Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 22, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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TDS u/s 194C – Putting up a logo on aircraft is also a type of hoarding which is advertising contract or not – The activity is subject to TDS - AT
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TDS liability - assessee being a C&F agent, is an intermediary, who booked cargo for and on behalf of importers and exporters and facilitated the contract for carrying goods, therefore not liable to withhold tax u/s 194C from payments made towards air freight on behalf of its customers - AT
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Exemption claimed in the revised return filed u/s 139(5) – When the assessee filed its original return of income at that time, assessee was not granted registration u/s 12AA and therefore, could not claim exemption u/s 11 and 12 of the Act in the original return of income - exemption allowed - AT
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TDS u/s 194C or u/s 194J – Payment for subtitling and editing charges - assessee had utilized the services of dubbing studio Ninety Degrees by using their equipments as well as the artists who were working for Studio Ninety Degrees - TDS u/s 194C applicable - AT
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Addition of cash credit – section 68 is not applicable to the cash credits recorded in the books of account of the assessee in the earlier previous year not relevant to the AY under consideration - AT
Customs
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Import of Low Ash Metallurgical Coke/Low Ash Low Phosphorous Coke - Reliability of test reports - Benefit of exemption Notification No. 35/90- Cus - Benefit of doubt has to go to the appellant - AT
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Levy of Education cess on Basic Customs Duty which was debited in the DEPB Licence - when the goods are chargeable to Nil duty or are cleared without payment of duty, the question of education cess to be levied does not arise - HC
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Illegal sale of confiscated gold - smuggle gold bars and coins - Refund of sale proceeds - grant of interest on delayed refund denied - CGOVT
Service Tax
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Improper adjustment of wrongly paid service tax paid against the subsequent liability instead of claiming refund - department was aware of the suo motu adjustment on 24.4.2006 - Show Cause Notice issued only on 21.12.2009, i.e., after a gap of three and a half years - stay granted - AT
Case Laws:
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Income Tax
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2014 (12) TMI 752
Admission of appeal - Disallowance of excess claim of depreciation on windmill deleted – Held that:- The approach of both the authorities is perfectly justified - windmill would require a scientifically designed machinery in order to harness the wind energy to the maximum potential - Such device has to be fitted and mounted on a civil construction, equipped with electric fittings in order to transmit the electricity so generated - Such civil structure and electric fittings, therefore, it can be well imagined, would be highly specialized - Thus, such civil construction and electric fitting would have no use other than for the purpose of functioning of the windmill - the installation of windmill and the civil structure and the electric fittings are so closely interconnected and linked as to form the common plant - the legislature has provided for higher rate of depreciation of 80 per cent on renewable energy devises including windmill and any specially designed devise, which runs on windmill - The civil structure and the electric fitting, equipments are part and parcel of the windmill and cannot be separated from the same. Disallowance of Additional depreciation u/s 32(1)(iia) deleted – Held that:- The assessee's claim of additional depreciation at the rate of 20 per cent u/s 32(1)(iia) on the same windmill - Revenue opposed such claim on the ground that the assessee cannot be stated to be engaged in the business of manufacturing or production of any article or thing – this question needs consideration – thus, the appeal is admitted for considering the same – Decided partly in favour of revenue.
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2014 (12) TMI 750
Penalty u/s 271(1)(c) – Penalty imposed because of difference in the stock between the stock statements - No concealment made by assessee - Held that:- The Tribunal rightly directed to delete the penalty while relying upon CIT v. Bharat Minerals Sales Corpn. [2001 (8) TMI 72 - CALCUTTA High Court] - there was as such no concealment by the assessee and the stock statement given to the Bank was purely for the purpose of accommodating existing bank finances and the assessee was required to submit stock statement showing a particular value of the stock in order to continuously enjoy overdraft facility and whatever was submitted before the Bank was disclosed before the authority and therefore as such there was no concealment, to impose the penalty imposed u/s 271(1)(c) – thus, as such no substantial question of law arise for consideration and the order of the Tribunal is upheld – Decided against revenue.
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2014 (12) TMI 725
Validity of notice for reopening of assessment u/s 148 - Failure on the part of the assessee to disclose fully and truly all material facts or not – Held that:- Assessee did not have any opening stock on 01.04.2005 - By virtue of a Business Transfer Agreement, the assessee received a stock valued at ₹ 19,90,92,944/- from Hindustan Motors Ltd. which became its initial stock - there were additions to the stock and the difference between the initial stock and the closing stock at the end of the year, that is, on 31.03.2006, came to ₹ 5,76,42,819 - there has been no failure on the part of the assessee to make a full and true disclosure of the material facts pertaining to the closing stock and that the allegation raised by the respondents is not borne out by the records. The initial view of the AO also coincided with the view taken by the assessee but because there was some circular which had been issued by the CIT, even though the AO disagreed with the audit objection, he had to take “remedial” steps u/s 148 - this also discloses the fact that the AO had not applied his own mind but was dictated to by the circular which he felt he was bound to follow - The provision for reopening of assessment u/s 147 specifically requires that it is the AO who must have reason to believe that income chargeable to tax has escaped assessment - The belief must be of the AO himself and not of anybody else – in the present case, although the AO believed that no income had escaped assessment and he had disagreed with the audit objection yet he went on to issue the notice u/s 148 which cannot be sustained in law – thus, the notice for reopening if set aside – Decided in favour of assessee.
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2014 (12) TMI 724
Additions towards unaccounted /black money lending business – Whether the assessee were involved in money lending business or had engaged services of Brij Mohan Gupta as a broker – Held that:- The Tribunal was rightly of the view that the there was no material or evidence to show that the assessee were involved in money lending business or had engaged services of Brij Mohan Gupta as a broker - there is no evidence or material to show that Brij Mohan Gupta or Ram Avtar Singhal during the search had identified and decoded the alphabets “AV” to stand for “M/s Amar Nath Virender Kumar, Khari Baoli” - Ram Avtar Singhal and Rajeev Gupta had refused to identify the assessee and had stated that they did not know the parties - Revenue has not produced any statement of Ram Avtar Singhal, Rajeev Gupta or (Late) Brij Mohan Gupta implicating the respondent assessee or corroborating that the code “AV” stands for “M/s Amar Nath Virender Kumar” - even the relevant diary or papers seized with the code “AV” have not been produced - The assertion made in the letter written by the Deputy Commissioner of Income Tax, Central Circle-19, is not sufficient and a good ground to uphold the addition which is only a finding or an inference - failure to produce the diaries/statements and the relevant statement decoding the entries is fatal for the case of the revenue – thus, the order of the Tribunal is upheld – Decided against revenue.
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2014 (12) TMI 723
Computation of deduction u/s 80HH – Interest earned from debtors on delayed payment - Whether the Tribunal is correct in holding that the interest earned from Trade Debtors on account of delayed payment should be treated as profits derived from the Industrial Undertaking of the assessee for the purpose of computing the relief u/s 80HH – Held that:- Assessee was undertaking only one activity viz., manufacture of cold roll strips - The income posted by him in the income tax returns comprised mostly of the sale proceeds of product manufactured by it - whatever may be the fluctuations in the trade in relation to a product, what becomes relevant from the point of view of Section 80HH of the Act, is the profit and gain, which the assessee has derived from the activity - not only from the point of view of Section 80HH of the Act but also in the ordinary parlance, the interest paid by the purchaser on account of bleated payment, becomes part of the consideration and partakes the character of price – relying upon CIT v. Raja Bahadur Kamakhaya Narayan Singh [1948 (7) TMI 1 - Privy Council] - the interest payable to him certainly partakes of the same character as the receipts for the payment of which he was otherwise entitled under the contract and which payment has been delayed as a result of certain disputes between the parties - It cannot be separated from the other amounts granted to the assessee under the awards and treated as income from other sources – thus, the order of the Tribunal is upheld – Decided against revenue.
