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TMI Tax Updates - e-Newsletter
November 19, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Undisclosed investment - purchase of land - difference between the said seized paper and the seized ledger - Assessee has no answer to the question as to whether said sum was recovered from the vendor - Additions confirmed - HC
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Income from house property - Annual value estimation u/s 23 - Property was rent out the company by its directs at lower rent and rent out to others at higher rate - since the annual value of the building which was let out was to be estimated, the estimation could be done applying Section 23(1)(b), which precisely was what was done by the Assessing Office - HC
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TDS u/s 194H - the discount offered by the respondent-assessee to the retailers could only be treated as sales promotion expenses, and not as commission, as no services were rendered by the retailers to the respondent-assessee. - HC
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Assessee having failed to prove the validity of the transaction, no right accrues in his favour on account of non- summoning of the witness u/s 131 by the AO - HC
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Merely because the assessee did not contest the addition, cannot give rise to any adverse inference against the assessee, as in any case it was running into huge losses - No penalty - AT
Customs
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Import of shredded metallic scrap - importer shall furnish to the Customs, a pre-shipment inspection certificate from the designated inspection & Certification agencies
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Project import - second-hand thermoforming plant and production line - in the absence of any restriction on subsequent sale, the benefit of assessment under chapter heading 98.01 cannot be denied - AT
Service Tax
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GTA Service – reverse charge mechanism - is appellant receiving GTA services from exporter? - Just because the Nepalese suppliers had billed the appellants separately for transportation from Nepal border to factory premises alongwith other expenses, they do not become the agents of the appellants - AT
Central Excise
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Refund claim - reversal of CENVAT credit on capital goods at the time of removal which is not required - principles of unjust enrichment - the appellant has been able to pass the bar of unjust enrichment, as no amount has been recovered from the buyer - AT
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Refund - principles of unjust enrichment - seeking audit report and details of information collected during special audit u/s 14A - department directed to provide the copy of the cost audit report and all relied upon material/documents to the appellant - AT
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Availment of cenvat credit by the appellant is incorrect as the provisions of Cenvat Credit Rules, 2002 do not permit the availment of cenvat credit wherein duty has been paid on being found that duty was evaded by suppression, fraud, collusion or misstatement - AT
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The scrap/waste have not been manufactured by the appellant and have not been arisen during the course of manufacturing of their final products. Therefore the said scrap/waste have not passed the test of manufacture. In the circumstances, the duty is not payable - AT
VAT
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Levy of VAT on mobile (telecom) services - The call charges per call will depend on plan tariff and call durations. This is only a service and there is no transfer of goods or sales to attract the provisions of the TNGST Act - demand set aside - matter remanded back - HC
Case Laws:
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Income Tax
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2016 (11) TMI 728
Addition of the licence fee paid - HC deleted the addition - Held that:- The licence fee stands forfeited, the licencee/assessee may be entitled to claim the forfeited amount as a business loss. However in the present case, from the grounds urged before the High Court which facts have not been controverted by the assessee, it appears that the respondent had transferred the licence on June 25, 2005 to one Shankarlal Patidar and the forfeiture of the said licence took place thereafter on August 1, 2005. If that be so, the loss, if any, on account of forfeiture was sustained not by the respondent-assessee but by the transferee-Shankarlal Patidar. In view of the above and as the learned Tribunal and the High Court have overlooked the aforesaid vital fact, we are of the view that the orders passed by the learned Tribunal and the High Court will require to be reversed by us. Consequently, we set aside the order of the High Court affirming the order of the learned Tribunal and the learned Commissioner of Income-tax (Appeals) passed in favour of the assessee and affirm the order of the Assessing Officer disallowing the aforesaid claims of the assessee. - Decided against assessee
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2016 (11) TMI 727
Disallowance of the deduction u/s 80HHC relating to the interest income - Held that:- The assessees, in our view, in present matters, have thoroughly failed to establish beyond doubt that the interest earned on the deposit or advance was income from the export business. Hence, extending the benefit of deduction as per computation provided in Clause (baa) to Explanation to section 80HHC cannot be made available to the assessees. - Decided against assessee
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2016 (11) TMI 726
Reopening of assessment - whether the assessing authority was entitled to invoke Section 147 of the Act as regards the deductions granted by the assessing authority at the first instance through the assessment order allowing deductions under Sections 80HH and 80I during the regular assessment proceedings against the assessee? - Held that:- The assessee had responded to the queries raised by the assessing officer in the original assessment proceedings and during the course of such proceedings had produced all material facts as were called for and were relevant and necessary for completing the assessment for the year. Under such circumstances, we are of the view that the Tribunal was abundantly justified in the facts and in the circumstances of the case in hand to have concluded that this is a case where proceedings were impermissible in view of the embargo under the first proviso to Section 147 of the Act. Having held so, we cannot but to affirm the decision of the Tribunal and thereby answer the questions raised by the Revenue against it.- Decided in favour of assessee.
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2016 (11) TMI 725
Claim for deduction under Section 80 IA - whether ITAT was right in directing AO to compute the deduction u/s 80 IA by following the method in section 80 HHC (3) for working out profit/loss from trading goods? - AO came to the conclusion that the profit earned by the assessee's eligible unit was not only on account of its manufacturing activities but also from its trading activities - Held that:- The assessee admittedly carries on trading as well as manufacturing and export activities. Admittedly, the manufacturing activity is an eligible activity under Section 80 IA. The assessee is, therefore, entitled to the benefit of deduction under Section 80 IA. Finding of the CIT(A) is that the AO having accepted, on the basis of the assessee's books of account, that there was a loss in respect of the trading activities while dealing with the case under Section 80 HHC could not come to a contrary conclusion while dealing with the claim under Section 80 IA. The loss in the trading activities is still a loss. We are unable to hold that this finding which is essentially one of fact is perverse or absurd The Tribunal has upheld the findings of the CIT(A) on the same basis. Having done so, the Tribunal rightly remanded the issue to the AO to recalculate the deductions under Section 80 IA.
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2016 (11) TMI 724
Income from house property - Annual value estimation u/s 23 - assessee contended that Section 23 (1) cannot be applied to this case for the reason that the coowners themselves are the Directors of the lessee company - Held that:- Admittedly the property is owned by the co-owners themselves, who are also the Directors of the lessee company which has established the Hospital. As per the lease agreement between the co-owners and the lessee company, the mutually agreed rent is ₹ 1 per sq.ft. However, a portion of the very same building is let out by the co-owners, the assessees herein, to the Telephone Department and the lease rent that is received is ₹ 4 per sq.ft. This would show that this is a case to which Clause (b) of Section 23(1) is applicable and the annual value has to be estimated, quantifying the sum for which the property might reasonably be expected to let. It is adopting this method that the Assessing Officer has framed the assessment by fixing the annual value at ₹ 4 per sq.ft. which is the rate of rent received for a portion of the building let out by the assessees themselves to the Telephone Department. Assessee's contention that Section 23 (1) cannot be applied to this case for the reason that the coowners themselves are the Directors of the lessee company cannot be accepted for the reason that Section 23 does not exempt cases in which buildings have been let out by the owners to firms or companies in which they are interested. Further no other provision of the Income Tax Act, providing for a different method of fixation of annual rent has shown to us. On the other hand, reading of Section 23 would show that in all cases annual value has to be estimated applying the principles of Section 23. Therefore, since the annual value of the building which was let out was to be estimated, the estimation could be done applying Section 23(1)(b), which precisely was what was done by the Assessing Officer. - Decided aganist assessee
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2016 (11) TMI 723
Doubtful source of the money paid by the farmers - Held that:- The shareholders had appeared before the Assessing Officer. The only grievance is that they had not appeared again. The matter pertains to questions of fact and the Tribunal and the Commissioner of Income-tax (Appeals) have found that the money, in fact, was received by the company. In consideration thereof, shares were issued and amount has been credited to the appropriate account. If the shareholders have acquired the money illegally, the respondent-assessee cannot be held liable. There is nothing to show that the money belongs to the company/assessee itself. The Revenue must then proceed against the shareholders. The appeal is, therefore, dismissed as no substantial question of law arises.
