Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 18, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Articles
News
Notifications
Customs
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56/2012 - dated
14-12-2012
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ADD
Modify final anti-dumping duty on imports of Cable Ties, originating in, or exported from the People’s Republic of China and Taiwan and imported into India, imposed vide Notification No. 44/2009-Customs dated 30th April, 2009
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55/2012 - dated
14-12-2012
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ADD
Seeks to levy Anti-dumping duty on imports of Sodium Hydrosulphite, originating in, or exported from People’s Republic of China, for a further period of five years
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54/2012 - dated
14-12-2012
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ADD
Rescinds Notification No.41/2011-Cus. dated. 23rd May, 2011
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53/2012 - dated
14-12-2012
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ADD
Seeks to Amend notification No.82/2008-Cus,dated 27.06.2008.
FEMA
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246/2012-RB - dated
27-11-2012
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FEMA
Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) (Third Amendment) Regulations, 2012
Circulars / Instructions / Orders
Highlights / Catch Notes
Customs
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Seeks to Amend notification No.82/2008-Cus,dated 27.06.2008. - Notification
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Rescinds Notification No.41/2011-Cus. dated. 23rd May, 2011 - Notification
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Seeks to levy Anti-dumping duty on imports of Sodium Hydrosulphite, originating in, or exported from People’s Republic of China, for a further period of five years - Notification
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Modify final anti-dumping duty on imports of Cable Ties, originating in, or exported from the People’s Republic of China and Taiwan and imported into India, imposed vide Notification No. 44/2009-Customs dated 30th April, 2009 - Notification
VAT
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Regarding Taxability of Set Top Boxes (STBs). - Circular
Case Laws:
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Income Tax
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2012 (12) TMI 530
FBT - Computation of fringe benefits - AO argued that assessee has not treated freebies expenditure and cost of samples of companies own products given free to customer on purchase of its products and expenditure on celebrity endorsement as fringe benefits 115WB(2)(D) – Held that:- Following the decision in case of T & T Motors Ltd. (2012 (1) TMI 96 - DELHI HIGH COURT) that the expenditure incurred by the assessee on freebies is not a fringe benefits covered u/s 115WB(2) (D). Similarly the expenditure incurred by way of giving samples of company’s products free to the customers along with sale of products of the assessee company was in the nature of sale expense and cannot be included as fringe benefits u/s 115WB(2)(D). In favour of assessee
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2012 (12) TMI 529
Approval u/s. 10(23C)(vi) - denial of exemption u/s. 11 - Educational income of the Trusts & Societies - Held that:- Following view taken by the coordinated benches of Tribunal in similar matters the order of the CIT(A) for the years under appeal is set aside and restore the matter to the file of AO with a direction to verify the aspect of donation, capitation fee etc., if any collected by the assessee, and if it is found that besides fulfilling other prerequisites for exemption under S.11, the assessee has not charged any money i.e. donation, building fund, auditorium fee etc, over and above the prescribed fee for the admission of students, the assessee would be entitled for exemption under S.11, even though the notification under S.10(23C)(vi) have not been received by it - in favour of revenue by way of remand. Depreciation claim denied - Held that:- AO directed to verify in respect of each asset on which depreciation claimed, whether the value of such asset was in fact allowed under S.11, and if it was so allowed, the depreciation would not be allowed in respect of such asset - Impugned order of the CIT(A) set aside and the matter restored to the file of the AO for fresh consideration - in favour of revenue by way of remand. Unrecorded capitation fees collected from the students admitted under the management quota - Held that:- Substantive additions having been made in the hands of the trustees on protective basis and as substantive additions have reached finality which has not been controverted by DR the impugned protective additions have no legs to stand - CIT(A) justified in deleting the said additions - in favour of assessee.
