TMI Tax Updates - e-Newsletter
November 29, 2013

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise

Articles

1. Analysis of the major amendments under Punjab VAT (Second Amendment) Act, 2013 - Part-1

   By: AMIT BAJAJ ADVOCATE

News

1. RBI Reference Rate for US $ and Euro

2. Exemption to exporters having IEC Code issued by DGFT from the purview of stock holding limits under the Essential Commodities Act, 1955 with respect to edible oilseeds, edible oils and rice

3. Mandatory use of jute in packaging for the jute year 2013-14

4. Amendments in the scheme for financial restructuring of State distribution companies

5. Extension of Proposal Submission due date for the NJRS Project.

Notifications

Customs

1. 116/2013 - dated 29-11-2013 - Cus (NT)

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

2. 115/2013 - dated 27-11-2013 - Cus (NT)

Designates Sh. R.K Singla as the Director General (Specific Safeguard)

3. 114/2013 - dated 27-11-2013 - Cus (NT)

Designates Sh. R.K Singla as the Director General (Specific Safeguard)

Income Tax

4. 91/2013 - dated 27-11-2013 - IT

NEW RECOGNIZED ASSOCITION FOR THE PURPOSE OF SECTION 43(5), CLAUSE (iii) OF EXPLANATION 2 TO CLAUSE (e) OF PROVISO, OF THE INCOME-TAX ACT, 1961

5. 90/2013 - dated 27-11-2013 - IT

NEW RECOGNIZED ASSOCITION FOR THE PURPOSE OF SECTION 43(5), CLAUSE (iii) OF EXPLANATION 2 TO CLAUSE (e) OF PROVISO, OF THE INCOME-TAX ACT, 1961

Circulars / Instructions / Orders

Income Tax

1. F. NO.500/139/2012-FTD-I(PT.) - dated 28-11-2013

REQUEST FOR INFORMATION FROM RETURN OF INCOME FILED TO ANALYZE THE NUMBER OF TAXPAYERS OPTING FOR THE SAFE HARBOUR

Highlights / Catch Notes

Income Tax

• Interest on Enhanced Compensation Must Be Allocated Annually from Possession Date to Court Order for Tax Compliance.

  Case-Laws - AT : Interest on enhanced compensation - The interest accrued to the assessee has to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the Court on time basis - AT
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• Reopening Not Permitted u/s 147 Without New Tangible Material Post Section 143(1) Intimation.

  Case-Laws - AT : Reopening u/s 147 in the cases processed u/s 143(1) is not permissible if there is no tangible material which came to the possession of Assessing Officer subsequent to issue of intimation u/s 143(1) - AT
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• High Court Rules Partner Can Be Aggrieved Person in Order Against Partnership Firm.

  Case-Laws - HC : Assessee aggrieved - appeal before tribunal - whether a partner can be aggrieved person for an order against the Partnership Firm - Held yes - HC
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• Court Rules Taxpayer Must Raise Reassessment Objections Before Tribunal u/s 147 of Income Tax Act.

  Case-Laws - HC : Re-assessment u/s 147 - If the assessee wanted to challenge and question that the information received from the DIT as not specific or vague, such plea or contention should have been raised before the Tribunal - HC
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• Son's Participation in Assessment Doesn't Mean Estate Representation Without Consent of Other Heirs, High Court Rules.

  Case-Laws - HC : The presence of son of deceased assessee in assessment proceedings cannot raise an inference that he represented the entire estate with consent of other legal representatives, as to acquiesce in the assessment proceedings - HC
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• Tax Exemption Reconsideration for Educational Institution's 2012-13 Application u/s 10(23C)(vi.

  Case-Laws - HC : Approval as an educational institution u/s 10(23C) (vi) – The application for exemption for the F.Y. 2012-13 was filed before 30.09.2013 -Technically it should have been filed after 30.04.2013 - revenue directed to reconsider the application - HC
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• Children's Tax Returns Accepted Under Amnesty Scheme; Income Recognized Separately From Parents' Taxable Income.

  Case-Laws - HC : The children filed returns under Amnesty Scheme, which had been accepted by the Assessing Officer, treating their separate income as such this amount was not liable to be added in the income of the assessee (Parent) - HC
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• Court Orders Revenue to Pay Interest u/s 244A on Funds in Commissioner of Income Tax Appeals P.D. Account.

  Case-Laws - HC : Interest on amount in P.D. account – The amount adjusted was lying in P.D. Account of Commissioner of Income Tax (Appeals) - revenue directed to pay the interest on the remaining amount u/s 244A - HC
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• High Court Rules Refund Withdrawal Under Income Tax Act Section 244(1A) Allowed via Rectification u/s 154.

  Case-Laws - HC : Whether Withdrawal of refund u/s 244(1A) can be made by rectification u/s 154 – Held yes - HC
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• Stock Valuation Discrepancy: Income Assessment Requires Corroborating Evidence Beyond Statements Filed with Bank.

  Case-Laws - AT : Valuation of stock – discrepancy between stock statements filed in Bank and stock shown in books of accounts - The assessee's income is to be assessed not on the basis of the statement given to a third party, unless there is material to corroborate - AT
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Customs

• Penalties Reduced for Importing Unshredded Scrap at Non-Designated Port, ICD Garh-Harsaru.

  Case-Laws - AT : Appellant has imported unshredded heavy melting scrap through ICD, Garh-Harsaru, which is not designated port - penalty and redemption fine reduced - AT
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• Customs House Agent Faces Six-Month Suspension Across India, Excluding Karnataka; Suspension Considered Harsh by Authorities.

  Case-Laws - AT : Imposition of punishment of suspension for a period of 6 months from 1st June against the CHA firm from operating in all parts of India except Karnataka is harsh - AT
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• Customs Case: Penalties Reduced for Employee in Misdeclaration of Imported Consumer Goods from UAE.

  Case-Laws - AT : Import of consignment of consumer goods and household items from UAE - Mis declaration of goods - appellant is only an employee of the CHA firm - penalty reduced taking lenient view - AT
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Service Tax

• Service Tax Applicability Questioned on Daily Spa Charges and Entry Fees at Tantra for Members and Visitors.

  Case-Laws - AT : Club or Association Services - Collection of daily charges for spa and entry fees for Tantra - Services provided to annual members as well as daily visitors - prima facie case against the assessee - AT
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• No Evidence of Cab Being Hired Regularly; No Demand or Penalty Imposed in the Case.

  Case-Laws - AT : There is no evidence on record to show that the cab was hired on monthly, weekly or daily basis. - No demand, no penalty - AT
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• Partial Stay Granted Due to Applicant's Lack of ISD Registration, Hindering CENVAT Credit Extension for Branch Invoices.