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2016 (11) TMI 722
Penalty under section 271(1)(c) - AO was of the opinion that the expenditure should be allowable over a period of five years which is also the period during which the mining is to be conducted - Held that:- Disclosure and concealment cannot co-exist. When a finding is recorded that disclosure was indeed made then the conclusion as regards concealment is bad. Furthermore, it cannot also be said that the assessee had furnished inaccurate particulars of income. This is so because there was no material on record to indicate that the particulars furnished by the assessee were factually incorrect. As held in Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT ] merely making a claim which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee. See CIT v. Pilani Investments and Industries Corporation Ltd. [2016 (3) TMI 323 - CALCUTTA HIGH COURT] - Decided in favour of assessee
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2016 (11) TMI 721
TDS u/s 194C - status of sub-contractor - non deduction of tds - Held that:- Tribunal came to a finding that Sri Suresh is a sub-contractor of the assessee. This factual finding of the Tribunal is based on its findings that lump sum payments were made by the assessee to Suresh and that Suresh was entirely responsible for transportation without even accounting to the assessee the expenses incurred by him for discharge of the transportation work. The Tribunal further found that if Suresh was her employee as contended by the assessee, Suresh would have furnished to the assessee the truck numbers, names and addresses of the truck owners, drivers and the payments made by him to each of the trucks engaged by him. The Tribunal found that none of these details were furnished by the assessee at any stage of the proceedings either before the Assessing Officer or the first appellate authority or the Tribunal. Such a finding of fact arrived at by the Tribunal that Sri Suresh was a sub-contractor, is not perverse to be interfered in an appeal under section 260A of the Income-tax Act. Once we accept the status of Sri Suresh as a sub-contractor, the liability under section 194C is automatically attracted. Admittedly, the assessee has not effected deduction under the said section. Consequence thereof is disallowance under section 40(a)(ia) of the Income-tax Act. - Decided against assessee
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2016 (11) TMI 720
Revision u/s 263 - Eligibility of benefit under section 10B - whether the order of the assessing officer is not erroneous and prejudicial to the interest of the Revenue? - Held that:- Reading of the order passed by the Tribunal shows that it has concluded that the view taken by the assessing officer is one of the possible views. The Tribunal arrived at this conclusion relying on the judgment of the Bombay High Court in Hindustan Unilever Limited v. Deputy Commissioner of Income Tax and Union of India [2010 (4) TMI 206 - BOMBAY HIGH COURT ] The view taken by the assessing officer allowing set off is one of the possible views. In such a case, having regard to the principles laid down by the Apex Court in its judgment in Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME Court ), the Commissioner could not have assumed jurisdiction under section 263 of the Act. Therefore, we confirm the order of the Tribunal.
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2016 (11) TMI 719
Quantum of deduction available - exclusion of foreign exchange receipts taken into account for the purpose of deduction under section 80HHD of the Income-tax Act, 1961 from the total turnover for the purpose of calculation of deduction under section 80HHC - Held that:- It was not the intention of the Legislature that the benefit under section 80HHC is to be regulated by the turnover of the hotel business to which section 80HHD is applicable. Sections 80HHC and 80HHD are two different channels. They provide for benefit of two different characters. The benefit receivable under section 80HHC is not regulated by the benefit received or receivable by the assessee under section 80HHD. Similarly, the benefit received or receivable under section 80HHD by the assessee is not regulated by the benefit received or receivable under section 80HHC. Income-tax Appellate Tribunal did not erred in upholding the views of the Commissioner of Income-tax (Appeals) who had directed the Assessing Officer to exclude foreign exchange receipts taken into account for the purpose of deduction under section 80HHD of the Income-tax Act, 1961 from the total turnover for the purpose of calculation of deduction under section 80HHC - Decided against revenue
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2016 (11) TMI 718
TDS u/s 194H - whether Payment received by a person from another, for services rendered, constitutes "commission"? - Held that:- Beer was sold by the respondent-assessee to the APBCL, and the APBCL had, in turn, sold the beer, purchased by them from the respondent-assessee, to retail dealers. Both these transactions were independent of each other, and were on a principal to principal basis. No services were rendered by the retail dealer to the respondent-assessee, and the incentive given by the respondent-assessee, to the retailers as trade discount, was only to promote their sales. The Tribunal rightly held that in the absence of relationship of a principal and agent, and as there was no direct relationship between the respondent-assessee and the retailer, the discount offered by the respondent-assessee to the retailers could only be treated as sales promotion expenses, and not as commission, as no services were rendered by the retailers to the respondent-assessee.
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2016 (11) TMI 717
Transfer of case from Mumbai to Auranbagad - Held that:- The reliance placed by the Revenue upon the order of the Punjab and Haryana in Kuantum Papers Ltd. (2015 (2) TMI 674 - PUNJAB & HARYANA HIGH COURT) in which the Court refused to stop the transfer as it had come to a finding that the order sanctioning the transfer of the case under Section 127(2) of the Act was an speaking order and not mala fide and / or arbitrary is not applicable in this case. This is so as in the present facts the impugned order is not only a nonspeaking order but is also arbitrary. Similarly, the decision of Rajasthan High Court in Rishikul Vidyapeeth (1981 (8) TMI 47 - RAJASTHAN High Court ) relied upon by the respondent Revenue for sustaining the impugned order under Section 127(2) of the Act is inappropriate. This for the reason that it was passed in the above case in the context of the petitioner therein not adverting in its objections to the reasons for the transfer disclosed in the showcause notice issued to it. This is not so in the present case. In fact, in this case the showcause notice is itself bereft of particulars save and except merely coordinated investigation and administrative convenience making it impossible to effectively respond. Nevertheless, the petitioner had itself pointed out the inconvenience which would be caused to it and the arbitrary nature of the transfer of petitioner's assessment to Aurangabad. This objection was not appropriately considered and dealt with in this case. Therefore, the aforesaid decision also has no application to the present facts. Transfer orders dismissed.
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2016 (11) TMI 716
Liability on account of customs duty - unascertained liability - ITAT deleted addition - Held that:- Clause as existing in the subject Assessment Year has not at all been considered by the Tribunal in the impugned order while allowing the Respondent-Assessee's appeal for the Assessment Year 1986-87. The distinction in facts has been ignored by Tribunal while passing the impugned order. Secondly, in the present facts, the Respondent-Assessee filed a suit against its sellers M/s. Vinay Industries in the Civil Court at Ludhiana, apparently disputing its liability to pay the additional Customs Duty of ₹ 91.54 lakhs. Thus, the amount payable, has not been crystallized during the subject Assessment Year according to the Revenue. This fact was absent in the proceedings leading to the order dated 17th July, 1989 passed in respect of Assessment Year 1985-86. The aforesaid distinction was also missed sight of by the Tribunal while passing the impugned order dated 13th December, 2007. Thus the appeal of the Respondent-Assessee is restored to the Tribunal for final disposal.
