TMI Tax Updates - e-Newsletter
November 14, 2013

Case Laws in this Newsletter:

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

News

1. Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy seeds and Gold Notified

2. RBI Reference Rate for US $ and Euro

3. Index Numbers of Wholesale Price in India (Base: 2004-05=100) Review for the month of October, 2013

4. Vigilance Administration: Encouraging Probity in Public Life (Keynote address “Vigilance Administration: Encouraging Probity in Public Life” delivered by Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India, at a Seminar organised by the Centre For Integrity, Governance and Training on Vigilance Administration on November 11, 2013)

5. Development of six laning of Jalandhar-Amritsar section of NH-1 in Punjab under NHDP Phase II

Notifications

Customs

1. 31/2013 - dated 13-11-2013 - ADD

Seeks to extend the validity of notification No.91/2008-Customs dated the 30th July, 2008 for a period of one year i.e. upto and inclusive of 9th April, 2014.

2. 30/2013 - dated 13-11-2013 - ADD

Seeks to levy definitive anti-dumping duty on imports of ‘Vitamin A Palmitate ’, originating in, or exported from, Switzerland and People’s Republic of China for a further period of five years

3. 111/2013 - dated 14-11-2013 - Cus (NT)

Amendment Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

DGFT

4. 51 (RE – 2013)/2009-2014 - dated 14-11-2013 - FTP

Amendment of paragraphs 4.1.13(a) and 6.2(a)(i) of FTP to permit export of an item which is otherwise prohibited for export, under Advance Authorisation and by EOUs

Circulars / Instructions / Orders

DGFT

1. 37/2009-2014 (RE- 2013) - dated 14-11-2013

Advance Authorization for export of an item which is otherwise prohibited for export

Highlights / Catch Notes

Income Tax

• Seized Documents u/s 292C Insufficient for Revenue Claims; Lacked Evidence of Income or Money Receipt.

  Case-Laws - HC : Presumption u/s 292C - Seized documents appears to be the dumb documents and would not lead anywhere to prove the case of the Revenue Department - revenue failed to prove corroborative evidence towards receipt of money / income - HC
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• High Court Confirms ITO's Authority to Initiate Penalty Proceedings u/s 271(1)(c) With DCIT Approval Needed.

  Case-Laws - HC : Penalty u/s 271(1)(c) - Previous approval of DCIT - The restrictions placed 271(1)(iii) cannot be interpreted in a manner to curtail the jurisdiction on the ITO, not to initiate proceedings - HC
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• High Court Highlights Compliance with Section 158BB in Block Assessments When Return Filing Deadlines Are Missed.

  Case-Laws - HC : Validity of block assessment u/s 158BB - when the due date for filing of the return of income has expired and the assessee had not filed the return even as stating that it was 'nil' income, then Section 158BD would be of relevance - HC
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• Court Rules Hire Purchase and Lease Transactions Invalid; Denies Depreciation Claims on Non-Existent Assets.

  Case-Laws - HC : Depreciation on non-existing assets - All the facts go to prove that hire purchase and lease transaction were only paper transactions and there was no genuine purchase of lease of assets. - HC
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• High Court: Institutions Must Prove Income is Solely for Charitable Purposes to Qualify for Tax Exemption u/s 10(23C)(vi.

  Case-Laws - HC : Exemption under Section 10(23C)(vi) - Charitable purpose - Chief Commissioner has been conferred powers to ascertain while judging the genuineness of the activities of the petitioner institution as to whether the petitioner applies its income wholly and exclusively to the objects for which it is constituted/established - HC
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• Section 194B: No Tax Deduction at Source for Winnings in Kind; Ensures Tax Payment Obligation.

  Case-Laws - HC : TDS - provisions of Section 194B does not provide for deduction of tax at source where the winnings are wholly in kind and it simply puts a responsibility to ensure payment of tax, where winnings is wholly in kind - HC
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• Community development expenses u/s 37(1) of the Income Tax Act not deductible if for religious or charitable purposes.

  Case-Laws - HC : Deductibility of expenditure for community development u/s 37(1) - Charity or allowable expenditure – Expenditure towards the religious funds, charitable institutions, social clubs or for charity do not stand to the test of commercial expediency - HC
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• HUF Receives Tax-Free Gift of Rs. 7 Lakhs from Uncle; Section 56 Exempts Relative Gifts from Taxation.

  Case-Laws - AT : Addition u/s 56 - the assessee-HUF has received a gift of Rs.7 lacs from a relative who is an uncle of the Karta of this HUF - brother or sister of either of the parents of the individual - not chargeable to tax in the hands of the assessee - AT
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• Entity's Land Investment Shift from Commercial to Mixed-Use Validates Capital Gains Tax Declaration in Tripartite Agreement.

  Case-Laws - AT : Adventure in trade - investment in land - conversion of land use from commercial to residential cum commercial - intention - assessee is justified in declaring the amount received from assigning its rights over the plot of land by a tripartite agreement is assessable to capital gains tax - AT
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Customs

• Duty Demand for Tug Smit Jaguar Suspended u/s 28(2) Amid Exemption Request for Salvage Operations Use.

  Case-Laws - AT : Duty demand u/s 28(2) - Import of self propelled Tug Smit Jaguar, year Built 2009 with NASSAU Registry - Exemption - vessel has been used for petroleum operations except for a period of 22 days for a salvage purpose other than petroleum operations - stay granted - AT
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• Central Government, Board, or Customs Officer Can Rectify Clerical Mistakes in EDI System Shipping Bills.

  Case-Laws - AT : Rectification of order - Incorrect entry made in the Shipping Bill under the EDI System by the assessing authority - provision could be invoked by the Central Government, the Board or any officer of Customs to correct its/his clerical or arithmetic mistakes in any decision or order - AT
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• Optical Fibre Cable's Acrylic Coating Not Considered 'Sheathing' for Customs Tariff Heading 900 Classification.

  Case-Laws - AT : Classification of ‘Optical Fibre Cable’ - Classification of goods under Customs Tariff Heading (CTH) 900 - prima facie this type of acrylic coating cannot be considered as ‘sheathing’ - AT
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Corporate Law

• Supreme Court Clarifies Chief Engineer's Decision Isn't Final; Not an Arbitration Clause Under Review.

  Case-Laws - SC : Appointment of arbitrator - The use of the expression ‘in the first place’ unmistakably shows that non-adjudicatory decision of the Chief Engineer is subject to the right of the aggrieved party to seek remedy - it cannot be treated as an Arbitration Clause - SC
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Indian Laws

• Court Rules Dry Brown Coconut Not a Fruit Under EPF Act, Influencing Industry Classification and Legal Interpretation in India.

  Case-Laws - HC : Classification of industry - Provident Fund - EPF - a dry brown coconut definitely is not a fruit as it is not so understood in common parlance and which meaning has to also apply for interpretation of the relevant entry in the EPF Act - HC
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Wealth-tax

• Wholly owned subsidiaries qualifying as public interest companies exempt assessors from Wealth Tax. Assessor company also deemed public interest.

  Case-Laws - HC : Whether assessee is not assessable to Wealth Tax - When the wholly owned subsidiary could be considered as a company in which public are substantially interested, the assessee-company ought to be treated as a company in which public are substantially interested. - HC
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Service Tax

• Refund Claim Denied: Shipping Bill Date Mismatch for August 16 - September 15, 2011 Period, No Relief Granted.