  Case-Laws - AT : Cenvat Credit - Applicant had not registered themselves as an ‘input service distributor’ (ISD) – Thus, Prima facie, it is difficult to extend the CENVAT Credit of input service invoices in the name of their Branch Office - stay granted partly - AT
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• Penalty Waiver Denied; 50% Penalty Imposed u/s 78 for Late Service Tax Registration in Construction Services.

  Case-Laws - AT : Waiver of penalty u/s 80 - Penalty u/s 78 - Construction of residential complex services - It was only after visit of the departmental officers, appellants got themselves registered - waiver of penalty is not correct - penalty levied equal to 50% - AT
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• Manufacturers can use input credits for central excise duty and service tax, simplifying tax payments under both categories.

  Case-Laws - AT : Cross utilisation of credit on inputs and input services by the same manufacturer for payment of duty of central excise and service tax - utilization allowed - AT
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• Wheat Conversion into Maida and Suji Ruled as Manufacturing Under Business Auxiliary Service, Impacting Service Tax Duties.

  Case-Laws - AT : Business Auxiliary Service - Grinding of wheat into wheat products - conversion of ‘wheat’ into ‘wheat products’ like maida, suji etc., amounts to manufacture - stay granted - AT
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• Exemption from Service Tax on Computer Maintenance Excludes Software; Withdrawal Doesn't Impose Tax on Software.

  Case-Laws - AT : Notification No.20/2003-ST provided exemption for maintenance of computers, computer systems or computer peripherals. Computer software was not exempted by the said notification. - withdrawal of said notification would not result into levy of ST on software - AT
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• Mining Operations Exempt from Site Formation and Excavation Tax Regulations: Overburden Removal and Ore Excavation Clarified.

  Case-Laws - AT : Removal of over burden and excavation of ore is undertaken for mining of ores only and activity does not fall under Site Formation and Excavation and Earth moving and Demolition service - AT
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Central Excise

• Appellant Complies with CCR 2004: No Credit Taken for Input Services on Traded Goods; Rule 6(2) and 6(3) Not Violated.

  Case-Laws - AT : Applicability of Rule 6(2) and 6(3) - appellant has not taken any credit in respect of input services attributable to the traded goods - violating the provisions of Rule 6 of the CCR, 2004 would not arise - AT
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• Rule 21 Duty Remission and Cenvat Credit Reversal: Rule 3 Sub-rule 5(C) Not Retroactive in Central Excise Context.

  Case-Laws - AT : Remission of duty under Rule 21 – Reversal of Cenvat Credit - There is nothing in this sub-rule 5 (C) of Rule 3, from which it can be concluded that it has retrospective effect - AT
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• Family Partnership Using 'AVON' Brand Name Eligible for Small Scale Industry Exemption Benefits Despite No Specific Ownership.

  Case-Laws - AT : Benefit of SSI Exemption – the brand name ‘AVON’ is being used by the partnership concerns of the same family - If a brand name is not owned by any particular person, the use will not deprive a unit of the benefit of the small scale exemption scheme - AT
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• Interest on Differential Duty Not Time-Barred; Show Cause Notices u/s 11A Are Communications for Interest Recovery.

  Case-Laws - AT : Demand of Interest on differential duty - there is no limitation period - The show cause notices issued in these cases, even if invoking Section 11A, have to be treated as mere communication to the assessees for recovery of interest u/s 11 - AT
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• Optical transmission gear for demos and rework is marketable; Rule 8 valuation bypassed for comparable goods value.

  Case-Laws - AT : Marketability of Goods – optical transmission equipment - clearance for Field Replacement/ Advance Field Replacement/ Rework and Demo - Held as marketable - valuation under Rule 8 will not apply and the value of comparable goods is correctly applied - AT
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• Concessional rate eligibility upheld under Notification No.1/2011 despite initial credit, if duty is later debited.

  Case-Laws - AT : Eligibility for concessional rate - If credit has been taken but the duty is debited subsequently, benefit of exemption under Notification No.1/2011 containing condition regarding non-availment of credit cannot be denied - AT
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Case Laws:

• Income Tax

• 2013 (11) TMI 1451
  Validity of assessment u/s 263 – Held that:- The Assessing Officer did not make proper enquiry which was expected from him considering the facts of the case - He has simply examined the cash deposit in the books of account without examining any aspect of manufacturing and trading account - The order of the learned CIT is upheld to the extent that the assessment order passed by AO is erroneous and prejudicial to the interest of the Revenue. Suppression of sales – Held that:- The CIT did not properly consider the assessee's written submission - No defects have been pointed out by the CIT in the regular books of account maintained by the assessee - Unless the defect is pointed out and books of account are rejected, there is no question of estimation of any production and sales – The issue is restored for fresh decision.

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• 2013 (11) TMI 1450
  Interest on enhanced compensation - Held that:- Following CIT v. Ghanshyam HUF [2009 (7) TMI 12 - SUPREME COURT] - Interest u/s 34 is interest and is not part of compensation - Following Rama Bai v. CIT [1989 (11) TMI 2 - SUPREME Court] - The interest accrued to the assessee has to be spread over on an annual basis right from the date of delivery of possession till the date of the order of the Court on time basis - Decided against Revenue.

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• 2013 (11) TMI 1449
  Reopening u/s 147 where assessment subsequent to issuance of intimation u/s 143(1) - Held that:- The AO reopened the cases on the basis of documents attached with the return of income - There was no other material from which the Assessing Officer had arrived at the conclusion that income of the assessee had escaped assessment - Following CIT v. Orient Craft Ltd. [2013 (1) TMI 177 - DELHI HIGH COURT] - Reopening in the cases processed u/s 143(1) is not permissible if there is no tangible material which came to the possession of Assessing Officer subsequent to issue of intimation u/s 143(1) - The Assessing Officer reached the belief that there was escapement of income "on going through the return of income" filed by the assessee after accepting the return under Section 143(1) without scrutiny - This is nothing but a review of the earlier proceedings and an abuse of power by the Assessing Officer - The reopening u/s 147/148 was not justified as Assessing Officer had no other documents/information other than the annexure attached with the return of income and therefore though returns were processed u/s 143(1) the reopening has been done on the change of opinion which is not permitted under the law - The reopening has been held to be not legal and assessment order has been quashed - Decided in favour of assessee.

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• 2013 (11) TMI 1448
  Assessee aggrieved - appeal before tribunal - whether a partner can be aggrieved person for an order against the Partnership Firm - Held that:- The aggrieved assessee is one who is liable to pay tax in terms of the order against which the appeal is preferred - The CIT (A) has held that the UK firm – PONP is taxable in India and the share of profits of the appellant is exempt from income under Section 10(2A) - Once the partnership firm is taxable in India then the appellant's would become liable to pay tax under Section 188A - When an assessment order is passed in respect of the partnership firm, partners would be liable to pay tax not paid by the partnership firm by virtue of the order of CIT(A) - Decided in favour of assessee.

