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Income Tax
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2013 (12) TMI 664
Surrender of stock - During the course of survey u/s 133A Excess stock of Rs. 4,73,155/- was found on physical verification of stock - Held that:- The assessee surrendered the value of stock of Rs. 4,73,155/-. The assessee has clearly calculated the excess stock and has paid taxes thereon The assessee has also disclosed to that extent in the return of income Decided in favour of assessee.
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2013 (12) TMI 663
Disallowance made u/s 40(a)(ia) Held that:- The Assessing Officer has wrongly treated the assessee as contractor in respect of buses taken on hire by the assessee - All the owners of the buses from whom the assessee has hired them on monthly rent have confirmed the balance of the assessee through confirmations / affidavits - They have confirmed that their buses have been given on monthly rent to the assessee - The Assessing Officer has not examined any of them and none of them have ever stated that the assessee is a contractor and they have given their buses to him - Section 194C is not applicable in the case of the assessee in respect of hire charges paid to the owners of the buses. Disallowance made u/s 40A(3) Held that:- None of the single payment is made in contravention of section 40A(3) - All such payments are less than Rs. 20,000 Decided against Revenue.
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2013 (12) TMI 662
Deemed dividend u/s 2(22)(e) The assessee had received a loan from the company to the extent of Rs.66,05,357 - The company had the reserve and surplus to the extent of Rs.35,63,996 - Held that:- The amount received by the assessee from the company are clear cut in the nature of advances - The assesee was a beneficial owner as well as share holder holding more than 10% shares in the company - The provision of section 2(22)(e) are clearly applicable in the hands of the assessee Decided against assessee. Disallowance u/s 14A The assessee has taken unsecured loan out of which a sum of Rs.6,21,300/- was given to M/s.Kiran Investments Corporation and the balance amount was deployed in the company from which the assesee derived dividend income - Held that:- The assessee has clearly accepted that money borrowed was utilized for purchase of shares - The assessee earned divedend income which was exempted form tax - The interest has been incurred by the assessee for earning of the dividend income Decided against assessee.
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2013 (12) TMI 661
Validity of assessment u/s 147 the receipt of Rs.10,05,496/- on account of foreign exchange fluctuation, though added to the capital account but no corresponding income was credited to the P&L A/c - Held that:- As apparent from the reasons recorded by the Assessing Officer u/s 148(2) it is a clear case of change of opinion - The reasons recorded by the AO are not bona fide Following CIT vs Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - The concept of "change of opinion" on the part of the Assessing Officer to reopen an assessment does not stand obliterated after the substitution of section 147 - The Assessing Officer has to have reason to believe that income has escaped assessment - The Assessing Officer cannot reopen an assessment on mere change of opinion - The Assessing Officer has power to reopen an assessment if he had "tangible materials" to prove income has escaped assessment Decided in favour of assessee.
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2013 (12) TMI 660
Re-computation of disallowance u/s 14A Held that:- Rule 8D was applicable from the assessment year 2008-09 For earlier years dis-allowance of expenditure had to be determined by adopting some reasonable method having regard to all facts and circumstances Following Godrej Agrovet Ltd. Vs. ACIT [2010 (9) TMI 291 - ITAT, MUMBAI] Disallowance of 10% is justified Decided against Revenue.
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2013 (12) TMI 659
Refusal to grant registration u/s. 12AA Exemption u/s 80G - The cataract operations and other supporting activities were done through its sister concern, M/s. Debipur Netralaya Pvt. Ltd - Held that:- M/s. Devipur Netralay Pvt. Ltd did not get any special benefit on account of cataract operation The medical expenses are high to pay Rs. 500/- for per cataract surgery and Rs. 175/- for providing spectacles to the school children and post operative cataract patients - Charitable activity was being done by making use of the facilities of the sister concern - On perusal of the income and expenditure accounts for the various years of the assessee society - The assessee is doing the charitable activities - Decided in favour of the assessee.
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2013 (12) TMI 658
Mistake apparent from record Valuation of stock on the date of survey - Held that:- The value of stock as physically found at the time of survey was short by Rs. 14,21,168/- than the value of stock recorded in the books - Some sales have been made outside the books due to which the stock is found lower in value - The action of the AO in estimating the sales outside the books at Rs. 18.00 lakhs, does not seem to be arbitrary or unreasonable on the facts of the case Decided against assessee.
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2013 (12) TMI 657
Disallowance of interest on borrowed funds Loans and advances were given to sister concerns of the assessee company without charging interest Held that:- Both the assessee and the Revenue have mingled up the facts and circumstances of the case It is not possible to draw the clear conclusions The matter restored to the files of AO for fresh decision.
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2013 (12) TMI 656
Deduction u/s 80P Held that:- Following the assessees own case for the A.Y. 2004-05 Although the assessee has furnished separate details of trading done with the members of society and with non-member public under the instruction and direction of the Government - A reliable bifurcation of sales activity cannot be made as the sales counter for member as well as non-member was same The assessee produced material for assessment year 2004-05 but there is no such material produced by the assessee during this year before the assessing officer - The appeal is restored for fresh judgement.
