TMI Tax Updates - e-Newsletter
October 3, 2016

Case Laws in this Newsletter:

Income Tax Customs PMLA Service Tax Central Excise CST, VAT & Sales Tax

TMI SMS

• Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18 - OLD ICDS notified in 2015 rescinded - CBDT

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Articles

1. GOODS FOR WHICH ANTI DUMPING DUTY IS LEVIABLE

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Setting The Priorities Right (Shri S. S. Mundra, Deputy Governor – September 28, 2016 – at the 3rd SBI Banking and Economics Conclave in Mumbai)

2. Income Declaration Scheme 2016 unearths ₹ 65250 crore of hitherto Undeclared Income and Assets; 64275 declarations filed under IDS-2016 up to the midnight of 30th September, 2016

3. 7% stake of Government in Hindustan Copper Limited fully subscribed and Government to get approximately ₹ 400 crore from this disinvestment

4. CBDT notifies 7 districts of Andhra Pradesh for availing tax incentives under the Income-tax Act

Notifications

Income Tax

1. 88/2016 - dated 29-9-2016 - IT

Income-tax ( 23rd Amendment) Rules, 2016

2. 87/2016 - dated 29-9-2016 - IT

Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

3. 86/2016 - dated 29-9-2016 - IT

Income Computation and Disclosure Standards (ICDS) - ICDS notified in 2015 rescinded

Service Tax

4. 45/2016 - dated 30-9-2016 - ST

Service of transportation, by educational institutions to students, faculty and staff

Circulars / Instructions / Orders

SEZ

1. Minutes of the 72nd meeting of the SEZ - dated 12-8-2016

Minutes 72nd meeting of the of the Board of Approval for SEZs held on 12th August 2016 to consider proposals for setting up Special Economic Zones and other miscellaneous proposals

Service Tax

2. 201/11/2016 - dated 30-9-2016

Guidelines for arrest in relation to offences punishable under the Finance Act, 1994 and Central Excise Act, 1944

FEMA

3. 4 - dated 30-9-2016

Investment by Foreign Portfolio Investors (FPI) in Government Securities

Highlights / Catch Notes

Income Tax

• CBDT Updates Income Computation and Disclosure Standards; Effective from Assessment Year 2017-18, Previous 2015 Standards Rescinded.

  Notifications : Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18 - OLD ICDS notified in 2015 rescinded - CBDT
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• Income Computation and Disclosure Standards (ICDS) Rescinded; Taxpayers Must Adjust to New Tax Computation Rules.

  Notifications : Notification on Income Computation and Disclosure Standards (ICDS) - ICDS notified in 2015 rescinded - Notification
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• Company Exempt from Tax on Notional Rent for Property Used by Partnership Firm u/s 22 of Income Tax Act.

  Case-Laws - AT : Notional rent - income from house property u/s 22 - The assessee is a Private Limited Company and is a partner in a Partnership Firm which carries on business from the same premises which is owned by the assessee - Notional rent is not chargeable to tax in this case - AT
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• Section 10AA Deduction Includes Job Work Manufacturing as Eligible Activity Under Income Tax Act for Tax Benefits.

  Case-Laws - AT : Deduction u/s 10AA eligibility - activities of getting manufactured goods from outside sources on job work basis are also covered under manufacturing activities. - AT
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• Payment for Technical Know-How Requires Tax Deduction at Source u/s 195 of Income Tax Act in Singapore.

  Case-Laws - AT : TDS u/s 195 - the Singapore company as a Consultant has made available to the assessee company technical knowledge in the form of expertise in the operation of its business which was in its possession along with experience and know-how and the same technical know-how can be used by the assessee for its enduring benefit and thus since the assessee has made the payment for fees for technical services, it was required to deduct tax at source - AT
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Customs

• Petitioner Must Pay Demurrage Charges Except for Confiscation Period; Waiver Granted Only During Seizure Time.

  Case-Laws - HC : Waiver of demurrage charges - The period during confiscation, charges have been waived, therefore, for the remaining period the petitioner is duty bound to pay the duty demurrage charges - HC
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• Car Import Status Clarified: New vs. Used Debate Settled; Exemption Granted Due to Manufacturing-Import Date Proximity.

  Case-Laws - HC : Import of a car - new or used car - Given the proximity of the date of manufacture of the car and date of its import, it cannot be said the said car ceased to be a new car and became a 'second hand' car at the time of its import - benefit of exemption allowed - HC
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Service Tax

• GTA Services Must Issue Consignment Note to Avoid Service Tax Liability u/s 65(50b) of Finance Act 1994.

  Case-Laws - AT : Goods transport agency service (GTA) - As per definition of goods transport agency in section 65(50b) of Finance Act, 1994, an essential characteristic of provider of the service is the issuance of a consignment note - In case no consignment note was issued, there was service tax liability - AT
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• New Arrest Guidelines for Finance Act, 1994 & Central Excise Act, 1944 Focus on Judicious Use and Tax Evasion.

  Circulars : Guidelines for arrest in relation to offences punishable under the Finance Act, 1994 and Central Excise Act, 1944 - Circular
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Central Excise

• Printed Paper Classification Debate: CETH 4901.90/4911 99 90 vs. CETH 4819 in Central Excise Case.

  Case-Laws - AT : Classification - printed Sheets of paper/paper board - to be classified under CETH 4901.90/4911 99 90 as per respondent and not under CETH 4819 as contended by the Revenue - AT
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• Freight Costs in Duty Refunds: Court Rules Against Appellant for Lack of FOR Destination Basis Evidence.

  Case-Laws - AT : Area based exemption - refund of duty paid - inclusion of freight from the factory gate to the place of delivery for payment of duty - appellant is not able to establish that the sales/clearances effected by them are on FOR destination basis. - AT
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• EOU Entitled to Cenvat Credit Refund u/r 5 of Cenvat Credit Rules, 2004; Not Recovered u/r 14.

  Case-Laws - AT : 100% EOU - they were entitled to avail the Cenvat credit and since the Cenvat credit is also not recovered under Rule 14 of Cenvat Credit Rules and is available in balance in the books of accounts the same is admissible to be refunded under Rule 5 of Cenvat Credit Rules, 2004 - AT
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• Appellant's Claim on Crushing Machinery Classification Under CTH 8431/8483 Lacks Evidence; Buyer Advice Unsubstantiated.

  Case-Laws - AT : Classification - parts/components of crushing machinery - The appellant's claim based on their buyer's advice is not supported by any material evidence - to be classified under CTH 8431/8483 - AT
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VAT

• High Court Upholds Enzymes Classified as Chemicals, Taxed at 4% According to Notification No.1084.

  Case-Laws - HC : Classification of goods - Enzymes - taxable @ 4% - or liable to tax @ 10% - "Enzyme" a chemical under Notification no.1084 dated 25.02.2003 to be chargeable to tax as chemical @ 4% - HC
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• High Court: ITC Valid Even When Goods Sold Below Invoice Price Due to Discounts or Incentives.

