against the income from other sources was in order and hence cannot be considered to be erroneous or prejudicial to the interests of the Revenue and in cancelling the order under sections 263?" – Held that:- As per Hon’ble Karnatka High Court Order,Commissioner directed that the unabsorbed depreciation and unabsorbed investment allowance should be adjusted against the income of the export-oriented business undertaking and the total income of the assessee should accordingly be recomputed afresh. - calculation cannot be at the whims and fancies of an assessee for exemption of tax - Commissioner is fully justified in holding that the assessee is not justified in showing nil return - Order of HC reversing the order of ITAT sustained [2006 (8) TMI 125 - KARNATAKA High Court]– Decided against the Assessee.

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• Customs

• 2013 (10) TMI 856
  Demand - Differential duty - LME price - Held that:- demands have been confirmed on the basis of publication of mineral and metal review which is a publication and reports of imports of aluminium scrap on various ports in India based on the import data provided by the customs department, the appellant prepared a comparative chart in respect of the imports that has not been considered by the adjudicating authority. In fact the adjudicating authority has to consider the data of the contemporaneous imports of aluminium scrap on various ports as per the worksheet prepared by the appellant which has not been done in this case. Therefore, demand on account of contemporaneous imports is not sustainable. Demand based on the argument that the price of these goods should be fixed at 65% of LME price for zinc is not consistent with laws and common sense. This formula does not take into account the fact that the Appellants were not manufacturing prime metal zinc for which price is quoted on LME. it does not take into account any processing cost or profit margin. It does not take into account the actual contents of zinc in the impugned goods and the form in which such zinc is present. It is also seen that the statement recorded under Section 108 accepts undervaluation of a few consignments only and not all consignments - Following decision of Sonia Overseas Pvt. Ltd. Vs Commissioner of Customs, Amritsar [2011 (3) TMI 1268 - CESTAT, NEW DELHI] - Decided in favour of assessee.

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• 2013 (10) TMI 855
  Differential Duty – Waiver of Pre-deposit - Whether the department was correct in demanding differential duty on lumps on the ground that the total quantity of Iron and Ore Fines exported by the appellant in three Shipping Bills can be charged duty at higher rate on the ground that the percentage of lumps is more than 5% - Revenue was of the view that 5% tolerance is allowed as per the practice followed in Goa Customs House – Held that:- The reason that 5% tolerance was allowed as per practice followed by the Goa Custom House, there is no other ground for charging differential duty on lumps in excess of 5% - The issue requires more detailed consideration taking into account the statutory provisions and basis for the same etc. which can be done at the time of final hearing stage - On the rejection of transaction value, even the documents based on such conclusions have been arrived were not provided to the appellant - It also requires a detailed consideration - the issues involved and taking into account the fact that the amount involved is very small and also taking into account the fact that the company is a small exporter and have financial hardships - the requirement of pre-deposit has to be waived - waiver of pre-deposit and stay of recovery in respect of the dues during the pendency of the appeals was allowed – Stay granted.

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• 2013 (10) TMI 854
  Redemption Fine – Waiver of Pre-deposit - Whether the duty element and redemption fine was discharged by M/s. Chetali Printing Press – Held that:- There was mis-declaration and undervaluation of import made in the name of Chetali Printing Press - the order role of Manoj Jain and Ajit Jain connected with Surana Exim P. Ltd. was brought out by Revenue - Overseas inquiry revealed undervaluation of import - Chartered Engineer’s report also went against appellant proving under valuation - Shri Manoj Jain admitted undervaluation – Pre-deposits were ordered to be made in installments - Failure to deposit any of the installments shall render this order vacated and the department shall be at liberty to realize its entire dues – Partial stay granted.

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• 2013 (10) TMI 853
  Waiver of pre deposit - Held that:- Adjudicating authority held that the transaction value of similar goods is available from the contemporaneous import price cleared at Jawaharlal Nehru Custom House, Nhava Sheva in the case of M/s. Lakshmi Trading Co., Delhi. The submission of the learned advocate that violation of natural justice before the adjudicating authority is not sustainable as they have got an opportunity before the Commissioner (Appeals) - we direct the applicant to deposit a sum of Rs.10,00,000/- (Rupees Ten lakhs only) within 8 weeks and report compliance on 20.6.2013. Upon such compliance, predeposit of balance dues arising from the impugned order is waived and its recovery is stayed during pendency of the appeal - Decided against assessee.

