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TMI Tax Updates - e-Newsletter
December 11, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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The Tribunal does not have power to review its judgment under Section 254(2) of the Act, which authorises the Tribunal to only correct its mistakes - HC
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Whether there is notional income on advances given to closely associated group - There is no statutory obligation on the assesse that the assessee must charge interest on the advance amounts - HC
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Registration u/s 12AA - object to impart education - mere charging of high fees is also not the ground for rejection of registration - HC
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Recovery of tax - The notices issued to the petitioner were wholly without jurisdiction and clearly indicate exercise of unauthorised and illegal power by the Tax Recovery Officer to harass the petitioner - HC
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Directions for special audit - Where satisfaction has been arrived at, in bonafide manner after making a genuine and past attempt to understand the accounts and after giving opportunity to the assessee to submit explanation, it cannot be said that unless any of the conditions given in the guidelines are satisfied, special audit cannot be directed - HC
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The assessee (Co-operative Bank) was justified in not recognizing interest income from non-performing assets in consonance with the notification issued by the RBI and AS-9 issued by ICAI- AT
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Whether deduction u/s. 10A is allowed if in the initial year assessee has not carried out any manufacturing activity unless relief granted for the first assessment year in which the claim was made and accepted is withdrawn or set aside, the Income Tax officer cannot withdraw the relief for subsequent years - AT
Customs
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Penalty u/s 112 - EPCG - When the notification itself provides for a situation where an importer is not able to fulfil the obligation, the question of violation of conditions of notification does not arise - AT
Service Tax
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In view of the explicit provision in law for centralised registration, the denial of CENVAT credit on the ground that individual premises from where service is rendered were not registered, is clearly unsustainable - AT
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It some more credit has been taken by the service recipient then such service recipient should have been issued show-cause-notice for reversal of excess cenvat credit taken, demand cannot be raised on assessee - AT
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Valuation - Whether the value of diesel supplied by the service recipient free of cost, to the assessee service provider ought to be included in the gross value - held no - AT
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Penalty u/s 76 - Service Tax discharged before show cause notice was issued u/s 73(3) - It is unfortunate that inspite of statutory provisions, the authorities have issued a show cause notice claiming penalty - AT
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Demand of service tax - If the appellant procures milk itself for use in manufacture that totally out of scope of Service Tax law from levy of Service Tax - AT
Central Excise
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Interest on the delayed payment of cess under Oil Industry (development) Act, 1974 cannot be demanded under the provisions of Central Excise Act and Rules made there under - AT
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Tea was 'nil' rate of duty prior to 27.02.1999 - By Finance Bill, 1999, duty was imposed, which would be forced into law on the midnight - the clearances made by the appellants before midnight, no demand can be raised - AT
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When the same edible oil is packed in the packing of 200ml or less cannot be considered as preparation for use on hair in the absence of any evidence that the composition of both types of oils are different - AT
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The approach of the department is absurd - in absence of any evidence showing clandestine removal it cannot be alleged that there was unexplained shortage of Cenvat credit availed input - AT
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Valuation of Free samples - Free samples cleared without paying duty on MRP basis the only way left is to assess the value based upon M.R.P. of similar goods after giving abatement as prescribed and on proportionate basis - AT
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Refund claim as per Notification No. 56/2002-CE goods could not be brought back in the factory within six months period - Rule 16 is different from Rule 16 (C) and the refund stands rightly sanctioned - AT
VAT
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Liability to sales tax - sale of specifically named ships - all these being specific goods located outside the State of Tamil Nadu, the transactions are not chargeable to tax - HC
Case Laws:
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Income Tax
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2013 (12) TMI 427
Whether Tribunal can review its own order - Held that:- From the decisions of various judgements delivered by the Supreme court as well as High Court it can be concluded that It is well settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication - A review proceeding cannot be equated with the original hearing of the case, and the finality of the judgment delivered by the Court will not be reconsidered except 'where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility - The power of review may be exercised on the discovery of new and important matter or evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made - It may be exercised where some mistake or error apparent on the face of the record is found; it may also be exercised on any analogous ground - It may not be exercised on the ground that the decision was erroneous on merits. That would be the province of a Court of appeal. A power of review is not be confused with appellate power which may enable an Appellate Court to correct all manner of errors committed by the subordinate Court. Following Lily Thomas, etc. etc. v. Union of India and others [2000 (5) TMI 1045 - SUPREME COURT] - Possibility of two views on the same subject is no ground to review the earlier judgment passed by a Bench of the same strength. Following CIT v. Mool Chand Shyam Lal [2004 (7) TMI 42 - ALLAHABAD High Court] - The Tribunal does not have power to review its judgment under Section 254(2) of the Act, which authorises the Tribunal to only correct its mistakes - ITAT has committed grave error of law to recall the order dated 30.6.1998 by the impugned order dated 14.2.2000 passed under section 254(2) of the Act - Decided in favour of Revenue.
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2013 (12) TMI 426
Validity of assessment u/s 147 - Held that:- The issue with regard to deduction u/s 80HHC having been examined by the Higher Authorities cannot be subject matter of review by the lower authorities - The issue with regard to claim of deduction u/s 80 HHC which has been dealt with by the ld. CIT by issuing notice u/s 263 was dropped after considering AO's report - Considering this report and the legal position there is no reason to disallow any portion of the deduction allowed u/s 80HHC of the Income Tax Act, 1961, for all the three years under consideration - As the issue has already been examined and held in favour of the assessee by that ld. CIT - The AO has no jurisdiction to reopen the assessment u/s 147, so as to circumvent the order of the CIT which has become final - No new facts came to the notice of the AO other than the facts known to the Department while initiating the proceedings u/s 263 - Decided against Revenue.
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2013 (12) TMI 425
Whether there is notional income on advances given to closely associated group - Held that:- Bonafide of the assessee's Company in not charging the interest has not been disputed by the Revenue - The matter of charing interest is a matter of contract between the parties - An income is chargeable to tax when it actually accrues to an assessee - Here no income actually accrued to the assessee - There is no statutory obligation on the assesse that the assessee must charge interest on the advance amounts - Decided against Revenue.
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2013 (12) TMI 424
Other Income - Held that:- The said income has been disclosed in the name of other family members - There being no concealment, the addition was rightly deleted - The Tribunal has recorded finding that the income was not hidden from the Department - Decide against Revenue.
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2013 (12) TMI 423
Unexplained investment - Held that:- there is no material in possession of the Department to show that during the previous year relating to the Assessment year 1980-81, the assessee has made any investment in the business - The finding recorded by the First Appellate Authority is essentially a finding of fact and calls for no interference in this appeal - Decided against Revenue.
