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TMI Tax Updates - e-Newsletter
November 16, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Addition treating the donation received as professional income - settlement of the disputes between the workers and their employers - the amounts so received by the assessee cannot be treated as business or profession, consequently should have been treated as exempt u/s 10(24) - AT
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Disallowance towards credit purchases - simply because DDs were encashed in Chennai and not in Delhi, AO cannot presume that M/s. Shagun Jewellers, Delhi is a bogus firm. - AT
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Claim of deduction u/s.54F - It is open for the assessee to put up a residential construction or to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then putup construction - AT
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Exemption u/s 11 - as assessee has already been allowed cost of addition to asset acquired out of the loans as application of income in relevant years and therefore assessee cannot be allowed the repayment of loan as application of the income - AT
Service Tax
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When cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service - AT
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Levy of service tax - scope of circular no. B1/6/2005 TRU - cleaning activity service - disposal of ‘fly ash’ emerging from thermal power plants - The claim of the assessee that the circular supra suffices to limit the scope of tax does not stand the test of the statutory intent. - AT
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Levy of tax - imposition of penalty - time bar - In the balance sheet, the appellant is disclosed the receipt of the records payment of services - extended period of limitation is not invokable - AT
Case Laws:
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Income Tax
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2016 (11) TMI 542
Reopening of assessment - period of limitation - change of opinion - Held that:- In the light of the arrangement between the respondent Department and Department of Posts, it is held that the despatch having been done in terms of business post arrangement is sufficient to hold that the notice was despatched well within the period of limitation. Accordingly the first contention raised by the petitioner is rejected. Nevertheless to examine as to whether there is any prima facie case made out by the petitioner on this ground, the Court examined the submissions. On a perusal of the reasons recorded, it is evident that it is not restricted to dis-allowance under Section 40(a)(i) of the Act, alone. The statements recorded from their Vice President (Finance), Deputy Managing Director and Secretary of the petitioner have been referred to and the reasons for reopening have been set out. The statements have been recorded during the course of enquiry under Section 131 of the Act, and the assessee's contention is that the enquiry was completed in 2011, the statements very much available on the date of assessment was finalised by the Assessing Officer and therefore, there is no cause for reopening and the respondent has taken a stand that the enquiry report was received only during 2013. There would be no necessity to go into these aspects of the matter, and if done, it would amount to prejudging the issue and giving a go-by to the directives issued by the Hon'ble Apex Court in the case of GKN Driveshafts (India) Ltd., (2002 (11) TMI 7 - SUPREME Court ). Thus, this Court having come to the conclusion that the impugned notice is not barred by limitation, is not inclined to examine the adequacy of the reasons assigned by the respondent for reopening, as the petitioner has to comply with the directives issued in GKN Driveshafts (India) Ltd., (supra).
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2016 (11) TMI 541
Tax exemption under Sub-section (26) of Section 10 - whether by virtue of being residents of Jonai and salary being earned as faculty members of the Murkong Selek College, Jonai, the income of the petitioners is traceable to the defined area, under the notification of 23.2.1951? - Held that:- From the communication of 27.4.2004 (Annexure-2) of the ITO, North Lakhimpur, it can be seen that the officer was influenced by the fact that Tribal Belt areas of Assam is not mentioned in Section 10(26) of the I.T. Act and on that basis, direction was issued to the college Principal to deduct tax at source from the salary of the petitioners. But the relevant question is whether the concerned area of the petitioners is covered under the notification of 23.2.1951. According to us, this factual aspect needs to be verified by the Tax Officer, without being influenced in any manner by the declaration of the Tribal Belt area by the Assam Governor, through the subsequent notification of 13.3.1951. Having concluded thus, we direct the jurisdictional Income Tax Officer (ITO) to re-visit the petitioners claim for tax exemption, under Section 10(26) of the I.T. Act, by identifying the area where they reside and wherefrom they earn their salary income, in the context of the areas specified 12.in the notification dated 23.2.1951.
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2016 (11) TMI 540
Transfer of cases - lack of reasons - Held that:- The substantiality of prejudice for lack of reasons or otherwise has to be independently considered given the fact of each cases. In the present case it is not as if the notice did not contain the reasons at all. The assessees’ contentions that the notice did not contain reasons is fallacious, the reference to search and seizure operations and the proposal to centralize the cases in Ghaziabad cannot be considered no reasons. If these had been omitted, the assessees would have been within their rights that the notices did not contain reasons. The assessees were fully aware of the search and seizure operations and the fact that its premises in Ghaziabad too were subject to such proceedings. Having regard to all these facts, the Court hereby rejects the first contention that the ingredients of the notice did not exist when the proposal to transfer was first notified to these assessees. As far as the rationale to transfer, i.e., conduct of coordinated post search investigation and meaningful assessment goes, we are of the opinion that like in the case of first contention, the assessees have failed here as well. The kind of reasoning required by an order under Section 127 cannot be compared or likened to a quasi judicial order that has adverse consequences. One can understand if additions are made on sketchy or bare minimum reasons, they cannot be upheld. However, what is proposed by an order under Section 127 is the transfer of one or several assessments from one circle to another, to that extent inconvenience undoubtedly ensue; however, to say that this leads to grave prejudice if detailed reasoning were not given is something that the Court cannot countenance.The Court’s task is to unravel whether in fact the revenue’s contentions are correct and if so reject the assessees’ contentions. On the other hand, if there is no real public interest and if there are no reasons even the briefest one, the order cannot be sustained. Conversely, if there is reasoning and the public interest is discernable, as in this case, the only result can be rejection of the assessees’ contentions.
