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Income Tax
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2013 (12) TMI 1170
Unexplained investment under section 69C – Held that:- The assessee has not submitted any evidence before the CIT(A) - The CIT(A) is not justified in deleting the same – The issue was restored for fresh decision. Re-opening of assessment u/s 147 – Held that:- Original assessment was framed u/s 144/147 on 8.12.2006 is a Regular Assessment as defined in sub-section (40) of Section 2 of the Act. While framing the original Assessment, Balance-Sheet as well as Audited Accounts were available on record before the AO - While framing this assessment the AO formed an opinion in respect of project advances shown by the assessee in the Balance Sheet as liability - A concluded assessment cannot be reopened beyond a period of four years from the end of the relevant Assessment Year unless there was failure on the part of the assessee to disclose fully and truly all material facts necessary for making assessment - In this case, the assessee has disclosed complete particulars regarding project advances in the Balance Sheet - The assessee has not suppressed any material facts and there is no documents on record from which an opinion can be formed that income of the assessee has escaped assessment - Following Parixit Industries (P) Ltd V/s ACIT [2012 (4) TMI 464 - GUJARAT HIGH COURT] – In the absence of existence of "any tangible material" to come to the conclusion that there was escapement of income from assessment, the Assessing Officer exceeded his authority to reopen the assessment merely on the basis of a "change of opinion" - Decided against Revenue.
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2013 (12) TMI 1169
Amount paid for production of television programme whether consitute fee for technical services - Held that:- As per Article 7 of the India-Singapore Tax Treaty - The profits of an enterprise of a Contacting State shall be taxable only in the State except if the profits of the enterprise are directly or indirectly attributable to the permanent establishment in the other state - The services of foreign company were utilized and payment for the services were also received outside India - There is no permanent establishment of that comany in India - Profits arising out of the transactions for services rendered by NAPL are not taxable in India - Decided in favour of assessee.
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2013 (12) TMI 1168
Substantive addition for the block period u/s 158(B) - Held that:- Addition of huge amount without any substantive basis and material available on record is unsustainable - Exercise of powers u/s 145 without disclosing cogent reason is unsustainable - Decided against Revenue.
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2013 (12) TMI 1167
Addition on account of unverified stock - Held that:- The CIT has observed the report of auditor - The Auditor has pointed out that the stores have not been physically verified in the constituent units and reconciled with the book value exhibited in the balance-sheet - There has been no adverse comments as regards the purchases from the consumption disclosed - The addition was deleted by CIT(A) as well as Tribunal. Addition on account of value of scrap recorded in books - Held that:- The assessee has not maintained any details of scrap and its value - The availability of the scrap was not denied - The assessee has regularly been following the particular method of accounting, the addition made on the basis of the estimates and conjectures cannot be justified - Both the additions were made on estimate basis - Estimation is a question of fact - No question of law is emerging from both the proposed questions by the Department - Decided against Revenue.
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2013 (12) TMI 1166
Whether income from letting out of shops held as stock in trade is taxable as business income - Held that:- Letting out the premises or receiving the rent is not a business of the assessee. The business of the assessee is to construct and sale the properties - Following CIT vs. M/s. Goel Builders [2010 (5) TMI 487 - Allahabad High Court] - The units lying vacant due to shortage of demand were rented to earn income - The rental income was utilized to reduce the burden of repayment of interest - The assessee has rightly claimed rental income under the head "income from business" specially when the assessee was not engaged in the business of letting out for the construction of the business complex - The rental income was earned for a short period - The same was shown in the books of account - The unsold units in the stock-in-Trade were already treated as business assets - Decided in favour of assessee.
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2013 (12) TMI 1165
Whether the assessment passed u/s 144 is barred by limitation - special audit u/s 142(2A) was not completed within the stipulated period - Held that:- the A.O. has issued the first letter on 08.03.2006, which was received by the assessee on 13.03.2006 - The could complete the assessment within the time if the assessee had completed the special audit within 30 days time alloted for it - It is the assessee who has delayed the matter - It was the pious duty of the assessee to get its accounts audited under section 142 (2A) of the Act or file objection, instead of that the assessee reached upto Hon'ble the Supreme Court - If the accounts might have been audited as per direction of the A.O. especially when the assessee claimed that accounts were perfect and there was no requirement for getting accounts audited - The assessee never filed any objection against the letter dated 08.03.2006 - Due to non-cooperation of the assessee, the A.O. was forced to pass the ex parte assessment order under Section 144 of the Act and only after the assessment order, the assessee has filed the objections - Decided against assessee.