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2013 (12) TMI 422
Registration u/s 12AA - object to impart education - Held that:- The objects of the Trust or genuineness of the activities of the Trust or Institution are to be examined before granting the registration under Section 12A of the Act - The power of the Commissioner of Income Tax under Section 12AA of the Act, does not extend to examining the other conditions of exemption of income under Sections 11 and 12 of the Act, which are to be seen in the assessment proceedings - The application for registration of the Trust/Institution has to be made within a period of one year from the date of creation of the Trust, but there is no requirement that the Trust or the Institution should have started all its envisaged activities in the first year itself - The quantum of activities undertaken by the Trust after its creation, cannot be the basis for examining registration application under Section 12AA of the Act - The Tribunal observed that mere charging of high fees is also not the ground for rejection of registration - Assessee Society is entitled to get registration under Section 12AA of the Act as the Commissioner, Income-tax-I had not doubted on the objects and genuineness of the activities of the Assessee Society - Decided against Revenue.
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2013 (12) TMI 421
Recovery proceedings without jurisdiction - Held that:- The power under Section 226(3) of the Act cannot be invoked for effecting recovery of a claim which is disputed, the letter written by Smt. Vaijanti Gupta to the Department on 18.12.2008 is nothing but making allegations against the petitioner and merely on an allegation made by an assessee, the proceeding under Section 226(3) of the Act cannot be initiated - Following P. Rajeswaramma v. Income-Tax Officer [1960 (1) TMI 30 - ANDHRA PRADESH HIGH COURT] - If a person to whom notice is sent denies that any money is due from him then the Income Tax Officer cannot take any further proceeding - The powers under Section 226 of the Act have not been given to the Assessing Officer or Tax Recovery Officer to adjudicate upon private disputes or to issue notices when there are no admission of liability to pay any amount to assessee - Section 226 of the Act is only a mode of recovery and sub-section (3) of Section 226 of the Act contains provision regarding collection from persons who owe money to assessee - The notices issued to the petitioner were wholly without jurisdiction and clearly indicate exercise of unauthorised and illegal power by the Tax Recovery Officer to harass the petitioner - Decided in favour of petitioner.
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2013 (12) TMI 420
Entitlement to receive interest u/s 244(1A) - Held that:- The tax was refunded in pursuance of the order passed by the Settlement Commission - As per section 244(1A) - Any order of assessment or penalty and such amount or any part thereof having been found in appeal or other proceeding under this Act" - The words "other proceeding" are comprehensive enough to encompass the proceedings before Settlement Commission and consequent direction issued thereon - Decided against Revenue.
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2013 (12) TMI 419
Directions for special audit - Held that:- The Assessing Officer after making genuine and honest attempt to understand the accounts before arriving at the conclusion that the accounts are so complex that special audit is required to be conducted - The Assessing Officer gave ample opportunity to the petitioner to satisfy her with regard to doubts and after seeking explanation of the petitioner, the findings were recorded that the accounts are so complex that special audit would be required - Following Sahara India (Firm), Lucknow v. Commissioner of Income Tax, Central-I and Anr. [2008 (4) TMI 4 - Supreme Court] - The requirement of Section 142(2A) must first be satisfied in every case that the objective assessment of the accounts of the assessee as to its nature and complexity and without there being such finding special audit ought not to be directed - If the accounts after a genuine and past attempt giving opportunity to the petitioner to clarify any doubt and after seeking explanation are found to be complex in nature and further that interest of revenue is involved, the Assessing Officer with a safeguard of obtaining approval from the Commissioner, can direct the special audit - Where such a satisfaction has been arrived at, in bonafide manner after making a genuine and past attempt to understand the accounts and after giving opportunity to the assessee to submit explanation, it cannot be said that unless any of the conditions given in the guidelines are satisfied, special audit cannot be directed - Decided against assessee.
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2013 (12) TMI 418
Transactions to be treated as Capital Gains or business income - Held that:- The delivery based transactions were made with an investment motive and as such, the income therefrom was in the nature of short-term capital gains whereas the income from F & O transactions and daily trading in shares were with the business motive, which were showed as business income only - As per the Board Circular No. 4 of 2007 issued on June 15, 2007 - It is possible for a taxpayer to have two portfolios, namely, an investment portfolio comprising the securities, which are to be treated as capital assets and trading portfolio comprising stock-in-trade, which are to be treated as trade asset - No single principle would be decisive and the total proposition is to be considered - Decided against Revenue.
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2013 (12) TMI 417
Reference to Transfer pricing officer - Held that:- The petitioner has the remedy of an appeal against the order of assessment in which all issues, inter alia, including the addition made by the Transfer Pricing Officer in the return could be addressed to the Tribunal - In order to enable the petitioner to apply for a stay before the Tribunal, the Court direct that for a period of six weeks from today, no coercive steps shall be taken against the petitioner - Decided in favour of petitioner.
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2013 (12) TMI 416
Estimation of income - the assessee is carrying on three kinds of contracts, as in earlier years, i.e.. (i) own contracts, (ii) contracts taken from the sub-contractors, (iii) contracts given to other parties on sub-contracts - Held that:- Following Teja Constructions [2009 (10) TMI 593 - ITAT HYDERABAD] and assessees own case for earlier year The profits of the Assessee are estimated @ 9% on own contract works, 8% on contracts taken by assessee on subcontracts and @ 5% on contracts given by the assessee to 3rd party on subcontracts is before allowing remuneration, interest on capital and depreciation and hence ITAT directed that these amounts should be reduced out of the estimated income - Depreciation is allowable u/s 32 of the IT Act and it falls under the provision of section 30 to 38 - Deemed to have been already given full effect while estimating the income of the assessee - Decided in favour of assessee.
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2013 (12) TMI 415
Validity of assessment u/s 143(3) and 144 The initial notice was issued by his predecessor on 15/07/2007, which was issued in time and served on the assessee in time, but, the acknowledgment could not be traced - The fresh notice issued on 26/05/2008 - The assessee submitted the information called for - Held that:- The assessee filed application on 08/09/2008 stating that the initial notice u/s 142 was not served in time - As the assessee has mentioned old address in the return of income filed by him. The notice has been served by the AO at the address mentioned in the return of income In view of the amendment to section 292BB The mistake on account of belated service of notice is a curable mistake. - The assessee has not raised such a plea before the AO, and fully participated in the assessment proceedings, the so-called mistake in serving the notice u/s 143(2) of the Act, stood cured, on account of the assessee's action in ignoring the same and participating in the proceedings - This amendment has been made applicable w.e.f. 1 st April, 2008 - The provision of new section 292BB shall apply to all proceedings which are pending on 1 st April, 2008 Decided against assessee. Addition on account of unsecured loan received The receipt of brokers with respect to the shares is given in the name of the assessee and not in the name of Maya Devi/Singh and on the other hand Ms. Maya Devi had shown the shares in her balance sheet - Held that:- The assessee failed to substantiate his claim by way of material evidence and proper explanation The sources of funds were not properly explained and there were loose ends in the explanation Decided against assessee.