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• 2013 (11) TMI 1447
  Re-assessment u/s 147 - Held that:- The reasons to believe recorded refer to the information which was provided and made available to the assessing officer - If the assessee wanted to challenge and question that the information received from the Directorate of Income Tax vide letter dated 2.3.2006 as not specific or vague, such plea or contention should have been raised before the Tribunal. The nature and character, what was contained and formed part of the information is primarily factual - The assessee has not raised this aspect before Tribunal - The AO had received specific information from the specialized wing of the Department, DIT(Inv) - The nature of information was specific - Decided against assessee.

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• 2013 (11) TMI 1446
  Validity of assessment order - the assessee has passed away - legal representatives - Held that:- The presence of son of assessee in assessment proceedings cannot raise an inference that he represented the entire estate with consent of other legal representatives, as to acquiesce in the assessment proceedings - The estate of the assessee was represented by fore legal heirs - Decided against Revenue.

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• 2013 (11) TMI 1444
  Revision u/s 263 on the ground that Proper enquiry not conducted by the AO - Held that:- The order of the AO shows that he has verified various details and documents produced before him and have also verified books of account - The Assessing Officer has not only taken into account all the details, but also granted disallowance and addition wherever he found that the same are required to be given - The Tribunal have recorded this fact in his order - Following Rajesh Goel and Sons v. C.I.T. [2008 (12) TMI 430 - ITAT AGRA] - Decided against Revenue.

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• 2013 (11) TMI 1443
  Depreciation - Held that:- Following assessee's own case - Depreciation is allowed on all the trucks as the trucks were given to hirers on the same date when they were purchased and taken delivery - Decided against Revenue. Hiring receipts - Held that:- The assessee is liable to tax only in respect of the income part. The assessee has rightly shown 50% of the amount received as assessee has received 50% towards purchase price and 50% towards lease income - Decided against Revenue. Unexplained cash credit - Held that:- The assessee has not taken any deposits from the said 5 parties but has made repayment of deposits taking in the earlier years - The repayment was made by cheques - The repayment cannot be said to be unaccounted payment on the part of the firm - In the absence of any contrary material brought on record by the revenue against the aforesaid finding of the learned CIT(A) - Decided against Revenue.

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• 2013 (11) TMI 1442
  Income of minor - additions u/s 69 - Held that:- The children filed returns under Amnesty Scheme, which had been accepted by the Assessing Officer, treating their separate income as such this amount was not liable to be added in the income of the assessee - Decided against Revenue. Cash found during search - Held that:- The statement of independemt witnesses were taken on record - They had sold their agricultural land and received sale consideration which was lying with them in their house - They advanced money to the assessee as they wanted to purchase the land of the assessee - The sale deeds executed by the witnesses were also brought on record - It was proved that money was received by them - These witnesses were cross examined by the Revenue - Decided against Revenue.

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• 2013 (11) TMI 1441
  Interest on amount in P.D. account – Held that:- The amount adjusted was lying in P.D. Account of Commissioner of Income Tax (Appeals), Jaipur - There is statutory provisions that interest shall be payable on such amount then that cannot be ignored on the ground that it will cast an extra burden of the Government - There is nothing on record to suggest that the petitioner was responsible for unreasonable delay. On the other hand seizure of the money of the petitioner was held as illegal as such he was illegally harassed and his money was blocked for his no fault as such statutory liability for payment of interest of the Revenue cannot be absolved on the so called extra burden - The respondents are directed to pay the interest on the remaining amount u/s 244A of the Income Tax Act, 1961 to the petitioner – Decided in favour of petitioner.

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• 2013 (11) TMI 1440
  Sale of shares – Capital gain or business income – Held that:- Following Commissioner of Income Tax, Kanpur vs. Shri Atul Kanodia [2010 (10) TMI 109 - ALLAHABAD HIGH COURT] - CIT(A) directed the AO to treat the profit on sale of shares as capital gain instead of income from business as assessed by the Assessing Officer - No dispute that shares had been held by the assessee for long time and were shown in the balance sheet separately as investments - Income is capital gains – Decided against Revenue.

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• 2013 (11) TMI 1439
  Condonation of delay – Held that:- The Tribunal in the case of another group company, namely, M/s Kamakhya Fresh Foods Ltd., Ghazipur had condoned the delay on the ground of illness of very same Director Sri S.K.Rai - It was not proper for the Tribunal to decline condonation of delay in the similar facts and circumstances of the present case – Following Bharat Auto Center, Lanka,Ghazipur Versus Commissioner of Income Tax, Varanasi and another [2005 (7) TMI 46 - ALLAHABAD High Court] - The delay in filing the appeal was condoned considering the same to be sufficient – Decided in favour of assessee.

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• 2013 (11) TMI 1438
  Relief u/s 80G – donation made to Sherwani Charitable Trust - notional trustee's remuneration from M/s Shervani Charitable Trust - Held that:- The trust deed was amended by rectification of original trust deed and suit was brought in the year 1980 in which declaration was obtained, the matter travelled upto the Supreme Court - The Apex Court held that a fraud was played by the rectification of the Trust-deed by altering the very object of the trust and directed that the Trust-deed must be read as it originally stood and that is the manner in which the appellant trust should be assessed except in the case - In the present case all the income tax appeals, which are in continuation of the proceedings of the assessment were pending - Thus the assessment proceedings had not become final – The issue was restored for fresh decision. - Decided in favor of revenue.

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• 2013 (11) TMI 1437
  Whether Withdrawal of refund u/s 244(1A) can be made by rectification u/s 154 – Held that:- The excess amount of tax paid under sub-section (1A) of Section 244 must be calculated by treating the amount of tax deducted at source and the amount of advance tax which were adjusted against the assessee's liability to pay tax as well as the amount of tax paid directly upon the assessment under Chapter XVII of the Income Tax Act – Following Leader Engineering Works [1989 (2) TMI 92 - PUNJAB AND HARYANA High Court] - The amount which was retained by the Income Tax Officer and adjusted against the tax demand must be treated as payment of tax pursuant to the assessment order by the assessee - On the day the advance tax amount is paid there is no assessment and, hence, it cannot be said to have been paid "in pursuance of any order of assessment". The provisions in the Income Tax Act allowing interest on refund have to be strictly construed - The AO did not commit any error of law in issuing notice under Section 154 and making an order by which the interest on refund was not clearly allowable – Decided in favour of Revenue.

