Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 16, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
TMI Short Notes
Articles
News
Notifications
Customs
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62/2015 - dated
14-12-2015
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ADD
Seeks to levy definitive anti-dumping duty on Abendazole, originating in, or exported from the People's Republic of China, for a period of five years
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57/2015 - dated
14-12-2015
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Cus
Seeks to further amend Notification No. 69/2011-Customs, dated 29th July, 2011 so as to provide a concessional rate of basic customs duty in respect of tariff item 84082020 [engines of a kind used for the propulsion of motor vehicles – of cylinder capacity exceeding 250 cc] and 87084000 [gear box and parts thereof, of motor vehicles], w.e.f. 1st of January, 2016 at 5.94% and 8.13%, respectively, when imported under the India-Japan Comprehensive Economic Partnership Agreement (IJCEPA)
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Provisions of section 115JB were applicable and that the amendment was prospective in nature. The Tribunal could not have ta ken a different view after relying upon the judgment in the case of State Bank of Hyderabad Vs. DCIT - HC
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Valuation of stock - Section 145A cannot be applied in a piecemeal and ad-hoc manner to a few handful chosen and selected transactions as is done by the revenue in the instant case which will lead to distortion of income chargeable to tax which is not permissible under the Act. - AT
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MAT - Computation of book profits u/s 115JB - AO sought to tax under MAT an amount being remission of liability of Bank - once this amount has been disclosed in the P&L A/c prepared strictly as per provisions of Schedule VI of the Companies Act, the same cannot be excluded for the purpose of computing book profits u/s 115JB - AT
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Bogus Purchases - assessee had purchased the goods in the months of May and June, 2008. However, the payments have been made from September, 2009 onwards, i.e., after expiry of about one and half years - assessee has failed to establish the genuineness of purchases - AT
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TDS u/s 194 - transporters have transported the goods of seller / supplier - assessee makes the payment to GTA, got reimbursed the amount and no expenses booked against such payment - No obligation to deduct TDS u/s 194C because the transporters have not acted on behalf of the assessee - AT
Customs
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Whether once the export obligation is discharged the conditions of customs Notification No. 48/99 are no more relevant - Diversion of goods - discrepancy establishes a case of violation of import condition for which the respondent was not entitled to any relief - AT
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Valuation of goods - Enhancement in value of goods - Assessee paid enhanced value since he wanted goods urgently - Since in this case the appellant has not challenged the assessment order, consequently refund claim is not maintainable - AT
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Valuation - determination of CVD - Section 4 or 4A - MRP Based method of assessment - before final assessment of Bills of Entry, they should have raised the question of proper valuation for assessment of CVD. Since they have not done so, the extended period cannot be invoked - AT
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Denial of refund claim - SAD - Unjust enrichment - The balance sheet shows the amount of 4% SAD as receivable under the asset category. Under the circumstances, it cannot be said that the 4% SAD has been passed on to the consumer. The bar of unjust enrichment will not be applicable - AT
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There is no dispute that the appellants were heard by one Commissioner and the adjudication order was passed by another Commissioner, which is clear violation of principles of natural justice and hence the impugned order cannot be sustained on this ground alone. - AT
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Imposition of penalty on a person treating as Importer - There is no evidence on record that appellant has signed the bills of entry and has given all the documents personally to the Customs House agent or any other person. Penalty can not be imposed upon the appellant on the basis of suspicion created by presumption & surmises by holding him to be the importer. - AT
Indian Laws
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The head notes of the defendant made are almost similar to that of the plaintiff - They are directed to remove the existing infringing material from its website www.casansaar.com, which may amount to infringement of plaintiff’s copyright as claimed. - HC
Service Tax
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Availment of CENVAT credit of service tax - scope of eligible input services - Rule 2(l) - outdoor catering service and insurance service -It is well settled that the legislative intent cannot be defeated by adopting an interpretation which is clearly against such intent - credit not allowed - AT
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Demand of service tax - pure agent - outdoor catering - The contract between the two parties does not provide that appellant will act as a pure agent. In fact, there is clear finding of the lower authorities that appellant received not only the wages but additional margin for the wages and further a lump sum amount for acting as a contractor have been made. In such circumstances, we cannot say that appellant has acted as a pure agent. - AT
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So long as an assessee is not undertaking manufacture of dutiable and exempted goods or providing taxable and exempted services, unless the credit is exclusively used for providing exempted services or manufactured goods credit cannot be denied in respect of services listed in Rule 6(5). - AT
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Residential complex was constructed by the appellants and handed over to the implementing agency of the Rajiv Gruhakalpa Scheme which in turn sold the apartments to the beneficiaries. Therefore, prima facie, it has to be held that appellants have rendered construction of residential complex service - AT
Central Excise
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Manufacture - marketability - process of cold-rolling of stainless steel patta/pattis - whether cold-rolled pattas are distinct marketable commodities - held yes - SC
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Clandestine removal of goods - The fact of clandestine removal of goods had not been proved. Mere quoting the statements of the proprietors and some of their employees was not enough. The value of clandestinely removed goods had not been adjudged. - no Demand - HC
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Denial of CENVAT Credit - credit on the xerox copy of the bill of entry - the original bill of entry is with the Customs authorities and they have refused to return the same to the appellant. In such situation, the appellant is not at fault for not producing the same. - AT
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Demand of education cess - the Paper Cess levied by other than the Ministry of Finance (Department of Revenue), and therefore, demand of Education Cess on Paper Cess cannot be sustained - AT
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If the cumulative credit in respect of all the duties is to the extent of ₹ 100 and if an asseessee has paid ₹ 120/- at the time of clearance of such inputs, it can be safely concluded that the entire credit stands reversed by him. There cannot be any further requirement of reversal of SAD component separately. - AT
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Denial of Adjustment of excess payment paid against the short payment paid at the provisional assessment - the adjustment of excess duty paid by the appellant against short duty on finalisation of the provisional assessment is permissible. - AT
Case Laws:
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Income Tax
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2015 (12) TMI 776
Reopening of assessment - Held that:- HC order upheld [2013 (3) TMI 645 - ALLAHABAD HIGH COURT] In absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment years under consideration, the notice under section 148 of the Act having been issued after the expiry of a period of four years from the end of the relevant assessment years, the very initiation of proceedings under section 147 of the Act stand vitiated and as such cannot be sustained. - Decided in favour of assessee.
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2015 (12) TMI 775
Penalty u/s 271(1)(c) - addition treating profits on cancellation of forward foreign exchange contract as trading receipt instead of capital receipt - Held that:- The question is whether non-acceptance of a claim can be said to be a concealment. In a case where claim is made it is for the authorities to decide. It may or may not accept the claim. In the instant case, as the sum claimed as deduction is undisputed, it cannot be said that the assessee had furnished inaccurate particulars of income. Since there is no finding that the factual details furnished by the assessee in its return were inaccurate or erroneous or false and as the assessee had claimed the deduction of an expenditure treating it be capital in nature, it is appropriate to refer to the law laid down by the Supreme Court in CIT vs. Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT ] wherein held A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Thus the income tax authorities erred in imposing the penalty and the Tribunal was not justified in upholding the imposition of penalty. - Decided in favour of assessee
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2015 (12) TMI 774
Rectification of adjustment made in intimation under section 143(1)(a) of the Income-tax Act, 1961, with regard to claim for deduction under section 80HHC - whether the Assessing Officer was justified in passing the order under Section 143(1)(a) with regard to the deduction under Section 80HHC? - Held that:- It is to be noted that Section 143(1)(a) empowers the Assessing Officer to compute the total income or loss after making adjustments, namely, "any arithmetical error in the return" "or" "an incorrect claim, if such incorrect claim is apparent from any information in the return". It is nobody’s case that there was any arithmetical error in the return. Moreover, the claim, assuming to be incorrect was not apparent from the information in the return which could have been dealt by the Assessing Officer under Section 143(1)(a). Thus, the issue was a debatable one as correctly held by the Tribunal. If the Assessing Officer was of the view that there was reason to believe that the claim was inadmissible, he should have served notice on the assessee specifying the particulars of such claim or such loss or deduction or relief under Section 143(2) or if he had reason to believe that the income had escaped assessment should have served notice under section 148 of the Act. The Assessing Officer chose neither of the two avenues. Thus the judgment of the Supreme Court in IPCA Laboratory Ltd. (2004 (3) TMI 9 - SUPREME Court ), relied on by the appellant, wherein the question for consideration was whether the appellants were entitled to deduction under section 80HHC in respect of the sum of ₹ 3.78 crores by ignoring the loss of ₹ 6.86 crores is not applicable as it is not a case regarding the processing of a return under section 143. The judgment of the Bombay High Court in IPCA Laboratories Ltd. (2001 (7) TMI 100 - BOMBAY High Court ) does not support the case of the Appellant as therein notice was issued under Section 148 of the Act, unlike the case in hand, where no such notice was issued. Therefore, the submission on behalf of the appellant cannot be accepted. - Decided in favour of the assessee.
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2015 (12) TMI 773
Reopening of assessment - whether the reopening of the assessment under Section 147/148 is valid? - Held that:- In respect of one of the issues, viz., payment of interest on fixed deposits, the Assessees drew the attention of the Assessing Officer ("AO") to the fact that the amount has already been offered to tax and tax had been paid and yet, in the order disposing of the objections, the AO is completely silent as regards this objection. The Court is of the view that notwithstanding several decisions of the Supreme Court as well as this Court clearly enunciating the legal position under Section 147/148 of the Act, the reopening of assessment in cases like the one on hand give the impression that reopening of assessment is being done mechanically and casually resulting in unnecessary harassment of the Assessee. - Decided in favour of assessee.
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2015 (12) TMI 772
Entitlement to such a claim in view of proviso 5 to Section 10(23C)(via) - Held that:- This appeal is allowed in terms of the judgment The Commissioner of Income Tax, Mangalore and another Vs. M/s.Manipal Academy of Higher Education (2013 (10) TMI 161 - KARNATAKA HIGH COURT) setting aside the order passed by the Assessing Authority, the Appellate Commissioner and Income Tax Appellate Tribunal respectively and the matter stands remitted back to the assessing authority. It is needless to clarify that the remaining substantial questions of law raised in the memorandum of appeal are left open and it is the duty of the assessing authority to consider the same after affording opportunity of hearing to both the parties afresh and to pass appropriate orders in accordance with law.