  Case-Laws - HC : Part of the refund claim denied on the ground that the claim pertains to period 16.08.2011 to 15.09.2011 whereas Shipping Bill No.4642020 dated 21.07.2011 submitted by them does not cover period of refund - no reliev to the assessee - HC
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• Excise Appeals: Limitation Period Reduced from Three to Two Months, But Exceptions Apply for Orders Before May 28, 2012.

  Case-Laws - HC : Period of limitation for filing of appeal before Commissioner of Excise (Appeals) - reduction of period from 3 months to 2 months by Finance Bill, 201 - since order was received prior to 28.5.2012, commissioner directed to consider the appeal - HC
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• BSNL Ordered to Reimburse Petitioner for Service Tax Without Further Delay by Court Directive.

  Case-Laws - HC : Claim of Reimbursement of the service tax from the recipient of services i.e BSNL - BSNL (i.e service recipient) directed to make reimbursement of service tax to the petitioner without further delay. - HC
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• Penalty for Late Service Tax Payment Overturned; Tax and Interest Paid Before Notice Issued.

  Case-Laws - AT : Imposition of penalty on the appellant for belated payment of service tax, which was remitted to the credit of Revenue along with corollary interest even prior to issuance of show cause notice, is unsustainable - AT
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• Applicant Denied Service Tax Exemption Due to Insufficient Evidence on Goods Value, Fails to Waive Predeposit Requirement.

  Case-Laws - AT : Benefit of exemption under notification No.12/03-ST - Evidence needed to prove value of goods - applicant failed to make out prima facie case for waiver of predeposit - AT
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Central Excise

• Duty on Unaccounted Safety Matches Reduced; Fine Adjusted Proportionately to Evaded Duty, Not Goods Value.

  Case-Laws - AT : Calndestine removal of goods – Bundles of Safety matches seized – the duty demanded on unaccounted clearances reduced – Redemption fine reduced because fine should be related to duty sought to be evaded rather than the value of goods. - AT
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• Refund Claim u/r 5 of CENVAT Credit Rules 2004 Stayed Due to Factory Closure Credit Issues.

  Case-Laws - AT : Stay of Refund - Refund claim under rule 5 of CENVAT Credit Rules, 2004 – unable to utilize the credit on account of closure of their factory - grant of refund stayed - AT
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• Demand Deemed Illegal: Lack of Evidence on Clandestine Manufacturing and Removal of Goods by Company Leads to Dismissal.

  Case-Laws - AT : Clandestine manufacture and removal of goods - there is no tangible evidence produced by the department to establish that Nova has clandestinely manufactured and cleared POY on which the present demand has been made - the demand set aside being illegal and unjustified - AT
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VAT

• High Court Rules Unsealed 20-Liter Water Jars Not Subject to Sales Tax; Must Be Sealed to Qualify.

  Case-Laws - HC : Whether Mineral water and water sold in sealed Bottles or Containers or otherwise - plastic jar containing 20 litres water has not been sealed by the assessee and it is simply sold after putting a lid on the jar - no sales tax - HC
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Case Laws:

• Income Tax

• 2013 (11) TMI 664
  Presumption u/s 292C of the Income tax act – Presumption to be supported by corroborative evidence – Cancellation of registration u/s 12A of the Income tax act - A search and seizure operation was carried out in the premises of the trust on 17.9.2010. During the course of search, certain documents were found which indicated that some receipt of cash against certain admission form number during the course of counseling by Gautam Budh Pravadhik University on 3.9.2010 to 5.9.2010 - Show cause notice was issued to the assessee on 18.3.2013. The Commissioner of Income Tax (Admn.) relied on the seized document, which was recovered from the main office of BMAS Engineering College, Agra from the seat of Shri Manish Gupta, the main counseller in the Admission Cell. The papers were found in torn position and rearranged by pasting - These papers give details of 31 students along with their registration numbers and date of receipt of money against their names. During post search proceedings Shri Y.K. Gupta the Director and Shri Pradeep Kumar Gupta were also confronted on 20.09.2010. Both of them gave evasive reply. They could not offer any comment on seized papers. Held that:- Seized documents appears to be the dumb documents and would not lead anywhere to prove the case of the Revenue Department. The same seized papers, therefore, are not admissible in evidence against the assessee, as also denied by the assessee. The presumption u/s. 292 C of the IT Act has been rebutted. No evidence of actual receipt of on money/ donations/ capitation fee is found in search. No incriminating evidence or corroborative evidence was found in search against the assessee to support that the seized papers pertained to the asessee to prove receipt of any on money by the assessee trust. No person from investigation wing examined any of the student or parents to prove the payment of on money. Even the recovered documents have not been sent to any hand writing expert for getting their opinion to prove their nexus with the assessee trust and to put liability upon the assessee. In the absence of any corroborative evidence against the assessee, therefore, following the same reasons for decision, cancellation of registration is not justified in this case - No evidence was found with regard to payment of any money to the assessee trust. The presumption under Section 292C of the Act was rebutted by denial of the assessee with no evidence of actual receipt of on money/ donation/ capitation fees was found in search. No incriminating evidence or corroborative evidence was found – Decided against the Revenue.

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• 2013 (11) TMI 663
  Additions based on the entries in the diary of the assessee recovered during the survey proceedings – Addition made in disregard of the explanations given in respect of entries – Held that:- Department has not disputed or controverted the explanation offered for each entry. The Tribunal, therefore, proceeded to delete additions made with respect to entries that were duly explained by the assessee but rejected additions relating to entries that were not explained - No error in the impugned order as it was for the revenue to controvert the explanation. The Assessing Officer as well as the CIT (A) apparently ignored the explanation offered by the assessee. The findings of the fact recorded by the Tribunal do not give rise to a question of law much less a substantial question of law particularly when the Tribunal has decided the matter after appraising contents of the diary – Decided against the Revenue.

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• 2013 (11) TMI 662
  Penalty u/s 271(1)(c) of the Income tax Act – Jurisdiction of AO to initiate penalty proceeding under section 271(1)(c) of the Income tax act, when the prior approval of Deputy Commissioner is not obtained – Application of proviso of section 271(1)(iii) of the Income tax Act - Investment shown by the assessee and his brothers in the renovation of the said property on the basis of the report of the valuation officer, was found to be understated by the I.T.O. Therefore, unexplained investment was added to the assessee's total income in respect of the assessment years in question - Assessing Officer had initiated proceedings for levying penalty u/s 271(1)(c) of the Income Tax Act. Held that:- ITO has initiated penalty proceedings. The quantum of concealed income was assessed at Rs.36,000/- for the year 1975-76, and Rs.37,000/- for the assessment year 1976-77. During the pendency of penalty proceedings, the assessee filed appeals against the assessment orders, which were allowed, and that the unexplained income was reduced to Rs.18,373/- for the assessment year 1975-76 and Rs.6,140/- for the assessment year 1976-77. When the order under Section 271 (1) (c) of the Income Tax Act, imposing penalty came to be passed, the quantum of income was reduced to below 25,000/-. The AO, therefore did have jurisdiction, to give directions for payment by way of penalty, without the previous approval of the Deputy Commissioner in view of proviso to clause (iii) of sub section (1) of Section 271. The restrictions placed by proviso to clause (iii) of sub-section (1) of Section 271 of the Act cannot be interpreted in a manner to curtail the jurisdiction on the ITO, not to initiate proceedings. Under the facts and circumstances of the case, imposition of penalty by the AO is not in contravention of the proviso of sub section (1) of Section 271 of the Act – Decided in favor of Revenue.