  Case-Laws - HC : Input Tax Credit - discount/incentive received - sale of goods at a rate lower than the price shown in the VAT invoice - ITC cannot be disallowed - HC
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Case Laws:

• Income Tax

• 2016 (10) TMI 9
  Notional rent added as income from house property u/s 22 - Held that:- The assessee is a Private Limited Company and is a partner in a Partnership Firm which carries on business from the same premises which is owned by the assessee. In such circumstances, whether rent from house property is to be assessed u/s 22 of the Act as notional rent or not, the issue has been answered by the Hon ble Bombay High Court in the case of Shantikumar Narottam Morarji v. CIT [1954 (9) TMI 27 - BOMBAY HIGH COURT] . Subsequently, the same has been followed by the Co-ordinate Bench of the Tribunal in the case of Smt. Indira Jain (2012 (6) TMI 33 - ITAT MUMBAI). Respectfully, following the same principle, it is of the view that notional rent u/s 22 of the Act cannot be charged in the given facts and circumstances of the case. Accordingly, delete the addition and allow the appeal of the assessee.

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• 2016 (10) TMI 8
  Deduction u/s 10AA eligibility - Assessee is engaged in the business of manufacturing of cut & polished diamonds and its unit is situated in SEZ - Held that:- We are of the considered view that assessee in the course of running its undertaking in SEZ is allowed to send raw material outside the SEZ area for getting it in a finished form on job work basis through outside labourers and further this activity of getting goods manufactured through outside sources is duly covered under the manufacturing activities. Assessing Officer was not justified in invoking the provisions of section 10AA(9) of the Act as there was no material evidence put on record and a specific finding to work out the basis to estimate reasonable profits by vehemently applying net profit rate at 2% as against 18.94% declared by the assessee without appreciating the facts that business house having a similar type of activity cannot end up at a similar level of GP/NP as much depends on the business strategy, quality of goods sold, rates negotiated with the buyers and optimum utilization of the resources including the employees and machines. We do not find any reason to interfere with the finding of ld. CIT(A). We uphold the same. Accordingly, ground no.1 is dismissed. Secondly, the alternate view taken by ld. Assessing Officer for proportionately denying deduction u/s 10AA of the Act for goods manufactured from outside parties cannot stand for in view of our above discussion and the judgments of Hon. Bombay & Calcutta High Courts and decision of the Co-ordinate Bench Delhi in the case of Rajiv Bhatnagar vs. DCIT (2012 (12) TMI 1104 - ITAT DELHI) and it is well decided that such activities of getting manufactured goods from outside sources on job work basis are also covered under manufacturing activities. We find no reason to interfere with the order of ld. CIT(A) on this issue also. Ground no.2 is dismissed.

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• 2016 (10) TMI 7
  TDS u/s 195 - liability of tax deduction at source (TDS) on payment made to foreign constituents - time frame for initiating action u/s. 201(1) against the non-residents - Held that:- Having carefully examined the rival submissions and the material on record, we find that the legislature has consciously used the word “resident in India”. Had it been the intention of the legislature to prescribe the time period for the non-residents, they would have comfortably used the word “payee”, but they have used the word ‘resident in India’. Therefore, the intention of the legislature is very clear that they do not want to fix the time limit for initiating action u/s. 201(1) for non-residents. In the light of these facts, we are of the view that the assessment is not barred by limitation as no time frame has been specified for initiating action u/s. 201(1) of the Act against the non-residents. We would find from the consultancy agreement that the assessee entered into agreement with the foreign constituent, i.e., MJR Consultancy Pte Ltd., a company incorporated in Singapore we find that the Consultant was required to render consultancy services on different issues by applying his technical know-how and whatever services are rendered, advisories were issued to the assessee, the Consultant shall immediately assign and transfer the rights in that consultancy services to the assessee and the assessee would be able to use that services for its enduring benefit in the succeeding years without any assistance of the Consultant. Though it has not been spelt out the specific nature of the consultancy services rendered by the Consultant, but from a careful perusal of this agreement and documents available on record, it appears that whatever consultancy services were rendered by the Consultant, it was made available to the assessee for its enduring benefit and the same consultancy advisories, opinions or services received by the assessee can be used by the assessee for its business purposes in the succeeding years without any aid and assistance of the Consultant. Therefore, in the light of these facts, we are of the view that the consultancy services having been made available to the assessee, the Revenue has rightly held that the Singapore company as a Consultant has made available to the assessee company technical knowledge in the form of expertise in the operation of its business which was in its possession along with experience and know-how and the same technical know-how can be used by the assessee for its enduring benefit and thus since the assessee has made the payment for fees for technical services, it was required to deduct tax at source and for non-deduction of the same, he can be declared to be an assessee in default. Accordingly, we confirm the order of the CIT(Appeals) and dismiss the appeals of the assessee.

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• 2016 (10) TMI 6
  Sale of shares - business income or capital gain - Held that:- Gain arising from the sale of shares held by the assessee for not more than twelve months shall be held to be short term capital gain chargeable to tax under the head ‘Capital Gains’ and not as income from business chargeable to tax under the head ‘Profits and gains of Business or Profession’ as was held by the AO.

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• 2016 (10) TMI 5
  Penalty under Section 271(1)(c) - disallowance of depreciation in respect of assets given under finance lease by treating the lease transaction as finance transaction - Held that:- As decided in assessee's own case for the instant assessment year 2002-03 under appeal by holding that the assessee is entitled to claim depreciation in respect of assets given under ‘sale and lease back basis’ The AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of capital component of the lease rent from the income of the assessee. The Tribunal has in the assessee’s own case has also allowed the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the assessment years 1995-96 to 1999-00 following the judgment of Hon’ble Supreme Court in the case of ICDS Limited v. CIT (2013 (1) TMI 344 - SUPREME COURT ) and the AO was directed to withdraw the corresponding benefit given to the assessee by excluding the value of capital component of the lease rent from the income of the assessee. The Tribunal has also allowed the afore-stated relief for assessment year 2000-01 to 2003-04 in assessee’s own case The Tribunal has also deleted the penalty levied by the AO and as sustained by learned CIT(A) on the disallowance of the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the assessment years 1995-96 to 1999-00 . Under the above circumstances, we are of the considered view that the penalty levied by the AO and as confirmed/sustained by the learned CIT(A) on the disallowance of the assessee’s claim of depreciation in respect of assets given under ‘sale and lease back basis’ for the instant assessment year 2002-03 cannot survive as quantum additions itself had already been deleted by the Tribunal as set out above and hence we order deletion of penalty levied u/s 271(1)(c) of the Act by the AO and as confirmed/sustained by the learned CIT(A). - Decided in favour of assessee.