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2015 (12) TMI 771
Reopening of assessment - ITAT deleted the reopening assessment - Held that:- It is well settled that in order to issue a valid reassessment notice, the AO has to be satisfied on the basis of tangible material or information subsequently available to him that the assessee had not made full and true disclosure which led to income escaping assessment at the stage when the original assessment was completed. Short of that a re-appreciation of the existing materials which really amounts to review is impermissible. The Tribunal, in the circumstances of this case was justified in concluding that re-assessment proceedings themselves were not in accordance with law and consequently dismissing the Revenue’s appeal. - Decided in favour of assessee.
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2015 (12) TMI 770
Non applicability of provisions of section 115JB on assessee as held by ITAT - Held that:- Provisions of section 115JB were applicable and that the amendment was prospective in nature. The Tribunal could not have ta ken a different view after relying upon the judgment in the case of State Bank of Hyderabad Vs. DCIT [2013 (3) TMI 307 - ITAT HYDERABAD]. If the Tribunal wanted to take such a view, the reasons should have been expressed, which the Tribunal never did. By this process the Tribunal got rid of the matter without really deciding the points urged. By such disposal of the appeal neither of the parties was benefited. The impugned order is accordingly set aside and the matter is remanded for rehearing.
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2015 (12) TMI 769
Transfer pricing adjustment - selection of comparbales - assessment proceedings on dissimilar companies - Held that:- The Hon’ble Delhi High Court held in the case of CIT Vs. Agnity India Technologies Pvt. Ltd. (2013 (7) TMI 696 - DELHI HIGH COURT) that comparison where super normal profit is shown by the company, it cannot be applied for ALP adjustment. The assessee had shown operating margin @ 13.17%, which is within +/- 5% variation of arithmetic mean i.e. 16.71% calculated on the basis of proper comparables. Therefore, we allow the assessee’s appeal and no adjustment is required to be made in ALP during the year under consideration. - Decided in favour of assessee. Comparing full-fledged risk bearing entities with the appellant’s captive operations without making any risk adjustment for difference between the functional and risk profile of comparable companies - Held that:- The ld TPO was right by accepting the arithmetic mean of comparable of comparable companies if any risk as claimed by the appellant was concerned, it will be resulted in the arithmetic mean of all the companies as these risks adjustments also applicable for them. The assessee could not show how such difference in risk and functions affected result of comparables. The assessee in comparing the case with Infosys and Wipro had claimed that the appellant had negligible risk as it is a captive unit providing service to its AE and is remunerated on cost which marked up basis. - Decided against assessee.
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2015 (12) TMI 768
Rectification of mistake - lack of jurisdiction in absence of order u/s. 127 - Held that:- The AR had referred to the letter of the assessee dated 14. 05. 2008. We find that the said letter pertains to the AY. 1995-96 only and not to the other years. The letter only proves that the assessee had asked for certain details from the AO, but it does not in any manner prove that the issue of change of jurisdiction u/s. 127 were agitated before the FAA. We find that the FAA had decided the appeal on 27. 3. 2008 whereas the letter to the AO is dated 14. 5. 2008. Naturally, the FAA had no occasion to deal with the issue. We find that while dealing with the issue the Tribunal has dealt all the arguments raised by the assessee and had arrived at a conclusion. In our opinion, while deciding the rectification application we cannot sit over the judgment of the earlier bench, because we do not have power of review. We have reproduced the grounds taken by the assessee before the FAA in the second round of litigation and there was no ground about change of jurisdiction. In our opinion, the Tribunal was right when it held that the issue is not arising out of the order of the FAA. While deciding the MA we cannot decide such an issue. As far as the argument of opening balance of cash credit is concerned, we would like to mention that the issue raised by the assessee was not argued by the assessee before the lower authorities as it had not taken the said ground. Considering the available material on record the Tribunal had decided the issue. Even if there is an error of judgment on part of the bench, same does not fall under the category of mistake apparent on the record, as held by the Hon’ble Bombay High Court in the case of Ramesh Electricals (1992 (11) TMI 32 - BOMBAY High Court ). The assessee had not brought to our notice any case by which the said judgment has been reversed. We also find that it is not that kind of a mistake that has been dealt with by the Hon’ble jurisdictional High Court in the case of Supreme Industries Ltd. (2014 (12) TMI 184 - BOMBAY HIGH COURT). It is not a case of typographical or arithmetical mistake. It is not the case that the judgment delivered by the Hon’ble Bombay High Court or the Hon’ble Apex Court has been not followed. The so called mistakes pointed out by the assessee are neither patent nor manifest nor self-evident and they require elaborate discussion of evidence or arguments to establish. Therefore, we agree with the argument advanced by the DR that the assessee wants us to review the order dated 15. 06. 2012 and that same is not permissible as per the provisions of section 254(2)of the Act. . The assessments were reopened for the above mentioned three years on the basis of subsequent AYs. It was found that the assessee had taken loans from same parties in AY. 1997-98 and had not filed confirmations. It not file any detail, so the AO invoked the provisions of section 68 of the Act. In the appellate proceedings, before the FAA it challenged the re-opening of the assessment as well as the additions made with regard to the creditors. The FAA dismissed the appeal filed by the assessee on both counts. Before, the Tribunal it did not press the ground that dealt with the re-opening of the assessment. Accordingly, the grounds were dismissed. The assessee made a request to the Tribunal to admit additional evidences and the Tribunal restored back the matter to the file of the AO. The assessee could produce confirmation of eight creditors only out of the 145 creditors. The AO, deleted the addition with regard to those eight creditors. In the appellate proceedings before the FAA it did not object the re-opening of the assessment. One more request was made to admit additional evidences as per Rule 46A of the Rules, before the FAA. He admitted the same and directed the AO to make necessary enquiries. Ample opportunity and time was given to the assessee to produce details about the creditors, but it failed to produce the same. In these circumstances the FAA upheld the addition made by the AO. Considering the above facts the Tribunal had in its order dated 15. 06. 2012 had taken a decision. In our opinion, the said decision cannot be rectified under the provisions of section 264(2) of the Act, as no mistake apparent from the record was brought to our notice. - Decided against assessee
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2015 (12) TMI 767
Set off of unabsorbed depreciation - Held that:- Perusal of the wordings of Section 32(2) as applicable to assessment year 2007-08 i.e. the impugned assessment year will reveal that the wordings are similar to the wordings as applicable for assessment year 2002-03. Respectfully following the decision of Hon’ble Supreme Court in the case of CIT v. Virmani Industries Private Limited (1995 (10) TMI 1 - SUPREME Court ) we hold that the assessee company is entitled to set off of unabsorbed depreciation against long term capital gain earned during the year by the assessee company. We order accordingly. Invoking provisions of Section 145A - additions to the closing stock and that too without making corresponding adjustments to the opening stock , purchase and sale of the assessee company - Held that:- in the instant case , the assessee company is consistently and regularly following the method of accounting by following ‘exclusive method’ also called ‘net method’ which is one of the accepted method of accountancy whereby the taxes paid on purchase of raw material are not included in the cost of purchase on the premise that the assessee company is entitled for Cenvat credit on the same to be adjusted against the excise duty liability on finished goods manufactured by the assessee company , while the basic fallacy in contention of the Revenue is that the Revenue is contemplating adding the excise duty paid to the value of closing inventory following the ‘inclusive method’ also called as ‘gross method’ and not to the totality of all relevant transactions during the previous year to arrive at a correct income chargeable to tax as per the Act and hence , in our considered view, , the ‘inclusive method’ also called as ‘gross method’ as mandated by Section 145A of the Act, is to be applied to the totality of all relevant transactions during the previous year to arrive at a correct income chargeable to tax as per the Act and the same cannot be applied in a piecemeal and ad-hoc manner to a few handful chosen and selected transactions as is done by the revenue in the instant case which will lead to distortion of income chargeable to tax which is not permissible under the Act. Our above observations and discussions in preceding para’s are equally applicable to VAT/sales tax on the raw materials, WIP and finished goods. Thus the interest of justice will be best served , if the matter is restored to the file of the AO to re-determine the correct income chargeable to tax as per the Act after considering the provisions of Section 145A of the Act in light of our observations as contained in the preceding para’s.