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2013 (12) TMI 414
Determination of transfer pricing Held that:- The comparable companies taken in the given case were not proper and reasonable - The companies having the turnover of less than Rs. one crore or more than Rs.200 crores and companies which are functionally dissimilar unless having segmental results in respect of comparable line of activity should not be taken as comparables - In case of comparable companies foreign exchange loss or gain have been taken into account in computing the profit, in the case of assessee also the foreign exchange gain or loss should be taken into account in determining the overall profit - All facts which impact the financial result of comparable companies should be taken into account and reasonable accurate adjustment should be made for the same - Companies whose employee or directors are involved in fraud should not be accepted as the financial results are not reliable The issue was set aside for fresh adjudication. Deduction u/s 10A - Held that:- Following CIT vs Gem Plus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT] - Explanation 2 to 10A excludes from the export turnover freight, telecommunication charges, insurance attributable to delivery of articles or computer software outside India - The telecommunication charges and circuit charges of Rs.20,18,437/- should be excluded from both the export turnover and the total turnover Decided against assessee.
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2013 (12) TMI 413
Order passed u/s 263 Whether provision for bad and doubtful debts is allowed to the assessee who is a cooperative bank engaged in banking activities - Held that:- The assesse did not recognise the interest attributable to the Bad and doubtful debts by debiting P&L and crediting the reserve for overdue interest The assessee transferred the interest to Reserve for overdue interest account - Following CIT v ELGI Finance Ltd [2007 (6) TMI 180 - MADRAS High Court] - The assessee was justified in not recognizing interest income from non-performing assets in consonance with the notification issued by the RBI and AS-9 issued by ICAI - Interest income on bad and doubtful debts does not accrue at all. Whether the interest on bad and doubtful debts, the overdue interest of Rs. 2,40,61,848.00 accounted by the Assessee but transferred to Overdue interest can really said to have accrued and realizable Held that:- Following Godhra Electricity Co Ltd v CIT [1997 (4) TMI 4 - SUPREME Court] - Income charged to tax is the income that is received or is deemed to be received in India in the previous year relevant to the year for which assessment is made or on the income that accrues or arises or is deemed to accrue or arise in India during such year - The computation of such income is to be made in accordance with the method of accounting regularly employed by the assessee. It may be either the cash system where entries are made on the basis of actual receipts and actual outgoings or disbursements or it may be the mercantile system where entries are made on accrual basis - What is to be taxed is only the real income and not on the basis of Book entries The issue was set aside for determining whether the amount of Rs. 2,40,61,848.00 represented real income of the assessee.
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2013 (12) TMI 412
Estimation of profit @ 5% of turnover - Held that:- The Assessee has disclosed 3.59% in AY 2008-09 - Most of the expenses on hire charges were through self- made vouchers. These vouchers cannot be verified in anyway - Decided against assessee. Whether commission of Rs. 4,59,145/- and additional income of Rs. 30,00,000/- to be taxed under the head income from business or profession Held that:- The additional income and commission income relates to the assessees business of Lorry freight These should be assessed as income from business and profession - Decided against assessee.
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2013 (12) TMI 411
Addition on account of cost of land and estimation of profit @ 15% of turnover Held that:- The CIT(A) has not considered the books of accounts maintained by the assessee while estimating the income @15% of turnover These books were impounded during the course of survey u/s 133A - The books impounded were ignored and the cost of land declared in these books was not considered The issue was set aside for fresh adjudication.
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2013 (12) TMI 410
Estimation of income u/s 144 The assessee has shown sales of agricultural produce of Rs. 35,73,30,388/- on which total income return was Rs. 2,93,898 The assessees books of accounts were destroyed in fire accident - Held that:- The assessee company failed to substantiate the profit shown by it by producing books of account, vouchers and other details called for - The correctness of purchases and other expenses claimed could not be verified - The assessment order passed by the AO is an ex-parte order u/s 144 Another opportunity to support the claim of the assesse should be given The issue set aside for fresh adjudication.
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2013 (12) TMI 409
Whether deduction u/s. 10A is allowed if in the initial year assessee has not carried out any manufacturing activity Held that:- Following Western Outdoor Interactive (P) Ltd [2012 (8) TMI 709 - BOMBAY HIGH COURT] Where a benefit of deduction is available for a particular number of years on satisfaction of certain conditions under the provisions of the Income Tax Act, then unless relief granted for the first assessment year in which the claim was made and accepted is withdrawn or set aside, the Income Tax officer cannot withdraw the relief for subsequent years - Decided against Revenue.
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2013 (12) TMI 408
Deduction u/s 80HHC Held that:- Following Vijaya Silk House (Bangalore) Ltd. & Others [2012 (9) TMI 263 - BOMBAY HIGH COURT] In view of retrospective amendment to Proviso to section 80HHc and section 28(iiid) - The profits computed u/s 80HHC(3) has to be further increased by the amount which bears to 90% of any sum referred to in clause (iiid) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee - The assessee having export turnover not exceeding Rs.10 crores during the year under consideration, is entitled for deduction u/s 80HHC in respect of DEPB profits as claimed in the return of income - Decided against Revenue.
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2013 (12) TMI 407
Disallowance of interest u/s 14A The assessee has earned interest income of Rs.10,50,00,000/- on tax free bonds which is exempt u/s 10(15) Held that:- The assessee at the relevant time had its own funds in the form of share capital and reserve amounting to Rs.703 crores which were far exceeding the investment of Rs.10.50 crores made by the assessee in tax free bonds - The said investment in tax free funds was made by the assessee out of its own funds The assessee has not incurred any expenditure on investment in tax free bonds - Following Reliance Utilities Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - When there is a common pool of funds it is presumed that investment yielding tax free returns is made by the assessee out of its own funds Decided against Revenue.