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2016 (11) TMI 539
Bogus purchases - whether the purchases which has been done from Vinayak Overseas is genuine or not? - Held that:- AO as already considered by the CIT (A) has confirmed the finding and Vinayak Overseas has specifically contended that they were not transfer by Vinayak Overseas and they were absconding. The Tribunal only on the statement of M.P. Sharma who was power of attorney holder of Vinayak Overseas has given the finding. In our view, the finding is perverse. The view taken by the Tribunal is required to be reversed. Apart from that merely voucher of the import export chanals or chanals of the custom clearance will not prove physical delivery of the material (precious stones). There is nothing on record to certify the stones which were verified by any of the valuer. In our view it is all paper transactions for the purpose of taking benefit of the export and tax benefits. Thus as it is a bogus purchase the finding which has been arrived by the Tribunal is not in consonance with the provisions of law - Decided in favour of revenue
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2016 (11) TMI 538
Penalty u/s 271(1)(c) - non offering of Income to tax on interpretation placed upon the DTAA - fees received in respect of CICT Services and for Corporate Services from its affiliated companies - Held that:- Two authorities have concurrently come to a finding of fact that the conduct of the Respondent Assessee was bonafide and its claim that amount received from its affiliated companies on account of CICT and Corporate Services is not taxable was based on an interpretation of DTAA. It is a settled position of law that where the issue is debatable then mere making of a claim on the basis of a particular interpretation would not lead to an imposition of penalty. Bearing in mind that for the earlier assessment years the Respondent Assessee had claimed and been granted refund of taxes deducted at source by the affiliated companies in respect of the payment received by it for Corporate Services and CICT Services would also establish that the claim made by the Respondent Assessee that the income received is not chargeable to tax was a bonafide claim. On facts there is a concurrent finding of there being no concealment of income or furnishing an inaccurate claim of income. - Decided in favour of assessee
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2016 (11) TMI 537
Addition treating the donation received as professional income - settlement of the disputes between the workers and their employers - Held that:- As in the case of the sister concern of the assessee, the settlement of the disputes between the workers and their employers was negotiated by the assessee to avoid any stand of between the employers and the workers by playing a vital role. The contribution received by the assessee is only in respect of and on account of its activities in achieving the objects, as per Constitution. The amount received by the assessee from the employers/employees has a direct nexus with the negotiation and settlement arrived at between the parties. Thus, the activity of the assessee cannot be generalized in the nature of professional services simplicitor. The contribution from the employer is received as per agreement and incidental to the activities of the services rendered by the assessee in resolving the disputes between the member workers and the employers with the intention of welfare of the members/workers. Thus, following the aforesaid decisions, it is noted that there is no material brought on record by the Assessing Officer evidencing that the amount received by the assessee from the employers as well as from the workers are not voluntary. In the absence of any contrary material and it has been accepted that the contribution of workers are exempt under section 10(24). Similar is the situation in respect of amounts received from counterparty, being employer, in pursuant to settlement / resolution of disputes, as exempt under section 10(24) of the Act. Following the aforesaid order, we are of the view that the amounts so received by the assessee cannot be treated as business or profession, consequently should have been treated as exempt under section 10(24) of the Act as well as on the principle of mutuality being distributed among the members. - Decided in favour of assessee Addition on account of workers aid - addition made on the plea that the assessee could not produce vouchers, evidencing payments and merely filed affidavit of nine persons only - Held that:-So far as, non-production of vouchers is concerned, the assessee has filed affidavit from Shri N.R. Agrawal & Company, who audited the account of the assessee and has duly confirmed that they saw the vouchers at the relevant time and due to reasons stated before us as well as before the Ld. Commissioner of Income Tax (Appeals), such vouchers could not be produced. Identical affidavits were filed form the General Secretary of the Union, from accountant of the union, three affidavits from the workers as a sample, detailed chart with name of each worker to whom the aid was provided, resolution of the Managing commission etc. It is also noted that such expenses are authorized by the Constitution of the Union and such aid is paid to the workers when the units of a particular union of workers are on strike and such workers are unable to meet their household expenditure. It is also noted that no such addition was made for Assessment year 2003-04 which is also based on similar facts. The original assessment for earlier three Assessment years was made under section 143(3) of the Act and no addition was made - Decided in favour of assessee Reopening of assessment after a lapse of four years - Held that:- Since, there was no new tangible material available with the Assessing Officer while resorting to section 147/148 of the Act, more specifically, while framing original assessment u/s 143(3) of the Act, there was full disclosure of material facts by the assessee and on the basis of those facts, assessment was completed u/s 143(3) of the Act, therefore, on the legal issue we decide the issue in favour of the assessee.
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2016 (11) TMI 536
Disallowance towards credit purchases - Held that:- AO did not make any enquiry whether M/s. Shagun Jewellers, Delhi has any branch or unit in Chennai or they have endorsed these DDs to some other party. The confirmation from SBH only indicates that these DDs were payable at Service Branch, Chennai. This even though does not prove that the DDs are encashed by assessee but certainly does not support that the payments are bogus. In the absence of contrary evidence, it is to be accepted that assessee has issued cheques on his bank account, from which DDs were purchased and those DDs were encashed. Therefore, simply because DDs were encashed in Chennai and not in Delhi, AO cannot presume that M/s. Shagun Jewellers, Delhi is a bogus firm. The reasons attributed for disbelieving the credit purchase are not valid. Therefore, we are of the opinion that assessee has discharged his duty in explaining the credit purchases and also payments thereon. In view of that, we are of the opinion that the disallowance towards credit purchases is not sustainable. - Decided in favour of assessee Credits given by Shri Omprakash Sirvi, Shri Kanaram Sirvi and loan from Mahesh Bank - Held that:- ince all the family members are in the same place and have been working in the jewellery and the Girvi business (all of them shown the similar sort of incomes in their returns), it can be presumed the loan funds obtained from Mahesh Bank could have been utilized by assessee. It is also seen that AO has quantified the excess stock or undisclosed income in the course of survey. Therefore, the explanation given by assessee to explain the stock on the date of survey could have been verified by the AO on the date of survey. Therefore, doubting the explanation of assessee of contributions from the family members is not correct. Considering the confirmations filed on record and the fact that the loan was obtained from Mahesh Bank, even though in the name of Shri Kanaram Sirvi, the credit can be given to assessee’s purchase of stock. Accordingly, we are of the opinion that addition made by AO is not warranted.- Decided in favour of assessee Unexpalined investment in the house - assessee explained that he has obtained ₹ 3,50,000/- from his father-in-law, Mr. Ratanlal Panwar and Mr. Sohan from Rajastan. Assessee also claimed credit from the loan funds and business funds to an extent of ₹ 8,50,000/- Held that:- Before us, except filing two confirmation letters in the Paper Book at pg. 3 & 4, nothing further was advanced in support of the contentions. As seen from the confirmation letter, there is only thumb impression on the confirmation letter filed on behalf of Shri Ratanlal Panwar. There is no identity with reference to thumb impression as well. No enclosures in the form of Identity Card, Voter Card or documents in support of agricultural lands was filed. Similarly in the case of Sohan also, some confirmation letter was filed but here also no enclosures were filed at least to identify the person who has issued the confirmation letter. The revenue contention that no proof was furnished either for receipt of the amounts or for establishing the creditworthiness has to be accepted. Since, no further evidence was furnished before us, we are also not in a position to appreciate the assessee’s contention. In view of that, addition made as ‘unexplained investment’ in the house stands confirmed. - Decided against assessee
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2016 (11) TMI 535
Disallowance u/s 40(a)(ia) - amount paid during the year - Held that:- We do not find any infirmity in the order of the CIT(A) in sustaining only the amount of ₹ 15,22,373/-, which is payable at the end of the year i.e. outstanding as on 31st March, 2015, as against the addition of ₹ 89,16,387/- made by the Assessing Officer, following the special bench decision of the ITAT in the case of Merlyn Shipping and Transport (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ). - Decided against revenue
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2016 (11) TMI 534
Addition u/s 14A r.w.s Rule 8D - investment made by assessee in equity shares and bond - Held that:- We find that assessee has made investment in its equity shares and tax free bonds. The assessee in its return of income suo moto has disallowed the expense of ₹ 7,82,695/- under the provision of Sec. 14A r.w.s. Rule 8D of the IT Rules. In this regard, Ld. AR before us submitted that these expenses were disallowed by mistake as all the investments in equity shares are strategic investment. In rejoinder, Ld DR has not brought anything contrary to the advanced argument made by Ld. AR with regard to strategic investment made by the assessee. We also find that various Tribunals have held that there should not be any disallowance u/s. 14A of the Act in relation to investment held by assessee as strategic investment. Therefore, we are inclined to reverse the order of Authorities Below in relation to investment in equity share which is strategic investment made by assessee. with regard to investment made in the interest free bonds of HUDCO assessee has not brought anything on record to justify that such investment was made out of its own fund. At the time of hearing, Ld. AR requested the Bench to restore the matter back to the file of AO to check whether the investment was made out of the borrowed fund or own fund of assessee. To this point, Ld. DR raised no objection if the matter is restored back to the file of AO for fresh adjudication. Considering the facts and circumstances of the case and in the interest of justice and fair play we are inclined to restore the matter back to the file of AO to adjudicate the matter afresh TDS u/s 194C - non deduction of tds on legal and consultancy expense - Held that:- AR before us submitted that payees have included in their receipts charges paid by assessee to them under the head legal and consultancy charge and requested to restore the issue back to the file of AO. To this point Ld. DR raised no objection if the matter is restored back to the file of AO for fresh adjudication. With the observation as above, and for the limited purpose set out above, the matter stands restored to the file of AO.