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• 2013 (11) TMI 661
  Validity of block assessment u/s 158BB of the Income tax act – Held that:- Search conducted after the expiry of the due date for filing return, payment of advance tax is irrelevant in construing the intention of the assessee to disclose income - If the search is conducted prior to due date for filing return, opportunity to disclose the income by filing the return is there, in which case, the payment of advance tax may be material for construing whether the assessee is intended to disclose the income - Thus, when the income had not been properly disclosed, the assessment under Section 158 BC and 158BD would be a case for consideration along with rest of Chapter XIV-B. Computation of the undisclosed income of the block period shall be the aggregate of the income could be determined on the basis of the entries as recorded in the books of accounts. The computation of the undisclosed income of the block period shall be the aggregate of the total income of the previous years falling within the block period, computed in accordance with the provisions of the Act. Thus, as far as Clause (ca) is concerned, when the due date for filing of the return of income has expired and the assessee had not filed the return even as stating that it was 'nil' income, then Section 158BD would be of relevance - Assessment made under Chapter XIV B of the Act is justifiable on facts and in law – Decided against the Assessee.

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• 2013 (11) TMI 660
  Question of law to be raised before High Court - Addition on account of freight charges for non deduction of TDS – Held that:- No any substantial question of law arising in this appeal because whether the assessee has failed to deduct T.D.S. from the careers to freight charges were paid by it in excess of Rs.20,000/- in a particular transaction or in a sum of Rs.50,000/- p.a. to a particular career, is a question of fact and not a question of law – Commissioner(A) as well as Tribunal concurrently held that the material placed by the assessee discloses that no payment has been made in excess of Rs.20,000/- in regard to single transaction or in excess of Rs.50,000/- p.a. to a particular career – No interference required – Decided against the Revenue.

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• 2013 (11) TMI 659
  Addition u/s 158BC on account of undisclosed income – claim of set-off on account of miscellaneous receipt from the undisclosed income - Held that:- During the course of assessment proceedings, the assessee had admitted that except the business of rectified spirit, they are not doing any other business. No document has been produced with regard to miscellaneous receipts. The Assessing Authority after considering the matter in detail passed fresh assessment order and the same was confirmed by the Appellate Authority - The assessee has failed to produce any materials or evidence to support the claim with regard to miscellaneous receipts and also failed to maintain the true and correct account – Decided in favor of Revenue.

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• 2013 (11) TMI 658
  Depreciation on non-existing assets - Allowability of depreciation on MS Rolls - Assessee claimed 100% depreciation of Rs.1,67,23,582/- on the plant and machinery leased to BSAL – Held that:- In the survey conducted under Section 133A of the Act in the premises of the BSAL, Bellary, it was found that M.S.Rolls said to have been leased by the assessee were not in existence. The M.S.Rolls was obtained by the assessee under hire purchase from KMFL and the assessee is not the real owner of the goods. The entry tax is payable on the goods entering into a local area for consumption or for sale. The assessee has neither consumed nor used the Rolls. No document has been produced with regard to payment of tax and also with regard to transportation of the goods from Mumbai to Bellary. While surveying, authorities noticed that no documents were found to support the lease, no stock register was found. The photocopies of the delivery challans do not bear the seal of sales-tax check post either in the State of Maharashtra or in the State of Karnataka. There is no evidence for payment of entry tax. The transporter has denied the transportation of Rolls from Mumbai to Bellary. The Supplier of M.S.Rolls also denied the supply of M.S.Rolls either to the Transporter or to BSAL. The Managing Director of BSAL admitted that it is only a paper transaction. Assessing Officer on the basis of the survey conducted in the premises of BSAL found that lease has been created on the basis of the non-existing assets. Accordingly, notice has been issued. All the above facts go to prove that hire purchase and lease transaction between the assessee and KMFL on one hand and the assessee and BSAL on the other hand were only paper transactions and there was no genuine purchase of lease of assets. By entering into paper transaction, the assessee has benefitted by availing depreciation at the rate of 100% of the value of the assets in question - Substantial question of law framed is required to be answered in favour of the Revenue and against the assessee

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• 2013 (11) TMI 657
  Condonation of delay in filing application u/s 264 before CIT for revision in favor of assessee - Allowance of writ petition filed by Revenue against the order in a writ petition filed by Assessee – Held that:- Learned Counsel for the respondent-assessee could not and did not dispute the factual matrix mentioned in the foregoing proceedings nor could he point out as to how the order passed by the learned Single Judge is correct. He could not dispute that an application for condonation of delay was filed before the Commissioner of Income Tax along with revision under Section 264 of the Act - Order dated 7th March, 2011 passed by the learned Single Judge in a writ petition is set aside and the writ petition is restored to file – Requested to the learned Single Judge to consider the writ petition afresh on merits – Decided in favor of Revenue.

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• 2013 (11) TMI 620
  Exemption under Section 10(23C)(vi) - Charitable purpose - educational institutions – profit motive - Held that:- applicant society is not existing solely for educational purposes as its main motive seems to be making profit by charging higher fees from students. Further, the applicant is existing for purposes of profit and therefore the application received on 26.3.2008 for grant of exemption u/s 10 (23C)(vi) is rejected. Plain language in Section 10 (23C) (vi) of the Act read with first and second Proviso and the law laid down by Hon'ble Supreme Court in the judgment in the case of American Hotel [2008 (5) TMI 17 - SUPREME COURT OF INDIA], to call for such document including annual accounts or information from the petitioner to check the genuineness of the activities of the petitioner institution which power was earlier not there with the prescribed authority under Section 10(22) of the Act – Chief Commissioner has been conferred powers to ascertain while judging the genuineness of the activities of the petitioner institution as to whether the petitioner applies its income wholly and exclusively to the objects for which it is constituted/established – Decided against the Assessee.

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• 2013 (11) TMI 619
  TDS deduction u/s 194B - Prize money given in kind – Assessee in default u/s 201 - Held that:- it is clear that provisions of Section 194B does not provide for deduction of tax at source where the winnings are wholly in kind and it simply puts a responsibility to ensure payment of tax, where winnings is wholly in kind. In the present case, admittedly, the winnings was wholly in kind. - Decided in favor of assessee. Proceedings u/s 201 - Held that:- the conjoint reading of Section 201 and Section 194B would show that the person responsible to deduct tax at source, if he either fails to deduct or after deducting, fails to pay, is deemed to be an assessee in default, in respect of the tax. However, where the payment of the winnings is wholly in kind and not in cash at all, the question of deduction does not arise and in that eventuality, the only responsibility, as casts under Section 194B, is to ensure that tax is paid by the winner of prize before the prize/winnings is released in his favour. Initiation of the proceedings under Section 201 against the assessee, was without jurisdiction - Section 271C and Section 270B make reference to the second proviso to Section 194-B, i.e., the proviso as it stands today - Proceedings against the person under section 201, such as the assessee in the present case, who fails to ensure payment of tax, as contemplated by proviso to Section 194B, before releasing the winnings, is not maintainable or the proceedings against such person is without jurisdiction – Decided against the Revenue.