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2016 (11) TMI 715
Undisclosed investment - purchase of land - difference between the said seized paper and the seized ledger - The assessee has explained that difference amount was paid out of the cash of M/s. Barelia Coke Industries and since the transaction did not materialise, no entry was passed for the same in the books of the assessee. - Held that:- We have repeatedly requested assessee to identify the evidence, which, according to him, was not taken into account by the learned Tribunal. But he was unable to draw our attention to any such piece of evidence, which the learned Tribunal did not consider or omitted to consider. We have also called upon Mr. Sen to identify the document which the learned Tribunal should not have taken into account. To that also he was unable to give any answer, except that the sum of ₹ 60,000 was not paid by the assessee before us. But he does not dispute that from the records seized marked A- 1/1, it appeared that the sum of ₹ 60,000 was invested for the purpose of buying the land for the assessee and this sum was not debited to the books of account of the assessee. Assessee has no answer to the question as to whether the sum of ₹ 60,000 was recovered from the vendor. We are, as such, of the opinion that the order passed by the learned Tribunal affirming the addition is an unimpeachable order. Therefore the challenge on the ground of perversity is altogether unmeritorious. - Decided against assessee
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2016 (11) TMI 714
Revision u/s 263 - transfer of development rights and warranty expenses - Held that:- The impugned order of the ITAT records findings of Assessing Officer in detail from which it is evident that the Assessing Officer applied his mind to the above claim and on the basis of the facts before him, came to the conclusion that an amount of ₹ 5.86 Crores out of ₹ 41 Crores received could alone be subjected to the tax as income during the subject assessment year. The balance amount ₹ 35.14 Crores has to be treated as deposit as the same is subject to being refunded in the absence of the environmental clearance. Thus, we find that the Assessing Officer has taken a view/formed an opinion on the facts before him and such a opinion cannot be said to be an erroneous as it does not proceed on the incorrect assumption of facts or law and the view taken is a possible view. Therefore, as held by the Apex Court in Malabar Industrial Co. Ltd Vs. Commissioner of Income Tax, [2000 (2) TMI 10 - SUPREME Court ] where two views are possible and the Income Tax Officer has taken one view with which the Commissioner of the Income Tax does not agree, cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is itself unsustainable in law. - Decided against revenue Warranty expenses claimed by the assessee - Held that:- It is clear that if the Assessing Officer is satisfied with the response of the assessee on the issue and drops the likely addition, it cannot be said to be non-application of mind to the issue arising before the Assessing Officer. In fact this issue was a subject matter of the consideration by this Court in the Commissioner of Income Tax-8 V/s. M/s. Fine Jewellery (India) Ltd. [2015 (2) TMI 732 - BOMBAY HIGH COURT ] an identical submission made on behalf of the Revenue was negatived in the context of exercising of power under Section 263 of the Act to hold that if a query is raised during the assessment proceedings and responded to by the assessee, the mere fact that it has not been dealt with in the assessment order would not lead to a conclusion that the Assessing Officer has not applied his mind to the issues.- Decided against revenue
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2016 (11) TMI 713
Disallowance of commodity loss - ingenuine transaction - Held that:- The onus was upon the assessee to prove the genuineness of the transactions by producing the relevant evidence and the material on record which he failed to do. He was unable to produce the authorised representatives of M/s. Anand Commodities Trading Services as the initial onus was upon him to establish genuineness of the loss. Opportunity was given to the appellant in this regard. The evidence collected from Ludhiana Stock Exchange and confronted to the assessee proved that the commodity transaction was not actually carried out but was merely accommodation entries. Further, Ludhiana Commodities Trading Services Limited in reply dated April 8, 2013 to the query dated April 3, 2013 by the Commissioner of Income-tax (Appeals) intimated that M/s. SMS and Company Prop. Shri Sham Sunder Khanna was not registered as a client with M/s. Anand Commodities Services Limited in the year 2015-16. The assessee-appellant was prima facie required to prove the validity of the transaction. The assessee having failed to do so, no right accrues in his favour on account of non- summoning of the witness under section 131 of the Act by the Assessing Officer.
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2016 (11) TMI 712
Revision u/s 263 - Held that:- As held by the Hon'ble Delhi High Court in the case of ITO Vs. D.G. Housing Projects Ltd., (2012 (3) TMI 227 - DELHI HIGH COURT ), the CIT has to make enquiries himself to arrive at the conclusion that the assessment order is both erroneous as well as prejudicial to the interest of the Revenue. CIT cannot direct the AO to make enquiries as to whether the assessment order is erroneous as well as prejudicial to the interest of the Revenue. As the CIT in the present case has failed to satisfy the above conditions, we are of the opinion that the revision order is not sustainable. Further, the source of the capital introduced by the partners has to be examined in the hands of the individual partners. The assessee has already explained the source and the CIT has not found the said sources as not acceptable. Therefore, we set aside the revision order u/s 263 of the Act. - Decided in favour of assessee
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2016 (11) TMI 711
Penalty levied on account of cessation of liability and estimation of net profit for concealment or furnishing inaccurate particulars of income - Held that:- As emerges from the record that the assessee was running into perennial losses and became a sick unit unable to pay its outstanding loans secured against the fixed assets. The loan in question, though adjusted to capital reserve account by the assessee, was not written off by the Gujarat Industrial Co-op. Bank Ltd. All the relevant details about the transfer of the amount to capital reserve account are duly mentioned in the audited report. This clearly reflects that all the relevant particulars were filed by the assessee along with return of income. Merely because the assessee did not contest the addition, cannot give rise to any adverse inference against the assessee, as in any case it was running into huge losses. Thus no penalty to be levied - Decided in favour of assessee
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2016 (11) TMI 710
Disallowance u/s 14A - Held that:- As decided in assessee's own case for A.Y. 2011-12 the assessee has demonstrated by placing sufficient material on record that no borrowed funds were utilized for making investment and wherefrom the exempt income is earned. In our considered view, the provisions of section 14A of the Act read with rule 8D of Income Tax Rules, cannot be invoked in mechanical way by AO. As per section 14A(2), the AO is required to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the Act and in accordance with rule 8D of Income Tax Rules, 1961 if the AO having regarding to the accounts, is not satisfied with the correctness of the claim of the asessee in respect of such expenditure in relation to such exempt income, is empowered for making disallowance as per rule 8D. In the case in hand, no finding is recorded by the AO in this regard. On the contrary, the ld. CIT(A) has given a finding after examining the accounts of the assessee. The AO has not brought on record any material to show that the assessee has incurred any expenditure in relation to the income which do not form part of the total income. - Decided in favour of assessee
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2016 (11) TMI 709
Allowable business expenditure - Held that:- Advertisement expenses is an allowable expenditure in the year of spending as the same is the nature of selling cost of the construction business. Considering the same, we are of the view that the finding of the Assessing Officer and the decision of the CIT(Appeals) on this issue is required to be reversed and allow the same in favour of the assessee. Regarding other claim of expenditure on account of brokerage and loan processing fee, we find the said claims should be allowed in favour of the assessee as they are otherwise found allowable under section 37(1) of the Act. In our view, these expenses constitute some kind of administrative expenses. The said administrative expenses are allowable as they are relatable to the business activities of the assessee. As such, it is not the Assessing Officer’s case that the claims are ingenuine and not qualified the conditions specified in the provisions of section 37 of the Act.