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2012 (12) TMI 528
Capital versus revenue expenditure - Expenditure on prospecting, etc., for certain minerals – Assessee claim over burden removal charges, Drilling, Blasting and Explosive, Shifting and Leveling charges, query development charges and mining survey – AO argued that these expenses are incurred for the purpose of exploring of iron ore and thus are covered by Sec. 35E – Held that:- An expenditure is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce profits it is a revenue expenditure. Hence the expenditure incurred in removal of overburden was of revenue nature and hence the assessee was entitled to claim deduction. In favour of assessee Addition on account of plot bidding charges – Revenue or capital expenditure – Assessee claim amount incurred for acquiring a plot inside the Port is revenue in nature - Ownership of the Plot is with Paradeep Port and the assessee is nothing but a tenant – Held that:- The assessee has incurred this expenditure for carrying out stowing operation for export business and such expenditure is not incurred for the purpose of bringing into existence any such assets or advantage but for running the business with a view to earn profits. The assessee was to bid when the Port Trust authority allowed it stock with condition of export of 1 lakh tones per annum. No capital assets can be transferred with condition and stipulation which rather indicate that the assessee must export lest be deprived of the plot in the Port Trust. The expenditure was necessarily for the smooth business of the assessee and not for creation of an asset or enduring benefit. In favour of assessee Disallowance u/s 40A(3) – Cash payment exceeding Rs. 20000 – Held that:- As the details as inscribed by the AO which are not individual vouchers for incurring a particular expenditure but are a group head. Delete the addition. In favour of assessee
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2012 (12) TMI 527
Disallowance of expenses on which assessee failed to deduct on TDS - When the provision of Section 40(a)ia)is attracted on the expenses which are paid or payable without deducting TDS as on balance sheet date - Held that:- Provisions of section 40(a)(ia), provided in non-deduction of amount which remains payable to a resident in respect of fees for technical services, commission etc.; that it is not applicable where expenditure is paid as decided by Special Bench of the ITAT in Merilyn Shipping & Transport (2012 (4) TMI 290 - ITAT VISAKHAPATNAM). The expression implied in section 40(a)(ia) of the Act, is “payable” and not “paid”. In the present case, the commission involved undisputedly stands paid. Therefore expression “payable” has been used which suggests that disallowance would be made of those expenses which are payable on 31st of March of every Year. Hence disallowance in the case of the assessee is not sustainable. Appeal decided in favour of assessee.
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2012 (12) TMI 526
Addition on account of short term capital loss – Assessee is in business of shares – Investment made in shares at a premium in a private company – Shares sold at 10% of cost after three months – AO made addition saying that no major change in financial of company in short spam – Held that:- As the assessee discharged his liability through cheque. And buyer also confirmed the same at value stated by assessee by filling affidavit with AO. Appeal decided in favor of assessee. Addition on account of cash deposit in bank – AO made addition during assessment u/s 143(3) on basis that practice of holding such large amount of cash in saving a/c was not practical - Assessee submit the details of income earned over the years from which cash in hand can be sustained - Held that:- As the assessee shown cash in his Wealth Tax which was in confirmation with cash book & detail submitted before authority by assessee. And fully explained opening & closing balance of cash. Therefore addition made by AO duly deleted. Decision in favour of assessee.
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2012 (12) TMI 525
Determination of cut-off date to determine pre-operative expense – AO's view is that date of commencement of business is the date of set up of business and such date is relevant to determine the nature of expenditure incurred – Assessee's view is that date of set up of the business is when some consultants were appointed for advice about the feasibility – Held that:- As revenue expenses incurred after the setting up of business and prior to its commencement are an allowable expense. Mere appointment of consultants, in itself does not mean anything in line of business. There are host of other activities which are required to be undertaken/ performed before the business can be stated to have actually been set up line of business. - even the road show conducted for launching of the project were only promotional activities and are therefore pre-operational in nature. The date of setup of the business should be 1.1.2003 and hence all the expenses which the assessee has incurred after 1.1.2003 whether on the payment of consultants or on rent or on staff salary or all other expenses of revenue nature etc. should be allowed as deduction, as against from 7.3.2003 taken by the Assessing Officer. All expenses incurred form 1.4.2002 to 31.12.2002 should be treated as pre-operative expenses and should be capitalized on which the assessee is entitled to get depreciation at the applicable rates. - Order of CIT(A) sustained.