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2013 (12) TMI 406
Addition of telephone expenses Held that:- Personal use of the telephone being very common cannot be totally ruled out The assessee has not produced any evidence to show that the entire telecommunication was used for the business purpose The disallowance was restricted to Rs. 50,000/- out of Rs. 1,00,000 - The appeal is partly allowed. Addition of Vehicle expenses and depreciation on vehicle Held that:- The AO has not justified the personal usage of vehicle with evidence or material on record Decided in favour of assessee. Addition of Conveyance expenses - Held that:- The assessing officer failed to prove the element of personal expenses included in conveyance bill or vouchers The adhoc disallowance was not properly justified by him Decided in favour of assessee. Addition of office expenses Held that:- The self-made vouchers should also be accepted It is not possible to obtain the receipt and vouchers of each and every expenditure - Once the expenditure is incurred for the purpose of the business, the same is allowable - Decided in favour of assessee. Addition of business promotion expenses Held that:- The assessing officer did not offered any proper justification regarding adhoc disallowance of expenses - Decided in favour of assessee.
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2013 (12) TMI 405
Penalty u/s 271(1)(c) The assessee has received Rs. 22.75 lakhs from his father time to time in the form of cash deposit in his bank account - Held that:- The dates and amount of deposits made by the assessee in his bank account and withdrawals made by his father from his bank account coincide The receipt forms the ground of addition of income but does not attract penalty u/s 271(1)(c) - Decided in favour of assessee.
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Customs
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2013 (12) TMI 404
Stay application - Penalty u/s 114(iii) - Confiscation of goods - Held that:- Pre-deposit of redemption fine is not at all warranted while hearing the stay application and, therefore, the Commissioner (Appeals) was clearly in error when she directed pre-deposit of 50% of the redemption fine also. Further, in the facts and circumstances of the case, when the department itself took five years to initiate action, it is not understood how the pre-deposit of penalty could be ordered without hearing the case on merits. Accordingly, I set aside the impugned order and direct the lower appellate authority to decide the appeal on merits without insisting on pre-deposit of the dues adjudged against the appellant, after giving the appellant a reasonable opportunity of being heard - Stay granted.
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2013 (12) TMI 403
Demand of duty - Diversion of duty free material imported in terms of Notification No. 53/97-Cus., dated 3-6-1997 - Confiscation of goods - Held that:- Admittedly the goods in respect of which duty stands confirmed against the appellant were found in the factory premises of the appellant. As such it can be safely concluded that the goods in question were not diverted by the appellant in the local market. Surprisingly neither any demand stands raised by the Revenue nor confirmed in the impugned order in respect of the duty free imports which were actually diverted in the local market. Inasmuch as the fabrics in question were still found in the factory of the appellant, no demand of duty can be confirmed in respect of the same on the ground that the previous consignments of imported fabrics stand diverted by the appellant. No presumption can be made that the said present fabric was also likely to be diverted. Admittedly the appellants factory had 35 sewing machines as also the cutter installed in their factory, required for stitching of the ladies ready-made garments. The manufacturing and other operations are required to be carried out in the said 100% EOU under Customs bond. No ex-bond bill of entry is required to be filed or any duty is required to be paid on warehoused goods before taking them for manufacture inside bonded premises. The imported warehoused goods in the said 100% EOUs cannot be treated as having been removed for home consumption so as to require any payment of duty leviable thereon - the fabrics in question were still in the 100% EOU, no duty liability can arise in respect of the same - Following decision of Paras Fab International v. CCE, Kandla [2010 (6) TMI 184 - CESTAT, NEW DELHI] - Decided in favour of assessee.
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2013 (12) TMI 402
Penalty u/s 112 - Minimum penalty condition - Held that:- Section 112 does not provide for any mandatory minimum penalty as has been done under Section 114A of the Customs Act, 1962. The limits prescribed under the said Section 112 are only the upper limits. In a case, where Rs. 10,000/- worth of goods have been absolutely confiscated, a penalty of Rs. 1,000/- amounting to 10% of the value of goods is adequate as the absolutely confiscated goods also vest in the government - decided against Revenue.
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2013 (12) TMI 401
Penalty u/s 112 - Import of capital goods - Imports were made under EPCG licences and as per the said licences - Non fulfillment the export obligation - Commissioner refrained Revenue to confiscate goods and impose penalty - Held that:- According to the Notification No. 110/95-Cus., dated 5-6-1995, if the importer does not fulfil the export obligation, the importer is required to pay duty leviable on the goods imported but for the exemption in the same proposition in the unfulfilled portion of the export obligation. The Notification itself provides the importer has to pay duty and interest and also proportionate of total export obligation. When the notification itself provides for a situation where an importer is not able to fulfil the obligation, the question of violation of conditions of notification does not arise - Decided against Revenue.
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2013 (12) TMI 400
Confiscation of goods - Bar of limitation - Date of order - Held that:- limitation of 1 year from the date of decision of the order, is to start running from the date of signing of the decision by the concerned authority - date of signing of the order is the relevant date for the purpose of limitation. Inasmuch as the review order passed by the Commissioner is within the period of 1 year from the date of signing of the impugned order, the appeals are required to be considered as having been filed within limitation period - Following decision of Collr. of C.E., Chandigarh v. Asian Rubber and Plastic Industries [1997 (9) TMI 177 - CEGAT, NEW DELHI] - Decided in favour of assessee.
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Corporate Laws
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2013 (12) TMI 399
Prohibition of manipulative, fraudulent and unfair trade practices as per Regulation 4, read with regulation 3, of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - SEBI found violation of provisions of FUTP Regulations which suggested certain trading activity on part of appellant along with others with intention of creating artificial volumes so as to give market players a false impression regarding liquidity in scrip Held that:- The shares were transferred to the applicant and other noticees from the accounts of promoters and not from Dena Bank - No evidence of the payment has been shown by the appellant - No document is brought on record to substantiate the story regarding the payment for these 20,000 shares. the appellant had kept the shares of the company in fact in his demat account without any transaction whatsoever in the said shares which were stated to be pledged for the loan in question - The role of the appellant was confined to extending loan facility to MK and no more - He was not found to have been engaged at all in any dealing in the shares of the ASL in any manner - He had no role in the circular/manipulative trades highlighted by the learned WTM in the impugned order for the simple reason that he did not trade in the shares - The role of the appellant in that case was that of a mere financier - He kept the shares of ASL in his demat account only as a security for the loan provided by him to MK. In this background, his appeal was allowed by this Tribunal - the appellant has admittedly received 20,000 shares in his demat account on January 19, 2009 - This fact clearly proves a nexus between the appellant and the promoter group Decided against Appellant.