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2013 (12) TMI 655
Calculation of value of stock Addition on account of labour charges - Held that:- When both expense and income elements are included in the manufacturing account the balance in manufacturing account cannot be further reduced The valuation of closing stock comes to Rs.8,33,413 Decided against Revenue. Addition on account of Bogus & Inflated Transportation Charges Held that:- the assessee submitted a copy of ledger account of Shri A.N.Banerjee in the books of M/s. Mahesh Road Carriers showing the balance as on 30.11.2005 and as on 31.3.2006 in respect of transport charges received from the assessee A copy of the ledger account of M/s. Mahesh Road Carriers in the books of the assessee along with the copy of the bills were also filed before the CIT(A) which shows the transport charges to the extent of Rs.20,88,053 If Revenue is of the opinion that expenses are bogus then the onus is on Revnue to prove the fact Decided against Revenue. Addition on account of Bogus/Ingenuine Sundry Creditors Out of Rs.12,80,618/- only a sum of Rs.3,20,709/- was receivable by M/s. Mahesh Road Carriers from the assessee - Held that:- M/s Mahesh Road Carriers directly received sum of Rs. 9,52,553/- from the client of assessee in Nepal The assessee has not accounted such payment in his books Decided against Revenue.
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2013 (12) TMI 654
Addition on account of liability u/s 41(1) The assessee has outstanding liability towards creditors amounting to Rs.1,66,53,143/- in respect of 28 creditors - Held that:- Following Visnagar Taluka Audyogik Sahakari Mandli Ltd vs CIT [1999 (9) TMI 51 - GUJARAT High Court] If the AO feels that the liability has ceased to exist then onus to prove the fact is on AO The assessee continued to show the liability Section 41(1) is not applicable Decided against Revenue.
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2013 (12) TMI 653
Disallowance of payment being unreasonable and excessive The assessee's name and logo is published in all the 16,85,640 pieces of calendars and no separate charges are collected by Media World enterprises for such advertisement - Held that:- Media World Enterprises, is a publisher and it is not a mere printer - A Hindu calendar requires many inputs, material and specialized knowledge which can be done only by certain persons having the expertise - Paying Rs. 2 in excess per calendar, for getting advertisement in about more than 10,00,000 pieces is justifiable - Media World Enterprises and the assessee company are paying tax at the very same marginal rate - Decided in favour of the assessee. Disallowance of professional charges paid for services rendered Assessee paid the sum of Rs. 3.6 lacs as honorarium to Mrs. Ashoo Darda - A member of the event group of the assessee called 'Sakhi Manch' - Held that:- The payment made to the person was for organizing event which helped the assessee in image building among public The similar payments were made by the assessee in earlier years The same were allowed by the Revenue Decided in favour of the assessee. Disallowance of recovery commission paid by the assessee The assessee entered into an agreement with the associate concern, M/s. Media Expert Pvt. Ltd (MEPL) and the recovery commission of Rs. 157.82 lacs @ 9% of amount collected on account of advertisement charges - Held that:- Following J K Woollen Manufacturers vs. CIT [1968 (8) TMI 15 - SUPREME Court] - The commission stood paid to MEPL since 1.1.1996 and commission income received by MEPL stood returned and assessed by the Department in the hands of MEPL - MEPL had actually rendered services relating to recovery, marketing, billing, collection of advertisement - The transaction with the associate concern was not merely a paper transaction While applying the test of commercial expediency, for determining whether an expenditure was wholly and exclusively laid out for the purpose of assessee's business, reasonableness of the expenditure has to be judged from the point of view of a businessman and not of IT Department - Decided against Revenue.
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2013 (12) TMI 652
Deduction claimed u/s 80-IA(4) Held that:- Following CIT vs. Emerald Jewel Industry P. Ltd [2010 (8) TMI 648 - Madras High Court] The assessee-company is eligible for deduction u/s 80-IA in respect of the income from Windmill installed by it - The unabsorbed depreciation set off in earlier years cannot be reduced from the profits for computing the deduction u/s 80-IA The issue remitted back for fresh decision.
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2013 (12) TMI 651
Penalty u/s 271(1)(c) levied on account of low GP rate Held that:- Following CIT Ahmedabad vs Reliance Petroproducts Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT] Penalty can be levied only when the explanation given by the assessee is false or malafide Following Dilip Shroff [2007 (5) TMI 198 - SUPREME Court] The concept of mensrea was an essential requirement for penalty u/s 271(1)(c) In this case different authorities were having different opinions as well as different estimates of probable G.P. rate for this same year Decided against Revenue.
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2013 (12) TMI 650
Whether income from share transaction to be treated as business income or income from capital gains Held that:- The assessee has not purchased, sold and repurchased the same scrips The assessees intention was that of an investor - The assessee has not taken any loan from any person for the purposes of purchasing shares - The assessee has sold shares after substantial capital appreciation Decided against Revenue.
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2013 (12) TMI 649
Addition on account of short term capital gain The assessee has sold only original shares and not the bonus shares - Held that:- In view of amendment bought to section 55 - The computation was made taking into consideration cost of original shares only Decided against Revenue. Disallowance u/s 14A Held that:- Following Godrej & Boyce Mfg. Co. Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record The issue set aside for fresh adjudication.