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• 2013 (10) TMI 852
  Penalty - Confiscation of goods - Held that:- The goods were re-examined at the request of the appellant and it was found that the consignment consisted of 10% of the sawn woods. The appellant has not contested this examination report since they waived the show-cause notice and also did not appear for personal hearing before the assessing authority. In other words, they had agreed with the examination report conducted in their presence under the supervision of Assistant Commissioner (Docks). If that be so, the appellant cannot at the appellate stage dispute the examination report. Therefore, we do not find any infirmity in the impugned order in confirming the duty demand on 10% of the consignment at the rate applicable to the “sawn woods” by classifying them under CTH 4407.29. It is not in dispute that the consignment consisted of roughly squared sawn woods logs as declared by the appellant to the extent of 90% of the consignment and only 10% of the goods were found to be sawn wood - there was no deliberate mis-declaration on the part of the appellant with intent to evade Customs duty. Therefore, confiscation was not warranted and consequently imposition of fine and penalty was also not warranted. Accordingly, we set aside the fine and penalty imposed on the appellant while upholding the confirmation of duty demand - Decided partly in favour of assessee.

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• Corporate Laws

• 2013 (10) TMI 851
  Disinvestment in equity shares - Held that:- What was involved in the present case was not the sale of assets but sale of equity capital. If after following the ICDR and on taking into consideration the relevant methodologies of valuation for sale of equity capital the price band of Rs. 226-245 per share was fixed, it cannot be said that the price band so fixed was unreasonable or sale of 10% equity capital by CIL was unfair. Where challenge is laid to a government policy, particularly economic policy, this Court does not interfere in such policy matter in its power of judicial review unless the impugned policy is found to be grossly arbitrary or unfair or unreasonable or irrational or violative of constitutional provisions or contrary to statutory provision - Writ dismissed.

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• 2013 (10) TMI 850
  Notice under Rule 4(1) of Adjudication Rules – Proceedings and Penalty u/s 15C and 15A (2) of SEBI Act - Why an enquiry should not be conducted against the company and penalty should not be imposed under sections 15C and 15A(a) of the Securities and Exchange Board of India Act, 1992 – Held that:- The redressal grievance mechanism envisaged under SEBI Act was an important tool in the hands of SEBI to discharge its duties and obligations imposed on it by the Parliament in the SEBI Act, 1992 - Section 11 of the SEBI Act categorically says that one of the most important objects of SEBI was to protect the interest of investors and would, undoubtedly include timely redressal of grievances of investors - There can be no dispute with this proposition of law. The company was a sick industrial company - It had financial constraints - Its inability to appoint a full time company secretary was also evident from the record even fees to the share transfer agent, NSDL and CDSL could not be arranged - these were important factors which should have motivated the Adjudicating Officer to impose a lesser penalty in the matter - Therefore, in the peculiarity of the facts and circumstances of the case, we uphold the order in principle but reduced the said penalty in respect of violation of section 15C and in respect of Section 15A(a) of the SEBI Act - With the modification of penalty, the order was upheld and the appeal was dismissed - However, the appellant shall pay the said amount within two months from the date of receipt of the copy of this order.

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• Service Tax

• 2013 (10) TMI 863
  CENVAT credit - reversal of credit related to trading activity - Revenue was of the view that assesse had irregularly availed CENVAT credit given in respect of the exempted service – held that:- prima facie no serious infirmity in the process adopted by the adjudicating authority for arriving at the quantum of cenvat credit irregularly availed by the assesse which requires to be disallowed - it was quite clear that since trading activity was nothing but purchase and sales and was covered under state sales tax law, it may not be appropriate to call it a service. Therefore it had to be held that trading activity cannot be called a service and therefore it cannot be considered as an exempted service also – adjudication order sets out the reasons for disregarding the assesse’s assessment of the allocation of the cenvat credit availed between the taxable Business Auxiliary Service. - We prima facie find no serious infirmity in the process adopted by the adjudicating authority for arriving at the quantum of cenvat credit irregularly availed by the petitioner which requires to be disallowed. - 50% of demand ordered to be pre-deposited - stay granted partly.

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• 2013 (10) TMI 862
  CENVAT Credit - supplementary invoice issued for service tax paid later - Revenue was of the view that the invoice issued to the appellant is supplementary invoice and since non-payment of service tax was on account of wilful suppression of facts, the appellant cannot take cenvat credit of this service tax on the basis of this invoice, in view of the provisions of the Rule 9(1)(b) of the Cenvat Credit Rules – Waiver of Pre-deposit - Held that:- Prima facie such a provision was not there in respect of input services and was introduced w.e.f. 1.4.2011 - in this case the receipt of the services by the appellant is not disputed and the fact that the services were used in or in relation to the manufacture of finished goods is also not disputed - the appellant have strong prima facie case in their favour – Following Secure Meters Ltd. Vs. CCE, Jaipur-II [2010 (1) TMI 284 - CESTAT, NEW DELHI] and Imagination Technologies India P. Ltd. Vs. CCE, Pune-III [2011 (4) TMI 406 - CESTAT, MUMBAI] - the requirement of pre-deposit of cenvat credit demand, interest and penalty waived for hearing of the appeal and recovery stayed till the disposal of the appeal – Stay granted.