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Customs
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2016 (11) TMI 681
Imposition of penalty - 100% EOU - mis-declaration of imported goods - Held that: - the tax arrears of the Directors and officers of a company can be proceeded with independently, if they do not join it in making an application. This case, however, it is not tax arrears which are in dispute but the penalty which is wholly dependent upon the findings that led to the tax arrears (which has not been settled by the company) in the part of other three petitioners. Secondly, and more importantly, the Supreme Court clearly stated that object of the removal of difficulties order in respect of the scheme was to give benefit of settlement by the main parties to all other co-noticees - imposition of penalty set aside - appeal allowed.
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2016 (11) TMI 680
Wrongful attachment of immovable property - contents of the communication dated 1-3-2016 - when the kingpin and the husband of the petitioner were involved in the operation of two private limited companies that the communication was addressed to the petitioner and she was called upon to produce the original documents for scrutiny and perusal of the DRI - whether communication to the husband of petitioner, instead of petitioner justified? - Held that: - there is a clear dichotomy or contradiction therein. In one breath the reply of the respondent Revenue states that the premises have not been attached or seized, but at the same time they claim to be thoroughly investigating the matter in the light of past history of the petitioner’s husband and his association with Badshah Malik. We are of the view that the original documents which are produced by the petitioner enable us to conclude that the Revenue could not have proceeded against the petitioner and addressed the subject communication. Once the petitioner’s role has not been pinpointed nor her association with the alleged kingpin, prima facie, also established, then such communication, innocuous as it may appear, has far reaching consequences and hence cannot be sustained. The department has not been able to satisfy even, prima facie, on the contents of the letter dated 1-3-2016 - petition allowed.
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2016 (11) TMI 679
Whether the CESTAT was justified in declining the Department 's prayer to be permitted to adduce additional evidence at the stage of the appeal before the CESTAT? - Held that: - The Court has been shown a copy of the application filed by the Department before the CESTAT as well as the documents sought to be tendered as additional evidence. It is seen that the said documents were received in the office of the Commissioner of Customs from the DRI on 13th October 2008. Yet, for reasons best known to the Department, the application seeking permission to tender the said documents as additional evidence was not filed before the CESTAT till 26th October 2009 i.e., more than one year after the receiving the said additional evidence from the DRI - the Department has slept over the matter for over a year, the Court is of the view that no interference with the impugned order of the CESTAT is called for. The Court is, therefore, not inclined to examine to the plea of the Department that the additional evidence ought to have been permitted to be tendered or the plea of the Assessee to the contrary on the ground that in the Assessee’s appeal the Department could not have been permitted to tender additional evidence - appeal dismissed.
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2016 (11) TMI 678
Refund - Unjust enrichment - Benefit of duty exemption in terms of Customs Notification No.21/2002 - end-use certificate - Held that: - I am of the considered opinion that both the authorities have not given any reason for not accepting the certificate issued by the Chartered Accountant and the Cost Accountant and they have not given any reason as to why the same is not material for deciding the question of unjust enrichment. In view of this, I am of the considered opinion that this case needs to be remanded back to the adjudicating authority with a direction to consider both the certificates issued by the Chartered Accountant and the Cost Accountant and pass a reasoned order. Before passing the order, the adjudicating authority will afford a reasonable opportunity to the appellant who will also be at liberty to produce any other document in support of their claim. The adjudicating authority is directed to dispose of the claim within a period of three months after receipt of the certified copy of this order.
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2016 (11) TMI 677
Refund claim u/s 3 (5) of Customs Tariff Act, 1975 - N/N. 102/2007-CUS dated 14/09/2007 - time bar - The Original Authority held that in respect of claim for ₹ 32,32,875/- duty was paid between 04/4/2008 to 17/05/08 and the claim was filed on 23/09/2009; it is after expiry of one year. Similarly, a refund of ₹ 5,75,336/- covered duty paid in July, 2008 is hit by time bar. As such, a total refund of ₹ 38,08,211/- was rejected on the ground of time bar. - Held that: - Reliance placed on the decision of the case Pioneer India Electronics (P) Ltd. Versus Union of India & Another [2013 (9) TMI 705 - DELHI HIGH COURT] where it was held that the right of claim refund only accrues to the importer once sale is complete. To uphold a limitation period starting from the date of payment of duty as prescribed in the amending notification would amount to allowing commencing of limitation period for refund claim before the right of refund even accrued. The Hon’ble High Court held that imposition of a period of limitation for the first time without statutory amendment, through a notification, therefore, could not prevail. Accordingly, the Hon’ble High Court read down the amending notification to the extent that it imposed limitation period. Considering the above legal position settled by the Hon’ble Delhi High Court, the refund claims of the appellant are to be allowed.
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2016 (11) TMI 676
Demand - EOU - export obligation - N/N. 53/1997-Cus. dated 3.6.1997 - whether the charge against the appellant that non-fulfilment of the conditions under Notification No. 53/1997 and the conditions of the bond executed at the time of setting up the EOU is justified? - Held that: - The impugned order has not given the proportionate benefit of the exports made by the appellant though it is a fact that their net foreign exchange earnings are not positive. However, considering the contents of Circular No. 29/2003-Cus dated 3.4.2003 issued by CBEC [its clause 7 (vii)] and considering Condition 3 (d) of notification No, 52/2003-Cus dated 31.3.2003 (though this notification was issued rescinding the N/N. 53/1997-Cus.) and considering the CESTAT Bangalore decision in case of CC Vs. Natural Stone Exports Ltd (2006 (1) TMI 338 - CESTAT, BANGALORE), we are of the considered view that the appellant is entitled to the proportionate benefit of exports made against which they claim to have realized the foreign exchange. The impugned order did not give the assessee appellant the benefit of exports saying that they did not produce any documentary evidence showing realization of export proceeds. The duty liability against the appellant is only to the extent of the gap between the foreign exchange realised on the exports made and the foreign exchange outgo for the imports made by the appellants as per the clarifications in the Circular No. 29/2003-Cus. and the contents of the N/N. 52/2003-Cus. referred above. The liability of duty against the appellant would be limited to the gap between the foreign exchange outgo for the imports and the foreign exchange earned on account of exports made. To hold the assessee liable for the duty foregone in case of all the imports is illogical, which is clear from the contents of the N/N. 52/2003-Cus. and the case laws cited above ; and it naturally flows that the appellant is entitled to the proportionate benefit of the exports made and foreign exchange realised though for which they had not produced the documentary evidence before the adjudicating authority. Impugned order set aside - matter remanded back to the Commissioner, Central Excise, Jaipur-I who shall decide it afresh in the light of the findings made above within four months of receipt of this order after giving opportunity of personal hearing and that of production of necessary evidence/documents.
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2016 (11) TMI 675
Project import - second-hand thermoforming plant and production line - N/N. 132/85 - Held that: - the Revenue has failed to establish any provision under Notification 132/85 or the Project Import Regulations or under Chapter heading 98.01 that prohibited sale of goods imported under chapter heading 98.01. The chapter heading 98.01 is a facility extended and not a concession granted. When a complete plant is imported, it may consist of thousands of different items, parts and components. To classify each and every component separately and to determine the value of each and every component would be a herculean task wasting time of importer as well as Revenue. In these circumstances, chapter heading 98.01 has been introduced where the entire plant is classified under a single heading and charged to a single rate of duty. In the instant case, the appellant has clearly imported the goods for bona fide use and manufacture of the intended final product. They have installed machinery in their plant and put the equipment to use for more than two years. It is only when the plant became unviable and was lying idle for more than 18 months that the appellant disposed of the plant. We find that in the absence of any restriction of such sale, the benefit of assessment under chapter heading 98.01 cannot be denied - appeal allowed.