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• 2013 (11) TMI 1436
  Nirgam Mulya – Consideration for grant of exclusive privilege for selling country liquor - Held that:- Following The Commissioner of Income-tax, Lucknow vs. M/s. Ram Sanehighat, Barabanki [2005 (4) TMI 545 - ALLAHABAD HIGH COURT] - Nirgam Mulya was not form part of the purchase price of country liquor but it is consideration paid by the State Government for party privilege – Decided against Revenue.

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• 2013 (11) TMI 1435
  Tax Effect - A notice of demand under section 158BD was issued for total undisclosed income of Rs. 1,86,035 - Held that:- The circular dated 27th March, 2000 issued by the Central Board of the Direct Taxes was binding upon the Department and, therefore, the appeal preferred by it against the order of the Commissioner of Income Tax (Appeals) dated 7.2.2003 wherein tax effect was less than rupees two lac ought not to have been filed - Decided against Revenue.

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• 2013 (11) TMI 1434
  Tax Effect - Held that:- Under section 268A of the Act which has been inserted with retrospective effect from 1.4.1999 the Board has power to issue circular regarding fixing monetary limit and no appeal can be filed by the Revenue - The circular dated 27th March, 2000 issued by the Board has thus been issued in exercise of powers conferred under section 268A of the Act and has binding effect on all the authorities. As the tax in dispute is less than rupees two lakh the Revenue was not entitled to file appeal before the Tribunal. The appeal neither involves any question which had a far reaching effect nor was of recurring in nature - The circular dated 27th March, 2000 issued by the Central Board of the Direct Taxes was binding upon the Department and, therefore, the appeal preferred by it against the order of the Commissioner of Income Tax (Appeals) dated 4th November, 2008 wherein tax effect was less than rupees two lac ought not to have been filed

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• 2013 (11) TMI 1433
  Condonation of delay - Held that:- The appellant should not suffer on account of the negligence of the Advocate, and has relied upon few cases decided by the Court, where the Advocate's negligence was treated to be sufficient to condone the delay - It is not only a case of negligence by the Advocate, who has admittedly committed professional misconduct, it also includes the negligence of the appellant, who did not enquire about the filing of the appeal for more than 2 and 1/2 years, and decided to file the appeal, when he received notice of appeal filed by the department - The delay in filing the appeal has not been sufficiently explained - Decided against assessee.

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• 2013 (11) TMI 1432
  Valuation of stock – discrepancy between stock statements filed in Bank and stock shown in books of accounts - Held that:- The practice of declaring higher stock to the bank to get higher loan facility, is a fact of life – Following CIT vs. Shree Padmavathy Cotton Mills [1997 (3) TMI 26 - MADRAS High Court] - The books of account had not been rejected by the department as not representing the correct stock position; and that the assessee had declared a higher quantity of closing stock to the bank for the purpose of securing a loan - The Tribunal arrived at the conclusion that the closing stock declared in the return filed by the assessee was based on the books of account and it should be accepted rather than the closing stock as declared to the bank - The inspection by the bank officials was only indirect evidence and the same should not be relied upon – Following Parimisetti Seetharamamma vs. CIT [1965 (4) TMI 21 - SUPREME Court] - The assessee's income is to be assessed by the ITO on the basis of material which is required to be considered for the purpose of assessment and ordinarily not on the basis of the statement which the assessee may have given to a third party, unless there is material to corroborate that statement of the assessee given to a third party - Decided against Revenue.

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• Customs

• 2013 (11) TMI 1431
  Confiscation of goods - Imposition of redemption fine - Import through designated ports - Customs Circular No.56/2004 dated 18.10.2004 - Held that:- import and clearance of metal scrap in unshredded compressed and loose form would be permitted through designated ports only - ICD, Garhi-Harsaru is not one of the designated ports through which such scrap can be imported. CBEC vide Circular No.56/2004/-Cus dt.18.10.2004 clarified the import and clearances of metal scrap in unshredded form would be permitted only at the designated ports. Circular was issued in view of threat of national security and there is possibility of import of arms, ammunition, bombs/explosives in the consignment of unshredded scrap. Since on examination, it is found that the appellant has imported unshredded heavy melting scrap through ICD, Garh-Harsaru, which is not designated port, it clearly comes out that there is violation of provision of foreign trade policy read with section 11 of the Customs Act, 1962 making the goods liable to confiscation under section 111(d) - Penalty reduced - Decided partly in favour of assessee.

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• 2013 (11) TMI 1430
  Confiscation of goods - Imposition of redemption fine - Import through designated ports - Customs Circular No.56/2004 dated 18.10.2004 - Held that:- import and clearance of metal scrap in unshredded compressed and loose form would be permitted through designated ports only - ICD, Garhi-Harsaru is not one of the designated ports through which such scrap can be imported. CBEC vide Circular No.56/2004/-Cus dt.18.10.2004 clarified the import and clearances of metal scrap in unshredded form would be permitted only at the designated ports. Circular was issued in view of threat of national security and there is possibility of import of arms, ammunition, bombs/explosives in the consignment of unshredded scrap. Since on examination, it is found that the appellant has imported unshredded heavy melting scrap through ICD, Garh-Harsaru, which is not designated port, it clearly comes out that there is violation of provision of foreign trade policy read with section 11 of the Customs Act, 1962 making the goods liable to confiscation under section 111(d) - Penalty reduced - Decided partly in favour of assessee.

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• 2013 (11) TMI 1429
  Suspension of CHA License - Misutilization of license - Held that:- Commissioner himself accepts that there is no evidence to show the involvement of the management of CHA firm and there are also no evidences for the CHA to benefit in any manner. We are unable to agree that the punishment has been given to CHA firm and therefore if the management was involved or not need not be considered. Further we also note that in para 28, the Commissioner himself observed that there are several mitigating facts and circumstances which should be taken note of, namely the suspension of CHA licence of Coimbatore jurisdiction for 6 months in 2005; suspension of CHA licence in Tuticorin jurisdiction for about 2 months; not allowing the CHA firm to operate in Pune from 16.06.2010 onwards in view of the current pending proceedings and the cooperation extended by the appellant in producing copies of fake BRCs of 4 exporters. We find that these observations are correct and we find that handed over copies of fake BRCs of 4 exporters which are necessary for the Revenue and there is no indication that these 4 fake BRCs were recovered in search operation. In such circumstance this shows good intension of the management. Imposition of punishment of suspension for a period of 6 months from 1st June against the CHA firm from operating in all parts of India except Karnataka is harsh. Moreover there was suspension of operation for varying periods outside Karnataka and there is evidence to show that events in Coimbatore were not because of the Branch Manager alone. Further management took action against the Branch Manager and co-operated with investigation by Revenue - punishment of one month suspension from operating the licence in other parts of Karnataka would meet the ends of justice. Accordingly we modify the order of the Commissioner (Appeals) and direct that suspension will run from 1st June to 30th June 2013 - Decided partly in favour of assessee.