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• 2016 (10) TMI 4
  Addition in respect of alleged sales to DLF Services Limited - amount as per TDS not disclosed - addition in this case has been made by the AO on the basis of AIR information which shows that the amount of Rs. 33,80,000/- was paid/credited in favour of the assessee on a/c of sale of advertisement pace by the assessee and accordingly TDS of Rs. 76,591/- was also shown to be deducted - Held that:- The said amount of TDS was also claimed by the assessee which was reversed after the AO asked the assessee to reconcile the AIR information. The ld. AR of the assessee argued before the AO as well as before the ld.CIT(A) that the assessee entered into a contract with the DLF Services Limited for supply of space for advertisement which never materialized and consequently not shown in the income of the assessee. We are convinced with the arguments of the ld AR that sale which has not taken place as the contract for sale of space was cancelled and thus never materialized can not be said to have accrued to the assessee and therefore cannot be considered as income of the year under consideration regardless of the facts that the TDS was deducted by M/s DLF Services Limited. In the present case before us, we find that the AO has not bothered to further verity the facts qua the entries in AIR information whereas the information as regards M/s DLF Services Limited were available with the AO and he proceeded to rely on the AIR information solely without further verification. The addition on the basis of entries in AIR as the these entries are made by the parties other than the assessee and can not be sustained In this case, the assessee claimed to have not executed contract and claimed that the income never materialized and therefore cannot be form part of income in the books of account which was not verified by the AO at all. Similarly the ld CIT(A), the ld.CIT(A) confirmed the action of the AO on the ground that the TDS of Rs. 76,591/- was deducted on the sales of Rs. 33,80,000/- which proved that the assessee had made the sale to M/S DLF Services Ltd is also wrong.In view of these facts as discussed above, we are of the considered opinion that the order by the ld. CIT(A) cannot be sustained and we ,therefore, set aside the order of ld. CIT(A) and direct the AO to delete the addition.- Decided in favour of assessee Addition on provisions for sundry balances written off - Held that:- The details of miscellaneous expenses reveals that 9th item of the above details represented Sundry debits balances written off which adequately proved beyond doubt that the assessee has not claimed the provisions of sundry balances written off but actual wrote off in the books and the said amount, therefore, in our view, admissible under the provisions of Act. Accordingly we set aside the order of ld CIT(A) and direct the AO to allow the claim of the assessee for bad debts of Rs. 6,22,705/-.

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• 2016 (10) TMI 3
  Deduction u/s 80IB - Held that:- The perusal of the order of ld.CIT(A) reveals that the discrepancies as pointed out by the AO and admitted by the assessee during the course of assessment proceedings regarding the finding of facts qua the said discrepancies being explained fully as the assessee has booked all the expenses on the basis of actual and thus there was no difference in allocation and restored the deduction of Rs. 1916.56 as claimed by the assessee. Looking into facts and circumstances of the case in totality, we find no discrepancy or infirmity in the order of ld. CIT(A) which after considering the submissions of the ld.AR directed the AO to allow the claim of assessee for deduction u/s 80IB of the Act and therefore the same upheld by dismissing the appeal of the revenue on this ground. Addition u/s 14A - Held that:- CIT(A) has directed the AO to exclude the cost of investment made in the bonds income of which was not tax free and was liable to be taxed under the income tax Act. The DR argued that the ld CIT(A) has erred in directing the AO to exclude the investments in bonds while calculating the disallowance u/s 14A read with rule 8D whereas the ld AR heavily relied on and supported the order of CIT(A) who rightly directed the AO to exclude the investments in bonds in the calculation of disallowance u/s 14A. We find no merit in the argument of the ld.DR that the CIT(A) was wrong in holding that the investments in bonds be excluded for the purpose of disallowance under section14A r.w.r 8D. We do not find any infirmity in the order of ld.CIT(A) who has recorded the finding of fact that the income from bonds was taxable and was not exempt as noted by the AO and do not require any interference . We, therefore uphold the order of ld. CIT (A) and dismiss the appeal of the revenue on this issue

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• 2016 (10) TMI 2
  Deemed dividend addition by applying the provisions of section 2(22)(e) - held that:- Since the Assessee in the present case is not a shareholder in the lender company, in the light of the intention behind the provisions of Sec.2(22)(e) and in the absence of indication in Sec.2(22)(e) to extend the legal fiction to a case of loan or advance to a non-shareholder also, we are of the view that loan or advance to a non-shareholder cannot be taxed as Deemed Dividend in the hands of a non-shareholder. - Decided in favour of assessee.

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• 2016 (10) TMI 1
  Disallowance of marketing and distribution fee paid to QIEF Management LLC, Mauritius - Held that:- The invoking of section 40A(2)(b) of the Act to disallow a portion of the expenditure in assessment year 2012-13 does not lend any support to the inference of the CIT(A) that the expenditure has not been made wholly and exclusively for the purpose of assessee’s business because what is envisaged by section 40A(2)(b) is to disallow an expenditure which is found to be unreasonable or excessive in relation to it’s market value. Invoking of section 40A(2)(b) of the Act to disallow a portion of the expenditure is an altogether different dimension than invoking section 37(1) of the Act to say that the expenditure is not laid out wholly and exclusively for the purposes of business. In fact, under such a situation, it was all the more onerous on the part of the CIT(A) to demonstrate as to why the entire expenditure was disallowable under section 37(1) of the Act, having regard to the stand of the Assessing Officer in the remand report as well as in the assessment for assessment year 2012- 13. The said burden, in our view, has not been discharged by the CIT(A) in the present case and, therefore, we are unable to acquiesce to the same. As a consequence, we hereby set-aside the order of the CIT(A) on this aspect and direct the Assessing Officer to delete the addition representing payment made to QIEF for marketing support services. Disallowance of advertisement expenditure - whether the advertisement expenditure incurred by the assessee could be construed to have been incurred “for the purposes of the business” within the meaning of Sec. 37(1) of the Act? - Held that:- It is the assessee-company which has set-up the Mutual Fund as a sponsor and is also the holding company for the Asset Management Company, which in turn is managing the assets of the Mutual Fund. The income-earning apparatus of the assessee includes a stream of income from such an activity in which assessee has a deep interest, may it be the affairs of the Asset Management Company or the Mutual Fund. No doubt, the advertisements are intended to secure investors for investing in the schemes of the Mutual Fund, which is a separate entity, so however, the incurrence of such expenditure vis-à-vis assessee’s business cannot be discounted even if its incurrence would result in a benefit to a third party. There can be no gain saying that-better the performance of the Mutual Fund and the Asset Management Company, better would be the returns of the assessee-company. Therefore, in our view, the CIT(A) has erred in holding that the advertisement expenditure is not laid out wholly and exclusively for the purposes of the appellant’s business. Having regard to the aforesaid discussion, we reverse the stand of the lower authorities on this aspect. Addition u/s 14A - Held that:- The factual matrix of the assessee-company not having earned any exempt income in the instant year has not been controverted by the Revenue and, therefore, on this limited point itself we find no reason to uphold invoking of Sec. 14A of the Act by CIT(A) in this year in order to disallow the impugned expenditure on advertisement. Disallowance for ‘ brand building’ expenditure - complete newspaper cuttings of advertisements not having been filed - Held that:- As we find no specific determination by CIT(A) on this aspect. In any case, we find that before the CIT(A), assessee had assailed the aforesaid position in a detailed manner and in the absence of any rebuttal of the same by the CIT(A), it can only be inferred that the CIT(A) acquiesced to the same. Nevertheless, we find that factually there is nothing on record to show that the expenditure has been incurred with the objective of brand building inasmuch as the advertisements are intended to canvas investors to invest in the schemes of the Quantum Mutual Fund. Therefore, on facts also, we find no support for the plea of the Assessing Officer. Insofar as the nonfurnishing of some of the newspaper cuttings is concerned, before the CIT(A) assessee had explained it properly and we find that there are no credible reasons to disbelieve the assessee on this aspect, as the sample newspaper cuttings clearly support the invoices raised by M/s. Hansa Vision Pvt. Ltd. In conclusion, having regard to the aforesaid discussion, we deem it fit and proper to set-aside the order of CIT(A) and direct the Assessing Officer to delete the addition of Rs. 3,77,14,278/- out of advertisement expenditure. Assessee appeal allowed.