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2013 (12) TMI 648
Disallowance u/s 14A Held that:- Following M/s. CCI Ltd., vs. JCIT [2012 (4) TMI 282 - KARNATAKA HIGH COURT] The provisions of section 14A are not made applicable to the case of dividend earned out of the shares held as stock-in-trade - The assessee had not retained the shares with the intention of earning dividend income which was incidental due to his sale of shares which remained unsold by the assessee - The assessee is liable to prove that the exempt income earned by him is out of the stocks held for trading purpose The matter restored to the files of AO.
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2013 (12) TMI 647
Disallowance u/s 14A Dividend earned on shares held as stock-in-trade - Held that:- Following M/s. CCI Ltd., vs. JCIT [2012 (4) TMI 282 - KARNATAKA HIGH COURT] - The provisions of section 14A are not applicable to the dividend earned out of the shares held as stock-in-trade - The assessee is not engaged in investment of shares and he is undisputedly into purchase and sale of the shares held as stock in trade - The dividend earned in undisputedly out of the unsold shares Decided in favour of assessee. Rebate u/s 88E from the tax computed u/s 115JB Held that:- Following CIT & Another vs. M/s. Horizon Capital Ltd. [2011 (10) TMI 489 - KARNATAKA HIGH COURT] - While computing the total income u/s 115JB of the Act, the assessee is entitled to claim deduction of the amount equal to the STT paid by him in respect of the taxable securities transactions entered into in the course of business during the previous year Decided in favour of assessee.
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2013 (12) TMI 646
Shares held for less than 30 days to be treated as investment or trading in shares Held that:- Following CIT Vs Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT] - Delivery based transactions should be treated as those in the nature of investment transactions and the profit received therefrom should be treated either as short term or long term capital gain, depending upon the period of the holding - The principle of res judicata is not attracted since each assessment year is separate in itself. - There cannot be any dispute about the basic proposition that entries in the books of account alone are not conclusive in determining the nature of income Decided in favour of Revenue.
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2013 (12) TMI 645
Revision of order u/s 263 Whether revision of order on the ground that rebate u/s 88E requires more careful examination is valid or not - Held that:- Following CIT Vs Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India] The CIT should have valid reason to exercise his revisionary powers The CIT has no plausible reason to review the case - It is only in cases of lack of inquiry the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings Decided in favour of assessee.
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2013 (12) TMI 644
Unexplained cash deposits - Held that:- The assessee has reflected the bank statement in his balance sheet as well as return of income - Every cash deposit made in the disputed savings bank account of the assessee was immediately withdrawn for the purpose of purchasing the demand drafts in the name of Indian Oil Corporation Limited - All the demand drafts were purchased in favour of Indian Oil Corporation Limited and they were all purchased for the purpose of running the fuel station - The assessee has explained the nature of these cash deposits found in the savings bank account maintained by the assessee Decided against Revenue. Unexplained investment in jewellery Held that:- The CIT(A) has granted sufficient relief to the assessee by accepting all the plausible explanations offered by the assessee - The assessee is again bringing some grounds against the confirmation of some quantity of gold jewellery as unaccounted, not on the basis of any evidence, but by way of pleadings Decided against assessee.
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2013 (12) TMI 643
Valuation of rights Held that:- Following ACIT vs. Shri Abhijit Rajan [2013 (12) TMI 234 - ITAT MUMBAI] the Assessing Officer was not given an opportunity by the CIT(A) before admitting the additional evidence - The issue was restored for fresh decision.
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2013 (12) TMI 642
Whether annual value can be determined u/s 23(1)(a) even when the actual rent received is higher Held that:- The actual rent received by the assessee can be an indicator as to what the landlord might reasonably except from the hypothetical tenant and so long as the rent received by the assessee is more than the municipal rateable value it is not proper to estimate reasonable rent by taking into consideration the notional interest on the interest free deposit Following assessees own case for the A.Y. 2004-05 to 2006-07 The CIT(A) was right in deleting addition on the basis of notional interest The annual value cannot be determined by invoking provisions of Section 23(1)(a) Decided in favour of assessee.
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2013 (12) TMI 641
Addition on account of unexplained cash credits Held that:- The person from whom amount was received admitted to have only one concern Deepak Corporation Whereas Ruchita Enterprise and Antima Corporation were operated by him for and on behalf of the assessee alone Observation of bank accounts presented by the assessee shows that the person has given false statement The assessee should be given chance for cross examining the person The issue set aside for fresh decision. Disallowance of bad debts written off Held that:- Following CIT v. Shreyas S.Morakhia [2012 (3) TMI 103 - BOMBAY HIGH COURT] - The brokerage having been credited to the profit and loss account of the assessee, it is evident that a part of the debt is taken into account in computing the income of the assessee - Since both form a component part of the debt, the requirements of Section 36(2)(i) are fulfilled where a part thereof is taken into account in computing the income of the assessee - The deduction should be allowed only to the extent of the debts as reduced by the value of shares in the hands of the assessee - Decided in favor of the assessee. Deduction on account of repairs and maintenance charges of computers Held that:- the amount paid is capital in nature The depreciation at the rate of 30% is allowed on the amount - The remaining amount will be allowed as depreciation in later years Decided against assessee.