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• 2013 (11) TMI 1428
  Import of consignment of consumer goods and household items from UAE - Mis declaration of goods - Held that:- the appellant is only an employee of the CHA firm and admittedly, it has not been controverted that he had assisted the importer for a consideration of Rs. 10,000/-. Further, the appellant also stated during the hearing that at present, he is working in a DTP company as an employee for a salary of Rs. 8,000/- per month. Having regard to all these circumstances, a lenient treatment as regards penalty is warranted - Penalty reduced - Decided partly in favour of assessee.

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• 2013 (11) TMI 1427
  Import of 2003 Model Volkswagan Beetle Cabriolet Car - Valuation of goods - Held that:- importer/their representative were unable to provide the amount of VAT paid in this case nor any evidence for the same could be produced. Further, the valuation of the goods as shown in the Kelley Blue Book held as basis for valuation by the Commissioner (Appeals), happens to reflect the Base Price (Factory Price) only. In these circumstances, we feel that to arrive on value of the impugned car, the case should be remitted to the Commissioner (Appeals) at this stage itself for deciding the case afresh after verifying of the said facts. We, therefore, set aside the order of the Commissioner (Appeals) and direct him to decide the case afresh after considering the evidences produced by the Revenue. Before deciding the case, the Commissioner (Appeals) shall also make available to the Respondent s copy of the references made to the Mumbai Customs and the reply received from them. It is needless to mention that adequate opportunity of hearing should be given to the Respondent, before passing the order - Decided in favour of Revenue.

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• 2013 (11) TMI 1426
  Penalty u/s 112 - Import of goods using advance licenses without payment of customs duty undertaking to discharge export obligations specified in each such advance license. Due to certain reasons, the appellants did not meet the export obligations accepted by them while importing the goods free of customs duty, within the time frame specified in the Exim Policy and the corresponding Notification No.43/2002-Cus., dated 19.04.2002 - Held that:- It proper to remand the matter to the adjudicating authority because the latest factual position relating to export obligation in respect of goods imported without payment of customs duty under each advance license and the relaxations granted by DGFT subsequent to the impugned order have to be re-examined for confirming duty demands and deciding on penalty if any to be imposed. So we set aside the impugned order and remand the matter to the adjudicating authority to examine all the contentions including facts that are now being presented as also the legal contentions raised - Decided in favour of assessee for statistical purposes.

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• Corporate Laws

• 2013 (11) TMI 1425
  Penalty imposed for offence u/s 15HA - Investigation report not submitted to appellants - whether, it was mandatory for the respondent to furnish entire copy of the investigation report to the appellants - whether failure to furnish entire copy of the investigation report constitutes violation of principles of natural justice - Held that:- It is equally well established that non supply of copy of documents having no bearing on charges framed in the show cause notice or non supply of documents tendered during inquiry but not relied upon by Inquiry Officer in support of charges, does not amount to violation of principles of natural justice - although appellants have repeatedly demanded complete copy of the investigation report, they have not demonstrated as to how failure to furnish complete copy of the investigation report has caused prejudice to them. unless there are compelling reasons, it would be just and proper that in every case the respondent furnishes entire copy of the investigation report to the charged person. In the present case, instead of furnishing entire copy of the investigation report, documents relied upon in the show cause notices have been furnished to the appellants. It is not the case of appellants that selective findings recorded in the investigation report are only furnished and findings which are in favour of the appellants have not been furnished and thereby prejudice is caused to the appellants. Similarly, contention that incomplete trade/order logs have been furnished to the appellants after granting personal hearing does not enhance the case of the appellants, because admittedly, appellants were called upon to furnish comments in respect thereof and appellants while offering their comments have neither demanded entire copy of the trade/order logs nor sought personal hearing in respect thereof - in the absence of any prejudice caused to the appellants by non supply of full investigation report or trade/order logs, it cannot be said principles of natural justice have been violated. Appellants are neither disputing the relationship between the parties set out in the impugned order, nor they are disputing the contents of the KYC documents. Their only grievance is KYC documents have not been furnished to them. It is relevant to note that no such request for furnishing copies of the KYC documents were made by appellants in their affidavit-in-reply to the show cause notices. No such request was made even during personal hearing. Therefore, in the absence of denial, findings regarding relationship of appellants with RCFL recorded in the impugned orders cannot be faulted - facts revealed during the course of investigation clearly show that appellants as a group have contributed to a new price high/LTP variation and hence action taken against appellants in the impugned order cannot be faulted - in all the transactions there was a time difference of few seconds and the price at which the buy orders and sell orders were placed, were matching in almost all cases with same counterparties. In these circumstances conclusion regarding circular/reversal trades carried out by appellants cannot be faulted - Decided against appellants.

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• Service Tax

• 2013 (11) TMI 1462
  Maintenance of software - Held that:- explanation appearing under the meaning of the term management, maintenance or repair defined by Section 65(105)(zzg) of Finance Act, 1994 specifies that goods includes computer software. The explanation operates like a charging provision from 1-6-2007 incorporated into law by Finance Act, 2007. This explanation cannot be read as retrospective in nature following the ratio laid down in Martin Lottery case [2009 (5) TMI 1 - SUPREME COURT OF INDIA] and the appellants shall not be brought to the ambit of tax for the period 9-7-2004 to 30-9-2005 when the explanation was inserted to the above section w.e.f. 1-6-2008 by Finance Act of 2007 - Decided in favor of assessee.

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• 2013 (11) TMI 1461
  Waiver of pre-deposit of Service Tax - Imposition of equal amount of penalty - Club or Association Services - Collection of service charge - Collection of daily charges for spa and entry fees for Tantra - Held that:- major portion of the demand relates to Service Tax on the value of services collected on daily basis claimed to be entry fees for entry as well as enjoying all the facilities provided by the Applicant at Tantra - Prima facie, facilities extended to the annual members, who pays the fees on lump sum basis annually enjoy the same facilities as are allowed on daily basis to other persons by collecting the fees on daily basis. At this stage, prima facie, it would be difficult to ascertain whether the persons who enter the said Tantra on daily basis do not enjoy the same status as that of members in absence of cogent evidences adduced by the Applicant - Applicant could not able to make out a prima facie case for total waiver of pre-deposit of dues - Aseessee directed to make pre deposit - Partial stay granted.