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• Customs

• 2016 (10) TMI 25
  Waiver of demurrage charges - business of rough gemstones, cutting and polishing thereof, trading in gemstones and export of finished gemstones - import of rough precious stone sapphire (yellow) and rough semi precious stone aquamarine - consignment of rough of yellow sapphire also contained, 224 gm yellow sapphire cut and polished, valued at Rs. 56,000/- at the rate of Rs. 50/- per carat - mistake on the part of staff of exporter - whether demurrage charges be demanded keeping in view that the polished diamond was sent mistakenly by the staff of importer who agreed to it and the fact immediately submitted by importer to the Assistant Commissioner of Customs, Air Cargo Complex, Jaipur? - Held that: - the decision in the case of Shipping Corporation of India Ltd. vs. C.L. Jain Woolen Mills [2001 (4) TMI 83 - SUPREME COURT OF INDIA] apply. The period during confiscation, charges have been waived, therefore, for the remaining period the petitioner is duty bound to pay the duty demurrage charges - petition dismissed - decided against petitioner.

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• 2016 (10) TMI 24
  Disposal of refund claim - Special Additional Duty by way of cash refund and re-crediting the DEPB Licence - time limit prescribed for disposal of refund application by Board's Circular No.18/2013 dated 29.04.2013 by 30.06.2013, further extended upto September, 2013 - whether under the garb of circular issued by the CBEC, the benefit granted under the notification issued in terms of Section 25(1) of the Customs Act, 1962, can be modified or amended? - Held that: - the decision in the case of ALLEN DIESELS INDIA PVT. LTD., v. UNION OF INDIA AND ORS. [2016 (2) TMI 247 - DELHI HIGH COURT] is relied upon. Various Circulars issued by the CBEC, extending time or imposing additional restrictions for availing the exemptions cannot be legally sustained and ultra vires of the provisions of the Act and accordingly, the Circulars which were the subject matter of challenge in so far as they seek to deny the importers and exporters the refund of SAD paid by using DEPB scrips, are held to be invalid. Till date the respondents have not taken a decision on the petitioner's Application and the matter has been put in the cold storage, since 2013 - respondent directed to pass orders on the petitioner's refund claim within six weeks. - if refund is granted, applicable statutory interest should also be granted - petition disposed off - decided in favor of petitioner.

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• 2016 (10) TMI 23
  Condonation of delay - Appeal filed after a delay of 382 days, which is over and above the condonable delay of 30 days - order in original dated 11.5.2004 not received and it is admitted in the impugned order that the same was sent by Registered Post and returned 'undelivered' - mode prescribed for communication - section 153 of the Customs Act, 1962, display in the notice board - change of place of business by petitioner, not intimated to respondents - whether on failure to intimate the place of business to respondent, the petitioner would be given relief and his delay be condoned on his claim that he never received the copy of original order? - Held that: - when the petitioner has failed to intimate the change of address, the Department cannot be faulted for not having able to serve the order on the petitioner and they having fully followed the procedure under section 153 of the Act - the respondent is fully justified in rejecting the appeal. Alternative remedy of appeal before the CEGAT - Held that: - the appeal could have been filed within a period of three months from the date of receipt of a copy of the order. However the petitioner did not prefer any appeal, but chose to file this Writ Petition - one more ground to reject the relief sought for. Petition dismissed - decided against petitioner.

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• 2016 (10) TMI 22
  Completion of adjudication proceedings - matter remanded to the adjudicating authority for “relook and verification” - no proceedings carried out for the case remanded - time bound direction - Held that: - if a time bound direction is issued, it will be complied with - the adjudicating authority to pass a fresh order on the SCN dated 29th January 2010 not later than eight weeks after giving an opportunity of being heard to the Petitioner. The next date of hearing in the proceedings be intimated to the Petitioner at least one week in advance - If there is non-compliance, it will be open to the Petitioner to apply to the Court for appropriate directions - petition allowed - decided in favor of petitioner.

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• 2016 (10) TMI 21
  Permission for re-export of goods after lifting of seizure - waiver of detention charges - reexamination of goods - carpets - No Objection Certificate - affidavits filed by DRI - Held that: - The DRI should refrain from expressing any opinion even prima facie about the legality and validity of the acts. The distinct departure in the nature of functions and duties is lost sight of and more because of the overenthusiasm by the DRI. While the proceedings are going and any other request is raised by the petitioner, then that request would have to be examined not by the DRI but by the Commissioner of Customs (Exports) or his delegates - examination by Commissioner of Customs to be done as expeditiously as possible and within a period of four weeks - while passing any orders, the said Officer shall issue a notice to the petitioner to appear before him and decide the issue raised by a reasoned order, uninfluenced by any of the contents and statements in the affidavit in reply - petition disposed off - decided in favor of petitioner.

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• 2016 (10) TMI 20
  Imposition of Anti Dumping duty - PVC Suspension Resin - import from EU and Mexico - mid-term review - acquisition of joint control of a newly established joint venture by way of transfer of assets - change of name - Held that: - the decision in the case of Inovyn Sverige AB Versus The Designated Authority & Anr [2016 (6) TMI 308 - DELHI HIGH COURT] relied upon. The impugned communication dated 7th March 2016 issued to the Petitioner gives no reason whatsoever for requiring the Petitioner to go in for a midterm Review. It is also silent on whether the application made by the Petitioner on 18th December 2015 with the enclosed documents was examined by the DA - A direction issued to DA to examine the Petitioner’s application dated 18th December 2015 and the enclosed documents and take a decision, in writing, after hearing the Petitioner, if considered necessary, within a period of four weeks from today - petition allowed - decided in favor of petitioner.

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• 2016 (10) TMI 19
  Maintainability - jurisdiction of SCN issued by the Additional Director General, Department of Revenue Intelligence under Section 28 of the Customs Act, 1962 - Resident of USA - several rounds of litigation - is the petition maintainable where the Petitioner is trying to initiate another round of litigation for the same relief after having been unsuccessful in the several rounds of litigation in which interestingly he never raised the issue of lack of jurisdiction of the officer who issued the SCN? Held that: - permitting the Petitioner at this stage, nearly 12 years later, to challenge the SCN or the adjudication order arising out of a SCN issued more than 12 years ago would constitute condoning a blatant abuse of the process of law. The decision in the case of Chandrabhai K. Bhoir & Ors. Versus Krishna Arjun Bhoir & Ors. [2008 (11) TMI 660 - SUPREME COURT] relied upon. Petition not maintainable, dismissed - decided against petitioner.

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• 2016 (10) TMI 18
  Import of car - high end luxury cars - new or used car - Denial of benefit of Notification dated 1st March 2002 as amended - confiscation of car under Section 111 (d) and 111 (m) of the Customs Act, 1962 - demand of differential customs duty and interest under Section 28AA of the Customs Act, 1962 - imposition of penalty under Sections 112, 114A and 114AA of the Customs Act, 1962 Held that: - the car was manufactured in Germany on 12th February 2010 and subsequently sold and shipped to the dealer in the U.K. and thereafter was exported by M/s Continental Motors, U.K. to India on 22nd March 2010. Given the proximity of the date of manufacture of the car and date of its import, it cannot be said the said car ceased to be a new car and became a 'second hand' car at the time of its import. Denial of benefit of notification, confiscation of car , demand of differential duty interest and penalty withheld - petition disposed off - decided in favor of petitioner.