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• 2013 (11) TMI 618
  Deductibility of expenditure for community development u/s 37(1) - Charity or allowable expenditure – Held that:- Expenses contributed for religious functions, charitable institutions, social clubs and charity such as donating a borewell to the municipality, etc. would not fall within the expenditure contemplated under Section 37(1) of the Act - Expenditure towards the religious funds, charitable institutions, social clubs or for charity do not stand to the test of commercial expediency. In any case, the expenditure under these heads cannot be stated to be exclusively for the purposes of business of the respondent-assessee and to allow it. That apart, the respondent-assessee has failed to place any material, in support of their case so as to claim the aforementioned expenditure under this head as contemplated by Section 37(1) of the Act as being commercial expediency – Decided in favor of Revenue. Nature of expenditure – Capital expenditure or Revenue expenditure – Claimed expenditure incurred by assessee for repairs and removal of machinery to make way for short mix plant installation as revenue expenditure – Held that:- Expenditure in not a revenue expenditure – In the present case, case the machinery was only shifted within the same premises of the factory to make way for short mix plant installation. It is clear from the facts that shifting of the machinery was for installation of a new short mix plant. The expenditure incurred for installation of the new plant would not amount a revenue expenditure and that will have to be treated as capital expenditure. Expenditure incurred for removal of existing machinery to make way for installation thereof. The arrangement, i.e. shifting of old machinery to make way for installation of new machinery, may give the assessee an enduring benefit of better and more efficient production over a period of time. Thus, the expenditure incurred for removal of the existing machinery only to make way for installation of new machinery, therefore, cannot be allowed under Section 37(1) of the Act – Decided in favor of Revenue. Deduction under Sections 80HHC and 80I of the IT Act – Held that:- No details were given about the new plant and machineries installed during the relevant assessment year. On the contrary it has accepted that the plant and machineries purchased were erected in the earlier year of assessment. If such plant and machineries were erected earlier to the present assessment year, those machineries cannot be considered as new machineries in order to claim deduction under Section 80HH & 80 I – Assessee should have made out claim during assessment year when new plants and machineries purchased during relevant assessment year. When the assessee had purchased the new machineries in the earlier assessment year and has installed the same, such unit cannot be treated as new unit for the present assessment year. It was open to the respondent-assessee to establish their claim/case for seeking deduction of such huge amounts before the AO by producing/adducing materials/evidence in support thereof. For the relevant years, they did not either place any materials or adduce any evidence before the authorities below nor did they ask for any such opportunity at any point of time till the present appeals were argued before this Court for final disposal – Decided in favor of Revenue. Bad-debt deduction u/s 36(1)(vii) – Held that:- Debt had become bad and they had written-off in the books of account. It is not in dispute that the books of account for the relevant year were placed before the Assessing Officer. Thus, it is clear that the Tribunal allowed to write off Rs.28,166/- as bad debt for the previous year on the basis of materials placed on record – Decided against the Revenue. Deduction u/s 40A(9) of the Income tax act – Held that:- Donation given by the assessee would not be a donation/contribution contemplated by sub-section (9) of Section 40A of the Act. It cannot be stated that the assessee gave donation or contributed for setting up or formation of, or as contribution to, any fund, trust, company, association of persons, body of individuals, society registered under the Societies Registration Act or other institution - Donation given by the asseesee for the purpose, as reflected in the forgoing paragraph, was wholly and exclusively for the welfare of its employees and also for carrying on business of the assessee more efficiently by having contended labour force - Donation is not covered under Section 40A(9) of the Act. Purchase of paintings is a revenue expenditure or not u/s 37(1) of the Income Tax Act – Held that:- Expenditure incurred by the assessee for atheistic purpose or for having better working environment cannot be treated as capital expenditure – Decided against the Revenue. Depreciation on goodwill u/s 32(1) of the Income tax act – Held that:- Having regard to the intent of the legislature, goodwill was not covered for depreciation under Section 32 of the Act. The definition of actual cost under Section 43(1) of the Act cannot be read to cover goodwill as an asset for which the assessee had to pay and which can be termed as actual cost of the assets to the assessee. The Tribunal apportioned the cost of goodwill to various other assets acquired by the assessee thereby increasing the cost of other assets and allowing depreciation thereon, which is not legally sustainable – Decided in favor of Revenue.

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• 2013 (11) TMI 617
  Addition u/s 56 on account of receipt by the assessee from the HUF of which the assessee was the member - Gift received from relatives - Assessee claims exemption under section 10(2) - Held that:- As per this newly inserted clauses, (a) “relative” means in case of HUF any “member thereof”. Although this subsequent change in the Act do not apply for the year under consideration being incorporated by Finance Act, 2009 but it appears that by insertion of these words Hon’ble Legislatures have visualized the difficulty, hence streamlined the provisions by removing the doubt. We therefore hold that since the assessee-HUF has undisputedly received a gift of Rs.7 lacs from a relative who is an uncle of the Karta of this HUF, i.e.; as per Explanation to sub-clause(iv); “brother or sister of either of the parents of the individual”, hence fall within the category of the “Relative” prescribed in the Act, therefore not chargeable to tax in the hands of the assessee. - Following decision of Vineetkumar Raghavjibhai Bhalodia Versus Income tax Officer, Rajkot Wd. 5(4), Morbi [2011 (5) TMI 584 - ITAT RAJKOT] - Decided in favour of assessee.

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• 2013 (11) TMI 616
  Adventure in trade - investment in land - conversion of land use from commercial to residential cum commercial - intention - Whether a single transaction of purchase and sale would constitute an adventure in the nature of trade - Intention in transaction - Held that:- Since the initial intention was not to carry on business of development of plots and even thereafter the assessee had never intended to carry on the business of development of plots it requested the CIDCO to change the right of user of plot from commercial purpose to residential-cum-commercial purpose only with a view to utilise the property. Since the assessee could not successfully utilise the said plot of land it had to take a decision of assigning the rights to a third party by way of a tripartite agreement - Under the circumstances it cannot be stated that the assessee company was interested in carrying on activity of business in purchase and sale of property. It cannot even be stated as an isolated transaction of purchase and sale of property with an intention to make profit out of such transaction - Merely because the assessee makes some profit in a particular transaction it cannot be treated as an adventure in the nature of trade so long as the initial intention of a person was to hold the property and utilise it for a different purpose. In the peculiar circumstances of the case it can only be said that it is only a case of capital gain and not profit derived from an adventure in the nature of trade - assessee is justified in declaring the amount received from assigning its rights over the plot of land by a tripartite agreement is assessable to capital gains tax - Following decision of G. Venkataswami Naidu & Co. vs. CIT [1958 (11) TMI 5 - SUPREME Court] - Decided in favour of assessee.

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• Customs

• 2013 (11) TMI 639
  Duty demand u/s 28(2) - Import of self propelled Tug Smit Jaguar, year Built 2009 with NASSAU Registry - Exemption under Notification No.21/2002 dt. 01.03.2002 at Sl.No.216, List No.12 and condition Sr.No.31 - Held that:- The Notification 21/2002 dt. 01.03.2002 at sl. No.216, provides ‘Goods specified in List 12 required in connection with petroleum operations undertaken under specified contract' are exempted from duty subject to fulfillment of condition 31 of the said Notification. As per the condition 31 of the said Notification, the applicant has obtained necessary certificate duly authorized by the relevant authority, certifying that the vessel has to be used for petroleum operations as per the agreement entered into between the applicant and the Govt. of India. There is no doubt that the vessel has been used for petroleum operations except for a period of 22 days for a salvage purpose other than petroleum operations. There is no post import condition imposed on the applicant in the said Notification. Waiver of pre deposit - applicant has made out a case for 100% waiver of pre-deposit of dues adjudged in the impugned order. Accordingly, we grant waiver of pre-deposit of the entire amount of duty, interest and penalty and stay recovery thereof during the pendency of the appeal. The bank guarantee of 5% of the duty executed by the applicant at the time of provisional release of the vessel shall be kept alive till the disposal of the appeal - Following decision of CLOUGH ENGINEERING LTD. Versus COMMISSIONER OF CUS. (IMPORT), MUMBAI [2005 (10) TMI 173 - CESTAT, MUMBAI] and KEMWELL PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, BANGALORE-III [2006 (4) TMI 332 - CESTAT, BANGALORE] - Stay granted.