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2016 (11) TMI 674
Smuggling of gold - confiscation of goods - quantum of redemption fine and personal penalty imposed upon the appellant, excessive and exorbitant - Held that: - the impugned order does not deal with the role of two noticees, viz. Karim D. Hajiali and Taherbhai insofar as the charges against the said persons have neither been confirmed nor dropped. To that extent, the impugned order cannot be sustained and needs to be set aside. The Revenue has pointed out various aspects in case of Bharat Chudasama and Bhupendra Chudasama, which have not been specifically examined in the impugned order. We find merit in this submission and accordingly we set aside the order and remand the case for de novo consideration by the Commissioner - appeal disposed off - matter on remand.
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Service Tax
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2016 (11) TMI 707
Levy of tax - Erection, Installation and Commissioning of Telecommunication Towers - Held that: - the activity of supply of materials, services of civil and electrical and commissioning and installation are part and parcel of and incidental to the turnkey project of design, supply, erection, commissioning and installation of telecommunication tower project undertaken by them and consequently the value of materials which were consumed/used for providing the service is includible in the taxable value of service. Delay in filing petition - Held that: - The respondent is bound by the Circular issued by CBEC. In the impugned order, there is no finding recorded by the respondent as to why the Circular was not adhered to and why the order was not passed within atleast one month after the conclusion of the personal hearing. It may be true that the delay by itself cannot be a ground to set aside the order, but if the assessee is put to prejudice on account of the delay, then it is a good ground to interfere with the order passed by the lower authority. However, in this case, this Court is not inclined to test the correctness of the order on the ground of delay, since this Court is satisfied that the impugned order is not sustainable, for the other reason, namely by relying upon an order of the Tribunal, which has been set aside, it is sufficient to hold that the impugned order is unsustainable and the matter requires fresh consideration. Appeal allowed - matter remanded.
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2016 (11) TMI 706
Imposition of penalties u/s 76, 77 and 78 - evasion of tax on commission - Cable Operator services - non-accountal of the subscription amount collected from the customers in full - Held that: - The present controversy of non payment of Service Tax has arisen soon after the introduction of the new service. The claim of the appellant that they were under a bonafide belief that they are liable to Service Tax is limited to commission retained by them seems to be a reasonable intention. As per their belief the Service Tax stand paid on the commission amount retained by them. Section 80 provides for waiver of penalties liable to be imposed under section 76, 77 and 78 if the assessee proves that there was reasonable cause for the said failure - where the detection of non payment of Service Tax was in the initial months after the introduction of Service Tax on cable TVs services, we are of the view that this is a fit case to waive the penalties under the then section 80 of the Finance Act, 1994. Penalties u/s 76, 77 and 78 waived - appeal disposed off.
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2016 (11) TMI 705
Refund claim - unjust enrichment - Held that: - refund claim was sanctioned by the Ld. Commissioner (Appeals) not only based on the certificate issued by the Chartered Accountant but also on verification of books of accounts namely profit and loss account, balance sheet and the agreements entered into between the Respondents and the buyers. Hence, we are of the view that the doctrine of unjust enrichment will have no application and the respondent should be eligible for the refund claim. Therefore, we do not find any infirmity in the impugned order - appeal dismissed - decided against Revenue.
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2016 (11) TMI 704
Denial of refund of service tax - terminal handling charges - export of goods - N/N. 41/2007-ST - whether the denial of refund on the ground that no evidence of payment of service tax by the service provider to the Government is justifiable? - Held that: - the appellant s eligibility to refund under Notification No. 41/2007-ST for service tax paid towards terminal handling charges availed during the course of exports, inside the port area, has been settled by various decisions of the Tribunal and High Courts - reliance placed on the decision of the case of SRF Limited [2015 (9) TMI 1281 - CESTAT NEW DELHI] where it was held that the service tax on terminal handling charges was rightly covered under N/N. 41/2007-ST - denial of refund claim not justified - appeal allowed.
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2016 (11) TMI 703
Demand - cargo handling services - The service provided by the appellant for transporting fly ash in closed trucks after liasoning loading port and unloading of the same at the factory site has been held to be falling under cargo handling services - demand is beyond the period of five years - period of limitation - Held that: - the lower authorities have not referred to any positive evidence on record to show that the appellant indulged in any malafide activities with an intent to evade payment of duty. In such a scenario the demand raised beyond the period of limitation is not sustainable - the entire demand is beyond limitation - appeal allowed.
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2016 (11) TMI 702
GTA Service – reverse charge mechanism – manufacture of grey fabrics – import of yarn from Nepal – separate invoice raised for expenses like transportation, clearance expenses etc – is appellant receiving GTA services from exporter? - Notification No. 35/04-S.T - Held that: - similar issue stand decided in the case of M/s. Chairman Silk Mills Pvt. Ltd. Versus C.C.E. Jaipur-II [2016 (8) TMI 946 - CESTAT NEW DELHI] where it was held that the contract of appellant with the Nepalese suppliers is for supply of yarn and not for providing any particular service. Transport of goods is an activity incidental to the supply of goods for which Nepalese suppliers has engaged transporters. Nepalese suppliers had not acted as the agents of the appellants for arranging transportation from Nepal border to the factory premises of the appellants. Just because the Nepalese suppliers had billed the appellants separately for transportation from Nepal border to factory premises alongwith other expenses, they do not become the agents of the appellants. In view of this, the appellants cannot be treated as recipients of GTA services in terms of Notification No. 35/04-S.T. - appeal allowed.
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2016 (11) TMI 701
Waiver of pre-deposit - Supply of Tangible Goods or Management of Maintenance or Repair Service - Barred by limitation - Held that: - As the applicant was having effective control and possession of the goods, therefore, the applicant does not qualify under the category of 'Supply of Tangible Goods Services'. In that circumstances, we are view that service tax is not payable by the applicant under the category of 'Supply of Tangible Goods Services' under the reverse charge mechanism - Demand of service tax has been confirmed under the category of Management of Maintenance or Repair Service for the service provided to the Indian customer of the foreign principal under the warranty service whatever the expensive made by the applicant have been reimbursed from the outside of India - Decided in favor of the assessee.
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2016 (11) TMI 700
Works contract service - modification of the stay order - power of Tribunal under statute to pass an order when there are change of circumstances - Held that: - the services carried out by the appellant during the period of dispute are indeed in the nature of works contract services. It is also seen that the nature of their work, in relation to construction of port or other port, are fully exempted from the whole of service tax leviable thereon right from 07-06-2005 till date, by a series of notifications. In fact it is interesting to note that after bringing Works Contract Service into the tax net vide Section 65(105) (zzzza) of the Finance Act, 1994, notification 25/2007-ST dated 22-05-2007 had incorporated "services provided in relation to execution of a works contract', for exemption from service tax liability, in relation to construction of a port or other port services - the activities contracted and carried out by the appellant are very much in the nature of works contract services in relation to construction of port or other port - the said activities are fully exempted by service tax all through the period of dispute 'by virtue of series of exemption notifications - for period after 01-06-2007 the works contract services provided by appellant continue to be exempt from service tax liability in view of aforesaid exemption notifications - appeal allowed.