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• 2013 (11) TMI 1460
  Penalty u/s 77 and 78 - Enhancement of penalty - Held that:- Appellant was engaged in the activity of transportation of written answer sheets collected from various District Collection centres and deliver the same to the Nagpur University and the payment is on the Kilometre basis as per the work order. There is no evidence on record to show that the cab was hired on monthly, weekly or daily basis. In view of the terms and conditions of the work order, we find merit in the contention of the appellant, that the appellant has not provided taxable service of “Rent-a-Cab Operator" services. In view of this, the demand and consequential penalty is set aside. As the demand is set aside, therefore, there is no question of imposition of any penalty - Decided against Revenue.

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• 2013 (11) TMI 1459
  Utilization of Services – Waiver of Pre-deposit - Whether the services have been used in or in relation to the manufacture of their finished goods at their factory or otherwise – Held that:- The burden lies on the Assessee to maintain proper records - Prima facie, the Applicant have failed to discharge the burden - the Applicant had not registered themselves as an ‘input service distributor’ – Thus, Prima facie, it is difficult to extend the CENVAT Credit of input service invoices in the name of their Branch Office – Relying upon B.S.N.L. vs. CCE, Jamshedpur [2013 (11) TMI 1261 - CESTAT KOLKATA] - the Applicant have failed to make out a prima facie case in their favour for total waiver of dues – Applicant directed to deposit 10% of the CENVAT Credit as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.

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• 2013 (11) TMI 1458
  Demand of service tax - Business Auxilliary service - Manpower Recruitment or Supply Agency - Intellectual Property- Held that:- petitioner received royalty from the newspaper - Business Standard for publishing the petitioner’s journal ‘Indian Management’. The petitioner had already remitted 10% of the value received under this head towards service tax, under the category ‘intellectual property service’- Prima facie that the conclusion as to the petitioner having provided Business Auxiliary Service is both erroneous and inadequately reasoned in the adjudication order; substantial amount of service tax has been paid in so far as intellectual property service is concerned; and in respect of Manpower Recruitment or Agency Service, service tax was remitted by the petitioner under a different category, of Management and Consultancy service. We do not find a strong prima facie case in so far as intellectual property service is concerned - Assessee directed to make a pre deposit - Partial stay granted.

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• 2013 (11) TMI 1457
  Waiver of penalty u/s 80 - Penalty under section 76 & 78 - Construction of residential complex services - Assessee neither got registered with the department under the Service Tax Act nor filed any returns to the department - Commissioner (Appeals) after invoking section 80 dropped the penalty as the appellant had contended the existence of bonafide belief that service tax would be applicable only when actual sale was effected - Held that:- amendment was effective from 1.7.2010. Visit to the factory by the officers was on 16.8.2011. It was found that the Respondent had already started booking of flats w.e.f.August, 2010. Law was already on the statute book. Therefore everyone was expected to know the law. Question of existence of bonafide belief as provided under section 80 of the Finance Act, 1994 does not come to their rescue. If registration was taken on their own and service tax would have been deposited thereon even at the time of booking of flats, question of bonafide belief would have come into play. There is nothing on record to show that they have made any effort to know about liability of service tax or approached department for any clarification. It was only after visit of the departmental officers, appellants got themselves registered - penalty reduced to equal to fifty percent of service tax due as provided under the first proviso to section 78 - Decided partly in favour of Revenue.

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• 2013 (11) TMI 1456
  Demand of service tax - Availment of CENVAT Credit - Beneft of Notification No. 30/2004-CE & 29/2004-CE both dt. 09/07/2004 - Business auxiliary services - Cross utilisation of credit on inputs and input services by the same manufacturer - Whether the appellant is doing both the activities of manufacturing dutiable goods and providing dutiable services - Held that:- after reversal of credit of inputs lying in the appellants factory premises on 01.07.2007 there was still unutilised credit in appellant’s cenvat credit account. Which can be on account of cenvat credit accumulated and lying with the appellant with respect to capital goods received by the appellant Once appellant is undertaking the activity of manufacturing of excisable goods and clearing a part of it on payment of duty and also paying service tax on the service rendered by the appellant the cenvat credit lying in the cenvat credit account can be utilised for payment of both the Central Excise duty and the service tax liability as Rule 3(1) & 4 of the Cenvat Credit Rules clearly prescribes that cenvat credit taken by the appellant can be used for payment of tax for any service - Decided in favour of assessee.

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• 2013 (11) TMI 1455
  Demand of service tax - Goods Transport Agency (GTA) service - Denail of abatement under Notification No. 32/2004-ST dated 3.12.2004 and No.1/2006-ST dated 1.3.2006 - Held that:- CBEC vide Circular dated 27.7.2005 clarified that a declaration by the GTA in the consignment note issued, may suffice for the purpose of availment of abatement by the person liable to pay service tax - declaration by the G.T.A. on the consignment note is not in mandatory terms, and is to the effect that such declaration by the G.T.A. on the consignment note may suffice. In other words, it is open to the discretion of the learned authorities under the Act to consider other mode and manner of evidence to consider the claims of the benefit of abatement. Sample copies of the certificates issued by the G.T.A., which were furnished before the learned Adjudicating Officer while claiming refund, are on record, and appears to the effect that such abatement had not been claimed by G.T.A. We are of the view that the same had adequate evidentiary value in a situation of confusion created by the authorities by issuance of the redundant circular dated 30-3-2005 - Following decision of CCE, Patna Vs. H.T. Media [2011 (4) TMI 172 - Patna High Court] - It is appropriate that the matter should be remanded to the Commissioner (Appeals) to decide the appeal on merit - Decided in favour of assessee.

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• 2013 (11) TMI 1454
  Demand of service tax - Business Auxiliary Service - Grinding of wheat into wheat products - Manufacture under Section 2(f) - Held that:- Commissioner of Customs & Central Excise Coimbatore Zone as well as Director (CX.1), of Ministry of Finance, Department of Revenue had a view that conversion of ‘wheat’ into ‘wheat products’ like maida, suji etc., amounts to manufacture. It is noticed that the demand of service for the subsequent period was set aside by the Commissioner (Appeals), Madurai. Hence, the demand of tax under the service tax, prima facie, is not sustainable. Accordingly, the pre-deposit of tax along with interest and penalty is waived till the disposal of the appeal - Stay granted.

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• 2013 (11) TMI 1453
  Service tax on computer software - Notification No.20/2003-ST - Maintenance of computers, computer systems or computer peripherals - Held that:- Notification No.20/2003-ST provided exemption for maintenance of computers, computer systems or computer peripherals. Computer software was not exempted by the said notification. So its withdrawal cannot result in levy of service tax on computer software as argued by Revenue - explanation appearing under the meaning of the term management, maintenance or repair defined by Section 65(105) (zzg) of Finance Act, 1994 specifies that goods includes computer software. The explanation operates like a charging provision from 1-6-2007 incorporated into law by Finance Act, 2007 - appellants shall not be brought to the ambit of tax for the period 9-7-2004 to 30-9-2005 when the explanation was inserted to the above section w.e.f. 1-6-2007 by Finance Act of 2007 - Following decision of VGL Softtech Ltd. Vs Commissioner of Central Excise, Jaipur [2013 (11) TMI 1462 - CESTAT NEW DELHI] - Decided in favor of assessee.