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2012 (12) TMI 524
Difference in comparable sale price - Cotton Waste sold to sister concern - market value of comparable cases as against the actual sale consideration - Held that:- Nowhere in the order sheet, the assessee agreed for an estimated addition of Rs.88,06,811/- towards difference in sale price of cotton waste. Therefore, the observation of the AO that the assessee admitted for an estimated addition of towards difference in sale price of cotton waste compared to the prevailing market price is not born out from the record. CIT(A) sustained the addition holding that the concept of revenue neutral cannot be seen from the assessment year alone and it has to be seen from the subsequent years of taxation. As the CIT(A) has not given any finding on the ground raised by the assessee that there is no admission at all by the assessee for an ad-hoc estimated addition and as the AO has not provided any data collected by him to the assessee calling for its objection for making such an estimated addition, it is necessary to set aside the issue to CIT(A) for disposing of the issue afresh - in favour of assessee for statistical purposes.
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2012 (12) TMI 523
Condonation of Delay in filling appeal before Tribunal – Delay of 2053 days - Whether the petition filed by the assessee seeking condonation of delay of 2053 days in filing the appeal is liable to be accepted – Held that:- Even if an assessee can’t explain delay on day to day basis, at least it should be able to demonstrate its inability in a reasonable manner. Here, the assessee is not a naďve or a first time litigant. This appeal itself is second round of litigation. We notice that neither there are sufficient particulars nor satisfactory explanation. The CIT(Appeals) passed order on 29.8.2006 whereas in the year 2011, for the first time, the assessee filed its representation(supra). No doubt, the law of limitation is only a tool to serve justice. When there is sufficient explanation, even time barred lis can be entertained by condoning delay. Hence, in our opinion, this hopelessly time barred appeal is liable to be dismissed for want of limitation. Issue decides against assessee Claim u/s. 40(b) – Fresh Claim before ITAT- Whether the CIT(A) order confirming the findings of the AO in rejecting assessee’s claim u/s 40(b)B is to be upheld or modified as per the respective stands of the parties – Held that:- Assessee needs for filing a revised return for making a fresh claim. In first round of assessment neither such claim had been raised nor was any revised return filed. Assessee preferred to raise claim the benefit of Sec.40(b) that too in the absence of books of accounts and other supporting documents. Issue decides against assessee
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2012 (12) TMI 522
Revision of Order by CIT u/s 263 – Erroneous and prejudicial to the interest of Revenue – Adjustment of unabsorbed depreciation while claiming deduction u/s 10B - Held that:- Divergent views were expressed by the Hon’ble Karnataka, Bombay & Kerala High Court. Following the decision in case of Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME COURT) that when two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as erroneous and prejudicial to the interest of Revenue unless the view taken by the AO is unsustainable in law. There is a contrary view expressed by the Hon’ble High Courts and AO has accepted one view. Therefore order of CIT u/s 263 needs to be set aside. Issue decides in favour of assessee
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2012 (12) TMI 521
India UK DTTA - Income from Shipping Business - Held that:- The assessee herein is a resident assessee but it is not borne out of record as to whether the "UK Company" is a resident assessee or non-resident assessee - relationship between the assessee-Company and the UK Company needs to be examined at the end of the AO in order to find out whether the assessee-Company is really acting as the agent of the UK Company. Further the applicability of DTAA to the instant transactions also needs to be examined. Both the assessee as well as the CIT(A) placed reliance on the decision of ITO Versus IAL Shipping Agencies (Mumbai) Ltd. [2010 (1) TMI 889 - ITAT, MUMBAI] that the assessee is only acting as the agent of the UK Company, it has to be examined whether the decision rendered in that case applies to the facts surrounding the instant case. As the assessee has not substantiated various claims made by it before the AO all the issues require re-examination at the end of the AO - AO directed to frame the assessment de nova without being influenced by the "Annual no objection certificate" in accordance with law - appeal filed by the Revenue allowed for statistical purposes.