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2015 (12) TMI 766
Income from unaccounted bank accounts and other material found during the course of survey - whether to be assessed in the hands of Shri S.N. Rathi, individual or in the hands of Shri S.N. Rathi, AOP? - Held that:- The concurrent finding of fact recorded by the revenues authorities below on this issue are to the effect that the said benami accounts were neither in the name of AOP nor in the name of any alleged member of the AOP. The Ld. First Appellate Authority has specifically observed that from the material collected during the course of survey and in the post survey inquiry, it emerges out that said accounts have been operated by Shri S.N. Rathi. The specimen signatures are similar in all the accounts. The handwriting in respect of documents also resemble with writing of Shri S.N. Rathi. During the course of survey, Shri S.N. Rathi or any other member of AOP had not disclosed to the survey party about the existence of any AOP. They could not produce any evidence to demonstrate that profit was distributed in a definite ratio among alleged members of AOP. Therefore, taking into consideration the specific objections pointed out by the Assessing Officer (extracted supra) as well as finding of the Commissioner of Income Tax(A), we are of the view that assessee failed to establish the existence of AOP. This line of argument has been taken after the survey during the assessment proceeding. Thus, the income from the 25 benami unaccounted accounts is to be assessed in the hands of Shri S.N. Rathi, individual. - Decided against assessee. Computation of profit from the benami bank account - Held that:- In assessment order relates to the issue, as to why alleged books of accounts should not be rejected. But after rejection of the books, the ld. Assessing Officer failed to substantiate his conclusion for computing the profit at @ 10% of the turnover. Taking into consideration the finding of the Commissioner of Income Tax(A), we do not see any reason to interfere in his orders in all the assessment years. Thus, grounds of appeal of the assessee as well as by the revenue on this issue, in all these assessment years are rejected. The Ld. Assessing Officer shall compute the profit from the benami bank accounts @ 2.45% of the turnover and assessed it in the hands of Shri S.N. Rathi individual. Suppression of sales/turnover - contentions of the assessee is that except one sale vide BF3/43 for a sum of ₹ 4,335/- all other sales are to its associate concerns - Held that:- The amounts collected from these sales were taken to the bank accounts and have been considered in the total turnover. In our opinion, Ld. First Appellate Authority has appreciated the controversy in right perspective. The Assessing Officer could not establish that these independent transactions have no connection with the total turnover computed on the basis of bank account. Ld. First Appellate Authority has rightly observed that notings of the sales on the loose papers were ultimately travelled to bank accounts of the benami concerns. Thus, it will amount a double addition. As far as addition of ₹ 16,09,314/- in Assessment Year 2005-06 is concerned, it ought to have been deleted on the same analogy. Ld. Commissioner of Income Tax(A), somehow, failed to record any finding on this issue. We find that, foundation of addition is similar, thus, this addition is not sustainable. - Decided in favour of assessee. Peak investment for seed capital - addition account of peak investment for seed capital in achieving the unaccounted turnover is to be made or not? - Held that:- It is an admitted fact that assessee has been doing business without disclosing it to the income tax authority. The bank accounts are benami of the assessee. For starting any business, some seed capital will always be required. The assessee has not disclosed initial capital in these accounts. He is bound to disclose the source of initial capital. Ld. Assessing Officer has worked the initial capital by taking a peak deposit and, therefore, to our mind ld. Assessing Officer has rightly made the addition for Assessment Year 2003-04. As far as Assessment Year 2004-05 is concerned, initial investment of ₹ 1,30,720/- has been worked out. To our mind, no addition can be made in this year because assesse has the benefit of availability of unexplained capital added in Assessment Year 2003-04 at ₹ 4,64,196/- + unexplained income from the benami account at ₹ 3,41,942/-. These two amounts can take care of the alleged unexplained investment at ₹ 1,30,720/-, therefore no addition is to be made in Assessment Year 2004-05. As far as Assessment Year 2005-06 is concerned, ld. Assessing Officer has worked unexplained investment of ₹ 28,57,013/-. In principle, we agree with the Assessing Officer that addition on account of unexplained investment for initiating the business has to be made but the telescoping of the unexplained income assessed in the hands of assesse for Assessment Year 2003-04, 2004-05 + additions made on account unexplained investment initially made in Assessment Year 2003-04 has to be granted. Ld. Assessing Officer shall give credit of ₹ 4,64,196/- + ₹ 3,41,942/- i.e. the peak investment and income for Assessment Year 2003-04. He shall further give credit of ₹ 14,53,727/- i.e. the income assessed for Assessment Year 2004-05. After setting these amounts against ₹ 28,57,013/-, he shall make addition of remaining amount in this Assessment Year on account of peak investment. In Assessment Year 2006-07, Assessing Officer has made addition at ₹ 27,37,624/-. Ld. First Appellate Authority has confirmed this addition. The assessee is in appeal. We agree in principle with the Commissioner of Income Tax(A) that initial investment made by the assessee has to be added as unexplained investment of the assesse. because assessee failed to establish the source of investment. But over a period of time, the assessee has accumulated sufficient capital which can take care of this investment. In the immediately preceding year, we have noticed the investment of ₹ 28,57,013/-. The benefit of telescoping of this amount will be available to the assessee in Assessment Year 2006-07. This amount is more than the alleged peak investment worked out in this year, therefore, in this year no addition can be upheld GP addition - CIT(A) deleted the addition - Held that:- No error in the order of Commissioner of Income Tax (Appeals), because the Assessing Officer failed to point the defects in the regular books of accounts maintained by the assessee. He simply compared the GP to ealier assessment year and then made the addition. This is not the right course provided u/s. 145(3)/144 of the income tax act. The Assessing Officer can estimate the GP only when it was not possible for him to deduce true income from the accounts of the assessee. He has not pointed out any such impossibility in the assessment order. - Decided in favour of assessee Addition u/s 68 - CIT(A) deleted the addition - Held that:- It emerges from the record that Assessing Officer has taken wrong figure of ₹ 2,50,000/- as credit appearing against the name of Shri Ruresh Paliwal (HUF). From the copy of affidavit considered by Commissioner of Income Tax (Appeals) and copies of the accounts, it reveals that amounts were only 20,000/-. With regard to Shri Om Textile, assessee has filed confirmation and PAN. Thus, he has explained cash credits appearing in his books of accounts. He has given the name, address of the creditor and also proved the genuineness of the transaction. The creditors are income tax assessee, therefore, their creditworthiness for small amount cannot be doubted. We do not find any error in the finding of Commissioner of Income Tax (Appeals) - Decided in favour of assessee Disallowance out of interest expenses - CIT(A) deleted the addition - Held that:- On due consideration of facts and circumstances, we do not find any error in the order of Ld. Commissioner of Income Tax (Appeals) because this year assessee has not taken fresh loan from the member of Joshi and Paliwal family. The genuineness of the loans was not doubted in earlier years and expenses were allowed. Therefore, no disallowance can be made in this year. - Decided in favour of assessee Charging interest u/s. 234B and 234C for the fault of advance tax - Held that:- The moment Assessing Officer has changed status of taxability, then, the credit of taxes paid in one entity ought to be given to the entity in whose hand income is ultimately taxed, we have upheld the action of Assessing Officer that income from unaccounted transaction ought to be assessed in the hands of Shri S. N. Rathi (individual) because assessee failed to establish the existence of any AOP. In these circumstances, the credit of taxes paid in the status of AOP deserves to be given to the assessee. Therefore, we set aside this issue to the Assessing Officer with direction that ld. Assessing Officer shall re- examine this issue after hearing the assessee. This ground of appeal is allowed for statistical purposes in all the assessment years.
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2015 (12) TMI 765
Addition on account of cash shortage resulting from the excess expenditure incurred - Held that:- Assessing Officer made specific defects in the cash book. The assessee could not be controverted the finding of the Assessing Officer and had not placed any evidence regarding shortage of cash before the lower authorities as well as before us. Therefore, we uphold the order of the ld CIT(A). - Decided against assessee. Disallowance U/s 40A(3) - Held that:- The assessee has paid salary in excess to ₹ 20,000/- and violated the provisions of Section 40A(3) of the Act but it is also revealed that these payments were pertained to salary for the months of May to August. The genuineness of the payments has not been doubted. The employees were insisted upon cash payments only, therefore, to maintain the good relation with them, the company paid cash salary for various months. The Hon’ble Rajasthan High Court in the case of Harshila Chorida Vs. ITO ( 2006 (11) TMI 117 - RAJASTHAN HIGH COURT ) has held that exceptional condition mentioned in Rule 6DD are not exclusive. This was the business expdiencies of the company to pay in cash, therefore, we do not find that these payments are covered U/s 40A(3) of the Act. Accordingly, the addition confirmed by the ld CIT(A) is deleted. - Decided in favour of assessee. Addition on account of expenditure incurred on repair and maintenance treating the same as capital expenditure - Held that:- the assessee has fabricated the evidence at the time of photo copying. Original vouchers were not produced before the ld CIT(A). The genuineness of the expenses has been doubted by the lower authority, therefore, we confirm the order of the ld CIT(A) on this ground - Decided against assessee. Addition on account of cessation of liability U/s 41(1) - Held that:- burden is on the revenue to prove that the assessee has taken deduction in earlier year and there is a write-off bilateral. In assessee’s case, even unilateral written off has not been claimed by the company. The other creditors were advance received from the customer to the tune of ₹ 9,41,354/-, which was paid of in later years. The AR of the assessee filed relevant evidences for repayment in subsequent year, which proved that the assessee’s liability was in existence. The revenue has not brought on record any adversary evidence to establish that liability was not inexistence or not paid in the subsequent year. The assessee has shown ₹ 3.60 lacs as security deposit out of this ₹ 2.10 lacs were added by the Assessing Officer in A.Y. 1996-97, which has been deleted by the ld CIT(A). No appeal had been filed by the revenue before the ITAT, therefore, issue is settled. Further remaining amount, the assessee filed confirmation and the ld Assessing Officer had not made any inquiry and established the case that liability is not inexistence. After careful consideration of all the facts and circumstances of the case and written submissions made by the ld AR on Section 41(1) of the Act, we do not find any reason to confirm the order of the ld CIT(A). - Decided in favour of assessee. Disallowance of ESI contribution made U/s 36(1)(x) read with Section 2(24)(10) - Held that:- The ld AR has submitted that the said amount of ESI has been paid before due date of return to the fund. In view of the facts and circumstances, we delete the addition made by the Assessing Officer and confirmed by the ld CIT(A). Accordingly, this ground of the assessee’s appeal is allowed. - Decided in favour of assessee.
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2015 (12) TMI 764
Addition under section 68 - CIT(A) deleted the addition - Held that:- The assessee by producing the address of the companies, PAN, confirmation from the share subscribers, ROC details that shares have been allotted to these companies, assessment order u/s 143(3) of one lender company for AY 2007-08 in which the AO has accepted the transaction, the bank details, bank statements, cheque number, etc., the assessee has discharged the preliminary onus on it to prove the identity, creditworthiness and genuineness of the transaction in question, the AO merely on suspicion and surmises cannot make addition u/s 68 of the Act, therefore, the ld. CIT (A) has rightly deleted the addition made u/s 68 of the Act - Decided in favour of assessee.
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2015 (12) TMI 763
Deemed dividend u/s 2(22)(e) - the advances had not been made in the ordinary course of business expediency and the assessee had been regularly repaying the amount received from the company - CIT(A) deleted the addition - Held that:- On perusal of the copy of ledger account of the assessee with M/s A.K.J. Industries Ltd. extracted in the assessment order, it is clear that there were continuous transactions of receipt and payment of money to the assessee by the said company. There are some debit balance and after some time it was converted into credit balance and finally at the end of accounting year, there was a debit balance of ₹ 53,28,853/-. Out of this, there were entry made on 31st March, 2009 towards TDS payable of ₹ 29,51,460/-. Thus, there are mutual transactions between the said company and the assessee throughout the year. Therefore, in our considered opinion, this account is in the nature of a current account, and moreover, the salary payable is also credited in this account and wherever there are payments in excess of the salary, it was submitted that it was an advance salary received from the company. Therefore, in our considered opinion, these transactions one in ordinary course of business of the said company, cannot be treated as deemed dividend. - Decided in favour of assessee.