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• 2013 (11) TMI 638
  Rectification of order - Incorrect entry made in the Shipping Bill under the EDI System by the assessing authority - Held that:- in the Shipping Bill prepared in the EDI system, all the particulars were entered as furnished by the exporter. The quantity of goods as furnished by the party and entered in the Shipping Bill was 10271MTs. This very quantity was mentioned by the party in the Check List for export, wherein they declared that the particulars given herein are true and are correct. Nevertheless, in a belated application filed by them under Section 154 of the Act, they sought correction of the quantity mentioned in the Shipping Bill. This Bench, in its Final Order, considered the applicability of Section 154 and held that the provision could be invoked by the Central Government, the Board or any officer of Customs to correct its/his clerical or arithmetic mistakes in any decision or order. This Bench rightly found that the provision was not invocable by the exporter for correction of their own mistake in the Shipping Bill. This view was expressed by the Bench after a close reading of the provisions of Section 154 of the Act. The present attempt of the party is to have a different finding substituted for the above view, which is definitely beyond the scope of sub-section 2 of Section 129B of the Act - Rectification denied.

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• 2013 (11) TMI 637
  Classification of ‘Optical Fibre Cable’ - Classification of goods under Customs Tariff Heading (CTH) 900 - Exemption under Notification No.24/05 dt. 1.3.05 - Held that:- this type of acrylic coating cannot be considered as ‘sheathing’ - that deposit already made is sufficient for hearing the appeals. Therefore, the pre-deposit of balance amounts arising out the impugned orders is waived and recovery thereof is stayed during pendency of the appeals - Following decision of Alcatel India Ltd. Vs Commissioner [2006 (2) TMI 196 - AUTHORITY FOR ADVANCE RULINGS] - Stay granted.

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• 2013 (11) TMI 636
  Waiver of pre deposit - Import of used injection moulding machine - Undervaluation of goods - Demand of differential duty - Held that:- Differential duty of Rs.12,72,620 is based on the invoice bearing the signature of the concerned supplier or person recovered from the e-mail of the applicant. Regarding the balance amount, it was proceeded on the basis of e-mail corresponding to dates of entries made under the heading INVOICE in statement of accounts. The contention of the learned counsel is that the demand in respect of the balance amount, the said documents are not correlating with the Bills of Entry - The applicant has failed to make out a prima facie case for total waiver - Stay granted partly.

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• 2013 (11) TMI 635
  Stay application - Waiver of pre deposit - Goods imported under Advance licence - job work - assessee has transferred the material out of the factory premises for job work purposes thereby violating the condition (vii) of Notification No..93/2004-Cus, dt.10.09.2004 - Held that:- Following decision of assessee's own case where Tribunal has granted unconditional waiver of the pre-deposit of the amounts involved - Prima facie appellant has made out the case for complete waiver of the pre-deposit of amounts involved - Stay granted.

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• 2013 (11) TMI 634
  Confiscation of goods - Valuation of consignment of foils imported - provisional release of goods - Held that:- four consignments seized by the respondent authority, we are of the view that in such situation, the petitioners maybe permitted to have release of three of the consignments and remaining one consignment will be kept as security. In addition to such security, the petitioners will give corporate bond of the entire valuation as demanded by the respondent and will give bank guarantee of 25% of the differential duty. On furnishing of such bond and bank guarantee as indicated above, the respondent authority will release three of the consignments detaining the remaining one. This order will abide by all the ultimate result of adjudication by the respondent authority - Supreme Court enhanced the security to 30%, but having regard to the fact that we have not permitted the release one of the four consignments of the petitioners, we, in the facts of the present case, restrict the amount of bank guarantee to 25%. The petitioners, however, must answer to the show cause notice within three weeks from today. In default of the same, the respondent authority will be free to adjudicate the matter exparte - Following decision of Navshakti Industries Pvt. Ltd. Vs. Commissioner of Custom, ICD, TKD, New Delhi [2010 (5) TMI 592 - DELHI HIGH COURT] - Decided partly in favour of assessee. Waiver of pre deposit - Held that:- Since the appellant in this case has followed the direction, ld. Sr. Counsel’s submission that one of the consignment is lying with the department, which is of value of approximately Rs.40 lakhs, we consider the compliance made by the appellant on the direction Hon'ble High Court, as enough to hear and dispose the appeals - applications for waiver of pre-deposit of balance amount of duty, interest and penalties imposed are allowed and recovery thereof stayed till the disposal of appeals - Stay granted.

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• 2013 (11) TMI 633
  Stay application - Transfer of fake DEPB licenses - Held that:- There is no dispute in the transaction of the fake DEPB licences. applicant failed to make out a prima facie case for waiver of the entire amount. After considering the facts and circumstances of the case, the applicant is directed to make a pre deposit - Stay granted partly.

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• Corporate Laws

• 2013 (11) TMI 632
  Appointment of arbitrator - Appellant was awarded contract for construction of bridge - Appellant did not complete the work by alleging lack of cooperation on the part of Chief Engineer, Communication and Building - Appellant lodged claim for payment of the amount allegedly due to him - Appellant filed an application under Section 11(6) and (8) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator for adjudication of all the disputes pertaining to Contract - Chief Justice of the High Court assigned the application to the Designated Judge, who dismissed the same - Whether there was a valid arbitration clause in the agreement entered - High Court held that Clause 29 of the Contract cannot be construed as an Arbitration Agreement or an Arbitration Clause for settlement of disputes - Held that:- in terms of Clause 29(a) and similar other clauses, any dispute or difference irrespective of its nomenclature in matters relating to specifications, designs, drawings, quality of workmanship or material used or any question relating to claim, right in any way arising out of or relating to the contract designs, drawings etc. or failure on the contractor’s part to execute the work, whether arising during the progress of the work or after its completion, termination or abandonment has to be first referred to the Chief Engineer or the Designated Officer of the Department. The Chief Engineer or the Designated Officer is not an independent authority or person, who has no connection or control over the work. As a matter of fact, he is having over all supervision and charge of the execution of the work. He is not required to hear the parties or to take evidence, oral or documentary. He is not invested with the power to adjudicate upon the rights of the parties to the dispute or difference and his decision is subject to the right of the aggrieved party to seek relief in a Court of Law. The decision of the Chief Engineer or the Designated Officer is treated as binding on the contractor subject to his right to avail remedy before an appropriate Court. The use of the expression ‘in the first place’ unmistakably shows that non-adjudicatory decision of the Chief Engineer is subject to the right of the aggrieved party to seek remedy. Therefore, Clause 29 which is subject matter of consideration in most of the appeals and similar clauses cannot be treated as an Arbitration Clause - The orders passed by the Designated Judge are set aside - Decided in favour of appellants.

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• 2013 (11) TMI 631
  Penalty on the appellant for violation of the insider trading regulations - Violation of Regulations 13(4) read with 13(5) as required by SEBI (Prohibition of Insider Trading) Regulations, 1992 - Failure to make disclosure - necessary material not brought on record to establish that the appellant was either a director or an officer of the company within the meaning of section 2(30) of the Companies Act, 1956 read with definition of the expression 'officer' as explained in Regulation 2(g) of the Insider Trading Regulations in question - Held that:- vital documents like e-mail received from NSE on January 20, 2012 and other connected documents which have been thoroughly relied upon by the learned adjudicating officer to come to the conclusion against the appellant in the impugned order and to hold him guilty of violation of Insider Trading Regulations were admittedly not supplied to the appellant either with show-cause notice or during the course of adjudication proceedings - This is evidently violation of principles of natural justice in as much as the appellant was not given an opportunity to confront these documents and to make his effective and proper defense on the same - Matter remanded back for fresh consideration - Decided in favour of Appellant.