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2012 (12) TMI 520
Chargeability to Capital Gain Tax - Valaution - nature to two different transaction - land development agreement as well as sale of developed land - Conversion of Agricultural land into Housing Plots - held that:- When the Assessing Officer himself has treated two agreements entered into by the assessee as two distinct and separate transactions, he was not correct in taking the indexed cost of acquisition, the purchase value of the land in 1980 and 1989. While computing capital gains arising out of transfer of 15% interest in developed land to M/s Koncept Nirman Pvt. Limited in April, 2006. In our view, the CIT (A) was right in holding that the cost of 15% of the right in developed land should be taken to be the value on which the SRO has calculated stamp duty of Rs.5,41,675/- The asset sold by the assessee to M/s Koncept Nirman Pvt. Limited is not the same which was given to the developer under the development agreement. Once the agricultural land was transferred to the developer under the development agreement, it lost its character as agricultural land. It is also evident from the materials on record that the intention of the parties was never to carry on any agricultural activity but to develop the land to residential/saleable plots. The nature and character of the land has also been changed from agricultural to residential by the order passed by the HUDA in its G.O. Ms. No.810 dated 21-9-2005 prior to the sale of 15% right and interest to M/s Koncept Nirman Pvt. Limited in April, 2006. That apart the assessee himself in the written submissions has submitted that no agricultural activity has taken place from the assessment year 2000-01 to 2005-06. On consideration of these facts, it cannot be said that the capital asset sold to M/s. Koncept Nirman Pvt. Limited in April, 2006 under the sale deed is the same as the land which was given for development under the development agreement and therefore not chargeable to capital gains tax. All the appeals by the Revenue as well as Cross Objections filed by the assessee are dismissed.
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2012 (12) TMI 519
Penalty u/s 271(1)(c)- Expenditure by hotel industry on renovation is a capital or revenue expenditure - Assessee claiming renovation expenditure as revenue expenditure – Assessee file belated return declaring loss - Held that:- As the assessee is not entitled to carry forward loss in these circumstances, there cannot be any intention to disclose more loss. In case of a hotel whether an expenditure on the renovation of hotel premises i.e. restaurant, bar & lounge, corridor, rooms, staircase, entrance lobby etc. is a capital or revenue is a highly debatable issue. In case where two views of the claim of the assessee were possible, the explanation offered by it could not be said to be false. Therefore, merely because the renovation expenditure was claimed by the assessee as a revenue expenditure but treated as capital expenditure by the Revenue would not be sufficient to hold that the assessee either furnished inaccurate particulars or concealed the income follow the decision of SC in Reliance Petro Products Pvt. Ltd. (2010 (3) TMI 80) & Delhi High Court in Zoom Communication Pvt. .Ltd (2010 (5) TMI 34). Decision in favour of assessee.
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2012 (12) TMI 518
Conversion of fixed asset into stock in trade - Business Income vs Capital Gain - Held that:- Though the land was shown as investment in the balance-sheet at the time of acquisition, the assessee has converted it into stock in trade before entering into the development agreement on 25-4-2004. This fact is clear from the assessee’s letter dated 6-12-2008 submitted before the AO in course of assessment proceedings. Therefore, the assessee having given stock in trade for development, the capital gains arising there from has to be charged to tax as per the provisions contained u/s 45(2). The assessee never had the intention of acquiring the land as an investment but to exploit it as business venture. When the assessee has entered into joint development agreement on 25-4-2004, the asset has already been converted into stock in trade and no more remains a capital asset. Therefore, it cannot be treated as a transfer u/s 2(47)(v). Thus no reason to interfere with the finding of the CIT (A) directing the AO to work out the short term capital gains on conversion of land held as investment in stock in trade and also the business income arising from sale of stock in trade separately - against revenue.