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2013 (12) TMI 1164
Whether wages paid to casual labour is not a business expense u/s 37 - Held that:- The books of accounts of the assessee company, bills and vouchers are audited under section 44 AB of the Companies Act but no audit account showing expenditure incurred for engaging casual labours or labours is produced - There is nothing on record to show payment of employees provident fund or the employees state Insurance Contribution with regard to these employees - This amount was not properly explained by documentary supporting evidence. The question of granting exemption from addition of this expenditure under section 37 will arise only if the expenditure is shown to have been incurred or proved on account of payment for casual labour etc - The expenditure is not proved to have been incurred and therefore, it is disallowed - Such position without proof of expenditure being established, the benefit of section 37 cannot be granted - Decided against assessee.
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2013 (12) TMI 1163
Enhancement of GP rate - Held that:- Following Commissioner of Income Tax (Central) Kanpur vs. M/s Carpet Palace, Rajpura, Bhadohi [2013 (9) TMI 447 - ALLAHABAD HIGH COURT] - The questions framed on the basis of rejection of books for low GP rate are not substantial questions of law - The material found during the search and seizure relating to AYs 2007-08, 2008-09 and 2009-10, (included in the block assessment period) was not considered by the AO - The AO satisfied himself in rejecting the books of account and thereafter raising the G.P. rate arbitrarily - The ITAT has given sufficient reasons to find that in comparable cases the G.P. rate in the relevant financial year was from 9% to 21%, whereas the assessee had disclosed a much higher gross profit rate at 28.4% - There was no justification to increase the G.P. rate beyond the highest gross profit rate in comparable cases, when the assessee had disclosed a higher rate of 22.40% for AY 2005-06 and 22.42% for AY 2006-07 - Decided against Revenue.
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2013 (12) TMI 1162
Whether the report of ADI (Investigation) may be the basis for initiating proceedings u/s 147 - Held that:- The condition that the A.O. must be in possession of a definite and relevant information or material which may led him to have reasons to believe that income chargeable to tax has escaped assessment must be fulfilled - The Tribunal is a final fact finding authority - The Tribunal observed that the mandatory conditions for initiation of the proceedings u/s. 147 were not fulfilled in the case of the assessee. Also the tax effect in each appeal is less than prescribed limit - As per Board's Circular dated 24.10.2005 as well as limit prescribed under Section 268-A of the Income Tax Act, the Department is not expected to file the appeals - Decided against Revenue.
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2013 (12) TMI 1161
Disallowance of interest under Section 244A - Held that:- If refund is delayed for reasons attributable to the assessee wholly or in part, no interest is payable and the said period has to be excluded, but the said decision has to be taken by the Chief Commissioner or Commissioner - The Assessing Officer cannot pass an order under Section 244A(2) as per the findings recorded by the tribunal - In the case of the assessee, neither the Commissioner nor the Chief Commissioner had passed any order under Section 244A(2) - Once the tribunal came to the conclusion that the Assessing Officer could not have decided the issue, they should not have gone into the factual matrix whether the delay was attributable wholly or in part to the assessee - Partly allowed in favour of the assessee.
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2013 (12) TMI 1160
Product development Expenses - Capital or revenue expenditure - Held that:- Following ALEMBIC CHEMICAL WORKS CO. LTD. V. CIT [1989 (3) TMI 5 - SUPREME Court] - The upgradations were required constantly and perpetually - The Assessee had to keep pace with the rapidly changing requirements of the mobile phone users and with other software providers - The expenditure such as new features, upgrades, patches for removing glitches did not bring into existence a new asset but rectified and improved the product being sold - There has to be recurring expenditure which has to be incurred in the said business to ensure sale of the software,for removal of obstructions, restrictions or disabilities on the sale - These were normal day-to-day expenses for running the business in question and did not create enduring rights or advantage or benefit over a long period time - The determination should be based upon consideration of facts and circumstances and by applying principles of commercial trading and business expediency - Decided against Revenue.
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2013 (12) TMI 1159
Validity of order of CIT(A) - Held that:- A perusal of the order passed by the ITAT reveals that, though, arguments were addressed on the question of legality of order passed by the CIT(A) - The ITAT has not recorded any opinion thereon - The order passed by the ITAT, suffers from an error of jurisdiction and must necessarily be rectified. The CIT(A) and the ITAT have apparently ignored Section 153(1)(a) as well as judgment of the Hon'ble Supreme Court of India in Assistant Commissioner of Income-tax v. J.K.Synthetics Ltd., [2001 (2) TMI 17 - SUPREME Court] - The matter was restored for fresh adjudication.