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2014 (12) TMI 722
Interest expenses u/s 36(1)(iii) - Whether the Tribunal is right in confirming the order of the CIT(A) deleting the addition made u/s.36(1)(iii) by the AO on account of interest expenditure – Held that:- Interest expenditure was disallowed mainly on the ground that the interest payment was not made in respect of capital borrowed during the course of business – assessee was under contractual obligation to make payments to the companies and it formed part of the costs of purchase of shares - interest paid for the debt incurred or paid as obligation under any agreement is allowable as expenditure - assessee was dealing in shares and that he had made interest payments to M/s. Arora Corporation and M/s. Rushabh Capital and Finance Ltd. - interest expenditure is allowable u/s 37(1) if the same is not covered by Section 36(1)(iii) and rightly held that the disallowance of interest expenditure to the extent by AO was bad in law and the Tribunal committed no error of law in confirming the order of the CIT(A) – Decided against revenue.
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2014 (12) TMI 721
TDS u/s 194C – Putting up a logo on aircraft is also a type of hoarding which is advertising contract or not – Board's Circular No.715 dated 8th Aug. 1995 - Nature of payment and the impact of non-deduction of tax - Held that:- The payment made to M/s Sahara Airlines Ltd. was in the form of subsidy against passenger’s ticket sale and in return thereof M/s Sahara Airlines Ltd. was entrusted with the job of printing of logo and colour scheme, etc of the appellant-company on the boarding card, ticket, baggage tag on board on their aircraft so that the passengers travelling could know about the company. In Re: Google Online India Private Ltd. (GIPL) [2005 (12) TMI 1 - Authority for Advance Ruling, New Delhi] it has been held that it has an inclusive definition that the advertisement means to make something known to the public or a segment of the public, to announce publicly by a printed notice or broadcast to call public attention to, especially by emphasizing, desirable qualities so as to arouse a desire to buy and patronize and it includes notices, circular, label, wrapper, document, hoarding or any other audio or visual representation made by means of light, sound, smoke or gas - an advertisement is generally of goods and services and is information intended for potential customers - the “advertisement” includes publicity, but vice-versa may not be possible - but whenever publicity of a brand or logo brings commercial benefit either apparent or hidden, it will assume the character of “advertisement”. It is very hard to believe that a businessman would publicize his logo or brand without visualizing any commercial benefit out of it - if the agreement is read carefully, it has been mentioned that the parties to the agreement have agreed that it was executed to give extensive publicity to the activities of the assessee in order to promote their business and area of operation and for doing so M/s Sahara Airlines Ltd. was required to display the logo of the appellant-company on both sides of the aircraft, tickets, boarding passes, baggage tags, newspapers, hoardings etc. - the only inference can be drawn from the agreement and the revised agreement that it was executed for the purpose of “advertisement” of the logo of the appellant-company - the assessee has agreed for advertisement of its logo for which it is required to deduct TDS u/s 194C of the Act. Whether provisions of section 201(1) of the Act can be invoked in the light of the fact that the deductee/recipient i.e. M/s Sahara Airlines Ltd. has already paid taxes or it did not have any tax liability on account of continuous business loss returned by it – Held that:- In Hindustan Coca Cola Breweries P. Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] it has been held that recovery provisions u/s 201(1) of the Act can be invoked only when loss to the Revenue is established and that can only be established when it is demonstrated that recipient of income has not paid taxes on the income - recovery provision u/s 201(1) of the Act can only be invoked when loss to the Revenue is established and the onus is upon the Revenue to demonstrate that the recipient of income has not paid due taxes - in the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - the provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact - once assessee furnishes the requisite basic information, the AO can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. Levy of interest u/s 201(1A) – Held that:- This interest is compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes – the same has been held in Bennett Coleman & Co Ltd. Vs ITO [1984 (11) TMI 58 - BOMBAY High Court] - this aspect was not examined by the CIT(A) as he was not required to do so in the light of the fact that he has concluded that the impugned payment was made for publicity and not for advertisement, for which the assessee was not required to deduct TDS - But now as it has been concluded that the payments were made for advertisement, this aspect of the issue requires a proper examination – thus, the matter is remitted back to the AO for verification and adjudication – Decided in favour of revenue. Deletion of penalty u/s 271C – Liability to deduct TDS u/s 194C – Held that:- The assessee has made the payments for advertisement and not for publicity and therefore, it was required to deduct the TDS u/s 194C of the Act - once it is held that there was no tax liability upon the recipient/deductee at any point of time with regard to the receipts, the assessee can neither be held to be in default nor chargeable to interest u/s 201(1A) - the difference between the publicity and advertisement is very thin as defined in various dictionaries – as decided in Woodward Governor India P. Ltd. Vs Commissioner of Income-tax [2001 (4) TMI 34 - DELHI High Court] section 273B starts with a non obstante clause which means that it has overriding effect over other provisions of law and initial burden is on the assessee to show there existed reasonable cause which was the reason for the failure referred to in section 271 - assessee has not deducted TDS on the impugned payments under the bonafide belief that the payments made by it is in the nature of publicity and not for advertisement for which he was required to deduct tax u/s 194C - the payments were made to the group concern of the assessee i.e. M/s Sahara Airlines Ltd., whose financial position might be known to the assessee - the assessee had a bonafide belief or reasonable cause for non-deduction of TDS for which penalty u/s 271C of the Act cannot be levied - assessee had a reasonable cause for non-deduction of TDS and thus the penalty levied u/s 271C of the Act is not leviable – thus, the order of the CIT(A) in setting aside the penalty is upheld – Decided against revenue.
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2014 (12) TMI 720
Allowability of deduction u/s 80IB(10) - provision of section 80IB(14)(a) prospective in nature or not - Whether some of the flats exceeded the built up area of 1500 sq.ft. violating the specific provisions u/s.80IB(10)(c) – Held that:- The AO disallowed the claim of deduction u/s 80IB(10) on the ground that some of the units had ‘built up area’ exceeding more than 1500 sq. ft. and therefore the assessee does not fulfil one of the conditions laid down in provisions of section 80IB(10) - CIT(A) allowed the claim of the assessee on the ground that the ‘built up area’ of none of the flats exceed 1500 sq. ft. From the various details filed by the assessee in the paper book, the assessee AOP has commenced the housing project namely “Rolling Hills” at Baner Road, Pune on 30-03-2001 as per copy of the commencement certificate - the project was completed on 27-03-2003 as per the part completion certificate - since the AY is AY 2004-05, therefore, the question of applying the definition of ‘built up area’ which was introduced w.e.f. 01-04-2005 does not arise as it has been already decided in Opel Shelters Pvt. Ltd. And Others Versus ACIT, Circle 3, Pune [2014 (2) TMI 593 - ITAT PUNE] - the ‘built up area’ is to be measured as per the Pune Municipal Corporation Rules - Therefore, the question of including the terrace, balcony etc., in the ‘built up area’ does not arise – once it is excluded from the ‘built up area’, the total area of each of the unit will be less than 1500 sq. ft. as per report of the Departmental Valuer - CIT(A) in our opinion is justified in allowing the claim of the assessee. Inclusion of staircase in built up area – Held that:- As regards the inclusion of staircase area in the ‘built up area’, although the departmental valuer has excluded the same from the ‘built up area’, the AO has considered the same in the ‘built up area’ - The action of the AO is not correct since in a row house there will be a stair case from the ground floor to the first floor and the same cannot increase the ‘built up area’ of the row house - This is within the boundary of the plinth area and therefore it has to be excluded which the Departmental Valuer himself has correctly done - the Departmental Valuer has considered the ‘built up area’ as per the Pune Municipal Corporation’s rules and regulations and therefore the CIT(A) has correctly appreciated the facts and has correctly excluded the same from the total ‘built up area’. Row house No. 18 belonged to Shri Harish Warrier or not – Held that:- The area of the unit was measured by the earlier departmental valuer one Shri Khandangale - he had computed the area at 1855 sq. ft. - he included the terrace area and the parking area - according to the succeeding Departmental Valuer Shri Harshad Ruparel, the area of this row house as per Pune Municipal Corporation rules is only 1081 sq. ft. after excluding the balcony etc. - If the balcony etc. are included, then also the total area comes to 1363.04 sq. ft., i.e., including the balcony - Thus, by both the methods it is less than 1500 sq. ft. - the CIT(A) has correctly appreciated the facts, therefore, there was no infirmity in the same. Certain row houses were combined and the total ‘built up area’ exceeds 1500 sq.ft. after combining or not – Held that :- The Departmental Valuer has evaluated this issue in his report - So far as row house Nos. 3 & 4 belonging to Shri Sharad Varma and Shri Chitravanshi Rajat are concerned, both the units have separate occupation certificate, separate corporation tax assessment, separate electricity meters etc. - The affidavit of the owner Shri Chitravanshi Rajat to the effect that he has combined the row houses later on for the convenience of his parents is also on record - The kitchen and entrance doors are also separate - The report of the valuer appointed by the AO shows that none of the units as per Pune Municipal Corporation rules exceed 1500 sq. ft. – there was no infirmity in the order of the CIT(A) who has allowed the claim of the assessee – revenue could not point out any adverse material so as to take a contrary view than the view taken by the CIT(A) who has followed various decisions while allowing the claim of the assessee –thus, the order of the CIT(A) allowing the claim of deduction of assessee u/s 80IB(10) is upheld – Decided against revenue.
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2014 (12) TMI 719
TDS liability - assessee claimed that the provisions of section 194 C and 194J of the Act are not applicable as there was no contract of the assessee with the payees and further the assessee is merely acting as an agent - payment of freight charges, seal wire charges, warehouse charges, detention charged, de-stuffing charges, crane/fork lift charges and survey fee etc. - Held that:- CIT(A) relied upon CIT vs Cargo Linkers 2008 (3) TMI 619 - DELHI HIGH COURT] wherein it has been held that the assessee being a C&F agent, is an intermediary, who booked cargo for and on behalf of importers and exporters and facilitated the contract for carrying goods, therefore not liable to withhold tax u/s 194C from payments made towards air freight on behalf of its customers, decided in favour of the assessee – CIT(A)’s view was right because such person who acts as an agent has no liability to deduct tax at source because he is acting merely as an intermediary between the airlines/shipping lines as also custodians of goods on one hand and the importers/exporters on the other - The contract is between the parties and not with the agent - The invoices and other shipping documents are in the names of importer/exporter and the assessee merely receives funds and disburses to the airline/shipping lines till clearance by the customs. The statutory warehousing charges is also the sole liability of the clients and the assessee merely defrays the expenses on behalf of the clients, thus, the assessee/agents are not liable to deduct tax u/s 194C of the Act - The privity of contract is between the clients and not with the assessee - There was no contract between the assessee and the authorities rather the assessee is working as a facilitator/agent between the parties and the authorities - TDS is deductable u/s 194C on the payments made to the contractors/ sub-contractors thus the basic premise for deducting tax is on the contracting parties - In the absence of any contractual relationship between the assessee and airlines/shipping lines/Authorities the assessee agent is not liable to withhold tax/deduct tax u/s 194C of the Act – the same has been decided in Commissioner of Income-tax Versus Bhagwati Steels [2010 (1) TMI 411 - PUNJAB & HARYANA HIGH COURT] and CIT vs United Rice Land Ltd. [2008 (5) TMI 142 - PUNJAB AND HARYANA HIGH COURT] – CIT(A) has dealt with the individual fee/payment/charges and the conclusion arrived at therein is identical –also in Hindustan Coca Cola Beverages Pvt. Ltd. vs CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] it has been held that where the deductee concerns have already paid taxes on the payments made by the assessee payer then the Department could not deduct tax from the deductor on the same income by treating the latter to be an “assessee in default” – here also, the payees have offered the corresponding income in their returns, therefore, the alleged TDS liabilities, raised upon the assessee was not enforceable. The freight charges, detention charges and de-stuffing charges, etc. were paid to foreign lines or to their agents or shipping lines for transportation of cargo thus the privity of contract is not between the assessee and foreign lines/shipping lines to whom such charges were paid, thus, the assessee cannot be held to be a person responsible to deduct tax on such payments while acting for his clients - in CIT vs Cargo Linkers [2008 (3) TMI 619 - DELHI HIGH COURT] it has been held that since the contract was between the exporter and shipping lines and the assessee was merely working as intermediary/agent, therefore, he is not a person responsible to deduct tax in terms of section 194C – thus, the order of the CIT(A) is upheld. Survey fee – Held that:- It is paid to the persons or agencies appointed by CCSP’s who conduct inspection of the goods - Inspection of cargo is integral step for custom clearance - Likewise seal wire charges are paid to local labour operating within the customs notified premises to seal/unseal the cargo/container, thus, such payments are paid on behalf of the client and the assessee is merely acting as intermediator for the smooth clearance on behalf of the clients - Identical is the situation for crane/fork lift charges – relying upon Reliance can be placed upon the decision in ACIT vs Accenture Sericves (P) Ltd. [2010 (10) TMI 572 - ITAT, MUMBAI] – thus, the order of the CIT(A) is upheld – Decided against revenue.
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2014 (12) TMI 718
Addition made on account of low yield deleted – Held that:- CIT(A) was rightly of the view that the additions are not sustainable because have been made on estimated basis and moreover, the purchase and sales of the Company are verifiable because well recorded in the books of accounts and the AO was totally failure in bringing out any strong reason for such addition - the raw material as well as finished goods of the assessee appellant Co. are excisable and no adverse fact is on records - in the case of both the assessees the finding of the CIT(A) in deleting the addition on the reasoning that no defects were pointed out in the books of accounts of the assessee is justified on facts - no defects have been pointed out by the AO - best low yield could have triggered an enquiry however thereafter it is necessary for the AO to point out specific defects in the books of accounts of the assessee – thus, the order of the CIT(A) is upheld – Decided against revenue. Classification of commission income – Business income or income from other sources – Held that:- CIT (A) has rightly accepted the appeal of the assessee and held that the income from commission is to be assessed as income from business as disclosed by the assessee - there was no reason with the AO as to why and what circumstances, he has established this income as income from Other Sources and not as Business Income, as shown by the assessee company – thus, the order of the CIT(A) is upheld – Decided against revenue.
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2014 (12) TMI 717
Validity of revised return filed u/s 139(5) – Claim of exemption not made by the assessee in the original return filed u/s.139(1) – Audit u/s.12(1)(b) has been conducted within the time frame envisaged u/s.139(5) or not - Held that:- Assessee is entitled for exemption under section 11 though the claim was made in the revised return filed subsequently on granting of registration u/s 12AA - registration u/s 12AA was granted to the assessee institution by the DIT(E) w.r.e.f. AY 2003-04- The Tribunal in the case of the assessee for the earlier assessment year, restored the assessment back to the file of the AO for reframing assessment in the light of the allowance of registration to the assessee u/s 12AA of the Act. When the assessee filed its original return of income at that time, assessee was not granted registration u/s 12AA and therefore, could not claim exemption u/s 11 and 12 of the Act in the original return of income - claim of the assessee for getting exemption u/s 11 and 12 of the Act on principal basis was agreed by the. Tribunal in view of registration allowed to the assessee u/s 12AA of the Act w.r.e including for the AYs - therefore, the Tribunal restored the matter back to the file of the AO for examining and verifying the facts and for allowing exemption u/s 11 and 12 of the Act as per law as both the parties agreed to it before the Tribunal – thus, there was no error in the order of the CIT(A) in directing the AO to allow exemption u/s 11 and 12 of the Act to the assessee – Decided against revenue. Entitlement for exemption u/s 11 – Effect of amendment u/s 2(15) w.e.f. 1.4.2009 - Whether the assessee is hit by newly inserted proviso to section 2(15) or not - Held that:- The assessee filed return of income for the AY 2009-10 on 29.9.2009 admitting Nil income – AO while in the scrutiny process of the view that the assessee as an AOP for this AY lost its character of charitable organization and not eligible for exemption u/s 11 – CIT(A) was of the view that the assessee is eligible for exemption u/s 11 & 12 of the Act as the same has been decided in assessee’s own case in the earlier assessment year – CIT(A) failed to note that the facts in appeals before him for the AYs 2005-06 and 2006-07 are not similar to that of AY 2009-10 - Provisions of section 2(15) was amended with effect from 1.4.2009 which are applicable to assessment year 2009-10, wherein a proviso was inserted – CIT(A) while disposing off the appeal for the AY 2009-10 did not go into the proviso to section 2(15) of the Act especially when the assessee is receiving various receipts for various services rendered by it – CIT(A) has not examined as to whether the assessee's activities fall under general public utility and whether they fall within the ambit of amended provisions of section 2(15) – thus, the matter is to be remitted back to the CIT(A) for fresh adjudication – Decided in favour of revenue.
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2014 (12) TMI 716
Payment made to the cable operators - TDS deduction u/s 194C or u/s 194J – Held that:- The payment was made by the assessee to the cable operators/ MSOs for placing the TV channels in the prime band in order to enhance the viewership and better advertisement revenue – also in the case of Kurukshetra Darpans (P) Ltd. Vs. CIT 2008 (3) TMI 48 - High Court Punjab and Haryana] similar issue has been decided wherein it has been held that the payment for obtaining the telecast licenses from the licensor falls under the provisions of section 194C - the work of broadcasting/telecasting including production of programme or such broadcasting or telecasting falls under the definition of "work” as provided under clause (iv) of the Explanation to section 194C - when two provisions are simultaneously introduced in the Act., one is specific and another is more general in terms then the resort must be to the specific provision - when the work of broadcasting and telecasting of the programmes specifically falls under the ambit of provisions of section 194C, then the provisions of section 194J cannot be applied on such payments – the order of the CIT(A) is upheld – Decided against revenue. Payment for subtitling and editing charges to be treated as fee for technical service or not – Applicability of provisions of section 194J – Held that:- Following the decision in ACIT Vs. Manish Dutt [2012 (7) TMI 186 - ITAT MUMBAI] - the assessee had utilized the services of dubbing studio Ninety Degrees by using their equipments as well as the artists who were working for Studio Ninety Degrees - The assessee had thus carried out the work of dubbing by engaging services and the same was of the nature of getting work done through a subcontractor - the provisions of section 194C were applicable and the assessee has rightly deducted tax at source at 2 per cent treating the payment as a payment to sub-contractor for carrying out a work – thus, the order of the CIT(A) is upheld – Decided against revenue.
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2014 (12) TMI 715
Deletion of penalty u/s 271(1)(c) – Addition restricted on unexplained receipt against bogus purchases - CIT(A) was of the view that the books of accounts to be rejected and because of no positive act of concealment on the part of the assessee has been brought on record, the penalty u/s 271(1)(c) is not sustainable - Held that:- CIT(A) made addition of ₹ 10,00,000/- by enhancing the sale of the assessee by rejecting the books of account and such finding of the CIT(A) clearly shows that he has accepted the purchases shown by the assessee - the basis of levying of penalty by the AO has itself not been found sustainable – the same issue has been already decided in Harigopal Singh Vs. Commissioner of Income Tax [2002 (8) TMI 65 - PUNJAB AND HARYANA High Court] wherein it has been held that the provisions of section 271 (1 )(c) are not attracted – in order to attract section 271(1)(c), it is necessary that there must be concealment by the assessee of the particulars of his income or if he furnishes inaccurate particulars of such income - there had to be a positive act of concealment on the part of the assessee and the onus to prove that was on the department – here, no such positive act of concealment on the part of the assessee has been brought on the record and the addition sustained is only on estimated basis - the basis for levying of penalty by the AO u/s 271(1)(c) that the assessee is guilty of furnishing of inaccurate particulars of her income by showing bogus purchases is not found to be correct after the assessment order passed in this regard. The books of account of the assessee were initially rejected and the AO has made the additions under different heads and in appeal, the CIT(A) has deleted the additions made under the head unexplained cash credit and u/s 40A(3) of the Act on account of cash payment - under the head unexplained receipt against bogus purchases, the addition was made by the AO, but in appeal the CIT(A) has restricted it to ₹ 10 lakhs only on estimate basis - therefore, no positive act of concealment of income chargeable to tax has been brought out on record - since the addition was made on estimate basis, the penalty u/s 271(1)(c) is not leviable – thus, CIT(A) rightly held that penalty cannot be levied on estimated addition – Decided against revenue.
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2014 (12) TMI 714
Deletion of compensation charges – Capital expenses or revenue expenses – Held that:- The past position on identical claims can be said to be covered in assessee’s favour - considering this past position the CIT(A) has arrived at a finding, however it is seen that the CIT(A) has been swayed by the past legal position on the issue and unfortunately has not cared to consider the same on facts - Simply because the past practice demonstrates that the assessee in its nature of business may require to compensate the parties to the extent the parties from whom advances have been received could not fulfill the commitment warranting payment of compensation does not mean that all claims without verification have to be allowed - as per assessee’s submissions only “some of the documents” relatable to the issue were made available to the CIT(A) based on which finding has been arrived at – CIT(A) held that assessee also filed a detail of payment made by it as compensation and also placed on record copies of some of the documents executed for payment of compensation and cancellation of bookings made by it – the approach of the CIT(A) on facts cannot be upheld - CIT(A) is necessarily required to look at the complete evidence necessary for arriving at a conclusion – thus, the matter is remitted back to the CIT(A) - assessee is granted liberty to place all necessary evidences before the CIT(A) in support of its claim as the same evidently has not been done – Decided in favour of revenue.
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2014 (12) TMI 713
Addition of cash credit – Amount to be treated as cash loan or not – Held that:- An amount of ₹ 1,20,000/- was received from Shri Biju Joseph - as evidenced from the bank account of Shri Biju Joseph, he is having enough balances in his account and he is having means to advance a sum of ₹ 1,20,000/- to the assessee - assessee has proved the identity of the parties and the creditworthiness of Shri Biju Joseph to lend ₹ 1,20,000/- to the assessee - it is not proper to make addition u/s 68 of the Act on this count – the AO is directed to delete the addition – Decided in favour of assessee. Addition of ₹ 22,10,051/- which is credited to the capital account – Held that:- These credits continue to be carried forward year after year and the assessee transferred these credits to the capital and current account in the AY - there was a doubt in the mind of the AO regarding these credits - in the normal course, nobody would ordinarily not claim his dues and usually they take steps to recover the dues if it is a genuine liability - the liability remains to be recovered after the assessee transferred these amounts to the capital and current account - in the case of carry forward credit which is from earlier year, provisions of sec. 68 cannot be applied - the liability is outstanding in the books of account of the assessee for the AY under consideration – as decided in CIT vs. Chipsoft Technology (P.) Ltd. [2012 (8) TMI 154 - DELHI HIGH COURT] - the provisions of sec. 41(1) could be applied in this type of credts - section 68 is not applicable to the cash credits recorded in the books of account of the assessee in the earlier previous year not relevant to the AY under consideration - when the cash credits pertain to the earlier previous year, no addition can be made u/s. 68 – thus, the matter is to be remitted back to the AO to find out whether the liability actually ceased to exist and if there is no possibility of revival of the liability, then only the AO has to apply the provisions of sec. 41(1) – Decided partly in favour of assessee.
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Customs
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2014 (12) TMI 731
Import of Low Ash Metallurgical Coke/Low Ash Low Phosphorous Coke - Reliability of test reports - Benefit of exemption Notification No. 35/90- Cus - Confirmation of duty demand u/s 28 r.w.s 28AA - Held that:- Goods were imported in July, 1990 and November, 1990. As per the test report furnished by the Chinese supplier and the Testing Agency in Japan, who conducted the test at the behest of the importer, the phosphorous content was found much lower than the 0.035%. The goods were again tested by the Customs laboratory in Goa at the time of importation and as per the Colour Test Comparison method, the phosphorous content was found to be less than 0.035% and the goods were provisionally cleared. After clearances by the customs, the assessee once again got the goods tested by M/s SGS (India) Pvt. Ltd., who also found the samples to be contain phosphorous less than 0.035%. As against the test reports by various agencies, Revenue wants to rely on the test report of the CRCL, which conducted the test in 1993 almost two years after the samples were drawn. There is nothing on record to show that the samples, which were drawn, were kept in airtight containers or the samples were drawn in accordance with ISI 436 prescribed for drawal and testing of the samples. In other words, there is no evidence adduced by the Revenue to show that the samples were representative and the sample could not have deteriorated with the passage of time. The Chief Chemist who was cross-examined had also accepted that only the samples kept in airtight containers would not deteriorate. However, there is no evidence forthcoming in this regard adduced by the Revenue. Benefit of doubt has to go to the appellant as the Revenue has failed to discharge the burden cast on it to show that the appellants are not eligible for the benefit of exemption Notification No. 35/90- Cus - demand of customs duty has been confirmed by the adjudicating authority under Section 28 of the Customs Act which is incorrect. If the contention of the department is that the goods were assessed provisionally earlier and they are being finally assessed now, then the duty demand should have been confirmed under Section 18 of the Customs Act and not under Section 28. - impugned order is not sustainable in law - Decided in favour of assessee.
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2014 (12) TMI 730
Waiver of pre deposit - Rate of duty on export of hot rolled and cold rolled products - Notification No. 66/2008-Cus, dated 10.5.2008 - Exemption from duty as Notification amended by Notification 77/2008-Cus. Dated 13.6.2008 whereby nil rate of duty has been prescribed - Retrospective effect of notification or prospective - Held that:- If the argument of the applicant is accepted, then the increased rate of duty is to be also with retrospective in nature which is not permissible in view of the provisions of Section 16 of the Customs Act. Section 16 of the Customs Act provides the rate of duty and tariff valuation, if any, applicable to the export goods, shall be the rate and valuation in force on the date on which the proper officer makes an order permitting clearance and loading of the goods for export. Applicant relied upon the decision of the Hon'ble Supreme Court in the case of WPIL Ltd. (2005 (2) TMI 137 - SUPREME COURT OF INDIA), where in view of the policy of the Government to grant exemption to the parts used in the factory, the subsequent Notification was considered as clarificatory in nature. The facts in the present case are not parallel to the facts of the case before the Hon'ble Supreme Court hence the ratio of the above decision is not applicable to the facts of the present case - partial stay granted.
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2014 (12) TMI 729
Reduction in penalty u/s 114 - Jurisdiction of Tribunal to reduce penalty - Held that:- Imposition of penalty under the Act is not automatic. However, once the conditions which give rise to imposition of penalty exists then the penalty has to be imposed as prescribed under law. At that stage, no discretion is left to the Authorities in the matter of imposing penalty. The law provides that the penalty payable would be not less than equal to the duty payable. Further, the law provides, if the assessee pays the duty with interest within 30 days from the date of the order, then the penalty payable would be 25% of what is imposed. Therefore, the statute provides for the penalty payable and also reduced penalty payable. There is no discretion left either with the authorities or with the Tribunal or with this Court to reduce the penalty. However, the Tribunal, which had no jurisdiction, had proceeded to reduce the penalty from ₹ 59,77,432/- to ₹ 5,00,000/-. Whatever is the reason given by the Tribunal, it is not necessary for us to go into the said question because the question is, whether there is any jurisdiction left with the Tribunal to reduce the penalty. The law on the point is now well settled. Once the authorities decide to impose penalty, no discretion is left in the matter of imposing of penalty except as provided under law. Even the Tribunal also has not been vested with any power to reduce the penalty, which is imposed by the authority as prescribed under law, and therefore, the order passed by the Tribunal reducing the penalty is one without jurisdiction and, accordingly, it is hereby set aside - Decided in favour of Revenue.
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2014 (12) TMI 728
Levy of Education cess on Basic Customs Duty which was debited in the DEPB Licence - Exempted goods - Held that:- Ministry of Finance clarified in the proceedings dated 8-7-2004 in D.O.F. No. 334/3/2004-TRU on the specific issue as to whether goods that are fully exempted from excise duty/customs duty or are cleared without payment of excise duty/customs duty (such as clearance under bond of fulfilment of certain conditions) would be subjected to Cess. It was stated therein that since education cess has to be calculated at the percentage on the duty liability, when the goods are fully exempted from excise duty or customs duty, are chargeable to Nil duty or are cleared without payment of duty under specified procedure such as clearance under bond, the question of education cess to be levied does not arise. Having regard to the specific understanding given on the principle of levy of education cess, and the subsequent Circular also issued in Circular No. 5/2005-Cus., dated 31-1-2005 (F. No. 605/54/2004-DBK), we have no hesitation in confirming the order of the Tribunal by dismissing the appeal. - Decided against Revenue.
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2014 (12) TMI 727
Free baggage allowance - Confiscation of one LCD TV and two litre whisky - One Laptop valuing ₹ 38,300 allowed as free baggage - Attempt to smuggle goods - Repeat offender - Imposition of redemption fine and penalty - Held that:- free baggage allowance is admissible to the applicants. Applicants are entitled for duty free clearance of 2 litres of whisky as per baggage rules. So, the confiscation of one LCD TV and two litre whisky is set aside and same may be allowed to be cleared in free baggage allowance after charging duty on value of goods which is in excess of free baggage allowance of ₹ 25,000/-. The remaining goods i.e. one TV, one litre whisky and 2 Sony FM/AM clock Radio totally valuing ₹ 32,666/- being non-bona fide baggage are liable to confiscation. As such the confiscation of goods valuing ₹ 32,666/- is upheld. The redemption fine and penalty is therefore modified keeping in view the value of confiscated goods - Decided partly in favour of assessee.
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2014 (12) TMI 726
Illegal sale of confiscated gold - smuggle gold bars and coins - Refund of sale proceeds - applicant has contended that since the goods have disposed of hence duty cannot be collected; that the interest of 9% per annum for the sale proceeds be paid for delayed payment and warehousing charges may be re-fixed - whether the refund has to be paid without deducting the duty as claimed by the applicant or not. Held that:- In view of judgment in the case of CC, Trichy v. K. Balaganesan [2011 (5) TMI 393 - CESTAT, CHENNAI], applicant’s refund claim for duty portion is rightly rejected by appellate Commissioner. As regards interest claim, Government notes that Section 27A of Customs Act grants interest on delayed refund of duty. In this case amount of sale proceeds are refunded and therefore provisions of Section 27A of Customs Act, 1962 are not attracted. Government also notes that excess warehouse charges of ₹ 18,880/- are already ordered to be refunded - Government do not find any infirmity in the impugned Order-in-Appeal and therefore upholds the same - Decided against assessee.
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Service Tax
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2014 (12) TMI 749
Bail Application - anticipatory bail under Section 438 Cr.P.C. - evasion of service tax - commission of offence punishable under Section 83 read with Section 89 (1) (ii) - petitioners claim that they were service providers for extending sanitation services to the Municipal Corporation, which included cleaning of the sewerage - Held that:- At this stage, no impediment can be caused in the investigation, which is in progress, and therefore, free hand ought to be given to the investigator. However, this Court will trust the better sense and discretion of the Investigating Officer to the effect that he shall affect the arrest of the petitioners only; after if he comes to a definite conclusion that prima-facie, offence is made out, arrest of the petitioners necessary to arrive at a truth. - application for grant of pre-arrest bail is, hereby, disposed of, without granting bail to the petitioners.
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2014 (12) TMI 748
Penalty u/s 76, 77 & 78 - Intention to evade tax - bonafide belief - Held that:- Only during the search on 17.01.2006 it was discovered that the appellants had not paid the impugned service tax which pertains to the period 01.04.2002 to 31.03.2003. In his statement which was recorded several days after the search, the proprietor Shri V.P. Singh did not claim to be ignorant about service tax and indeed admitted that the appellants service tax liability was pending. It is totally untenable to claim that proprietary organisation is not a concern. They were clearly engaged in commercial activity. So the appellants were clearly a commercial concern. It is seen that M/s. Vasudha Security Pvt. Ltd. had taken registration in the year 2005 which clearly shows that they were aware about the service tax leviability on security services way before the search operation. Thus, it was not a case of ignorance on the part of the appellants but a deliberate act on their part to evade service tax. - Decided against assessee.
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2014 (12) TMI 747
Condonation of delay - Delay in receipt of order - Commissioner dismissed appeal as barred by limitation - Held that:- Appellant had shifted their office and had not intimated the same to Department about the change of the office. It is evident from the letter dated 21.10.2013 of the Postmaster, Tirunelveli that the Adjudication Order was delivered on 5.4.2011 in the address as mentioned in the adjudication order, and therefore, the appeal filed on 13.1.2012 before Commissioner (Appeals) is time-barred. No reason to interfere with the order of the Commissioner (Appeals) - Decided against assessee.
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2014 (12) TMI 746
Levy of penalty u/s 78 where service tax with interest was paid before issuance of SCN - construction of residential complex service - Held that:- As the service tax liability along with interest has been discharged prior to the issue of show cause notice, sub-section (3) of Section 73 provides for waiver of penalties if reasonable cause is shown for the failure to pay tax. In the present case, the appellant is small time service provider who is ignorant of the statutory provisions relating service tax. Therefore, the provisions of Section 73(3) and 80 could have been invoked and penalty should have been waived by the adjudicating/appellate authorities, which they have not done. - penalty waived - Decided in favour of assessee.
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2014 (12) TMI 745
Waiver of pre deposit - Advertisement agency service - Sale of Space or Time for Advertisement Service - Held that:- Tribunal in the case of Tamil Nadu Cricket Association (2009 (10) TMI 669 - CESTAT CHENNAI), directed predeposit in respect of demand of tax on sale of space and time for advertisement agency relating to sponsorship. The Tribunal in the case of Kerala State Road Transport Corporation (2010 (12) TMI 114 - CESTAT, BANGALORE), as relied upon by the learned counsel, remanded the matter as the assessee’s service tax liability was not considered by the adjudicating authority as the discharge of service tax liability has been discharged by the persons who have taken the space from the assessee. In the present case, prima facie, we find that the applicant paid the tax prior to April 2009. We are unable to accept the submission of the learned counsel that the service tax liability was shifted on the advertisement agency after April 2009. In this context, the learned counsel failed to place any evidence of the discharge of service tax liability by the persons who have taken the space from the assessee. Applicant failed to make out a prima facie case for waiver of predeposit of the entire dues - Partial stay granted.
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2014 (12) TMI 744
Waiver of pre deposit - Call center service - Bar of limitation - whether the appellant received the services in India, it is seen from the record that it is on the appellant's behest M/s Technion Communication Corporation rendered the Call Centre Services in Canada to M/s Monster Inc. - Held that:- M/s Technion Communication Corporation had raised bills on the appellant for the services provided and the appellant had made payments for the services rendered. In these set of circumstances, it is evident that it is the appellant who is recipient of the services and not M/s Monster Inc. Therefore, in terms of Section 66A, the appellant would be liable to pay service tax on the services received. - it is the contention of the appellant that the demand is time barred inasmuch as early as in November 2007, the appellant had furnished details of the services received and the payments made. In spite of such details available with the department as early as in 2007, the Show Cause Notice was issued only in November 2011. Prima facie , the demand appears to be time-barred. Therefore, the appellant has made out a prima facie case for grant of stay. - Stay granted.
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2014 (12) TMI 743
Waiver of pre deposit - Renting of immovable property service - ‘Daily Market’ and ‘Shop Rent’ - Held that:- Demand of tax of ₹ 14,89,730/- under Daily Market and ₹ 56,67,524/- under Shop Rent are, prima facie, sustainable. Accordingly, we direct the applicant to predeposit ₹ 72,00,000 within a period of eight weeks and report compliance on 5.11.2014. Upon such deposit, predeposit of the balance dues stands waived and recovery thereof stayed during the pendency of the appeal. - Stay granted partly.
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2014 (12) TMI 742
Penalty u/s 76 - Consulting engineering service and construction services - Held that:- construction of bus terminal is an activity which may not be liable to tax at all and hostel construction also may not be liable. In view of the above, we consider that the amount deposited by the appellants is sufficient for hearing the appeal. Accordingly, there shall be waiver of pre-deposit of balance dues and stay against recovery for a period of 180 days. - Stay granted.
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2014 (12) TMI 741
Improper adjustment of wrongly paid service tax paid against the subsequent liability instead of claiming refund - Penalty u/s 76, 77 & 78 - Business Auxiliary Service - Held that:- It is not in dispute that the service tax law does not provide for adjustment of excess tax paid against the subsequent liability except in certain specified situations and the present case does not involve those specified situations. Therefore, suo motu adjustment of excess tax paid would not arise in the present case. However, it is on record that the appellant intimated and informed the department of the excess service tax paid and suo motu adjustment towards their liability on 24.4.2006 and thus the department was aware of the suo motu adjustment on 24.4.2006. However, the department has chosen to issue the Show Cause Notice only on 21.12.2009, i.e., after a gap of three and a half years. Under these circumstances, the appellant has made out a prima facie case for wavier of pre-deposit of the dues on account of time bar. Accordingly, we grant unconditional waiver from pre-deposit and stay of recovery of the dues adjudged vide the impugned order during the pendency of the appeal - Stay granted.
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Central Excise
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2014 (12) TMI 740
Condonation of delay - Improper guidance - Rejection of stay application - Whether on the facts and in the circumstances of the case, the Tribunal was justified in not condoning the delay caused in preferring the appeal - Held that:- From the facts stated in the memorandum of application, it appears that the work carried out by the appellant is mainly in the nature of labour work, as such, the case put forth by the appellant that he were not aware of the intricacies of law, and therefore, could not approach the Tribunal in time appears to be quite plausible. It appears that the appellant was represented by a Chartered Accountant before the appellate authority and, therefore, relied upon him to give him proper guidance. However, since no proper guidance was given till the appellant contacted the learned advocate who represents him before the Tribunal, there was a delay in preferring the appeal. Moreover, the appellant has shown his bona fides by depositing 75% of the amount. Under the circumstances, the Tribunal was not justified in summarily rejecting the application without properly applying its mind to the explanation given by the appellant. It is by now well settled that the court while considering an application for condonation of delay should adopt a pragmatic approach which furthers the cause of justice and not a narrow or pedantic approach. In the present case, the delay in preferring the appeal is not so huge so as to cause any undue prejudice to the respondent. Under the circumstances, if the delay is condoned, the only consequence would be that the appellant's appeal would be heard on merits. In the aforesaid premises, in the interest of substantial justice, the delay caused in preferring the appeal before the Tribunal is required to be condoned. - Delay condoned.
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2014 (12) TMI 739
Concessional Rate of duty - notification No.50/97-CE dated 01.08.1997 - Imposition of penalty - Held that:- It is seen that the compounded levy scheme was introduced from 01.08.1997 vide notification No.33/97-CE(NT), wherein it was stated that in terms of sub-section (3) of Section 3A of the Central Excise Act, the duty liability was determined on the basis of Annual Capacity of Production. The assessee cleared the goods under this compounded levy scheme. Subsequently, by Notification No.57 of 1997-CE dated 30th August, 1997, the relevant date, viz., 1st August, 1997, was changed to 1st September, 1997. Hence, the assessee became ineligible to claim concessional rate of duty as per the compounded levy scheme. However, by a Notification No.4/2000-CE(NT) dated 31.1.2000, where the concessional duty, as applicable under Notification No.50/1997 dated 01.8.1997, was made applicable for the period 01.08.1997 ending with 31.8.1997. - assessee itself had admitted that Notification No.4/2000-CE(NT) dated 31.1.2000 is applicable for the goods cleared during August 1997, we find no reason to interfere with the order of the Tribunal. The Tribunal, after taking note of various notifications, viz., Notification No.48/97, CE dated 01.08.1997, 50/97-CE dated 01.08.1997, 57/97-CE dated 30.08.1997, deleted the penalty also. Hence, the questions of law raised do not merit consideration, as the assessee had already accepted the benefit of Notification No.4/2000-CE(NT) dated 31.1.2000. - Tribunal was justified in upholding the order of the Adjudicating Authority - Decided against assessee.
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2014 (12) TMI 738
Shortage of goods - Penalty u/s 11AC - Whether on the facts and circumstances of the case, the Tribunal was justified in restoring the penalty - Held that:- There was a huge shortage of finished goods for which no explanation was offered by the appellant at the time of stock checking. It means that the appellant had admitted the shortage and paid the duty accordingly. Thus, the appellant was unable to give any suitable explanation for the shortage of the finished goods. This is an admission by the appellant that the goods found short had been removed without payment of the duty. The method for clandestinely removal of the goods is not required to be explained. Since, it is a case of the shortage of the finished goods for which the appellant has no explanation, so the provision of Section-11AC for levy of the penalty and Rule-26 for levy of the penalty on the authorized signatory would be attracted. - no reason to interfere with the impugned order - Decided against the assessee.
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2014 (12) TMI 737
Waiver of pre deposit - Valuation of goods - related party transaction - Department initiated proceedings stating that the price at which the related persons sold the goods at the open market should be the price that is to be taken for computation of duty liability - Whether there is a prima facie case for interference with the order of the Tribunal on merits and also a case for reduction of pre-deposit on the ground of financial hardship - Held that:- On perusal of the order of the Tribunal, this Court finds that both the grounds as pleaded by the appellant are totally lacking in the present appeal. On the first ground, this Court is of the opinion that the new plea taken before the Tribunal, as rightly held by the Tribunal, has to be tested, since the same was not before the assessing authority, viz., the Commissioner. In the above backdrop, reduction in pre-deposit, as sought for by the appellant, cannot be justified on prima facie case - order of the Tribunal clearly shows that there is a net profit of ₹ 2.75 Crores, outstanding of ₹ 2.9 Crores and receivables to the tune of ₹ 3.4 Crores and, therefore, there is no justification for the appellant to plead financial hardship. This Court is in full agreement with the view expressed by the Tribunal on the plea of financial hardship - no reason to interfere with the order passed by the Tribunal. This Court is of the considered view that no questions of law, much less substantial questions of law arise for consideration in this appeal. - Decided against assessee.
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2014 (12) TMI 736
Removal of chewing/spit tobacco without payment of duty - Violation of principle of natural justice - Whether the Customs, Excise and Service Tax Appellate Tribunal was correct in disposing of the applications for waiver of pre-deposit in terms of the directions issued in other cases without elucidating and referring to the facts and contentions raised by the applicants - Held that:- It would not be correct and proper to examine the factual matrix and issues in these appeals while answering the substantial question of law. We have noticed that the allegations against the appellant are quite serious. However, they should be given an opportunity to meet the findings and their contentions noticed before a prima facie view is formed. We are not stating that the appellant should not have been asked to deposit 50% of the tax amount but before any direction or finding is recorded, the pleas raised by the appellants have to be examined and considered. - Matter remanded back - Decided in favour of assessee.
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2014 (12) TMI 735
Condonation of delay - Misplacement of order - wrong availment of cenvat credit - Held that:- personal reasons attributed to the stress undergone by Sri.Ramakrishnan, who was in incharge of the case and the fact that he has submitted a letter of resignation earlier to the proceedings before the Commissioner (Appeals) and was relieved subsequently on 19.2.2013 are not in dispute. Therefore, the appellant's plea that there was good reason for not filing the appeal for the aforesaid reason appears to be a bona fide reason. Further more, the appellant has been continuously pursing his matter before the Adjudicating Authority as well as before the Commissioner (Appeals). The same is borne out by records and the appellant's plea is bona fide. In our considered opinion, the same would constitute "sufficient cause" for not presenting the appeal within the prescribed period. - Following decision of The Collector, Land Acquisition v. Katiji [1987 (2) TMI 61 - SUPREME Court] - Decided in favour of assessee.
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2014 (12) TMI 734
Extention of stay order - Whether the Hon'ble CESTAT has erred in granting waiver of pre-deposit of assessed demand in favour of the respondent during pendency of the appeal thereby extending the period of stay beyond 365 days ignoring the recent amendment to Section 35C of the Central Excise Act, 1944 - Held that:- only reason given by the CESTAT for extending the stay order to operate until decision of the appeal, is that the appeal could not be disposed of for no fault of the petitioner, and that in view of pendency of several older appeals, the stay order deserves to be extended till the hearing of appeal. Thousands of appeals are pending in the CESTAT, arising from six States, for which earlier there was only one Bench and only recently a second Bench has been constituted. The final hearing of the appeals ordinarily takes about three years in CESTAT, and that in the present case also, hearing of appeal, filed in the year 2012, will take some more time. In the Finance Act, 2014, with effect from 01.10.2014, Section 35C(2A) has been omitted and that appeals can be filed now for hearing with a deposit of 10% of the demand. - CESTAT, New Delhi, to decide the appeal as expeditiously as possible, and preferably within a period of six months from today. The waiver of pre-deposit will be valid upto the period of six months - Following decision of Commissioner of Cus. & C.Ex., Kanpur Vs. J.P. Transformers [2013 (10) TMI 1194 - ALLAHABAD HIGH COURT] - Appeal disposed of.
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2014 (12) TMI 733
Power of Tribunal to extend the stay order beyond 365 days - Whether even if it is held that the learned Appellate Tribunal can extend the stay granted earlier beyond the total period of 365 days, the learned Appellate Tribunal is required to pass a speaking order/reasoned order considering 3rd proviso to Section 35C(2A) of the Central Excise Act, 1944 - Held that:- In view of the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (2014 (7) TMI 738 - GUJARAT HIGH COURT) it can be concluded that the Tribunal did not lack the power to extend stay beyond 365 days from the initial date of granting stay. However, if the stand of the revenue is that such extension was without recording reasons or without passing speaking order as required by the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (supra) it would be open for the Department to move a rectification application before the Tribunal. - Decided against Revenue.
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2014 (12) TMI 732
Condonation of delay - Inordinate delay of 580 days - Reason attributed to delay is lack of knowledge of legal technicalities - Held that:- Even if the petitioner was not fully aware about the period of limitation prescribed under the law of limitation, that would not enable him to sleep over his right for inordinate period and claim illiteracy as a ground for defence. Even as per his own affidavit he has merely instructed his advocate to file an appeal. He has never stated that he had signed the authorization form of the advocate or the appeal memo. Surely even a layman is supposed to know that legal proceedings cannot be launched without authorization being given to the legal consultant. He has also not stated that after having assured him that the appeal would be filed, the advocate had at any point of time conveyed to him that the appeal was actually filed. In short, even as per the petitioner's own account he has merely raised contention that he had instructed his advocate to file an appeal neither ensuring that the appeal is prepared duly signed by him and presented before the Tribunal nor did he obtain the confirmation from his advocate that the same is actually filed. The petitioner cannot throw the entire blame on his advocate. - Condonation denied.
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Indian Laws
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2014 (12) TMI 751
Jurisdiction of High Court - Willful falsification of official register - Gross misconduct and failure to maintain absolute integrity and devotion to duty or not - Contravention of the provisions of Rule 3(1)(i), 3(1)(ii), 3(1)(iii) of Central Civil Services (Conduct) Rules, 1964 - Departmental proceedings initiated under Central Civil Services (Classification, Control and Appeal) Rules, 1965 - Held that:- The High Court has acted as an appellate authority in the disciplinary proceedings, re-appreciating even the evidence before the enquiry officer - The finding on Charge no. I was accepted by the disciplinary authority and was also endorsed by the Central Administrative Tribunal - In disciplinary proceedings, the High Court is not and cannot act as a second court of first appeal - The High Court, in exercise of its powers under Article 226/227 of the Constitution of India, shall not venture into re-appreciation of the evidence - the disciplinary authority, on scanning the inquiry report and having accepted it, after discussing the available and admissible evidence on the charge, and the Central Administrative Tribunal having endorsed the view of the disciplinary authority, it was not at all open to the High Court to re-appreciate the evidence in exercise of its jurisdiction under Article 226/227 of the Constitution of India. It was not open to the High Court, in exercise of its jurisdiction under Article 226/227 of the Constitution of India, to go into the proportionality of punishment so long as the punishment does not shock the conscience of the court - the disciplinary authority has come to the conclusion that the respondent lacked integrity - that view has been endorsed by the Central Administrative Tribunal also - Thereafter, it is not open to the High Court to go into the proportionality of punishment or substitute the same with a lesser or different punishment - the finding on Charge no. I has attained finality - It is the punishment of dismissal on Charge no. I which was directed to be reconsidered by the Central Administrative Tribunal and which view was endorsed by the High Court - on that basis only, the dismissal was converted to compulsory retirement - Such findings cannot be reopened in the subsequent round of litigation at the instance of the respondent - It was only the punishment aspect that was opened to challenge. The Central Administrative Tribunal, after elaborately discussing the factual as well as the legal position, has come to the conclusion that the punishment of compulsory retirement is not outrageous or shocking to its conscience, it was not open to the High Court to interfere with the disciplinary proceedings from stage one and direct reinstatement of the respondent with back wages - The respondent stood dismissed from service as per order dated 10.06.1997 - It was that punishment which was directed to be reconsidered – thus, the judgment of the HC is set aside and the order passed by the disciplinary authority and confirmed by the Central Administrative Tribunal is restored – Decided in favour of petitioner.
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