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2016 (11) TMI 699
Levy of service tax - canal project viz., Flood Flow Canal Project - N/N. 41/2009-ST dated 23.10.2009 - Held that: - Following the judgment laid in Lanco Infra Tech Ltd. [2015 (5) TMI 37 - CESTAT BANGALORE (LB)] case, where it was held that Where under an agreement, whether termed as works contract, turnkey or EPC, the principal contractor, in terms of the agreement with the employer/ contractee, assigns the works to a sub-contractor and the transfer of property in goods involved in the execution of such works passes on accretion to or incorporation into the works on the property belonging to the employer/ contractee, the principal contractor cannot be considered to have provided the taxable (works contract) service enumerated and defined in Section 65(105)(zzzza) of the Act. - this Bench has remanded the matter to adjudicating authority. Therefore, in the light of the decision laid in Lanco Infra Tech as well as the decision of Tribunal in the above stated final order we remand this matter to the adjudicating authority - appeal allowed by way of remand.
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Central Excise
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2016 (11) TMI 698
Modvat credit - genuineness of the duty paying documents - Held that: - the petitioner in the present case is entitled to Modvat credit on duty paid at the time of purchase of goods vide invoice dated 30-6-1994 from a wholesaler. The requirement that the selling wholesaler should be a dealer registered with the department under the Act was notified on 4-7-1994 vide N/N. 32/94-C.E. (N.T.). For any sale made by a wholesaler prior thereto, there was no such condition - Though the first Appellate Authority accepted the plea raised by the appellant regarding his entitlement of Modvat credit, however, he had put a condition that the supplier should get himself registered under the Act before 31-12-1994. Such a condition could not be made applicable in the case of the petitioner as it was not within his control to get registration for the selling dealer. As regards payment of duty on the goods purchased by the petitioner is concerned, necessary facts pertaining thereto were noticed by the Commissioner (Appeals) in his order with reference to invoice number and date, which was issued by the manufacturer M/s. Bharat Heavy Electricals Limited. As per those details, the excise duty was debited in the PLA account on 17-6-1994. The appellant entitled to Modvat credit - appeal allowed.
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2016 (11) TMI 697
Demand - utilization of CENVAT credit for payment of excise duty - non-discharge of duty within time period prescribed as per Rule 8 (1) of Central Excise Rules, 2002 - invocation of Rule 8(3A) - appropriation of duty already paid through through Personal Ledger Account (PLA) - Held that: - the appellants have not discharged the duty liability on monthly basis within stipulated time in terms of Rule 8(1). Hence Rule 8(3A) conditions apply for subsequent clearances. They were supposed to pay duty on each consignment and also without utilizing the cenvat credit - reliance placed on the decision of the case of Steel Tubes of India Ltd. vs. C.C.E., Indore [2016 (2) TMI 684 - CESTAT NEW DELHI] where it was held that the duty liability when fully discharged, payment of the amount again by cash only which will result in to re-credit of already debited credit is not necessary - reliance also placed on the decision of the case of Jayaswal Neco Ltd. [2015 (8) TMI 404 - SUPREME COURT] where it was held that the duty payment through cenvat credit during default period is acceptable mode of discharging duty - demand not justified - appeal allowed.
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2016 (11) TMI 696
Area based exemption - N/N. 50/2003-CE dated 10.06.2003 - non-filing of declarations as mentioned in Condition No. (ii) of proviso in the said notification - Held that: - The details as required to be filed in the option were all available in the letter dated 15.03.2010 seen in the appeal records. The said letter was in connection with registration of the Unit No. III under Rule 9 of Central Excise Rules, 2002. The registration as sought for has been given by the department on 19.03.2010. However, we note that the appellant indicated in the said Notification No. 76/2008-CE dated 24.03.2008 with reference to already existing unit (Unit -II) apparently no reference to area based exemption No. 50/2003 was made when new registration was sought for Unit No. III. However, the monthly ER-I return which is a statutory return giving various details of excisable goods manufactured and cleared and the exemption availed was filed for Unit No. III for the month of March, 2010 on 10.04.2010. The said return clearly indicated Notification No. 49/2003 and 50/2003 alongwith details like description of goods, quantity manufactured etc. The department has been intimated about the existence of the unit, nature of products manufactured and the exemption claimed under N/N. 50/2003-CE. We find that the same can be considered as adequate compliance of the condition of the notification. We again note that there is no other material ground on which the exemption is sought to be denied. In view of these factual positions, we find no justification in denial of exemption and accordingly set-aside the impugned order - appeal allowed.
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2016 (11) TMI 695
Evasion of Central Excise duty - SSI exemption - clubbing of clearances - creation of dummy units - Held that: - If the proposal is made to discount the legal existence for the purpose Central Excise levy and to take the main appellant as the legal entity behind all excisable operations, then it is necessary to issue notice, with allegations/evidences, to these purported dummy units also. These units are having legal existence with reference to other statutory authorities. It is all the more reason to put them in notice as their existence as an independent units is being questioned. It is a well settled principle that their legal status can be settled only upon issuing notice to them. It would appear that at the notice stage itself, it is presumptively concluded that these units have no existence and apparently do not require any notice. Such pre-judicial presumptions is against the principles of natural justice - reliance placed on the decision of the Hon’ble Madras High Court in CCE, Chennai vs. Urbane Industries [2015 (11) TMI 1162 - MADRAS HIGH COURT]. Demand set aside - Matter remanded back.
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2016 (11) TMI 694
Refund claim - benefit of exemption Notification No.64/1995-CE, dt.16.03.1995 - the Appellants had availed CENVAT Credit of inputs which were used in or in relation to manufacture of dutiable as well as exempted goods; during the course of audit, it was alleged that since separate records were not maintained, they were required to pay 10% of the price of the exempted goods - the Appellants had availed CENVAT Credit of inputs which were used in or in relation to manufacture of dutiable as well as exempted goods; during the course of audit, it was alleged that since separate records were not maintained, they were required to pay 10% of the price of the exempted goods - whether the refund claim justified? Held that: - the Appellants are eligible to reverse the proportionate CENVAT Credit attributable to exempted products in view of the specific provision contained under Rule 6(3)(a) of CENVAT Credit Rules 2004, which has not been considered by the authorities below. Also, in view of the retrospective amendment to the Rule 6 of CENVAT Credit Rules,2004 by virtue of Finance Act,2010 the Appellants are eligible to reverse proportionate CENVAT Credit on inputs attributable to exempted products. However, it is prudent to remand the matter to the Adjudicating authority to ascertain the proportionate credit attributable to exempted products and consider the refund application afresh in the light of above findings. Needless to mention that reasonable opportunity of hearing be granted to the Appellant - appeal allowed by way of remand.