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2013 (12) TMI 640
Computation of undisclosed income During search and seizure operation The assessee has not disclosed one bank account Held that:- The Autosweep investments has been made from the said bank account The same amount has been credited back to this account The addition should be on the basis of one transaction The deduction of opening balance of bank account shall be allowed Decided in favour of assessee.
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2013 (12) TMI 639
Rejection of application for registration u/s 12AA The assessee is a public charitable trust having objects Providing of medical relief to poor; to provide food free of cost to poor people and to carry on such philanthropic activities for the benefit of the downtrodden Held that:- The charity should come after some reasonable time The concept of gestation period for any institution to start functioning, is applicable to a charitable institution as well - . The assessee trust is in infancy - The objectives declared by the assessee in its trust deed are charitable in nature Decided in favour of assessee.
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2013 (12) TMI 638
Disallowance of interest u/s.36(1)(iii) The assessee borrowed Rs. 2.45 crores for working capital requirements The assessee has invested Rs. 1.53 crores in share application money and Rs. 1 crore in shares in its sister concern - Held that:-The assessee produced before CIT(A) the additional evidences which were not produced before AO - The CIT(A) deleted the disallowance without giving an opportunity of being heard to the AO - The issue set aside for fresh adjudication.
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2013 (12) TMI 637
Whether the expenses incurred on repair and maintenance of roads inside premises are capital or revenue Corporation has got 1700 godowns which are connected with the roads for transporting food grains - Held that:- The godown roads are maintained every year for smooth movement of food grains - The expenditure incurred on such repair and maintenance of approach roads of godowns has not resulted in creation of any capital asset - Decided against Revenue.
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2013 (12) TMI 636
Validity of proceedings u/s 154 Held that:- The assessee did not appear before AO for assessment proceedings The AO did not consider the tax deposited by the assessee The assessee produced the challans and other material on record for verification by authorities for the first time before Tribunal The same was not produced before AO The issue restored for fresh examination.
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2013 (12) TMI 635
Validity of service of notice u/s 143(2) The return of income was filed by the assessee on 30.10.2001 The notice was served on 31.10.2002 on Shri Devang Shah, Chartered Accountant, who has audited the accounts of the assessee-firm Held that:- Following Shubham Enterprises Vs. ITO [2003 (8) TMI 461 - ITAT ALLAHABAD] - The AO has not claimed that Shri Devang Shah, CA was authorised to receive any notice on behalf of the assessee-firm or was the representative of the assessee or that any power of attorney was executed by the assessee firm in favour of the said Chartered Accountant The notice was not served validly within the stipulated time Decided in favour of assessee.
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2013 (12) TMI 634
Addition u/s 68 The assessees bank account has been credited with Rs. 44,24,500 and later on this amount was transferred to the account of directors - Held that:- Following decision in assessees own case for the A.Y. 2007-08 The assessee was merely an employee - The amount was deposited in his bank account by the directors or family members of the business concern The amount was transferred to the bank account of the directors of the family concern - The assessee was merely a benamidhar of the bank account in his name - The money deposited belonged to the directors or family members of the business concern The real owners of the money were directors or the family members of the business concern - The facts and circumstances are identical with the facts of the assessee for the earlier A.Y.2007-2008 - The issue is restored to the file of the AO to verify the entries in the bank account of assessee with the bank accounts of S/Shri Chimanlal Jamnadas Sheth and Ketan Sheth or any other family members of the directors of the business concern.
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2013 (12) TMI 633
Adhoc disallowance of Rs.75,000/- out of conveyance expenses, staff welfare expenses, sundry expenses and traveling expenses Held that:- Certain expenses were not supported by third party vouchers The disallowance was restricted to the amount for which the assessee failed to substantiate with the vouchers Decided against assessee. Disallowance of 10% of freight expenses and other expenses The assessee issued Debit notes to its principal companies for Rs.5.36 crore towards service charges and commission income to the tune of Rs.3.07 crore and reimbursement of expenses worth Rs.2.29 crore - Held that:- If any expenditure is recorded in the books of account, there cannot be any reason to invoke the provisions of section 69C. Notional income out of reimbursement - The CIT(A) is of the view that the assessee must have saved 20% out of such reimbursement - It is for the principal companies to verify the actual expenditure incurred by the assessee on their behalf and then make reimbursement of the same The authority tried to step into the shoes of the principals for verifying the correctness of the claim lodged by the assessee towards reimbursement of expenses - When the principal companies have reimbursed the expenditure to the tune of Rs.2.29 crore there cannot be any presumption that the assessee must have saved some money out of the same Decided in favour of assessee.