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2013 (12) TMI 1158
Whether conversion of deposit is income - Held that:- Following CIT v. Shri Bhogawati Sahakari Sakhar Karkhana Ltd. [2005 (8) TMI 66 - BOMBAY High Court] - Conversion of deposits is not income of the trust. Whether interest paid on deposits is allowable - Held that:- Following CIT v. Shri Bhogawati Sahakari Sakhar Karkhana Ltd. [2005 (8) TMI 66 - BOMBAY High Court] - Interest payable on refundable and nonrefundable deposits is also an expenditure of the society and is liable to be deducted from income taking into consideration the Maharashtra Cooperative Societies Act, bylaws and the Government directives - Decided in favour of assessee.
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2013 (12) TMI 1157
Whether benefit of exemption for investment in shares is violation of section 13(1)(d) - Held that:- It is well settled that the depiction in books of accounts is not a determinative test but the factual nature of the transaction which has to be considered for the purpose of taxation - The investment in shares of cooperative banks was a precondition for raising of loans and it was therefore not an investment as normally understood - The shares were subscribed to only for purposes of obtaining the loan and the amounts so obtained were used for furtherance of the objects of the trust - There is no reason to deny the benefit of exemption under Section 11 of the Act for Assessment Year 2008-09 - Decided against Revenue.
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2013 (12) TMI 1156
Whether amount received for commercial transaction be held as loan or dividend u/s 2(22)(e) - Held that:- The Tribunal being final Court of fact accepted the explanation that the amount was received as advance sale consideration for sale of cold storage of the assessee - The agreement could not materialise on which the MOU was executed cancelling the transaction - The payment of the amount in pursuance to the agreement for sale of cold storage would not by itself become loan or partake the character of loan after the agreement was cancelled and MOU signed for returning the amount – The MOU was produced by the assessee before CIT(A) - Decided against Revenue. Interest free loan given to family members - Held that:- The Tribunal recorded the findings that the assessee in his individual account was having sufficient capital - If he had given the amount as interest free loan to his family members, that by itself could not be put to doubt and on which the interest was disallowed under Section 36 (1) (iii) of the Act – Decided against Revenue.
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2013 (12) TMI 1155
Penalty u/s 271(1)(c) – Held that:- The assessee could not produce supporting evidence/vouchers before the AO to substantiate the claim of expenses - The absence of any explanation or evidence/vouchers to support the claim of the assessee is nothing but false claim/bogus claim of the assessee - This amounts to furnishing wrong particulars of claim as assessee has claimed expenses which have not been substantiated by any document could not be established that claim was genuine - Assessee has concealed its income by claiming expenses which could not be found to be genuine – Decided against assessee.
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2013 (12) TMI 1154
Provision for Royalty – Held that:- The Copy right Board decided the rate of royalty payable by appellant to PPL at the average rate of Rs.660/- per needle hour - The appellant was allowable the expenditure for payment of royalty to the PPL @ Rs.660 per needle hour and not @ Rs. 1,500 per hour - the provision reflected at Rs.3,49,86,000/- included the opening balance of Rs.94,60,000/-, which was not required to be considered for the purpose of disallowance since the same was not provision made during the year – Decided against Revenue. Advertisement and marketing cost – Held that:- As per Accounting Principle the provision for expenses are also allowable if the goods/services have been received - There is no material on record to show that in the instant case the goods/services have been received by the assessee during the year under consideration and there is no positive finding of the ld. CIT(A) in this regard - Even at this stage the ld. counsel for the assessee has placed no material on record to show that the goods/services have been received by the assessee during the year – The issue was restored for fresh decision.
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2013 (12) TMI 1153
Assessment u/s 143(3) r.w.s. 147 – Depreciation on windmill @ 80% or not - Held that:- Following K.K.S.K. Leather Processors P. Ltd. v. ITO [2009 (11) TMI 556 - ITAT MADRAS-D] - The claim made in the "return" of income filed within the due date of filing is sufficient for exercising the option as required under the second proviso of rule 5(1A) - Decided against Revenue.
