Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 2, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Central Excise
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36/2016 - dated
1-12-2016
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CE
Seeks to further amend notification No. 12/2012-Central Excise dated 17th March, 2012, in respect to the excise duty exemption on branded gold coins of purity 99.5% and above.
Customs
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59/2016 - dated
1-12-2016
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Cus
Seeks to further amend notification No. 12/2012-Customs dated 17th March, 2012, so as to withdraw CVD exemption on gold coins having gold content not below 99.5%, and gold findings
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144/2016 - dated
30-11-2016
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver
Income Tax
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108/2016 - dated
29-11-2016
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IT
Income-tax (34th Amendment) Rules, 2016
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Addition of bogus purchases of machinery - the proceedings before Sales Tax Department alone could not be the sole basis of addition in the hands of assessee before Income Tax Authorities - Section 69 had no applicability since the machinery was duly recorded in the books of accounts - AT
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Levy of penalty u/s 271(1)(c) - addition of unexplained sundry creditor - bogus purchases - the nonpayment of purchase consideration is a strong circumstance regarding non-genuineness of transactions and stands on its own de hors any other evidence. - AT
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When the existence of the stated outstanding liability on account of aviation fuel is found to be bogus, the addition is to be upheld on account of the said bogus liability of ₹ 99 lakhs remaining unproved - AT
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CIT (A) did not have the power to enhance the income of the assessee in the instant case and the enhancement made by him is beyond the powers conferred upon him by the statute - AT
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Exemption u/ss. 11 & 12 as well as u/s. 10(23C) - status of society - assessee is eligible for exemption u/s. 11 of the Act and therefore the status of the assessee would be AJP and not AOP - AT
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Effective date of registration u/s 12AA - the registration has been granted w.e.f. from the last day of the financial year 2002-03 whereas the scheme of the Act envisages that the registration should be granted from the first day of the financial year - CIT directed to make suitable amendments - AT
Customs
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Refund claim - whether the rejection of refund claim on the ground that the appellants cannot claim the refund directly without challenging the assessment order is justified? - Held Yes - AT
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Import of exported goods for re-processing and thereafter export - appellant could not comply the post import condition of re-export of the goods within stipulated period - The appellant is entitle for alternate exemption Notification No.94/96-Cus subject to it’s eligibility - AT
Service Tax
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Refund - SEZ unit - services consumed wholly by the appellant within SEZ within which it is situated - rent-a-cab services - outdoor catering services - refund allowed - AT
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Classification of taxable serivce - the activities of loading, unloading of cargo from the local warehouse to the trucks as also at the premises of dealers or godown - not falling under the cargo handling service category - AT
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Valuation - photographic service the term 'sold' appearing thereunder has to be interpreted using the definition of 'sale' in the Central Excise Act, 1944 and not as per the meaning of deemed sale under Article 366(29A)(b) of the Constitution. - AT
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Refund - CENVAT credit - 100% EOU - export - the provisions of rule 4(1) are not attracted and, in terms of rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under rule 5 of CENVAT Credit Rules, 2004 - AT
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Amendments in the Provision of Services Rules, 2012 so as to exclude 'online information and database access or retrieval services' from the definition of 'telecommunication services'
Central Excise
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Manufacture - assembling of semi finished Auto Parts - the appellant has rightly availed the CENVAT credit in respect of semi finished bought out components - credit allowed - AT
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Job-work - CENVAT credit - goods not received back - These manufactured items have been cleared on payment of proper central excise duty at the job worker's end - there is no justification for reversal of any credit availed on inputs - AT
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The Department by entertaining a view that assessee manufactured only “Ready Mix Concrete” and not “Concrete Mix” proceeded to demand central excise duty - if the contention of the revenue is accepted, the exemption notification no.4/2006-CE would be rendered in fructuous or meaningless - AT
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Interest on delayed refund of pre-deposit -The appellants are entitled for interest for the period beyond three months from the date of final order of the Tribunal dated 04/04/2001 till sanction of the amount to the appellant. Such interest is automatic and no separate claim is mandated - AT
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Clearance of Cement - concessional rate of duty - the sales without RSP marking is direct to the consumer not through an intermediary as such the criteria for “retail sale” has not been fulfilled - AT
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Manufacture of PVC footwear - exemption under N/N. 10/96-CE - Some process like preparation of EVA compound is carried out in one premises and consumed for manufacture of footwear in another premises, both belonging to the same respondent-assessee - benefit of exemption allowed - AT
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Refund - Rule, 5 of CENVAT Credit Rules - the status of appellant whether it is a proprietorship or partnership, 100% EOU are not criteria for rejection of refund. - AT
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CENVAT credit - all the constructions are integral part of the factory and hence credit taken over the input services by the respondents is eligible. - AT
VAT
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Levy of penalty - it was established by the department that the goods were imported by the assessee from Indore (MP) from undisclosed dealer and the same was attempted to be transported under the cover of bill issued by the assessee from Agra with intent to evade payment of tax - penalty confirmed - HC
Case Laws:
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Income Tax
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2016 (12) TMI 59
Taxability of income - correct person to be taxed - Additional Solicitor General to contend that the tax in the hands of the Estate of late Ramniklal N. Mehta is not correct and the Revenue is obliged to tax the income in the hands of the correct person i.e. Petitioner herein - Held that:- When we queried the learned Additional Solicitor General with our understanding at the stage of rejoinder, he clarified that the Revenue is not contending that the Estate of late Ramniklal Mehta has been wrongly taxed but it was his submission in the alternative that even if the said Estate of late Ramniklal N. Mehta has been wrongly taxed, it is the obligation of the Revenue to tax the right person (s) including the Petitioner. We accept this as an alternative submission made by the Revenue and we concede that it is likely that we may have not correctly understood the same when voiced by the Revenue at the first instance. This submission of Additional Solicitor General was an alternative submission made even though the Executor of the Estate of late Ramniklal N. Mehta, one Mr. Dilip Mehta – uncle of the Petitioner clearly admits in his statement made to the Income Tax Authority on 10th January, 2012 that he has limited authority to operate the A/c. No. 5091404580 in the name of M/s. White Cedar. The Revenue ought to have in fact proceeded further and held the uncle of the Petitioner – Mr. Dilip Mehta who is Executor of the Estate of late Ramniklal N. Mehta bound by his admission that he has limited authority to operate the Account No. 5091404580 in HSBC Geneva of M/s. White Cedar. As we understood the Revenue to contend that the Estate of late Ramniklal Mehta is not the correct person to be taxed there was no occasion to to examine the statement of Dilip Mehta dated 10th January, 2012 as extracted in the order dated 30 May 2014 passed in the case of the Estate before our attention was invited by the petitioner to the order dated 30 May 2014 in support of its case during its rejoinder. We would expect the Revenue in matters such as these to take decisions with due consideration and some thought before taking a stand as taken in the affidavit in reply 16 December 2015 with regard to the order dated 30 May 2014 passed on the Estate of late Mr. Ramnikal Mehta. Neither the Petitioner nor her uncle i.e. Executor of the Estate of late Ramniklal N. Mehta is ready to obtain the necessary statement either directly or through M/s. White Cedar from HSBC, Geneva in respect of A/c. No. 5091404580 by exercising or causing to be exercised the limited authority to instruct White Cedar to apply for and obtain the requisite information. In the normal course of human conduct if a person has nothing to hide and serious allegations /questions are being raised about the funds a person would make available the documents which would put to rest all questions which seem to arise in the mind of the Authorities. The conduct on the part of the Petitioner and her uncle, in not being forthcoming, to our mind leads us to the conclusion that this is not a fit case where we should exercise our extra ordinary writ jurisdiction and/or interfere with the orders passed by the authorities under the Act. If a person has nothing to hide, we believe the person would have cooperated in obtaining the Bank Statements.
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2016 (12) TMI 58
Validity of reopening of assessment - Held that:- Assessing Officer has not applied his mind while recording the reasons to believe that the income escaped the assessment and he has acted only in a mechanical manner. Thus, the reassessment proceedings completed under Section 147 r.w.s. 143 of the Act in the present case in question are thus, held as void-ab-initio. - Decided in favour of assessee.
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2016 (12) TMI 57
Levy of penalty under section 271(1)(c) - addition of unexplained sundry creditor - bogus purchases - Held that:- The assessee has failed to substantiate the purchases made from M/s Unifoil Enterprises. Except the purchase bill, no other evidence could be produced by the assessee in support of such bill. The assessee did not even make the payment for such purchases for a period of twelve years and thereafter, wrote back the amount in its books of account. Thus, in effect, the assessee did not make the payment for purchase of such goods. The seller i.e., M/s Unifoil Enterprises has denied to have sold the goods to the assessee by writing a letter to the Assessing Officer and also in the statement recorded by the Revenue authorities. The ITAT in the quantum proceedings has clearly held that the nonpayment of purchase consideration is a strong circumstance regarding non-genuineness of transactions and stands on its own de hors any other evidence. Also it cannot be believed that anybody would sell the goods worth ₹ 66 lakhs and would not pursue for payment thereof. No satisfactory explanation is given by the assessee for not making the payment of goods claimed to have been purchased from M/s Unifoil Enterprises. The only explanation given is that the goods supplied were of inferior quality but no evidence in this regard is produced by the assessee. On the other hand, the assessee claimed that the goods supplied by the assessee were exported by it and, therefore, the genuineness of the purchases cannot be doubted. Once the assessee claimed that the goods supplied by M/s Unifoil Enterprises are exported by it, it itself disproves the assessee’s contention that the goods were of inferior quality.On these facts, the only inference that can be drawn is that no goods were supplied by M/s Unifoil Enterprises because if the goods had actually been supplied, no creditor would forego his claim merely because the other party is disputing the quality of the goods supplied. Thus we uphold the levy of penalty under section 271(1)(c) of the Act. - Decided against assessee.