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Service Tax
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2013 (12) TMI 440
Availment of CENVAT Credit - Debit notes - Revenue contends CENVAT Credit cannot be availed on the strength of debit notes - Whether, whether credit can be availed on the strength of debit notes - Held that:- purpose of prescribing a document for availment of credit is to enable the Revenue to verify the fact of payment of service tax by the service provider and the receipt and consumption of service by the service recipient in further provision of output service. The prescription of document is only a machinery provision for achieving the object of law. In the present case, Rule 4A of the Service Tax Rules, 1994 does not prescribe any format of document to be issued by the service-provider. It only specifies what are the particulars which should be contained in the document. These particulars are, namely and, address of the service provider, service tax registration number, name and address of the service recipient, description of the service rendered and the value thereof and the service tax paid. If this information is available in any document, the same would constitute a valid document for the purpose of availing CENVAT credit. The appellant has obtained centralized registration accordingly at the relevant time. All the invoices for the input services were received and also addressed to the registered office of the appellant. In view of the explicit provision in law for centralised registration, the denial of CENVAT credit on the ground that individual premises from where service is rendered were not registered, is clearly unsustainable - Decided in favour of assessee.
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2013 (12) TMI 439
Condonation of delay - Delay to 323 days - Dealing person had gone on leave for his daughter's marriage - Order received at some other factory - Held that:- factory sent the impugned order to Mumbai office and thereafter, there is no follow up action on the part of the factory. It is seen that the Sr. Manager (Taxation) appeared in personal hearing before the Commissioner (Appeals) and about more than one year, there is no effort to know whether any order was passed - applicant had not filed any affidavit narrating facts in detail in support of their contention and a general statement was made in the application - applicant would not file the appeal, unless the Department initiates recovery proceedings. There should be reasonable and acceptable explanation for the total delay ought to be condoned. The delay cannot be condoned by merely stating that the file was misplaced during the leave of Sr. Executive of a Public Limited Company - No satisfactory reason for condonation of such long delay - Condonation denied.
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2013 (12) TMI 438
Violation of provisions of Rule 6 (3) or Rule 6(3A) - Services provided exempted from payment of Service Tax vide Notification No.4/2004-ST, dt.31.03.2004 - Demand of service tax - Availment of exempted granted to the service provider for the services rendered to a unit in SEZ or a developer of a unit in SEZ - Held that:- appellant had provided services to MPSEZ. It is also undisputed that the appellant had discharged the Service Tax liability. On perusal of the retrospective amendment as has been brought in by Finance Act, 2012 by Section 144, we find that the Central Government has categorically stated that if any services are rendered to a unit situated in SEZ, the said services cannot be termed as exempted services - Therefore, impugned order is unsustainable - Decided in favour of assessee.
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2013 (12) TMI 437
Availment of CENVAT Credit - Less service tax paid - Held that:- adjudicating authority has taken a view that sister concern M/s. Sos Finance Ahmedabad has not reversed the excess cenvat credit taken and accordingly he cannot accept the value given in the ST-3 returns for the purpose of discharging service tax liability. The finding given by the first appellate authority does not seem to be in accordance with the law because under the prevailing provision of Sec. 68 of the Finance Act, 1994 service tax was required to be paid by the appellant only on the amount received from the service recipient. It some more credit has been taken by the service recipient then such service recipient should have been issued show-cause-notice for reversal of excess cenvat credit taken - Principle of natural justice should be observed by the adjudicating authority while deciding the issue in denova proceeding - Decided in favour of assessee.
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2013 (12) TMI 436
Availment of CENVAT Credit - Intellectual Property Right services - Bar of limitation - Classification of service - Held that:- discharge of service tax liability by the service provider was never disputed by the department at all. Shri Kelkar also raised invoices on the appellant, which shows the nature of the services rendered, the amount charged, the service tax liability discharged and all other relevant particulars. On the strength of these invoices, the appellant company has taken credit. Once the appellant has received the services and has borne the incidence of service tax, the appellant is rightly entitled to the service tax credit. The authorities at the service recipient's end has no jurisdiction to question the classification of service and the liability to service tax so long as the authorities having jurisdiction over the service provider's end do not dispute the same. Therefore, the impugned demand holding that the appellant has not received any input service and therefore nor eligible for any service tax credit is unsustainable in law - the entire demand is time barred. As early as in 2007, when the records of the appellant firm were audited by the department the payment of royalty to Shri Kelkar and receipt of service by the appellant was known to the department, and thereafter, on the advice of the department Shri Kelkar obtained service tax registration and discharged service tax liability. The receipt of service and availment to service tax credit was also reflected by the appellant in the monthly ER-1 returns. Therefore, the whole transaction, the payment of service tax and availment of credit thereon was in the full knowledge of the department. In spite of having the information, the show-cause notice has been issued in this case only in January 2011 after a lapse of more than 3 ½ years. Thus, the demand is clearly time barred - Decided in favour of assessee.
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2013 (12) TMI 435
Demand of service tax in terms of Rule 2 (1)(d)(iv) of Service Tax Rules, 1994 - Recipient of service - Held that:- service tax cannot demanded from the service recipient under provisions of rule 2 (1)(d)(iv) of Service Tax Rules, 1994, prior to 18.04.2006. This judgment was uphold by the Hon'ble Supreme Court as reported in (2009 (12) TMI 850 - SUPREME COURT OF INDIA) and Board has also accepted - Following decision of National Shipowners Association Vs. UOI [2008 (12) TMI 41 - HIGH COURT OF BOMBAY] - Decided in favour of assessee.
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2013 (12) TMI 434
Valuation - Whether the value of diesel supplied by the service recipient JSPL, free of cost, to the assessee service provider ought to be included in the gross value charged for the service provided for valuation of the tax liability under Section 67 - Held that:- value of diesel supplied free of cost by the service recipient to the assessee service provider for providing the taxable site formation and clearance, excavation and earthmoving and demolition service would not be a component of the gross value charged for the service provided, for computation of tax under Section 67 of the Act and the failure to so include would not constitute either suppression of material facts nor a wilful contravention of the provisions of the Act with a view to evade tax, justifying invocation of the extended period of limitation under the proviso to Section 73(i) of the Act either - Following decision of Intercontinental Consultants & Technocrats Pvt. Ltd. vs. Union of India [2012 (12) TMI 150 - DELHI HIGH COURT] - Decided in favour of assessee.
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2013 (12) TMI 433
Penalty u/s 76 - Discrepancy in ST-3 return - Duty discharged before show cause notice was issued - Held that:- assessee on being pointed out by the authorities for not paying the service tax, has paid the service tax with interest even before the issue of show cause notice. Sub-section (3) of Section 73 of the Finance Act, 1994, categorically states that if tax and interest is paid and the same is informed to the authorities, then the authorities shall not serve any notice calling upon the authorities to pay penalty. It is unfortunate that inspite of statutory provisions, the authorities have issued a show cause notice claiming penalty. So, tax and interest was paid before issue of show cause notice - Therefore, impugned order is liable to be set aside - Decided in favour of assessee.