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• Service Tax

• 2013 (11) TMI 652
  Refund claim of service tax paid on input services utilized in export of goods - part of the refund claim denied on the ground that the claim pertains to period 16.08.2011 to 15.09.2011 whereas Shipping Bill No.4642020 dated 21.07.2011 submitted by them does not cover period of refund - Held that:- Refund claimed pertains to a later period, whereas the Shipping bill enclosed with the refund claimed was dated 22.2.2011, is a finding of fact. The Commissioner (Appeals) as well as the CESTAT have recorded categorical findings that as claimed by the appellant there was no clerical error. The facts available on record clearly established that the claim was not for the period for which the refund was claimed. The goods exported vide the said Shipping bills, were not stored/warehoused during the period of 16.9.2011 to 15.10.2011, and were in fact exported well before that period is a finding of fact, which does not raise any question of law to be considered by the Court - Decided against assessee.

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• 2013 (11) TMI 651
  Cenvat credit – Whether the Authority has travelled beyond the scope of show cause notice - Maintenance and repair service under Rule 6 (5) of Cenvat credit Rules – Tribunal has decided in favor of assessee and allowed the credit - Held that:- There was no question of law appears to consider – the amount involved is also not such to entertain the appeal – Decided Against Appellant.

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• 2013 (11) TMI 650
  Period of limitation for filing of appeal before Commissioner of Excise (Appeals) - reduction of period from 3 months to 2 months by Finance Bill, 2012 - Held that:- The materials available on record clearly show that the order passed by the original authority was on 27.03.2012. The Amendment came into force on 28.05.2012. Therefore, the petitioner is justified in its contention that the appeal should have been taken up on file in accordance with the regulations in force prior to 28.05.2012. In case the time limit prescribed for filing an appeal i.e. three months is taken into account, it cannot be said that the appeal was barred by limitation. - the first respondent was not justified in rejecting the appeal on the ground of limitation. - The first respondent is directed to register the appeal, if the same is otherwise in order and decide it on merits and as per law. - Decided in favor of assessee.

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• 2013 (11) TMI 649
  Claim of Reimbursement of the service tax from the recipient of services i.e BSNL - Assessee provided security services to Respondent No. 2 i.e BSNL - Service tax was demanded from the petitioner which has been deposited by the petitioner - Held that:- service tax is statutory liability. It is a tax which is required to be collected by the service provider from the person to whom service is provided, and thereafter to be deposited with Government treasury within the prescribed time - Thus essentially the statute is being imposing the tax upon the person to whom service is being provided, and the service provider is merely a collecting agency - BSNL (i.e service recipient) directed to make reimbursement of service tax to the petitioner without further delay.

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• 2013 (11) TMI 648
  Waiver of pre deposit - Demand confirmed under the Site Formation and Clearance Service - Applicants are only undertaken the activity of removing the jungle and bushes inside the building area and received labour charges - Held that:- As per the work order the applicants had undertaken the activity of removal of bushes etc. inside the building. Therefore, prima facie, we find that applicant had made out strong case, therefore the pre-deposit of dues are waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

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• 2013 (11) TMI 647
  Demand of service tax - Business auxiliary service - Section 65(19) - Held that:- service tax registrant for providing the taxable Air Travel Agent service and was remitting service tax on the income received from airlines and bona fide believed that the income received from travel agents does not constitute income from any taxable service nor was it liable to be classified as BAS. Challenge is also to invocation of the extended period of limitation for passing the order of assessment - Prima facie case not in favour of assessee - Stay granted partly.

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• 2013 (11) TMI 646
  Scope of the term Export - Export of business auxiliary service – Location of the consumer - Since the destination of the goods and services of the foreign entities was within the Indian territory, Revenue assumed that the benefits under the Export of Services Rules, 2005 was unavailable and the adjudication order ensued. – Held that:- An identical issue was decided by the full Bench of this Tribunal in Paul Merchants Ltd. vs. CCE [2012 (12) TMI 424 - CESTAT, DELHI (LB)] which concluded that the fact that the goods and services of the foreign entities are disbursed in India would not render dis-apply the beneficient provisions of the Export of Services Rules, 2005. - Prima facie issue covered in favour of assessee - stay granted.

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• 2013 (11) TMI 645
  Exemption / abatement under Notification No.1/2006-ST - Commercial or industrial construction service - Section 65(105) (zzq) - repair, alteration, renovation or restoration of, or similar services in relation to building or civil structure, pipeline or conduit - Held that:- Prima facie case in favour of assessee - Stay granted.

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• 2013 (11) TMI 644
  ROM Application - CENVAT Credit - Availment of credit on the capital goods - Held that:- credit account records stand examined by the Commissioner (Appeals) and there is categorical finding on the factual aspect that only 50% credit was availed by the respondents. For arriving at a fair and just conclusion, the examination of the actual records maintained by the appellant was required and Commissioner (Appeals) has rightly looked into the same and has come to a right conclusion - Decided in favour of Revenue.

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• 2013 (11) TMI 643
  Penalty for non remittance of service tax in time - Construction related services provided to M/s. Reliance Industries Limited - Failure pointed out in audit report - Held that:- when service tax and interest is remitted even before issue of a show cause notice, provisions of Section 73 (3) disable initiation of proceedings for recovery of penalty; except where circumstances justify invocation of the provisions of Section 73(4) of the Act - Therefore, adjudication order as confirmed by the appellate order, insofar as imposition of penalty on the appellant for belated payment of service tax, which was remitted to the credit of Revenue along with corollary interest even prior to issuance of show cause notice, is unsustainable - Following decision of Commissioner of Service Tax Bangalore vs. Master Kleen [2011 (9) TMI 788 - KARNATAKA HIGH COURT] - Decided in favour of assessee.

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• 2013 (11) TMI 642
  Stay application - Refund claim - Lower appellate authority allowed refund claim of assessee - Held that:- Commissioner (Appeals) set aside the adjudication order. The advocate submits that refund is already granted to them. In view of that, we do not find any reason for stay of operation of the impugned order.

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• 2013 (11) TMI 641
  Benefit of exemption under notification No.12/03-ST - Evidence needed to prove value of goods - Held that:- Notification No.12/03-ST provides to exclude the value of cost of materials sold by the service provider to the service recipient of service. During the course of hearing, ld. advocate placed a letter to show that they have placed the balance sheet and other documents before the audit officers to establish the value of the goods. At any event, it appears that said documents were not placed before adjudicating authority. Hence applicant failed to make out prima facie case for waiver of predeposit of entire amount of tax, interest and penalty - stay granted partly.

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• Central Excise

• 2013 (11) TMI 630
  Power to condone delay by the Tribunal u/s 35(E)(i) & (ii) of the Central Excise Act, 1944 - Directing the Commissioner to file an application before the Tribunal u/s 35(E) (4) – Permission to make up deficiency in affixing court fee – Held that:- Following Collector of Central Excise v. M.M. Rubber Co. [1991 (9) TMI 71 - SUPREME COURT OF INDIA] - The Tribunal has no jurisdiction to condone delay in an order passed by the Committee of Chief Commissioner's, asking the Commissioner to file an appeal - The power to condone delay relates to filing the application - The Tribunal dismissed the appeal by holding that as the order passed by the Committee of Chief Commissioner's is barred by limitation and it has no jurisdiction to condone this delay, the appeal is not maintainable – Tribunal rightly declined to entertain the appeal – Decided against the revenue.