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• 2016 (10) TMI 17
  Restoration of confiscation order by the Adjudicating authority - foreign marked gold bars - foreign markings in the delivery / sales documents - whether this is a case of smuggling and confiscation order need to be restored in the view that foreign markings were not present in the sales documents? - Held that: - It is not a legal requirement to indicate the foreign markings of the gold bars in the sale bills. Once importer MMTC Ltd is not showing any foreign markings in the delivery / sales documents then the Respondent can not be questioned to explain the foreign markings not indicated in the bill No. 527 dated 30/1/97. Once Respondent has produced such a bill then the burden under Sec 123 of the Customs Act 1962 stands discharged. It is a well settled legal proposition that a case can not be held to be established on the basis of assumptions, presumptions & surmises. Revenue is not able to demonstrate with documentary evidence that the seized gold bars were procured from any other source, except raising some suspicion. No confiscation justified - appeal dismissed - decided against Revenue.

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• 2016 (10) TMI 16
  Classification of used Digital Multifunction Machines - Chapter Heading 9009 of Customs Tariff or Chapter Sub-heading 847160 of the Customs Tariff - photocopier machines as envisaged under para 2.17 of FTP or photocopying apparatus under the Customs Tariff - the decision in the case of Shivam International Vs. Commissioner of Customs, Cochin [2013 (3) TMI 408 - CESTAT BANGALORE] has been referred - Held that: - the decision in the case of Shivam International applies to the present case - redemption fine and penalty set aside. Valuation of Analogue Photocopiers - value enhanced by Chartered Engineer - Held that: - no finding given in favor of appellant - imposition of redemption fine and penalty upheld - amount to be paid within two months - appeal disposed off - decided partly in favor of appellant.

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• PMLA

• 2016 (10) TMI 10
  Competent Authority to act upon the recommendations made by the Lokayukta - Held that:- As submitted by the counsel appearing for the concerned State agencies that having regarding to the voluminous documents and more particularly the need to verify the correctness of the information made available during the investigation/enquiry, it would take some more time to complete the investigation/enquiry in the respective cases. The counsel appearing for the appellant, however, submits that the law enforcement agencies have not done enough and are responsible for delaying the investigation/enquiry for reasons best known to them, which inevitably would benefit respondent nos. 5 and 6. The counsel for the respondent nos.5 and 6 has refuted this veiled attack on respondent nos.5 and 6 of being responsible for delay in the enquiry. He submits that these respondents have extended full cooperation to the concerned agencies thus far and would continue to do so even in future. It is unnecessary for us to dilate on this aspect. As aforesaid, the relief in the writ petition was limited to directing the Competent Authority to act upon the recommendations made by the Lokayukta. That relief has worked out in view of the direction issued by the Competent Authority to investigate/enquire into the factual matrix noticed in Lokayukta’s report. Further, the law enforcement agencies have moved into action and have collected information and material including with reference to the representations and affidavits received in the course of the said investigation/enquiry. We may, therefore, accede to the request of the law enforcement agencies to give them some more time to complete the investigation/enquiries in relation to the acts of commission and omission of respondent nos.5 and 6 or any other person(s) privy thereto. Considering the fact that the law enforcement agencies are on their job for quite sometime, we express a sanguine hope that they would complete the investigation/enquiry at the earliest and not later than six months from today and take the same to its logical end in accordance with law. We make it clear that we are not expressing any opinion on the merits of the matters under investigation/enquiry or the defence that may be available to respondent nos. 5 and 6 in any proceedings to be instituted against them in relation to the said matters.

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• Service Tax

• 2016 (10) TMI 42
  Goods transport agency service (GTA) - non-issuance of consignment notes - Commissioner (Appeals) held that individual truck owners are not providers of goods transport agency service and relying on Commissioner of Central Excise & Customs, Guntur v. Kanaka Durga Oil Products Pvt Ltd [2009 (3) TMI 130 - CESTAT, Bangalore] set aside the demand - Held that:- the decision in re Kanaka Durga Oil Products Ltd prevails. We are not impressed with the grounds of appeal filed upon the authorization of the designated Committee. Revenue contends that tax is leviable under section 65(105)(zzp) of Finance Act, 1994 for providing of service by goods transport agency which is defined in section 65(50b) and that with the recipient not being one of the entities listed in rule 2(1)(d)(v) of Service Tax Rules, 1994, it is the provider of the service who is the designated person liable to pay the tax. As per definition of goods transport agency in section 65(50b) of Finance Act, 1994, an essential characteristic of provider of the service is the issuance of a consignment note. Revenue has resorted to a circular logic by claiming that rule 4B of Service Tax Rules, 2004 requires the goods transport agency to issue a consignment note. This, according to us, is a specious line of reasoning as the provider of goods transport agency service being determined by issuance of consignment note under the statute, it is not within the ambit of a subordinate legislation to create the class of taxable persons by imposing a condition that would, perforce, bring such persons within the tax net. The intent and purpose of rule 4B has been misinterpreted by the reviewing authority. During the transportation stage, the respondent does not acquire any lien on the goods which is implicit in the issue of a consignment note. Therefore, no stretch of imagination can document issued by District Supply Officer conveying the goods transported be construed as a consignment note to render the respondent to be a goods transport agency. The demand of tax therefore, fails. - Decided against the Revenue

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• 2016 (10) TMI 41
  Refund claim - service tax paid on input service credit taken during the period October 2012 to December 2012 - denial of refund on renting of immovable property service on account of non-registration of the premises - Held that:- in the case of KLA Tencor Software Private Limited Vs CST, Chennai [2016 (6) TMI 447 - CESTAT CHENNAI], it was held that registration is not a mandatory condition to avail refund under the Notifications prescribed by placing reliance on the ruling of mPortal Wireless Solutions Private Limited Vs CST, Bangalore []2011 (9) TMI 450 - KARNATAKA HIGH COURT]. Therefore, the refund of CENVAT Credit on renting of immovable property is allowed, by following the ruling of Karnataka High Court. Refund claim - denial of refund claim on the ground of imitation of time - Held that:- Commissioner (Appeals) dealt the limitation issue in depth and passed a detailed order and held that inasmuch as the refund is related to Cenvat credit taken during the given period and the same shall be taken till the last day of the given period, namely the quarter, the claim for refund can only be filed after the last date of the respective quarter and the relevant date is the date of export and are entitled in terms of Notification No. 27/2012 dated 18.06.2012 read with Section 11 B of CEA, 1944, and the refund claim is not hit by limitation. As per Rule 5 of CCR, 2004, in case of export of services, export is complete only when foreign exchange is received in India. This aspect has not been brought out by both the authorities below. Hence, the matter is remanded to the adjudicating authority with the direction to verify the date of receipt of foreign exchange received in India to determine the relevant date of export to decide the limitation aspect. - Appeal disposed of

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• 2016 (10) TMI 40
  Whether, during the period 2005-2006 to 2009-2010, trading should be considered as exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 for the purpose of requirement of Rule 6(3) ibid - Held that:- on perusal of both un-amended and amended provisions of exempted service, it reveals that the activity of trading was not included within the ambit of definition prior to 01.04.2011. In this case, since the dispute is up to the period of 2009-2010, the amended definition of exempted service would not be applicable. Thus, the embargo credit in Rule 6(3) of the Rules does not have any application for taking of cenvat credit on the activities concerning provision of taxable service and trading activity. Hence, denial of cenvat credit by the authorities below, in my opinion, is not in conformity with the statutory mandates. - Decided in favour of appellant

