Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 27, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Income from vacant house property - income would not be assessed under Section 23(1)(c) but under Section 23(1)(a). - HC
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Method of accounting - whether sale price in respect of constructed/built up properties should not be accounted for at the time of handing over the possession or conveyancing whichever is earlier? - HC
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Claim of refund - Revision before the Commissioner u/s 264 in favor of assessee, against in intimation u/s 143(1) - the intimation under Section 143(1) is regarded as an 'order' for the purposes of Section 264 - HC
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Validity of reopening of assessment - notice to dead person - even if Section 159 is attracted, in that case also, the notice was required to be issued against and in the name of the heirs of deceased assessee - HC
Service Tax
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Levy of Penalty u/s 78 of the Finance Act, 1994 - The assessee/appellant has the option to deposit the balance service tax together with accumulated interest and penalty of 25% of the entire tax due, within the period indicated in the third proviso to Section 78(1). - HC
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Demand of service tax is to be excluded wherever such fabrication activity amounts to manufacture, leading to a structure classifiable under Section 73.08 of the Central Excise Tariff. - AT
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Service tax is not leviable on the commission earned by the distributor on the basis of the volume of the purchases made by the group of second level of distributors appointed by FSL on being sponsored by the distributor. - AT
Central Excise
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Clandestine removal - when such evil activities are done in utter secrecy and in an organized manner, there would be only very few evidences available; therefore, whenever such a few evidences are available, the inferences have to be made out of those evidences on the yardstick of preponderance of probability and offenders are to be strictly dealt with accordingly. - AT
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Valuation - Scope of show cause notice - Since the show cause notice is vague and does not make any sense on reading the same, the proceedings arisen out of said show cause notice are totally vitiated. - AT
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Valuation - transfer of goods to own unit - cost plus method - unless cost accountant certifies the cost of manufacture in the form CAS4, the provision of said Rule 8 cannot be applied - AT
Case Laws:
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Income Tax
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2016 (12) TMI 1299
Undisclosed income of the assessee - Held that:- Revenue had not brought on record any material indicating that the amount received by the assessee was by way of compensation. On the other hand, the employees of the assessee were cross examined in respect of the entries made in the pay-in-slips and this cross examination had revealed that narrations in the pay-in-slips accompanying the two cheques of ₹ 50 lakhs each were made by them on their own without any directions or instructions from the assessee. The order of the Tribunal cannot be faulted. However, we are in agreement with the view taken by the Tribunal to the effect that the entry made in the pay-in-slips cannot prevail over the entry in the books of account since the books of account would reflect the appropriate record wherein treatment of receipts would be found. In the circumstances, we have no hesitation coming to our conclusion and as a result we find that the Tribunal was justified in holding that the amount of ₹ 1 crore cannot be assessed as undisclosed income. In the result, the question referred to us for our opinion is answered in the affirmative i.e. in favour of the assessee and against the Revenue.
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2016 (12) TMI 1298
Income from house property - Chargeability of rent which cannot be realized resultingly according to Section 23(1)(c) - annual value of any property - Held that:- Section 23(1) has three sub sections which have been set out earlier. Section 23(1)(b) and (c) would apply only to those properties which were actually let out and for which rent was actually received or receivable by the assessee. These provisions deal with the concept of real income and not notional income. Thus, the annual value of the properties like the ones in the case in hand which are more than one, owned by the assessee and which admittedly remained vacant throughout the previous year would not be assessed under Section 23(1)(c) but under Section 23(1)(a). The annual value would, therefore, be determined notionally as done in the case in hand by the Assessing Officer and concurrently upheld by the Commissioner and the Tribunal.The question of law is, therefore, answered in favour of the Revenue.