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2016 (11) TMI 533
Penalty u/s. 271(1)(c) - defective notice - Held that:- We find that undisputedly the AO has not identified in the notices as to whether the penalty proceedings are initiated for concealment of income or furnishing of inaccurate particulars of such income. Therefore, following the aforesaid judgment of Hon'ble jurisdictional High Court, we are of the considered view that on account of defective notice issued for initiation of penalty proceedings, the penalty order passed by the AO is not sustainable in the eyes of law. We accordingly set aside the order of the CIT(Appeals) as well as the Assessing Officer and delete the penalty on account of wrong initiation of penalty proceedings. - Decided in favour of assessee
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2016 (11) TMI 532
Claim of deduction u/s.54F - Held that:- As the Hon’ble Apex Court has held in the case of CIT vs. Vegetable Products Ltd.(1973 (1) TMI 1 - SUPREME Court ) as well as supported by several decisions of Superior Court that where there are two different decisions have been taken by the different High Court and there is no direct judgement of Jurisdictional High Court on the subject matter, then whichever judgement is in favour of the assessee, shall apply. Therefore keeping in view the ratio laid down by the Hon’ble Karnataka High Court in the matter of CIT vs. K. Ramachandra Rao (2015 (4) TMI 620 - KARNATAKA HIGH COURT ) wherein held that in the entire scheme there is no prohibition for the assessee putting up construction out of sale construction received by such transfer of a site which is owned by him as is clear from the language used. It is open for the assessee to put up a residential construction or to purchase a residential house. It is not the requirement of law that he should purchase a residential site and then putup construction., we set aside the order of the ld.CIT(A) and direct the AO to delete the disallowance - Decided in favour of assessee
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2016 (11) TMI 531
Addition as unexplained cash credits - addition as interest expenditure on the aforementioned cash credits - Held that:- A.O. had made two additions which were not there in the first assessment order. Therefore, the assessment order to this extent is not as per the directions of the Tribunal and these two additions deserve to be deleted. Considering the facts in totality, as stood at the time of original assessment stage qua the directions of the Tribunal qua the aforementioned judicial analysis, in our considered opinion and understanding of the law the present assessment order is in complete disregard to the orders of the appellate authorities. Interest Expenses disallowed - Held that:- The interest free funds available with the assessee are in excess of the interest free advances made by it. The ratio laid down by the Hon'ble High Court of Bombay in the case of Reliance Utilities and Power [2009 (1) TMI 4 - BOMBAY HIGH COURT ] squarely apply on the facts of the case wherein the Hon'ble High Court has held that where there is a mixture of own funds and loan funds, then the presumption is that the interest free advances have been made out of own funds.Advances were made for business purposes. We set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition Unexplained cash credits addition - Held that:- If the transaction is done by account payee cheque then the identity of the payer goes into oblivion because the money has flown from one identified bank account to another identified bank account. We also find that wherever it was possible PAN details were made available to the A.O. No effort to verify from the allottees of the flats by making any physical verification thereof. In our considered opinion, the assessee has successfully established the identities. The transaction is done by account payee cheque. Further the identities of the allottees are supported by municipal tax bills of AMC and electricity bills. Considering these facts in totality, we do not find any reason for making the impugned addition. We, accordingly, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition Assessee appeal allowed
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2016 (11) TMI 530
Validity of assessment u/s 153C - absence of satisfaction - Held that:- No satisfaction was recorded by the AO in his capacity as AO of the searched person because it is seen that the so-called satisfaction note prepared by the AO is in his capacity as AO of assessee, although he happens to be the AO of the searched persons also, it could not be shown by the revenue that any satisfaction note was prepared by him as AO of searched persons and therefore, under these facts, this is to be accepted that no satisfaction was recorded by the AO of searched person and therefore we hold that in the present case, notice issued by the AO u/s. 153C of the I.T. Act deserves to be quashed and accordingly, we quash these assessment orders framed by the AO u/s. 153C r.w.s. 143(3) of the I.T. Act. - Decided in favour of assessee
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2016 (11) TMI 529
Disallowance towards freight expenses u/s. 40(a)(ia) - CIT(A) had deleted all the disallowances only on the ground that the expenses were paid by the assessee before the end of the previous year - Held that:- Hon’ble Calcutta High Court in the case of CIT Vs. Crescent Exports Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT ] wherein it has been held that the provisions of section 40(a)(ia) of the Act would be applicable even if amounts were paid before the end of the previous year. In respect of payments made to Port Management Board we are convinced on verification of the invoices given by Port Management Board that the said payment is made towards supply of fresh water to the ships. Hence, the same does not fall under the ambit of deduction of tax at source under any of the provisions of the Act. Hence, disallowance made u/s. 40(a)(ia) of the Act to that effect is deleted. In respect of payments made towards stevedoring charges, we find that the ld AO had not given any finding in his order as to how the subject mentioned expenditure would fall under the ambit of provisions of deduction of tax at source. Accordingly, we deem it fit and proper to set aside this issue to the file of the ld AO to give a clear finding in this regard in the light of the evidence submitted by the assessee with regard to the subjection mentioned expenditure. In respect of payments made to Indian Register of Shipping we are convinced that the said party had given a certificate u/s. 197(1) issued by the I. T. Department wherein payments made to them has to be made without deduction of Tax at source which has been clearly mentioned. Hence, there is no violation of provision of section 194C of the Act warranting any disallowance u/s. 40(a)(ia) of the Act. In respect of payment of freight charges we are in agreement with the argument of the Ld. AR which was also considered by the Ld. DR that the issue requires fresh examination by the AO as to whether the payment exceeded in the aggregate of ₹ 50,000/- in respect of each party thereby warranting any deduction of tax at source in terms of section 194C of the Act. It is true that no such finding was given in the assessment order in this regard. Accordingly, we deem it fit and proper to set aside this issue to the file of AO to decide this issue afresh in accordance.