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2015 (12) TMI 762
Addition on difference in the amount of credit notes - Held that:- A reconciliation statement was furnished by the assessee before the ld. CIT(A) explaining the said difference. When the said reconciliation was forwarded by the ld. CIT(A) to the AO, the latter did not make any adverse comments thereon and although this position was specifically pointed out by the assessee, the ld. CIT(A) still confirmed the addition made by the AO on this issue observing that there was no documentary evidence filed by the assessee in order to enable verification of the reconciliation statement as pointed out by the AO. At the time of hearing before us, the ld. Counsel for the assessee has taken us through the copy of remand report submitted by the AO to the ld. CIT(A) to show that there was no such adverse comment offered by the AO in his remand report regarding lack of any documentary evidence and the reconciliation statement furnished by the assessee was actually accepted by him. It is also seen from the reconciliation statement furnished by the assessee that the major difference, as explained by the assessee, was on account of difference in the years, in which some credit notes were accounted for by both the sides. Thus the addition made by the AO on this issue was not sustainable and the ld. CIT(A) is not justified to confirm the same without appreciating the reconciliation statement filed by the assessee explaining the difference in the amount of credit notes - Decided in favour of assessee. Disallowance on account of interest on unsecured loan under section 40(a)(ia) - non-deduction of tax at source - said disallowance was made by the AO due to failure of the assessee to file during the course of assessment proceedings form no.15G claimed to be issued by Shri S. Debnath, the recipient of the interest - Held that:- Before the ld. CIT(A), the assessee however filed a photo copy of relevant form no.15G with a stamp thereon acknowledging receipt thereof by the concerned authority. The ld. CIT(A) however did not admit this relevant evidence on the ground that a photo copy of form no.15G was filed by the assessee and not the original. Unable to subscribe to the view taken by the ld. CIT(A) on this issue. At the time of hearing, the ld. Counsel for the assessee has filed a photo copy of the said form no.15G duly certified as a true copy and keeping in view the relevance of this documentary evidence, thus consider it fair and proper to restore this issue to the file of the AO for deciding the same afresh after verifying the authenticity and reliability of the form no.15G - Decided in favour of assessee for statistical purposes. Addition made on account of low withdrawals - Held that:- It is observed that reasonableness of the withdrawals of ₹ 29,500/- shown during the year under consideration was duly explained by the assessee before the AO as well as before the ld. CIT(A). In the said explanation, all the relevant aspects including the single status of the assessee living in the joint family leading a simple life were specifically pointed out by the assessee. It appears that the AO as well as ld. CIT(A), however, has overlooked all these relevant aspects and estimated the withdrawals of the assessee for personal and household expenses at ₹ 60,000/- without giving any sound or convincing basis whatsoever. I, therefore, find no justification in the addition made by the AO on this issue and confirmed by the ld. CIT(A) and deleting the same - Decided in favour of assessee
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2015 (12) TMI 761
Deemed dividend u/s. 2(22)(e) - Held that:- There is factual error in computing the deemed dividend. Surprisingly, there is no reference to the computation made by the assessee in the assessment order. In our considered opinion, without pointing out any flaw or error in the calculation made by the assessee, the AO should not have proceeded by calculating the deemed dividend of its own. Further, the AO has not given any basis as to how he has come to the accumulated profit of the respective companies. This issue cannot be decided on incorrect facts therefore, we restore this issue to the file of the AO. The AO is directed to decide the issue afresh in the light of the workings given by the assessee after giving a reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purpose. Disallowance u/s. 14A r.w. Rule 8D - Held that:- The Hon’ble High Court of Delhi in the case of Joint Investments Pvt. Ltd (2015 (3) TMI 155 - DELHI HIGH COURT) has held that the “window for disallowance is indicated in Sec. 14A, and is only to the extent of disallowing “expenditure incurred by the assessee in relation to the tax exempt income”. This proportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case.” Thus we direct the AO to restrict the disallowance to ₹ 2,62,194/-.- Decided in favour of assessee for assessee in part.
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2015 (12) TMI 760
MAT - Computation of book profits u/s 115JB - AO sought to tax under MAT an amount being remission of liability of Bank - Held that:- In the case in hand, the assessee got remission of liability of ₹ 43 lakhs under one time settlement by the ING Vysya Bank which has been disclosed by the assessee in the P&L A/c. This disclosure, in the P&L A/c is strictly as per the requirement of Schedule VI of the Companies Act and further in conformity with the mandatory accounting standard AS 5. Therefore, the treatment of the amount in the books of account and particularly in the P&L A/c, is as per the provisions of Schedule VI of the Companies Act as well as accounting standard AS 5. Hence, any disclosure in the notes to accounts would not require any change in the P&L A/c already prepared as per Schedule VI of the Companies Act. The decisions relied upon by the assessee are applicable on the facts and circumstances where if an item of income or expenditure which is required to be disclosed in the P&L A/c prepared as per provisions of Schedule VI of the Companies Act but instead of disclosing the said item in the P&L A/c, it was disclosed in the Notes to the accounts, then such item of income or expenditure will be treated as part of the P&L A/c for the purpose of computing book profits u/s 115JB. Once P&L A/c is admittedly prepared as per Schedule VI of the Companies Act, then neither the AO has any power to tinker with it nor the assessee is permitted to claim exclusion or inclusion of any item of income or expenditure as the case may be, for the purpose of computing book profits u/s 115JB except the permissible adjustment provided under the Explanation to sec.115JB of the Act itself. It is not disputed that this amount does not fall in the ambit of any of the clauses of Explanation to 115JB. Therefore, once this amount has been disclosed in the P&L A/c prepared strictly as per provisions of Schedule VI of the Companies Act, the same cannot be excluded for the purpose of computing book profits u/s 115JB. See Apollo Tyres (2002 (5) TMI 5 - SUPREME Court) as well as CIT vs. HCL Comnet Systems & Services Ltd. (2008 (9) TMI 18 - SUPREME COURT). - Decided against assessee.
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2015 (12) TMI 759
Profits from shares - CIT(A)’s directing AO to treat his share profits as business income in case of shares held for less than 30 days and capital gains heaving holding period more than that - Held that:- It transpires that the Commissioner of Income Tax(A) has followed the tribunal’s order in deceased assessee’s own case relating to preceding assessment years in directing the Assessing Officer to treat profits arising from shares held less than 30 days only as business income and exceeding the said period to be capital gains. There is no distinction on facts forthcoming. The Revenue merely pleads that its appeal u/s. 260A of the Act is pending before the hon’ble high court. We do not see the same to be a plausible explanation for adopting a different view. More so, when the same has arisen in assessee’s own case in preceding assessment years without these being any change in facts and circumstances. We adopt consistency in these facts and reject the Revenue’s sole substantive ground. - Decided against revenue
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2015 (12) TMI 758
Bogus Purchases - Purchase of goods from related parties - addition u/s 40A(3) cash paymetns - contention of the assessee is that the goods could not have been sold without purchasing the same and accordingly contended that the purchases were genuine - Held that:- In the instant case, the initial explanations furnished by the assessee have been proved to be wrong. Subsequently, the assessee could have produced Shri Chirag Vora, who had supplied goods to the assessee, to prove the claim of purchases. Similarly, the assessee could not offer proper explanations with regard to the payments made against the purchases. The assessee also could not offer proper explanations as to why the amount due against purchases was shown as outstanding as at the year end. We notice that the assessee had purchased the goods in the months of May and June, 2008. However, the payments have been made from September, 2009 onwards, i.e., after expiry of about one and half years. It is also not shown that the assessee could avail credit period of one and half years under normal trade practice. Hence, we are of the view that the assessee has failed to establish the genuineness of purchases claimed to have been made from M/s Chirag Corporation. Since the assessee has claimed to have sold the goods and since the amount due to M/s Chirag Corporation was shown as outstanding as at the year end, we are of the view that the Ld CIT(A) was justified in drawing inference that the assessee could have purchased goods from third parties by making payment. In that kind of situation, the payments that could have been so made should be considered as unexplained investment. The facts and circumstances of the case, in our view, supports the inference so drawn by the Ld CIT(A). - Decided against assessee
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2015 (12) TMI 757
Disallowance of expenditure in respect of bad debts written off during the year - Held that:- Assessee has placed reliance on the judgement of the Hon’ble Apex Court in the case of TRF Limited vs. CIT reported at (2010 (2) TMI 211 - SUPREME COURT) in support of his contention that the claim of the assessee with regard to bad debt is allowable. We do not see any force in the contention of the ld.counsel for the assessee as in the present case the AO has demonstrated that the assessee has continued business transactions with the concerned party. It is also not disputed that the assessee has received payments from the concerned party. Moreover, assessee through its Authorized Representative agreed to the disallowance of bad debt and addition of the same. The judgement of Hon’ble Apex Court in the case of TRF Limited vs. CIT(supra) relied upon by the assessee will not help to the assessee. Therefore, ground raised in the Assessee’s appeal is rejected. - Decided in favour of assessee.
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2015 (12) TMI 756
Assessment under s. 143(3) r/w s. 158BC - non service of notice - Held that:- While applying the ratio of Hon’ble Apex Court in the case of Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA) to the facts of case and other decisions held that all block assessment are null and void where notice u/s.143(2) of the Act was served on the assessee beyond prescribed time limit. The CIT(A) finally held that in the case of the assessee, since the notice u/s.143(2) was not served on the assessee within the period of 12 months from the end of the month in which the block-return of income was furnished, the assessment order dated 31/07/2001 was patently illegal and void ab initio. This legal and factual finding of CIT(A) is no need of any interference, same is hereby upheld by us. As a result, appeal of the Revenue is rejected. - Decided in favour of assessee.
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2015 (12) TMI 755
TDS u/s 194 - Addition u/s 40(a)(ia) - non deduction of tds on road transportation charges - CIT(A) deleted the addition - Held that:- Assessee was not under any obligation to incur transportation charges because they are reimbursed by the APO. It has only accommodated the APO by making the payments to the transporters. In other words, the APO reimbursed the actual expenses incurred on their behalf. Therefore, the assessee has maintained a separate account for this purpose. This aspect has been seen by the CIT(A) in the finding extracted (supra). Assessee was not under obligation to deduct TDS under section 194C because the transporters have not acted on behalf of the assessee. They have transported the goods of APO. Considering these facts we do not find any error in the order of the ld. CIT(A). Hence the appeal of the Revenue is dismissed. - Decided in favour of assessee.
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Customs
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2015 (12) TMI 742
Denial of benefit of advance license -import of Natural rubber which is a major raw material - activity of manufacturing and exporting heat resistant latex rubber threads - Vide circular dated 10.10.2003, the embargo imposed on the import of natural rubber was lifted and it was stated that fresh advance licenses are issued as per normal EXIM policy. The old licenses can be revalidated up to 31.12.2003 - HC quashed the circular Held that:- View taken by the High Court is without any blemish and the High Court has given cogent reasons while holding that the circulars in question suffer from bias and arbitrariness and were discriminatory in nature. This aspect of classification is without any rational nexus between the differentia and the object which was sought to be achieved and the differentia is discussed by the High Court - No merit in appeal - Decided against Revenue.