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• 2013 (11) TMI 629
  Goods Returned as Defective – Input or Not as per Rule 57A - Whether as per Rule 173H and Rule 173L of the Central Excise Rules, 1944, remaking, refining, reconditioning, repairing or similar processes on defective goods returned to the manufacturer of the final product can be treated as an input for the purpose of Rule 57A of the Central Excise Rules, 1944 – Held that:- There is no restriction of bringing in the defective material in the factory on which the assessee has paid the excise duty at the time of removing those goods horn the factory - Once they have brought in the factory and if anybody wants to take benefit of refund of the duty because of the defects in the goods etc., then in that situation in stipulated period one can apply for the refund of the excise duty as provided by Rules 173H and 173L. Neither the Rules 173H nor 173L made any provision or had put any restriction that these goods which have been brought in the factory as defective goods cannot be used as input in the factory – Relying upon CCE, Merrut v. Bhushan Steel & Strips Ltd. [2000 (6) TMI 47 - CEGAT, NEW DELHI] - Revenue cannot dispute that the defective refractory bricks have been subjected to manufacturing and because of that reason only they have levied the excise duty for final product which have been made from the defective refractory bricks - there is no application for the Rules 173H and 173L – Decided against the revenue.

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• 2013 (11) TMI 628
  Calndestine removal of goods – Bundles of Safety matches seized – Appellant transported the goods without any sort of accounting – Documents produced does not prove bonafide of the assessee – Held that:- The defense being raised is based on the register which was not available at during investigation which leads to the inevitable conclusion that the these are created just for defending the case - The documents cannot be accepted as a bonafide records based on which relief can be granted - the seized bundles can be considered only as part of goods produced by Suriyan Match Works which were yet to be accounted on the date of seizure - thus on this quantity duty cannot be demanded or a second time by including it in the quantity of goods to be received back - the duty demanded on unaccounted clearances reduced – Redemption fine reduced because fine should be related to duty sought to be evaded rather than the value of goods. Penalty u/s 11AC r.w. Rule 25of central excise rules – Held that:- Rule 25 of Central Excise Rules is subject to provisions of section 11AC of Central Excise Act - This is to be understood to mean that where section 11AC is applicable provisions of section 11AC will apply and not provisions of Rule 25 - This is a case of clandestine removal which is held to be proved – Thus penalty under section 11AC is sustainable - the amount demanded has already been appropriated from the Security Deposit made - it is proper that the penalty is reduced to 25% of the differential duty involved – Decided partially in favour of Assessee.

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• 2013 (11) TMI 627
  Stay of Refund - Refund claim under rule 5 of CENVAT Credit Rules, 2004 – unable to utilize the credit on account of closure of their factory - Revenue was of the view that there is no provision in law to allow such refund in cash on the ground that the factory is closed – Relying upon Steel Strips vs. CCE, Ludhiana [2011 (5) TMI 111 - CESTAT, NEW DELHI] – Held that:- The refund has not been sanctioned yet – Thus, at this interim stage the status quo should be maintained till the final disposal of the appeal - stay to the refund granted – Decided in favour of Revenue.

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• 2013 (11) TMI 626
  Clandestine manufacture and removal of goods - Request for cross examination rejected by the Adjudicatory authority - Witnesses whose statements have been relied upon in the Show Cause Notice – Held that:- Following Swadeshi Polytex Ltd v CCE, Meerut [2000 (7) TMI 85 - SUPREME COURT OF INDIA] if the Adjudicating Authority ‘intends to rely upon the statement of any such persons, the Adjudicating Authority should give an opportunity of cross examination to the appellant - The decision made by the Adjudicating Authority in his letter dated 10.10.08 and in the order, denying Nova’s request for cross examination of witnesses, and subsequently recounted in the order is clearly in violation of principles of natural justice in the matter of the need to permit cross examination of witnesses on whose statements reliance has been placed. Establishment of Charge of Clandestine Removal of Goods – Held that:- Charge of clandestine manufacture of the dutiable goods and removal without discharging the duty liable by an assessee, cannot be established on assumptions and presumptions - Such a charge has to be based on concrete and tangible evidence - Relying upon Oudh Sugar Mills Ltd. v. Union of India [1962 (3) TMI 75 - SUPREME COURT OF INDIA ] - demand of duty cannot be raised on the strength of assumptions and presumptions - There should be sufficient evidence of the removal of the goods alleged to have been manufactured and cleared without payment of duty - The charge of clandestine removal must be based on tangible evidence and not on inferences involving unwarranted assumptions. Duty demand on documents seized from premises – Held that:- Mere admission of a document in evidence does not amount to its proof - The demand which has been confirmed against Nova by the order is not based on evidence which, as the Tribunal has repeatedly emphasized in cases of clandestine manufacture and clearance, would justify a finding against the appellant - Inferential or conjectural conclusions cannot be arrived at in such cases as has been done in the present demand, merely based on what GSL did with the POY allegedly sold to them by Nova - there is no tangible evidence produced by the department to establish that Nova has clandestinely manufactured and cleared POY on which the present demand has been made - the demand set aside being illegal and unjustified. Demand on the basis of statements made by the employees – Held that:- It is totally a different thing to assess the probative value of the contents of the document - They have to be established on evidence, relatable to or linked with actual manufacturing operations - there is no such evidence forthcoming in the record before us - Mere reliance on note books/diaries or statements cannot justify a finding of clandestine manufacture and/or clearance - Apparently, no efforts seem to have been made in this behalf by the investigating authorities - In the absence of all such evidence, a finding that excisable goods have been clandestinely manufactured and cleared by Nova cannot justifiably be arrived at - The present demand is unjustified. Demand on Degraded Chips/Polymer Waste arising from factory - Held that:- There were 9 vehicles out of 130 but the entire duty in respect of all the 130 vehicles has been confirmed. In any event, this being a case of clandestine clearance, evidence thereof cannot be the mere incapacity of 9 vehicles (inferred from only the Vehicle No. indicated) out of 130 to carry the goods - Corroborative evidence of actual manufacture of POY and clearance to identified person or places and of payments made are some of the required conditions, which are not there in the case of the present demand, as in the earlier two demands - the demand has been made without any concrete or tangible evidence, and for the sole reason that no goods were sent out because the vehicle no. indicated was wrong - No attempt was made to find out from the parties to whom 130 consignments had been sent as to whether or not they received the goods - the duty demand confirmed against Nova, as being not substantiated is liable to be set aside – Decided in favour of Assessee.

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• 2013 (11) TMI 625
  Condonation of Delay – Appeal rejected on the ground of limitation – Supreme court gave direction to rehear the matter in proper forum - Held that:- The Hon’ble apex court have allowed leave to the appellant to withdraw and approach the Commissioner(Appeals) for redressal and its grievances giving specific direction – Relying upon ITC Ltd. Vs. UOI [1990 (8) TMI 173 - SUPREME COURT OF INDIA ] - The learned Commissioner(Appeals) have misconstrued the direction given by the Apex court wherein in so many words it has directed him to consider the appeal of the appellant on merits taking notice of the time already spent in pursuing its matter before wrong forum - It is further noteworthy that the Constitution of India gives the special powers to Supreme Court of India to pass any order in the interest of justice under Article 142 of the Constitution of India. It is a fit case to condone the delay in preferring the appeal before the Commissioner(Appeals) in terms of the order of the Hon’ble Supreme Court - thus the matter is remanded before the Commissioner(Appeals) - Commissioner (Appeals) shall hear the appellant and decide the issue on merits without insisting on any pre-deposit – Appeal allowed by way of remand – Decided in favour of Assessee.