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2016 (11) TMI 693
Refund claim - reversal of CENVAT credit on capital goods at the time of removal which is not required - principles of unjust enrichment - Held that: - There is no reason to decide the issue of unjust enrichment. In that circumstance, I hold that the quantum of refund is not to be entertained in this appeal - With regard to the unjust enrichment, I find that the appellant has not recovered any amount towards the amount reversed from the buyers and to that extent the buyer has issued No.E/1610/2008 CCE, Gurgaon circumstance, the appellant has been able to pass the bar of unjust enrichment. Accordingly, the impugned order deserves no merit and the same is set aside. The appellant is entitled to refund claim as considered by the adjudicating authority in this case - refund allowed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 692
Denial of CENVAT credit - non- filing of relevant documents for verification - Held that: - there was no list of documents have been sought from the appellant for verification purposes. In that circumstance, the matter needs examination at the end of the adjudicating authority for verification purpose. The adjudicating authority on production of records by the appellant shall direct the appellant to provide further documents if required for entertaining their refund claim. In that circumstance, the matter is remanded back to the adjudicating authority for consideration of the issue of refund claim - appeal disposed off - matter on remand.
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2016 (11) TMI 691
Classification of manufactured product - ceramic titles or clay bricks/tiles? - whether the appellant is manufacturing ceramic titles or not? - Held that: - On going through the process of manufacture it was found that the appellants' product are building bricks classifiable under the heading 69.04 and which are exempt vide Notification No. 05/2006-CE dated 01.03, 2006 as amended - the appellants are manufacturing the bricks for construction purpose which exempted under Notification No.05/2006-CE dated 01.03.2006 - appeal allowed - decided in favor of appellant-assessee.
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2016 (11) TMI 690
CENVAT credit on capital goods and clearance without payment of duty - N/N. 30/2004-CE dated 9.7.2004 - Held that: - similar issue decided in the case Winsome Yarns Ltd. [2015 (9) TMI 459 - CESTAT NEW DELHI] where it was held that Since during the period of dispute the appellant was clearing the goods by availing full duty exemption as well as on payment of duty, the capital goods cannot be treated as having been used exclusively in the manufacture of exempted goods and Cenvat credit in respect of the same cannot be denied - the appellant has correctly taken the credit on capital goods - appeal allowed.
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2016 (11) TMI 689
Levy of duty - SSI exemption - use of brand name of others - Held that: - suppliers of raw material cannot be held as manufacturers. The respondents herein have submitted supporting documentary evidences in the form of affidavit from job workers, details of raw material sent, quantity of items manufactured, ledger account confirming payment of job charges, copies of bills, invoices raised on each job workers, TDS certificate towards Income Tax deducted at source etc. Upon perusal of all these documents and evidences the lower authority concluded that the impugned items have been manufactured by various independent job workers in arrangement with the respondent and in the absence of any evidence placed on record by the department in support of the allegation that the respondents have actually manufactured said items in their factory, the duty liability cannot be sustained against them - appeal rejected - decided against Revenue.
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2016 (11) TMI 688
Demand of duty - EOU - clearances of the cotton waste made to DTA exceeding the permission granted to them by DGFT - Held that: - we find that for the period 29.5.2000 to 31.3.2003, the DTA sale limit as per the permission, has been reduced by the value of the cotton waste sold by the appellant; same is the case for the period 1.4.2001 to 31.3.2002. On perusal of the judgment of the Tribunal in the case of Nahar Industries Enterprises Ltd. vs. CCE [2003 (2) TMI 97 - CEGAT, NEW DELHI], we find that for the period in question in the case in hand, the judgment would apply in its full force. If the value of the cotton waste sold for the period 2000-01 and 2001-02, is reduced, the appellant has not exceeded the limit of the permission for clearance to DTA, by the DGFT authorities - appeal allowed - decided in favor of appellant-assessee.
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2016 (11) TMI 687
Area based exemption - Benefit of notifications no.49/2003 and 50/2003 - Condition of filing of declaration - whether the denial of benefit of notification by the Revenue on the ground that declaration did not exist in Division Office, is justified? - Held that: - reliance placed on the party's own case in CCE, Chandigarh Vs. Nalagarh Steel Rolling Mills Pvt. Ltd. [2013 (9) TMI 60 - CESTAT NEW DELHIwhere it was held that The whole idea of filing a declaration and choosing an option under intimation to the department is that the Revenue is put to notice. This intention having been fulfilled by the appellant in the months of July and August, 2003 would not result in denial of the benefit of notifications no.49/2003 and 50/2003, when the respondent fulfilled all the basics, essential and requisite conditions of the notifications as regards the location of the factory being in Himachal Pradesh. Such procedural contravention, if any, cannot result in denial of the substantive benefit of the notifications, if the same is otherwise available - denial of benefit not sustainable - appeal dismissed - decided against Revenue.
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2016 (11) TMI 686
Refund - principles of unjust enrichment - seeking audit report and details of information collected during special audit u/s 14A - Valuation - aerated waters falling under chapter 22 of CETA 1985 - assessable value not acceptable to Department - Held that: - the appellant has indeed not been given a fair opportunity to adequately counter the findings in the cost audit report and the basis of such findings therein - It is very much in the realm of possibility that had the appellant been given full details of report/document regarding cost audit report he could have presented his defence accordingly. In the fitness of things we therefore order that appellant should be given a copy of the cost audit report and all relied upon material/documents and be given an opportunity for both written and oral submissions following which denovo finalization/proceedings should be done by original authority - appeal allowed by way of remand.
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2016 (11) TMI 685
CENVAT Credit - inputs and capital goods - irregular availment of credit on MS beams, angles, channels etc - Held that: - The major part of the credit falls prior to 07.07.2009 and the department has relied upon the decision laid in M/s Vandana Global Ltd. [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)], case to hold that the credit is not eligible. On perusal of the records it is seen that the subject items are used for fabrication of support structures conveyer system, hoppers, silos, railway sidings etc. It is not disputed that without these support structures and such other capital goods fabricated using the MS items, the process of manufacture cannot be carried out effectively by the appellant. It has to be stated that on introduction of explanation in the definition of inputs after 07.07.2009 the restriction is only when the MS items are used for construction of shed, laying of foundation etc. Extended period of limitation - Held that: - the appellants have filed ER-1 returns regularly, the extended period is not invokable as the issue is a contentious one. Disallowance of credit is unjustified - appeal allowed.
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2016 (11) TMI 684
Levy of tax - Eligibility of provisions of Section 4A - The respondent manufactured and cleared their finished products in four litre pack, whether the provisions of Section 4A will be attracted? - Held that: - catering pack of ice cream of four-litre pack are not covered under the provisions of Section 4A, but duty is liable to be discharged under Section 4 of the Central Excise Act, 1944 - appeal rejected - decided against Revenue.
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2016 (11) TMI 683
Whether an amount of duty partly paid through PLA on the molasses which are consumed captively for manufacture of ethyl alcohol (denatured or potable) under exemption in terms of Notification No. 67/95-CE is correct and whether duty paid only after detection of duty evasion will be admissible as cenvat credit or otherwise? - Held that: - the appellant is not seriously contesting that part as to duty liability has been discharged after being detected by the officers and a show cause notice has been issued for invoking the extended period. If that be so, availment of cenvat credit by the appellant is incorrect as the provisions of Cenvat Credit Rules, 2002 do not permit the availment of cenvat credit wherein duty has been paid on being found that duty was evaded by suppression, fraud, collusion or misstatement. To that extent, we hold that the impugned order is correct and legal. Since we are upholding the cenvat credit ineligible, we also hold that the adjudicating authority was correct in confirming the demands with interest and also imposing equivalent amount of penalty. The main appellant’s appeal on this is rejected. Imposition of personal penalty on distillery in-charge - Rule 13(1) of the Cenvat Credit Rules, 2002 - Held that: - no specific role has been attributed to him except by a bland statement that he being in-charge of the distillery unit, was aware that credit was availed of an amount which was inadmissible. We do not find any reason to uphold such imposition of penalty. Accordingly, the penalty imposed on the individual is set aside. Appeal disposed off - decided partly in favor of appellant.