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2015 (12) TMI 729
Whether once the export obligation is discharged the conditions of customs Notification No. 48/99 are no more relevant - Diversion of goods - marking in the goods differed when enquiry was made with overseas exporter - Held that:- There is a condition in the EXIM Policy that the imported goods should be utilized for the purpose of manufacture of goods and the goods so manufactured should be exported to earn foreign exchange. But mere earning of the foreign exchange shall not ipso facto establish a case of compliance to the condition of EXIM Policy when export of the goods manufactured using imported raw material is not established. It may so happen that hawala money may come through questionable exports. Therefore, it is necessity of law that the raw materials which were imported duty free should only result in export of finished goods manufacture out of such raw materials making value addition to the imported goods. This is absent in the present case. Investigation found the goods were diverted to market. There was no pleading of the respondent to defend such allegation before the appellate authority below. Its bonafide was questioned when the stainless steel coil bearing the mark 304 DDQ 0.7000x1250xcoil was discovered by investigation not agreeing with the specification appeared in Invoice No. 2839@USD 1930 PMT/CIF - discrepancy establishes a case of violation of import condition for which the respondent was not entitled to any relief before learned Commissioner (Appeals). Therefore, the adjudication order is restored and the appellate order is set aside - Decided in favour of Revenue.
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2015 (12) TMI 728
Valuation - Assessee contended that the grammage of paper imported by them is 18 GSM which is different from the grammage of 14 & 16 GSM in case of contemporary imports of M/s. Gujarat Small Industries Corporation Ltd. imported at prices of J. Yen 530 Kg - Held that:- Commissioner (Appeals) did not give any findings on the letter of the supplier. In the said letter it has been stated that material supplied to the Gujarat Small Industries Corporation is different not only in quality but was produced in a different mill. The Commissioner (Appeals) has failed to take this into account and give any findings on the same. He has observed that in case the prices are ridiculously low and unrealistic compared to contemporary imports, the same need to be enhanced. There are no reasons in the impugned order to reject the claim of the appellants that the products imported by them are different from those of Gujarat Small Industries Corporation. Since comparison is being made to goods which are not established to be of identical or similar, we are unable to uphold the impugned order. - Decided in favour of assessee.
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2015 (12) TMI 727
Valuation of goods - Enhancement in value of goods - Assessee paid enhanced value since he wanted goods urgently - Thereafter he filed refund claim since no assessment order was passed - Held that:- decision of the Apex Court in the case of Priya Blue Industries (2004 (9) TMI 105 - SUPREME COURT OF INDIA) as well as Flock (India) Pvt. Ltd. (2000 (8) TMI 88 - SUPREME COURT OF INDIA) settles the issue beyond doubt. The Hon'ble Supreme Court has held that once the order of assessment is passed and unless that order is reviewed under Section 128 or modified in appeal that order stands and officer considering the refund claim cannot stand in appeal over the assessment made by the competent officers - Since in this case the appellant has not challenged the assessment order, consequently refund claim is not maintainable - Decided against Assssee.
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2015 (12) TMI 726
Penalty u/s 114 read with Section 4 of the Antiquities and Art Treasure Act, 1972 - Smuggling of antiques - Held that:- Joint operation with the help of CBI was conducted by opening the consignment at IGI Airport Air Cargo wherein it was found that certain items which are antiques and the statement of Shri Nand Ram was recorded. Later on with the help of Shri Nand Ram, the premises at Mahipalpur Extension was interrogated and there also some antiques were found. As per the statement of Shri Nand Ram and Shri Rajeev Gupta it is alleged that the appellant is actively involved in smuggling and the said premises was on rent by the appellant and she is operating from there and Shri Rajeev Gupta are indulged in the activity of smuggling of antiques on the behest of the appellant. - incriminating statement of the appellant. Moreover, the appellant has been penalized only on the basis of statements of recorded by the co-accused. Moreover, the contention of the adjudicating authority that the appellant has taken the premises on rent from Shri Hitender Kumar. Infact, Shri Hitender Kumar was not the owner of the said premises. Therefore, the statement of Shri Hintender Kumar cannot be relied upon and I also find that no other evidence has been produced by the Revenue to implicate the appellant in the alleged activity of smuggling of antiques. As Revenue has failed to produce any positive evidence in corroboration of the statements of the co-noticees to impose penalty on the appellant, therefore, impugned order qua imposing penalty on the appellant is not sustainable. Consequently, the same is set aside. - Decided in favour of assessee.
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2015 (12) TMI 725
Valuation - determination of CVD - Section 4 or 4A - MRP Based method of assessment - Invocation of extended period of limitation - Held that:- Appellants had filed Bills of Entry wherein the goods are described as ‘Part of CFL (Fluorescent Glass Tubes J5) classifiable under 8539.9010. It is also observed that the goods were examined in detail by the Customs officers in second check examination and were assessed at merit rate of duty and cleared out of Customs charge. As the Assessment had become final, the relevant date of issuance of Show Cause Notice would be reckoned by the normal time limit, unless the ingredients for invoking the extended period under Section 28 of Customs Act are attracted. The Department was aware that the goods attracted MPR assessment under Section 4A of the Central Excise Act. Therefore, before final assessment of Bills of Entry, they should have raised the question of proper valuation for assessment of CVD. Since they have not done so, the extended period cannot be invoked. - Order-in-Original cannot be sustained in the said respect. Hence, the impugned Order-in-Original is modified to the extent that the demand beyond the normal period of 6 months is set aside. The penalties are also set aside. - Decided partly in favour of assessee.
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2015 (12) TMI 724
Denial of refund claim - SAD - Unjust enrichment - Held that:- Appellant has produced copy of the invoices which clearly indicate that credit of 4% SAD is not admissible. I also find that the invoices indicate the basic value and 12.5% VAT. It does not indicate separately SAD or any other component of import duty. In the accounts, the appellant has shown the 4% amount of SAD as receivable under assets. The Chartered Accountant has also certified the same. - appellant is not a registered dealer and has not sold the entire consignment on the bill of entry itself, but the goods have been sold on the invoices and the invoices indicate the price at which the goods are being sold. It also indicates the amount of VAT that is being paid. Further, the Chartered Accountant has given the requisite certificate. The balance sheet shows the amount of 4% SAD as receivable under the asset category. Under the circumstances, it cannot be said that the 4% SAD has been passed on to the consumer. The bar of unjust enrichment will not be applicable - Decided in favour of assessee.
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2015 (12) TMI 723
Waiver of pre deposit - appellant has not been able to produce the export obligation discharged certificate by DGFT and as such, the benefit of duty free imports availed in terms of Notification No. 55/2003-Cus., dated 1-4-2003 - Held that:- Appellants have made efforts for procurement of the certificate, the issuance of which is in hands of DGFT officers. If the said certificates are not being issued by DGFT, the assessee cannot be blamed for the same. We would like to observe here that number of such type of orders are repeatedly argued before us whereas inspite of an assessee having done his part of the job, the DGFT authority are not issuing necessary certificates. Such type of inaction on the part of the DGFT officers result in increase of litigation at all the levels thus creating obstacle to discharge of other deserving matters by consuming the time of the Court. Apart from that, unnecessary litigation also involve unnecessary expenses and if the same can be avoided, it should be. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2015 (12) TMI 722
Permission for re-export of goods - Non imposition of redemption fine - Held that:- It is not the Revenue’s case that purchase order was for lead scrap Rail. However, they are simplicitor referring to documents issued by the foreign supplier indicating the goods to be lead scrap rails. As the material sent by the foreign supplier is different than the material ordered for by the respondents, documents are bound to be different. It was in that scenario that the request was made to the Customs for re-export of the good, Commissioner has correctly come to a finding that in terms of the purchase order, recipient had ordered for lead scrap radio and in the absence of any evidence, intention of importer can not be doubted. We also find that no remittance has been made by the recipient to the foreign supplier. - No infirmity in impugned order - Decided against Revenue.
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2015 (12) TMI 721
Determination of assessable value of the ball bearings - Enhancement in value based upon the Circular No. S/26-Misc.-2195/2005 VA, dated 24-9-2008 - Held that:- Tribunal in the case of Commissioner of Customs, New Delhi v. Nath International reported in [2013 (12) TMI 1042 - CESTAT NEW DELHI] has considered an identical situation and has held that the instruction issued by the Commissioner of Customs (Import), Mumbai cannot be solely adopted for enhancing the assessable value without first rejecting the transaction value and the invoice value. Further it was held that such enhancement, without examining the quality of the goods and the size of the ball bearings etc. which were of different sizes, cannot be held to be justifiable. - Impugned order is set aside - Decided in favour of assessee.
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2015 (12) TMI 720
Demand of differential duty - Confiscation of goods - Redemption fine - MRP stickers not affixed - Held that:- Goods stand confiscated and penalty imposed on the technical ground that all the goods imported by the appellant were not having MRP stickers. The Appellate Authority has himself observed that the stickers may get withered away on account of many reasons. In such scenario, we find no justification for imparting any mala fide to the appellant so as not to paste the MRP stickers on the goods. Accordingly, we set aside the confiscation of the imported items as also imposition of penalty - Decide din favour of assessee.
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2015 (12) TMI 719
Duty demand - violation of principles of natural justice - importers were indulging in misuse of Target Plus Scheme by obtaining licence under the said scheme, which was cancelled by the DGFT - Held that:- M/s. Victoria Marine and Agro Exports Ltd. imported various grades of plastic granules for UV Master Batch and UV Stabilizer availed exemption from customs duty under Notification No. 32/2005-Cus. After investigation, it was found that the importers were indulging in misuse of Target Plus Scheme by obtaining licence under the said scheme, which was cancelled by the DGFT. By the impugned order, the adjudicating authority confirmed the demand of duty as per Annexure-I to the show cause notice and has also imposed penalty on various persons - there is no dispute that the appellants represented by Shri Gururaj, learned counsel, were heard by one Commissioner and the adjudication order was passed by another Commissioner, which is clear violation of principles of natural justice and hence the impugned order cannot be sustained on this ground alone. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2015 (12) TMI 718
Waiver of pre deposit - Confiscation of goods - Importer - speed post parcel - The contents of the said parcel were declared as “Food”. However on opening, the same was found to be containing steroids/stimulants primarily used for strengthening the muscle mass. - Held that:- apart from the address given on the parcel, there is absolutely no other evidence to connect the appellant with the imported goods. The appellant in his first statement recorded during investigation had clearly deposed that he was not, in any way, connected with the said parcel and does not know why somebody has used his name and address. In the absence of any corroborative evidence to show that the appellant was the real person for whom parcel in question was meant for, we find that imposition of penalty upon him on the basis of doubt is not, prima facie, justifiable. We accordingly, dispense with the condition of pre-deposit and stay the recovery of the same during the pendency of the appeal. - Stay granted.