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2012 (12) TMI 517
Undisclosed cash credit - Held that:- It is revealed from the ledger account submitted with the paper book that the assessee has disclosed the addresses and telephone numbers of the members in the ledger account, therefore, the allegation of the AO that the details have not been furnished, cannot be accepted - no infirmity in the accounting methodology as the appellant debits the cash account on receipt of monthly instalment and credits the ledger account of the customer & when the jewellery is given, at that point the credits are converted into sales - in favour of assessee. Addition on account of deficit stock of Diamonds - survey under section 133A - Held that:- The AO treated the deficit in stock as unaccounted sales and added an amount of Rs.5,74,394/- but when the assessee has produced certain evidences, the same cannot be discarded on doubts and presumptions without bringing sufficient material to disprove them. It appears from the assessment order that there is no out-right denial from Sri Satish Kumar Shah regarding receipt of diamonds for assortment, AO is not precluded from making any enquiry to find correctness of the claim made out by the assessee. However, principles of natural justice demands the assessee must be informed about the result of such enquiry and may be given a fair chance of rebutting it - set aside this issue to the file of AO who shall make proper enquiry and come to a conclusion after affording an opportunity of being heard to the assessee in this regard. Disallowance of notional interest received on loan advances - Held that:- It is seen from the balance-sheet of the assessee having enough capital to advance the loan amount of Rs.30 lakhs, and the unsecured loans were all taken in the earlier years and no fresh loan has been taken in the current assessment year hence there is no nexus between the borrowed capital and loan advanced by the assessee - addition towards notional interest cannot be sustained - in favour of assessee. Monies collected as a part of the assessee’s monthly gold scheme lucky draw - Held that:- It is seen from the terms and conditions of the scheme that under no circumstances, cash will be refunded to the member and only gold ornaments will be issued. Therefore, the inference to be made is as soon as the member participates in the scheme and pays installment money, there is accrual of income to the assessee since the money is not going to be refunded to the member. Therefore, it cannot be said that the income has not accrued to the assessee - The assessee is showing it as a liability, will not change the character of receipt which always remains as a trading receipt - against assessee. Addition on account of valuation of closing stock - Held that:- As the assessee has been consistently adopting the same FIFO method of valuation of closing stock from the past years without being doubted or questioned by the department and is sought to be changed by the department, it has to be backed by sound reasoning which is lacking in the present case - set aside this issue to the file of the AO who shall take a decision after affording a reasonable opportunity of being heard to the assessee.
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Customs
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2012 (12) TMI 539
License of Custom House Agent - old v/s new regulation - Held that:- All those who had cleared the examinations, under the regulations issued in the year, 1984, would be eligible for the grant of the custom house agents license, subject to their fulfilling the other conditions of eligibility as decided in Sunil Kohli Vs. Union of India [2012 (10) TMI 638 - SUPREME COURT]. Consequently, the petitioners are entitled to be considered for grant of Customs House Agent licenses without having to clear the examination in the additional subjects. It is appropriate to direct the respondents to issue the necessary certificate granting the Customs House Agents Licence to the petitioner, as per Regulation 9 of the Customs House Agents Licencing Regulations, 2004, on the petitioner complying with the requirements prescribed, under Regulation 10 of the said regulations, within a period of eight weeks from the date of receipt of a copy of this order - writ petition is ordered accordingly.
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2012 (12) TMI 538
Contempt of Court proceedings - Held that:- Appellant chose not to file reply to the show-cause notice dated despite several opportunities therefore, it was observed that the appellant has nothing to say in reply to the show-cause notice - matter referred to Hon'ble High Court of Bombay for proceedings of contempt of Court against the appellant.
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Corporate Laws
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2012 (12) TMI 537
Scheme of Amalgamation - Merger - Application u/s 391,394 of Companies Act - Held that:- Representation/reports filed by the Regional Director and the Official Liquidator that no objections of Shareholders and Creditors of the Petitioner Company, received to the proposed Scheme, there appears to be no impediment to grant of sanction to the Scheme - no notice is required to be given to the commission in case of an amalgamation which involves an Holding company and its subsidiaries, which are wholly owned by enterprises belonging to the same group - Sanction is hereby granted to the Scheme u/s 391 and 394 of the Companies Act, 1956 - Petitioner Company will comply with the statutory requirements in accordance with law - Certified copy of the order will be filed with the ROC within 30 days from the date of receipt of the same - Petitioner Company and the property, rights and powers & all the liabilities and duties concerning the same will be transferred to and vest in the Transferee Company without any further act or deed - this order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law - Petitioner Company would voluntarily deposit a total sum of Rs.1,00,000/- in the Common Pool fund of the Official Liquidator within three weeks from today - Scheme of Amalgamation allowed.