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• 2013 (11) TMI 1452
  Demand of service tax - Classification of service - Service tax not paid in respect of contract dated 21.12.2003 under Site Formation, Clearance, Excavation, Earthmoving and Demolition services under Section 65(97a) - Excavation, Earthmoving and Demolition services - Held that:- activity undertaken by the appellants is excavation and removal of O/B waste and mining of ore. We also note that there is only one contract with the appellants showing the scope of work as excavation and removal of O/B waste and mining of ore. This activity starts from excavation and ends at mining of ore. We find that this is a composite activity and cannot be split into two separate parts for levy of service tax - removal of over burden and excavation of ore is undertaken for mining of ores only and activity does not fall under Site Formation and Excavation and Earth moving and Demolition service - Decided in favour of assessee.

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• Central Excise

• 2013 (11) TMI 1424
  Clandestine manufacture and removal of goods - Waiver of Pre-deposit of duty – Penalty u/s 11AC of the Central Excise Act, 1944 – Personal penalty under Rule 26 of the Central Excise Rules, 2002 – Held that:- There are enough substance in the allegation of the Department that the goods were manufactured and cleared clandestinely without payment of duty - The Department has adduced credible evidences in the form of parallel invoices, a fact admitted by one of the Directors that the goods mentioned in these invoices were cleared clandestinely without payment of duty - the exact quantity of goods, could be ascertained at the time of disposal of the Appeals, after considering the evidence on record - Prima facie the Applicants could not able to show that it is a case of no evidence - the claims and counter claims rest on the evidences adduced by both sides, which require detail analysis and could be possible at the time of the disposal of the Appeal - applicant directed to deposit 25% of the duty as pre-deposit – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.

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• 2013 (11) TMI 1423
  Loose documents and registers maintained - Waiver of Pre-deposit of duty – Penalty under rule 25 of Central Excise Rules, 2002 r.w. Section 11AC of the Central Excise Act, 1944 - Private Penalty under Rule 26 of Central Excise Rules,2002 – Held that:- These statements clearly indicate that the documents recovered from the premises of Shri Sureka were geneuine and reflect the true entries of receipt of raw materials and dispatches of finished goods by the Applicants – payment made towards receipt of un-accounted raw materials and the accounted receipts as well - Prima-facie, the applicants could not able to make out a case for full waiver of pre-deposit - the issue involved relates to appreciation of evidences produced by both sides, which can be taken up at the time of final disposal of Appeals - assessee directed to deposit 25% of the duty as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.

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• 2013 (11) TMI 1422
  Applicability of Rule 6(2) and 6(3) - Separate accounts not maintained – Services used for services used in manufacturing and trading activity – Held that:- The goods which the appellant had traded are imported goods - As per the definition of exempted goods which are exempt from the whole of the duty of excise leviable, and includes goods which are chargeable to ‘Nil' rate of duty and goods in respect of which the benefit of an exemption under Notification No. 1/2011-CE dated 01/03/2011 is availed - exempted goods have to be excisable goods - By no stretch of imagination imported goods which are traded can be considered as exempted goods - the question of invoking the provisions of Rule 6(2) and 6(3) for payment of a sum @10%/5% on the value of the exempted goods would not arise at all. The appellant has not availed any CENVAT credit at all in respect of input service relating to the traded goods - question of maintenance of separate accounts does not arise at all - Consequently provision of sub-rule (3) of the said Rule 6 mandating payment of an amount equal to 10%/5% of the value of the exempted goods and exempted service would also not apply - the appellant has availed input service credit on both dutiable/exempted goods and taxable/exempted service, Rule 3A which came into force w.e.f. 01/04/2008 provides for reversal of credit on the input service attributable to exempted goods/services on a proportionate basis based on the turn over. The appellant has precisely done that ab initio and has not taken any credit in respect of input services attributable to the traded goods - in the absence of any evidence led by Revenue proving that the appellant has taken ineligible credit, the question of appellant violating the provisions of Rule 6 of the CCR, 2004 would not arise – Following M/s. Orion Appliances Ltd. Versus CST Ahmedabad [2010 (5) TMI 85 - CESTAT, AHMEDABAD] - if the assessee reversed input service tax credit attributable to trading activities according to standard accounting principles – Decided in favour of Assessee.

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• 2013 (11) TMI 1421
  Sealent tape exported without payment of duty under bond – Clearances were made to SEZ developers - Held that:- Following Videocon International Ltd. Vs. CCE, Vadodara-II [2008 (7) TMI 275 - CESTAT, AHMEDABAD ] - assessee is free to remove inputs or capital goods as such without payment of duty for export under bond – Decided in favour of Assessee.

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• 2013 (11) TMI 1420
  Remission of duty under Rule 21 of the Central Excise Rules – Reversal of Cenvat Credit - Held that:- Relying upon GRASIM INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, INDORE [2006 (8) TMI 69 - CESTAT,NEW DELHI] - Remission of duty under Rule 21 of the Central Excise Rules, in respect of the finished goods destroyed in any accident, reversal of input duty credit is not required, as the finished goods in respect of which remission of duty has been allowed are not exempted goods. Reversal of cenvat credit – Goods destroyed by flood – Held that:- KHURANA WOOLEN MILLS (P) LTD. Versus COMMISSIONER OF C. EX., LUDHIANA [2010 (5) TMI 700 - PUNJAB & HARYANA HIGH COURT] - specific provision providing for reversal of cenvat credit in such a situation was made only by inserting sub-rule 5 (C ) of Rule 3 of the Cenvat Credit Rules w.e.f. 7.9.2007 - There is nothing in this sub-rule 5 (C) of Rule 3, from which it can be concluded that it has retrospective effect - the order in so far as it imposes the condition of reversal of input duty credit is not sustainable and set aside – Decided in favour of Assessee.