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2013 (12) TMI 632
Deduction u/s 80lB(10) . A search and seizure action u/s. 132 of the Act was conducted -The assessee has constructed houses which exceeded the prescribed limit of 1500 sq.ft of built up area The assessee has failed to comply with the condition precedent u/s 80IB i.e. the built up area of each unit should not exceed 1500 sq.ft and, accordingly, disallowed the claim of the assessee Held that:- the AO has rejected the claim based on Physical verification and report of Govt. approved valuer and Statement of the Director u/s 132[4] - The AO based his finding on the statements of the site engineer and one of the resident of 'J' Block without affording any opportunity to the assessee to cross examine the witnesses - The AO and the CIT(A) both have violated the principles of natural justice - The AO should get the physical verification of the flats at J and K Block of the project through the DVO .It is also suggested that the each and every occupant of the flats should be contacted to verify whether any addition/alteration was done by them or the built up area is same as it was purchased originally, this can also be verified from the municipal authorities who have fixed municipal taxes for each unit separately - Decided against Revenue and the appeal was restored back for denovo assessment.
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2013 (12) TMI 631
Disallowance of writing off of deposits with debtors The deposits relate to the business which has been closed down and sold off - These are generally deposits with statutory authorities - Others are in relation to other than Government authorities also - Held that:- Following G.R.Pandya Share Broking Ltd. vs. ITO [2008 (9) TMI 612 - ITAT MUMBAI] If the amounts receivable from the Government authorities are taxable as income then such amounts not receivable shall be allowed as deduction The matter set aside for fresh decision. Sundry interest receivable from Directors of the assessee company The loan as well as interest on such loan has been written off by the company - Held that:- Since the loan and interest was receivable from the Directors of the assessee-company itself, therefore, in my considered view written-off the same as bad debt was not justified at the end of the assessee-company. The Director or the Person who manages the affairs of the assessee-company, how the Directors can take a view that the loan paid by them along with interest has become bad? - The amount written-off by the Directors of the assessee-company was just to avoid the taxability which has arisen on account of interest and rental income Decided against assessee.
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2013 (12) TMI 630
Re-opening of assessment u/s 147 The assessee has carried forward long term capital loss on sale of shares which were subjected to STT - Held that:- The AO was justified in reopening the case on account of wrongly allowing carry forward of long term capital losses on account of transaction with STT which are exempted under section 10(38) Decided against assessee.
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Central Excise
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2013 (12) TMI 691
Penalty - Applicability of Rule 26 of Central Excise Rule, 2002 against the transporter Held that:- It is not coming out from the list of consignments transported by the appellant, whether in all the consignments Central Excise invoices were made available to the transporter - It has not been brought out anywhere during the investigation that the appellant had the knowledge that some of the consignments transported by them were cleared without payment of duty and were liable to confiscation the consignments taken by the appellant were not included in the pocket diary recovered from the manufacturer - By submitting the list of consignments transported for the manufacturer voluntarily has actually helped the investigators in making out the case of clandestine removal against the manufacturer more strong. Relying upon Vijay Transport Co. Ltd vs. CCE, Daman [2008 (5) TMI 530 - CESTAT, AHMEDABAD ] and Commr. Of C.EX., Coimbatore vs. Al Matheswara Lorry Service [2004 (1) TMI 537 - CESTAT, CHENNAI] - From the statement of the appellant or any other document it has not been brought out by the department that appellant was aware of the clandestine nature of the goods transported - Penalty cannot be based on presumption or assumptions - There are no circumstantial evidence to indicate the involvement of the appellant in the clandestine removal of excisable goods by the manufacturer - no penalty under Rule 26 of the Central Excise Act, 2002 is imposable upon the appellant Decided in favour of Assessee.
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2013 (12) TMI 690
Clandestine removal of goods Duty not paid on individual clearance - Penalty under Rule 25(a) of of Central Excise Rules, 2002 Held that:- There is no doubt that the provisions of section 11AC is not attracted - If duties are not so paid, the goods are deemed to be non-duty paid as per the Rule and hence such goods become liable to confiscation under Rule 25 of the Rules and assessee becomes liable to penalty under Rule 25 (a) - Following Paras Lubricants Ltd Vs. CCE [2013 (4) TMI 245 - CESTAT, MUMBAI] - Penalty under Rule 25(a) is applicable - the Tribunal did not agree with imposing heavy penalty -there is some variation in the proportionality of penalty imposed considering the amounts involved and period involved Penalty in the present case reduced Decided partly in favour of Assessee.
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2013 (12) TMI 689
Goods cleared to SEZ developer No separate accounts maintained - Demand as per Rule 6(3)(b) of Cenvat credit Rules, 2004 - Waiver of Pre-deposit Held that:- The goods cleared to SEZ developer cannot be considered as exempted final products as they should be considered to have been exported - Following Sujana Metals Products Ltd. and Ors. vs. CCE, Hyderabad [2011 (9) TMI 724 - CESTAT, BANGALORE]- the appellant has made out prima facie case against the demand and associated penalties pre-deposits waived till the disposal Stay granted.
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2013 (12) TMI 688
Denial of MODVAT credit Capital goods under Rule 57Q oferstwhile Central Excise Rules, 1944 Waiver of pre-deposit Held that:- The Commissioner (Appeals) apparently has not proceeded on the basis that the use of the goods claimed to be capital goods is irrelevant, the Boards circular is prima facie of no significance - Prima facie the goods can be brought within the purview of the definition of capital goods under Rule 57Q as the rule stood during the material period - there will be waiver of pre-deposit till the disposal - stay granted.