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2016 (12) TMI 1297
Deemed dividend addition u/s 2(22)(e) - Held that:- In the instant case, the loan advanced is found to be gratuitous inasmuch as, the loan advanced was not in return to an advantage conferred upon the closely held company by the assessee company and thus, none of the decisions cited by the learned counsel referred to hereinabove help the appellant in any manner. In view of the conclusion arrived at by us after due consideration of the facts situation emerging in the present case that money lending cannot be treated to be substantial part of the business of the closely held company, the decision of the Bombay High Court in Parle Plastic Ltd. s case (2010 (9) TMI 726 - BOMBAY HIGH COURT), also does not help the appellant. Accordingly, the question no.1 framed is answered in terms that the ITAT has committed no error in construing the provision of Section 2 (22)(e) of the Act of 1961 while arriving at the conclusion that the loan advanced by M/s Sun Polytex Pvt. Ltd. shall be treated to be deemed dividend liable to be taxed in the hands of the assessee. Income by way of dividends being exempt in the hands of shareholder in view of the provisions of Section 10(34) read with Section 115-O - Held that:- A bare perusal of Section 10(34) read with Section 115-O makes it abundantly clear that by virtue of said provisions, only the amount declared, distributed or paid by the domestic company by way of dividends whether out of current or accumulated profits made chargeable to additional income tax in the hands of the company, stands excluded from the computation of the income of any person and not the deemed dividend in terms of provisiosn of Section 2 (22)(e) of the Act of 1961. Thus, the loan or advance by closely held company to the shareholder, which is treated to be deemed dividend by virtue of provisions of Section 2 (22)(e) of the Act of 1961, continues to remain liable to be taxed in the hands of the recipient.
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2016 (12) TMI 1296
Reopening of assessment - Held that:- Whether or not the reasons recorded by the assessing officer for issuing notices under Section 148 are valid and good reasons is entirely a factual issue. The assessee would have the right to urge before the assessing officer that the reasons are not justifiable and the assessing officer would have to deal with and dispose of the assessee’s objection by a reasoned order. In the present case, the Writ Court cannot go into the disputed fact of whether or not the petitioner company has window-dressed its accounts by showing contributions on account of share subscription money by paper companies and by showing payments for alleged services rendered by shell companies. Such factual matters are within the exclusive domain of the assessing officer. We are inclined to give an opportunity to the petitioner company to file its objection to the reasons recorded by the assessing officer for issuing the notices under Sec. 148 of the IT Act so that the assessing officer may conduct the assessment proceeding afresh from that stage. Solely on that ground and without going into the merits of the assessment orders dated 31 March, 2015, the said assessment orders are set aside. The petitioners are permitted to file objection to the Department’s communication dated 15 January, 2015 within three weeks from date. In the event they do so, the assessing officer shall consider and dispose of such objection by a reasoned order, before proceeding, if at all, with the reassessment in accordance with law and the principles of natural justice. If the petitioners do not file their objection within the time indicated above, the assessment orders dated 31 March, 2015 shall stand revived.
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2016 (12) TMI 1295
Method of accounting - whether sale price in respect of constructed/built up properties should not be accounted for at the time of handing over the possession or conveyancing whichever is earlier? - Held that:- The change in the accounting method in 1992-93 ipso facto could not have resulted in loss of revenue as is urged by the tax authorities in the present case. The distortions, which the revenue urges relate to the treatment of development charges as well as the treatment of expenditures such as brokerage, commission and interest payments. The assessee’s explanation here is that the 30% of the sums realized by it were under compulsion of law to be treated as development expenses and kept in a separate escrow account under the control of the HUDA. The revenue has not disputed this position. In that sense, the assessee was justified by statute to appropriate the sums towards development expenses. So far as the treatment of revenue with respect to brokerage and interest payments is concerned, the assessee again has an explanation, which is a rational one: i.e., that only such of the expenses attributable to the agreement with the purchasers was debited as expenditure. So far as the question of applicability to section 2 (47) or Section 53(A) of the Transfer of Property Act is concerned, legally speaking, part performance is undoubtedly an interest or right known to law. However, part performance, pre- supposes handing over a possession, at the time the agreement is entered into. Having regard to the assessee’s uniform pattern of revenue recognition that only upon execution of the conveyance/sale- deed, would the amounts lying with it be treated as profit and brought to tax, the possibility that in law certain flat or plot buyers could be handed over possession earlier per se would not result in distortion of the kind stated by the revenue. There is no material or evidence in this regard nor was cited by the revenue. - Decided in favour of the assessee. Re-working the cost of land - dividing the cost of the acquired till the end of the year by saleable area including lands earmarked for schools, hospitals, clubs and other community building, in each phase - Held that:- The factual findings are against the revenue, which had clearly accepted the legal position interpreted by the ITAT as correct - evidenced by not filing an appeal on this question. Therefore, the revenue cannot be permitted to urge this as a grievance. In any case, this kind of treatment was permitted during all other years and there is no compelling rationale for the court to examine it – especially because the facts found point to a contrary picture. The question of law is therefore, answered against the revenue/appellant.