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2016 (11) TMI 528
TDS u/s.194-I - non tds on rent expenses - wrong provisions adopted - Held that:- Payment to ACBPL does not fall under the Rent expenses because ACBPL is a business developer appointed by the assessee and as per the agreement ACBPL is providing multiple services relating to stock market and working on behalf of the assessee and more so, most of the expense incurred on the office premises of ACBPL are reimbursed by the assessee. Certainly, such kind of arrangement does not fall within the ambit of rent expenses and, therefore, assessee has rightly deducted TDS by bifurcating the payments made to ACBPL under the head brokerage, fees for providing technical services and reimbursement of expense and has duly deducted TDS on all these payments under the correct provisions of Income Tax Act. Similarly, payment incurred on lease line expenses and VSet charges also do not fall under the category of rent expenses because the machineries and equipments used for providing these services are shared by many stock-brokers and, therefore, the assessee has rightly deducted TDS u/s.194-C. We are, therefore, of the view that the ld.AO erred in observing that the assessee has not deducted TDS u/s.194-I of the Act as the assessee has deducted and deposited TDS under the correct provisions of the Act, i.e. u/s.194-J & 194- C respectively and, therefore, no disallowance is called u/s.40(a)(ia) of the Act. - Decided in favour of assessee
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2016 (11) TMI 527
Exemption u/s 11 - Application of income towards loan repayment to the bank - depreciation claim - whether the loan money was shown to have been utilized for acquisition of the asset? - Held that:- On perusal of the statement of income filed for the assessment years 1992-93 to 1999-2000 during which the loan was received by the assessee, we find that apparently the loan under reference received from World Bank has not been shown as income in any of the year concerned. Further, we find from the statement of total income that the cost of fixed assets acquired during the relevant years has been claimed as application of income. In the note appended to depreciation chart for the assessment year 1992-93 enclosed along with the balance sheet and profit and loss account, it is mentioned that additions include assets amounting to ₹ 91,31,124/- (previous year ₹ 75,50,597/-) purchased under the Industrial Credit and Investment Corporation of India Ltd. (Technology Service Revolving Fund) Scheme. Similar notes have been provided in case of other assessment years involved. In the assessment years from 1992-93 to assessment year 1998-99, the depreciation provided in the books of accounts has been reduced from the expenditure claimed towards application of income, which means the depreciation has not been claimed as application of income. From the assessment year 1999-2000 onwards till the assessment year under consideration also the depreciation has not been claimed towards application of the income. In view of above observations, it is clear that the assessee has not shown the loans received as its income or receipt, in the year in which such loan was received by the assessee and, therefore, the repayment also cannot be allowed as an expenditure or application of income. Further, we find that loan money obtained has been shown as application on acquisition of fixed assets and, therefore, the assessee has already claimed loan as deduction or application of income and therefore, in our opinion, allowing application of repayment of loan will amount to double deduction. Thus as assessee has already been allowed cost of addition to asset acquired out of the loans as application of income in relevant years and therefore assessee cannot be allowed the repayment of loan as application of the income - Decided against assessee
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2016 (11) TMI 526
Addition on account of grant received under Sampoorna Gramin Swarojgar Yogna (SGSY) from Government - whether the assesses started its commercial activities much before the receipt of the aforesaid grant, hence the same ought to be treated as revenue receipt as per Explanation 10 of section 43 ?- Held that:- Respectfully following the decision of Hon. Punjab & Haryana High Court in the case of CIT vs. The Punjab State E-Governance Society (2011 (4) TMI 1332 - PUNJAB & HARYANA HIGH COURT ) also going through the detailed finding of ld. CIT(A) and in the given facts and circumstances of the case we are of the view that grant received under SGSY Scheme from Government of Gujarat cannot be treated as revenue receipt of the assessee as it was received specifically towards attainment of objectives enumerated in the MOU between the appellant, District Rural Development Agency, Nadiad (DRDA) and Commissioner, Rural Development, Government of Gujarat, Gandhinagar and assessee had no authority to use this grant towards its normal business activities. Therefore, we find no reason to interfere with the order of ld. CIT(A). - Decided against revenue
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2016 (11) TMI 525
Disallowance under section 40A(3) - Held that:- The assessee has a commercial expediency under Rule 6(2) of the West Bengal Rules referred to above to make payments to the credit of M/s. Asansol Bottling and Packaging Pvt. Limited, Burdwan and M/s. Asansol Bottling and Packaging Pvt. Limited, Burdwan, who is deemed to be an agent of the State Government, as such in terms of Rule 6DD(b) and Rule 6DD(k) of the Income Tax Rules, they are exempted and the disallowance made under section 40A(3) of the Act cannot be sustained. We, therefore, answer this issue in favour of the assessee
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Customs
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2016 (11) TMI 501
DEPB Scheme - the case of M/s Shri Rolex Rings Pvt. Ltd., Shri Manesh Madeka Versus Commissioner of Customs, Kandla [2015 (11) TMI 446 - CESTAT AHMEDABAD] contested - no reason to interfere with the impugned judgment - appeal dismissed.
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2016 (11) TMI 500
Refund of Special additional customs duty (SAD) - limitation bar - the decision in the case of Sony India Pvt. Ltd. Versus The Commissioner of Customs [2014 (4) TMI 870 - DELHI HIGH COURT] contested - SLP dismissed on ground of limitation.
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2016 (11) TMI 499
Offense of smuggling - Import of prohibited / restricted goods - Levy of penalty - the decision in the case of Mahender Jain, Gopal Dokania, Anup Singh, Arun Dokania, Sanjeev Jain, Nitesh Kumar Kedia, Anudeep Singh Versus The Commissioner of Customs (Import And General) And Others [2015 (3) TMI 1037 - DELHI HIGH COURT] contested - SLP dismissed.
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2016 (11) TMI 498
Tribunal relying on its own order in assessee’s own case set aside the penalty imposed u/s 114A - the decision in the case of COMMISSIONER, CENTRAL EXCISE & CUSTOMS, SURAT-II Versus MICRO POLYESTER PVT. LTD. [ 2009 (1) TMI 101 - GUJARAT HIGH COURT] contested - Held that: - Since the tax effect is insignificant, we are not inclined to entertain this appeal - appeal dismissed.