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2013 (12) TMI 1152
Penalty u/s. 271(1)(c) – Disallowances in scrutiny assessment - Held that:- Following CIT v. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - The assessee respondent, in its return of income, had disclosed all details and material particulars - It is a different aspect that Assessing Officer made certain additions in the scrutiny assessment. However later on, CIT (Appeals) had treated it differently by allowing and deleting certain additions - This cannot give rise to the penalty proceedings - For levying penalty u/s.271(1)(c), non bona fide conduct of the assessee should be apparent from the facts and circumstances – Decided against Revenue.
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2013 (12) TMI 1151
Conversion charges and parking charges – Revenue or capital in nature - Held that:- Following Bikaner Gypsums Ltd. vs CIT [1990 (10) TMI 2 - SUPREME Court] - If some expenditure incurred resulted into advantage of enduring benefit, the expenditure may not amount to acquisition of an asset - The assessee had paid amounts for one time conversion charges and for parking charges at the two outlets, the benefits of which might accrue to the assessee for indefinite period of time - These were incurred to enable the profit making structures to work more efficiently leaving the source or the profit making structure untouched - The expenditure were in the nature of levies/taxes paid by an assessee to a government authority for making available the required infrastructure to run the business efficiently and effectively – The expenses are revenue in nature - Decided against Revenue.
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Customs
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2013 (12) TMI 1150
Waiver of pre deposit - Penalty u/s 112 - Held that:- Order of pre deposit modified - Amount of pre deposit reduced - Upon such predeposit, the deposit of the balance amount of penalty shall stand waived and the recovery of the same pending the appellant's appeal before the Tribunal is stayed - Partial stay granted.
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2013 (12) TMI 1149
Confiscation of goods - Provisional release of the seized goods pending adjudication u/Sec.110-A - Held that:- respondents directed to consider within a period of six weeks from the date of receipt of a copy of this order , the representations dated 11-12-2012 and 03-01-2013 of the petitioner for provisional release of the above motor bike u/s.110-A of the Act pending adjudication of the proceedings initiated - Decided in favour of assessee.
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2013 (12) TMI 1148
Refund claim for SAD - Documentry evidence in support of it not produced - Held that:- Agreement Extension from 01.04.2008 to 31.03.2011 was not asked by the department before sanctioning the refund claim. However, the same was produced when asked before the Commissioner (Appeals). We also note that the Rule 5 of the Customs (Appeals) Rules 1982 is with the reference to the evidence to be produced by the appellant. In this case the above said Agreement Extension was not submitted by the appellant but by the respondent - whole matter remanded to the original authority for re-examining the matter with reference to the issues raised in the appeal filed by the Revenue before the Commissioner (Appeals). Needless to say that the appellant will be entitled to produce any documents relevant for the case and the adjudicating authority will pass the order after granting personal hearing - Decided in favour of assessee.
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2013 (12) TMI 1147
Waiver of pre deposit - Benefit of duty exemption - Import of Magnesite Refractory Bricks - Held that:- appellant had imported Magnesite Spinal Bricks is not disputed nor the fact that the said bricks have been used in the factory premises in the kilns. It is also seen that the standard input and output norms has specifically indicated the import of “Magnesite Refractory Bricks” or “Magnesite Spinal Bricks”. At Sl. No. 3 at A1050 of the standard norms it is seen that the standard input and output norms has given only broad heading and the McGraw-Hill dictionary of scientific, technical terms, specifically gives the meaning of Spinal Bricks which is a type of brick composed of magnesium oxide with about 15% of other oxides. It is undisputed in this case that the goods which were imported by the appellant is of magnesium oxide and 15% of other oxide contents contains which is aluminium oxide. We find prima facie that the HSN notes also supports the case of the appellant, i.e. Magnesite Spinal Bricks would cover the Magnesite Refractory Bricks - Prima facie case in favour of assessee - Stay granted.
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2013 (12) TMI 1146
Denial of duty exemption - Notification 21/2002, dated 1-3-2002 - Import of capital goods - Imposition of redemption fine and penalty - Diversion of imported goods to other entities before completion of 5 years from date of import - Violation of condition 40(b) of Notification - Held that:- The paver finisher was used not for construction of road but for the construction of depot and platform for storage of pipes - As per the condition of the Notification, the undertaking was given by the appellant at the time of import that the impugned paver finisher shall be used only and only for construction of roads for a period of 5 years. From the facts ascertained hereinabove, we find that the paver finisher was not used for the intended purpose as undertaken by the appellant. In view of this finding, the department has rightly issued show-cause notice to the appellant for violation of condition of their undertaking and thereby for denying the exemption under Notification 21/2002. As show-cause notice has been rightly issued and in the adjudication order it is also found that the impugned paver finisher was not used for construction of road, therefore they have not fulfilled the condition terms of undertaking/bond at the time of import. As they have violated the terms of condition of their bond/undertaking, therefore they are liable to pay duty as demanded in the impugned order. On limitation, we find that the show-cause notice has been issued for violation of undertaking given at the time of importation for intended use and the fact that the imported paver finisher was not found to be used for intended purpose during investigation which amounts to suppression, therefore, the show-cause notice issued is within limitation - Decided against assessee.