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2016 (12) TMI 56
Revision u/s 263 - Computation of deduction u/s 36(1)(viia) - Held that:- the present case, the assessee had given the break-up of each branch. The assessee in its computation of revised total income/loss clearly mentioned that deduction u/s 36(1)(viia) of the Act was claimed @ 10% of average agricultural advances of ₹ 801.56 crores. Thereafter, the AO after examining the aforesaid details came to the conclusion that the claim of the assessee was allowable and he accordingly allowed the claim of the assessee u/s 36(1)(viia) of the Act. The said claim was in accordance with law and as provided in the provisions of Section 36(1)(viia) of the Act. AO made the proper inquiry/investigation on the issue under consideration and the ld. CIT simply directed the AO to re-examine the claim u/s 36(1)(viia) of the Act afresh. He nowhere recorded a finding that the inquiry made by the AO was erroneous and did not point out any error or mistake made by the AO. Therefore, the action of the ld. CIT in setting aside the assessment order passed by the AO was not justified. - Decided in favour of assessee
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2016 (12) TMI 55
Permission to enhance the depreciation by revaluation of the assets upwards - Held that:- We do not find any merit in this petition. The special leave petition is, accordingly, dismissed. HC order confirmed [2016 (11) TMI 1364 - ALLAHABAD HIGH COURT] Assessing Officer could not go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J of the Act. We are of the opinion that the provision of Section 115J does not empower the Assessing Officer to embark upon a fresh inquiry in regard to the entries made in the books of account of the company
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2016 (12) TMI 54
Addition u/s 14A read with Rule 8D(2)(ii) - Held that:- In the instant case before us, interest amount other than interest on term loans works to be ₹ 23 lakhs i.e., (45.32 crores – 45.09 crores). However, the interest incurred on the loan taken from bank is to be considered u/s.36(1)(iii) and since it is not incurred for earning exempt income, the same cannot be disallowed u/s.14A read with Rule 8D(2)(ii). As per the working of CIT(A), such disallowance of interest works out to be ₹ 26,64,777/-. However, nothing was brought on record to controvert the findings of CIT(A). Accordingly, we confirm the action of CIT(A) for restricting the disallowance of interest under Rule 8D(2)(ii) to the extent of ₹ 26,64,777/-. For disallowance warranted under Rule 8D(2)(iii) it is clear from the working that after excluding the long term strategic investment and investment not yielding dividend income there remains to be ‘nil’ investment on which disallowance under Rule 8D(2)(iii) can be applied. Applying the proposition of law as cited by Ld. A.R. and referred by us in para 8 to the facts of instance case, we found that no disallowance is warranted under Rule 8D(2)(iii), in so far as after excluding such investment there remains to be nil investment. However, keeping in view the working given by the assessee, we restrict the disallowance to the extent of ₹ 14,79,411/-. Addition made on account of provision for wealth tax for MAT calculation - Held that:- Issue is squarely covered by the decision of Jurisdictional High Court in case of Echjay Forgings Pvt. Ltd. [2001 (2) TMI 56 - BOMBAY High Court]. Respectfully following the same, we do not find any infirmity in the order of CIT(A) for deleting the addition made on account of provision of wealth tax while computing book profit u/s.115JB of the IT Act.
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2016 (12) TMI 53
Unpaid Provision of leave encashment - revised return filed by assessee - Held that:- The claim made by the assessee ought to have been examined on merit and not shut-out in a superficial manner. Obviously, the claim of the assessee is based on the fact that there is an error in the reporting of the unpaid Provision for leave encashment in the audit report but the claim has been rejected without subjecting it to any kind of verification. Under these circumstances and considering that the revised return filed on 13/10/2005 was within the period prescribed under section 139(5) of the Act and that the original return was filed within the period prescribed under section 139(1) of the Act, the Assessing Officer was bound to take cognizance of the revised return filed on 13/10/2005 and consider the plea of the assessee on merits having regard to the material sought to be relied upon by the assessee before him. On the failure of the lower authorities to do so, we deem it fit and proper to set-aside the order of the CIT(A) and direct the Assessing Officer to take cognizance of the third revised return filed on 13/10/2005 and consider the plea of the assessee relating to the unpaid Provision of leave encashment on merits having regard to the material that the assessee seek to rely before him.
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2016 (12) TMI 52
Addition in difference in valuation of property arrived at by DVO - Held that:- In the instant case, the transactions were entered during the financial year 2006-2007 i.e., 1st April 2006 to 31st March 2007 which is prior to 01/10/2009. Therefore, as per CBDT, circular provisions of Section 50C are not applicable in so far as sales deed so executed were not registered with the Stamp Duty Violation Authority. We are also inclined to agree with learned AR Mr. Shashank Dandu that in view of the decision of Co-ordinate Bench in case of Rahul Construction (2012 (1) TMI 229 - ITAT PUNE) since the difference between the sale consideration of the property shown by the assessee and the FMV determined by the DVO under Section 50C(2) being less than 10 per cent, AO was not justified in substituting the value determined by the DVO for the sale consideration disclosed by the assessee. We are also in agreement with AR that decision of Madras High Court in case of Sugantha Ravindran [2013 (3) TMI 271 - MADRAS HIGH COURT] is squarely applicable to the facts of the instant case where it has been held that since transfer was made prior to the amendment of Section 50C w.e.f. 1/10/2009, the provisions of section 50C would not be applicable. Unregistered property was sold on 07/08/2006 which means, since the unregistered property was sold before the clarification was issued under Circular No.5/2010 dated 03/06/2010 where it clearly states that the scope of the provisions do not include transactions which are not registered with stamp duty valuation authority, and executed through agreement to sell or power of attorney and hence the provisions of Section 50C will not be attracted since the sale is before 01/10/2009, which is the date on which the circular becomes applicable. - Decided in favour of the assessee.
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2016 (12) TMI 51
Addition of bogus purchases of machinery - disallowance of depreciation - Held that:- AO has proceeded to make the additions on the basis of suspicion that the purchases have been made from Hawala entry operators listed on the website of Sales Tax Department but strangely, no independent inquiry to corroborate the transaction has been made by the AO. The full information in the shape of invoice copy, confirmation etc. was available before AO yet no notice u/s 133(6) was issued to the supplier. The assessee also placed the photographs of Machinery in support of physical delivery and installation at the premises of the assessee, but the same were not verified by the lower authorities. On these facts, the assessee had duly discharged its initial onus to prove the purchases and onus was on revenue to confront the same. CIT(A) affirmed the same by noticing that the Sales Tax payment has been discharged by the assessee without seeking cross examination of the supplier before Sales Tax Department. But the proceedings before Sales Tax Department alone could not be the sole basis of addition in the hands of assessee before Income Tax Authorities. Further, as rightly observed by Ld. CIT(A), Section 69 had no applicability in the case of the assessee as the Machinery was duly recorded in the books of account. We are inclined to allow the appeal of the assessee and delete both the impugned addition - Decided in favour of assessee.
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2016 (12) TMI 50
Addition of unproved credits - outstanding liability on account of aviation fuel - Held that:- Inspite of being specifically required to, the assessee has not been able to furnish any basic material evidence to establish that the alleged fuel purchases were ever made by it in the past. The assessee itself accepted that ₹ 8 lakhs thereof could not be reconciled by it. Even bills for purchase thereof, confirmations from so called creditors in respect of outstanding balances were never furnished. That the said amounts were outstanding liabilities of the earlier years is also not established by the assessee. Also note that the averments by the assessee that it had written back and offered these amounts of ₹ 99 lakhs for taxation in the A.Y. 2012-13, was found to factually incorrect by the AO and this fact was admitted to be so by the learned A.R. in proceedings before us, i.e. that these amounts were not written back/offered to tax in the assessee’s return of income for A.Y. 2012-13. Thus we agree with the learned CIT(A) that it can be concluded that there is no genuine outstanding liability on account of aviation fuel and therefore no likelihood of any amount being paid on this account in the future and further that this amount of ₹ 99 lakhs claimed by the assessee is a bogus liability. The fact that the assessee has in its submissions before the learned CIT(A) (supra) stated that it has written back and offered to tax the so called outstanding liabilities of ₹ 99 lakhs in A.Y. 2012-13, evidences that the assessee itself admits that the liability in question is not genuine and was put forth only after the detection of these bogus outstanding liabilities of ₹ 99 lakhs by the AO. Thus when the existence of the stated outstanding liability on account of aviation fuel is found to be bogus, we are of the considered view that the addition is to be upheld on account of the said bogus liability of ₹ 99 lakhs remaining unproved.- Decided against assessee
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2016 (12) TMI 49
Enhancement of income - powers of CIT(A) - Held that:- As far as the issue of enhancement of income by the Ld. CIT (A) is concerned, as in the case of CIT vs. Sardari Lal & Company [2001 (9) TMI 1130 - Delhi High Court] has held that CIT (A) has no power to direct the AO to bring to tax a new source of income, which is not considered by the AO in the order appealed against him. The Hon’ble Delhi High Court observed that wherever the question of taxability of income from a new source of income is concerned, which has not been considered by the AO, the jurisdiction to deal with the same in appropriate cases may be dealt with u/s 147/148 and section 263 if the requisite conditions are fulfilled. The Hon’ble High Court further observed that in presence of such specific provisions, the CIT (A) does not have the power to tax a new source of income not considered by the AO in the order of assessment which was appealed against before him. In coming to this finding the Hon’ble Delhi High Court approved its own decision in the case of CIT vs. Union Tyre (1999 (9) TMI 81 - DELHI High Court) and CIT vs. Shapoorji Pallonji Mistry (1962 (2) TMI 12 - SUPREME Court ) and CIT vs. Rai Bahadur Hardutroy Motilal Chamaria (1967 (4) TMI 8 - SUPREME Court). Thus we hold that the Ld. CIT (A) did not have the power to enhance the income of the assessee in the instant case and the enhancement made by him is beyond the powers conferred upon him by the statute. -Decided in favour of assessee
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2016 (12) TMI 48
Sale of software - chargeable to tax under Article 7 of DTAA as business income of the assessee OR not under Article 12 as ‘Royalty’ - Held that:- On identical set of facts, respectfully following the decision of the coordinate bench of the ITAT in the assessee’s own case for A.Ys. 07-08, 08-09 and 09-10, we hold that for A.Ys. 11-12 and 12-13, the sale of software by the assessee is the sale of standard software which is chargeable to tax under Article 7 of DTAA as business income of the assessee and not under Article 12 as ‘Royalty’. Allowance of tds credit - action of grossing up of the receipts for the purpose of computation of income - Held that:- Both the issues are set aside to the file of the AO with the direction to grant the credit of TDS, if found in accordance with the law and also to re-compute the gross receipts for the purpose of taxation.
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2016 (12) TMI 47
Disallowance u/s 14A - Held that:- Assessing Officer has not furnished any reasons for rejecting the suo motu disallowance of ₹ 50,000/- computed by the assessee before invoking the formula contained in Rule 8D(2)(iii) to compute the disallowance. Notably, the phraseology of Sec. 14A(2) of the Act itself shows that the computation of disallowance prescribed in Rule 8D of the Rules can be resorted to if the Assessing Officer is not satisfied with the correctness of the claim made by assessee. In the present case, there is no satisfaction arrived at by the Assessing Officer. Be that as it may, following the ratio of our coordinate Bench in the case of Devkant Synthetics (India) Pvt. Ltd. (2015 (11) TMI 1067 - ITAT MUMBAI) the disallowance of expenses u/s 14A of the Act is restricted to 5% of the exempt income. The Assessing Officer is directed to retain the addition to the extent of 5% of exempt income after allowing credit for the suo motu disallowance of ₹ 50,000/- already made by the assessee. Thus, on this aspect, assessee partly succeeds.
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2016 (12) TMI 46
Denial of exemption u/ss. 11 & 12 as well as u/s. 10(23C) - status of society - Assessment framed in the status of AOP or AJP - aggregate annual receipts - Held that:- Clause (vi) makes it clear that if educational institution do not fall under either of those two categories and still such educational institutions are also entitled to the exemption, provided such institutions are approved by the prescribed authority. Therefore, all these three provisions apply under three differed spheres. Otherwise, there was no necessity for the Legislature to introduce these three provisions. In that view of the matter, the finding recorded by the Tribunal that aggregate annual receipt of other educational institution means, total annual receipt of each educational institution, is correct and it does not call for any interference. Thus we hold that the annual receipt of each college which is a separate educational institution, has to be considered for the purpose of section 10(23C) of the Act. The assessee is a trust created vide trust deed dated 2.3.1995. There is no denial that the main object of the assessee trust is to impart education. The assessee is running two colleges in the name & style of M/s. Nargund College of Pharmacy and M/s. Nargund College of Physiotherapy. Besides this, the assessee is also running hostel meant for students. It is pertinent to note that upto FY 2003-04, the department accepted the assessee as charitable trust in terms of section 2(15) as well as for the purpose of sections 11 and 10(23C) of the Act. Benefit of sections 11 and 12 cannot be denied merely on the ground that registration is granted w.e.f. 1.4.2008, though by a subsequent order, but the registration u/s. 12A came into effect prior to the initiation and completion of assessment proceedings of these four years. Accordingly, we hold that assessee is eligible for exemption u/s. 11 of the Act. The status as per section 164(2) is only for the assessment purpose and not to after the real status of the trust. In the case of society, there is no special provision providing the status of the person in terms of section 2(31) of the Act and therefore it was held by the Hon'ble High Court in in the case of Children's Education Society [2013 (7) TMI 519 - KARNATAKA HIGH COURT ] that it would fall in the residual category of Artificial Juridical Person ["AJP"]. Whereas in case of income from property held under trust which is not eligible for exemption u/ss. 11 and 12 of the Act, it will be dealt with as per the special provisions of section 164(2) of the Act, which stipulates the status in which the income is assessable. Therefore, this provision is applicable only when the income is found to be not eligible for exemption u/ss. 11 and 12 of the Act. In the case in hand, we have given a finding that assessee is eligible for exemption u/s. 11 of the Act and therefore the status of the assessee would be AJP and not AOP. Reopening of assessment - Held that:- It is undisputed fact that at the time of issuing notice u/s. 148, an application for registration was rejected by the DIT (E) and therefore as per the provisions of section 12A as existed at the relevant point of time, the AO has valid reason to believe that the income assessable to tax has escaped assessment. As regards the composite amount of receipts, it is only a matter of interpretation that for the purpose of section 10(23C) of the Act, the receipt of each educational institution has to be considered separately and not by clubbing together of all the institutions of the trust. In the absence of any provision in the statute as well as any binding precedent at the time when the notice was issued by the AO u/s. 148, the AO was justified to believe that consolidated amount of receipts of the assessee trust are to be taken into account for the purpose of exemption u/s. 10(23C) of the Act. Therefore, at the stage of forming the belief, the AO was having tangible material in the shape of rejection of registration as well as consolidated receipt of the assessee trust exceeding the exemption limit provided u/s. 10(23C) and hence initiation of proceedings u/s. 148 are valid. Registration on expiry of six months from the date of application - Held that:- We find that the present proceedings are against the assessment order and not against the order of DIT (E) u/s. 12AA of the Act. Further, the issue of registration was earlier brought before the Tribunal and in the set aside proceedings, the DIT (E) granted registration vide order dated 5.3.2010 w.e.f. 1.4.2008. The said order has not been challenged by the assessee, therefore, the issue of registration has attained finality and cannot be agitated in the proceedings arising from the assessment order. Hence this issue cannot be raised in the present proceedings and therefore deserves to be dismissed. Appeal decided partly in favour of assessee
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2016 (12) TMI 45
Additional disallowance made u/s. 14A r.w. Rule 8D - dividend income earned by the assessee on shares and mutual funds held as stock-in-trade - Held that:- The issue raised in the present set of appeals is identical to one adjudicated by the Co-ordinate Bench of the Tribunal in the case of Kunal Polymers Pvt. Ltd. Vs. Dy. Commissioner of Income Tax [2015 (10) TMI 2373 - ITAT PUNE] wherein held that assessee has not held the shares for earning dividend income. Dividend income is incidental to the share trading business of the assessee. Thus, no disallowance u/s. 14A is warranted on dividend earned on shares held as stock-in-trade, Also in the case of CCI Ltd. Vs. JCIT (2015 (10) TMI 2373 - ITAT PUNE ) has held that when no expenditure has been incurred by the assessee in earning the dividend income no notional expenditure could be deducted from the said income. The Hon'ble High Court further held that when the assessee has not retained shares with the intention of earning dividend and the dividend income is incidental to business of sale of shares no disallowance u/s. 14A of the Act is to be made. - Decided in favour of assessee
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2016 (12) TMI 44
Receipt of rental income - Nature of income - income from house property or income from business - Held that:- Since in the instant case the assessee has shown the shops under the head ‘investment’ and has received rental income from such shops which were let out, therefore, such income in my opinion should be held as ‘income from house property’ and not as ‘business income’. The various decisions relied on by the CIT(A) are distinguishable and not applicable to the facts of the present case. Accordingly, the order of the CIT(A) is set aside and the ground raised by the assessee is allowed.
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2016 (12) TMI 43
Transfer pricing adjustment - payment on account of royalty by aggregating transaction along with all other international transactions based on CUP - Held that:- Keeping in view the law laid down in CIT vs. EKL Appliances [2012 (4) TMI 346 - DELHI HIGH COURT] and the fact that the contention of the assessee company that the payment on account of royalty by aggregating transaction along with all other international transactions based on CUP has been accepted by the revenue in assessee’s own case qua AY 2010-11 and 2012-13 (TPO vide order qua AY 2010-11 held that on the basis of functional and economic analysis of assessee company and that of comparables, no adverse inference is drawn in respect of the international transaction undertaken by the assessee during FY 2009-10), we are of the considered view that the matter is required to be remanded to the TPO to decide afresh on furnishing the facts by the assessee after providing an opportunity of being heard to the assessee. Adjustment in respect of intercorporate services - non furnishing of details of expenses in the shape of service charges and corporate services received from its AEs - Held that:- As relied upon CIT vs. EKL Appliances (supra) and further contended that during the AY 2010-11 and AY 2012-13 in assessee’s own case, the revenue has accepted the contention of the assessee that intra-group services have actually been received by the assessee from its AEs. Even otherwise, there is a mistake apparent on record that the TPO/DRP have treated ₹ 3,14,87,895/- as adjustment u/s 92A on account of intra-group services when the assessee has actually charged to profit & loss account of ₹ 2,57,91,160/- for intra-group services received and claimed in returned income for the year under assessment after offering ₹ 48,20,700/- as prior period charges. So, the TPO required to verify all these facts and to decide the issue afresh after providing an opportunity of being heard to the assessee. So, this issue is also restored to the TPO.
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2016 (12) TMI 42
Revision u/s 263 - Claim of depreciation on the amount of computers purchased - whether the business of the assessee was set-up during the year under consideration, so as to enable it to claim depreciation? - Held that:- The assessee had supplied these computers to its Retail Distributors and also got installed therein requisite software and also carried out trial runs. There may be some debate or discussion on the date of actual user by these Retail Distributors but as far as assessee is concerned, these can be deemed to be put to use the moment these computers and their software were provided by the assessee to its Retail Distributors for online sale of lottery tickets. The assessee had set-up its business during the year under consideration and had also put to use the computers on which depreciation has been claimed on proportionate basis for using the same for less than 180 days and therefore, the claim of the assessee was valid in the eyes of law and facts of this case and therefore, same was rightly allowed by the Ld. AO after examining all the facts in this regard and the same was wrongly denied by the Ld. CIT and therefore his action is reversed. The claim of depreciation is directed to be allowed. Since, we have allowed the claim on merits, the other issue with regard to jurisdictional validity of impugned order passed u/s 263 becomes academic and therefore, we are not going into the same at this stage.
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2016 (12) TMI 41
Eligibility to registration u/s 12AA - effective date of registration - Held that:- According to the newly introduced provisions of section 12AA of the Act the person in receipt of the income should make an application in Form No. 10A for registration of the trust or institution to the Commissioner before the expiry of a period of one year from the date of the creation of the trust or the establishment of institution, whichever is later. However, where an application for registration is made after the expiry of the aforesaid period, the provisions of sections 11 and 12 will apply from the date of the creation of the trust or the establishment of the institution if the Commissioner is, for reasons to be recorded in writing, is satisfied that the person in receipt of the income was prevented from making the application within the aforesaid period for sufficient reasons. If the Commissioner is not so satisfied, the provisions of section 11 and 12 will apply from 1st day of the financial year in which the application is made. In the instant appeal, it is undisputed that the assessee has been granted registration. However, the registration has been granted w.e.f. from the last day of the financial year 2002-03 whereas the scheme of the Act envisages that the registration should be granted from the first day of the financial year. We find the approach of the Ld. CIT contrary to the provisions of the Income Tax Act and therefore we direct the Ld. CIT to make suitable amendment in the registration certificate granted to the assessee u/s 12AA so as to make the registration effective from 1st April, 2002.
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2016 (12) TMI 40
Income from sale of shares - busniss income or capital gain - Held that:- Once the assessee was holding the shares as investment since 1996-97 up to 2013-14, there was no reason to treat the income from sale of shares under the head "Business income" because the intention of assessee was manifested very clearly by its conduct. The assessee had primarily utilised its surplus funds for investing in shares and not borrowed funds. Moreover, the learned Commissioner of Income-tax (Appeals) has also observed that in the memorandum of the assessee- company, there was no objects clause for trading in shares. We, therefore, uphold the order of the learned Commissioner of Income-tax (Appeals).
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2016 (12) TMI 39
Levy of penalty u/s. 271(1)(c) - additions on unexplained cash credits - Held that:- In the instant case the assessee has not been able to establish the identity of the creditors itself. The confirmations furnished by the assessee in the form of so called affidavits are nothing but self created documents and thus cannot be relied upon. Penalty confirmed - Decided against assessee
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Customs
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2016 (12) TMI 14
Refund claim - whether the rejection of refund claim on the ground that the appellants cannot claim the refund directly without challenging the assessment order is justified? - reliance placed on the decision of the case of M/s Priya Blue Industries Ltd. Vs. Commissioner of Customs [2004 (9) TMI 105 - SUPREME COURT OF INDIA] by learned A.R. where it was held that the refund cannot be claimed directly without challenging the assessment order - the learned counsel placed reliance on the case of Aman Medical Products Ltd. Vs. Commissioner of Customs, Delhi [2009 (9) TMI 41 - DELHI HIGH COURT] and laid that the question of reassessment by way of challenging the assessed Bill of Entry would arise only in case where there is a lis or dispute between the assessee/importer and the Department, thus, assessments need not to be challenged. Held that: - I am of the considered opinion that the judgment relied upon by the learned counsel is not applicable in the facts and circumstances of the case and there is no infirmity in the impugned order as the appellants are not entitled to claim refund unless they challenge the assessment order which has not been done in the present case. Refund rightly rejected - appeal dismissed - decided against appellant.
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2016 (12) TMI 13
Validity of an order on a showcause notice against the Petitioners passed by Joint Director General of Foreign Trade - Held that: - the Respondents admit that the show cause notice issued on 9th July, 2010 could not be adjudicated till 2015 for some reason or other. The Petitioners have already submitted their reply to the show cause notice. Once it was decided to take it up for adjudication only in the year 2015, then, interests of justice demanded that the Petitioners should have been heard before an adverse order. The opportunity of personal hearing, even if the earlier date had been postponed, should have been granted in the peculiar facts and circumstances. We are of the opinion that the Petitioners were granted an opportunity on 5th June, 2015 to remain present. However, that was not availed of on the ground that the advocate was unavailable. Though, the Petitioners claim that a notice dated 11th June, 2015 scheduling the hearing on 16th June, 2015 was never received, we do not wish to enter into that controversy. As we have noted that the show cause notice remained pending for nearly five years, if one more opportunity had been extended and granted, nothing was lost. In such circumstances, without entering into the merits, we quash and set aside the impugned order. It is quashed and set aside only on the ground that the Petitioners were not granted an opportunity of personal hearing. Now, the Petitioners have agreed to appear before the authority on 1st December, 2016. Let, the Petitioners so appear and if on that date they remain present, the Joint Director shall allow them to rely on such material as is permissible in law. If the Petitioners fail to appear on that date, the authority can proceed on the footing that right of personal hearing stands forfeited. Thereafter it can pass an order in accordance with law.
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2016 (12) TMI 12
Valuation - import of tin prime stock lot - if the goods can be treated as prime product or defective? - Held that: - It is seen that no reasonable explanation has been given to discard the letter of the assayer produced by the appellant. What is the prime quality product and what is the defective products have not been stated. It is seen that the appellant had in the defence stated that they have sold part consignment of the said goods to M/s. Eagle Metal Printers Pvt. Ltd., on highseas basis and the same has been cleared on prime stock lot by the admission on the part of the importer that the goods are anything other than prime product. We find that the Revenue has failed to discharge the onus to prove or otherwise - appeal allowed - decided against Revenue.
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2016 (12) TMI 11
Import of exported goods for re-processing and thereafter export - N/N. 158/95-Cus 14.11.1995 - re-assessment of consignment under N/N. 94/96-Cus. - whether the appellant, in case of non-fulfilment of the condition of Notification No. 158/95-Cus. dated 14.11.1995, is entitle for the alternate Notification No. 94/96-Cus.? - Held that: - though the appellant re-imported exported goods claiming the Notification No. 158/95-Cus. and executed the Bond and bank guarantee but due to unavoidable reason could not re-export the said goods. Therefore the appellant claimed the alternate exemption Notification No. 94/96-Cus. In our view, there is no reason to deny the alternate exemption notification. If the importer fails to comply with the condition of the notification which was claimed at the time of import, the duty is required to be paid as per the rate applicable and as per any other notification, if available to the imported goods. Only because the notification was not claimed at the time of import and claimed later on, the legitimate exemption, which otherwise available under the statute, cannot be denied. This issue has been settled in the various judgments. In the case of SHARE MEDICAL CARE Versus UNION OF INDIA [2007 (2) TMI 2 - SUPREME COURT OF INDIA], the Hon’ble Supreme Court has held that alternate Notification No. 65/88-Cus should be allowed, if the exemption Notification No.64/88-Cus claimed at the time of import is not admissible due to non-fulfilment of the post import condition. The fact of the present case is also identical in as much as the appellant could not comply the post import condition of re-export of the goods within stipulated period. Hence the issue in hand is squarely covered by the above referred Hon'ble Apex Court judgment. The appellant is entitle for alternate exemption Notification No.94/96-Cus subject to it’s eligibility. The Assistant Commissioner has not considered the eligibility of the said notification, which needs to considered - appeal allowed.
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2016 (12) TMI 10
Eligibility of Notification No.203/92-Cus dated 19.05.92 for import of goods under Value Based Advance Licencing Scheme - availing of MODVAT credit - Held that: - though initially MODVAT credit was availed but subsequently reversed and interest was also paid and a certificate was produced before the Commissioner (Appeals). The Learned Commissioner, in spite of submission of proof of reversal of MODVAT credit and payment of interest, denied the exemption. The Ld. Commissioner has diverted from the show cause notice and original order in as much as he given conclusive finding that the certificate was given by the Superintendent and not by the Assistant Commissioner, therefore the same was not accepted. We absolutely disagree with this finding of the Learned Commissioner for the first reason that there was no such allegation in the show-cause notice and secondly, also no findings in the original order in this regard. Hence the Commissioner was not supposed to go into the issue which is not arising from show-cause notice and adjudication order. There is no dispute that the appellant reversed MODVAT credit and paid the interest. In our considered view with these payments, the condition V(A) of notification No.203/92-Cus has been complied with. Therefore both the authorities are wrong in confirming the demand - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 9
Valuation - import of second-hand machines - EPCG scheme - enhancement of value - Held that: - The enhancement accorded by the licencing authority is incorporated into the licence and it has the effect of having been revised to the higher limit from the original date of issue. The assessing officer appears to have encashed the bank guarantee without finalizing the provisional assessment which is an action outside the authority of law. Duties become payable only upon assessment and failure to discharge assessed duty liability is visited by consequences such as encashment of bank guarantee or other coercive measures. The realization from the encashment of bank guarantee is liable to be treated as payment of duty and interest, if any be due, is liable to charged only till that date on the shortfall. Consequently, in finalizing of the provisional assessment, it was incumbent upon the proper officer to order for recovery of duty only on the value of imports not covered by the enhanced value of licence as on date of import, i.e., ₹ 4,97,180 along with interest from 1st December 1995 to 29th September 1998 when the bank guarantee was encashed. The interest liability is approximately ₹ 2,53,275. With a total liability of ₹ 7,50,455 appellant is entitled to refund of the amount appropriated in excess in the order-in-original. Appeal is allowed by modifying the demand of duty and interest as narrated supra. The assessment is finalized on the above terms and the competent authority in New Customs House is directed to compute the exact interest liability and refund the balance amount to the appellant.
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Corporate Laws
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2016 (12) TMI 2
Rejection of CFSL reports - difference between an 'expert' and a 'witness of fact' - Held that:- Placing non-reliance upon the expert's opinion is the final outcome of appreciation thereof in the light of other evidence, circumstances etc., to be done at the final stage of the matter. His report has no value as such without his oral evidence. There is no necessity of expressing an opinion about the reliability of the report at this stage and reject the same at the threshold. If it is done at this stage and the report is expunged from the record, the party in whose favour the opinion is expressed by the expert would be put to disadvantage. If at all the expert is examined by the opposite party to prove the contents of the report, then it is open to the petitioner to raise the same objections raised now, to demolish the reliability of the expert opinion and his evidence. We are, therefore, not impressed with the sustainability of the relief claimed in this petition.
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Service Tax
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2016 (12) TMI 38
Denial of refund - SEZ unit - services consumed wholly by the appellant within SEZ within which it is situated - rent-a-cab services - outdoor catering services - Notification No.9/2009-ST as amended by Notification No.15/2009-ST - Held that: - Doubtless, the Notification No.9/2009-ST as amended by Notification No.15/2009-ST provided for abinitio exemption from discharge of service tax liability by an SEZ unit in respect of authorized services consumed fully within the SEZ. This however, in my view, cannot disentitle such a unit of refund of the service tax liability discharged even when all such services have been consumed fully within the SEZ. It is further seen that list of specified services have been issued by Development Commissioner for authorized operations by the unit within MEPZ/SEZ in which disputed services viz. Rent-a-cab services, and Outdoor catering services are listed out at Sl.No.20 & 25 respectively. Thus, I find that the conditionalities in para (i) of Notification No.9/2009-ST, as amended, are satisfied. Reliance placed on the decision of the case of Intas Pharma Ltd. Vs CST Ahmedabad [2013 (7) TMI 703 - CESTAT AHMEDABAD], where it was held that Notification No. 9/2009-ST enable claim of exemption by developers or units in SEZ by way of refund of service tax paid for services used in relation to authorized operations in SEZ - insofar as the claim for refund is filed within six months or within such extended period as the AC or DC of Central Excise shall permit - provisions of the 2005 Act are provided an overriding effect vide Section 51 - the immunity to service tax in respect of taxable services provided in relation to SEZ is a legislatively enjoined immunity - any service tax paid/ remitted by a service provider is liable to be refunded to the provider who has remitted service tax in relation to taxable services provided to the unit to carry on authorized operations in a SEZ. I hold that the appellant is very much eligible for grant of refund in respect of services availed by them and consumed fully within the SEZ provided that said services are authorized by competent authority and they are not in dissonance with rule 2(l) of the CCR. In the instant case, there is no allegation that input services provided in relation to outdoor catering or rent-a-cab services are used primarily for personal use or consumption of any employee from the facts on record. They are provided by appellant to their employees which are in the nature of welfare activity. They are therefore are very much within the ambit of rule 2(l) of CCR 2004 for the purpose of eligible input services . No other disentitling factors are found in these cases. Hence all the appeals, in respect of services consumed wholly within the SEZ by appellant in respect of rent-a-cab services and outdoor catering services are allowed, with consequential benefit - appeal allowed.
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2016 (12) TMI 37
Demand - Classification - cargo handling services or transportation agency - Held that: - assessee is transporting fertilizers, as per the direction of the various suppliers, from the railway platform to the premises of dealer or godown. No doubt they also undertake the activities of loading, unloading of cargo from the local warehouse to the trucks as also at the premises of dealers or godown. Clearly these activities cannot be covered under the definition of cargo handling services as given above - Decided in favor of the assessee.
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2016 (12) TMI 36
Jurisdiction - whether the Commissioner (Appeals), while decising a service tax appeal has powers to remand the matter to the adjudicating authority? - Held that: - it is clear that the sub-section 4 of Section 85 of Finance Act, does not specifically curtail the power to remand as in the case of Section 35 (A) (3) Central Excise Act. Reliance placed on the decision of the case of CST Vs Associated Hotels ltd. [2014 (4) TMI 406 - GUJARAT HIGH COURT], where After analyzing sub-section 4 of Section 85 of Finance Act, the Hon'ble High Court observed that the Commissioner (Appeals) can pass such order as it thinks fit including the orders for enhancing tax , interest, or penalty and that such powers would include the power to remand also. The impugned order remanding the matter to the original authority does not call for any interference - appeal dismissed - decided against Department.
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2016 (12) TMI 35
Demand - valuation - photographic service - the value of the material used by him, while providing the said services, are required to be added in the assessable value of the services - Held that: - the issue on merits stand decided against the appellant by Larger Bench decision of the Tribunal in the case of Aggarwal Colour Advance Photo System Vs. CCE [2011 (8) TMI 291 - CESTAT, NEW DELHI (LB)], where it was held that The value of other goods and material, if sold separately would be excluded under exemption Notification No. 12/2003 and the term 'sold' appearing thereunder has to be interpreted using the definition of 'sale' in the Central Excise Act, 1944 and not as per the meaning of deemed sale under Article 366(29A)(b) of the Constitution. Period of limitation - Held that: - reliance placed on the decision of the case of CCE Vs. Centre Point Colour Lab [2011 (9) TMI 269 - CESTAT, NEW DELHI], where it was held that longer period of limitation would not be available to the Revenue. Demand set aside - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 34
Refund - CENVAT credit - 100% EOU - export of services or not - scientific or technical consultancy service - Appellant avails CENVAT credit on inputs/input services as per CENVAT Credit Rules, 2004 but, being an exporting unit, is unable to utilize the accumulated CENVAT credit. Refund of the accumulated credit is claimed under rule 5 of CENVAT Credit Rules, 2004 - POPOS rules - Held that: - the location of performance of service in respect of goods is not an abstract, absolute expression for fastening tax liability on services that involve goods in some way; for that, rule 3 would have sufficed. A contingency that is not amenable to rule 3 has been foreseen and remedied by rule 4. And in the process, the sovereign jurisdiction to tax is asseted. It is, therefore, not by the specific word or phrase in rule 4(1) of Place of Provision of Services Rules, 2012 that the taxability is to be determined but from the mischief effect intended to be plugged. It is obviously not intended to tax any activity rendered on goods as to alter its form because that would be covered by excise on manufacture or be afforded privileges available to merchandise trade. The provision itself excludes goods imported temporarily for repairs but that does not, ipso facto, exempt goods imported temporarily for repairs from taxability which would, by default, be predicated by the intent in rule 3. Consequently, a recipient in India would be liable to tax on such temporary imports for repairs while service to a recipient located abroad would not be taxable. This is in consonance with the privilege of exemption afforded to export of services. The goods supplied to the respondent, minor though the proportion may be, are subject to alteration in the course of research. It is not asserted anywhere that these goods, in its altered or unaltered form, are sent back to the service recipient; if it were, the provisions of Customs Act, 1962 would be invoked to eliminate tax burden. If the goods cease to exist in the form in which it has been supplied, it cannot be said that services have been provided in respect of goods even if it cannot be denied that services have been rendered on the goods. Consequently, the provisions of rule 4(1) are not attracted and, in terms of rule 6A of Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the appellant to eligibility under rule 5 of CENVAT Credit Rules, 2004. The respondents to be entitled to refund of accumulated CENVAT credit - appeal dismissed - decided in favor of assessee-respondent.
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2016 (12) TMI 33
Demand - Composition scheme - Period of limitation - erection, commissioning and installation services as also under commercial and industrial construction services - Held that: - in the case of Subhash Knandelwal & Sons [2011 (7) TMI 940 - CESTAT, NEW DELHI] wherein it was observed that non-disclosure of information of services of pre-commissioning undertaken by the assessee, and such fact noticed by department during the course of audit will not lead to invocation of longer period of limitation when there is no positive act of suppression against the appellant - appeal allowed.
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Central Excise
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2016 (12) TMI 32
Demand - valuation - undervaluation of compound of automatic chemicals dIspatched to contract manufacturers during the period January 1995 to April 2000 - understating overheads, labour charges and profit margin as the final products manufactured by contract manufacturer’s were sold in entirety to respondent - Whether the respondent has short paid the duty on the various goods cleared by them to their contract manufacturers? - Held that: - learned Counsel for the respondent was correct in pointing it to us that the self same issue of the same respondent is decided by the bench for the subsequent period that is clearances effected from May 2000 to March 2003 in the case Commissioner of Central Excise, Mumbai-I Versus Colgate Palmolive (I) Ltd. [2011 (2) TMI 636 - CESTAT, MUMBAI], where it was held that no evidence is brought on record either in form of statements or contracts which would indicate that the prices charged by the respondent for the aromatic compounds were influenced in any way or that they were abysmally low - Since the self same issue has already been decided by the bench for the subsequent period and for the earlier period, the adjudicating authority by an order dated 31.3.2000 has held the same we do not find any merits in the appeal filed by the revenue. As an identical issue for the subsequent period in respect of the very same respondent held in their favour, respectfully following the same, we reject the appeal filed by the revenue - decided in favor of respondent-assessee.
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2016 (12) TMI 31
Manufacture - the appellant is purchasing semi finished Auto Parts on payment of Excise duty and availing the CENVAT credit. The appellant, on such bought Auto Parts, carrying out certain processes including ancillary and incidental processes such as sizing on fixture, powder coating, inspection, fine boring, deburring, gauging, thickness measurement, dimension inspection, application of rust preventive oil, champering, tapping, welding, drilling, notching, thread cleaning depending on the type of the product, after carrying out aforesaid process they are clearing the same to the manufacturer on payment of Excise duty - whether the denial of CENVAT credit on the ground that the appellant is not carrying out any manufacturing activity, is justified? - Rule 16 of Central Excise Rules. Held that: - From the plain reading of the Rule 16 it can be seen that if the assessee receive duty paid goods in his factory and carries out the various processes they can avail the CENVAT credit on said duty paid goods. The condition is that assessee is required to pay duty on reissue of bought out goods equivalent to the CENVAT credit availed, if the process does not amount to manufacture and if the process is amount to manufacture then the duty as per Section 4 is required to be paid i.e. on the transaction value. In the present case it is the contention of the Revenue that the appellant is not carrying out any manufacturing activity. Therefore the appellant is required to pay the duty equivalent to the CENVAT amount. However, the fact remains that the appellant has discharged the duty on the transaction value of on the processed goods, which is more than credit availed. Therefore in such fact the appellant is entitled for credit under the provision of Rule 16. We also take a note that the appellant has paid excise duty on the process component more than the amount of CENVAT credit of brought out goods. Therefore under these circumstances no demands exist, As per the above discussion, we are of the considered view that the appellant has rightly availed the CENVAT credit in respect of semi finished bought out components. CENVAT credit allowed - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 30
Job-work - CENVAT credit - BHEL have not received back the inputs supplied to job workers fully. It is the case of the department that certain quantity of inputs viz. continuous cast copper rods, on which cenvat credit has been availed by BHEL supplied to the job workers, has not been fully accounted for and received back by BHEL and hence, there is a violation of provisions of Cenvat Credit Rules, 2004 - Held that: - BHEL have categorically asserted that there will certainly be a process loss and also emergence of scrap in the form of off-cuts and other pieces. BHEL requires the product with a particular specification and length. The generation of such specified intermediate products will result in certain end cuttings and also certain process loss. This much cannot be disputed. It is also not disputed that there will be certain conversion loss as no process can be undertaken on 100 % conversion basis. If the resultant product has to meet the standard specification of the principal manufacturer, off-cuts and the copper scrap, which is not useable for the intended purpose or further use by the principal manufacturer, are retained by the job workers and have been put to profitable use in further manufacture of various other items. These manufactured items have been cleared on payment of proper central excise duty at the job worker's end. This has also not been disputed. In such situation, we find that there is no justification for reversal of any credit availed on inputs by BHEL. There is no violation of provisions of Rule 4 (5)(a) of Cenvat Credit Rules, 2004 read with provisions of N/N. 214/96-CE. It is also apparent that the resultant off-cuts and scrap cannot be considered as "inputs as such" at the job worker's end. We find no evidence to that effect in the proceedings before the lower authority. Calculation for quantification of cenvat credit to be reversed by the principal manufacturer has been worked out on some percentage basis with no cross examination of manufacturing process at the job worker's end and the emergence of off-cuts and other waste products, which is not useable to the same intended purpose further by the job worker. Appeal allowed - decided in favor of appellant.
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2016 (12) TMI 29
Eligibility of the respondent for exemption under N/N. 4/2006- dated 1.3.2006 - manufacture of Ready Mix Concrete falling under Heading No.38245010 - The Department by entertaining a view that the respondent manufactured only “Ready Mix Concrete” and not “Concrete Mix” proceeded to demand central excise duty from the respondent - Held that: - merely using a different name for the same product cannot result in a different product thereby leading to denial of exemption to which the appellant are lawfully entitled and Notification No.4/2006-CE dated 1.3.2006 having referred to the concrete mix as filling under Chapter Heading 38 of the Central Excise Tariff Act it is but necessary to treat the said entry as only referring to the RMC since Concrete Mix if left unused would harden and particularly in the absence of any other entry in the said chapter referring to the Concrete mix, as otherwise notification no.4/2006-CE would be rendered in fructuous or meaningless which is not permissible under law as has been laid in a plethora of judgments of the courts and tribunals Appeal dismissed - decided against Revenue.
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2016 (12) TMI 28
Eligibility of the respondent for exemption under N/N. 6/06-CE dated 1.3.2006 - goods supplied to Mega Power Projects - The respondent supplied dutiable goods classifiable under CETH 68071090. The imported goods are covered by Notification No.21/2002-Cus dated 1.3.2002 - Sl.No.400. The exemption under notification in respect of the goods supplied to Mega Power Projects is under classification heading 9801. Proceedings were initiated against the respondent to deny the exemption on the ground that the classification under notification does not cover the impugned goods supplied by the respondent. Held that: - There are various decisions of this Tribunal dealing with similar set of facts, wherein the exemption claimed were allowed to the assessee. Reference can be made to two of the recent decisions - Paramount Communication Ltd. Vs. CCE, Jaipur-I [2016 (7) TMI 863 - CESTAT NEW DELHI], and KEI Industries Limited Versus CCE, Jaipur-I [2016 (7) TMI 1221 - CESTAT, NEW DELHI]. Appeal rejected - decided against Revenue.
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2016 (12) TMI 27
Classification - Olemessa Baby Massage Oil - Held that: - the decision of the Tribunal on the very same product made by the appellant dealt with the classification in the new tariff under heading 1508.90. It was noted that the classification list dated 01/03/1986 and 01/4/1986 of the appellants were also finally approved under heading 1508.90 based on earlier decision of the Tribunal. It was also recorded that the earlier decision of the Tribunal dated 31/01/1990 holding the classification of the product under T.I. 12 has been affirmed by the Apex Court also - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 26
Interest on delayed refund of pre-deposit - The Commissioner (Appeals) held that the date for interest calculation starts after three months from the date of refund application. The said three months cannot start from the date of original application as it was not in the prescribed manner supported by documentary evidence - the appellants filed claim for interest after six years of sanction of refund - time bar - Held that: - the appellants deposited an amount of ₹ 2 crores during the course of investigation itself. Apparently, the same is considered, all throughout, as a deposited amount not a regular payment of duty. We note that the Hon’ble Supreme Court in CCE, Hyderabad vs. I.T.C. Limited [2004 (12) TMI 90 - SUPREME COURT OF INDIA] held that in terms of draft Circular by the Board interest shall be payable for delay beyond of three months after final disposal of dispute between the parties. The contents of the Circular was ordered to be part of the order of the court. In this connection, we note that the Board vide Circular dated 08/12/2004 held that such refund should be disposed of within three months from the date of the order of the Tribunal/Court etc., failing which due interest shall be payable - We find that the Original Authority categorically held that the amount of ₹ 2 crores is a pre-deposit amount, which was paid by the appellant at the investigation stage and the same has been considered as pre-deposit specifically vide interim order dated 06/07/2000 passed by the Tribunal. The appellants are entitled for interest for the period beyond three months from the date of final order of the Tribunal dated 04/04/2001 till sanction of the amount to the appellant. Such interest is automatic and no separate claim is mandated for the same. As such, we find the impugned order is not legally sustainable with reference to rejection of interest - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 25
Cement - concessional duty in terms of Sl. No. 1C of Notification No. 4/2006-CE dated 01.03.2006 - qualification of buyers in terms of Rule 2A of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (PC Rules) - eligibility of appellant for the concessional rate of duty for cement sold directly to individuals without marking of any MRP on the bags - Held that: - a similar situation came up before the Tribunal in the case of Prism Cement where the sale of cement to various categories of buyers, including individuals was considered. The Tribunal in the case of M/s Prism Cement Limited Versus CCE, Bhopal And Vice-Versa [2016 (10) TMI 828 - CESTAT NEW DELHI] held that the definition of retail sale as per Rule 2(q) of the PC Rules are to be examined before deciding the nature of sale. Admittedly, the cement without marking of RSP has been sold by the appellant directly to consumers and as such these transactions do not qualify as “retail sale” in view of the statutory definition which requires sale, distribution or delivery of such commodity through retail sale agency or other instrumentality for consumption by an individual. In the present case, the sales without RSP marking is direct to the consumer not through an intermediary as such the criteria for “retail sale” has not been fulfilled. As such, the Tribunal held that whenever such direct sale is affected application of PC Rules will not be governed by Rule 3. Appeal allowed - decided in favor of appellant.
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2016 (12) TMI 24
Eligibility of exemption under N/N. 10/96-CE dated 23.07.1996 - manufacture of PVC footwear - EVA blanded compound arising at intermediate stage - whether the denial of exemption on the ground that EVA compound made in one premises is cleared to another premises which is a different factory, justified? - Held that: - We find the department contested the impugned order only on the ground that the premises are separated by quite some distance and as such cannot be considered as one factory since the respondent assessee did not apply for Central Excise registration, it cannot be presumed that they will be covered by a single registration. We find no force in the argument by the Revenue. Admittedly, as examined in the impugned order both the premises belong to the same respondent and involved in the process of manufacture of footwear. Some process like preparation of EVA compound is carried out in one premises and consumed for manufacture of footwear in another premises, both belonging to the same respondent-assessee. In such situation, we find no justification to deny the exemption in the absence of evidence to the effect that both are to be treated as separate factory - appeal dismissed - decided against Revenue.
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2016 (12) TMI 23
Rejection of refund claim - additional duties of excise - Notification No. 5/2006-CE(NT) dated 14.03.2006 as amended by Notification No. 13/2007-CE(NT) dated 01.03.2007 - time bar - Rule 5 of Cenvat Credit Rules does not cover a situation where the refund can be granted in respect of final products cleared for domestic consumption - Held that: - the Hon’ble Madras High Court in CCE, Coimbatore vs. GTN Engineering (I) Ltd., [2011 (8) TMI 960 - MADRAS HIGH COURT] examined similar set of facts. It was held that the notification prescribed a period of one year as provided under Section 11B for making the application for refund. The Hon’ble High Court recorded that though no specific relevant date is prescribed in the Notification, the ‘relevant date’ must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim for cenvat credit. Accordingly, the Hon’ble High Court held that time period of one year should be reckoned the date of export of goods. As such, we find that the impugned order is correct with reference to rejection of this claim. Regarding the refund of input duty of ₹ 29,57,205/- claimed under Rule 5, we note that the said inputs have been used in the manufacture of goods cleared for home consumption. In such situation provisions of Rule 5 has no application and as such we find no justification to interfere with the findings of the lower authority. Appeal dismissed - decided in favor of appellant.
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2016 (12) TMI 22
Denial of CENVAT credit - cement and clinker - eligibility for cenvat credit of tax paid on input services, namely, insurance services, courier services and telephone services - Held that: - The appellants availed service tax paid on insurance service availed to insure the machinery used in the plant. Various types of insurance are taken by the appellants to insure the stock of raw material, fuel etc. all these are in connection with the activities relating to business of the assessee. Service tax paid on courier services was also availed by the appellants. Courier services were availed mainly for delivery of various letters, business correspondence, bill etc. to the customer and other person in connection with business. Similarly, telephone and mobile services were availed by the appellant and the expenditure is borne by them alongwith service tax. These mobile phones were provided for business use and the whole expenditure is with reference to the business activity of the company. We find that the reasoning given in the impugned order to the effect that these services are not mentioned by name in the definition of "input services" and hence not eligible for credit, is legally untenable. Input service has been examined by various decisions of this Tribunal as well as High Courts. Hon'ble High Court of Bombay in case of Commissioner vs. Ultratech Cement [2010 (10) TMI 13 - BOMBAY HIGH COURT] considered the issue at length and held that the definition of input service under Rule 2(l) of the Cenvat Credit Rules is very wide and covered services whether directly or indirectly used in or in relation to manufacture of final product and also after manufacturing of the final product. CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 21
Demand - Cenvat credit - GTA services - whether the “place of removal” is the factory of the appellant or the customer’s premises - Held that: - the appellants have submitted categorical supporting evidences to the effect that “place of removal’ is the customer’s premises only. As already noted they heavily relied on the terms of purchase orders, freight payment by the appellants, risk and insurance, inclusion of freight in the value for excise duty in support of their case - Since, large number of purchase orders covering the period of demand are to be examined for factual verification, we find it a fit case for remanding the matter back to the Original Authority for re-verification of the facts and to record his finding thereafter - Appeal allowed by way of remand.
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2016 (12) TMI 20
Refund - Rule, 5 of CENVAT Credit Rules read with Notification No. 5/2006-CE (NT) dated. 14.03.2006 - 100% EOU - sales commission agent services and CHA services - nexus of input services with output services - Held that: - The CHA service as well as commission agent service can be undoubtedly said to be services which are availed and utilized by the appellant for the export of finished products - With regard to the issue whether the appellant is eligible for refund in respect of credit availed for earlier period, the D.O.F. No. 334/1/2010-TRU, dated.26.02.2010 clarifies the same - the status of appellant whether it is a proprietorship or partnership, 100% EOU are not criteria for rejection of refund. - Appeal allowed - Decided in favor of the assessee.
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2016 (12) TMI 19
Manufacture - biscuits - excisability of goods - whether the Sugar Syrup manufactured and used captively by appellant, in further manufacture of exempted biscuits is excisable and therefore the appellant is liable to pay excise duty on sugar syrup in terms of Notification No. 67/1995-CE dated 16-03-1995? - Held that: - the appellant was manufacturing sugar syrup being an intermediate product, in the course of manufacturing biscuits. On similar set of circumstances, the Tribunal Chennai in the case of Pepsico India Holding Ltd. Vs CCE Chennai [2008 (10) TMI 544 - CESTAT, CHENNAI] set aside the demand as time barred. It can be safely concluded that there is no legal or factual basis for alleging suppression of facts with intend to evade payment of duty against the respondents. The Commissioner(Appeals) has rightly held part of the demand to be barred by limitation. On such score, I do not find any infirmity in the impugned order - appeal dismissed - decided against Department.
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2016 (12) TMI 18
CENVAT credit - not registered at the time of availing credit - credit transferred to M/s. Samruddhi Cement Ltd on demerger and subsequent transfer thereof to appellant consequent to amalgamation - Held that: - in respect of disputed credit of ₹ 4,32,74,207/- being credit availed before registration of Grasim, the issue is fully settled in favour of the appellants vide the case law Well Known Polyesters Ltd., V/s CCE, Vapi [2011 (1) TMI 664 - CESTAT, AHMEDABAD]. In respect of the remaining amount of ₹ 80,52,675/- the issue of credit, on steel structural, etc., has already been decided in favour of appellant by the Tribunal in M/s India Cements Ltd., Vs CCE [2016 (6) TMI 1143 - CESTAT HYDERABAD]. With regard to credit on technical documentation as the same has been related to import of technical documents as dutiable goods and, CVD paid thereof credit of CVD suffered cannot be denied. With regard to remaining items, they all fall within the ambit of eligible input services prior to 01.04.2011. CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 17
CENVAT credit - TMT bars / MS bars / TOR steels etc. - construction of RCC (Reinforced Cement Concrete) structures which are cement pillars / columns required for installation of machinery in the course of expansion/modernization of their factory by enhancing the capacity of production - Held that: - the subject items have been used for making supporting structures, parts, accessories for capital goods which are highly essential for carrying out the manufacturing process in the factory. Further the period involved is also prior to 07/07/2009. The issue whether credit can be availed on MS channels, bars, angles etc. was analysed in the case of India Cements Ltd. Vs. CES TAT [2015 (3) TMI 661 - MADRAS HIGH COURT], wherein the Hon'ble Madras High court has held that MS angles, channels etc. used for supporting structures is eligible for credit - The second contention of the Department is that the explanation which restricts the use of MS items for fabrication introduced in the definition of inputs is applicable retrospectively as laid by Larger Bench of this Tribunal in the case of Vandana Global Ltd. [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - following the ratio laid in the above judgments, I hold that the denial of credit is unjustified. The availment of credit wrongly by taking 100% credit in the same financial year - Held that: - taking note of the fact that the appellant is eligible for balance 50% of credit in the subsequent year though wrongly availed in the same financial year, I hold that the same would amount to only a procedural lapse/ premature availment of credit. Therefore the appellant cannot be denied the credit but is liable to pay interest upon the amount so wrongly availed during the period of irregular availment of credit. The impugned order disallowing the credit on subject items is set aside - The demand of interest on the irregularly taken CENVAT credit of ₹ 18,83,061/- is sustained - The penalties are set aside - appeal disposed off - decided partly in favor of appellant.
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2016 (12) TMI 16
Irregular availment of credit - MS items - Held that: - At the foremost, it has to be seen that the period involved is October 2008 to June 2009 which is prior to the insertion of the explanation w.e.f. 07/07/2009 to the definition of inputs. The MS items are contended to be used for fabrication of Mezannine floor which is between the ground floor and roofing and used for the purpose of storing the packing materials. The finished products being paint and varnishes, these have to be packed and only then can be cleared. Therefore the use of the MS items for fabrication of Mezannine floor can be considered to be connected with the manufacture of finai products. Further the period involved is prior to 07/07/2009. I therefore hold that the appellant is eligible for credit of ₹ 1,28,341/- availed on MS items. Imposition of penalty - Held that: - I hold that the penalty imposed in respect of credit already reversed by the appellant accepting the liability is unsustainable. The impugned order to the extent of demand of ₹ 1,28,341/- along with interest is set aside. Demand of ₹ 62,418/- is sustained. The penalties imposed are set aside. Appeal allowed - decided partly in favor of appellant.
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2016 (12) TMI 15
CENVAT credit - commercial construction services used for the construction of annealing sheds, pickling sheds, EB room, wire drawing room, compound wall, rest room, toilet, security room, overhead tank, road laying etc - whether the allegation that assessee had contravened the provisions of Rule 2 (l) and Rule 3 of CCR 2004 by availing credit on ineligible input services as the said services have not been used for providing any output service as well as the said services are not used by the respondents directly or indirectly, in or in relation to the manufacture of final products and for clearances of final products, is justified? Held that: - the processing of goods was in relation to manufacture implies not only production but the various stages through which the raw material is subjected to change by different operations. It is the cumulative effect of the various processes through which the raw material is subjected, the manufactured product emerges. Therefore, each step towards such production would be a process in relation to the manufacture. Whether any particular process is so integrally connected with the ultimate production of goods but for that, process, manufacture or processing of goods would be impossible or commercially inexpedient, that process is the one in relation to the manufacture. There is no warrant for limiting the meaning of expression “in the manufacture of goods’ through the process of production of goods. I find that the construction of compound wall, rest room, toilet, security room, overhead tank, road laying activity project work or CC work, painting work, annealing sheds, pickling sheds, EB room, wire drawing room are all necessary to run the factory or not depends on the activity undertaken by the manufacture or as per the requirement of their manufacturing activity. In this case, from the facts, it emerges that all the constructions are integral part of the factory and hence credit taken over the input services by the respondents is eligible. I also find that in view of the clarification issued by the Board’s circular dt. 29.4.2011 cited (supra) and in view of the fact that the services have been rendered and billed prior to 1.4.2011 for which payment has also been paid on 1.12.2007 i.e. prior to 1.4.2011. Hence in this view of the matter also, the input service tax credit is eligible as clarified by the above mentioned Board’s circular. CENVAT credit allowed - appeal disposed off - decided against Revenue.
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CST, VAT & Sales Tax
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2016 (12) TMI 8
Input tax credit - registration number of suppliers cancelled - Held that: - the question would be as to why the then Assessing Officer did not proceed further pursuant to the notices dated 09.03.2012. Since no action was taken pursuant to the notice dated 09.03.2012, it is prima facie clear that the then Assessing Officer was satisfied with the petitioner's explanation dated 25.03.2012 supported by the letter given by M/s.Super Flames dated 02.04.2012. Thus, the respondent should objectively assessed the entire situation and then come to a conclusion. For the above reasons, this Court is of the view that the matter should be send back to the respondent for re-consideration - petition allowed by way of remand.
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2016 (12) TMI 7
Levy of penalty - evasion of sales tax - Detention of goods and truck - inter-state sale or intra-state sale - Held that: - A concurrent finding of fact has been recorded by the authorities including the Tribunal that the statement of the driver of the truck was recorded on oath and he narrated the events in detail starting from the place at Indore where the goods in questions were actually loaded and terminating with the point where the tanker was intercepted. The Tribunal has found that the statement of the driver was not under any pressure, but it was given by him on oath. Under the circumstances, it was established by the department that the goods were imported by the assessee from Indore (MP) from undisclosed dealer and the same was attempted to be transported under the cover of bill issued by the assessee from Agra with intent to evade payment of tax. Thus, I do not find any infirmity in the impugned order of the Tribunal upholding imposition of penalty of ₹ 50,000/- under Section 15A (1)(0) of the Act. Since, this Court has upheld the penalty and found the transaction in question to be evaded sale of the assessee and as such determination of turn over of imported refined oil by the assessing authority as upheld by the Tribunal to the extent of ₹ 17 lacs is wholly justified. The Tribunal itself has considered the facts in detail and substantially reduced the turnover of imported reined oil from ₹ 70 lacs to 17 lacs. Under the circumstances, I do not find any good reason to interfere with the impugned order of Tribunal. No question of law arises. Revision dismissed.
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2016 (12) TMI 6
Replacement of defective parts during warranty period - whether amounting to sales transaction? - liable to VAT or sales tax? - Held that: - Both the counsels for the Revenue as well as the assessees after arguing for some time contended during the Course of hearing, that all these petitions be disposed off by this Court, to be governed in the light of the judgment pending before Apex Court in the case of M/s Marudhara Motors [2009 (3) TMI 956 - RAJASTHAN HIGH COURT], to avoid multiplication of litigation which otherwise can be saved by disposing off all these petitions and in observing that all the cases would be governed by the fate of M/s Marudhara Motors pending decision before the Apex Court. To avoid multiplication of the litigation it would be appropriate to dispose off all the petitions as raised by the Revenue to avoid multiplicity of litigation to be governed by the judgment of M/s Marudhara Motors by the Apex Court. If the civil appeal in M/s Marudhara Motors is allowed by the Apex Court in favour of the revenue then these revision petitions would be allowed automatically. However, if the Judgment of this court in M/s Marudhara Motors is upheld by the Apex Court, then all these petitions would stand automatically dismissed. It would be appropriate to dispose off the present petitions to say and to hold that the outcome of these petitions would be governed finally by the outcome of the SLP pending before the Apex Court on the same challenge in the case of M/s Marudhara Motors.
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2016 (12) TMI 5
Imposition of penalty u/s 76(6) of the Act - Rajasthan VAT Act, 2003 - VAT declaration form 47 - punching of form - Held that: - reliance placed on the decision of the case of ITC Agrotech Limited, through its Manager Ramlal Verma Versus Assistant Commercial Taxes Officer, Anti Evasion 1, Circle 2, Jaipur [2016 (9) TMI 1086 - RAJASTHAN HIGH COURT] where it was held that punching was introduced later-on and if the declaration form is not duly punched, then it is a material deficiency and penalty even in such cases is required to be imposed. The punching admittedly having not been done, it being a material deficiency, the order passed by the Tax Board is just and proper - the declaration form has to be complete in all respect and finding the form even incomplete in respect of material particulars and punching, the order of Tax Board does not call for any interference by this court - penalty rightly imposed - petition dismissed - decided against appellant-assessee.
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2016 (12) TMI 4
Imposition of penalty u/Sec. 78(5) - Declaration form ST-18-A - Held that: - the order of both the appellate authority is required to be interfered with and quashed and set aside & taking into consideration the fact that the driver may have produced bills, vouchers & builty etc. but declaration Form ST-18- A which was mandatory under Rule 53 ought to have been carried duly filled in and admittedly such declaration Form ST-18-A was neither produced at the time of interception of the vehicle nor later on and in the light of judgment of the Apex court in the case of Guljag Industries Vs. Commercial Taxes Officer [2007 (8) TMI 344 - SUPREME Court] which has considered the self same controversy at length, the penalty is inevitable. Mens rea is not essential for imposition of penalty. Penalty upheld - decided against Assessee.
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2016 (12) TMI 3
Imposition of penalty u/Sec. 78(5) - doubts in documents produced - Held that: - In my view, no case is made out for interference in the order of the Tax Board as merely because the bill and GR appeared to have been prepared with the same handwriting, is no reason at all for coming to such a finding that goods were being carried with the intention of evasion of Tax. It is rather surprising that the AO merely on the basis of comparison of the bills and builty has come to such a conclusion which is wholly unjustified and it appears to have been done just to create an atmosphere of harassing the respondent and in my view, something more was required to be established which the AO has utterly failed and it appears that entire exercise has been done or have taken place sitting in the office and passing such an order which prima-facie does not even show a reasonable basis for imposing penalty. The order passed by the Tax Board is based on finding of fact and I find no error, illegality or perversity in the same so as to call for interference by this Court - petition dismissed - decided in favor of assessee.
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Indian Laws
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2016 (12) TMI 1
Conviction under Section 15 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - nature of offence - Held that:- An appraisal of the testimony of the prosecution witnesses and in particular of PW-4 ASI/Satnam Singh and PW-5 HC/Darbara Singh, the seizure witnesses, fully substantiate the recovery of the contraband i.e. Poppy Husk from the conscious possession of the accused persons. That the samples were properly sampled, sealed and forwarded to the Forensic Science Laboratory through Malkhana also stands established. The certificate of the Chemical Examiner, FSL to the effect that the seal of the samples was found intact and that the same tallied with the specimen seals also rules out the possibility of any tampering therewith. The fact that the contraband was recovered from the car while the same was being driven by one of the accused persons in the company of the other also authenticate the charge of their conscious possession thereof. The haul of six bags of Poppy Husk is substantial so much so that it negates even the remote possibility of the same being planted by the police. Furthermore no evidence with regard to bias or malice against the Investigating Agency has been adduced. In the wake of the above, we are of the unhesitant opinion in the face of the evidence on record, that the prosecution has been able to prove the charge against the accused persons beyond all reasonable doubt. The Courts below have appreciated the materials on record in the correct legal and factual perspectives and the findings recorded do not merit any interference. The appeal is thus dismissed. The Trial Court is hereby directed to take immediate follow up the steps so as to ensure that the sentence awarded is served out by the accused persons.
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