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Service Tax
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2016 (11) TMI 524
Cash management service - taxability - Business Auxiliary Service - Section 65(19) of the Finance Act, 1994 - Held that: - The Banking and Other Financial Services (BOFS) was included in the statute w.e.f 16.7.2001 under Section 65(12), however, the definition as it was initially introduced specifically excluded cash management services. The definition of scope of BOFS was further amended w.e.f 1.6.2007 when cash management service was specifically included under Clause (v). It is also on record that from 1.6.2007, the appellant has been discharging service tax liabilities under BOFS. Revenue authorities have taken a view that for the period prior to 1.6.2007 such services would be covered by BAS. Reliance placed on the decision of the case of CST vs. M/s. Federal Bank Limited [2016 (3) TMI 354 - SUPREME COURT] where it was held that Clause (12) of Section 65 covers all charging services rendered by the Banks. - when cash management services stood excluded from the purview of service tax at the hands of the Bank until 31.05.2007, the authorities cannot levy service tax on an activity which is essentially cash management service, by taking aid of other general charging heads, such as business auxiliary service. Appeal dismissed - decided against Revenue.
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2016 (11) TMI 523
Refund of Service tax - paid on specified services in terms of the provisions of Notification No.41/2007-ST 6.10.2007 - Non-fulfillment of condition contained in proviso (e) to para (1) of Notification that the goods exported without availing drawback of service tax paid on the specified services under the Customs, Central Excise and Service Tax Drawback Rules, 1995 - Held that: - the present bunch of appeals are being repeatedly adjourned at the requests of Mr. O P Aganwal, Id Consultant, who is representing most of the assessees on the ground that Tribunal has decided against them in the above referred decision in the case of Art & Craft Inc. & Others Vs. CCE, Jaipur-II [2016 (4) TMI 25 - CESTAT NEW DELHI] and they are making efforts at the Ministry level to get retrospective exemption. However, it is seen and as clarified by the Id. Advocate today that in spite of representations made by them, no decision has been taken by the Ministry. This fact itself leads to the conclusion that the issue stand decided against the assessees by the above referred decision in the case of Art & Craft Inc. & Others Vs. CCE, Jaipur-II and this fact stands accepted by the Id. Advocates representing the assessees. The goods having been exported under claim of drawback is a violative of the condition I (e) of the Notification, thus leading to the fact of non-refund of service tax paid on various services utilised at the port area for the export of goods - appeal of assessee rejected - decided in favor of Revenue.
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2016 (11) TMI 522
Demand during the period 09.07.2004 to 31.12.2008 - Foreign Agent Commission - reverse charge mechanism - Held that: - till 17.04.2006, no demand of service tax on reverse charge basis can be raised against the assessee in terms of law declared by the Hon'ble Bombay High Court. For the subsequent period, we have seen that the Board circular holding that services provided outside India are not taxable was withdrawn only on 10.05.2007. Otherwise also, we note that the fact that the service tax of reverse charge was recently introduced and its scope was not clear and entertained various doubts, requiring issuance of various clarifications by the Board. In the facts and circumstances of the case that the services were provided outside India and tax liability fell on the appellant on reverse charge basis, a bona fide belief entertained by the appellant was justified. Further, the appellant has been reflecting the payment of commission in their balance sheet in which case, it can be held that there was no suppression or mis-statement on the part of the assessee so as to avoid the service tax payment with a mala fide intention. Reliance placed on the decision of the case Kirloskar Oil Engines Ltd. Vs. CCE, Nasik [2004 (8) TMI 259 - CESTAT, MUMBAI] where it was held that balance sheet being a publicly available document, suppression of such information cannot be alleged and therefore, extended period was not invocable, interest not demandable and penalty not imposable under Sections 11A, 11AB and 11AC of Central Excise Act, 1994. The longer period of limitation is not available to the Revenue and accordingly demand beyond the period of limitation is set aside with confirmation of demand falling within the limitation period. Accordingly, we remand the matter to the original adjudicating authority for fresh decision. Such quantification should be done by the original adjudicating authority. As we have already held that there is no suppression or mala fide intention on the part of the appellant, the penalty imposed upon them is set aside in toto - appeal disposed off.
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2016 (11) TMI 521
Refund claim for unutilized input service credit under Rule 5 of Cenvat Credit Rules, 2004 read with Notification No. 5/2006-C.E.(NT) dated 14/3/2006 - input services - Event Management Services - Mandap Keeper Services - Health and Fitness Services - Pandal and Shamiana Contractor’s Services - whether the denial of refund on the ground that the said services are not input services, justified? - Held that: - these services are input services and have nexus with output services, we therefore hold that the Cenvat credit as well as consequential refund against exports of the services in respect of above services are admissible. As regard the discrepancy in the name of the appellant appearing in the input services invoice, since the appellant was earlier operating in different name and subsequently after amalgamation the name was changed therefore in our view if the invoices is bearing old that does not mean invoices was issued to some different persons but it is to the appellant only therefore only because of the different name the Cevnat credit/refund cannot be denied. Similarly, invoices raised in the name of the Deutsche Bank cannot be held invalid as Deutsche Banch is not a different entity, it is a part and parcel of the appellant company only, therefore on invoice bearing the name of Deutsche Bank Cenvat credit as well as refund is admissible. Incomplete name and description of services appearing in invoices is clerical error that does not conclude that the appellant have not received and used the services, therefore for this reason Cenvat credit/refund cannot be denied - As regard the common issue in all the refund i.e. dispute of application of correct formula and re-quantification of the refund amount, the matter needs to be re-verified by the adjudicating authority for this purpose, we remand the matter to the original adjudicating authority. Appeal disposed off - matter remanded.
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2016 (11) TMI 520
Demand - Section 73(1) of the FA, 1994 - Port Services - Renting of Immoveable Property services - whether the amount received by the Assessee from SWPL, under the nomenclature of royalty, was a consideration for the renting/leasing of the land and the waterfront and accordingly liable to tax under the head of Renting of Immoveable Property services? - Held that: - there is no service that has been rendered by the Appellant, much less the taxable service of renting of immoveable property. The money flow to the Assessee from SWPL, under the nomenclature of Royalty, is not a consideration for rendition of any services but infact represents the Appellant’s share of revenue arising out of the Joint Venture being carried on by the Assessee and SWPL - the Revenues appeal challenging the non-imposition of penalty does not survive as the demand of service tax itself is not sustainable - appeal of assessee allowed - Revenue's appeal dismissed - decided in favor of appellant-assessee.