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2015 (12) TMI 717
Imposition of penalty on a person treating as Importer - import of goods without the knowledge of such person - whether appellant is liable to penalty and whether he should be held to be the importer of consignments of zinc Flux Skimming's for which two bills of entry were filed by CHA M/s. R.N. Lal & Bros - Held that:- appellant has denied to have imported the consignments for which bills of entry were filed by the CHA. The signatures on the bills of entry have been found to be not made by the appellant. Even the CHA who filed bills of entry has not implicated the appellant to have authorized him for filing the impugned bills of entry. There are few statements of Sh. Nanda Ganguly, Sh. Uttam Swarckar, a Sircar holder of CHA , Sh. Sunil Agarwal, a metal Trdev and Md. Fazlul Hoque to the effect that appellant was making certain enquires regarding transportation & importation of zinc Flux skimmings. Penalty under Sec - 112 of the Customs Act 1962 can be imposed only upon on importer or any person who claims himself to be an importer. Appellant has neither filed any bill of entry nor is he claiming the ownership of the imported goods. Circumstantial evidences discussed by the adjudicating authority only raise a suspicion about the appellant but it is a settled position of law now that suspicion howsoever grave can not take the place of an evidence. There is no evidence on record that appellant has signed the bills of entry and has given all the documents personally to the Customs House agent or any other person. Penalty can not be imposed upon the appellant on the basis of suspicion created by presumption & surmises by holding him to be the importer. - Decided in favour of appellant.
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Service Tax
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2015 (12) TMI 754
Availment of CENVAT credit of service tax - scope of eligible input services - Rule 2(l) - outdoor catering service and insurance service - Held that:- The exclusion clause was effective w.e.f. 01/04/2011 and Clause (C) of the said exclusion specifically excludes the services provided in relation to outdoor catering and health insurance or life insurance etc. Admittedly such services, prior to 01/04/2011, have been held to be covered by the definition of input services. In fact, the need for exclusion would arise only when the services are otherwise covered by the definition. Legislation, in its wisdom, has excluded certain services from the availment of CENVAT credit w.e.f. 01/04/2011, when such services are otherwise covered by the main definition clause of input service. To interpret the said exclusion clause, in such a manner, so as to hold that such services have direct or indirect nexus with the assessee's business and thus would be covered by the definition, would amount to defeat the legislative intent. It is well settled that the legislative intent cannot be defeated by adopting an interpretation which is clearly against such intent. As such, I find no justifiable reason to allow the credit in respect of the two disputed services and I uphold the confirmation of denial of CENVAT credit and demand of interest thereon. - appellants have taken the credit by reflecting the same in their statutory records and as such there can be no mala fide or suppression or mis-statement with an intent to wrongly avail the credit. In the absence of any such intent, imposition of penalty upon them is not justified. The same is accordingly set aside. - Appeal disposed of.
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2015 (12) TMI 753
Utilisation of Cenvat credit - Goods Transport Agency service - Held that:- Issue is now finally settled by the Larger Bench of the Tribunal in the case of Panchmahal Steel Ltd. [2014 (4) TMI 490 - CESTAT AHMEDABAD] wherein one of us was a Member. It is also brought to our notice that Revenue had challenged this Larger Bench decision before the Hon'ble High Court of Gujarat. The Hon'ble High court by an order dated 18.12.2004 (2014 (12) TMI 876 - GUJARAT HIGH COURT) dismissed the appeal filed by the Revenue holding that the Larger Bench decision was correct decision. - impugned orders are liable to be set aside - Decided in favour of assessee.
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2015 (12) TMI 752
Imposition of penalty - reversal of cenvat credit before utilization - Construction service - Held that:- Admittedly the appellant reversed the credit immediately on being pointed out by the Audit. There could be some confusion on their part as regards the availability of the credit inasmuch as it was their own unit which was being constructed in Maharashtra and all the accounts were being maintained at their Unit in Hyderabad. Further, the appellant had not utilized the credit and the same was paid back to the Revenue immediately on being pointed out by the audit, along with interest. The above two decisions referred to and relied upon by the learned advocate are holding that in such a situation penal provisions would not get attracted. In view of the above decisions, I set aside the penalty imposed upon the appellant and allow the appeal to that extent. - Decided in favour of assessee.
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2015 (12) TMI 751
Demand of service tax - pure agent - outdoor catering - whether the activity undertaken by the appellant falls under outdoor catering service for M/s. Zuari Cement Ltd or not - Held that:- Appellant had entered into an agreement with M/s. Zuari Cement Ltd. According to the agreement, the appellant was to provide catering services and for this purpose agreement provided for appointment of Cook and Asst. Cook and helpers, etc. for which the appellant was paid the wages of the staff and a margin against the wages and also a lump sum amount. This would show that the agreement is for providing catering services in the factory premises of M/s. Zuari Cement Ltd. and the claim of the appellant that appellant was not acting as an outdoor catering cannot be accepted. According to Clause 76(a) of Section 65 of the Finance Act, 1994 outdoor caterer means a caterer engaged in providing services in connection with catering at a place. Therefore the classification adopted by the Revenue is correct. The contract between the two parties does not provide that appellant will act as a pure agent. In fact, there is clear finding of the lower authorities that appellant received not only the wages but additional margin for the wages and further a lump sum amount for acting as a contractor have been made. In such circumstances, we cannot say that appellant has acted as a pure agent. SSI Exemption is not available to assessee - Since appellant did not follow any procedure and did not file the returns, we cannot say that extended period could not have been invoked. - However, benefit of 25% penalty is given - decided partly in favour of assessee.
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2015 (12) TMI 750
Denial of CENVAT Credit - whether the ISD may distribute the CENVAT Credit to any other units equally to all the units, in any proportion to all the units or proportionate to the input service consumed by the unit - Held that:- Commissioner (Appeals), following the decision of the Tribunal in the case of ECOF Industries Pvt.Ltd. Vs CCE Bangalore - [2009 (10) TMI 171 - CESTAT, BANGALORE] decided the issue in favour of the Respondent. It is seen that the Revenue has challenged the decision of the Tribunal before Hon'ble High Court, which was rejected - No reason to interfere the order of the Commissioner (Appeals). - Decided against Revenue.
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2015 (12) TMI 749
Demand of service tax - penalties under Sections 76, 77 & 78 - commercial or industrial construction services - Held that:- Activity undertaken by the appellant pertain to widening/construction/maintenance of roads, construction of toll plaza and sheds including high mast poles, construction of bridges, etc. Therefore, there was enough material available before the adjudicating authority to verify the exact nature of work undertaken and to see whether the same was taxable or not. We have perused the work orders submitted by the appellant and find that all these work orders pertain to construction/repairs/maintenance of roads, construction of toll sheds/plaza located in the road, civil works relating to irrigation dams and so on. All these activities have been retrospectively exempted either by way of notification or by means of a specific provision in the Finance Act itself and therefore, the activities undertaken by the appellant is either exempted or falls outside the purview of the taxable services. Therefore, the impugned demands are clearly not sustainable in law and have to be set aside. - Decided in favour of assessee.
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2015 (12) TMI 748
Waiver of pre deposit - Banking and other Financial Services - appellant availed Cenvat credit on insurance policies of its employee - Held that:- Appellant is clearly engaged in providing Banking and other financial services and service it is engaged in lending money to borrowers. However assisting borrowers to obtain life and health risk coverage even though appellant may have an incentive for doing this, by way of covering the risk it incurs in lending to small borrowers and whose life and health are a matter of economic concern for the appellant, this activity does not fall within any of the integers of the Banking and other Financial Services, referred in Section 65(12) read with Section 65(105)(zm) of the Act - Prima facie the appellant’s activity of maintaining records of the insurance policies of borrowers, managing the data in this regard and facilitating an interface between borrowers and insurance companies, does not fall within the definition of Banking and other Financial Services - Stay granted.
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2015 (12) TMI 747
Penalty u/s 76 - delayed payment of service tax - Held that:- Appellant has paid the service tax along with interest in their own detection. In these circumstances, show cause notice was not required to be issued as per the provisions of Rule 73(3) of the Act. But without application of mind, the show cause notice was issued and thereafter the same was adjudicated and penalty was also confirmed against the appellant. This shows the arrogance of the official for imposing penalty on the appellant. As discussed above, that the show cause notice was not required to be issued to the appellant. Therefore, I set aside the penalty imposed on the appellant - Decided in favour of assessee.
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2015 (12) TMI 746
Waive of pre deposit - CENVAT Credit - Consulting Engineer Services - Held that:- When a manufacturer is producing dutiable in ‘Consulting Engineer Services’ which the service on which Cenvat credit has been taken in this case is also included in the list of services contained in Rule 6(5) of CCR. Nowhere, there is a finding that appellant has used ‘Consulting Engineer Services’ exclusively for manufacture of exempted goods or providing exempted services. The ground taken by the Revenue is that the appellant has entered into independent contract for supply of goods and services. Therefore, one of the grounds taken is that if the supply of goods is involved, credit proportionate to that extent is not admissible. However, Rule 6(5) of Cenvat Credit Rules, 2004 does not distinguish between the activities undertaken as part of composite contract or independent contracts. So long as an assessee is not undertaking manufacture of dutiable and exempted goods or providing taxable and exempted services, unless the credit is exclusively used for providing exempted services or manufactured goods credit cannot be denied in respect of services listed in Rule 6(5). This being the position, in the absence of any finding that services have been used exclusively in the manufacture of exempted goods or providing exempted services, credit cannot be denied in respect of services listed in Rule 6(5) of Cenvat Credit Rules. - appellant has made out a strong prima facie case for waiver and for stay against realization of dues. - Stay granted.
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2015 (12) TMI 745
Denial of refund claim - Rule 5 of the Cenvat Credit Rules, 2004 - Accumulated CENVAT Credit - Held that:- refund claim sought to be denied on the premise that input service credit availed by the appellant does not fall under Rule 2(l) of Cenvat Credit Rules, 2004. As the appellant is an exporter of service and all the services have been availed by them in their activity of export of service the Cenvat credit lying in their account unutilized. It is not the case that the appellant has availed inadmissible Cenvat credit. The services availed by the appellant also do fall under the exclusive clause of 2(l) of Cenvat Credit Rules, 2004. In these circumstances, I hold that appellant is entitled for refund claim as claimed by them on merits as the services have been availed by the appellant for export of services. Therefore, I set aside the impugned order - Decided in favour of assessee.
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2015 (12) TMI 744
Waiver of pre deposit - Construction service - Held that:- Definition of construction of commercial complex service would mean that residential units should not have been sold but given on rent or given without consideration. In this case admittedly, the apartments/housing units were sold by the Andhra Pradesh Government under the scheme and therefore it has to be held that residential complex was constructed by the appellants and handed over to the implementing agency of the Rajiv Gruhakalpa Scheme which in turn sold the apartments to the beneficiaries. Therefore, it has to be held that appellants have rendered construction of residential complex service. - Partial stay granted.