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• 2013 (11) TMI 624
  Goods written off but not found in factory – Duty Liability - Waiver of Pre-deposit - Whether the appellant is liable to pay duty on inputs/capital goods written off in their account but not found in the factory – Held that:- The appellant has not been making true statements in the balance sheet itself and the figure shown in the balance sheet were false and there are findings by the officers who visited the factory which, according to the appellant, are not correct - the issues involved are very complicated and require detailed consideration of various documents for arriving at any conclusion as to whether the appellant is liable to pay duty or not - in the case of capital goods at least, prima facie, the legal provisions appear to support their contentions - the counsel was asked to make an offer of pre-deposit for consideration - appellant is directed to deposit an amount of Rupees twenty lakh as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.

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• 2013 (11) TMI 623
  Eligibility of CENVAT Credit – Extended Period of Limitation – Waiver of Pre-deposit – Held that:- Appellant availed cenvat credit on goods not falling under the category of capital goods - Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] – For the demands involving extended period of limitation, total waiver has been granted and for the normal period, 25% of the CENVAT Credit has been directed to be deposited – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.

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• 2013 (11) TMI 622
  Appeal time barred - Condonation of Delay – Delay of 101 days - Waiver of Pre-deposit -Held that:- Commissioner (Appeals) has rejected the appeal of the appellant on the ground of time bar by holding that he has no powers to condone the delay of 101 days – Following Singh Enterprises vs. CCE, Jamshedpur [2007 (12) TMI 11 - SUPREME COURT OF INDIA ] - Prima facie the appeal filed by the assessee before Commissioner (Appeals) was barred by limitation and he has rightly held the same to be so - the applicant directed to deposit the entire duty amount of pre-deposit – upon such submission rest of the duty to be waived till the disposal – stay not granted.

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• 2013 (11) TMI 621
  Eligibility of Cenvat credit – Manipulation in Documents – Waiver of Pre-deposit of balance Penalty - Revenue was of the view that there was manipulation of documents for taking ineligible credit in Unit I – Held that:- The transfer of the equipment was on account of the fact that there was no adequate electricity available at Unit-II - But before they could shift the machinery, electricity problem was faced by Unit-I also and therefore physical removal of the machinery was delayed and that was the reason for irregularity and they had no intention to evade any payment of duty as can be seen from the fact that they reversed credit both at Unit I as well as Unit II - Prima facie, it appears that applicant has already reversed credits at both ends though machine is available in Unit-II - Further, a penalty of Rs.20,394/- is paid - thus there is no need to make further deposit in this case for admission of appeals – stay granted.

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• CST, VAT & Sales Tax

• 2013 (11) TMI 654
  Reduced rate of tax - Section 3-D(7) - the plea that the assessee was entitled to the benefits of reduced rate of tax i.e. at the rate of 2% on sale of oil seeds to a purchaser having recognition certificate against Form 3-B and for exemption from tax in respect of the sales made against Form 3-C(1) has been reduced. - Held that:- Tribunal has clearly loss sight of Clause (3) of the notification dated 29th August, 1987 while holding that in view of the fact that earlier notifications issued under Section 4-B have been superseded the assessee was not entitled to the reduced rate of tax. In like manner the exemption from tax qua the sale effected against Form 3-C(1) has also to be considered as per section 3-D(7) afresh - Decided in favour of assessee.

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• 2013 (11) TMI 653
  Revision of penalty - Whether Mineral water and water sold in sealed Bottles or Containers or otherwise - However, Adjudicating authority found that plastic jar containing 20 litres water has not been sealed by the assessee and it is simply sold after putting a lid on the jar - Held that:- The learned appellate authority as well as the learned Tax Board has recorded a concurrent finding of fact based on proper appreciation of materials on record while construing the circular issued by the State Government. Therefore, in my considered opinion, there is no infirmity, much less legal infirmity, in the impugned order passed by the learned Tax Board - Decided against Revenue.

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• Wealth tax

• 2013 (11) TMI 656
  Whether assessee is not assessable to Wealth Tax - Is assessee is a company in which the public is substantially interested - Assessee is a subsidiary of M/s.Ace Investments Private Limited, which held 100% shares in the assessee company. The shareholders of the company were members of Goenka Family – Held that:- 49% of the shares in Ace Investments were transferred to Bhagwan Das Goenka Educational Institution as early as on 19.03.1984 - Status of the Bhagwan Das Goenka Educational Institution, treated as Section 25 Company – As per Clause 13 of the Articles of Association, every member present in person shall have one vote only in respect of every share held by him. When the Revenue has not furnished materials to discredit this and the findings recorded before the Income Tax Appellate Tribunal regarding the Ace Investments in the appeal filed by the Revenue, thus, having attained finality, in the background of this fact situation with 100% of the shares of the assessee company held by Ace Investments, which is recognised as a company in which public are substantially interested, no any justifiable ground to take a view differently as that of what had been taken by the Income Tax Appellate Tribunal - When the wholly owned subsidiary could be considered as a company in which public are substantially interested, the assessee-company ought to be treated as a company in which public are substantially interested. The order of the Income Tax Appellate Tribunal dated 02.04.2002 in the assessee's own case, thus having attained finality, there being no appeal filed against this order – Decided against the Revenue.

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• Indian Laws

• 2013 (11) TMI 655
  Classification of industry - Whether petitioner’s industry which makes products from desiccated or dry/brown coconuts is covered under the entry “Fruit and Vegetable Preservation Industry” as found in Schedule-I of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 - Held that:- fresh fruits and vegetables being household articles of everyday use for the table, these will have to be construed in the popular sense, meaning the sense in which every householder will understand them - ripend coconut is neither a fresh fruit nor vegetable. The watery coconut is no doubt a ripend coconut used for several purposes like offerings to a deity in a Hindu temple being broken or used on auspicious occasions or used in preparation of the daily table food or in confectionary like biscuits or in the extraction of oil when it is fresh or dried kernel. When a person in the commercial market goes and asks for coconut no one will consider brown coconut to be vegetable or fresh fruit, much less a green fruit. No householder would purchase it as a fruit - dry brown coconut cannot be said to be a fruit and that meaning has to be taken for interpretation of the relevant entry of the EPF Act. The issue in this case is not free from difficulties because coconut is a natural product which is sold in different forms and for different purposes, as stated above, however in my opinion, a dry brown coconut definitely is not a fruit as it is not so understood in common parlance and which meaning has to also apply for interpretation of the relevant entry in the EPF Act - Decided in favour of assessee.

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• 2013 (11) TMI 640
  Access to Service Tax Audit Manual, 2011 - Upload of a document namely ‘HSN’ on the website - Held that:- There is no reason why the Service Tax Audit Manual, 2011 should not be put on the website of the respondent public authority. Section 4(6)(v) of the RTI Act expressly provides for publishing of rules and regulations held by it or under its control or used by its employees. Therefore, since such documents are to be published, there is no reason why such documents cannot be put on its website. The Commission therefore directs the respondent to put on its website the Service Tax Audit Manual, 2011. Insofar as the HSN is concerned it is a document which, as per respondent, is published by the World Customs Organization and, therefore, cannot be said to be held by the public authority. The Commission is of the view that there is no obligation on the part of the public authority to put HSN on its website. If this was the case, there would be no end to the documents required to be put on website by any public authority - Decided partly in favour of appellant.

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