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2016 (11) TMI 519
CENVAT credit - ‘rent-a-cab’ service - suppression of facts - Held that: - Suppression of facts with intent to evade tax/duty for invoking the extended provision to recover duty/tax cannot be straitjacketed into a particular set of circumstances. Each evaluation is dependent on the particular set of facts peculiar to the case in dispute - In essence, the claim is that the service tax authorities could not be presumed to be aware of every aspect of the functioning of the assessee. The denial of CENVAT credit is sought on the basis of interpretation of definitions in the CENVAT Credit Rules, 2004. The statutory provisions in section 73 of Finance Act, 1994 are amply clear in permitting the extension of period of limitation only in the event of fraud, collusion, willful misstatement, suppression of facts, or any other contravention with intent to evade tax. Interpretational disputes and these specifically enumerated situations are mutually exclusive. The provision for extending the period of limitation was originally enacted because suppression of fact, willful misstatement et al cannot be ruled out in discharge of duty/tax liability. That, in the present context, would entail application of that provision to the utilization of CENVAT credit towards discharge of tax liability which is not in dispute here. The applicability of section 73 to rule 14 of CENVAT Credit Rules, 2004 is qualified by the expression ‘mutatis mutandis’ besides admitting to two mutually exclusive possibilities. In the context, it is more pertinent to note that suppression of fact is not the mirror image of lack of awareness by the tax authorities for, if that were to be so, the statutory provision of section 73 of Finance Act, 1994 relating to the normal period of limitation would be redundant as would the dichotomy specified in rule 14 of CENVAT Credit Rules, 2004. The appeal of assessee is allowed to the extent of setting aside the demands that, despite being barred by limitation, were held to have been due for discharge by default - appeal of Revenue rejected.
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2016 (11) TMI 518
Divestment programme - Appellant had taken over control of “Hotel Centaur” from Govt. of India - Mandap Keeper Services - Health and Fitness Services - Dry cleaning Services - Held that: - Once it is accepted that the Appellant were rendering Mandap Keeper/ Banquet Servcies and the Bills were raised for the gross amount towards food and all services related with such activity, the assessee would be eligible for abatement of 40% from the value of the service for payment of service tax. Therefore the service tax liability of the Appellant in respect of “Mandap Keeper” services should be on the value after abatement of 40% in terms of Notification No. 21/97 - ST dt. 26.06.97 and subsequent analogus notifications. We accordingly hold that the Appellant is eligible for abatement of 40% from the value of services under aforesaid notifications. Imposition of penalty u/s 76,77 and 78 - Held that: - the Appellant had taken over the hotel known as “Hotel Centaur” from Govt. of India under its divestment programme. However as the facts appear, due to non cooperation by employees and their strike, litigation in High Court, VRS to their employee and subsequent closure the service tax payment could not be made. We also find that details of services rendered by them were appearing in their Bills and accounts books. we find that the non payment of service tax on above services was due to financial constraints as well as various happenings as mentioned above. Moreover, the Appellant has not contested the service tax liability which is payable and major amount was already deposited. We therefore hold that the Appellant is eligible for waiver of penalties in terms of Section 80 of the Finance Act, 1994. Penalties u/s 75A - Held that: - Appellant has not got the Health & Fitness and Dry-cleaning services incorporated in their registration. Therefore penalty under section 75A imposed, is sustained. Demand of service tax reduced - penalties u/s 76,77 and 78 set aside - appeal allowed - decided partly in favor of appellant.
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2016 (11) TMI 517
Imposition of penalty u/s 76, 77 and 78 - Benefit of N/N. 12/2003-ST - invocation of Section 80 - suppression of facts - Held that: - specifically the adjudicating authority has exercised his power under Section 80 for non imposition of penalty under Section 78 and it is not a case that since double penalty under Sections 76 and 78 is not imposable, penalty under Section 78 was not imposed - we set aside the impugned Order to the extent of penalties imposed under Section 76 of Finance Act, 1994 and Rule 7C of Service Tax Rules, 1994, under challenge and allow the appeal.
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2016 (11) TMI 516
Levy of service tax - scope of circular no. B1/6/2005 TRU - cleaning activity service - disposal of ‘fly ash’ emerging from thermal power plants - transportation of goods by road service - site formation and clearance, excavation and earth moving and demolition service - goods transport agency service - clearing agency service - Held that: - The evacuation involves transfer by the pipe-lines in slurry form and allowing the ash to be deposited in the designated area with the water to be drained out thereafter. With the visit of the first appellate authority, the felicity of an elaborate description of the structure in the impugned order for a clearer insight into the issue is gratefully acknowledged. The aim and purpose of the taxable entry, evident from the circular supra, was to tax the activity rendered by providers ahead of another activity on the said land. Land is used for construction of buildings or facilities or is exploited for agriculture and mining. To the extent that some of these uses are to be encouraged, even at the cost of foregoing tax, in the larger interests of societal needs, the statute itself provides exclusion. The claim of the assessee that the circular supra suffices to limit the scope of tax does not stand the test of the statutory intent. The circular merely exemplifies the scheme of the tax entry. Whether the services have been rendered to the project proprietor by the assessee? - Held that: - We are unable to fault the finding of the first appellate authority that the site being handed over to the assessee for raising of the height of the ‘ash bund’ which is the subject matter of the contract, the clearance and excavation work is in relation to that activity and hence rendered to themselves. Had that portion of the work been executed by another person, the tax liability would devolve on that person for having rendered service to the assessee and not upon the assessee. Revenue, in its appeal, appears to have confused the construction work for site formation and excavation and has confounded it further by presuming that even such work as is covered by the definition has been rendered to the power plant by being the project proprietor. Persons, in the context of levy of service tax, have to be identified in accordance with the specific service rendered. Appeal dismissed - decided against Revenue.
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2016 (11) TMI 515
Levy of tax - imposition of penalty - time bar - Scientific and Technical Consultancy Service - reverse charge mechanism - Held that: - As the appellant is not contended the classification of the service nor its liability to remit service tax as the recipient of the Scientific or Technical Consultancy service and remittance of service tax and availing credit for the input service. As however, the only contend the appellant is that it is the revenue's, situation whatever they would have paid service tax, they were entitled to take cenvat credit the same immediately. In that circumstances, the extended period of limitation is not invokable. I have seen that in the balance sheet, the appellant is disclosed the receipt of the records payment of services. The same has been accepted by the department. In that circumstance, extended period of limitation is not invokable - the service tax for the extended period of limitation is not sustainable and no penalty is imposable on the appellant - appeal allowed.
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Central Excise
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2016 (11) TMI 514
Demand of interest - the date specified in the supplementary invoices on 11.2.2011 for the period from September 2004 to December 2006 - time bar - Held that: - the show-cause notice is held to be time barred, if issued beyond the period of one year - show-cause notice was issued after the expiry of 4 years 4 months, the entire demand of interest is beyond the period of limitation - reliance placed on the decision of the case of PARAMOUNT RUBBER INDUSTRIES Versus COMMISSIONER OF C. EX., DELHI-IV, FARIDABAD [2011 (4) TMI 1083 - CESTAT, NEW DELHI] where it was held that the demand for interest on differential duty paid consequence to the issue of supplementary invoices is subjected to the bar of limitation. Impugned order set aside - appeal allowed.