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2013 (12) TMI 1145
Non clearance of goods from port - Import of 20kgs of Oats for home use - Denial of re packing of goods - Held that:- appellants have imported the consignment of Oats in 20 kgs. packs and the same bears the necessary details regarding the supplier’s name, brand, address and the date of expiry as April, 2012, before the consignment has been shipped from Argentina. The appellants are also undertaking to provide any other detalls required to comply with the local laws at the time of re-packing and re-labeling the impugned goods in the Customs bonded area before customs clearance. They are also undertaking to ensure that the Port health authorities are called upon to test the consignment before customs clearance is sought. As such, the prayer made by the appellants is very reasonable and there is no reason why the same should not be allowed. Accordingly, the impugned order is set aside and the customs authorities are directed to allow the appellants to re-pack and relable the impugned goods in a customs bonded premises, subject to mutual convenience. Thereafter, it would be open to the Port health authorities to test and certify the impugned goods. A fresh order may be passed by the original authority after the certification is done by the Port health authorities - Decided in favour of assessee.
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Service Tax
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2013 (12) TMI 1180
Waiver of pre-deposit - Stay of recovery - rent-a-cab service - Held that:- buses owned by the appellants were allowed to be used by APSTRC as stage carriages and, on the terms and conditions of the relevant agreements, these appellants cannot be said to have rendered ‘rent-a-cab service’ to APSRTC. There appears to be no dispute regarding the similarity of the terms of the agreements with those of the agreements considered in the cited stay order. If that be so, the appellants before us should be held to have made out prima facie case against the impugned demands of service tax raised under the head ‘rent-a-cab service’ - Following decision of UPSRTC vs. Commissioner [2009 (4) TMI 477 - Allahabad High Court] - Stay granted.
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2013 (12) TMI 1179
Stay application - Goods Transport Agency Service - Held that:- in terms of Rule 2 (1) (d) (v) of Service Tax Rules, 1994, person liable for paying service tax in relation to taxable service provided by a goods transport agency, any person who pays or liable to pay freight either himself or through his agent for the transportation of the goods, subject to the consignor or consignee of goods as mentioned in clause (a) to (g) is mentioned therein. M/s. Ringo Cargo Care, a proprietorship firm is not covered in clause (a) to (g) of the said Rule. In the present case, the applicant has not mentioned the name of the importers in the consignment note and prima facie, the applicant is liable to pay tax - Prima facie case not in favour of assessee - Stay granted partly.
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2013 (12) TMI 1178
Stay application - Classification of service - Whether the ‘drilling services’ could be classified under ‘mining services’ for the period from 1.6.2007 and/or under ‘site formation services’ for the prior period - Held that:- drilling for the purpose of mining is not encompassed by the definition of ‘site formation service’ but the same can prima facie be considered as an activity integrally connected with ‘mining services’. It is not in dispute that the appellant did not pay service tax under the head ‘mining services’ for the period from 1.6.2007 to 13.3.2009 - appellant was eligible for SSI benefit for the said period and hence their tax liability, if any, under ‘mining services’ would be around Rs.1.2 lakhs only. If that be so, in our view, the appellant should have paid such tax with interest for the period from 1.6.2007 to 13.3.2009 - Prima facie case not in favour of assessee - Stay granted partly.
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2013 (12) TMI 1177
Denial of benefit of Notification No.12/2003-ST - Bar of limitation - Payment of VAT and CST - Held that:- Notification No.12/2003-ST dated 20/06/2003 provides for excluding the value of goods and materials sold by the assessee to the recipient of service for the purpose of computation of service tax liability. This notification applies to all the services including completion and finishing services rendered by the appellant herein. If that be so, benefit of notification cannot be denied to the assessee and has to be allowed, if the assessee has fulfilled the terms and conditions of the notification. The only condition which needs to be satisfied for availing the benefit is that no credit of duty paid on such goods and material sold has been taken under the provisions of Cenvat Credit Rules, 2004. From VAT returns, copies of balance sheets, copies of purchase invoices and sample copies of sale invoices, it is evident that the appellant has discharged VAT/CST liability. In view of this, the matter has to go back to the adjudicating authority to verify the claim of the appellant that they have paid VAT/CST in respect of the goods sold by them during rendering of completion and finishing services and therefore, they are eligible for the benefit of notification No.12/2003-ST - Matter remanded back - Decided in favour of assessee.