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• 2013 (10) TMI 861
  Condonation of delay - Exemption from payment of service tax to municipalities - Held that:- Assistant Commissioner had required the bank to pay Rs.35,06,174/- towards the dues arising as a result of impugned order in this case and this amount has been paid by the bank to the Government by preparing a Demand Draft and the Demand Draft numbers are also available in letter written by bank to the appellant. We consider that the evidence produced by the appellant to show the payment is sufficient - stay allowed.

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• 2013 (10) TMI 860
  Payment of commission for procuring the orders - import of servcies - Manufacture of textile made ups - Held that:- applicants already deposited more than 50% of tax except in Appeal No.ST/666/11. Following the cited stay order dt. 6.5.13 of the Tribunal, in Appeal No.ST/666/11 we direct the applicants to deposit a further amount of Rs.9,00,000 within a period of 8 weeks. Subject to such deposit, the pre-deposit of balance amount of tax along with interest would be waived and recovery thereof stayed during pendency of appeal - Decided partly in favour of assessee.

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• 2013 (10) TMI 859
  Rectification of mistake in final order - Commercial coaching or training services - Exemption under Notification No. 9/2003-ST - Held that:- In the order, no distinction has been made between ISB and IIRM on the one hand and ICFAI on the other hand. In the absence of any discussion and identification of difference between the activities of ISB and IIRM on the one hand and ICFAI on the other hand in the Final Order, at this stage, if we make a distinction in the nature of the institutions, in our opinion, it may amount to review of the order. If we will be going into an area where error/mistake is not apparent from records, it would emerge as a fresh consideration of the nature of the appellants which may not be correct to undertake. Once this point cannot be taken up by us because it may amount to review of the order, what remains is the request for consideration of the alternative claim. Needless to say that while considering the alternative claim, the original authority will be free to go into all the aspects of the matter to determine whether the training given by the institutions is vocational training or not and the institutions can be considered as vocational training institutes or not. Therefore, in our opinion, it would be appropriate to allow the request for rectification of mistake and remand the matter to the original authority as in the cases of ISB and IIRM - Decided in favour of assessee.

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• 2013 (10) TMI 858
  Valuation - inclusion of reimbursement of freight - steamer agent - booking of space in the ships belonging to other companies - Extended Period of Limitation – Application to Produce Additional Evidence - Revenue was of the view that the appellant should have paid service tax on the ocean freight element collected from the customers – Held that:- Following Gudwin Logistics vs. CCE [2009 (11) TMI 157 - CESTAT, AHMEDABAD] - There was absolutely no indication as to what was the ratio of the decisions cited and why they were not relevant and whether there were any contrary decisions considered by him for this purpose - Similarly there were no findings as to why extended period can be invoked in this case and why penalties should be imposed - To consider an appeal against an order, there should be some reasoning in the order which can be considered whether it was appropriate or not. The decision in the case of Sri Bhagavathy Traders [2011 (8) TMI 430 - CESTAT, BANGALORE] is not relevant since the ocean freight is nothing but reimbursement of actual expenditure and when the Steamer Agent collecting the freight on behalf of the shipping company and charging his commission separately it is nothing but a reimbursement of the cost. It was also submitted that in majority of the cases the appellant is not even a Steamer Agent but books shipping space for other customers and in such cases he is only doing this for the customers and charging for his services. In the, absence of any reasoning in the order, it becomes difficult to consider the same in appeal - In these circumstances, we find that the matter was required to be remanded to the original adjudicating authority.

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• 2013 (10) TMI 857
  Enhancement of service tax - Section 85(4) - Held that:- A plain reading of the section shows that the said section does not confer any power of remand to the lower appellate authority. Therefore, the impugned order passed by the lower appellate authority is not sustainable in law - appellate authority is directed to decide the case on merits and determine the tax liabilities, interest and penalties himself - Decided in favour of assessee.

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• Central Excise

• 2013 (10) TMI 849
  Clandestine removal - CESTAT dropped the demand in the absence of proper evidence - Condonation of Delay – Delay of 129 Days – Held that:- Apart from loose papers, which on the face of it cannot be related to the appellant's business account, there was no other evidence to reflect upon clandestine activities of the appellants - The Tribunal also examined the loose papers and found that there was no indication that the same belonged to cement as substantial part of factory premises were let out to other companies, for carrying on business in minerals - The loose papers only referred to tax and figures and did not relate to cement, which stood cleared by the appellant - condonation application as well as the appeal dismissed – Decided against Assessee.