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2016 (11) TMI 513
Clandestine removal of goods - recovery of incriminating documents - inspection of documents - principles of natural justice - Held that: - It has to be noted that the search proceedings took place as early as 1999 and till date the relied upon documents have not been furnished to the assessee. The case laws relied upon by the ld. advocate is specifically on the point that the Hon'ble Gujarat High Court in the case of CCE Vs. Chandan Steel Ltd. [COMMISSIONER OF CENTRAL EXCISE & CUSTOMS Versus CHANDAN STEEL LTD.] has quashed the proceedings under similar circumstances, where the documents relied upon by Revenue were not furnished even after the lapse of 19 years. In the present case, the Commissioner (Appeals) has given the finding that the documents have not only been given, but the same was not available with the adjudicating authority and were not even not made available to the appellate authority. Under the circumstances, I have no option, but to uphold the order passed by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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2016 (11) TMI 512
Interest and penalty for taking the Cenvat credit wrongly - whether mere wrong availment of CENVAT credit without utilisation of the same would attract interest and penalty? - Held that: - reliance placed on the decision of the case of Commissioner of Central Excise & ST, LTU, Bangalore vs. Bill Forge Pvt. Ltd. [2011 (4) TMI 969 - KARNATAKA HIGH COURT] where it was held that The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise. The reversal of CENVAT credit wrongly availed and reversed before utilisation amounts to non-availment of CENVAT credit and hence interest and penalty not payable under Rule 15(1) of CCR, 2004 - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 511
Recovery of improperly availed CENVAT credit - Rule 3 (1) and Rule 9 (1) of Cenvat Credit Rules, 2004 - Held that: - the appellants have reversed the credit based on a wrong advice at the time of internal audit which subsequently was found to be wrong and accordingly they took re-credit. This is only a technical adjustment. I find that the issue at hand is fully covered by decision of this very Tribunal in the case of Godrej Sara Lee Ltd. Vs CCE Pune [2012 (9) TMI 166 - CESTAT, CHENNAI] where it was held that As such, the erroneous reversal made by the appellants, prompted by wrong audit objection and an inapplicable circular, has been rectified by the appellants by taking the suo motu credit of the reversed amount which is not the same as taking refund of excess duty amount paid. Demand not sustainable - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 510
Clandestine removal - confiscation of final product as well as raw material - goods not entered by the appellant in their RG-23 part 1 records - Held that: - by extending the benefit of doubt to the appellant, the confiscation of finished goods set aside. In as much as the goods were still within the factory premises and there was a doubt about the same having reached the RG-1 stage, confiscation of the same is bad in view of the law laid down by the Tribunal in the case of Kamal Plywood & Allied Industries Pvt. Ltd. vs. CCE Meerut [1995 (12) TMI 112 - CEGAT, NEW DELHI] as also in the case of Indra Metal Works Vs. CCE Pune 1999 [1998 (5) TMI 193 - CEGAT, MUMBAI] Confiscation of raw material - Held that: - there is no provision for confiscation of the unaccounted raw material. Demand - Held that: - the Revenue has not been able to produce any evidence on record to show that the said goods were actually manufactured in the appellant's factory and were cleared there from, without payment of duty of excise. The fact of non availability of any evidence read with the fact of the appellant's FIR and the resultant disclosure of the fact of presence of spurious manufacturers when taken into consideration will lead to the unsubstantiated allegation of the Revenue as regards clandestine clearances. As such by extending the benefit of doubt to the assessee, the confirmation of the demand in respect of the said goods and the imposition of penalty on both the appellants is set aside. In as much as the appellant have not claimed the goods seized from the railway station, their confiscation is upheld. Appeal allowed.
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2016 (11) TMI 509
Denial of CENVAT credit - Pipes and the Transmission Assembly - goods are not cenvatable capital goods - whether wrong classification on part of supplier of goods would lead to denial of CENVAT credit? - Held that: - reliance placed on the decision of the case of Recon Limited. Vs. Commissioner of Central Excise, Bangalore [2003 (9) TMI 615 - CESTAT, bangalore] where it was held that wrong classification on the part of the supplier should not be used to deny the credit otherwise available to the assessee - Transmission Assembly is used in heavy earth moving machinery like dozers and loaders which admittedly fall under chapter 84.29. The transmission assembly used in these items are eligible for Cenvat credit by their own right. The issue that Transmission Assembly used in mines for transmission of the excavated material to the factory has been admittedly held to be Cenvat capital goods. The wrong adoption of classification at the manufacturer's supplier cannot adopted as a reason for denial of credit, otherwise available to the assessee. CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 508
Clandestine removal of goods - Copper Wire and Super Enamelled Copper Wire - denial of exemption under N/N. 8/2003-CE dated 01.03.2003 - whether drawing of Copper Wire from Thicker Gauge to Thinner Gauge and Varnishing of the same for the purpose of insulations would amount to manufacture or not? - Held that: - the issue is decided by the Hon'ble Supreme Court in the case of Techno Weld Industries referred [2003 (3) TMI 123 - SUPREME COURT OF INDIA]. However Commissioner (Appeals) has distinguished the said judgment on the ground that in the case of Techno Weld it was wire of the Iron and iron-rod whereas in the present case it is Copper Rod and Copper Wire. I do not find any merits with the above distinction made by the Id Appellate Authority. It is the process of drawing of wire which has been held to be a non-manufacturing activity, whether of Iron and Steel or Wire of Copper. The ratio of the law declared by the Supreme Court would be fully applicable in respect of Copper Wire also. In fact the Board vide its Circular No. 720/36/2003 -CX dated 29/5/2003, has withdrawn its earlier Circular No. 570/7/2001 -CX dated 16/2/2001 which held to the contrary. The issue of insulation stand settled by laying down that the same does not amount to manufacture. Varnishing of Copper Wire which lead to Supper Enamelled Copper Wire is for the purposes of increasing the conductivity of the Copper Wire, and the Copper Wire remains Copper Wire only. In the case of Lenzohm Electrical Engg. Co. Pvt. Ltd. Vs. Commissioner of Central Excise, Mumbai-Il [2003 (6) TMI 261 - CESTAT, MUMBAI] it was held that insulating a Copper Wire as not amounting to the manufacture. As much as the activity of the appellant did not amount to the manufacture, the question of availability of small scale notification or otherwise does not arise - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 507
Cenvat Credit - Receipt of inputs which was not amounting to Manufacture - cutting/slitting of H.R./C.R. coils/sheets into C.R. sheets of required sizes - C.B.E.C. Circular No.811/8/2005-CX dated 02.03.2005 - whether Respondent is eligible to take CENVAT Credit on the impugned goods? - Held that: - reliance placed on the decision of the case Commissioner of Central Excise & Customs vs. MDS Switchgear Ltd. [2008 (8) TMI 37 - SUPREME COURT] where it was held that CER entitled the receipt manufacturer to avail credit of the duty paid by the supplier - so quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be challenged by revenue in charge of recipient unit - when the supplier has paid duty and issued valid invoices, the Respondent is eligible to take credit, moreover the issue herein is a revenue neutral situation. Therefore, the argument vehemently put-forth by the Appellant does not hold water - appeal rejected - decided against appellant.