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2013 (12) TMI 432
Demand of service tax - Transportation of school children - Tour operator service - Held that:- When we examined the definition the tour operator and essential conditions of law, we find no substance in the first appellate order. The satisfaction of the element of law has not been brought out by impugned order. Once such a material fact comes to our notice, waiving requirement of pre-deposit, we allow the appeal of the appellant annulling the demand in question - Decided in favour of assessee.
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2013 (12) TMI 431
Stay application - Demand of service tax - Call Centre Services - Department treated the service of purchase of time and spaces lots in foreign magazines and journals published and circulated there as Business Auxiliary Service taxable - Section 65(105)(zzb) - Department held that these services had been received by the appellant from foreign service providers not having any office or establishment in India, the appellant being service recipient, were liable to pay service tax in respect of the same - Held that:- for services to be treated as having been received in India from offshore service providers, in terms of the provisions of Rule 3(ii) of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006 these services should have been performed in India. However, admittedly none of these services have been performed in India. Therefore, so far as these services are concerned, the same, in terms of the provisions of Rule 3(ii) of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006, the same cannot be treated as having been received in India by the appellant and we are of prima facie view that the appellant cannot be saddled with duty liability under Section 66A of the Finance Act, 1994 in respect of these services. service of purchase of space and time slots in foreign magazines and journals by the appellant, became taxable w.e.f. 1-5-2006 under Section 65(105)(zzm) and, hence, during the period prior to this, the same could not be treated as taxable. The bulk of the service tax demand is in respect of this service for the period prior to 1-5-2006, beside this, it is also doubtful as to whether the extended period under proviso to Section 73 can be invoked - Prima facie case in favour of assessee - Stay granted.
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2013 (12) TMI 430
Waiver of pre deposit - Demand confirmed on the ground that manpower service provided to M/s. Punjab Tractors Ltd. - Held that:- appellants are not merely supplying the drivers to the M/s. Punjab Tractors Ltd. in which case the letter referred to by the adjudicating authority may be held to be prima facie applicable. In the present case, the agreement between the appellants and the receiver is for transporting the vehicle manufactured by them on principal to principal basis and for a consideration, which is based upon the per km run of the vehicle. As such, at this prima facie stage, we agree with learned Advocate that that the activity undertaken by the appellant cannot be held to be falling under the manpower supply agency so as to tax the same under the said category - stay granted.
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2013 (12) TMI 429
Cenvat Credit - Denial of benefit of credit of service tax paid - Output service - Construction service - Held that:- Apart from the fact that construction of premises by the provider of output services stands specifically included in the definition of input service and the towers are essential factors to provide telecommunication service - prima facie the appellant is entitled to credit. Demand of service tax - C & F service - Import of various components of the towers - Denial of credit on ground that such service is not C & F service - Held that:- By whatever name the service is called, the fact that the same stands utilized by the appellant for procuring the inputs, in which case the same would be covered by the definition of inputs service. Admittedly the service tax stands paid by on the services, the appellants are entitled to avail credit on the same. On this ground also, the appellants have been able to make out a good case in their favour - Stay granted.
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2013 (12) TMI 428
Demand of service tax - Assessee gets milk from different milk unions for use in manufacture of Ghee and Milk Powder for them - Revenue raised demand Business Auxiliary Service - Held that:- appellant procures milk from different areas and no evidence came to record to show that such milk was supplied by any client. Such contrary factual aspect provides scope to understand that the appellant has been unreasonably brought to tax ambit. If the appellant procures milk itself for use in manufacture that totally out of scope of Service Tax law from levy of Service Tax. If it had been supplied milk by others for use in manufacture it falls in exclusionary category under Section 65(19) of the Finance Act, 1994 - Decided in favour of assessee.
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Central Excise
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2013 (12) TMI 441
Availment of cenvat credit - Cenvat credit utilised for the manufacturer of exempted products - Penalty u/s 11A(2B) - Held that:- The Adjudicating Authority has not given any reason for imposing equivalent amount as penalty. The First Appellate Authority has recorded that the appellant herein has suppressed and indulged in committing fraud which is unsubstantiated. On the perusal of the show-cause-notice though there is allegation of suppression or fraud committed by the appellant herein for taking cenvat credit, on deeper perusal of the show-cause-notice, I find that the said show-cause-notice does not indicate any reasons for invoking the extended period of limitation - first Appellate Authority cannot justify the imposition of penalty by recording reasoning which were not invoked in the show-cause notice. In view of this the equivalent penalty imposed on the appellant is improper and needs to be set aside. The appeal to the extend it challenges the upholding of imposition of equivalent of penalty is set aside and the impugned order to that extent is set aside. As the appellant on being pointed out reversed the amount and is not contesting the issue on merits, the interest liability gets fastened; even as per the provisions of section 11A(2B), interest liability needs to be discharged by an assessee when he reversed an amount on his own or being pointed out by an office. In the facts and circumstances of this case, I find that interest liability of ₹ 27,366/- for improper availment of cenvat credit needs to be upheld - Following decision of Union of India vs. Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - the liability to interest is upheld and penalty imposed on the appellant is set aside - Decided partly in favour of assessee.
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2013 (12) TMI 398
Valuation of Goods Goods cleared under CKD Condition to be added in the value of goods cleared or not Held that:- There is no evidence to show that the items procured from the market were taken to the factory and cleared with the manufactured parts - there is no finding in the order regarding the excisability of the conveying system as a whole Relying upon Mil India Ltd. vs. CCE, Noida [2007 (3) TMI 8 - SUPREME COURT OF INDIA] - the value of bought out items should be added for computing assessable value would depend on the facts of each case - for the subsequent period, the demand of duty which was made on the grounds is dropped by the Commissioner of Central Excise - On the last date of hearing, the matter was adjourned to find out whether the Revenue has filed any appeal against this order. The learned AR produced a communication from the office of the Chief Commissioner of Central Excise, where it has been stated that the order passed by the Commissioner of Central Excise is accepted by the Revenue - the matter requires reconsideration by the Adjudicating authority afresh after taking into consideration the subsequent decision of the Commissioner of Central Excise - order set aside and the matter remanded to the adjudicating authority for de novo adjudication Decided in favour of Assesssee.