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2013 (12) TMI 687
Clandestine removal of goods - Shortage of raw materials/finished goods Details given in computer print outs about the goods was in question - Burden to prove - Waiver of Pre-deposit Held that:- Prima facie, even though the computer printout has been retrieved from the premises of the applicant on 23.08.2008, it is quite necessary to show that the quantity of goods mentioned were cleared without payment of duty by adducing other corroborative evidence - the burden lies on the department - the Director accepted to removal of goods without payment of duty but the said statement cannot be extrapolated to allege that the details mentioned in the computer printout had been admitted to have been removed clandestinely without payment of duty by him. the Revenue could not place any corroborative evidence, to support the allegation of manufacture and clearance of the goods mentioned in the computer printout, without payment of duty from the factory premises of the Applicant to the persons - the issue of clandestine manufacture and clearance of goods without payment of duty rests on the appreciation of evidences adduced by both sides, which would be weighed and analyzed in detail, at the time of disposal of appeal Assessee directed to submit Rupees thirty five lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal partial stay granted.
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2013 (12) TMI 686
Differential Central Excise duty - Freight collected less the actual freight paid Waiver of pre-deposit Held that:- Following BARODA ELECTRIC METERS LTD. Versus COLLECTOR OF CENTRAL EXCISE [1997 (7) TMI 126 - SUPREME COURT OF INDIA] - the appellant has deposited entire amount of differential Central Excise duty confirmed by lower authorities Thus, the appellant has made out a case for waiver of pre-deposit of interest and penalties involved - the application for waiver of pre-deposit till the disposal Stay granted.
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2013 (12) TMI 685
Classification of the goods Waiver of Pre-deposit - The Revenue wants to classify under Heading 4820 of the Tariff, which covers registers, account books, notebooks, order books, receipt books, letter pads, manifold business forms etc. whereas the applicants want to classify the same as printed books, brochures, leaflets and similar printed matters - Held that:- The products, prima facie cannot be treated as printed books, brochures or leaflets, therefore the applicants have not made out a case for total waiver of duty - the applicants are directed to deposit an amount equal to 50% 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 (12) TMI 684
Reclassification of Goods Demanded Revenue relied upon the Test report Held that:- The report is not definite as the opinion of the Chief Chemist "it appears that after demineralization the some minerals have been added" - The report of Dy. Chief Chemist only opined that it appears that some minerals have been added - the report is not definite on the issue Thus, there was no infirmity the order Decided against Revenue.
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2013 (12) TMI 683
Addition of the freight charges to the assessable value Revenue was of the view that the assessees are recovering the freight by issue of debit notes separately and the freight is mentioned in the invoice separately Held that:- Following CCE, Noida vs. Accurate Meters Ltd. [2009 (3) TMI 1 - SUPREME COURT ] The freight charges are not part of assessable value of the goods Assessee contended that the transportation of the goods to the place of their customer is not a condition for sale - It is in some cases where the customer making a request for delivery, the appellants arranged transport and recovered transportation charges as agreed by the customer - order set aside Decided in favour of Assessee.
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2013 (12) TMI 682
Entitlement for benefit of Notification NO. 83/94 Held that:- The Notification 83/94 dated 11.04.1994 is applicable to the items falling under sub-heading 8413.11, 8413.12, 8413.13 and 8413.14 of the schedule of the Central Excise Tariff Act, 1985 - the item manufactured by the appellants also does not fall under Notification 8/2000 and 9/2000 - As the Notification itself is not applicable to the items manufactured by the appellant, therefore the benefit of Notification or undertaking given by the appellant on behalf of the raw material supplier are of no use for their benefit - the demands for the normal period are payable by the appellant as the activity of job worker was in the knowledge of the department from day one, therefore no penalty is imposable on the appellant Decided against Assessee.
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2013 (12) TMI 681
Denial of Interest on refund Held that:- Following Ranbaxy Laboratories Ltd. vs. Union of India [2011 (10) TMI 16 - Supreme Court of India] - Interest on delayed refund is payable under Section 11BB of Central Excise Act, 1944 on the expiry of period of three months from the date of receipt of application under Section 11B(I) and not from the date of order of refund or appellate order allowing such refund - the refund has been asked for the period from 21.09.1992 to 17.9.2002 but, the refund applications have been filed on 25.02.1991 which is prior to introduction of Section 11BB of the Central Excise Act, 1944- the provisions would start after three months from the date of assent of the President in the Finance Bill 1994 i.e. w.e.f 26.5.1995 - interest on the delayed refund is payable for the period from 25.08.1995 to 17.09.2002 - adjudicating authority directed to calculate the amount of interest and pay the to the appellants Decided in favour of Assessee.
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2013 (12) TMI 680
Defaults in payment of duty during the defaulted period - utilization of cenvat credit Held that:- The appellant has made out a case of 100% waiver of pre-deposit Following Solar Chemferts Pvt. Ltd. Vs. Commissioner of Central Excise, Thane -I [2011 (6) TMI 640 - CESTAT, MUMBAI] - interest will be payable from the date of each clearance to the date on which the default is made good - the payment made through Cenvat become proper even if it is paid before the date on which defaulted amount is paid, there is no case for demanding the duty paid through Cenvat credit to be paid again through cash/PLA - The matter remanded back to the adjudicating authority, who will ascertained the amount of interest payable by the appellant - The adjudicating authority is directed to calculate the interest within 30 days of the communication of the order the appellants are also directed to calculate the amount of interest payable by them Decided in favour of Assessee.