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• 2013 (10) TMI 848
  Submission of Pre-deposit – Held that:- The petitioner submitted the amount of pre-deposit and complied with the order - CESTAT may treat the appeals as competent and proceed with the hearing of the appeals.

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• 2013 (10) TMI 847
  Diversion of export Goods OR Not – Waiver of Pre-deposit – Held that:- The goods had been cleared on 10/5/11 for export under bond - According to the appellant these goods could not be exported, as the buyers representative in pre-shipment inspection rejected the consignment as the same was not as per their quality specifications - According to the appellant for this reason only, the goods were returned to the factory - a consignment of the garments was available in the factory and the Jurisdictional Range Officer after inspecting the same has given a report that those goods are in accordance with the description given in the invoices, but still he has said that it cannot be proved that the goods available in the factory are the same as the goods cleared - the appellant did not intimate the return of the goods within 24 hours, the fact remains that they have produced Transport company’s GR and as such no inquiry has been conducted with the transporter - there was a consignment of Kaftans available in the factory which appeared to be covered by the export invoice - the appellant have a prima facie case in their favour - The requirement of pre-deposit of duty demand, interest and penalty waived for hearing of the appeal and recovery stayed - stay granted.

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• 2013 (10) TMI 846
  CENVAT Credit – Waiver of Pre-deposit - Revenue imposed penalties on the ground that the main appellant issued invoices for facilitating availment of ineligible cenvat credit – Held that:- Shri Shashikant Koticha has given a categorical statement before the authorities that they were supplying Pet coke to various parties without invoices - The invoices which indicate such pet coke presumably, were given to persons who could avail cenvat credit - the legal submissions made by the learned counsel as there being no corroborative evidences, needs to be gone into detail which can be done only at the time of final disposal of appeals - assessee is directed to pre- deposit an amount of Rs. 2,00,000 – upon such submission rest of the duty to be allowed to be stayed till the disposal – Partial stay granted.

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• 2013 (10) TMI 845
  Refund - Unjust Enrichment - Entry by debit note / credit note – Nil rate of duty in terms of Notification No. 3/2005 - Held that:- Following COMMR. OF C. EX., LUDHIANA Versus ORIENTAL TEXTILE PROCESSING CO. (P) LTD. [2012 (5) TMI 247 - CESTAT, NEW DELHI] - Merely because the buyers of the respondent had issued the debit notes and had made reference to debit notes in their ledger books that itself cannot be sufficient to say that the respondent had discharged their burden in that regard - there is no dispute that the duty was initially collected by the appellant from their customers, who had also availed cenvat credit and it was only subsequently that debit note were issued the lower authorities have rightly held the refund claim to be hit by the bar of unjust enrichment. - decided against the assessee.

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• 2013 (10) TMI 844
  Waiver of Pre-deposit - CENVAT Credit – Held that:- Relying upon Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - it is also noticed from the records that in addition to supporting structures, there are items used for connecting pipelines, evaporators, etc. - Therefore the appellant may not have a 100% case but definitely a portion of the credit would be admissible - the appellant is directed to deposit 50% of the CENVAT credit demanded – upon such compliance there shall be wavier of pre-deposit of the balance and stay against recovery during the pendency of appeal – Partial stay granted.

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• 2013 (10) TMI 843
  Refund claim of Accumulated Credit - 100% E.O.U. - services were used for manufacture of the goods - Held that:- Following COMMISSIONER OF CUSTOMS, BANGALORE V/s SFO TECHNOLOGIES PVT LTD. [2013 (2) TMI 472 - CESTAT BANGALORE] - The services have been used by them in relation to the manufacture of the finished goods and also in the day-to-day activities like procurement of raw materials, production and quantity control, marketing and sale & export of the finished goods - This finding of the original authority has not been rebutted in the grounds of appeal – Decided in favour of Assessee.