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2013 (12) TMI 396
Interest on delayed payment of cess u/s 11 (a)(b) of Central Excise Act 1944 Held that:- Following OIL & NATURAL GAS CORPN. LTD. Versus C. C. & C. E., VISAKHAPATNAM-II [2009 (4) TMI 814 - CESTAT BANGALORE ] - there is no provision in the OID Act, 1974 for demand of interest for delayed payment of Cess - Interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf -the provision relating to interest in the latter part of Section 9(2) can be employed by the Stales' sales tax authorities only if the Central Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent - There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax, the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest. The provisions of Section 15 of the OID Act and noted that the said section does not contemplate for levy of any interest for delayed payment on oil cess - Interest can be levied and charged on delayed payment of tax only if the statute that levies and charges the tax makes a substantive provision in this behalf - the provisions of the OID Act do not contain any provision for levy of interest on delayed payments of cess - Interest on the delayed payment of cess under Oil Industry (development) Act, 1974 cannot be demanded under the provisions of Central Excise Act and Rules made there under - order unsustainable and set aside Decided in favour of Assessee.
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2013 (12) TMI 395
Violation of Principle of natural justice Opportunity of being heard not granted to the assessee matter regarding the duty and pre-deposit travelled till Supreme Court Held that:- The appellant directed that there should not be any further allegation against the Adjudicating Authority and a cooperative attitude should be followed and should come out with clean hands to defend the allegations in show cause notice filing a detailed reply to show cause notice - The Authority should also in all fairness do justice to the appellant granting reasonable length of time to file reply to show cause, so that the appellant shall get full opportunity to defend its case The appeal remanded back to the adjudicatory authority for reconsideration of the issue as expeditiously as possible Decided in favour of Assessee.
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2013 (12) TMI 394
Black Tea removed on the budget day - New Levy to be Imposed - Goods removed after 05 00 p.m. before mid-night of budget day, whether the new levy would be imposed as per Rule 224 (2A) of the erstwhile Rules, 1944 - Whether the undertaking given by the appellant under Rule 224(2A) would cause levy of duty at the enhanced rates by Notification dated 01.03.2000, when the clearances were effected on 29.02.2000, after 11 00 a.m. and before 05 00 p.m. Held that:- The differential duty on enhancement of rate of duty on the budget day had been rightly recovered - there is no enhancement of duty by notification - it is a case for imposition of levy by Finance Bill, 1999 - tea was 'nil' rate of duty prior to 27.02.1999 - By Finance Bill, 1999, duty was imposed, which would be forced into law on the midnight - the clearances made by the appellants before midnight, no demand can be raised order set aside Decided in favour of Assessee.
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2013 (12) TMI 393
Invocation of extended period of limitation Held that:- There is no mention in the Show Cause Notice with regard to invoking extended provision against the appellant Following Commissioner Central Excise Commissionerate Vs. VAE VKN Industries Pvt Ltd [2013 (10) TMI 30 - PUNJAB & HARYANA HIGH COURT] - there is no case of demand of interest invoking extended period of 5 years - the demand has been raised beyond the 1 year Show Cause Notices are clearly hit by the time limitation and the time barred the time limitation of 1 year from the relevant date for recovery of the principal amount, will also be applicable for recovery of interest as well - Decided in favour of Assessee.
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2013 (12) TMI 392
Classification Coconut oil in small packing of 200ml and less Chapter 33 OR Chapter 15 of Central Excise Tariff Act Held that:- Edible Coconut Oil packed and sold in the packing of capacity of 200ml and less is classifiable under Chapter Heading 15 of the Central Excise Tariff and not under Chapter 33 of the Tariff - The edible Coconut oil who packed in the packing of more than 200ml the same is classifiable under Chapter 15 of Excise Tariff Relying upon AISWARYA INDUSTRIES Versus COMMISSIONER OF C. EX., PONDICHERRY [2008 (7) TMI 771 - CESTAT, CHENNAI] - When the same edible oil is packed in the packing of 200ml or less cannot be considered as preparation for use on hair in the absence of any evidence that the composition of both types of oils are different Decided in favour of Assessee.
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2013 (12) TMI 391
Clandestine removal of goods - Unexplained shortage of Cenvat credit Absence of Evidences Held that:- The fact that the department is comparing the stock of raw material as mentioned in the RG 23A register as on 3rd August 2004 with the stock of raw material actually found in that day and the entries regarding the issue of raw material had been made only upto 30th June 2004, for determining the shortage of inputs, if any, the figure regarding the quantity of raw material consumed should have been updated after taking into account the quantity of raw material consumed during the month of July 2004 and without doing this, the question of shortage or excess cannot be determined. Though an opportunity was given to the department to rectify this mistake, this has not been done - The department has neither accepted the figures of consumption of raw material during July 2004 as given by the respondent nor has made any effort to ascertain the quantity of inputs consumed on the basis of production of finished products - The approach of the department is absurd - in absence of any evidence showing clandestine removal it cannot be alleged that there was unexplained shortage of Cenvat credit availed input and the same had been illicitly removed without reversal of credit Decided against Revenue.
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2013 (12) TMI 390
Valuation of Free samples - Free samples cleared without paying duty on MRP basis Held that:- In respect of physician's sample being manufactured by job worker and sold to the principal manufacturer, valuation is to be done as per UJAGAR PRINTS ETC. ETC. Versus UNION OF INDIA & OTHERS [1989 (1) TMI 124 - SUPREME COURT OF INDIA] judgement of Apex Court - Appellant's are not assessing duty as envisaged in Ujagar Print's case, which requires specifying cost of all the raw materials, packing material supplied by the principal manufacturer, job charges and profit element - Principal manufacturer on his own dictating the assessable value to be declared - This has come out clearly in the statement mentioned by the appellant has not rebutted the same - Even Ld. Advocate is claiming that they are declaring value as per CAS-4 - CAS-4 valuation scheme is applicable for goods meant for capative consumption, which is not the case here. The transaction between appellant and principal manufacturer cannot be considered as on principal to principal basis - the only way left is to assess the value based upon M.R.P. of similar goods after giving abatement as prescribed and on proportionate basis - This is what has been ordered by Commissioner (Appeals) Decided against Assessee.
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2013 (12) TMI 389
Mandatory requirement of authorization not made Held that:- The note sheet enclosed to the Misc. application clearly indicates that a note was placed before two Commissioners who were from Jaipur-I jurisdiction and Jaipur II jurisdiction - there was no Committee of Members either on 12.07.2010 or 14.07.2010 nor they had any views expressed on the note to record their decision - There is no empty formality to be followed in law when the law requires certain duties to be discharged by the Committee of Commissioners - A casual approach has been made by the Members of the Committee just to endorse their signature to the note of the Noting Officer who placed his note on 09.07.2010 - Such a practice is not acceptable to law as has been held in the case of CCE, Delhi-I vs. Kundaliya Industries [2012 (8) TMI 789 - DELHI HIGH COURT] - Decided against Revenue.