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Central Excise
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2015 (12) TMI 743
Manufacture - marketability - process of cold-rolling of stainless steel patta/pattis - whether cold-rolled pattas are distinct marketable commodities - Invocation of extended period of limitation - Held that:- A categorical finding was given by the Adjudicating Authority that goods are of different use and have a distinct identity of their own in the market which was sufficient to hold that the new commodity has come into existence as for a product to be marketable it is not necessary that the products should be actually marketed but they should be capable of marketing since cold reducing is being independently by multiple number of units either on job work basis or for use in their other factories it is certainly capable of being marketed. - Held as manufacturing activity. Extended period of limitation - Officers in the panchnama observed that the two housing of cold-rolling mills fitted with debapti and gearbox were found installed and other parts were not found in the said rolling mills. - it is difficult to accept that the assessee was under bona fide belief that excise duty was not payable and that it was not permissible for the Department to avail the larger period of limitation by invoking proviso to Section 11A of the Act. - impugned notice is not time barred - Decided against Assessee.
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2015 (12) TMI 741
Classification of Vacuum Brake Hose Pipe - Classification under Tariff Heading 4009.92 or under Tariff Heading 4009.99 - Bar of limitation - Held that:- view taken by the High Court is unsustainable on two grounds. In the first instance, writ petition itself was not maintainable when there was alternate remedy available to the assessee under the provisions of the Central Excise Tariff Act and the assessee should have exhausted those statutory appeals. Even otherwise, on merits, the High Court has allowed the writ petition wrongly. The High Court has glossed over the vital fact that the order of Collector (Appeals) in the first round of litigation was not accepted by the Department but was challenged. This plea did not fail on merit but appeal was dismissed by the Tribunal as time barred. Therefore, at the most, the said order of the Collector (Appeals) attained finality insofar as period covered by the earlier show cause notice is concerned and could not have been binding precedent for future period. - Impugned order is unsustainable - Decided in favour of Revenue.
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2015 (12) TMI 740
Valuation - Contravention of the provisions of Section 4 of the Central Excise Act read with Rule 4 & 5 of the Central Excise Rules - Contravention of Rule 6 of the Central Excise (Determination of price of Excisable Goods) Rules, 2000 - Failure to declare the correct price of its manufactured goods - Failure to correctly assess/determine the central excise duty payable on the goods manufactured - Held that:- the assessee has no objection if the price at which the goods were sold by the alleged related persons is made the basis of arriving at the valuation for each month separately, which is covered by the show cause notices. - Benefit of deduction on the ground of excise duty, sale tax, freight and transit insurance should be given. Since these deductions are permissible under the provisions of the Act it hardly requires to mention that the Commissioner shall allow the same once satisfactory proof of incurring these expenses is furnished by the assessee. The assessee shall be permitted to file the required computation as well as documents in support its case. - Decided in favour of Revenue.
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2015 (12) TMI 739
Modvat / Cenvat Credit - Benefit of Rule 57A(4) of the Central Excise Rules - whether the inputs which was used were for the final products or not - Held that:- Insofar as sealing strips are concerned, they are not used by the assessee in the manufacture of aseptic packaging - Appeal preferred by the Department before the High Court has been dismissed solely on the ground that no question of law arises. We do not agree with the aforesaid observations of the High Court as according to us, question of law clearly arises which had to be determined by the High Court. We, thus, set aside the impugned judgment and remand the case back to the High Court - Appeal disposed of.
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2015 (12) TMI 738
Duty demand - Clandestine removal of goods - Clubbing of clearances - Held that:- Tribunal failed to appreciate that the proprietors of both the units had not retracted from their statements as well as of their Accountant and Store Incharge made before the search team. Both the respondents had stored the raw material without maintaining any separate record regarding their respective manufacturing of boring machines by using raw material and machinery with the help of both the units as and when required. Even both the respondents were having common electricity connection, telephone, computer, office accountant. They were dependent on each other as they were issuing the sale bills as per their requirement. They had fragmented their sales in order to avail the benefit of SSI exemption fraudulently. The adjudicating authority had rightly clubbed the clearances of both the respondents removed by them in a clandestine manner. The Commissioner (Appeals) and the Tribunal ought to have relied upon the statements of the proprietors which were not under inducement or threat. - The fact of clandestine removal of goods had not been proved. Mere quoting the statements of the proprietors and some of their employees was not enough. The value of clandestinely removed goods had not been adjudged. - view adopted by the Commissioner (Appeals) and the Tribunal is a plausible view based on appreciation of material on record and, therefore, does not warrant any interference by this Court - Decided against Revenue.
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2015 (12) TMI 737
Reversal of MODVAT Credit - input credit on felts and wires for the period from 29.07.1987 to 09.07.1992. - Held that:- For the period 29.07.1987 to 09.07.1992 the appellant did claim MODVAT credit treating the felts and wires as inputs. But the same was denied on the interpretation of the Rule at that point of time. The decision of denying the input credit came to be challenged by the appellants by resorting to the provisions under the Act and Rules and the denial order came to be affirmed by the Tribunal, which denial became final. The order of the Tribunal, intra parties is binding and there cannot be any two opinions about the same decision. Further the effort made by the appellant seeking rectification of the order of the Tribunal on 22.11.1991 also came to be rejected and in fact the reference which is sought from the said Rectification of Mistake (ROM) order also came to be rejected. In other words, whatever may be the legal position for other manufacturers, so far as the appellant is concerned the decision intra parties is binding and there is no escape from the same. Appellants themselves treated the period from 01.03.1987 onwards as distinct would go to show that the declaration filed on 07.07.1992 is only restricted to their claim for availing MODVAT credit on felts and wires treating them as inputs, especially in the light of the order of the Tribunal in Straw Products Ltd., case (1991 (10) TMI 139 - CEGAT, CALCUTTA ). In other words, the claim of the appellant in the letter dated 07.07.1992 is limited to claim a MODVAT credit from and with effect from 07.07.1992 which came to be denied initially by the authorities and subsequently allowed by the Tribunal setting aside such denial. Thus, making the appellant entitle for the input credit with effect from 07.07.1992. The entire proceedings never dealt with the claim of the appellants for MODVAT credit for the period 29.07.1987 to 09.07.1992. Merely because the dates have been mentioned in the claim petition in the letter dated 07.07.1992 it cannot be presumed that the same was in issue before the authorities and adjudicated upon. - order of the Tribunal does not call for any interference and the same is in order - Decided against the assessee.
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2015 (12) TMI 736
Compounded levy scheme - Penalty under Rule 96ZO - violation of the provisions of erstwhile Rule 96ZO of the Central Excise Rules, 1944 - Held that:- Issue raised in this appeal stands concluded by the decision of this Court in [M/s Jai Bharat Maruti Ltd. v. Commissioner of Central Excise Delhi-III, Vanijya Nikunj, Udyog Vihar, Phase-Gurgaon (Haryana)] [2013 (10) TMI 355 - PUNJAB & HARYANA HIGH COURT] [Commissioner of Central Excise, Chandigarh-II v. M/s Pee Iron & Steel Co. (P) Ltd., Derabassi] [2014 (6) TMI 197 - PUNJAB AND HARYANA HIGH COURT], where following the earlier decision of this Court in Bansal Alloys and Metals Pvt. Ltd.'s case (2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT ), the appeal filed by the revenue was dismissed. This Court in Bansal Alloys & Metals Pvt. Ltd's case (supra) while deciding the question of vires of Rules 96ZO(3), 96ZP and 96ZQ of the Rules held the said provisions to the extent of providing for mandatory minimum penalty without mens rea and without any element of discretion as excessive and unreasonable restriction on fundamental rights being arbitrary and were accordingly declared to be ultra vires the Act and the Constitution - no substantial question of law arises in this appeal - Decided against Revenue.
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2015 (12) TMI 735
Denial of CENVAT Credit - credit on the xerox copy of the bill of entry - Held that:- Case of the appellant is squarely covered by the law cited by the appellant [1997 (4) TMI 170 - CEGAT, NEW DELHI] and [1998 (6) TMI 166 - CEGAT, NEW DELHI] and I am of the considered opinion that the cenvat credit availed by the appellant on the strength of xerox copy of bill of entry is available to them as it is a settled law that a substantial benefit cannot be denied on the basis of technical violations, as I have seen in this case that the original bill of entry is with the Customs authorities and they have refused to return the same to the appellant. In such situation, the appellant is not at fault for not producing the same. On careful consideration of the submissions of both the sides, I am of the opinion that the impugned order is not sustainable in law and I set aside the same - Decided in favour of assessee.
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2015 (12) TMI 734
Denial of refund claim - discharge of duty liabilities under the Compounded Levy Scheme as per Annual Capacity of Production under Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 - Bar of limitation - Unjust enrichment - Held that:- Gujarat High Court in the case of M/s Premraj Dyeing and Printing Mills Pvt Ltd Vs UOI - [2013 (6) TMI 118 - GUJARAT HIGH COURT] held the first issue is in favour of the appellants. It has been held that as the ACP order was not appealable, it would be incorrect to hold that without challenging such an order, the manufacturer cannot claim refund of duty erroneously collected. The other two issues, the Honble High Court remanded the matter to the Adjudicating Authority. - refund claims cannot be rejected on the first issue as the ACP order was not appealable. The other two issues, the matters are remanded to the Adjudicating authority to decide afresh in the light of the decision of the Honble High Court. The impugned order is modified accordingly - Decided against Assessee.
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2015 (12) TMI 733
Demand of education cess - whether the Education Cess is payable on Paper Cess for clearance of Paper and Paper Board - Held that:- CBEC vide Circular F.No.345/2/2004-TRU (Pt.), dt.10.08.2004, clarified that “as the Education Cess is calculated on the aggregate duties of Excise/Customs (excluding certain duties of Customs like anti-dumping duty, safe guard etc) levied and collected by the Department of Revenue, only such duties, which are (a) levied and collected as duties of Excise/Customs and (b) are both levied and collected by the Department of Revenue should be taken into account for calculating Education Cess.” - It is clear from the Board Circular F.No.262/2/2008-CX.8, dt.07.01.2014 that a cess levied under an Act, which is administered by Ministry of Finance (Department of Revenue) but only collected by Department of Revenue under the provisions of that Act, cannot be treated as a duty, which is both levied and collected by Department of Revenue. The Board further clarified that the Education Cess is not to be calculated on cesses which are levied under Acts administered by the Department/Ministries other than the Ministry of Finance (Department of Revenue) but are only collected by the Department of Revenue in terms of those Acts. Thus, it is clear that the amount collected by the Ministry of Finance (Department of Revenue), levied by the other Ministry cannot be treated as duty. There is no dispute that the Paper Cess levied by other than the Ministry of Finance (Department of Revenue), and therefore, demand of Education Cess on Paper Cess cannot be sustained. - Decided against Revenue.