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2012 (12) TMI 536
Winding up petition - Whether scheme u/s 391-392 of the Companies Act is maintainable in a winding up petition filed by the Reserve Bank of India under Section 45MC(1) of RBI Act, 1934? - Held that:- If the scheme contains any term or condition which is in derogation of any statutory provision, the same cannot be sanctioned. It is a part of public policy itself that statutory provisions are to be followed and are not to be disregarded or contravened. Therefore, a scheme which ignores or side-steps statutory provisions would clearly be opposed to public policy. Therefore, while a scheme under Sections 391/392 of the Companies Act could be considered by the company court even during the pendency of the winding up petition filed by RBI under Section 45MMC of the RBI Act, such a scheme cannot be sanctioned if it is in violation of any of the statutory provisions including the provisions of Chapter III-B of RBI Act. Whether criminal and income tax proceedings pending against the company and its directors & quasi-judicial orders passed by a statutory authority like SEBI could be stayed by the company court while sanctioning a scheme under Sections 391-392 of the Companies Act, 1956 - Held that:- “Suit or other legal proceeding” as appearing in Section 446(1) as also the expression “suit or proceeding” under Section 446(2) of the Companies Act do not include criminal proceedings. The same would be the position with regard to the expression “suit or proceeding” as appearing in Section 391(6) of the Companies Act. The consequence of this would be that a company court while examining or sanctioning a scheme under Section 391/392 of the Companies Act cannot stay any criminal proceedings as that is beyond the scope of the powers and jurisdiction of the company court. In Krishna Texport Industries Ltd. Versus DCM Ltd. (2008 (5) TMI 425 - HIGH COURT OF DELHI) an unequivocal view was taken that Section 391(6) of the Companies Act does not envisage either quashing or stay of criminal cases against the company or its Directors. Such criminal proceedings include those under Section 138 of the Negotiable Instruments Act, 1881. Statutory authority like SEBI or orders passed by RBI and the ITA under special enactments cannot be set aside while sanctioning a scheme under Section 391 of the Companies Act. No stay of any criminal or income tax proceedings can be ordered by the company court while considering an application under Sections 391/392 of the Companies Act, 1956. Therefore, the scheme which entails a direction to SEBI to revoke the orders passed under Section 11B of the SEBI Act could not have been sanctioned in law. Similarly, directions regarding “vacation or stay sine die” of all criminal cases could not have been given by the company court. Directions could not be given to the CBI to release the passport of the propounders of the scheme as also of the Ex-Directors of CRB Capital nor a direction could be given to CBI to hand over all records and documents of CRB Capital including records of fixed deposits, particularly, in view of the fact that the criminal cases were pending against the said Directors/ Ex-Directors of CRB Capital - the provisions of SEBI Act and RBI Act being special and complete codes in themselves with regard to their respective subject matters would over-ride the provisions of Companies Act in case there is any inconsistency between the said provisions Whether the scheme formulated in the instant case is bona-fide, feasible and fair? - Held that:- It is apparent that the reliefs and concessions as sought under the scheme form an integral part of the scheme. If a majority of reliefs and concessions sought in law cannot be granted, the scheme itself would be unworkable - Several directions including the direction in respect of criminal cases and stay of demands and vacation of ex-parte orders insofar as income tax authorities are concerned also the release of the passport of the propounders of the scheme would probably be contrary to the direction given by the criminal court inasmuch as that may have been a condition for grant of bail. Such a direction, once again, may be contrary to law, thus scheme as formulated in the present case is not bonafide, feasible or fair. Whether grounds for winding up of the Company under Section 45MC (1) of Reserve Bank of India Act, 1934 as made out in the winding up petition exist. If so, to what effect? - Held that:- If the scheme cannot be successfully implemented, then the winding-up petition filed by the RBI in respect of CRB Capital would revive. It is obvious that the company court has not examined the winding-up petition of RBI on merits - set aside the impugned judgment as also the scheme and remit the matter to the company court for consideration of the winding-up petition in accordance with law - no bar on CRB Capital propounding another scheme during the pendency of the said winding-up petition or even thereafter, in case winding-up is ordered.
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Service Tax
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2012 (12) TMI 542
Assessee provide services in the state of J&K and to SEZ - Service provided in the state of J&K does not attract service tax leviable under Sec.66 - Services provided to the units situated in SEZ is exempted vide Notification 4/2004-ST dated 31.3.2004. Assessee had not maintained separate accounts in respect of receipt, consumption and inventory of input services meant for use in providing output service - Which are chargeable to tax as well as exempted service, as provided under Rule 6(2) of CCR, 2004 - Availed cenvat credit on the entire input services received by them – Revenue contended that if cenvat credit on common input services is not taken, appellant is required to maintain separate accounts – Assessee argued that once a service tax paid on input services has not been taken at all, the provisions of Rule 6(3)(c) of CCR would not be applicable – Issue remand back to revenue and waive the requirement of pre-deposit of service tax demanded by Commissioner. Held that:- As the assessee did not fulfill their obligation which has resulted in impugned order. Therefore an amount of pre-deposit required to be deposit by assessee. And also submit copies of the relevant documents with a worksheet showing the details of documents on the basis of which credit is taken and the details of credit utilized. Appeal remand back to AO
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2012 (12) TMI 541
Travel Agent Services - Demand of Service Tax, Interest and Penalty - denial of SSI benefit - Held that:- In view of the fact that during the previous year appellants were availing the SSI benefit, denial of the same in the next year on the ground of non-filing of declaration is not appropriate. Even after surrendering of certificate and treating it as declaration, it was the bounden duty of the appellants to register themselves when they crossed the turn over of Rs.3 lakhs and to start following the statutory procedure, but they have failed to do so. Since they have failed to do so demand for service tax of Rs. 2930/- with interest is upheld and penalty under section 76 and Section 78 at Rs. 2930/- each is upheld. Penalty amounting to Rs. 1000/- u/s. 77 also confirmed.
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2012 (12) TMI 540
Maintainability of rectification of mistake - difference of opinion between Member (Judicial) & Member (Technical) - Promotion or marketing of logo or brand - demand under BAS - Held that:- No mistake apparent in the Tribunal's order while arriving at decision by both the members independently. Reliance placed on the decision of Suzlon Infrastructure Ltd. (2009 (5) TMI 64 - BOMBAY HIGH COURT) wherein the Hon'ble High Court hold that the application for ROM is maintainable but in that case, both the Members had not given finding on some issues but in this present case Member (Judicial) allowed the appeal on merit and Member (Technical) dealt with all the issues. Therefore, the decision of Suzlon Infrastructure Ltd. (supra) is not applicable to the facts of this case - application for ROM is dismissed.
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Central Excise
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2012 (12) TMI 535
Restoration of stay petition - waiver of dues dismissed for non-prosecution - Held that:- Appellant produced a copy of the letter dated 4.08.2012, which was sent through Speed Post and as per receipt of the Speed Post, that letter was submitted to the Postal Department on 4.08.2012 at 2.28 p.m. - notice for hearing was issued on 18.06.2012 fixing the application for waiver of dues on 06.08.2012 - The applicant receive the notice, however, the request for adjournment was only made through letter dated 04.08.2012 - applicants are interested only in delay the proceedings - matters listed before the Bench are also put up on the Website of the CESTAT. As the applicant was interested in undue delay in disposing of the application for waiver of dues, the Restoration application of Stay petition is allowed subject to deposit of cost of Rs.20,000/- to be deposited with the jurisdictional Commissioner within a period of two weeks. The Stay application is adjourned to 4.12.2012.