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• Central Excise

• 2016 (10) TMI 39
  Classification - printed Sheets of paper/paper board - whether to be classified under CETH 4901.90/4911 99 90 as per respondent or under CETH 4819 by the Revenue - Held that:- the representative samples have been examined by the Commissioner (Appeals). He recorded that the sample sheets having printed logo of the contracting customers, are not perferated, groomed or cut to shape and size and therefore it could be said that this sheet to be used as printed cartons has to pass through more processes and this point has not been disputed by the Department. Therefore, we find no valid reason to interfere with the said order. - Decided against the Revenue

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• 2016 (10) TMI 38
  Area based exemption - refund of duty paid - inclusion of freight from the factory gate to the place of delivery for payment of duty - contracts for goods are FOR destination - appellant is selling the goods at the factory gate but showing the sale as FOR destination and pay more duty, by including freight from the factory gate to the place of delivery, to get more refund under Notification No.32/99-CE - Held that:- the freight is included in the agreed upon prices but actual freight incurred is also known to the appellant and the buyer. That is why some of the buyers have a specific clause in purchase order that adjustment on account of freight charged and actually incurred has to be allowed by the appellant. If sale is FOR destination based then where is the requirement for such an adjustments/compensation. In certain cases insurance of goods is borne by the buyers. It has also not been brought on record by the appellant as to where sales tax is paid. The onus is on the appellant to establish the point of sale with documentary evidences to stake claim for exemption and refund under Notification No.32/99-CE. Inspite of the specific directions from the bench appellant has not been able to bring on record that ownership of the goods, till their delivery at the doorsteps of the buyers, lies with them and that insurance of goods in transit is borne by the appellant. Hence, the appellant is not able to establish that the sales/clearances effected by them are on FOR destination basis. - Decided against the appellant

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• 2016 (10) TMI 37
  100% EOU - Refund claim - Rule 5 of Cenvat Credit Rules, 2004 - export of goods under bond - goods viz., Photovoltaic Solar modules, panels and cells manufactured were exempted under Notification No. 06/2006-CE dated 01-03-2006 as amended by Notification No. 12/2012-CE dated 17-03-2012 - Held that:- in view of the finding by the Original Authority that at the time of clearance of the goods in domestic tariff area duty foregone on the inputs equal in amount to that leviable on inputs used in the manufacture of such goods cleared in DTA is payable at the time of clearance of said goods. Therefore it cannot be held that the goods manufactured by the appellants are exempted when they are cleared in domestic tariff area. Therefore, we hold that they were entitled to avail the Cenvat credit and since the Cenvat credit is also not recovered under Rule 14 of Cenvat Credit Rules and is available in balance in the books of accounts the same is admissible to be refunded under Rule 5 of Cenvat Credit Rules, 2004. - Decided in favour of appellant

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• 2016 (10) TMI 36
  Classification - parts/components of crushing machinery as claimed by appellant or parts of bridge scrapper as asserted by revenue - whether to be classified under CTH 8474.00 as per appellant or under CTH 8431/8483 as per revenue - appellant contended that it is for Department to establish a particular classification and they are guided by the advice of the buyer to classify these products under a particular CTH - Held that:- Heading 8431 deals with parts suitable for use solely or principally with the machinery or Heading No.84.25 to 84.30. Heading 84.29 specifically includes “scrapers" and Heading 84.28 specifically includes "conveyers". We have examined the description of the products, which is as per the appellant's own documents. The description specifically mentions like rollers table for bridge scrapper, gangway platform and ladders for bridge scrapper, rake car for bridge, travel carriage for bridge scrapper, parts of bridge scraper. When the products are described in such explicit terms, we are not able to appreciate the claim of the appellant that these impugned goods should not be categorized as parts of such machinery. The appellant's claim based on their buyer's advice is not supported by any material evidence. Based on the description of the products, we have no hesitation to hold that the lower authorities are correct in classifying the same under the respective headings. - Decided against the appellant

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• 2016 (10) TMI 35
  Classification - Link Cartridge Metallic Belt 0 whether to be classified under Chapter Heading 73.20 as per Commissioner (A) or under 93.06 as per Revenue - Held that:- the impugned goods are used as packing material and not as part of the ammunition, and the Section Note and HSN Notes under Chapter 73, and when the subject product viz., Link Cartridge Metallic Belt is still being classified under Chapter Heading 73.02 as per the information in Addl. Commissioner LTU's letter dated 18.5.2016. Revenue s stand does not seem to be justified. Therefore, we do not feel convinced to interfere with the impugned order which decides the classification as Chapter 73.20. - Decided against the Revenue

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• 2016 (10) TMI 34
  100% EOU - Cenvat credit - High Speed Diesel - appellants vide Circular No. 799/32/2004 CX dated 23.09.2004 procured HSD on payment of duty and availed CENVAT Credit - appellant argued that facility of Cenvat Credit was extended to EOUs w.e.f. 06.09.2004 vide Notificaiton No. 18/2004-CE(NT) dated 06.09.2004 which amended Rule 17 of the Central Excise Rules, 2002 to enable EOUs to pay duty on clearances made to DTA by utilizing Cenvat Credit. Also Notification No. 22/2003 dated 31.03.2003 provided that specified goods when brought into an EOU from the DTA in connection with manufacture of articles, shall be exempt from the whole of the duty of excise leviable thereon. Held that:- it is found that the definition of an input given in Rule 2(k) of CENVAT Credit Rules, 2004 cannot restrict the entitlement, when they are taking CENVAT credit in terms of Notification No.22/2003 dated 31.3.2003. More so, when the decisions of the Tribunal viz., Hindustan Unilever Ltd. vs. CCE, Bhavnagar [2009 (7) TMI 605 - CESTAT, AHMEDABAD] and CCE vs. Jagmini Micro Knit Pvt. Ltd. [2008 (11) TMI 169 - CESTAT, NEW DELHI] make it clear that appellants as an EOU can claim CENVAT credit for the duty paid on HSD oil used as fuel and when they are eligible to avail the benefit of the said Notification. Therefore, the Revenue's contention that in terms of definition of input given in Rule 2(k) of CENVAT Credit Rules, 2004 the appellants are not entitled to claim CENVAT credit, cannot be accepted, when the Notification No.22/2003 dated 31.3.2003 makes an EOU entitled to claim CENVAT credit on the procurement of HSD used as fuel. - Decided in favour of appellant

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• 2016 (10) TMI 33
  Demand and imposition of penalty - contravention of the various rules with intention of evading Excise duty - manufacture of ducts classifiable under sub-heading No. 7304.10 of the Central Excise Tariff Act, 1985 - Held that:- in view of the decision of the Hon'ble Supreme Court in the appellant's own case reported in [2006 (4) TMI 526 - SUPREME COURT], we are of the considered opinion that the issue is squarely covered in favour of the appellants. Therefore, we hold that the impugned orders are not sustainable in law and the same are set aside. When the demands are not sustainable and the same are set aside, the penalty imposed on Shri V. Seshadri, Chief Executive Officer of the appellant's firm is also set aside. - Appeal disposed of

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• 2016 (10) TMI 32
  Reversal of Cenvat credit - Whether the appellant is liable to reverse the proportionate CENVAT Credit taken on service tax paid in respect of GTA service utilized for transportation of sugar cane on the ground that a portion of GTA service involved is attributable to sugar cane used for manufacture of bagasse which is in turn is used for generation of electricity - Held that:- the issue involved is no more res integra in terms of the decision of Hon'ble Allahabad High Court in the case of Balrampur Chini Mills Ltd Vs UOI [2013 (1) TMI 525 - ALLAHABAD HIGH COURT] wherein the Board Circular No. 904/24/2009-CX dated 28/10/2009 requiring reversal of credit or payment of amount in terms of Rule 6 stands quashed. Therefore, by following the same, the impugned order is set aside. - Decided in favour of appellant

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• 2016 (10) TMI 31
  Recovery of Cenvat credit - Cenvat Credit availed on various input services - input service invoices were in the name of their Head Office, at Mumbai, which was not registered as an Input Service distributor - Held that:- except on the ground that relevant input service invoices were not in the name of their Vapi but in the name of Head Office, and the Head Office was not registered as an Input Service Distributor, the Cenvat Credit availed on such invoices even though the services were utilised in or in relation to the manufacture of excisable goods at their Vapi unit, had been denied. I find that the issue is covered by the decision of Hon’ble Gujarat High Court in the case of CCE Vs Dashion Ltd [2016 (2) TMI 183 - GUJARAT HIGH COURT]. Therefore, in view of the same, the impugned order is set aside. - Decided in favour of appellant

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• 2016 (10) TMI 30
  SSI Exemption - Whether or not appellant can change it s option under clause 2 (i) of Notification No. 9/03-CE dated 1/3/2003 in the same financial year - appellant initially filed declaration in April, 2004 where exemption under Notification No. 91/03-CE was availed and Central Excise duty was paid @ 9.6% and subsequently appellant vide letter dated 1/9/2004 intimated the Department that they will be paying full rate of duty @16% - Held that:- in view of the provisions contained in clause 2(i) of exemption under Notification No. 9/03-CE, option exercised once cannot be changed by the appellant in the same financial year. This issue has been decided in the case of Canara Poly Pack Ltd. Vs. Commr. of C.Ex., Bangalore-III [2007 (9) TMI 286 - HIGH COURT OF KARNATAKA AT BANGALORE] by Hon’ble Karnataka High Court where it has been held that option once exercised shall not be withdrawn by the manufacturer during the remaining part of the same financial year. Therefore, in this case option exercised in April, 2004 by the appellant will continue to hold good for the entire financial year. Appellant was not entitled to change such option exercised once and start paying duty at full rate. Therefore, observations made by first appellate authority in Order-in-Appeal to deny exemption for the entire financial year is ex facie wrong and is set aside. In such cases of interpretational disputes, Bench is of the considered opinion that no penalty proposed in the show cause notice is imposable. Recovery of Cenvat credit - improper utilisation of CENVAT Credit - clearances of goods when 16% rate was wrongly paid by the appellant - Held that:- this aspect will only be decided by the adjudicating authority in remand proceedings as directed by the first appellate authority. - Appeal partly allowed and partly remanded back

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• 2016 (10) TMI 29
  Clandestine removal of goods - Demand raised unjustly - processed fabrics dispatched in the name of M/s/Jayalakshmi Printing Mills were entered in the Central Excise Record on payment of duty, the processed fabrics dispatched in the name of M/s/Bharath Printing Mills - material facts and evidence not examined - Held that:- the order of the Adjudicating Commissioner shows that he has not applied his mind when he writes "without going too much into the identity of M/s.Jayalakshmi Printing Mills, Erode and M/s.Bharath Printing Mills, Erode he shall try to evaluate whether the quantities of processed fabrics specified in the show cause notice were manufactured and removed without payment of duty or not", that demonstrates that he had prejudged mind to reach to his decision without testing the evidence on record. The order has been passed superficially. The Authority records status of two noticees i.e. Jayalakshmi Printing Mills and Bharath Printing Mills as partnership firms and there was proximity between the two. But, he suddenly came to the conclusion that he has no difficulty to hold that M/s. Jayalakshmi Printing Mills was engaged in illicit manufacture of processed fabrics in the premises of M/s.Bharath Printing Mills and removed that without payment of duty also. He has brushed aside the documents gathered by investigation and failed to test evidentiary value thereof. It was the duty of the Adjudicating Authority to ascertain whether there were two distinct and independent units existed and what was their liability on the basis of investigation result and evidence on record. It is necessity of law that an assessee should not be unjustly be dealt under law. There should be cogent and credible evidence in support of each material fact and decision. But that was not tested by the Commissioner. It is relevant to mention that in the SCN, the notice issuing authority noticed that M/s.Jayalakshmi Printing Mills had processed and cleared cotton fabrics to M/s.Bharath Printing Mills directly and through M/s.Senthilandavar Calendering Mills and M/s.Sri Devi Felt Calender without accounting the transactions in the statutory records and without payment of Central Excise duty. But all such facts were not tested. Therefore, the manner in which the impugned order has been passed, that calls for direction to the Adjudicating Authority to redo the adjudication examining the controversy in the SCN and considering the material facts, evidence, law and previous directions of Tribunal as well as the defence plea, granting fair opportunity of hearing to the appellant. It is made clear to him that his order should confine to the allegations in SCN without any superficial approach to pass order since the impugned order has been passed superficially wasting public time and public money. - Appeal allowed by way of remand

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• 2016 (10) TMI 28
  Manufacture - Nature of activity - iron /steel articles subjected to various processes like cutting, bending, punching and making holes - proprietor admitted that articles are manufactured by them - invoices clearly state that the goods supplied after cutting and drilling etc. resulting in emergence of completely different products - Held that:- it is found that the impugned order is specific and categorical on the factual issue. There is no material evidence to contradict the factual finding by the lower authority that activity can not be treated as manufacturing and no excise duty is leviable on it. - Decided against the Revenue

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• 2016 (10) TMI 27
  Cenvat credit - dumpers - used in the factory as a material handling equipment for transportation of basic raw material (lime stone) to the crusher hopper for crushing - Held that:- by following the decisions of the Hon'ble Supreme Court in the case of Vikram Cement vs. CCE, Indore [2006 (2) TMI 1 - Supreme court] and in Madras Cements Ltd. vs. CCE, Chennai [2010 (7) TMI 179 - SUPREME COURT] wherein it was held that capital goods used as material handling equipments for moving the raw material are integrally connected to the manufacture of final products and, as such are eligible for credit, the impugned order is set aside. - Decided in favour of appellant

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• 2016 (10) TMI 26
  Demand - failure to pay duty - Held that:- since the Respondents have not disputed the liability to pay Duty, there was no necessity for the Tribunal to examine the correctness of the adjudication in that regard. Imposition of penalty - Rule 209A of the Rules - there was no evidence brought forth to link Shri N.Ramachandran, for the alleged violations - Held that:- Rule 209A of the Rules, has specifically required that any person, who deals with any Excisable goods which he knows or has reason to believe are liable to confiscation under the Act or Rules made thereunder, shall be liable to a penalty not exceeding three times the value of such goods or Rs. 5,000/- whichever is greater, if he is in any way concerned in transporting, removing or depositing, keeping, concealing, selling or purchasing or in any other manner deals with such goods. Therefore, it is essential that there must be evidence brought on record linking the role of the individual to any of these offending acts in which event alone the penalty contemplated by Rule 209A of the Rules, can be imposed. Since there was no material to link Shri N.Ramachandran, with any such acts enumerated under Rule 209A of the Rules, the penalty imposed against him under Rule 209A of the Rules, is liable to be set at naught and that was the reason why the Tribunal has rightly set aside that portion of the Order in Original passed by the adjudicating Authority. Imposition of penalty - Rule 173Q of the Rules - Tribunal has reduced the penalty from Rs. 1,00,000/- to Rs. 50,000/- - Held that:- the discretion has not been exercised on sound lines and hence the Tribunal has reduced the penalty from Rs. 1,00,000/- to that of Rs. 50,000/-, though the Tribunal ought to have given the necessary reasons for it to substitute the quantum of penalty. But however, we cannot ignore the fact that the Order-in- Original does not speak of the liability of the goods for confiscation itself, at the first place. It is therefore, obvious that instead of remitting the matter to the Adjudicating Authority for consider afresh, even with regard to the penalty that is liable to be imposed under Rule 173Q of the Rules and furthermore with a view to shorten the litigation between the parties, the Tribunal has reduced the penalty from Rs. 1,00,000/- to Rs. 50,000/- and the Respondent/Manufacturer has not called in question that part of the order of the Tribunal and he has accepted it. Therefore, we see no reason to interfere with the order passed by the Tribunal. - Decided against the Revenue

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• CST, VAT & Sales Tax

• 2016 (10) TMI 15
  Classification of goods - "Enzymes" - classified under the entry of the chemical under Notification No.1084 dated 25.02.2003, taxable @ 4% - to be treated as an unclassified item liable to tax @ 10% - enzyme treated as chemical or protein? - Held that - An enzyme is in the nature of chemical substance, which acts upon a protein and helps in the process of absorption of food by converting the sugars and starch into energy for the body. In common parlance also an enzyme is understood to be a catalyst agent, which helps in the break-up of food in the intestines and leads to better digestion. It is well settled in law that while interpreting a classification it is the "word" an "item" as is understood in common parlance, which is to be taken into account. The decision in the case of State of Madhya Pradesh vs. Marico Industries Ltd. [2016 (7) TMI 1057 - SUPREME COURT] is relied upon. "Enzyme" a chemical under Notification no.1084 dated 25.02.2003 to be chargeable to tax as chemical @ 4% - revision dismissed - decided against Revenue.

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• 2016 (10) TMI 14
  Revision application - denial of the benefit of the provisions of Section 3 F (2) (b) (i) of the U.P. Trade Tax Act - non-allowance of deductions for sales as central sales under Section 3, 4 & 5 of the Central Sales Tax Act - works contract - movement of goods from Nagpur to Saharanpur - Whether even assuming without admitting that the two contracts entered into between the applicant and IVO Power Engineering Limited can be treated as one indivisible works contract liable to tax under Section 3-F of U.P. Trade Tax Act still in view of Section 3 F (2) (b) (i) of U.P. Trade Tax Act the specific goods having moved from outside the State of U.P. in pursuance of the prior agreement, the value of such amount shall be covered by Section 3F of the Central Sales Tax Act and no tax can be legally imposed? Whether evidence with regard to the prior purchase orders contracts at Nagpur were there or not? The tribunal remained silent about this evidence and simply records a finding that in fact the assessee was seeking to evade tax and had resorted to a device in the movement of goods simply for the purposes of evading the tax. Held that: - the Tribunal is unable to show any finding or any ground at all, which lends support to the orders passed by the Tribunal as to why it has not even considered the fact that actually material evidence was there on record to show that the entire process of the movement of goods had started from Nagpur nor has it given any real reason for rejection of inter state nature of transaction and why it did not accept the inter state transaction between Nagpur and Saharanpur - the matter requires reconsideration by the Tribunal after examining the material evidence on record as referred to in paragraphs no.13, 14 & 15 of the memo of appeal before the first appellate authority - matter remanded - revision disposed off - decided in favor of revisionist.

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• 2016 (10) TMI 13
  Input Tax Credit - discount/incentive received - sale of goods at a rate lower than the price shown in the VAT invoice - same self question decided by the court already - Held that: - once this Court has already taken a view on the self same controversy by various judgments, and particularly when SLP has been dismissed by the apex court, this court is not inclined to take a different view than what has already been taken, particularly when no distinguishing feature has been pointed out by the learned counsel for the Revenue. Merely because the Kerala High Court has taken a different view, is no good reason to come to a different conclusion - petition dismissed - decided against petitioner.

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• 2016 (10) TMI 12
  Imposition of penalty - vehicle carrying jaggary - goods moved from Delhi to MP - registration of parties with the Delhi Sales Tax Authority/Departments - Held that: - There may be some discrepancy/deficiency in the Bills/Vouchers but the facts remains that the goods were being transported from Delhi to Mansore (MP) and it was proved on the basis of the Bills and vouchers and Builty etc. which was produced by the incharge/driver of the Vehicle. The decision in the case of ACTO., Ward-I, Rajasmand Versus White Marble House [2005 (11) TMI 444 - RAJASTHAN HIGH COURT] has been relied upon. Merely doubting and coming to abrupt finding sitting in the office at least in the facts found was not required. Once the owner appeared and contended that the goods were intended for MP, the order of the Tax Board is just and proper and no error, illegality or perversity in the order impugned so as to call for interference by the Court. Revision petition dismissed - decided against petitioner.

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• 2016 (10) TMI 11
  Reassessment under Section 29(7) of Act, 2008 - change of opinion - Eligibility Certificate under Section 4-A of U.P. Trade Tax Act, 1948 - tax exemption for a period of ten years from 15.04.1999 to 14.04.1999 for Rs. 107,58,99,224/- - modification in Eligibility Certificate - U.P. Act, 1948 was abolished on 31.12.2007 and U.P. Value Added Tax Act, 2008 came into force with effect from 01.01.2008 - Rule 70(9) relied by respondent substituted on 28.02.2010 by U.P. Value Added Tax (Second Amendment) Rules, 2010 published in the Notification dated 04.02.2010 - Whether here is a case of change of opinion so as to deny permission for reassessment under Section 29(7)? - Held that: - the decision in the case of ALA Firm Versus Commissioner of Income-Tax [1991 (2) TMI 1 - SUPREME Court] is relied upon, where it was held that If a conscious application of mind is made to the relevant facts and material available or existing at the relevant point of time while making the assessment and again a different or divergent view is reached, it would tantamount to "change of opinion". If an assessing authority forms an opinion during the original assessment proceedings on the basis of material facts and subsequently finds it to be erroneous; it is not a valid reason under the law for reassessment. Entire material which is now being taken into consideration for the purpose of impugned notice and approval granted was available before Assessing Authority and after having considered the same, assessment was made. Now authorities, taking a different view, have issued impugned notice. Thus, it is a clear case of change of opinion, hence reassessment is not permissible. Writ petition allowed - decided in favor of petitioner - petitioner entitled to cost Rs. 5,000/-.

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