TMI Tax Updates - e-Newsletter
October 4, 2013

Case Laws in this Newsletter:

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

Articles

1. Section 56 deeming gifts as income appears to be ultravirse the Constitution of India (COI) , not within scope of “tax on income” and purposes and charging provisions of the Income-Tax Act (ITA).

   By: DEVKUMAR KOTHARI

2. TRANSACTIONS REQUIRED SPECIAL RESOLUTION UNDER COMPANIES ACT

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. India Signs Credit Agreement with IFAD for Jharkhand Tribal Empowerment Livelihood Project ; To Benefit Small Rural Producers, Women, Scheduled Caste Households and Youth in the Hill Districts of Jharkhand

2. Financial Education Key to Promoting Financial Inclusion and Customer Protection (Keynote Address by Dr Deepali Pant Joshi, Executive Director, Reserve Bank of India at the College of Agricultural Banking Conference on October 3, 2013 at Pune)

3. Exchange Rate of Foreign Currency Relating to Imported and Export Goods Notified

4. RBI Reference Rate for US $ and Euro

5. Rashtriya Uchchatar Shiksha Abhiyan for reforming state higher education system

6. Consolidated pay package for Chairpersons and members of regulatory bodies

7. Approval for proposal of M/s. Etihad Airways PJSC, UAE to subscribe to equity shares of M/s. Jet Airways (India) Limited amounting to Rs.2,057.66 crore

Notifications

Customs

1. 103/2013 - dated 3-10-2013 - Cus (NT)

Amends exchange rate notification no. 100/2013-Customs (NT), w.e.f. 04th October, 2013

Indian Laws

2. No. A.12023/1/2013-Estt. II - dated 30-9-2013 - Indian Law

Engagement of consultant on contract basis in DIPP- inviting applications thereof

Circulars / Instructions / Orders

VAT - Delhi

1. 19/2013-14 - dated 4-10-2013

Regarding filing of Stock Statement.

DGFT

2. 30 (RE: 2013)/2009-2014 - dated 4-10-2013

Suspension of SIONs.

Highlights / Catch Notes

Income Tax

• Interest on Delayed Tax Refunds: Claim Only Statutory Interest u/ss 214 & 244, No Additional Interest Allowed.

  Case-Laws - SC : Interest u/s 214 and 244 - Interest on interest for late grant of refund - it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest - SC
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• Application Delay u/s 12AA Condoned; Department Ordered to Proceed with Respondent's Registration.

  Case-Laws - HC : Condoning the delay in filing the application or registration u/s 12AA - delay in submitting application for registration has been condoned and the department has been directed to registration of the respondent - HC
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• High Court Rules Share Issue Expenses as Capital Expenditure, Not Deductible for Cash Flow Improvement.

  Case-Laws - HC : Share issue expenses - Even though the assessee stated that this expenditure was incurred so as to improve the cash availability, yet, the fact remains that the expenditure incurred was only for the purpose of expansion of the capital base - held as capital in nature - HC
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• Voluntary Retirement Scheme Expenses Deductibility: Rule 2BA Applies Only with Section 10(10C), Not Section 35DDA.

  Case-Laws - HC : Deductibility of expenditure incurred on VRS - Rule 2BA of the Rules is attracted and applicable only to a circumstance, where the benefit of Section 10(10C) of the Act is sought for and not in a situation where the provisions of section 35DDA of the Act is called in aid - HC
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• Unsigned Photocopy of Property Agreement Invalid When Registered Sale Deed Exists, Court Rules.

  Case-Laws - HC : Evidentiary value of the documents seized – Unsigned photocopy of the agreement for purchase of the property cannot be a material to rely on, when the registered sale deed has been produced - HC
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• TDS Shortfall u/s 192: Payment Extension Allowed Until Financial Year-End, Regardless of Deduction Timing.

  Case-Laws - HC : Shortfall in TDS u/s 192 – it would appear that the payment of deducted tax shall be extended upto the end of the relevant financial year irrespective of the fact whether the deduction has been made at the time of payment or not - HC
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• Court Rules No Penalty u/s 271(1)(c) of Income Tax Act Due to Deleted Benami Accounts and Audited Records.

  Case-Laws - AT : Penalty u/s 271(1)(c) - In the given situation and particularly as the addition for benami accounts stands deleted and there is no dispute about the facts that the accounts were duly audited and pertain to a much earlier year, it is not a fit case for levy of penalty - HC
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• Court Orders Correction of Mistake in Chapter VI-A Deduction Denial; Rectification and Order Issuance Within Two Weeks.

  Case-Laws - HC : Mistake in refusing deduction under Chapter VI-A - obvious mistake - such mistake shall be rectified within a period of one week and consequential order shall be passed thereafter within a period of two weeks giving effect to such rectification - HC
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• Section 143(1)(a) Intimation Order Not an Assessment; Taxpayers Can Revise Returns Within One Year of Assessment Year.

  Case-Laws - HC : Intimation order under Section 143(1)(a) cannot be treated to be an order of assessment. - it was open for the assessee to submit the revised return at any time before the expiry of one year from the end of the relevant assessment year. - HC
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• Income from Tea Business: 60% Classified as Agricultural Income u/r 8 for Tax Purposes.

  Case-Laws - HC : Agriculture income - composite income - Rule 8 - business of growing, manufacturing and selling of tea - 60% of Premium on import licence, Sale of Scrap, Misc. Garden Income, and Excise duty, etc to be treated as agriculture income - HC
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Customs

• High Court dismisses appeal for restoration; appellant avoided complying with predeposit order and duty liability. Doctrine of merger considered.

  Case-Laws - HC : Restoration of appeal - Doctrine of merger - all efforts were made by the appellant to see that he does not comply with the order of predeposit and/or confirmed the duty liability - petition dismissed - HC
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• Imported Goods Face Confiscation and Penalties Without DGFT License, Even Without Malafide Intent.

  Case-Laws - AT : Imported Goods – Even if there was no malafide, the goods were liable for confiscation and imposition of penalty, if no licence was produced or non permission from the DGFT - AT
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Corporate Law

• Court Considers Winding-Up Petition; Resolving Director Disputes Could Revive Company's Operations Under Companies Act Sections 433(f) & 439(c.

  Case-Laws - HC : Winding up Petition u/s 433(f) r.w. Section 439(c) of the Companies Act – Once the differences between the directors were sorted out – for which no attempt appears to have been made so far – the possibility of the company reviving its operations and making profits cannot be ruled out - HC
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Indian Laws

• Telecom Tower Construction Cannot Be Blocked If Permits and Licenses Are Secured Despite Health Concerns.

  Case-Laws - HC : Erection of telecommunication tower - Obstruction in construction on the ground of health issues - , if the petitioner has obtained necessary permits and licenses, nobody can prevent them from erecting and commissioning telecommunication towers. - HC
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Service Tax

• High Court Orders Reconsideration of Petitioner's Request to Transfer Pending Assessments After Opting Out of LTU Scheme.

  Case-Laws - HC : The grievance of the petitioner was that the petitioner had opted out of LTU scheme and the request of the petitioner to transfer the pending assessment and other proceedings has not been considered - authorities to reconsider the issue - HC
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• Service Tax Implications Partially Stayed for Pipeline Contract Involving Operation and Maintenance Activities.

  Case-Laws - AT : Management, Maintenance or Repair Services – assessee had been awarded a contract of laying pipelines and also pumping operation, maintenance and repair of such pipelines along with pumping machinery for supply of water to various district and taluka places - stay granted partly - AT
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• Foreign Ad Agency Granted Stay in Service Tax Case Due to Lack of Evidence on Ad Conceptualization.

  Case-Laws - AT : Advertising Agency - There was nothing on record to show that the advertising agency which was situated abroad was visualizing, conceptualizing etc of the said advertisement - stay granted - AT
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• Section 67: Valuation of Imported Consultancy Services with Reverse Charge in Associated Enterprises Transactions; Stay Granted.

  Case-Laws - AT : Valuation u/s 67 - import of services - reverse charge - consultancy services - transaction with associated enterprise (AE) - addition on account of amount debited or credited as the case may be - stay granted - AT
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Central Excise

• Court Rules EOU Entitled to Utilize Pre-Conversion CENVAT Credit Balance After DTA to EOU Transition.

  Case-Laws - HC : CENVAT Credit – DTA unit converted into 100% EOU – Conversion and Utilization of Credit – the assessee is entitled to avail the credit in balance as on the date of conversiont - HC
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• High Court Rules No Penalty u/r 25 for Pre-Notice Duty Payment and Disclosure.

  Case-Laws - HC : Penalty – The disclosure of duty liability in the return and payment of duty along with interest before the issuance of show cause notices cannot invite penalty under Rule 25 - HC
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• Late Form-'H' Submission: Can Notification No. 8/2011 Benefits Be Claimed Beyond Six-Month Limit in Circular No. 212/96?

  Case-Laws - HC : Export or Clearances for Home Consumption – Benefit of Notification No. 8/2011 - The only dispute was that since the Form-‘H’ Certificate was furnished beyond the period of six months specified in the Circular No. 212/96 - held as Export - HC
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• High Court Dismisses Writ Petition on Vehicle Conversion to Ambulances; Lacks Jurisdiction Over Central Excise Issues.

  Case-Laws - HC : Conversion of vehicles into ambulance - Manufacture - writ petition against show cause notice - petition dismissed for want of jurisdiction - HC
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• CESTAT to Decide if Revenue's Admissions Before Settlement Commission Were Binding or Incorrect.

  Case-Laws - HC : It was just and proper for the Revenue to demonstrate as to how the admissions made before the Settlement Commission were erroneous and it was just and proper for the CESTAT to record a finding as to why the admissions made by the Revenue before the Settlement Commission were not binding on the Revenue - HC
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Case Laws:

• Income Tax

• 2013 (10) TMI 117
  Interest u/s 214 and 244 - Interest on interest for late grant of refund - whether interest is payable by the Revenue to the assessee if the aggregate of installments of Advance Tax OF TDS paid exceeds the assessed tax? - Correctness or otherwise of the decision of this Court in the case of Sandvik Asia Limited vs. Commissioner of Income Tax & Ors. [2006 (1) TMI 55 - SUPREME Court] - Held that:- it is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest.

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• 2013 (10) TMI 116
  Whether assessee has incurred any expenses for the previous year, is required to be taken into consideration while passing the order of assessment – Held that:- Assessing Officer has to consider the same in accordance with law and pass an order on merits after providing an opportunity to the assessee to explain the expenditure incurred by him for the previous assessing year - The matter is remanded to the Assessing Officer for fresh consideration in accordance with law.

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• 2013 (10) TMI 115
  Condoning the delay in filing the application or registration u/s 12 AA of the Act without assigning any reason for condoning the delay – Held that:- Reliance has been placed upon the judgment in the case of Commissioner of Income Tax Vs. Krishi Utpadan Mandi Samiti [2009 (12) TMI 13 - HIGH COURT OF ALLAHABAD], wherein it has been held that registration of mandi samities, established by notification in exercise of powers under Section 12 of the Krishi Utapadan Mandi Ahiniyam 1964, as statutory body, with the object to regulate the sale and purchase of the agricultural produce and also to develop the facilities for the farmers, are entitled for registration u/s 12-A of the Act as a trust, even if the application for registration was submitted belatedly – In the instant case, delay in submitting application for registration has been condoned and the department has been directed to registration of the respondent – Decided against the Revenue.

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• 2013 (10) TMI 114
  Income escaping assessment u/s 147 of the Income Tax Act – Undisclosed investment made by the Assessee - Held that:- There was no any credible material, which could relate to or connect to the investment of Rs.21 lacs by Reena Arora, which she had paid to D.N. Taneja - The entries in the diary of D.N. Taneja found during search and seizure, which he admitted were not of the amount of Rs.21 lacs paid by Smt. Reena Arora. The entries were with noting on the top (Praveen, Dilbagh) only indicated a schedule of payment. The name of Reena Arora did not appear in the diary. The A.O. while relying upon additions on the basis of the entries did not provide reasonable opportunity to the assessee. He did not allow cross-examination of D.N. Taneja by the assessee nor any bank statement or other records were found connecting these entries to Reena Arora - The investment made by Reena Arora and quantum was purely a guess work, which has been arrived at on surmises and conjectures without giving her an opportunity to be heard – Decided against the Revenue.

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• 2013 (10) TMI 113
  Appeal against the recall of its earlier order by the tribunal - assessee has stated at the bar that the impugned orders passed by the appellate tribunal dtd. 12/6/2009 as well as the subsequent order dtd.30/3/2012 passed in ITA No.633/Ahd/2008, be quashed and set aside and he does not invite further reasoned order, however, has stated that the same shall be without prejudice to the rights and contentions of the assessee in Tax Appeal No.1231 of 2008. - Held that:- without passing any reasoned order, the order in question quashed and set aside.

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• 2013 (10) TMI 112
  Share issue expenses paid to be treated as capital expenditure or revenue expenditure - Assessee admittedly took steps to go for public issue and after incurring expenditure, just before the public issue, by reason of the orders from the SEBI, the assessee could not go in for public issue – Held that:- Reliance has been placed upon the judgment in the case of BROOKE BOND INDIA LIMITED v. CIT [1997 (2) TMI 11 - SUPREME Court] - Considering the purposes for which the company incurred this expenditure, the fact that the efforts had got frustrated later on, would not alter the nature of the expenditure and it remains the capital expenditure – In the present case, admittedly the expenses were incurred by the assessee for the purpose of putting up publication. This was done for the purpose of widening its capital base. Even though the assessee stated that this expenditure was incurred so as to improve the cash availability, yet, the fact remains that the expenditure incurred was only for the purpose of expansion of the capital base – Decided against the Assessee.

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• 2013 (10) TMI 111
  Disallowance of various expenses u/s 40(a)(ia) – Whether section 40(a)(ia) of the Income Tax Act can be invoked only to disallow expenditure of the nature referred to therein, which is shown as 'payable' as on the date of the balance sheet or it can be invoked also to disallow such expenditure which became payable at any time during the relevant previous year and was actually paid within the previous year? - Held that:- Order passed by the ITAT dated 21.9.2012 is quashed and set aside and the matter is remanded to the ITAT to consider the aforesaid two questions afresh in accordance with law and on merits.

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• 2013 (10) TMI 110
  Addition u/s 68 of the Income Tax Act read with Rule 46A of the Income Tax Rules – Held that:- Sufficient reasons for admitting the additional evidence on the conditions laid down in Rule 46-A, and further that the documents were forwarded to AO under Section 46-A vide letter dated 21.5.2008, calling for a remand report, and on which the AO had filed the remand report - Share transactions were genuine and thus the addition made at Rs.10,62,000/- was liable to be deleted – Decided against the Revenue.

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• 2013 (10) TMI 109
  Proceeding u/s 158BD of the Income Tax Act – Held that:- In order to proceed against the firm, the AO should have recorded reasons, for issuing notice under Section 158 BD and having not recorded such reason, he could not be permitted to proceed with the assessment for the block period. Application of section 158BA(3) of the Income Tax Act - Undisclosed income of the assessee – Held that:- AO has tried to make out a case of undisclosed income on presumptions and discrepancies – A.O. failed to satisfy the requirement of the definition of the undisclosed income as provided under Section 158 B(b) of the Act - Assessee was squarely covered by Section 158 BA (3) of the Act and the CBDT Circular no. 717 - Decided against the revenue.

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• 2013 (10) TMI 108
  Extension of attachment u/s 281B(2) of the Income Tax Act – petition for recall of order where request for extension was rejected - Held that:- Third proviso to Section 281B(2) of the Act provides is for exclusion of the period of two years provided in first proviso, during which the proceedings of assessment are stayed by any Court. This is not the issue in the present matter at all – In the present case, after extension there was no further extension – High court has never precluded the applicant-Department from extending the attachment if it was otherwise open to do so in law. The extension of attachment and extension of uppermost time limit for attachment are two vastly different aspects - Request for recall is rejected – Decided against the Revenue.

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• 2013 (10) TMI 107
  Benefit of section 35DDA of the Income Tax Act - Deductibility of expenditure incurred on VRS - Applicability of Rule 2BA - Held that:- Section 35DDA reveals that no mention is made of any rule in the body of this Section. On the other hand, Rule 2BA of the Rules, a specific reference to Section 10(10C) of the Act is made and it is captioned as “Guidelines for purposes of Section 10(10C)”. Moreover the language of Rule 2BA of the Rules makes it very clear that the amount received is by the employee and for the purpose of claiming benefit under Section 10(10C) of the Act, this has nothing to do with the employer’s claim, which is under a different claim under Section 35DDA of the Act - Rule 2BA of the Rules is attracted and applicable only to a circumstance, where the benefit of Section 10(10C) of the Act is sought for and not in a situation where the provisions of section 35DDA of the Act is called in aid – Decided against the Revenue.

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• 2013 (10) TMI 106
  Evidentiary value of the documents seized – AO had relied on a photocopy of an unsigned sale agreement - Held that:- Unsigned photocopy of the agreement for purchase of the property cannot be a material to rely on, when the registered sale deed has been produced and the same shows that the property was purchased at a price of Rs.23,50,000/-. This registered sale deed was disclosed at the time of original assessment - Agreement of sale loses its force, the moment registered sale deed is executed. If the property has been purchased at a higher price than that of mentioned in the purchase deed, then the onus is on the Assessing Officer to establish that – Decided against the Revenue.

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• 2013 (10) TMI 105
  Penalty u/s 271(1)(c) of the Income Tax Act - Additions made by the AO was deleted by the ITAT - it is the case on behalf of the Revenue that though the revenue was aggrieved by the decision of the ITAT in quantum appeal because of the low tax effect, the Revenue did not challenge before the High Court. – Held that:- the aforesaid stand has not been substantiated by the Revenue. – No penalty - Decided against the Revenue.

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• 2013 (10) TMI 104
  Shortfall to deduct tax at the time of making payment under Section 192 – Held that:- Reliance has been placed upon the Uttarakhand High Court in the case of C.I.T. vs. Enron Expat Services Inc., reported in [2010 (8) TMI 201 - UTTARAKHAND HIGH COURT] - The provisions of Sub-section (1) and Sub-Section (3) of Section 192 have to be read together and if the same are read carefully, then it would appear that the payment of deducted tax shall be extended upto the end of the relevant financial year irrespective of the fact whether the deduction has been made at the time of payment or not – In the present case, shortfall of TDS was adjusted and made good and followed up in the relevant financial year – Decided against the Revenue.

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• 2013 (10) TMI 103
  Penalty u/s 271(1)(c) of the Income Tax Act - Addition in respect of benami accounts itself is deleted, the expenses incurred are disallowed primarily for the reasons that expenses incurred through these expenses could only be bogus account – Held that:- In penalty proceedings, an explanation of the assessee is not required to be substantiated to the hilt and all that is to be examined whether the explanation is bona fide, reasonable and can indeed stand the test of preponderance of probabilities - In the given situation and particularly as the addition for benami accounts stands deleted and there is no dispute about the facts that the accounts were duly audited and pertain to a much earlier year, it is not a fit case for levy of penalty. The assessee's claim is of the books of accounts having been destroyed in a natural calamity may not have been accepted in the quantum assessment proceedings – Penalty deleted – Decided in favor of Assessee.

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• 2013 (10) TMI 102
  Mistake in the order to grant deduction under Chapter VI-A - Deduction u/s 80IB of the Income Tax Act - Held that:- There is obvious mistake in refusing to grant deduction under Chapter VIA of the Act of total amount of Rs.1,02,04,258/ out of gross total income of Rs. 1,69,25,004/. It is submitted that such mistake shall be rectified within a period of one week and consequential order shall be passed thereafter within a period of two weeks giving effect to such rectification - Respondent no.1 is directed to act as stated above and rectify its mistake and pass further consequential order within a period stipulated hereinabove – Decided in favor of Assessee.

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• 2013 (10) TMI 101
  Reassessment u/s 147 - issuance of notice u/s 148 beyond four years - issue regarding adjustments u/s 115JB regarding unabsorbed depreciation or unabsorbed business loss, whichever is lower – Held that:- Assuming that there is a different angle that needed to be examined by the Assessing Officer from the material which was already existing on the record, as held in case of Jivraj Tea if was not in the mind of the Assessing Officer, nevertheless, when entire details were already made available at the time of original assessment, this ground cannot be validated. In the scrutiny assessment when the very issue has been examined thoroughly, the notice for reopening lacks validity and therefore on jurisdictional issue, this petition deserves to be allowed. – Decided in favor of Assessee.

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• 2013 (10) TMI 100
  Revised return - whether filing of revised return after receipt of intimation u/s 143(1)(a) is invalid - Credit of TDS not claimed in the original return - As soon as the petitioner assessee came to know that there was a mistake in not claiming credit of the TDS on receiving the intimation under Section 143(1) dated 7.1.2011 immediately within a period of two months – The same was not accepted by Revenue – Thereafter revision application u/s 264 was also rejected on the ground of filing of original return beyond the period of limitation – Held that:- Intimation order under Section 143(1)(a) cannot be treated to be an order of assessment. In that case, it was open for the assessee to submit the revised return at any time before the expiry of one year from the end of the relevant assessment year. As the revised return submitted by the assessee is within the prescribed period of limitation as provided under subsection (5) of Section 139, it cannot be said that revised return submitted by the petitionerassessee was not within the limitation period. Particulars of TDS deposit are mentioned in form no.26(AS) - The department has taken too technical view and as such not justified in not giving the credit of TDS already deposited with the department, the particulars of which are mentioned in Form No.26(AS) - Petition is to be allowed by directing concerned respondent to give credit and / or refund the TDS already deducted – Decided in favor of Assessee.

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• 2013 (10) TMI 99
  Jurisdiction under Section 263 of the Act – Held that:- Commissioner assumes jurisdiction on the premise that the order is erroneous and had deprived the revenue of certain amount of taxes, which is a legitimate due by allowing a deduction otherwise not entitled for deduction - Commissioner assumed jurisdiction only on the Assessing Authority having not given reason for the passing of the order and therefore, it not necessary to interfere on this ground, more importantly the Tribunal directing the Assessing Officer for re-examining the matter in the light of the existing position of law. In that view of the matter, the Tribunal has not committed any error – Decided against the Assessee.

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• 2013 (10) TMI 98
  Determination of agriculture income - composite income - Rule 8 of the Income Tax Rules - business of growing, manufacturing and selling of tea. - division as 40% as business income and 60% as agriculture income – Premium on import licence, Sale of Scrap, Misc. Garden Income, and Excise duty, etc. - Held that:- Receipts, which the assessee-appellant claimed as composite income before apportionment thereof in terms of Rule 8, had direct nexus with the assessee-appellant’s activities of growing, manufacturing and selling of tea, it was not open to the authority concerned to treat such income as an income, which could not have been described as income derived from the business of growing, manufacturing and selling of tea by the assessee-appellant. Refusal to treat the total sum of Rs. 2,73,40,080/- as composite income of the assessee-appellant, before apportionment thereof, under Rule 8, was wholly illegal and cannot be sustained – Revenue is directed to treat the receipts of Premium on import licence, amounting to Rs. 1,20,25,812/-, Sale of Scrap, amounting to Rs. 2,12,218/-, Misc. Garden Income amounting to Rs. 1,44,32,310, and Excise duty amounting to Rs. 6,69,740/-, as the assessee-appellant’s composite income before apportionment thereof in terms of Rule 8 of the Rules - Decided in favor of assessee.

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• 2013 (10) TMI 97
  Delay in filing appeal - The time period prescribed under the Income Tax Act for filing an appeal is admittedly 120 days from the date on which the order appealed against is received – Held that:- The delay has not properly been explained - There is no whisper of what the departmental officers did between 18th April, 2006, when the judicial folder was allegedly handed over to Mr. Soumik Mukherjee for drafting the memorandum of appeal and stay petition and 14th January, 2011, when the judicial folder was allegedly returned to the Ministry of Law and Justice without the draft memorandum of appeal and the stay petition – For ends of justice looked into question involved, which is covered in favour of the assessee by a judgement and order dated 30th July, 2004 of a Division Bench of this Court in Commissioner of Income Tax vs. A.F.T. Industries Ltd. reported in [2004 (7) TMI 81 - CALCUTTA High Court] – Delay not condoned – Decided against the Revenue.

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• Customs

• 2013 (10) TMI 124
  Restoration of appeal - Doctrine of merger - Held that:- all efforts were made by the appellant to see that he does not comply with the order of predeposit and/or confirmed the duty liability. Even immediately on dismissal of the SLP by the Hon’ble Supreme Court, the appellant did not deposit any amount and after a period of six years from the date of dismissal of the SLP, he deposited a sum of Rs. 6 lacs. Under the circumstances and in the aforesaid facts and circumstances of the case, the learned Tribunal has rightly dismissed the application submitted by the appellant for restoration of the appeal, which came to be dismissed as far as back in the year 2003. It appears that while dismissing the restoration application the learned Tribunal has relied upon the decision of the Delhi High Court in the case of Commissioner of Customs vs. M/s. Lindt Exports reported in [2011 (9) TMI 609 - DELHI HIGH COURT] by which a view has been taken by the Delhi High Court that since the interim order of the CESTAT has merged with the High Court on appeal, the Tribunal becomes functus officio and cannot restore the appeal though predeposit was made later. Under the circumstances and in the facts and circumstances of the case, no error has been committed by the learned Tribunal in dismissing the restoration application and consequently not restoring the appeal to file - Decided against assessee.

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• 2013 (10) TMI 123
  Application for restoration of appeal – Held that:- It is seen that the Hon’ble High Court in the applicant’s case had given observation that the court is of the considered view that no prejudice would be caused to the respondent in the event of restoring the appeal for consideration and disposal on the basis of merits by affording opportunity to the petitioner. - applicant is directed to comply with the defect memo insofar as the correction of the respondent’s name should be Commissioner of Customs, Trichy. - order recalled.

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• 2013 (10) TMI 122
  Benefit of Notification No. 57/2009-2012 – Confiscation of Goods u/s 113 – Redemption of Goods – Penalty u/s 114 – and 114AA of Customs Act – Waiver of Pre-Deposit - Revenue was of the view that the price submitted for export was non-Basmati Rice which was prohibited for export during the relevant time - Held that:- Following GLOBAL AGRO IMPEX Versus COMMISSIONER OF CUSTOMS, NOIDA [2013 (9) TMI 851 - CESTAT NEW DELHI ] u/s 129E of Customs Act there was no requirement of pre-deposit of redemption fine - The detained goods were sufficient security for realising the dues from the order and therefore there was a considerable merit in the argument of the appellants -pre-deposit of penalty for hearing the appeal was waived. - stay granted.

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• 2013 (10) TMI 121
  Imported Goods – Restricted Category as per Notification No.53/2009 – Confiscation of Goods u/s 111(d) – Penalty u/s 112(a) - The Commissioner had rightly confiscated the goods as the importer could not produce WPC licence or any permission from the DGFT - the appellant fairly agreed that due to change in the circumstances, they could not get WPC licence - However, they have already paid customs duty of Rs.22 lakhs and now they wanted to re-export the goods which were already allowed by the Commissioner - However, they have contended that imposition of redemption fine was on the higher side and requested to reduce it after considering the amount already deposited as sufficient deposit for the purpose of hearing the appeal. CHA had failed to discharge the obligatory duty as set out in the sub-regulation (b) of Regulation 20 of CHALR - They have rendered themselves liable for penal action in terms of section 112 (a) and section 117 of Customs Act. No malafide had been reflected upon on the part of the appellant - However, it was fact that the licence was required for importation of the goods and these goods were restricted under import and export policy - Even if there was no malafide, the goods were liable for confiscation and imposition of penalty, if no licence was produced or non permission from the DGFT - Similarly, CHA can also not get exoneration for his acts - However, in view of the stand already taken in respect of mens rea, ends of justice shall be met if penalty on CHA was reduced.

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• 2013 (10) TMI 120
  DPEB Benefit - Assesse imported knitting and embroidery machines under 4 EPCG licences - Held that:- Corroborative statements of the third party would show that the applicants name was not mentioned in the shipping bill and therefore there was no substance in their contention that non-supply of shipping bill would effect demand of duty - There was no mention of applicants name in the 12 shipping bills which were supplied to them - In this perspective, the contention that demand cannot be sustained for non-supply of the shipping bills would be considered after going through the case records in detail. - The applicants failed to make out a prima facie case for waiver of predeposit - Partial Stay Granted.

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• Corporate Laws

• 2013 (10) TMI 119
  Winding up Petition u/s 433(f) r.w. Section 439(c) of the Companies Act – The petitioner was denied access to the company’s records, factory etc. and was made non-functional – Held that:- Clause (f) of section 433 uses the expression “just and equitable” - This expression was not to be construed ejusdem generis with the other clauses of the section, as held by the Supreme Court in Rajamundry Electric Supply Corporation Ltd. v. A. Nageswara Rao [1955 (12) TMI 21 - SUPREME COURT OF INDIA ] - The facts alleged in the petition and elaborated prima facie show that this was a case to which the provisions of Sections 397-398 may be attracted - It was well-settled that winding-up proceedings have to be used as a last resort - In a case such as the present one, there were preventive provisions in the Act safeguarding against oppression and mismanagement - If some other remedy was available to the petitioner, that should be exhausted first - This petition was thus premature. The petitioner draws the attention to the accounts to show that for three continuous years the company had been incurring losses which exceed the paid-up capital - this by itself was not decisive of the question whether it was just and equitable to wind up the company - Once the differences between the directors were sorted out – for which no attempt appears to have been made so far – the possibility of the company reviving its operations and making profits cannot be ruled out - the winding- up petition was premature and was not maintainable – Decided against Petitioner.

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• 2013 (10) TMI 118
  Liquidation - Deposit the sale proceeds with interest realized - Held that:- orders were passed by the Division Bench after noting that no unsecured creditor had come to light despite advertisement having been issued by the OL. As things stand, the OL has issued a second advertisement and claims of at least six other creditors have been filed with the OL. We extract hereinbelow the relevant extract of the judgment of the Division Bench, which bears out the fact that it was never the intent of the Division Bench that the amount lying with the Appellant Corporation, which is an unsecured creditor, should remain with the Appellant Corporation for all times to go and even if claims of other creditors were filed with the OL - It also cannot be lost sight of that there is no dispute as to the fact that the Appellant Corporation is not a secured creditor qua the amount realized from sale of immovable properties and if there are any other unsecured creditors the claim of the Appellant Corporation would rank pari passu with such unsecured creditors. The claims of other unsecured creditors having surfaced upon the second advertisement having been issued by the OL, we do not find any infirmity in the order of the learned Company Judge directing the Appellant Corporation to deposit the sale proceeds relating to the sale of immovable property of the Company in liquidation with the Official Liquidator - Appeal dismissed.

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• Service Tax

• 2013 (10) TMI 135
  Transfer of Pending Assessments to Concerned Jurisdictional Office – Held that:- The grievance of the petitioner was that the petitioner had opted out of LTU scheme and the request of the petitioner to transfer the pending assessment and other proceedings has not been considered - In similar circumstances, in many cases, pending assessment/proceedings have been transferred - In response to the request of the petitioner to furnish information under the Right to Information Act, the respondents have furnished information as per Annexures-'L', 'N' and 'Q' - They show that in respect of some Companies who have opted out of LTU scheme, pending assessments/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction. Insofar petitioner was concerned, the request was not considered for the reason that the assessment for the year 2009-10 was not completed and the petitioner had approached the court - Keeping in view, Annexures 'L' 'N' and 'Q' which show that pending assessment/proceedings have been transferred from LTU jurisdiction to the normal jurisdiction, it was proper to direct the first respondent to consider the request of the petitioner in the light of Annexures -'L', 'N' and 'Q' - the first respondent was directed to consider the request of the petitioner vide Annexure 'E', keeping in view the communications at Annexures -'L', 'N' and 'Q' and section 127 of the Income Tax Act.

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• 2013 (10) TMI 134
  Recovery of Irregularly Sanctioned Refund Claims – Stay Applications – Held that:- On the same refund claims in the case of same appellants, appeals are filed with this Bench and are pending - Therefore, after granting of stay against recoveries, it was ordered that these appeals may be linked with appeal filed by the same appellants and listed in due course - Accordingly, there will be stay on recoveries of the dues in these appeals till the disposal of appeals.

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• 2013 (10) TMI 133
  Restoration of the Appeal – Held that:- There was apparent a clearly casual and negligent on the part of the appellant - The appeal was dismissed for failure of pre-deposit by the order which suffered from no error since demonstrably there was a default on the part of the appellant in complying with the condition of pre-deposit - However, the appellant now seeks indulgence since it was pleaded that it had substantial merit in the appeal - It would be appropriate to recall of the order (dismissing the appeal for failure of pre-deposit), on condition that the petitioner / appellant deposits the entire adjudicated liability set out in the adjudication order to the extent confirmed by the order of CESTAT.

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• 2013 (10) TMI 132
  Management, Maintenance or Repair Services – Penalty and Interest u/s 76, 77 and 78 of the Finance Act – Held that:- The appellant contended that he had been awarded a contract of laying pipelines and also pumping operation, maintenance and repair of such pipelines along with pumping machinery for supply of water to various district and taluka places – Relying upon Nagarjuna Construction Co. Vs. CCE Hyderabad [2010 (5) TMI 232 - CESTAT, BANGALORE] - he had been engaged in discharge of sovereign function of supply of water to the citizens by laying the pipelines - the sovereign function if executed by a contractor, such activity cannot be under the category taxable services and no Service Tax was leviable on such activity. Waiver of Pre-deposit - The issue needs deeper consideration as it was not free from doubt - though the ld. Counsel had relied upon various case laws, the facts of those case laws and the facts in this case needs to be considered before arriving at the final conclusion which can be done only at the time of final disposal of appeal - Since the issue was not free from doubt and the appellant was aware from the tender document that the appellant may have to discharge the Service Tax, the appellant had not made out a prima facie case for complete waiver of the amounts involved.

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• 2013 (10) TMI 131
  Advertising Agency - Waiver of Pre-deposit – Both the lower authorities have held that the appellant was liable to discharge Service Tax liability under the category of advertising agency as they have published an advertisement in journals/magazines abroad - Held that:- The appellant places advisement for sale of products in foreign journals/magazines, through an agency, which had no office in India - It transpires from the record that the appellant was placing advertisement which he himself sends it abroad through advertising agencies - There was nothing on record to show that the advertising agency which was situated abroad was visualizing, conceptualizing etc of the said advertisement - the decision of Ajanta Fabrication Vs. CCE Meerut [2006 (10) TMI 1 - CESTAT, NEW DELHI ] may cover the issue in favour of the assessee - The appellant had made out a prima facie case for complete waiver of pre-deposit of the amounts involved - the application for waiver of pre-deposit of the amounts involved was allowed and recovery thereof stayed till the disposal of appeal.

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• 2013 (10) TMI 130
  Survey and Exploration of Mineral Oil and Gas Service – Waiver of Pre-deposit – Held that:- Revenue contended that on perusal of the agreement, it was clearly evident that they have rendered the service under the category Survey and Exploration of Mineral Oil and Gas Service - After hearing both sides and on perusal of the records there was force in the Contention of the Revenue – the Commissioner (Appeals) for the earlier period had accepted the classification of the service as contended by the learned counsel - After considering the submissions of both sides, we find that the deposit already made by the applicant was sufficient for waiver of predeposit of balance dues - it was made clear that the deposit made by the applicant would be accepted subject to verification by the Divisional Office - Stay granted.

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• 2013 (10) TMI 129
  Condonation of Delay – Delay of 56 Days - Held that:- Misplacement of the file of a Company, cannot be the reason for condonation of delay in filing the appeal - However, it should be considered under which circumstances the file was misplaced - the file was misplaced at the time of shifting of a portion of their office from 5th Floor to 3rd Floor - It was also noted that during the course of shifting to the third floor, the files were transferred to the respective departments - It was also noted that the concerned staff after examining the files detected the present case file - It appeared that after shifting of the department, there was an imitative on the part of the staff to watch the files and the present case file was located - it was appropriate to condone the delay in filing the appeals - the delay in filing the above appeals were condoned and COD applications were allowed - Miscellaneous applications for additional facts to COD application were disposed of.

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• 2013 (10) TMI 128
  Waiver of Pre-deposit – valuation - section 67 - import of services - reverse charge - consultancy services - transaction with associated enterprise - addition on account of amount debited or credited as the case may be - Held that:- On a prima facie view, since the amendment to Section 67 and the complementary amendment to Rule (6) was subsequent to the period in issue in the present appeal, the liability to tax had been wrongly assumed in the adjudication order - Further the substantive component of the service tax liability as assessed had already been remitted - We therefore find a strong prima facie case in favour of the petitioner and therefore grant waiver of pre-deposit and stay of all further proceedings pursuant to the impugned order in appeal, pending disposal of the appeal – Stay granted.

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• Central Excise

• 2013 (10) TMI 146
  Condonation of Delay – Delay of 556 days – Held that:- The officials of the department for nothing sat tight over the matter and did not take any action bona fide for preferring the application – Nothing has been produced to support that such opinions of various authorities and officials are needed - the counsel should be engaged for drafting and setting reference application under Section 5 of the Limitation Act, 1963 - Actual action had been taken almost after more than one year unnecessarily wasting time - there has been again change of lawyer - These were unacceptable explanation – Application of Condonation of Delay was dismissed.

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• 2013 (10) TMI 145
  Reversal of CENVAT Credit – DTA unit converted into 100% EOU – Conversion and Utilization of Credit – Whether the CESTAT was justified in holding that the assessee, a DTA unit converted into a 100% Export Oriented Unit with effect from 14-7-2004 was not required to reverse the balance CENVAT credit available in the books of accounts of the assessee on the date of conversion and utilize the said credit in respect of the clearances effected from the 100% Export Oriented Unit is the question of law - Held that:- Following GTN Exports Ltd. v. Commissioner of Central Excise, Coimbatore [2008 (7) TMI 377 - CESTAT, CHENNAI] and Commissioner of Central Excise, Rajkot v. Ashok Iron & Steel Fabricators [2002 (1) TMI 91 - CEGAT, NEW DELHI ] – the assessee is entitled to avail the credit in balance as on the date of conversion - there was no fault can be found with the decision of the CESTAT – Appeal was dismissed.

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• 2013 (10) TMI 144
  Penalty – Discharge of Duty Liability - Penalty was imposed on the respondent under Rule 21 of the Central Excise Rules, 2002 on the allegation that respondent failed to discharge duty liability under Rule 8 of the Central Excise Rules, 2002 – Held that:- It was not disputed between the parties that due penalty along with interest was paid by the respondent before issuance of the show cause notice - The duty short-paid, was paid along with the interest and it was not a case of intend to evade the payment of duty - The Tribunal had further noticed that respondent disclosed its duty liability in the return - The disclosure of duty liability in the return and payment of duty along with interest before the issuance of show cause notices cannot invite penalty under Rule 25 of the Rules in the facts of the present case - Cogent reasons had been given by the Tribunal for deleting the penalty - the order of the Tribunal was legally justified in deleting the penalty and no error had been committed in deleting penalty.

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• 2013 (10) TMI 143
  Penalty - Duty under Protest – Held that:- Party without making any protest deposited the amount of duty before issue of show cause notice along with interest - All the three authorities held that it was a case of non-imposition of penalty after considering relevant materials on the record and after considering all the pleas raised by the department - Having regard to the findings it was not a case of warranting of any penalty – there was no substantial question of law.

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• 2013 (10) TMI 142
  MODVAT credit under Rule 57A - Whether Modvat credit under Rule 57A can be availed on the basis of declaration filed by unit earlier existed in the premises without filing the declaration under Rule 57G or without seeking permission under Rule 57F(20) of the Rules – Held that:- In so far as permission under Rule 57F(20) was concerned, finding had been recorded that said allegation was not made in the show cause notice, nor the assessee was required to seek permission under Rule 57F(20) when an allegation was not made in the notice - The adjudicating authority committed error in relying on the Provisions of 57F(20) - The findings recorded by the Tribunal that show cause notice did not contain any allegation regarding violation of Rule 57F(20) had not been challenged. - No such substantial question of law arises for consideration. In so far as filing of declaration under Rule 57G of Central Excise Rules, 1944 was concerned the declaration was submitted by the assessee with delay - The declaration filed with delay was rejected without any valid reason - Rule 57G(9) empowers the authority to condone the delay in filing of such declaration and allow the manufacturer to take credit of the duty already paid on the inputs - Declaration of the assessee was claimed to have been filed well within a period of six months from the receipt of input in the factory - the Tribunal had rightly dismissed the appeal of the revenue confirming the order of the Commissioner (Appeals) - The appeal was concluded by findings of the facts and no substantial question of law arises for consideration.

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• 2013 (10) TMI 141
  Application for Restoration of Appeal – Held that:- The endorsement by the postal authority that “there is nobody in the factory” cannot tantamount to the refusal of the appellant nor that can be read as factory was closed as had been read by the Tribunal - The Tribunal ought to have taken fresh steps for service to the appellant in the manner prescribed under law - The Tribunal committed error in rejecting the application of the appellant – Appeal was allowed.

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• 2013 (10) TMI 140
  Export or Clearances for Home Consumption – Benefit of Notification No. 8/2011 - The only dispute was that since the Form-‘H’ Certificate was furnished beyond the period of six months specified in the Circular No. 212/96, whether the exports effected by the assessee could be considered as clearances for home consumption and benefit of Notification No. 8/2011 could be denied to the assessee in respect of those exports - Held that:- As per the Circular No. 212/96, no doubt that the exporter was required to furnish a photocopy of Form-H to establish proof of export within a period of six months from the date of clearance of the goods from the factory, but the said Circular nowhere states that if the Form-H certificate furnished beyond the period of six months, exports effected by the assessee would be treated as clearance for home consumption - it was not in dispute that the assessee had in fact effected exports and had furnished photocopy of Form-H certificate, thus no fault can be found with the decision of the CESTAT that the clearance effected for exports cannot be taken as clearance for home consumption – there was no merits in the present appeal.

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• 2013 (10) TMI 139
  Condonation of Delay - Whether the appellant has sufficiently explained the delay – Held that:- The observation of the Tribunal that the order was received by the Company on 17th November, 2003 through courier was based on no material - It does not appeal to reason that when the order has been passed on 17th November, 2003 how it can be received through courier on the same day - It may be another thing that some representative of the appellant may receive the copy of the order in the office itself on the same day but the observation without there being referring to any material is erroneous - More so, in the explanation given in the delay condonation regarding company being sick, it was under consideration before the BIFR, the package was finally sanctioned in the year 2004 and in the meantime there was change of officials, who were looking after the case, was sufficient explanation for condonation of delay. - delay condoned.

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• 2013 (10) TMI 138
  Conversion of vehicles into ambulance - Manufacture - writ petition against show cause notice - the petitioner claimed that he was undertaking an activity which was classified as service and, therefore, the entire action including search operations and proceedings thereafter were illegal - Held that:- Following M/S BAFNA HEALTHCARE PVT. LTD. & ORS. VERSUS COMMISSIONER OF CENTRAL EXCISE DELHI IV [2011 (8) TMI 327 - DELHI HIGH COURT] where the similar issue was raised and disposed of, the petitioner should not be permitted and allowed to raise the plea once again - The unit where the petitioner undertakes and carries on business activities was located in Faridabad - The petitioner was also registered with the Commissionerate in Faridabad - The proceedings were pending at Faridabad. - writ petition dismissed.

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• 2013 (10) TMI 137
  Undervaluation of AC Parts – Whether the CESTAT was justified in confirming the duty demand by holding that the proceedings before the Settlement Commission, Customs & Central Excise as provided in Chapter V of the Central Excise Act, 1944 were not judicial proceedings and any admission made before that Commission would not be judicial admission – Held that:- It was just and proper for the Revenue to demonstrate as to how the admissions made before the Settlement Commission were erroneous and it was just and proper for the CESTAT to record a finding as to why the admissions made by the Revenue before the Settlement Commission were not binding on the Revenue - In the absence of any such finding recorded by the Tribunal, it would be proper to remand the matter to the file of the Tribunal - the decision of the CESTAT was extended to the extent it confirmed the duty demand and restore the issue for fresh consideration in accordance with law.

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• CST, VAT & Sales Tax

• 2013 (10) TMI 136
  Classification of goods - Audit u/s 43 - Held that:- Section 43 of the Value Added Tax Act empowers the Commissioner to audit the accounts, registers or documents of a dealer for any year or part thereof not being a period which ended five years previous to the date of selection. Sub-section 3 as already indicated above requires the preparation of the report containing the observation and findings, regarding correctness of the returns, admissibility of various claims of the dealer for which the audit is conducted and the preparation of computation sheet quantifying the tax interest or late fees. Sub-section 5A of the Act says that if the dealer fails to pay the tax interest and late fees stated in the computation sheet within one month of the receipt of such report, it would culminate into an order of assessment and shall be deemed to be notice of demand. There is a distinction between the levy and the assessment, as the levy is wider in its import than the assessment so as to include both the imposition of tax and the assessment - Section 5A of Section 43 of the Act specifically provides that in default of the payment of the tax interest or the late fees stated in the computation sheet, it would partake the character of an order of assessment and shall be deemed to be a notice of demand. Rule 54 (7A) of the West Bengal Value Added Tax Rule, 2005 also makes the determination of tax interest or late fees in the computation sheet be deemed to be an order of assessment in default of its payment within a specified date. Audit made under Section 43 and the computation of tax, penalty and late fees shall be deemed to an order of assessment in default of the payment within one month from the date of the service of the report and the computation sheet is amenable to be challenged before the tribunal under Section 5 & 6 of the Taxation Tribunal Act - Decided against assessee.

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• Indian Laws

• 2013 (10) TMI 127
  Erection of telecommunication tower - Obstruction in construction - Held that:- None of the respondents have filed any counter affidavit in this writ petition. The matter was heard. Whether the commissioning of a telecommunication tower would affect the health of the people of the area is an issue which is still being debated among the scientist communities all over the world. This Court has, in two decisions, held that there is no evidence that the same will affect the health of the people. Whether it will affect the health of the people or not, it is an undisputed fact that we are bound to live for the rest of our lives with mobile phones in our pockets. The statute prescribes certain licenses and permits for erecting telecommunication towers. All what we can ensure is that such requirements are complied with in the erection and operation of the tower. In the above circumstances, if the petitioner has obtained necessary permits and licenses, nobody can prevent them from erecting and commissioning telecommunication towers. Therefore, we dispose of the writ petition with a direction to respondents 1 and 2 to see that the petitioner is not prevented from commissioning the telecommunication tower already erected, if they have all the permits and licences to operate the telecommunication tower - Decided in favour of appellant.

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• 2013 (10) TMI 126
  Relocation of the Liquor Shop - Rule 5 sub-rule (4) of U.P. Number and Location of Excise Shops (Fourth Amendment ) Rules, 2008 – Held that:- In order to respect the public sentiment which was expressed by the flat owners of the building, who have objections to the location of the shop an inspection was made - The District Excise Officer was, thereafter, directed to re-locate any shop - The license of the shop is renewed every year - Every renewal amounts to fresh grant and thus, the restriction applicable under sub rule (4) of Rule 5 of the aforesaid Rules in respect of the distance namely, 100 Mts. from the residential locality, would be attracted in the present case - The District Excise Officer, thus did not allow the renewal of the petitioner's shop close to the building. There was no error in the order of the District Excise Officer, Allahabad, directing the shop to be re-located by the order which is within the parameters of law - The public interest is an important factor for relocation of country liquor shop - No one has a fundamental right to trade in country liquor which is by its nature a dangerous and obnoxious trade - The country liquor shop in a residential locality causes bad odour, makes an entire area unhygienic and attracts bad elements of the area to assemble at odd hours - The families living in neighborhood with children and women find it difficult to live with a country liquor shop in the vicinity - The District Excise Officer did not commit any illegality in accepting in public protest - He has not cancelled the license - The petitioner has only been asked to relocate the shop – Decided against Petitioner.

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• 2013 (10) TMI 125
  Right to information - Appellant sought list of officers empanelled for appointment as member C.B.E. & C. for the year 2009-2010 and 2010-2011 - Appellant further sought the inspection of all records, documents, files, notesheets, correspondence relating to the selection and appointment of members to the C.B.E. & C. from the year 2009 to 2011 - Delay in reports - Held that:- Mr. V. Sreekumar, CPIO has prima facie caused a delay of more than 100 days in providing the information to the appellant. A separate show cause notice u/s 20(1) of the RTI Act would be issued to Mr. V. Sreekumar, who was the CPIO at the relevant time asking him to show-cause why a penalty of Rs. 25,000/- should not be imposed upon him - Decided in favour of appellant.

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