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• 2013 (11) TMI 1419
  Benefit of Small Scale Exemption in terms of Notification No.8/01 - Using of brand name of another person – Held that:- The appellants were also manufacturing the identical goods i.e. centrifugal pumps, which was being manufactured by M/s. Kalsi Engineeers in the brand name of ‘Prince’ cannot be held to be a reflecting upon their bonafide intention – Assessee being in the same business is expected to know about the ownership of the brand name, which they are putting on the goods manufactured by them - there is intention on the part of the appellants to use the brand name ‘Prince’ which belonged to M/s. Kalsi Engineeers – Decided against Assessee

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• 2013 (11) TMI 1418
  Benefit of SSI Exemption under Notification No.1/93 – Brand name not own by the person using it – Held that:- If a brand name is not owned by any particular person, the use will not deprive a unit of the benefit of the small scale exemption scheme - This applies not only to locks but to all other goods specified in Notification No. 1/93 - the brand name ‘AVON’ is being used by the partnership concerns of the same family - It has not been established by the investigation that the brand name ‘AVON’ belongs to any other person – Relying upon CCE Vs Minimax Industries [2011 (1) TMI 782 - DELHI HIGH COURT] and on CBEC Circular No. 52/52/94-CX, dt.01.09.1994 - when the brand name does not belong to any person, then the manufacturers using such brand name are eligible for exemption under Notification No.1/93. Time barred demand – Held that:- The appellants filed suitable declarations under Rule 174 of the Central Excise Rules and Notification No.1/93-CE, dt.28.02.1993 - It cannot be held that there was any suppression on the part of the appellants with intention to evade duty - The reason given by the first appellate authority that appellants did not declare the use of brand name ‘AVON’ in the declaration filed with the Department amounts to suppression with intention to evade duty, is not correct because the appellants can be under bonafide belief that the brand name ‘AVON’ did not belong to any other person and that they were eligible to small scale exemption – thus, it cannot be considered that the appellants suppressed any information with intention to evade Central Excise duty – Decided in favour of Assessee.

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• 2013 (11) TMI 1417
  Invocation of Rule 6(3) of Cenvat credit rules - Separate account and inventory not maintained for dutiable as well as exempted goods – Held that:- Nowhere in the show cause notices, it is mentioned as to which are the common input or input services in respect of which cenvat credit has been availed and which had been used in or in relation to the manufacture of dutiable and exempted final products - Unless the common inputs and or input services, in respect of which cenvat credit had been availed and which had been used in the manufacture of dutiable and exempted final products are clearly mentioned in the show cause notice, the show cause notice cannot invoke Rule 6(3) of Cenvat Credit Rules and demand an amount to 10% equal to the sale value of the exempted final products. The Rules 6(2) & 6(3) would not apply when some exempted final products emerge as inevitable and unavoidable waste or by-product, as in such a situation, even if the manufacturer wants, he cannot maintain separate account and inventory - Rule 6(2) and 6(3) cannot be construed to impose an obligation on a manufacturer which is imposable to observe and then go on penalise him, by the demands under Rule 6(3) and imposition of penalty – Relying upon RALLIS INDIA LTD. Versus UNION OF INDIA [2008 (12) TMI 46 - HIGH COURT BOMBAY] - Rule 57 CC of Central Excise Rules, 1944 (which is pari materia with Rule 6(3) of Cenvat Credit Rules, 2004) is not applicable in respect of by-products – Decided against revenue.

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• 2013 (11) TMI 1416
  Demand of Interest on differential duty - Non observance to the provisions of Rule of central excise rules – Held that:- Following Hindustan Insecticides Ltd. Vs. CCE&ST(LTU) [2013 (3) TMI 456 - CESTAT NEW DELHI ] - The interest under Section 11AB on a duty demand confirmed under Section 11A(2) or self-admitted/self-ascertained duty liability under Section 11A(2B) or for delay in payment of duty self-assessed under Rule 6 of Central Excise Rules, 2002 by the due date prescribed under Rule 8 ibid is sum due to the Government, which is recoverable under Section 11 of the Central Excise Act, 1944 and for which there is no limitation period. The show cause notices issued in these cases, even if invoking Section 11A, have to be treated as mere communication to the assessees for recovery of interest under Section 11 - the appellant has not been able to make out a case in favour of the them – Decided against Assessee.

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• 2013 (11) TMI 1415
  Marketability of Goods – optical transmission equipment - clearance for Field Replacement/ Advance Field Replacement/ Rework and Demo - Held that:- Relying upon A.P. State Electricity Board Vs. CCE [1994 (2) TMI 56 - SUPREME COURT OF INDIA] - For goods to be marketable it is not necessary that goods in question should be generally available in the market - Marketability does not depend upon the number of purchasers - Huge machineries as also small parts of one machinery may be designed to the order of one customer and such item may not be useful to others - Still such goods will be considered as marketable. Valuation of goods – Cost construction method OR value of comparable goods – Held that:- The goods cleared without payment of duty for which duty is now demanded cannot be considered as goods cleared to other units of the appellant for further manufacture of other excisable goods - These are cases of clearances for evasion of duty - thus valuation under Rule 8 will not apply and the value of comparable goods is correctly applied. Demand of duty on removals for replenishments of short-shipments - clandestine Removal - Held that:- The question whether short shipments and subsequent replacement to make good the short shipment was genuine or not is a question of fact rather than law -The second consignments sent on the pretext of goods short shipped were clandestinely removed - Excise liability does not depend on realisation of money but on manufacture and removal - the appellant has been freely removing goods under the pretext of testing to be done, replacement of defective pieces etc. without payment of duty and proper accounting of the goods after testing etc. – thus in the case of short shipment also this is only a method adopted for clandestine removal and not cases of genuine supplies to make good short shipments. Extended period of limitation – Held that:- Following Commissioner of Central Excise, Mumbai Versus M/s. Kalvert Foods India Pvt. Ltd. & Ors. [2011 (8) TMI 24 - SUPREME COURT OF INDIA] - The argument of the first appellant that SCN was issued after one year from the date of knowledge and hence time barred is not a legally correct argument - Section 11A of Central Excise Act provides time limit from the ‘relevant date’- Decided against Assessee. Penalty on employees of the Company - The second appellant and the third appellant are only employees of the first appellant which is a company - Nothing has been brought on record to show that they have personally gained by the duty evaded – thus after imposition of adequate penalty on the first appellant there is no justification to impose penalty on the second and their appellants also – the penalties imposed on second and third appellant set aside.

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• 2013 (11) TMI 1414
  Eligibility for concessional rate under Notification No.1/2011 – PU foam cleared for captive consumption at concessional 1% rate of duty - Held that:- Following SHIVALIK AGRO POLY PRODUCTS LTD. Versus COLLR. OF C. EX., CHANDIGARH [1999 (9) TMI 215 - CEGAT, NEW DELHI] - If credit has been taken but the duty is debited subsequently, benefit of exemption under Notification containing condition regarding non-availment of credit cannot be denied - the appellants are entitled to the benefit of Notification 1/2011 – Decided in favour of Assessee.

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