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2016 (12) TMI 1294
Reopening of assessment - Held that:- Notice has been served within six years from the end of the relevant assessment year and the tax effect is in crores of rupees and therefore, the Assessing Officer was justified in initiating proceedings and in rejecting the objections raised by the petitioner. The net result is that this Court is of the considered opinion that notice has been served within the time frame work to the assessee, notice has rightly been served as the Assessing Officer was having reasons to believe and there was a failure on the part of the assessee to disclose the fully and truly material and facts at the time of proceedings initiated under Section 143(3) of the Act. Resultantly, admission is declined. However, it is made clear that anything observed by this Court in the present order will not come in way of the assessee in respect of proceedings which are going on before the Income Tax Department as well as before the other authorities.
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2016 (12) TMI 1293
Claim for deduction under Section 80HHB - contribution to the Foreign Project Reserve Account - Held that:- The non-satisfaction of the conditions necessary to be fulfilled to avail of the benefit of Section 80HHB of the Act would disentitle a party from claiming its benefit. Accepting the submissions on behalf of the applicant would mean ignoring the conditions specified in subsection (3) of Section 80HHB of the Act, which the Court cannot do. The further reliance on the part of the applicant on Section 80HHC of the Act to bolster its case, is not of any assistance. This is so, as the conditions required to be satisfied to avail of the benefit of Section 80HHB of the Act is different from that to be satisfied for the purposes of Section 80HHC of the Act. Therefore, the manner in which the Courts construe Section 80HHC of the Act would be of no assistance to construe Section 80HHB of the Act as the wordings of the conditions to be satisfied in both the sections are entirely different. In fact, there is no obligation under Section 80HHC of the Act to create a separate fund as in the case of Section 80HHB of the Act. Therefore the reliance upon the decision of this Court in Karimjee Pvt. Ltd. (2000 (2) TMI 60 - BOMBAY High Court) is not of any assistance to the applicant as it was rendered in the context of different provision of law, differently worded. Decided in favour of the respondent Revenue and against the applicant assessee Doubly taxed income for the purpose of computing the DIT relief under Section 91 - amount deducted under 80HHB and weighted deduction allowed under Section 35B - Held that:- It is only when the Income has paid tax abroad and also bears the burden of discharging tax thereon under the Indian Act that it would become such doubly taxed income. The amounts claimed as deduction under Section 80HHB and Section 35B of the Act admittedly do not bear any tax in India, therefore, no relief can be granted under Section 91 of the Act to the deduction claimed of ₹ 47.30 lakhs under Section 80HHB and ₹ 5.59 lakhs claimed under Section 35B of the Act. - Decided against the applicant assessee and in favour of the respondent Revenue. Tax paid in Saudi Arabia on which no DIT relief could be claimed was not allowable as deduction in computing the income under the provisions of the Income-Tax Act - Held that:- It is not disputed before us that some part of the income on which the tax has been paid abroad is on the income accrued or arisen in India. Therefore, to the extent, the tax is paid abroad on income which has accrued and/or arisen in India, the benefit of Section 91 of the Act is not available. In such a case, an Assessee such as the applicant assessee is entitled to a deduction under Section 40(a)(ii) of the Act. This is so as it is a tax which has been paid abroad for the purpose of arriving global income on which the tax payable in India. Therefore, to the extent the payment of tax in Saudi Arabia on income which has arisen / accrued in India has to be considered in the nature of expenditure incurred or arisen to earn income and not hit by the provisions of Section 40(a)(ii) of the Act. - Decided against the Revenue and in favour of the applicant assessee.
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2016 (12) TMI 1292
Penalty u/s 271(1)(c) - disallowance of deduction claimed for exploration expenditure incurred in the business of prospecting u/s.42(1) - