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TMI Tax Updates - e-Newsletter
October 9, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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International transaction or not - Consultancy charges - even if it is assumed that certain benefit accrued to the Associated Enterprises and they were to compensate the respondent-assessee, the ALP would have to be determined. - HC
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Addition on the basis of inflated stock statement submitted to bank - Addition under Section 69B - additions not permissible - HC
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Transfer of case - Reasonableness of order passed by Commissioner u/s 127 - so long as reasons indicated in the order are neither arbitrary and/or unreasonable, Court would not be justified in setting aside the impugned order - HC
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Limitation – Notice for penalty u/s 271(1)(c) - the notice under Section 271(1)(c) of the Act was handed over to the counsel on 13.03.1989, and by then, the time available for completion of assessment was already over on 31.03.1988 - no penalty - HC
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Disallowance of interest expense - loan and advances to sister concerns – Held that:- Rate of interest for advancing the loan to the sister concern was 6% and borrowing in the majority cases was at 12% - no disallowance - HC
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Nature of expenditure incurred on account of issue of bonds - revenue expenditure or capital expenditure – expenditure was a permissible deduction - HC
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Addition u/s 41(1) - The fact that the assessee had refunded the amount does not exonerate his accountability under charging Section 41(1) and 43(B) read with Section 147 of the I.T. Act - HC
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Reassessment u/s 147 without service of Notice u/s 143(2) - whether Notice under section 143(2) to be directory and not mandatory - held as mandatory - HC
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Deduction u/s 80IB - Housing project - Joint development agreement - whether for the purpose of benefit u/s 80IB(10, the assessee could be considered as the owner of the land in question - Held Yes - HC
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Retrospective effect of section 234D of the Income Tax Act – Interest on excess refund - period prior to 1.6.2003 - can not be demanded - order of HC sustained - SC
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Disallowance under Section 40(a)(ia) due to non deduction of TDS - section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year - AT
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Disallowance u/s 14A - since the shareholders funds are far in excess of the investments, it can be presumed that investments are out of interest free shareholders funds - no disallwance - AT
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Penalty u/s 271(1)(c) of the Income Tax Act – short term capital gains was not disclosed in the return of income - levy of penalty confirmed - AT
Customs
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Validity of Order passed by Appellate Committee, Ministry of Commerce – Misuse of DEEC licence - It is apparent that there has been error in the decision making process. Relevant statements had been ignored and not taken into consideration - HC
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Order u/s 3(1) of COFEPOSA - Considering the grounds on which the detention order is sought to be quashed at the pre-execution stage and the law relating thereto, none of the grounds are attracted in the present case - no relief - HC
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CENVAT Credit and Claiming All industry Duty drawback - merchant exporter - the restriction in condition 13 (i) of Notification 103/2008-Cus(N.T) is with reference to the goods manufactured and not with reference to the person who is claiming drawback - AT
Indian Laws
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Withholding of Pension - A person cannot be deprived of this pension without the authority of law, which was the Constitutional mandate enshrined in Article 300 A of the Constitution - SC
Service Tax
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Valuation - Construction of commercial and residential complexes - when abatement is claimed, it should be from value inclusive of all the materials used for providing the service - stay granted partly - AT
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Provision of services to self - BAS - Export of services without receiving foreign exchange - valuation u/s 67 regarding transactions with associated parties - stay granted - AT
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Renting of Immovable Property Services - Joint property / co-ownership - benefit of SSI exemption Notification No 6/2005-ST - whether each owner is eligible for value based exemption - prima facie the answer is Yes - AT
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Franchisee Services - Period of limitation – applicant was granted representational rights for providing service - No prima facie case for total waiver of pre-deposit of service tax - AT
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BAS - Commission on Promotion and Marketing – incentives were received in respect of all the models as quantity discounts or prompt payment discounts in respect of purchase of motor vehicles - stay granted - AT
Central Excise
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CENVAT Credit cannot be denied merely on the basis of certain procedural lapses when the duty paid nature and its receipt in the factory and utilization in the manufacturing activity are not disputed - AT
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Cenvat Credit - various iron and steel items used for laying down the foundation which are attached to earth and cannot be said to be cenvatable items - prima facie case is against the assessee - AT
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Refund - Whether in view of subsequent issue of credit notes neutralising the higher price along with higher duty earlier charged, the respondent would be eligible for refund - held yes - AT
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Eligibility for Duty Exemption under Notification No. 108/95-C.E – Assesse cannot be accorded of suppressing the relevant facts from the Department, more so, when the exemptions certificates had been countersigned - AT
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Penalty u/s 11AC - The assesse did not choose to contest the demand on the ground of limitation, thereby virtually accepting the allegation of suppression - penalty confirmed - AT
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Valuation - compensation for damage, breakage or loss suffered by the goods after removal from the factory, was not permissible to be deducted from value - AT
VAT
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Purchase against C Form - any notification issued under the Act of 1954 cannot discredit the rebate claimed by an assessee on purchase of material by declaration under ‘C’ form in adherence of the Act of 1956 - HC
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Penalty u/s 4B(5) of UPTT - when the assessee in his proforma 4 and form 82 has himself declared the manufacture goods as plastic goods there was little or no evidence before the Tribunal to come to the conclusion that the goods so manufactured were packaging materials - HC
Case Laws:
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Income Tax
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2013 (10) TMI 293
Whether on the facts and circumstances of the case and in law, the Tribunal did not err in failing to appreciate that as per the provisions of Section 80HHE, profits of any branch, office, warehouse or any other establishment of the assessee situated outside India are to be reduced from 'export turnover of the business' and not from 'total turnover? - Appeal admitted on this issue. International transaction or not - Consultancy charges - Held that:- dispute relates to allocation of consultancy charges paid by the respondent-assessee to M/s. McKinsey & Co. on the ground that there was an arrangement between the respondent-assessee and its Associated Enterprises and on that basis, the Revenue sought to justify the inclusion of consultancy charges paid to M/s. McKinsey & Co. as an international transaction. The Tribunal held that there was no material to support the conclusion that there was an arrangement between the respondent-assessee and its Associated Enterprises and the entire case is based on mere presumption. Therefore, the Tribunal concluded that the order of the Transfer Pricing Officer (TPO) is without any evidence. The Tribunal further held that even if any benefit accrued to the Associated Enterprises, it was merely incidental to the consultancy obtained by the respondent-assessee from M/s. Mc Kinsey & Co. Besides, the Tribunal held that even if it is assumed that certain benefit accrued to the Associated Enterprises and they were to compensate the respondent-assessee, the ALP would have to be determined. This can only be determined on finding out the consultancy charges paid by similarly situated and comparable independent entities. In the absence of any comparison, the Tribunal held that the action of the TPO cannot be upheld - Decided in against the Revenue. Deduction u/s 10A - Held that:- respondent-assessee established three units at Chinchwad, Ackruti and Millennium. The Revenue denied the benefit of Section 10A of the said Act in respect of three units on the basis of the approval letter issued by Software Technology Park in India that the three units are to be considered as part of the existing unit. The Tribunal has recorded a finding of fact that all the three units fulfil the conditions prescribed under Section 10A(2) of the Act. The three units were separate and independent production units and the same cannot treated as mere expansion of the existing units. Thus, the respondent-assessee is entitled to its claim for deduction under Section 10A of the Act - Decided against the revenue.
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2013 (10) TMI 292
Disallowance on account of loss in share trading loss - Appellant had followed the consistent method of computation of income/loss from the earlier year – Held that:- Appellant had not proved before the A.O. As well as CIT(A) that shares loss was not speculative loss or delivery of share has been taken by the appellant or not - When the transactions themselves were not under any cast of shadow or doubt and there was no dispute over the quantum of loss computed by the appellant and the respondent assessee when had substantiated the entire transactions by furnishing otherwise valid and statutorily accepted documents, on merely debiting directly these items in capital account instead of in P&I account and thus not routing share trading account through audited account under section 44AB cannot furnish a ground to disregard overwhelming legally acceptable evidences to reject the claim of assessee – Decided against the revenue.
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2013 (10) TMI 291
Addition on the basis of inflated stock statement submitted to bank - Addition under Section 69B - Held that:- Only on account of inflated statements furnished to the banking authorities for the purpose of availing of larger credit facilities, no addition can be made if there appears to be a difference between the stock shown in the books of account and the statement furnished to the banking authorities - If, for the purpose of fulfilling the margin requirements of the bank purely on inflated estimate basis, when the stock statement had reflected inflated value of the stock, both for the purpose of value as well as quantity, addition can not be made – Decided against the Revenue.
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2013 (10) TMI 290
Deduction Section 80IB - fulfillment of conditions - housing project – Held that:- Deduction under Section 80IB(10) of the Act with respect to only those units of ‘housing project’ named ‘Maninagar’ approved prior to 01/04/2004 and of which constructions have been completed prior to 31/03/2008 be granted – In the present case, ‘housing project’ named ‘Maninagar’ was already approved prior to 01/04/2004 with respect to different units. - And constructions that have been put up have been completed prior to 31/03/2008 – Decided against the Revenue.
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2013 (10) TMI 289
Transfer of case - Reasonableness of order passed by Commissioner u/s 127 of the Income Tax Act – Held that:- While exercising its power of transferring proceedings under Section 127(2) of the Act, the Commissioner of Income Tax has exercised the discretionary power vested in him to transfer the case from one Assessment Officer to another - Section 127 of the Act itself does not circumscribe/limit the power of a Commissioner of Income Tax to transfer Assessment Proceedings from one Assessing Officer to another but has left it to the judgment of the Commissioner of Income Tax to exercise his discretion in a reasonable manner. To ensure that the Commissioner of Income Tax exercises his discretion in a just and reasonable manner he has to record reasons for doing so. If the reasons are arbitrary, the Court will set aside the order of transfer. In the present case, Commissioner of Income Tax has so recorded reasons while exercising his powers and these reasons are that the substantial transactions of petitioner with related parties i.e. entities belongs to Sahara Group of Companies. Therefore, so long as reasons indicated in the order are neither arbitrary and/or unreasonable, Court would not be justified in setting aside the impugned order passed by the Commissioner of Income Tax under Section 127(2) of the Act. Therefore, reason/purpose for coordinated investigations and assessments viz: the substantial financial transactions of the petitioner with the various entities within the Sahara Group of Companies is not perverse or arbitrary – Decided against the Assessee.
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2013 (10) TMI 288
Limitation – Notice for penalty u/s 271(1)(c) of the Income Tax Act – Held that:- Notice under Section 271(1)(c) of the Act was not served on the assessee on 17.03.1988 as claimed by the department found the assessment to be barred by limitation under Section 153(1)(a) of the Act - In view of the reasons recorded by revenue for reaching the conclusion that the notice under Section 271(1)(c) of the Act was handed over to the counsel on 13.03.1989, and by then, the time available for completion of assessment was already over on 31.03.1988 and that the department was not entitled for extended period of limitation under Section 153(1)(b) of the Act - Counsel for the appellant has failed to point out any perversity either in the findings recorded by the learned Tribunal or from the original record, which was summoned by this Court – Decided against the Revenue.
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2013 (10) TMI 287
Disallowance of interest expense - loan and advances to sister concerns – Held that:- Rate of interest for advancing the loan to the sister concern was 6% and borrowing in the majority cases was at 12% - No error much less any substantial error can be said to have been committed - As far as M/s.RJD Impex Pvt. Ltd., a proprietary concern, is concerned, on having noted that it being in the business of financing, not only advances money and charges interest at the rate of 12%, but, it also passes 12% interest on the borrowings made by it - Both the CIT (Appeals) and the Tribunal appropriately dealt with the issue, then, no reason to interfere with the deletion made by the CIT (Appeals) and confirmed by the Tribunal – Decided against the Revenue.
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2013 (10) TMI 286
Withdrawal of reasons recorded for issuance of Notice u/s 148 – Held that:- Submission made by Revenue that Income Tax Officer will withdraw the impugned reasons recorded, which are the basis for issuing the said notice and record fresh reasons incorporating the correct factual position and then proceed in the matter in accordance with law - In view of this submission, the petition is disposed of on the understanding that the show-cause notice dated 5.10.2011 does not survive and is effaced from the record since reasons recorded on the basis of which the same was issued have been withdrawn by the Income Tax Officer with liberty to record fresh reasons and proceed in the matter, in accordance with law.
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2013 (10) TMI 285
Nature of expenditure incurred on account of issue of bonds - revenue expenditure or capital expenditure – Held that:- Funds having been raised precisely with issuance of secured redeemable non-convertible bonds, we find no reason to take any view different than that taken by this Court in Secure Meters Ltd's case [2008 (11) TMI 66 - HIGH COURT RAJASTHAN] as also by the Hon'ble Delhi High Court in Thirani Chemicals Ltd. [2005 (12) TMI 86 - DELHI High Court], wherein it has been held that expenditure incurred on the issue of debentures will be a permissible deduction notwithstanding the introduction of Section 35D - Issue of debentures for expansion of an existing business, the expenditure incurred on the same must be amortised - Tribunal was, in that view, perfectly justified in holding that the expenditure was a permissible deduction and accordingly deleting the additions made by the Assessing Office – Decided against the Revenue. Whether on the facts and in the circumstances of the case, the ITAT was legally justified in reversing the findings of the CIT (A) and deleting the disallowance of Rs.1,05,87,365/- provided for contractual obligation in the return which was not allowable being contingent /unascertainable liability? - Appeal admitted.
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2013 (10) TMI 284
Re-opening of assessment u/s 147 of the Income Tax Act - Basis of re-opening of assessment that excise duty refund received by the assessee should be brought to tax under section 41(1) of the Act – Held that:- The legal liabilities whether remitted or not could have been claimed as deductions. But with the incorporation of sections 41 to 43(B), the proposition has undergone a thorough change insofar as legal liability is payable to Statutory Authority or the Government. No deduction was permitted until the said amounts are actually paid and remitted, and the accounting on annual basis in Mercantile system in respect of the said liabilities stood expressly excluded by law. In the instant case, for the assessment year in question, Section 43(B) applies. The ratio laid down by the Hon'ble Supreme Court in Thirumalaswamy Naidu[1997 (8) TMI 7 - SUPREME Court] case would justify the act of the Assessing Officer in assessing the refund of amount in the hands of the assessee as trade-in-receipts until it was paid back to the Government or distributed to the beneficiaries. In the present case, it appears that the assessee after dismissal of the writ petition has remitted the refund amount to the Excise Department as per law. The fact that the assessee had refunded the amount does not exonerate his accountability under charging Section 41(1) and 43(B) read with Section 147 of the I.T. Act – Decided in favor of Revenue.
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2013 (10) TMI 283
Reassessment u/s 147 without service of Notice u/s 143(2) of the Income tax Act - whether Notice under section 143(2) to be directory and not mandatory as held by Hon’ble Tribunal – Held that:- Relying upon the judgment in the case of CIT Versus Mukesh Kumar Agrawal [2012 (7) TMI 543 - Allahabad High Court], it has been held that non-service of notice under section 143(2) of the Act and the assessment so made in absence thereof is void ab initio. Any assessment made in absence of notice under section 143(2) is void ab initio - The service of the notice under section 143(2) is being disputed, the stand taken by the Revenue that notice was in fact served and the stand taken by the learned counsel for the appellant that no notice was served - Directed the Tribunal to decide the appeal a fresh in accordance with law. It will be open for the Revenue to make an application for filing additional evidence, which shall be decided in accordance with law – Decided in favor of Assessee.
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2013 (10) TMI 282
Violation of provisions of Section 40A(3) - Assessee having made cash payments in excess of Rs.10,000/- in contravention of the provision Section 40 A (3) of the Act, the said payments should be added to the income of the assessee for the assessment year 1990-91 – Assessee made cash payment of Rs.13,43,790/- - Held that:- Assessee had led evidence in detail to explain the payments made in cash in excess of Rs.10,000/- beyond banking hours - Payments were made in the bank account of the U. P. State Sugar Corporation Ltd., Bareilly on the instructions of the Corporation directly in the bank or in case of payments made after banking hours, the payments have been made at Mill counter as directed by the Corporation to enable them to meet their daily expenses and excise duty payments. The certificate was also filed before the Assessing Officer - Deleted of the addition of the amount of Rs.13,43,790/- for the assessment year 1990-91 – Decided against the Revenue.
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2013 (10) TMI 281
Deduction u/s 80IB of the Income Tax Act - Housing project - Joint development agreement - whether for the purpose of benefit under Section 80IB (10) of the Act, the assessee could be considered as the owner of the land in question. - Held that:- ssessee had undertaken the development of housing project at its own risk and cost. The land owner had accepted only the full price of the land and nothing further. The entire risk of investment and expenditure was that of the assessee. Resultantly, profit and loss also would accrue to the assessee alone. Reliance has been placed upon the judgment in the case of Mysore Minerals Ltd. vs. Commissioner of Income Tax [1999 (9) TMI 1 - SUPREME Court], the ownership has been understood differently in different context - For the limited purpose of deduction under Section 80IB(10) of the Act, the assessee had satisfied the condition of ownership - Assessee was given full rights to develop the land by putting up the housing project at its own risk and cost. Entire profit flowing therefrom was to be received by the assessee. It is true that the agreement provided that the assessee would receive remuneration - Agreement was one of works contract - Assessees were entitled to the benefit under Section 80IB(10) of the Act even where the title of the lands had not passed on to the assessees – Decided against the Revenue.
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2013 (10) TMI 280
Retrospective effect of section 234D of the Income Tax Act – Interest on excess refund - period prior to 1.6.2003 - Held that:- Having regard to the legal position which has been clarified by the Parliament by insertion of Explanation (2) in Section 234D of the Act, in the present case, retrospectivity of Section 234D does not arise – the view of the High Court in relying upon the decision of the Bombay High Court in M/s Delta Air Lines Inc. (2011 (9) TMI 21 - BOMBAY HIGH COURT) cannot be said to be erroneous - Decided against the Revenue.
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2013 (10) TMI 279
Disallowance under Section 40(a)(ia) due to non deduction of TDS - whether application only on the amount due as on 31st March - Transaction charges paid to BSE and NSE – Held that:- Reliance has been placed on the judgment in the case of CIT vs. Sikander Khan Tunvar [2013 (5) TMI 457 - GUJARAT HIGH COURT], wherein it has been held that section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year of course as long as the other requirements of the said provision exist - Assessing Officer, was justified a making the disallowance – Decided in favor of Revenue.
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2013 (10) TMI 278
Disallowance u/s 14A of the Income Tax Act – Held that:- Assessee explained investment to the tune of Rs.17.24 crores out of which an amount of Rs. 10 crores was out of the current account of Vysya Bank, in which repayment of loan advanced to Aparna Constructions on 05.02.2007 was credited. Thus, there is a nexus between the borrowed fund to that of investment in mutual fund – A.O. was directed to restrict the disallowance to the period for which the borrowed funds were utilised for investment - Issue remitted to the file of the Assessing Officer to work-out the disallowance accordingly – Appeal allowed for statistical purpose – Decided in favor of Assessee.
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2013 (10) TMI 277
Disallowance u/s 14A of the Income Tax Act – Held that:- If there are funds available both interest free and overdraft and/or loan taken, then a presumption would arise that investments would be out of interest free funds generated or available with the company, if the interest free funds were sufficient to meet the investments - Looking at the facts in the present case, since the shareholders funds are far in excess of the investments, it can be presumed that investments are out of interest free shareholders funds and therefore no disallowance on account of interest can be made in the present case – Decided against the Revenue. Allowance of de-merger expenses of Rs. 1,66,666/- - Held that:- There is a break up of de-merger expenditure amounting to Rs. 3,27,332/- - Same has to be borne by Madhusudan Oils and facts Ltd. is not available from details filed - Fact remains that this is a capital expenditure which is required to be disallowed - At the same time, in view of clear provisions of law appellant's claim of deduction u/ 35DD has to be allowed - If 50% is borne by Madhusudhan Oils and Fats Ltd. then the Assessing Officer would take the balance of Rs. 1,63,666/- for the purpose of section 35DD and allow 1/5th of the same – Decided partly against the Revenue. Prior period expenses allowability – Held that:- Appellant have four divisions where the net figure after adjustment of prior period expenses had been worked out. However, while examining the same, the Assessing Officer has made a mistake to the extent of taking the net figure where short provision of earlier years have also been written back and adjusted with provisions made relating to earlier years expenses – Only expenditure related to prior period is disallowed - Therefore, out of disallowance of Rs. 5,17,785/-, Rs. 2,10,807/- is hereby confirmed.
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2013 (10) TMI 276
Addition on ground of sundry creditors - Addition of amount of Rs. 62,97,788/- - Held that:- Assessee had filed confirmations before Assessing Officer and had also furnished copies of ledger accounts - Assessing Officer has not disputed the purchases made by the Assessee from the aforesaid parties - Trade creditors were from purchases and full set off of purchase bills were produced before Assessing Officer – No material evidence is produced to controvert these findings – Decided against the Revenue. Addition of Rs. 26,03,728/- on account of capital introduction by the partners – Held that:- Assessee had furnished more than sufficient evidence to explain the source of funds introduced by the partners and had also furnished the copy of PAN numbers, Capital account, Balance sheet and returns of income – Moreover, when cash is introduced into partners firm and if the partners are unable to explain the source of funds, in the assessment proceedings of the firm, no addition can be made in the hands of firm but the addition can be made in the hands of individual partner – Decided against the Revenue. Addition of Rs. 1,12,80,134/- on account of non filing of details of TDS – Held that:- TDS was deposited with the prescribed time and thus there was no case of disallowance under 40(a)(ia) - Learned D.R. could not controvert the above findings nor could bring any contrary material on record – Decided against the Revenue. Disallowance of Rs. 2,05,936/- - Assessee has incurred various expenses in cash - Assessee could not produce the vouchers, A.O. made an ad-hoc disallowance of 25% of Rs. 3,43,228/- and added to the income – Held that:- Appellant was unable to produce full set of vouchers for the expenditure during assessment proceedings. Therefore the AO was right in disallowing a part such expenditure. But 25 % disallowance for such expenditure is according to me on the higher side - Restricted the disallowance to 10 % of such expenditure – Decided against the Revenue.
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2013 (10) TMI 275
Penalty u/s 271(1)(c) of the Income Tax Act – short term capital gains was not disclosed in the return of income - Held that:- Reliance has been placed upon the judgment in the case of Kailashbhai Ambalal Shah [2010 (11) TMI 131 - ITAT, AHMEDABAD] - The assessee has not brought any clinching material in support of the statement that she was not aware of the details of the return of income filed by the power of attorney holder and further in the absence of any evidence has been brought on record to demonstrate that the return of income was filed without the knowledge of the Assessee - Assessing Officer was fully justified levied the penalty in the present case – Decided in favor of Revenue.
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2013 (10) TMI 274
Rejection of books of accounts maintained u/s 145 of the Income tax act – Held that:- No specific defects has been pointed out by the Assessing Officer in the books of accounts and since the Assessee has been consistently following the Project Completion Method of accounting in the year under appeal and in earlier years and on the basis of the same, the Assessee has been allowed deduction under 80IB in the past in the assessment framed u/s. 143(3) - A.O. was not justified in rejecting the books of accounts - Further even the estimated an addition of Rs. 8 lakhs upheld by CIT(A) is not supported by any specific finding of CIT(A) or material on record - No rejection of books is called for year under appeal – Reliance has been placed upon the judgment of the Hon’ble Gujarat High Court in the case of CIT vs Symphony Comforts System Ltd. [2013 (10) TMI 258 - GUJARAT HIGH COURT] - Decided against the Revenue.
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2013 (10) TMI 258
Additions on account of low gross profit rate - Additions on account of excessive loss - CIT(A) and ITAT deleted the additions - Held that:- . The AO merely gone by the fact that there was a fall in the gross profit rate as compared to the preceding assessment year which itself is no ground to reject the books of account of the assessee. No specific defect in the maintenance of the books of account by the assessee has been pointed out AO. - decision of CIT(A) and ITAT upheld - decided against the revenue. Regarding excessive expenditure, it was held that, the AO has not pointed out which of the expenditure were not admissible in law. - no addition - Decided against the revenue.
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Customs
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2013 (10) TMI 273
Validity of Order passed by Appellate Committee, Ministry of Commerce – Penalty - goods imported under the DEEC scheme had been diverted and sold in the market. - The imported material itself could not be seized and located. It was not found to be in possession of the petitioner. No investigation was carried out to locate and seize the imported consignments. There is no evidence to show that any payment was made by the petitioner for the imported consignment - Held that:- the oscillating statements made by Ramesh R. Desai as it was sometimes stated that the petitioner had purchased the imported goods and on the other occasion it was stated that DEEC book itself was sold to the petitioner. The order of the Collector of Customs (Judicial) also refers to the statement of the petitioner recorded on 5th October, 1990 under Section 108 of the C Act. In this statement the petitioner had stated that he had not purchased the said CRCA sheets from Ramesh R. Desai, though he was engaged in import of steel from various countries for trading purpose. He has also stated that he arranged for import of steel on behalf of actual users as a letter of authority holder and had never arranged for import of steel other than in cases of actual users. The petitioner has further accepted that he knew Ramesh R. Desai, who was dealing in steel but he did not have any business dealings with Ramesh R. Desai. One authority has relied upon and accepted the statements of Ramesh R. Desai and whereas the other authority on the basis of the same statements felt that this was not sufficient. It is apparent that there has been error in the decision making process. Relevant statements had been ignored and not taken into consideration. The appellate order dated 22nd July, 1996, is brief and cryptic and does not deal with the contentions and issues raised by the petitioner. The said order cannot be sustained. – the order of Appellate Committee, Ministry of Commerce quashed - matter remanded back for reconsideration.
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2013 (10) TMI 272
Order u/s 3(1) of COFEPOSA - The main challenge is to the order of detention passed u/s 3(1) of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974 – Held that:- The rejoinder of the petitioner thereto and the documents relied on, that it was the petitioner, to whom the consignment was to be delivered - This is borne out not only from the show-cause notice issued to the petitioner and documents but also from the order of the Commissioner of Customs passed annexed by the petitioner to his rejoinder, which shows that penalty of Rs.15 lakhs has been levied on the petitioner - the ground raised that it was issued `against a wrong person' is devoid of any merit in the light of the material on record to show, that it was the petitioner, who was to receive the courier containing the memory chips - we are satisfied that the consignment was meant to be delivered to the petitioner; that he was unable to offer an explanation as to why there was a discrepancy in the invoice; that the alleged fax sent was doubtful; and that the petitioner had absconded and had tried to evade summons. Detention order at Pre-execution stage - Relying upon Additional Secretary to the Government of India & Ors. vs. Alka Subhash Gadia & Anr. [1990 (12) TMI 216 - SUPREME COURT OF INDIA ] - Despite strenuous efforts to search the detenue, he was not found, nor did the petitioner’s wife and brother disclose the whereabouts of the petitioner - It was thus evident, that the petitioner was trying to evade the execution of the detention order - From the show cause notice, it is evident that the petitioner was an habitual offender, indulging in smuggling activities and it was with a view to preventing him in future from smuggling goods, that the detention order was passed - The ground raised by the petitioner, therefore, in our opinion, cannot be said to be `for a wrong purpose', inasmuch as, it is passed `with a view to preventing the petitioner in future from smuggling goods' - Therefore, we are of the opinion, that it cannot be said that the detention order was passed “for a wrong purpose”. While initiating action against the petitioner under the COFEPOSA, his past antecedents, that he was involved in smuggling activities in April, 2010 and in a similar smuggling activity in the year 2004, were considered and it was felt, that the detention of the petitioner was necessary “with a view to preventing him in future from smuggling goods” - the contention of the petitioner that the order was passed on `vague, extraneous and on irrelevant grounds', is devoid of merit. Considering the grounds on which the detention order is sought to be quashed at the pre-execution stage and the law relating thereto, none of the grounds are attracted in the present case – We cannot make an exception to the general rule in this case by quashing the order of detention at the pre-execution stage – there was no merit in the petition – Decided against Assessee.
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2013 (10) TMI 271
Ex parte order - Setting aside of order - Held that:- Since the impugned order passed by the Government of India on 24th June, 2011 is an ex parte order and in view of the fact that the Government of India has not considered its order dated 3rd May, 2011 in the present case, in our opinion, it would be just and proper to set aside the impugned order dated 24th June, 2011 passed by the Government of India and direct the Joint Secretary to the Government of India to hear the matter afresh and pass fresh order in accordance with law. Accordingly, the impugned order dated 24th June, 2011 passed by the Government of India is quashed and set aside and the Government of India is directed to pass fresh order in accordance with law - Decided in favour of assessee.
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2013 (10) TMI 270
Attempted Export – Waiver of Pre-deposit - The goods were brought into the customs area, the goods were examined by the Custom House officers, it was seen that the container had 9.89 MTs of Red Sanders valued at Rs.49.45 lakhs which was not declared in the shipping bill - Red sanders wood is prohibited for export – Held that:- Prima facie as far as the CHA is concerned, there is a clear lapse on his part of not having exercised with due diligence to ensure that he was actually dealing with the exporter in whose name shipping bill was filed - In fact the evidence available would indicate that he was aware that the IEC code of another person was being used - In the case of Shri. Mariappan also there is clear finding that he has been interacting with actual exporter and he was aware of the fact that shipping bill was being filed in the name of another person and he appears to have handed the sealed cover which was found have contained fraudulent documents - the applicants should be put to reasonable terms of pre-deposit for admission of appeals – applicants was directed to make a predeposit for admission of appeals - upon such deposit, predeposit of balance dues arising from the order in respect of both the applicants stand waived and there shall be stay on collection of dues during pendency of the appeals – Partial stay granted.
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2013 (10) TMI 269
CENVAT Credit – Duty drawback - Revenue was of the view that for claiming All Industry Rate as claimed by the applicant, the goods should have been manufactured without availing the benefit of cenvat credit scheme – Held that:- The Board has decided to accept the recommendation of the Drawback Committee in this regard - merchant exporters who purchase goods from the local market for export shall henceforth be entitled to full rate of duty drawback (including the excise portion) - However, such merchant exporters shall have to declare at the time of export, the name and address of the trader from whom they have purchased the goods - They shall also have to declare that no rebate (input rebate and also the final product rebate) shall be taken against the Shipping bills under which they are exporting the goods - The merchant exporters who purchase goods from traders may therefore furnish the declaration, at the time of export, in the format annexed with this circular. - This is issued in supersession of para (vi) of Circular No. 64/98-Cus dated 01.09.1998. There was strong merit in the arguments of the Ld. AR inasmuch as we find that the restriction in condition 13 (i) of Notification 103/2008-Cus(N.T) is with reference to the goods manufactured and not with reference to the person who is claiming drawback - Further in the present situation, if the manufacturer was to export the goods and claim drawback he would not have been eligible to get the drawback (excepting the customs component) - However, considering that the customs component would have been available to the exporter we are not inclined to call for 100% pre-deposit of the amount confirmed - Considering the overall facts of the case and law applicable, applicants 1 and 2 was directed to make a pre-deposit of 50% of the drawback amounts demanded from each of them - Subject to such pre-deposit the balance dues arising from the order from these appellants and the other two appellants shall be waived for admission of the appeals and there shall be stay on collection of such dues during pendency of the appeals – Partial Stay granted.
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Service Tax
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2013 (10) TMI 301
Valuation - Construction of commercial and residential complexes - stay - Held that:- Since the matter has been consideredby the Tribunal in two appeals and this Tribunal has taken a view that when abatement is claimed, it should be from value inclusive of all the materials used for providing the service. In the case of invoking extended period, we primafacie accept the contention of the counsel of the applicant. Considering the various aspects, we find it proper to call for a reasonable pre-deposit at this stage. - stay granted partly.
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2013 (10) TMI 300
CENVAT Credit – Intellectual Property Service u/s 65(55b) - Revenue was of the view that assesses were not entitled for taking credit in excess of 20% under the provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 – Held that:- The applicant had transferred copyright and therefore, the same was not included in the definition of ‘Intellectual Property Service’ - it cannot be said that the same was taxable service and it cannot be exempted service. Export of Service – Held that:- In respect of the demand of the service recipient was outside India though the part of the advertisements was also broadcasting in India - The Board vide Circular No. 111/05/2009-ST clarified that for the services fall under the Category III [Rule 3(1)(iii)], the relevant factor was the location of the service receiver and not the place of performance - As the service recipient was outside India, therefore, there was merit in the contention of the applicant. Business Auxiliary Services - As regards demand in respect of ‘Business Auxiliary Service’ – the applicant was receiving the service from the foreign cable operator in respect of their business - We find that the applicant had not made out prima facie case for total waiver of pre-deposit of the service tax for the normal period of demand - In respect of the other demands, the applicant had not made out a case for total waiver of pre-deposit of the service tax – the applicant was directed to make a pre-deposit – partial stay granted.
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2013 (10) TMI 299
Provision of services to self - BAS - Export of services without receiving foreign exchange - Waiver of pre deposit - Business Auxiallry Service - Held that:- There is a serious error in the process of reasoning of the adjudication authority. If the corporate veil of the petitioner is lifted (assuming this process to be legitimate) and the petitioner is considered as the alter ego of the overseas companies (RIM, Canada and RIM, Singapore), there would in such an event and on such inferential process occur no provision of service to another (as it would amount to a service to self); and thus outside the ambit of the taxable service. In so far as the second category is concerned, i.e., during the period June 2009 to February 2010, representing tax liability of ₹ 6,45,65,653/-, as receipts for the service provided during this period were in convertible foreign exchange, prima facie, the issue is covered in favour of the petitioner by the Larger Bench decision in Paul Merchant Ltd. Vs. CCE, Chandigarh reported in [2012 (12) TMI 424 - CESTAT, DELHI (LB)]. In so far as payment of interest for delayed payment of Service Tax, amounting to ₹ 8,05,774/- is concerned, the amounts were received by the petitioner as an associated enterprise were entered into books of accounts of the petitioner prior to 10.05.2008, the date with effect from which the provisions of Rule 6 of the Service Tax Rules, 1994 were amended in conformity with the amended provisions of Section 67 (4) (c) of the Finance Act, 1994. In Sify Technologies Ltd. Vs. LTU, Chennai reported in [2012 (5) TMI 376 - CESTAT, CHENNAI], an interim order of waiver of pre-deposit was granted - stay granted.
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2013 (10) TMI 298
Waiver of pre deposit - Manpower recruitment and supply agency service - Held that:- prima facie, find no serious error in the conclusion of the adjudicating authority. The Ld. Counsel now desires to marshal additional evidence before the Tribunal in support of his plea as to receipt of sale proceeds on the immovable property and refund from Income Tax Department. No fresh evidence can be entertained by the Tribunal at this stage and without any application for production of additional evidence in this appeal. Prima facie, however, it would appear that the petitioner had not properly structured his case before the authorities below. - Service tax alongwith interest directed to be deposited - stay granted towards penalty.
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2013 (10) TMI 297
Renting of Immovable Property Services - Joint property / co-ownership - benefit of SSI exemption Notification No 6/2005-ST - whether each owner is eligible for value based exemption - Held that:- the aggregate value of the taxable services rendered should be considered for the purpose of exemption and in the present case if individually all the appellants be considered as provider of such service, their aggregate value does not exceed the threshold limit. - Following Pankajbhai Champaklal Parekh Vs. Commar. Of S.T. Ahmedabad [2012 (11) TMI 252 - CESTAT AHMEDABAD] – Stay granted.
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2013 (10) TMI 296
Franchisee Services - Period of limitation – applicant was granted representational rights for providing service to more than 100 Centres for consideration - Held that:- There was no merit in the contention of the applicant that the demand is time-barred - In respect of the other services, the applicant was providing taxable services for consideration - Therefore, it cannot be said that the services provided to itself and not to the clients - We also point out that in some cases, the applicants collected service tax but they did not pay the same - In these circumstances, the applicant has not made out prima facie case for total waiver of pre-deposit of service tax – appellant was directed to submit the pre-deposit – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.
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2013 (10) TMI 295
Business Auxiliary Service - Commission on Promotion and Marketing – Waiver of Pre-deposit - The applicants were dealers of motor vehicles manufactured by Hyundai Motors India Ltd. Applicants are purchasing and selling the cars - Revenue issued notice for demanding service tax in respect of the amounts of commission/incentives received from the manufacturer of motor cars on account of promotion and marketing of the motor vehicles – Held that:- The demands were based in respect of the amounts of all discounts on all models of cars received from the manufacturer on account of promotion and marketing of the motor vehicles and not in respect of particular models - incentives were received in respect of all the models as quantity discounts or prompt payment discounts in respect of purchase of motor vehicles, therefore applicants have made out a prima facie case for total waiver of service tax - The pre-deposit was waived and recovery was stayed during the pendency of the appeal. Stay Granted.
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Central Excise
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2013 (10) TMI 268
Condonation of Delay – Held that:- Following CCE Cochin Vs. Mathew Kurian [1999 (2) TMI 68 - SUPREME COURT OF INDIA] - A person seeking condonation of delay has to give full justification with documentary evidence as to why the delay in filing appeal should be condoned - the appellant has shown a very casual approach in seeking condonation of delay without giving any justifiable reasons and documentary evidences - it is held that the Commissioner (Appeals) has rightly rejected their appeal as time barred by not condoning the delay in filing appeal - stay application and the appeal dismissed.
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2013 (10) TMI 267
CENAVAT Credit – Waiver of Pre-deposit - The issue involved is of CENVAT Credit under Rule 6(3) of CENVAT Credit Rules, 2004 with respect to Pressmud generated during the manufacture of V.P. Sugar – Held that:- A product ‘pressmud’ comes into existence which fetches some price and is held to be marketable by the Revenue - Following Manakpur Chini Mills Vs. CCE Allahabad [2012 (7) TMI 474 - CESTAT, NEW DELHI] - appellant has made out a prima facie case for complete waiver of confirmed dues and penalty – Stay granted.
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2013 (10) TMI 266
CENVAT Credit – Waiver of Pre-deposit - Whether CENVAT Credit availed by the appellant on the basis of debit note issued in favour of a person other than the appellant is eligible or otherwise – Held that: - There were some procedural irregularities with respect to Cenvatable documents - Prevailing Central Excise law makes the provisions that if there was a procedural lapse and the defects in the documents are rectifiable, the same may be got done - It is also an established law that CENVAT Credit cannot be denied merely on the basis of certain procedural lapses when the duty paid nature and its receipt in the factory and utilization in the manufacturing activity are not disputed – Appellant has made out a prima facie case for complete waiver of the confirmed dues and penalties – Stay granted.
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2013 (10) TMI 265
CENVAT Credit – Waiver of Pre-deposit - inputs (furnace oil) - maintenance of separate records - Revenue was of the view that such credit should be taken only in respect of furnace oil going into the production of dutiable products – Held that:- Following CCE Vs Gujarat Narmada Valley Fertilizers Co. Ltd. [2012 (12) TMI 437 - SUPREME COURT] - the matter stands referred to a Larger Bench of the Apex Court in view of conflicting decisions of the Hon. Apex Court on the issue – assessee pleaded that since there is doubt expressed by the Hon. Apex Court itself on the issue, his stay petition should be allowed - it would be proper to waive pre-deposit of dues arising from the order for admission of appeal – Stay granted.
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2013 (10) TMI 264
Availment of Cenvat Credit - Waiver of Pre-deposit – The adjudicating authority has denied the credit on the ground that various iron and steel items supplied by the appellant to M/s. Machmet India Ltd. for laying down the foundation of conveyor belts, do not stand used by them and further the same are used for laying down the foundation which are attached to earth and cannot be said to be cenvatable items - Held that:- The issue is arguable and contentious – the appellant has not been able to make out a good prima facie case in its favour so as to allow the stay petition unconditionally - We further note that no financial hardship stand pleaded before us - Partial Stay granted.
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2013 (10) TMI 263
Eligibility for Refund - Provisional Assessment - manufacture of explosives - Whether in view of subsequent issue of credit notes neutralising the higher price along with higher duty earlier charged, the respondent would be eligible for refund - Held that:- If the credit notes were genuine and had been acted upon, resulting in neutralising the higher incidence of duty earlier passed on, the refund claim would no longer be hit by the principle of unjust enrichment - The impugned order was set aside and the matter was remanded to the original adjudicating authority for de novo adjudication keeping in view the observations and also keeping in view the judgments of UNION OF INDIA Versus A.K. SPINTEX LTD. [2008 (11) TMI 89 - RAJASTHAN HIGH COURT] COMMISSIONER OF C. EX., LUDHIANA Versus BHARAT BOX FACTORY LTD. [2007 (3) TMI 167 - HIGH COURT, PUNJAB AND HARYANA] - Though Section 12B provided for the presumption that once the goods have been cleared on payment of duty under invoice which mentions some amount charged as duty, it shall be presumed that the incidence of duty has been fully passed on by the assesse to the customer, this was a rebuttable presumption and if the assesse produced evidence showing that by the issue of credit note to the customer subsequently or by charging lesser price in respect of subsequent clearances, the incidence of higher duty earlier charged had been neutralized, burden would then shifted to the Revenue to prove that the claim of the assesse was not correct and if the assesse’s claim was found to be correct, the refund claim would be admissible.
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2013 (10) TMI 262
Eligibility for Duty Exemption under Notification No. 108/95-C.E – Suppression of Facts – Duty Demand - Penalty - Held that:- The goods cleared by assesse for use in the project being financed would not be eligible for duty exemption - Assesse was the project implementing authority and had issued the certificates certifying that the goods being sourced were meant for the project - Exemption Notification No. 108/95-C.E. exempted the goods supplied to United Nations or International Organizations for their official use or supplied to the project financed by the said United Nations or International Organizations which have been approved by the Government of India, from the whole of the duty of excise subject to certain conditions specified therein. The term ‘International Organization’, as defined in Explanation to the notification means an International Organization which the Central Government has so declared in pursuance of Section 3 of the United Nations (Privileges and Immunities) Act, 1947. Extended Period of Limitation - Penalty – Cum-Duty Benefit - Held that:- Neither the longer limitation period would be invokable under proviso to Section 11A(1) nor penalty under Section 11AC would be imposable - Assesse cannot be accorded of suppressing the relevant facts from the Department, more so, when the exemptions certificates had been countersigned – AMRIT AGRO INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., GHAZIABAD [2007 (3) TMI 14 - SUPREME COURT OF INDIA] - As regards the cum-duty benefit assesse had cleared the goods by availing full duty exemption under Notification No. 108/95-C.E - there was no justification for abatement of the duty which had not been paid at all. Penalty under Rule 26 - Held that:- The penal provisions of Rule 26 were not attracted and the Commissioner’s order imposing penalty was not sustainable - just because the same project had not availed of the exemption under Notification No. 108/95-C.E. it cannot be concluded that they had knowledge about the fact that JBIC was not an International Organization - Order modified.
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2013 (10) TMI 261
Penalty u/s 11AC - Whether under Section 11AC of the Central Excise Act assesses were liable to be penalized - Assesse had removed a Horizontal Cold Chamber Pressure Die Casting Machine (which had been purchased on which CENVAT credit had been taken to another unit without reversing the credit - Held that:-The assesse had tacitly admitted their liability to have reversed the CENVAT credit at the time of removal of the capital goods - They also voluntarily paid interest u/s 11AB - These payments cannot be accepted as payments under sub-section 2B of Section 11A of the Act inasmuch as these were made under compulsion - the question of invoking Explanation 3 ibid does not arise. Penalty u/s 11AC of the Central Excise Act read with Rule 15(2) of the CENVAT Credit Rules, 2004 - Held that:- The penalty was unquestionable in the case The grounds for invoking the extended period of limitation were identical to the grounds for invoking Section 11AC - where mens rea stands accepted in relation to the demand of duty, it had to be accepted by the assesse vis-vis the proposal for imposition of penalty under Section 11AC - If that be so, where the demand had not been contested on the ground of limitation - it was not open to the assessee to oppose the Section 11AC penalty. Extended Period of Limitation u/s 11A(1) of the Act - Held that:- The assesse did not choose to contest the demand on the ground of limitation, thereby virtually accepting the allegation of suppression - It was not in dispute that the show-cause notice invoked the extended period of limitation on the ground of suppression of facts with intent to avail undue CENVAT credit.
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2013 (10) TMI 260
Valuation - Provisional Assessment - Assesse manufacture laminated sheets of different shapes and designs which were chargeable to Central Excise duty under sub-heading 4803.90 of the Central Excise Tariff - Discount Through Credit Notes - there was no dispute that this discount was for damage of the goods during transit after ex-depot sale – Held that:- The deduction of damage discount being in the nature of refund or benefit to the buyer by the way of compensation for damage, breakage or loss suffered by the goods after removal from the factory, was not permissible – following CCE, New Delhi v. Vikram Detergent Ltd. [2001 (1) TMI 84 - SUPREME COURT OF INDIA] - Commissioner (Appeals)’s order permitting the deduction of the damage discount was incorrect was liable to be set aside. Deduction of Rebate and Similar Claims - Held that:- Commissioner (Appeals) had gone wrong in permitting the deductions of the special discounts, as it was not known as to on the basis of which criteria those buyers had been treated as a different class of buyers - the Commissioner (Appeals)’s order permitting deduction of special discount under the “rebate and similar claims” head was not sustainable and was liable to be set aside – following Metal Box India Ltd. v. CCE [1995 (1) TMI 380 - SUPREME COURT] - When the different prices were fixed by an assesse for different classes of buyers by the way of different trade discount, there must be some rational criteria for classification of the buyers and arbitrarily treating some buyers as special customers for higher trade discount was not correct - the criteria for classification of the buyers and the trade discount for different classes of buyers must be known before the clearance - The discounts given on discretion after the sale for which the criteria was not known prior to the sale, would not be admissible. Whether deduction of “packing and forwarding charges” was to be allowed, the packing and forwarding charges were mainly expenses incurred on packing of the goods sold from the depot - Held that:- The Commissioner (Appeals) in the order had not given any finding on the issue and had simply disallowed its deduction - Therefore, on this point, the matter needed to be remanded to the Commissioner (Appeals) the issue was required to be decided in accordance with the Apex Court judgment in the case of U.O.I. v. Godfrey Philips India Ltd [1985 (9) TMI 90 - SUPREME COURT OF INDIA]. The Commissioner (Appeals)’s order allowing the deduction on account of damage discount (discount through credit notes) and special discount to special customers (rebate and other claims) was set aside and on the points the order passed by the original Adjudicating Authority was restored and as such, the Revenue’s appeal was allowed.
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2013 (10) TMI 259
Compounded Levy Scheme under Rule 96ZO of the Central Excise Rules - Penalty - The assesses were manufacturers of non-alloy steel ingots and billets chargeable to Central Excise duty under sub-heading 7206.90 of the Central Excise Tariff - Held that:- The provision to the extent of providing for mandatory minimum penalty without any mens rea and without any element of discretion was excessive and unreasonable restriction on fundamental rights and was arbitrary - exercise of such power by way of subordinate legislation was not permissible when rule making authority for levying penalty was limited to default “with intent to evade duty” - The writ petitions of the assessees were allowed and impugned provisions in Rules 96(ZO), (ZP) and (ZQ) permitting minimum penalty for delay in payment, without any discretion and without having regard to extent and circumstances for delay are held to be ultra vires the Act and the Constitution - In CWP No. 8555 of 2010, penalty had been sustained by the Tribunal to the extent of 100% which will stand quashed without prejudice to any fresh order being passed in accordance with - Krishna Processors v. Union of India [2012 (11) TMI 954 - GUJARAT HIGH COURT ]. The provision for minimum mandatory penalty equal to the amount of duty even for slightest bona fide delay without any element of discretion is beyond the purpose of legislation - The object of the rule was to safeguard the revenue against loss, if any - The penalty had been provided in addition to interest - Mere fact that without mens rea, one can be punished or a penalty could be imposed was not a blanket power without providing for any justification - In the Indian Constitutional scheme, power of legislature was circumscribed by fundamental rights - Judicial review of legislation was permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test - imposition of penalty equal to the outstanding duty liability was not sustainable - since there was delay in discharge of duty liability by the due date and the same by itself would attract penalty, imposition of some penalty would be required - Accordingly, the penalty on the appellant was reduced – Partial appeal allowed.
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CST, VAT & Sales Tax
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2013 (10) TMI 303
Discredit the exemption on purchase of material by declaration of ‘C’ Form out of the State - Interpretation of Section 4(2)/15 - Tax rebate on purchase of material - The assessing authority, while making assessment, added the transportation charges and profit on the goods purchased from outside Rajasthan on declaration ‘C’ and also imposed surcharge and interest on the ground that the assessee had not complied with the Condition No.4 of the Notification dated 28.04.1993 issued by the State Government under Section 4(2) of the Rajasthan Sales Tax Act 1954 - Held that:- There remains no quarrel that any notification issued under the Act of 1954 cannot discredit the rebate claimed by an assessee on purchase of material by declaration under ‘C’ form in adherence of the Act of 1956. There cannot be two opinion that the Act of 1994 and the Act of 1956 are separate and distinct enactments covering different spheres, and any notification issued under the Act of 1994, therefore, ipso facto cannot be applied vis-ŕ-vis a transaction for which tax rebate is claimed by the assessee within the four corners of the Act of 1956. The concurrent finding of fact arrived at by both the Courts below in the given circumstances has persuaded this Court not to concur with an illogical conclusion of the assessing authority. - Decided against Revenue.
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2013 (10) TMI 302
Penalty u/s 4B(5) of UPTT - exemption claimed on purchase of plastic granules - it was recorded that he purchased granules were not used for manufacture of packing material instead for manufacturing plastic goods namely plastic bottles and plastic jar. - interpretation of Entry 4 of the notification no. 4519 - Held that:- said entry applies when the plastic bottles and plastic jars are used for the purposes of packaging of liquids and other goods so as to answer the description of the packaging material but when the bottles and jars are sold in the open market as plastic goods in themselves to be used by the ultimate consumer for storing whatever he so desires they will answer the description of plastic goods nor covered by item 4 of Annexure I of the notification. Therefore the counsel for the department appears to be justified in submitting that when the assessee in his proforma 4 and form 82 has himself declared the manufacture goods as plastic goods there was little or no evidence before the Tribunal to come to the conclusion that the goods so manufactured were packaging materials. The order of the Tribunal is not supported by cogent reasons as no material fact have been recorded for arriving at the conclusion contrary to what was held by the assessing authority as well as by the First Appellate Authority - Decided in favour of revenue.
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Indian Laws
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2013 (10) TMI 294
Withholding of Pension - Departmental/ Criminal Proceedings - Whether in the absence of any provision in the Pension Rules, the State Government can withhold a part of pension and/or gratuity during the pendency of departmental/ criminal proceedings - Held that:- The order dated June 12, 1968 denying the petitioner right to receive pension affects the fundamental right of the petitioner under Articles 19(1)(f) and 31(1)of the Constitution, and as such the writ petition under Article 32 was maintainable - It may be that under the Pension Act there was a bar against a civil court entertaining any suit relating to the matters mentioned - That does not stand in the way of a Writ of Mandamus being issued to the State to properly consider the claim of the petitioner for payment of pension according to law. The right of the petitioner to receive pension was property under Article 31(1) and by a mere executive order the State had no power to withhold the same - Similarly, the said claim was also property under Article 19(1)(f) and it was not saved by Sub-article (5) of Article 19. For the purposes of quantifying the amount having regard to the period of service and other allied matters, it may be necessary for the authorities to pass an order to that effect, but the right to receive pension flows to an officer not because of the said order but by virtue of the Rules - The Rules clearly recognise the right of persons like the petitioner to receive pension under the circumstances mentioned. Whether the pension granted to a public servant was property attracting Article 31(1) came up for consideration before the Punjab High Court in Bhagwant Singh v. Union of India [1962 (1) TMI 55 - PUNJAB HARYANA HIGH COURT] - such a right constitutes property and any interference will be a breach of Article 31(1) of the Constitution - It was further held that the State cannot by an executive order curtail or abolish altogether the right of the public servant to receive pension. A person cannot be deprived of this pension without the authority of law, which was the Constitutional mandate enshrined in Article 300 A of the Constitution - It followed that attempt of the appellant to take away a part of pension or gratuity or even leave encashment without any statutory provision and under the umbrage of administrative instruction cannot be countenanced - It hardly needs to be emphasized that the executive instructions were not having statutory character and, therefore, cannot be termed as law within the meaning of aforesaid Article 300A - On the basis of such a circular, which is not having force of law, the appellant cannot withhold - even a part of pension or gratuity - so far as statutory rules were concerned, there was no provision for withholding pension or gratuity in the given situation. Had there been any such provision in these rules, the position would have been different.
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