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• 2013 (10) TMI 842
  Assessable Value – Place of removal - delivery at customer's factory gate - inclusion of cost of transportation - Held that:- The assessable value has to be determined in respect of each removal of the excisable goods and the value on which the duty is liable to be paid in a case where the goods are sold by the assessee for delivery at the time and place of removal and the assessee and the buyer are not related and the price is the sole consideration for sale, is the transaction value - the price for levy of excise duty is the transaction value for delivery of the excisable goods at the time and place of removal. If goods are delivered at the customers' premises, whether at appellant's own volition or at the request of the customer, that should not make any difference in the assessable value of the goods because the goods are sold for delivery at the customers' premises and as per Section 4, the price is the sale value of the goods for delivery at the time and place of removal - As per the definition of ‘place of removal' when the goods are sold at the customers' premises for delivery, it is the customers' premises which is the ‘place of removal' - there was no merit in the argument of the appellant that where the goods are delivered at the customers' premises at a pre-agreed rate of transportation, the cost of transportation should be excluded from the sale price to arrive at the assessable value. Time-Barred Appeal – Waiver of Pre-deposit - Held that:- The declaration made in the ER-1 return is only with respect to availment of CENVAT credit on the GTA services paid by the appellant - Availment of credit has nothing to do with the valuation of excisable goods - this declaration in the ER-1 returns no way shows that the appellant has declared the correct value or revealed the entire nature of the transactions to the department - the plea of time-bar raised by the appellant is prima facie not admissible – in the absence of a prima facie case and financial hardship, balance of convenience lies in favour of the Revenue - the appellant directed to make a pre-deposit of four crore – upon ssuch submission rest of the dues adjudged against the appellant shall stand waived and recovery stayed during the pendency of the appeal – Partial stay granted.

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• 2013 (10) TMI 841
  Rectification of Mistake – Held that:- The distinction between unitized structural glazing and semi-unitized structural glazing was brought up before the Tribunal for the first time - Even when this was brought up and even though a claim was made that duty had been paid in the case of unitized structural glazing, there was no opportunity for the Department to examine this claim and its correctness and according to the appellant this had a bearing on the conclusions - In the absence of any verification of the claims, the Tribunal had to necessarily go by the facts available on record and facts available on record clearly showed that appellants had not discharged any duty even though there were tariff entries for structural and the process undertaken by the appellants was not limited to drilling holes and cutting the aluminium sections into sizes. The activity involved is correctly described as semi-unitized glazing system and the Tribunal took note of the fact that the assessee fabricated parts of structures and therefore it cannot be said that the Tribunal did not consider this aspect - there cannot be any basis for a bona fide conclusion on the part of the appellants - even to examine that the decision of the Tribunal was having any mistake, considerable discussion is required – there was no mistake apparent flowing from the order – Application for Rectification of Mistake is rejected – Decided against Assessee.

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• 2013 (10) TMI 840
  CENVAT Credit - Waiver of Pre-deposit - Rule 4(5)(a) of the CENVAT Credit Rules, 2004 nowhere envisages that the waste and scrap generated at the job-worker's premises should be brought back by the supplier and if they are not brought back, the supplier of raw material is liable to discharge excise duty liability - What is envisaged is that the raw material sent for processing at the job-worker's end, the processed goods should be brought back and if they are not so brought back, the appellant has to reverse the credit taken on the raw materials supplied. Following Commissioner of Central Excise vs. Rocket Engineering Corporation Ltd. [2006 (6) TMI 66 - HIGH COURT BOMBAY] - The liability to pay excise duty arises not under the provisions of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 but under Section3 of the Central Excise Act, 1944 on the manufacture of a marketable commodity as specified in the Central Excise Tariff Act - when the waste and scrap has arisen in the job-worker's premises, the job-worker is the manufacturer of waste and scrap so generated and not the appellant, who is the supplier of the raw material - the appellant has made out a strong case in their favour for grant of stay - unconditional waiver from pre-deposit of the dues adjudged against the appellant and stay recovery during the pendency of the appeal – Stay granted.

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• CST, VAT & Sales Tax

• 2013 (10) TMI 864
  Demand - State Development Tax - Held that:- The questions in this writ petition have been adjudicated by this Court and the Supreme Court in the judgments cited in M/S Systematic Conscom Limited Versus State of U. P. and others [2009 (3) TMI 872 - ALLAHABAD HIGH COURT]. As the circular instructions issued by the Commissioner, Trade Tax, U.P. dated 4.6.2007 has already been quashed, no further orders are required to be made in this regard. So far as imposition of State Development Tax, in the orders dated 31.3.2008 passed by respondent no.3 for the assessment years 2005-06 and 2006-07 in respect of the petitioner is concerned, the same is set aside with the similar liberty to the assessing authorities as given in paragraph 24 of the judgment of the Supreme Court whether to demand the State Development Tax from those dealers who had opted for the composition charges under the composition scheme by way of issuing appropriate demand notices in accordance with law. If and when such demand notices are issued by the assessing authority/ authorities, the assessee including the petitioner will be at liberty to question the same before the appropriate forum - Decided in favour of assessee.

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