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CST, VAT & Sales Tax
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2016 (11) TMI 673
Entertainment tax - exemption from payment - date of release of film i.e.13.05.2016 - whether the grant of exemption should be from the date of issuing of the Government Order, i.e., from 21.07.2016, or from the date of release of the feature film? - Held that: - if the Government Order dated 21.07.2016 is not given effect to from the date of release of the film i.e.13.05.2016, it would result in anomalous position, since the entertainment tax could not have been collected from the viewers either by the petitioner or the Cinema Theater owners, and therefore, at this distance point of time, the question of denying the grant of exemption from payment of entertainment tax from the date of release of the movie cannot be countenanced and is required to be considered - the respondents to grant the benefit of exemption, as granted by the Government, w.e.f. from the date on which the Film was released, i.e.13.05.2016 - petition disposed off - decided in favor of petitioner.
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2016 (11) TMI 672
Reversal of ITC - opportunity of being heard - Held that: - One important point which has been lost sight of by the respondent is that Section 9 deals with levy and collection of tax and penalties which is in effect enabling provision and sub-section 2 states that the authorities exercising power under the State law will be entitled to exercise the power under the CST Act. However, that does not mean that the reversal should take place under the CST Act, but the reversal of ITC can be done only under the provisions of the TNVAT Act, since the concept of Input Tax Credit is alien to the CST Act. Thus, the error which has crept in the impugned order is on the account of the fact that while issuing the pre-revision notice, it has not been clearly spelt out as to which provision of law, the respondent proposes to reverse the ITC. Partially, the petitioner also has to be blamed because, the petitioner did not give objections, but only produced certain "C" forms. That apart, if the respondent had accepted few "C" forms and sought to not extend the benefit of concessional rate of tax in respect of certain transactions for non-production of "C" forms and ultimately resulting in reversal of Input Tax Credit, the respondent should have issued show-cause notice - the Assessment Proceedings have to be re-done in accordance with law - petition allowed.
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2016 (11) TMI 671
Rectification under section 55 of the TNGST Act - refund of the Additional Sales Tax - Held that: - any dealer who is not liable to pay tax under the principal Act, either by reason of his not having sufficient gross turnover of goods or by reason of exemption given under section 7 of the principal Act, is not liable to pay the additional sales tax. If a dealer is exempted by the State Government under the second proviso to section 3(1) of the Act of 1975, he is also not liable to pay the additional sales Tax. Further, the turnover in respect of goods whose sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act is not liable to the payment of additional tax by reason of the first proviso to section 3(1). Any other turnover which is exempted by the State Government under the second proviso to section 3(1) is also not liable to additional tax - the only conclusion that could be arrived it is that the turnover in respect of the goods, which is sales or purchases are not taxable under the principal Act in the hands of any dealer by reason of section 8 of the principal Act, is not liable to payment of additional tax. Writ Petition allowed - the impugned order quashed and the respondent is directed to extend the benefit of the exemption notification and effect the refund of the Additional Sales Tax paid by the petitioner, by considering their claim date 18.07.2013, under section 55 of the TNGST Act. The above direction shall be complied with by the respondent, within a period of eight weeks
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2016 (11) TMI 670
Levy of VAT on mobile (telecom) services - Airtime Charges - Service Income - Miscellaneous Income - SIM Cards - Held that: - The Assessing Officer has referred to the petitioner's objection, wherein, the petitioner has stated that the Airtime Charges are collected from the subscribers towards Extending Mobile Telephone Services by which subscribers can communicate to others while on the move and receive calls as well, Air time charges represent call charges for originating by mobile subscriber. The tariff is dependent on the plan under which a subscriber has enrolled on the network. The call charges per call will depend on plan tariff and call durations. This is only a service and there is no transfer of goods or sales to attract the provisions of the TNGST Act - the conclusion of the Assessing Officer under the said head, which is termed as "Service Income" by the petitioner calls for interference. Miscellaneous Income - Held that: - the petitioner is ready and willing to file an Appeal after effecting pre-deposit. This submission is taken on record and the Court will grant time to file an Appeal - liberty is granted to the petitioner to file an Appeal before the Appellate Authority and if the Appeal is filed within a period of 30 days from the date of receipt of a copy of this order, the Appellate Authority shall entertain the Appeal without reference to limitation, as these Writ Petitions have been pending before this Court, since 2010 onwards. SIM Card - Held that: - the petitioner has stated that no sales tax can be charged on the value of SIM Card and in the petitioner's case since the SIM is merely incidental to the service, the petitioner has also given the details of the purchases effected by their vendors viz., M/s.Gemplus India P Ltd., and has also given the cost incurred by them and other details. This aspect of the matter, though was verbatim extracted by the Assessing Officer while completing the Assessment, erroneously stated that there are no records available. Even assuming if there are no records, nothing prevented the Assessing Officer to direct the petitioner to produce necessary records. Therefore, the Assessment on said head, calls for interference - the respondent shall afford an opportunity of personal hearing to the petitioner and redo the Assessments. Petitions disposed off.
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Wealth tax
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2016 (11) TMI 708
Wealth tax assessment - ITAT held that certain provisions of building bye laws framed by J.D.A in Jan, 1996 were to apply retrospectively for Wealth Tax assessment on valuation date 31.3.1987 - applacability of provision of bye laws of J.D.A of Jan, 1996 - Held that:- In the present case, in our view, Regulations 1996 for the purpose of assessment of valuation of disputed property are not at all applicable unless it is shown that the disputed property has been developed or constructed observing the standards and requirements of Regulations 1996 or any other Regulations under J.D.A. Act, 1982. To us it appears that JDA Regulations 1996 have not been appreciated by Tribunal in the light of the provisions of JDA Act 1982. The purpose and object of such Regulations has been misconstrued. We, therefore, have no hesitation in holding that for the purpose of valuation of property in dispute, reliance placed on Regulations 1996 was neither correct nor valid nor in accordance with law. In the present case, the said Regulations will have no application for the purpose of valuation of building in dispute and it will have to be made only in accordance with Schedule III, as it is. We therefore, answer substantial questions of law formulated above, by holding that Regulations 1996 are not retrospective but operates on and after 28.6.1996 that is the date of publication of notification in the Gazette but it would make no difference in the present case, for the reasons that these Regulations have no application to the disputed property which has to be valued as per the procedure prescribed in Schedule III of Act, 1957. All the questions are therefore, answered in favour of Revenue and against Assessee
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Indian Laws
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2016 (11) TMI 682
Seeking of information - Right to Information Act - Held that: - gross injustice has been caused to the petitioner by virtue of the impugned order. There was no response from the respondents regarding the information supplied to the petitioner or atleast the order does not mention so. The information sought by the petitioner when examined in the light of Annexure P5, the response given to him in the first instance is much short of the information sought by the petitioner. Evidently, the State Information Commissioner failed to apply her mind to the facts of the case and passed an order which can be termed to be cryptic, non speaking and thus, unsustainable in law - The impugned order set aside and the petition is disposed off - matter remanded back to the State Information Commissioner, Punjab to look into the entire issue and ensure that the grievance of the petitioner is redressed.
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