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2015 (12) TMI 732
Reversal of SAD credit on removal of inputs as such - Whether in such a scenario, the law requires separate reversal of SAD or not - Held that:- Provision of law simplicitor requires an assessee to reverse the CENVAT credit so availed by him in case the receipted inputs are subsequently removed. In the present case admittedly the appellant has paid excise duty by adopting transaction value of the said inputs by debiting the CENVAT credit. The said fact is not in dispute and stands mentioned in the impugned order of the original adjudicating authority - appellant had paid more duty at the time of clearance of the inputs from their factory is not disputed by the Revenue. If that be so, I really fail to understand as to how the appellant is further required to reverse the SAD component. It stands explained to me that the appellant is maintaining only one register reflecting the credit of all the types of duties paid at the time of import. If the cumulative credit in respect of all the duties is to the extent of ₹ 100 and if an asseessee has paid ₹ 120/- at the time of clearance of such inputs, it can be safely concluded that the entire credit stands reversed by him. There cannot be any further requirement of reversal of SAD component separately. - Impugned order is set aside - Decided in favour of assessee.
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2015 (12) TMI 731
Duty demand - undervaluation of the goods - appellants paid the duty on their own calculation and they have not followed the provisions of Rule 8 of Central Excise valuation (Determination of Price of Excisable Goods) Rule 2000 and CAS-4 in respect to clearance of the goods to their sister unit during the period from December 2001 to March 2006 - Held that:- Larger Bench of the Tribunal in the case of M/s Ispat Industries Ltd (2007 (2) TMI 5 - CESTAT, MUMBAI) held that transfer part of production to another plant of same assessee and balance production sold to independent buyers, Rule 8 could not be applicable and value could be determined by the assessee under Rule 4 of the Valuation i.e., transaction value. It has been held that the provision of Rule 4 are in any case to be preferred over the provisions of Rule 8 not only for the reason that they occur first in the consequential of the valuation Rules but also for the reason that in a case where both the Rules are applicable, the application of Rule 4 will be allowed to determine value which will be more consistent and in accordance with the parent statutory provisions of Section 4 of the Central Excise Act 1944. In the present case, there is no dispute that during the period 2003-04 to 2005-06 the appellant transferred the goods to their sister unit as well as to the independent buyers Demand of duty alongwith interest for the period 2003-04 to 2005-06 is set aside. The demand of duty for the period 2001-02 to 2002-03, the adjudicating Authority is directed to examine in the light of the decision in the case of M/s Bajaj Tempo Ltd (2004 (7) TMI 145 - CESTAT, MUMBAI) after giving adjustment of excess/short duty in accordance with law. The penalty is set aside - Decided partly in favour of assessee.
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2015 (12) TMI 730
Denial of Adjustment of excess payment paid against the short payment paid at the provisional assessment - whether during the course of assessment of provisional assessment, excess duty paid by the appellant can be adjusted against short payment paid at the time of finalisation of assessment or not - Held that:- appellant has not sought refund of the excess duty paid - Reliance placed by the Ld. AR in Excel Rubber Ltd. (2011 (3) TMI 527 - CESTAT, NEW DELHI (LB)) is not applicable when the decision of the Hon'ble High Court of Karnataka is available. Further, the case of GIS Cotton Mills Ltd. (2013 (6) TMI 119 - Calcutta High Court) relied upon by the ld. AR is not applicable to the facts of this case as in this case the assessee sought refund of the excess duty paid. Therefore, as in this case where the appellant has not claimed refund of the excess duty paid, the case is covered by the BSL Ltd. (2014 (9) TMI 771 - CESTAT NEW DELHI). Accordingly, the adjustment of excess duty paid by the appellant against short duty on finalisation of the provisional assessment is permissible. Accordingly, impugned order is set aside - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2015 (12) TMI 716
Imposition of penalty under Section 78 (5) - mens rea - Held that:- there is no requirement in law for Revenue to establish mens rea on the part of assessee in these penalty proceedings under Section 78 (5) of the Act - Present case is covered by the decision of this Court in various similar cases and one of such order passed in Assistant Comercial Taxes Officer, Ward-II, Circle-D, Jodhpur Vs. M/s.Nahar Granite P. Ltd., Jodhpur [2015 (11) TMI 1141 - RAJASTHAN HIGH COURT] - Petition disposed of.
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2015 (12) TMI 715
Challenge to assessment order - Delay in filing of returns - since the annual returns were filed after a lapse of 16 months and the petitioner company having not furnished the sales details and purchase code etc. under the best of judgment - Held that:- Due to the non-availability of required documents during the relevant period of time, the petitioner was not able to produce those documents to the respondent. Hence, in the absence of the relevant materials, so as to pass an order of assessment on works contract, the impugned order came to be passed. Since there is no error apparent on the face of the record, the petition under section 84 of the Act was not considered. - Impugned order is set aside - Decided in favour of assessee.
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2015 (12) TMI 714
Condonation of delay - Delay of 59 days - Delay due to ill health - Held that:- In view of the fact that the petitioner has filed the appeal with 59 days delay and the reason for the said delay was due to the ill health of the petitioner, which is supported by the Certificate given by the Doctor annexed in the typed set of papers and having been satisfied with the reasons stated in the affidavit filed in support of the writ petition and in the interest of justice, and considering the fact that one of the ground raised by the petitioner in this writ petition is that there is violation of principles of natural justice to the extent of not providing an opportunity of personal hearing before passing the assessment order, this Court is of the view that the delay may be condoned and the appellate authority may be directed to entertain the appeal since this Court is of the considered view that the matter has to be dealt with by the appellate authority on merits. - by condoning the delay, this Court permits the petitioner to re-present the appeals before the appellate authority within a period of two weeks from the date of receipt of a copy of this order and on such re-presentation, the appellate authority is directed to entertain the same and pass orders on merits and in accordance with law - Delay condoned.
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2015 (12) TMI 713
Maintainability of appeal - Alternate remedy - Held that:- Court finding that there is a statutory appellate authority to consider the grievance of the petitioner, is not inclined to entertain this writ petition. Hence, the same is dismissed. It is for the petitioner to approach the appellate authority. - Decided against assessee.
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2015 (12) TMI 712
Maintainability of appeal - Alternate remedy - Held that:- since the controversy raised appears to have been decided by the assessing authority by giving a clear finding on facts thereon, this Court is not inclined to delve into the same. Hence, without going to the merits, this writ petition is dismissed giving liberty to the petitioner to avail the appeal remedy. - Decided against Assessee.
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Indian Laws
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2015 (12) TMI 711
Permanent injunction restraining infringement of copyright (in editorial comments/ headnotes to cases) and unfair competition and for damages etc. against the defendant - Held that:- Perusal of the cases as submitted shows that the head notes of the defendant made are almost similar to that of the plaintiff. Thus, the plaintiff has been able to make out a strong prima facie case for grant of ad interim injunction. Hence, till the next date, the defendant is restrained from continuing with the infringement of plaintiff’s copyright in its editorial comments/case Head-notes. They are directed to remove the existing infringing material from its website www.casansaar.com, which may amount to infringement of plaintiff’s copyright as claimed.
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2015 (12) TMI 710
Copyright infringement and breach of confidentiality - The Plaintiff claims to hold the copyright in a concept note for a proposed television serial called "Ye Tera Ghar Ye Mera Ghar" - Held that:- Nothing in either of the two documents supports the comparative chart that was shown to me on 11th September 2015. Here, the Plaintiff claims its story includes themes about the ghost family claiming ownership of the house, being murdered, hoping for revenge and justice and so on. There is a welter of additional material in this chart, all claiming similarity. But what is the source of this? It is not to be found in the 'literary work’ annexed to the Plaint and on which the suit is brought. It is not to be found in the slide presentation said to have been made to Star India. Is it a further iteration of the work as developed for Zee? If it is, then it has never been disclosed to Star India, and, in any case, it would be for Zee to file suit. This would be so even on an acceptance of the Plaintiff’s assertion that it retained the copyright in the initial work despite the Agreement with Zee. A more helpful comparison is the one that is provided by Star India in paragraph 20 of its Reply, and it shows the very marked difference between the two works As a matter of law, when copyright infringement is alleged in this form, and in relation to a concept, there must be an established comparable similarity between the work in which copyright is said to subsist and the work said to be infringing. A person cannot claim copyright in some work, and then contrast the defendant’s work with some entirely different work of unknown provenance and at a very great intellectual and literary remove from the work in which copyright is said to exist. This is where the Plaintiff’s case fails the Beyond Dreams test, and fails it utterly. Gupte J held that a first pre-requisite was to identify the confidential information itself. That is not done. Second, it must be material not in the public domain. The 'crux and essence’ claimed by the Plaintiff sits squarely in the public domain. Then, the material disclosed must be sufficiently developed to lend itself to realization; and this takes us to the springboard or kernel doctrine, which has it that breach of confidentiality liability will arise where it is shown, the other tests being satisfied, that the plaintiff’s work lies at the heart of the offending or infringing work; and that the rival work has only dressed up the kernel with additional material. I would add to this a further test, viz., a demonstration that the plaintiff’s work on which the suit is brought is indeed comparable to that of the defendant. All these tests, including the factual test of whether or not there was a handing over of proprietory material in circumstances of confidence, must be established. None are. The Motion fails. It is dismissed.
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2015 (12) TMI 709
Allegation of Cheating, fraud, criminal misappropriation, etc., by Office Bearers of the Congress Party who also happen to be the members of a Private Company-Young Indian Private Company (hereinafter referred to as Y.I.) and major shareholders of Associated Journals Private Limited (hereinafter referred to as AJL), which was engaged in publishing of newspapers including National Herald, etc. - Held that:- This Court finds no hesitation to put it on record that the modus operandi adopted by petitioners in taking control of AJL via Special Purpose Vehicle i.e. Y.I., particularly, when the main persons in Congress Party, AJL and Y.I. are the same, evidences a criminal intent. Whether it is cheating, criminal misappropriation or criminal breach of trust is not required to be spelt out at this nascent stage. In any case, by no stretch of imagination, it can be said that no case for summoning petitioners as accused in the complaint in question is made out. Questionable conduct of petitioners needs to be properly examined at the charge stage to find out the truth and so, these criminal proceedings cannot be thwarted at this initial stage. Such a view is being formed on a bird’s eye view of the whole case and the observations in the impugned order of there being a prima facie case have to be read in the context of there being sufficient grounds for summoning petitioners. Without casting any reflection on the merits of this case and while leaving the larger questions raised in these petitions open, to be considered at the charge-stage, these petitions and the pending applications are dismissed with afore-noted clarification.
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