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2013 (12) TMI 388
Refund claim as per Notification No. 56/2002-CE Held that:- The assessee failed to receive the goods in their factory within the stipulated period of six months, they paid the amount as duty on the said goods and on receiving back the said goods, filed the refund claim under Section 11B of the Act - The Rule 16 is different from Rule 16 (C), as the former deals with only those goods on which duty was paid at the time of removal of goods - goods were cleared without payment of duty under the special procedure laid down under Rule 16 (C) of the Rules and duty was paid subsequently when goods could not be brought back in the factory within six months period - Secondly, Rule 16 (1) deals with those goods which are received back in the factory for recondition, repair or re-made whereas in the present case goods were not received back because of above stated purposes, but received back after carrying out tests under the special procedure for removal of excisable goods laid down as per provisions of Rule 16 (C) of the Rules - Rule 16 is different from Rule 16 (C) and the refund stands rightly sanctioned Decided against Revenue.
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2013 (12) TMI 387
Determination of Assessable value of goods - Sale of goods at the depot Price at which goods sold at depot as per Rule 10A of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 Waiver of Pre-deposit Held that:- Prima facie, the Revenue has not placed any material to show that the price at which the 'urinal casing' was sold to the applicants was vitiated in any manner - Before proceeding to adopt valuation of the goods sold by Inova to PRPL under the Valuation Rules, reason why the transaction value cannot be accepted has to be recorded - No forceful reasoning for such rejection is coming forward from Revenue - The conditions in the contract cannot be interpreted to mean that the price of the goods was influenced in any manner by the conditions - The conditions appear to be common among parties entering into contract for manufacture of such specialised items which cannot be sold to public at large and in respect of which some type of IPR may be involved. high margins are noticed in most cases were a small manufacturer manufactures goods under the brand name of a well-known company which is able to market the product - There is no legal provision under excise laws controlling the profit margin or the premiums that may accrue on brand name Prima facie the Revenue has not made out a case Pre-deposits waived for the admission of appeal stay granted.
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CST, VAT & Sales Tax
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2013 (12) TMI 443
Right of assessee to claim fresh relief even if no appeal / revision filed against the order of lower authority - Chargeability of tax - HELD THAT:- As to the right of the assessee to question the very applicability of Section 3A of the Tamil Nadu General Sales Tax Act to the transaction of the assessee in a revision filed by the State, even in the absence of any revision filed by the assessee, we agree with the submission of the learned senior counsel appearing for the assessee. In the background of the well settled principles laid down as regards the jurisdiction of this Court, that the ultimate endeavour in recognising such a right in the opposite party in a tax litigation being one of arriving at appropriate and correct tax adjustment, we hold that the assessee is entitled to make its submission on the very applicability of Section 3A of the Act to the facts of this case. Liability to sales tax - Exemption under Section 3A(2)(a) of the Tamil Nadu General Sales Tax Act - Transfer of possession accompanied by transfer of right to use - Leasing of ship - Held that:- there was no transfer of right to use to have an effective control of the Vessel by the charterer under the time charter so as to attract the charge under the provisions of Section 3A of the Act - mere fact that the agreement had been entered into and that the assessee had been paid the hire charges, does not, per se, bring the transaction within the scope of Section 3A of the Act - amendment to the Central Sales Tax Act in including the transfer of right to use any goods as deemed sale was brought in under the definition of sale in Section 2(g) under the Finance Act (No.20 of) 2002, effective from 11th May 2002. In any event, even otherwise, the enlarged definition of sale , available on and from 11th May 2002, can have no relevance to the transaction of time charter for considering the same even by way of a deduction under Section 3A(2)(a) of the Tamil Nadu General Sales Tax Act. Question of considering a deduction under Section 3A(2)(a) of the Act does not arise and it would be in excess of what is contemplated under Section 3A of the Act, or for that matter, beyond the legislative power of a State - This is the reproduction of Section 4 of the Central Sales Tax Act. Thus the location of goods at the time of sale determines the jurisdiction of that State to levy sales tax under the State Sales Tax Act. Thus in the case of ascertained goods, the place where the goods are at the time of contract, is the State which has the jurisdiction to assess the transaction. In the case of unascertained or future goods, the State where appropriation takes place, would be the competent State to impose tax. As on the date of sale relating to the assessment years 1993-94 to 1997-98, the agreement was for named ships which were nowhere near the jurisdiction of the State of Tamil Nadu, to levy sales tax on the transactions under the provisions of Tamil Nadu General Sales Tax Act, treating them as local sales. The mere fact that the contract is entered into in Tamil Nadu, or for that matter the assessee has sought for registration under the State Act, by itself, would not confer jurisdiction on the State to impose tax on the sale of the assets located outside the territorial application of the Tamil Nadu General Sales Tax Act. Except for contending that the sale of ships is assessable under the Tamil Nadu General Sales Tax Act, no material is placed before us to challenge the findings of the Tribunal on the sale of specifically named ships. In the circumstances, we agree with the assessee that having regard to the fact that the agreement is with reference to the sale of specific Vessel by name, we have no hesitation in holding that all these being specific goods located outside the State of Tamil Nadu, the transactions are not chargeable to tax - In the light of the above, cancelling the assessment, the question of levy of penalty does not arise - Decided against Revenue.
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2013 (12) TMI 442
Admissibility of appeal - Appellate authority returned the Memorandum of Appeal on the ground that Section 51 uses the term "entertain" - Single Judge directed the assessee to comply with all the requirements as intimated by the appellate authority in the Return Memo - Adjustment of amount due as per section 51 - Held that:- for a condition to entertain an appeal does not mean that the Memorandum of Appeal shall be returned because of such non- compliance pertaining to pre-deposit. The only consequences that the appeal shall not be entertained which means the appeal shall not be considered on merits and eventually has to be dismissed on that ground. Appellant shall deposit the amount as required by the Deputy Commissioner-I, Commercial Taxes vide order dated 6.1.2011 by 30th September, 2013 whereafter the appeal shall be heard and disposed of on merits. As far as the adjustment/refund is concerned, it is open to the appellant to initiate any independent proceeding. The conclusion of the Division Bench with regard to the factum that there has been proper adjustment by the Department in respect of the claim made by the assessee is set aside - Decided partly in favour of assessee.
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