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2013 (12) TMI 679
Separate accounts not maintained - plastic crates used in the manufacture of exempted final products Demand under Rule 6(2) of the CENVAT Credit Rules, 2002made - Waiver of pre-deposit Held that:- The Commissioner had not taken into consideration the submission of the applicant that they have not availed the credit on the crates used in the manufacture of the exempted final products namely 'maaza mango' Relying upon CCE Vs. Nicholas Piramal (India) Ltd. [2009 (8) TMI 224 - BOMBAY HIGH COURT ] - the applicant has made out a prima facie case for waiver of pre-deposit of the amount till the disposal Stay granted.
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2013 (12) TMI 678
Benefit of SSI exemption of concessional rate of duty Goods cleared and manufactured by using brand name of foreign company Held that:- The appellant are using the brand name of their foreign supplier of raw material to them - appellants are using the brand name of others as decided in CCE vs. Rukmani Pakkwell Traders [2004 (2) TMI 70 - SUPREME COURT OF INDIA] Following COMMISSIONER CENTRAL EXCISE, BANGALORE Versus M/s. MEYER HEALTH CARE PVT. LTD. & ORS. [2011 (4) TMI 4 - SUPREME COURT OF INDIA] - for excise purposes the registration of brand name in the name of appellant is applicable from the date of registration which is 05.03.2009 thus, prior to 05.03.2009 the appellant are not the owner of the brand name Decided against Assessee.
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2013 (12) TMI 677
Valuation of petroleum products Pending appeal - Waiver of Pre-deposit Held that:- The matter of the same assessee is pending before the Supreme Court - CBEC vide Circular F. No.6/21/2003-CX.1 (Pt.) dated 3.2.2010, stated that as the appeal of BPCL is pending before the Hon'ble Supreme Court, the field formations are directed to consign all the pending show-cause notices on the issue to the call book pending a final verdict of the Hon'ble Supreme Court - the order was passed before the issue of the Board's Circular Prima facie the appellant is having a strong case in their favour Pre-deposits waived till the disposal stay granted.
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2013 (12) TMI 676
Eligibility for exemption under Notification No.6/06-CE CPU cleared with monitor, mouse and key board as a set Waiver of Pre-deposit - Revenue was of the view that as per the definition of "computers" given in the Explanation, the exemption will be available only in cases where CPU is cleared separately with no other items or if CPU is cleared along with monitor, mouse and key board as a set Held that:- Prima facie, the exemption under the notification will be applicable for CPU even if a key board and mouse were cleared along with CPU - There can be a doubt whether for the combination, the exemption is available - The issue will be decided at the final hearing of the appeal - the applicant is directed to make out a pre-deposit of Rupees Twenty lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2013 (12) TMI 675
Reversal of cenvat credit under Rule 3(5) of Cenvat credit Rules,2004 Waiver of Pre-deposit Held that:- The applicants are only inspecting the goods purchased which any prudent buyer of any goods does and hence, the activity is not manufacture - The applicants are only an intermediary to procure goods and supply to 100% EOUs, thereby stripping CENVAT credit available on the goods for the use by appellants Following Lakshmi Automatic Loom Works Ltd. Vs Commissioner of Central Excise, Trichy [2008 (10) TMI 57 - CESTAT CHENNAI] credit was to be reversed Thus, the applicant directed to pre-deposit a sum of Rupees Fifteen Lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2013 (12) TMI 674
Cinders as Residue emerges from the manufacture - Sold in the open market Waiver of Pre-deposit Held that:- The meaning of "excisable goods" has changed by amendment in law, the Tribunal should look into the new legal provision, in which case the product is excisable - The amendment made in Section 2(d) will not have the effect of changing Following Union of India Vs Ahmedabad Electricity Co. Ltd. [2003 (10) TMI 47 - SUPREME COURT OF INDIA] - Pre-deposit waived till the disposal Stay granted.
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2013 (12) TMI 673
Process amounts to manufacture or not u/s 2(f) of the Central Excise Act, 1944 - Regeneration of platinum catalyst from spent catalyst and conversion of platinum into colloidal platinum Waiver of Pre-deposit Held that:- It is evident from the orders that the applicant manufactured the goods and therefore duty liability is on them - the applicants have not made a prima facie case for waiver of entire amount of duty, interest and penalties - the applicant has already deposited a sum of Rs.3,78,212.98 - the applicant is directed to deposit a further sum of Rupees three lakhs as pre-deposit upon such submission rest of the amount to be waived till the disposal Partial stay granted.