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2013 (12) TMI 1176
Demand of service tax - Availment of CENVAT Credit - Club or Association service - Held that:- On a perusal of the show-cause notice, we find there is no indication of the worksheet being annexed to it. On the other hand, the learned Commissioner proceeded on the basis of the worksheet. It is observed that the worksheet had been provided to the appellants and the same is available in the case records. We are not convinced with the argument of the Revenue that the worksheet is available in the case records, which is annexed to the impugned order and, therefore, the demand is justified. In our considered view, it is a fit case, where the appellant deserved to be granted adequate opportunity to place its case before the adjudicating authority after going through the work sheet - Partial demand sustained - Matter remitted back - Decided partly in favour of assessee.
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2013 (12) TMI 1175
Waiver of predeposit of tax - Rent-a-cab service as well as air travel agency service - Reimbursement of expenses - Held that:- there is no dispute that "Rent-a-cab Operator" and "Air Travel Agency" are two divisions of the appellant's company. The only allegation is that they have taken separate registrations in terms of Board's circular dt. 20.3.08 and therefore the argument that they are to be treated as separate legal entities would not be sustained. In view of that, we find that applicant is able to make out a prima facie case for waiver of predeposit of entire amount of tax, interest and penalty during pendency of appeal. Accordingly, predeposit of tax along with interest and penalty shall stand waived and recovery thereof stayed during pendency of the appeal - Stay granted.
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2013 (12) TMI 1174
Waiver of pre deposit - Demand of service tax - Renting of immovable property services - Held that:- receipts was for giving furniture and fixture fixed in the said property on hire to M/s. Satya Prakash Recreation (P) Ltd. The said service does not stand notified to fall under the category of “renting of immovable property services”. Prima facie the service is not liable to service tax - Stay granted.
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2013 (12) TMI 1173
CENVAT Credit - Tax paid on commission agent services - Whether the Service Tax paid on commission agent services is available as Cenvat credit to the appellants by treating the same as input services in terms of Rule 2(1) of Cenvat Credit Rules, 2004 - Held that:- Foreign Commission agent service for sale promotion, are input services and credit on Service Tax paid on the same is admissible. As such, we note that there are catenas of judgment laying down that the Service Tax paid on the commission agent services is available as Modvat credit - recent Circular No. 943/4/2011-CX, dated 29-4-2011 issued by the Board clarifying that even after the deletion of expression “activities related to business” from the definition of input services, the credit of Service Tax paid on the sales promotion activities and on the services of sales of dutiable goods on commission basis would be admissible as credit - even after the activities related to business stand deleted from the definition of inputs credit, as per the Board’s Circular, the Service Tax paid on commission agent services would be available. However, he clarifies that period involved in the present case is prior to the amendment to the definition of input services - Stay granted.
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2013 (12) TMI 1172
Demand of service tax - GTA Service - Availment of CENVAT Credit - Whether during the period from 19-4-2006 onwards, the GTA services received by the appellant and in respect of which they had paid the service tax as service recipient would be treated as their output service - Held that:- It is by virtue of this explanation that prior to 19-4-2006, the GTA services received by a person in respect of which he was liable to pay service tax as service recipient could be treated as his output service and on this basis, he could pay the service tax through Cenvat credit. During period w.e.f. 19-4-2006, in absence of the deeming provisions, the service received by a manufacturer cannot be treated as his output service, as in terms of Rule 2(p) of the Cenvat Credit Rules, ‘output service’ means any taxable service provided by the provider of taxable service, to a customer, client, subscriber, policy-holder or any other person, as the case may be and in case, the GTA service received by an assessee, there is no customer or client and hence, the GTA service received could not be treated as the output service - appellant could not discharge service tax liability in respect of the GTA service received by them through Cenvat credit and the service tax liability was to be discharged through PLA only - Decided against assessee.