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2012 (12) TMI 534
Confiscation of Drums of packing material - drums were found having not been entered in their RG 23A Part I records - Imposition of Penalty - Held that:- Statements of appellant had clarified that these drums were old and used drums and were purchased under an invoice which was not cenvatable. As such the question of making entries of the same in RG 23 A Part I does not arise. The appellate authority have not found that appellants have taken the credit in respect of seized drums. The Revenue, for confiscation of drums in question should have shown that they have taken the credit in respect of seized drums. There is no such finding by the authorities below - no reason to uphold the confiscation of drums or to impose penalty on the appellant - in favour of assessee.
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2012 (12) TMI 533
Power of Commissioner to remand the matter to the adjudicating authority for fresh adjudication - setting aside of Demand of Duty, Interest and Penalty - Held that:- If the order in original is passed without giving opportunity of being heard to the assessee or without permitting him to produce evidence in support of his case then only order with the Commissioner (Appeals) would be able to pass him to set aside the impugned order on the ground of failure of justice. This would create an anomaly with prejudice to the Revenue as it would bring an end to the litigation without adjudicating on the demand raised by the show cause notice. Therefore, just and proper order in such a case would be nothing but an order of remand to adjudicate the matter denovo after giving due hearing to the assessee - it is apparent that Commisioner(A) have power to remand the matter back to original adjudicating authority even after amendment of Sec 35A(3). As decided in COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-I Versus MEDICO LABS [2004 (9) TMI 108 - HIGH COURT OF GUJARAT AT AHMEDABAD] that Commissioner (Appeals) continues to have power of remand even after the amendment of Section 35A(3) of the Central Excise Act, 1944 by Finance Act, 2001 w.e.f. 11.5.2001 - no merit in appeal filed by the department.
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2012 (12) TMI 532
Wrong availment of Cenvat Credit - Imposition of Penalty and Interest under Rule 15 of CCR 2004 rws 11AC of Central Excise Act, 1944 - Held that:- On reading of Rule 15(2) it is evident that this rule is applicable only in respect of Cenvat credit wrongly availed by the assessee in relation to “Inputs” or “Capital Goods”. This rule does not apply to wrong availment of Cenvat credit in relation to “Input Service”. Rule 12(4) would show that it is applicable in the case in which the assessee is a service provider. However, in the instant case appellant is a manufacturer and not service provider. Thus, in our view Rule 15(4) is also not attracted. At best, the appellant can be penalised under Rule 15(3) to the extent of Rs. 2,000/- - thus impugned order is set aside and amount of penalty is modified to Rs. 2,000/- in accordance with Rule 15(3) of CRR, 2004.
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2012 (12) TMI 531
Rectification of Mistake - Condonation of delay of 124 days in filing ROM Application – Held that:- Foolowing the decision taken in COLLECTOR OF C.E., CHANDIGARH Versus DOABA CO-OPERATIVE SUGAR MILLS [1988 (8) TMI 103 - SUPREME COURT OF INDIA] there is no scope for condonation of delay in filing of ROM application under Section 35C(2) when there is no provision for such condonation and the Tribunal being a creation of statute, cannot travel beyond the confines of the statute. The provisions of Section 5 of the Limitation Act, 1963 read with Section 151 CPC are not applicable for condonation of delay in filing of appeals or rectification application under the provisions of Central Excise Act, 1944.The delay in filing of ROM application, therefore, cannot be condoned and the application has to be rejected as time barred. Interest on Refund of Pre deposit - Held that:- As from ROM it is seen that assessee seek interest @ 12% p.a. from the date of pre-deposit i.e. 8-8-2008 till the date of refund of pre-deposit on 18-10-2011. But there is no provision in Central Excise Act, 1944 for interest on pre-deposit from the date of pre-deposit. Section 35FF permits interest only from the date of expiry of three months from the date of communication of the Appellant order to the Department till the date of refund of pre-deposit. A debatable point of law can not be a “mistake apparent from the record” as held in case of CCE, Calcutta v. ASCU Ltd. (2002 (12) TMI 87 - SUPREME COURT OF INDIA) - a mistake apparent from record’ is that which is an obvious and patent mistake and is not something which has to be established by long drawn process of reasoning on which there may be conceivably two opinions - ROM application and condonation of delay in filing of ROM application dismissed.
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