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2013 (12) TMI 672
Denial of credit on 'hollow profiles' and 'panels' Waiver of Pre-deposits Held that:- The applicant took a definite stand that the items were used in the 'hollow profiles' and 'panels' which are integral part of the paint shop for effective performance of the machinery in the painting processes - There is a dispute as to use of these items in or in relation to the manufacture of final product - there is no verification of the use of the items - Relying upon Saraswati Sugar Mills Vs Commissioner of Central Excise, Delhi-III [2011 (8) TMI 4 - SUPREME COURT OF INDIA] - iron and steel structure in Sugar Mills is not eligible for CENVAT credit - the applicant failed to make out a prima facie case for waiver of entire amount of pre-deposit of duty, penalty and interest - the applicant directed to deposit a sum of Rupees Twenty Five Lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2013 (12) TMI 671
Application of Section 11AA of the Central Excise Act, 1944 Waiver of Pre-deposit Held that:- The applicant deposited entire amount of duty on the basis of duty ascertained by Central Excise officer, before issue of notice - in view of Section 11A (1)(b) of the said Act, the applicant is also liable to pay interest along with duty - the demand was not time barred - The case of EID Parry was with reference to Section 11AB as it was originally introduced by Section 76 of Finance Act, 1996 - Section 11AA as it stands now makes it very clear that interest is payable if duty payment is delayed Following CCE Pune Vs SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT] - interest provision would apply even when deposit is made before issue of SCN - the applicant is liable to pay the amount of interest Thus, the applicant is directed to deposit a sum of Rupees Ninety five lakhs as pre-deposit upon such submission rest of the amount to be stayed till the disposal Partial stay granted.
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2013 (12) TMI 670
Addition of the value of third party inspection charges in the assessable value Waiver of pre-deposit Held that:- Relying upon CCE, Raipur vs. Bhaskar Ispat Pvt. Ltd [2004 (3) TMI 102 - CESTAT, NEW DELHI] - the cost of additional testing conducted at customer's request and borne by the customer is not to be included in the asessable value of goods The inspection is optional at the request of the customers and at the cost of the customers and service tax is being paid in respect of inspection charges Thus, the applicants have made out a case for waiver of pre-deposit of dues Pre-deposits waived till the disposal Stay granted.
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2013 (12) TMI 669
Goods cleared in small packing Assessable u/s 4A of Central Excise Act,1944 Waiver of Pre-deposit Held that:- Note 3 to Section VI and Note 1 to Section VII of the Central Excise Tariff Act, 1985 provides that goods put up in sets consisting of two or more separate constituents, some or all of which in all this section are intended to mixed together of obtain a product of Section VI or VII, are to be classified in the heading appropriate to that product, provided that the constituents are put up, clearly identifiable as being intended to be used together without being repacked. Revenue was of the view that the resin and hardener even though packed separately are intended to be used in the predetermined ratios - the goods were cleared even in 500 gms. Relying upon The learned AR strongly relied upon the decision of the Hon'ble Supreme Court in the case of Commissioner Vs. Convertor Adhesive & Chemicals (P) Ltd. [2005 (8) TMI 17 - SUPREME COURT OF INDIA] - It is apparent that the intended use of the product was not within the knowledge of the Department - the applicants failed to make out a prima facie case for waiver of pre-deposit assessee directed to deposit Rupees forty lakhs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2013 (12) TMI 668
Process amounts to manufacture or not u/s 2(f) of Central Excise Act, 1944 - Cutting and slitting of jumbo rolls of plastic, aluminium and paper Held that:- Following CCE, New Delhi-I vs. S.R. Tissues Pvt. Ltd. [2005 (8) TMI 111 - SUPREME COURT OF INDIA] - the slitting and cutting of tissue paper or aluminium foil does not amount to manufacture Decided against Revenue.
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2013 (12) TMI 667
Eligibility for cenvat credit on Detergent cake Waiver of Pre-deposit - Revenue was of the view that the product manufactured was detergent powder and detergent cake could not be considered as "input" for manufacture of detergent powder Held that:- Prima facie, provisions of Section 2(f)(iii) and the fact that combined product is notified in the Third Schedule, applicant should be eligible for Cenvat credit of duty paid on detergent cake Appellant had made out a prima facie case in their favour Pre-deposits waived till the disposal Stay granted.
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2013 (12) TMI 666
Denial of cenvat credit in terms of Rule7(1)(b) of the Cenvat Credit Rules, 2001- Expenses to be included in the assessable value Waiver of Pre-deposit Held that:- The duty has been paid by R&D unit - the applicants have taken the credit on the strength of supplementary invoice - Whether the credit is admissible or not has to be seen at the time of final hearing - As the duty has been paid and on the strength of that, they have taken the credit Thus, the applicants have made out a case for 100% waiver of amount Pre-deposits waived till the disposal stay granted.
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2013 (12) TMI 665
Impure Spirit and carbon-di-oxide generated during re-distillation of Ethyl alcohol - Revenue was of the view that the denatured spirit and carbon-di-oxide are dutiable items Waiver of Pre-deposit Held that:- Relying upon SCI India Ltd. v. Commissioner of Central Excise, Patna [2007 (6) TMI 152 - CESTAT, KOLKATA] - ethyl alcohol for human consumption is not in the category of exempted goods and do not fall within heading 22.04 as the same are not excisable at all - Prima facie, the appellants claim that rectified spirit is non-excisable and only denatured ethyl alcohol can be considered excisable even though it has not been dealt by them has considerable force - the appellant has made out a prima facie case for waiver of amount Pre-deposits waived till the disposal Stay granted.
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