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Central Excise
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2013 (12) TMI 1144
Waiver of Pre-deposit of Penalty under Rule 26 - Documents issued for availment of cenvat credit without payment of the inputs – Held that:- The issue needs deeper consideration from the Bench as it is on record that appellant has issued invoices and there was no movement of goods - The first appellate authority has already considered all the arguments and reduced the penalties - penalty under Rule 209A of the Central Excise Rules, 1944, which is pari-materia to Rule 26 of the Central Excise Rules, 2002, cannot be invoked for imposing of penalty on the Company – all these aspects can be considered at the time of final disposal of the appeal – Assessee directed to submit Rupees fifty thousand as pre-deposit – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.
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2013 (12) TMI 1143
Chhakdo Rikshaws received and cleared without any invoice - Waiver of Pre-deposit of Penalty 26 of Central excise Act,2002 – Held that:- The issue involved needs to be appreciated on the evidence on record and also on the factual position as to the role played by the appellant in receipt and disposing of 54 Chhakdo Rikshaws, which were received by him without any duty paying document - the appellant has not made out a case for complete waiver of the amount of penalty - appellant is directed to deposit an amount of Rupees ten thousand as pre-deposit – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.
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2013 (12) TMI 1142
Utilization of Cenvat credit in Basic excise duty - Education Cess and Secondary and Higher Education Cess discharged by debiting in RG 23A Part-II – Waiver of Pre-deposit – Held that:-Following COMMISSIONER OF CENTRAL EXCISE Versus MALWA INDUSTRIES LTD. [2009 (4) TMI 381 - PUNJAB & HARYANA HIGH COURT] – Unconditional stay granted for the amount due - The appellant has made out a case for the waiver of amount - Pre-deposits waived till the disposal – stay granted.
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2013 (12) TMI 1141
Dutiability of the capital goods – Capital goods cleared after their worn out as waste and scrap – Waiver of Pre-deposit - – Held that:- The invoices raised are for the goods as waste and scrap - both the lower authorities have not considered and recorded any finding as regards waste and scrap is generated either by mechanical working on the capital goods or otherwise – following UNION OF INDIA Versus HINDUSTAN ZINC LTD. [2007 (3) TMI 198 - HIGH COURT RAJASTHAN] – the appellant has made out a prima facie case for the waiver of the amount – pre-deposits waived till the disposal – Stay granted.
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2013 (12) TMI 1140
Denial of Cenvat credit on Molasses - Revenue was of the view that the applicant could not have taken CENVAT credit on such molasses contained in De natured spirit – Waiver of pre-deposit – Held that:- Payment of 10% of the price of exempted product is only one such option - This cannot be thrust on any assessee especially when the assessee meticulously acts to ensure that credit is taken only in respect of inputs that are going into the manufacture of dutiable product - the appellant had maintained separate account regarding receipt, inventory and utilization and took credit on inputs used in dutiable products - the quantity of molasses that will go into dutiable product will be known only at the point of time of de-naturing – Relying upon Sakthi Sugars Ltd. Vs Commissioner of Central Excise, Salem [2007 (6) TMI 471 - CESTAT, CHENNAI] - the applicant is prima facie correct in taking the credit immediately on knowing the quantity of molasses used in the manufacture of the dutiable product - waiver of pre-deposit of dues gratned till the disposal – Stay granted.
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2013 (12) TMI 1139
Waiver of pre-deposit - Goods cleared without payment of duty - Discharge 5% of the value of goods - Held that:- appellant has made out a prima facie case for the waiver of pre-deposit of the amounts involved. Application for the waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Following decision of Indian Potash Limited [2012 (12) TMI 347 - CESTAT, NEW DELHI] - Stay granted.
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2013 (12) TMI 1138
Waiver of pre deposit - Denial of CENVAT credit - Availment of CENVAT credit on HR plates - Construction of storage tanks - Held that:- CENVAT credit was admissible to inputs used in the manufacture of storage tanks which were expressly covered by the definition of "capital goods" given under Rule 2(a) of the CENVAT Credit Rules, 2004 - Following decision of Bannari Amman Sugars Ltd. Vs. Commissioner of Central Excise, Mysore [2009 (11) TMI 232 - KARNATAKA HIGH COURT] and Commissioner of C. Ex., Bangalore-II vs. SLR Steels Ltd. [2012 (9) TMI 169 - KARNATAKA HIGH COURT] - Stay granted.