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2016 (11) TMI 506
Demand - valuation - bearing rings - job-work - additional consideration received on account of conversion charges in the form of scrap value paid to job workers in addition to job charges not included - whether appellant has undervalued the bearing rings manufactured by them and cleared to SKF Ltd. or otherwise? - Held that: - we perused the purchase order placed by SKF on TISCO and the invoices raised by appellant and find that appellant has discharged the applicable central excise duty on the value on which TISCO sells the goods to SKF. If it is so, then in our view, appellant cannot be saddled with additional duty liability - reliance placed on the decision of the case Surindra Steel Rolling Mills vs. CCE [2003 (1) TMI 176 - CEGAT, NEW DELHI] where it was held that it is a case where the assessable value included all the costs and profit up to the sale of the goods i.e. the profit of the merchant (SAIL) and not merely the cost of the materials and the cost of conversion by the appellant job workers and their profit. The assessable value adopted by the appellants could only be in excess of assessable value liable to be adopted by the appellants. There could be no arguing that, by adopting the sale price of SAIL, the appellants under valued the goods and paid less duty than was due. Demand not sustainable - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 504
Defective fans received under rule 173-H - assembly of dismantled parts or fan/new part amounts to manufacture? - replacement of defective fan - Held that: - it is not disputed that defective fans were received for the purpose of service or repair. They were dismantled and parts were kept in heap. Dismantled parts independently can not be identified as fan - decided in favor of assessee. When defective fans which had been dismantled, are reassembled, after removal of defective parts, repaired and replaced as new one by reusing remaining workable parts, it is a case of mere repairs and service and same can not be said to be 'manufacture' as defined under Section 2 (f) of Central Excise Act, 1944. Learned counsel for Revenue could not place any authority before us to persuade us to take a different view. - service or repair by replacement of new parts while using other parts for reassembling, will not amount to 'manufacture'. Appeal allowed - decided in favor of assessee.
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2016 (11) TMI 503
No-objection certificate - GIDC - Held that: - GIDC cannot refuse No-objection certificate to the petitioner on the ground that the Central Excise Department has been demanding its dues from the petitioner. The prayer and the petition deserves to be allowed by issuing necessary directions to the Gujarat Industrial Development Corporation - petition allowed.
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2016 (11) TMI 502
100% EOU - 100% export of Pan Masala, Gutkha and Tobacco in multilayered plastic sachet - exemption contained under Rule 2 of Plastic Wastes (Management & Handling) Rules, 2011 - Held that: - a Writ Petition under Article 32 of the Constitution filed by Baba Global Ltd. has been finally disposed of by permitting the 100% export of Pan Masala, Gutkha and Tobacco in multilayered plastic sachet; and in Harsh International interim orders have been passed exempting the writ petitioner from the operation of the said 2011 Rules - e think it is imperative to impart parity to all the writ petitioners before us. In these circumstances, we pass orders similar to those passed in Harsh International namely that during the pendency of the present proceedings, the petitioner shall stand exempted from the operation of the 2011 Rules on the understanding that it shall strictly abide by all the terms contained in the undertaking furnished by it in terms of its Affidavit dated 28th July, 2015 - petition allowed - decided in favor of petitioner.
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CST, VAT & Sales Tax
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2016 (11) TMI 497
Validity of assessment order - business of Coke and Power Generation - C Forms - high seas sales - Held that: - the respondent, after considering the documents produced by the petitioner, more particularly with regard to high sea sales, observed that copies of certain documents were not available. If that be the case, nothing prevented the respondent from calling upon the petitioner to produce those documents, failing which, the respondent could have drawn an adverse inference. Similarly, there is no discussion as to why the debit notes and credit notes produced by the petitioner along with their reply dated 16.12.2015, were not taken into consideration. That apart, there is nothing on record to show that notice for personal hearing was issued to the petitioner and in spite of an opportunity, the petitioner did not produce the documents. Hence, it is held that the impugned order dated 26.8.2016 is in violation of the principles of natural justice and that the respondent has not taken into consideration the material facts placed by the petitioner before the respondent. In the light of the above, the assessment has to be redone. Petition disposed off - matter on remand.
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2016 (11) TMI 496
Validity of order of assessment dated 11.7.2016 - TNVAT Act, 2006 - violation of principles of natural justice - Held that: - The respondent seeks to take umbrage under the notice issued by the first respondent dated 22.8.2016 and to state that the petitioner was given opportunity. Unfortunately, the second respondent failed to note that the impugned order of assessment is dated 11.7.2016 and therefore, the notice issued by the first respondent dated 22.8.2016, could have no bearing on the impugned assessment. That apart, even assuming that notice was issued by the first respondent on 22.8.2016, the same was received by the petitioner only on 6.9.2016. However, even prior to that the impugned order of assessment has been passed on 11.7.2016, despatched belatedly and received by the petitioner on 6.9.2016. Thus, it is evidently clear that there is total violation of principles of natural justice and the second respondent has clearly abdicated his duties as an Assessing Officer. Revision of assessment u/s 84 of the TNVAT Act - Held that: - the AO has to be well aware of the fact that under the provisions of law, he is exercising his jurisdiction, when admittedly he has not passed the order of assessment and there is no Petition u/s 84 of the TNVAT ACT, filed by the dealer or there is no exercise of suo motu power by the second respondent, reference to section 84 of the Act is wholly unsustainable. Writ Petition allowed - respondent is directed to issue fresh notice, giving full particulars and affording an opportunity of fifteen days, to submit their objections and after the objections are received, the second respondent shall afford an opportunity of personal hearing and redo the assessment in accordance with law - decided in favor of petitioner.
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2016 (11) TMI 495
Concessional rate of VAT @4% subject to turnover limit of ₹ 300 crores - imported peas - whether the threshold limit of ₹ 300 crores is to be restricted to the turnover of Peas and Peas dhall or should be taken on the basis of the overall turnover of the petitioner? - Held that: - in terms of Entry 68, the sale of Peas and grams which have been listed out under the said Entry which are twelve in number, the threshold limit is ₹ 500 crores in a year. Therefore, looking at the case from both the angles, the impugned assessment order made by the respondent, stating that the petitioner has exceeded the threshold limit of ₹ 300 crores limit is not sustainable in law. - petition allowed - decided in favor of petitioner.,
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2016 (11) TMI 494
Validity of ex-parte order - demand due to denotification of certain sez areas - whether the demand for the interest on tax paid on areas denotified, is justified? - Held that: - demand for the interest on the said amount may not be justified, since it is a demand raised on the petitioner as a consequence upon the request for denotification, which is in process - this Court is inclined to grant one more opportunity to the petitioner to go before the Assessing Officer subject to certain conditions - The petitioner is directed to pay 15% of the disputed tax for all the four Assessment Years within a period of two weeks from the date of receipt of a copy of this order. On such remittance, the petitioner is granted 15 days time to submit their objections to the proposal made by the respondent and on receipt of the objections, the respondent shall afford an opportunity of personal hearing and re-do the assessment in accordance with law. Other proceedings also to be re-done taking note of the observation made by this Court - matter remanded back.
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