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2013 (12) TMI 1137
Waiver of pre-deposit of duty - Imposition of equivalent penalty under Section 11AC - Availment of CENVAT credit on capital goods installed at the adjacent plot to the factory of the applicant which finally merged with the factory of the applicant - Held that:- capital goods and the storage tank has merged with the factory of the applicant and if the same are merged with the factory of the applicant, prima facie, I am of the view that applicants are entitled for CENVAT credit. Accordingly, applicant has made out a case for 100% waiver of pre-deposit therefore, I waive the requirement of pre-deposit of entire amount of duty, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.
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2013 (12) TMI 1136
Maintainability of appeal - Authorization of Commissioner required - Held that:- Authorisation of the Committee of Commissioners is not dated. But one Commissioner has authorised the appeal to be filed under his signature dated 8-11-2010. The other Commissioner has not yet authorised because the signature is undated. A public document sees the light of the day only when that is authenticated under signature and date. Part of the authorisation is yet to be dated. Such authorisation not being acceptable to law - Decided against Revenue.
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2013 (12) TMI 1135
Availment of CENVAT Credit - Whether the respondent is entitled to avail the Cenvat credit on the basis of certified copy of Bill of Entry - Held that:- all the particulars in the Bill of Entry relate to the respondents. It is also not disputed that either the duty was paid by them on imported goods or the goods were received in the factory and utilised in the manufacture of final product. In the absence of all these allegations, I find no reason to deny the credit of duty availed by the respondents on the certified copy of Bill of Entry - Decided against Revenue.
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2013 (12) TMI 1134
Double benefit - CENVAT Credit on capital goods - Availment of depreciation on the same capital goods - Held that:- prima facie it appears that the demand is not sustainable. No double benefit has been taken in respect of capital goods, which is prohibited under the law. In this case, the credit has been taken in respect of the inputs and there is no charge in the show cause notice that the credit on the inputs is not admissible. Hence, the requirement of pre-deposit is waived during the pendency of the appeal - Decided in favour of assessee.
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2013 (12) TMI 1133
Demand of duty - Goods sent to the SEZ without payment of duty for export purposes - Jurisdiction of Tribunal - Held that:- As per proviso (C) to Section 35B of the Central Excise Act, 1944, this Tribunal has no jurisdiction to deal with such cases. In view of the above, the appeal is not maintainable before this Tribunal. The appeal is dismissed with a liberty to the applicant to take appropriate remedy before an appropriate forum within one month - Decided against assessee.
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2013 (12) TMI 1132
Rectification of mistake - Application for rectification filed beyond period of 6 months - Held that:- Tribunal has no power to condone the delay in filing the application for rectification of mistake. In view of this, as the application was filed after 6 months from the date of Order, we find no merit in the application - Rectification denied.
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CST, VAT & Sales Tax
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2013 (12) TMI 1181
Suppression of actual sales of normal latex – Held that:- The single Judge found that the purchase is seem to have been made from farmers and "WH" which means 'warehouse' - there is an overwriting in stock register with reference to the date, 5.4.2004 - Thus, it is found that the entry with reference to the date is doubtful. Shortage of centrifuged latex – Unaccounted of sales of cenex – Held that:- The single Judge found that there was no material before the first revisional authority to have concluded the issue by stating that the officer has not taken into account the opening stock of 353 barrels and the centrifuged latex in various tanks of 147 barrels - The first revisional authority in fact found fault with the officer in omitting to take note of the stock contained in the said 147 barrels - if there was any such claim on the part of the dealer regarding the stock of 147 barrels the same would have been brought to the notice of the Intelligence Officer at least when they filed their explanation on 28.07.2004 - the contention was an afterthought which should not have been taken note of the by the first revisional authority - Unaccounted of sales of cenex by the petitioner cannot be confirmed and requires reconsideration. Penalty on unaccounted transactions – Transactions detected from the notebook, outward register and inward register – Held that:- The Single Judge confirmed the findings of the second revisional authority after confirming that the findings were justifiable – Decided partly in favour of Petitioner.
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Indian Laws
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2013 (12) TMI 1171
Denial of information - Non maintenance of record - Held that:- appellant is seeking information only about those appeals/complaints in which orders have not been passed within sixty days of the hearing by various Information Commissioners. In my opinion, the number of such cases would be small. Hence, it would not be appropriate for any Registry to take the plea that they are not maintaining this information. As the information sought by the appellant can easily be collected by the Registries concerned, the CPIO is hereby directed to revisit the matter and supply a information, IC-wise, in two weeks time - Decided in favour of appellant.
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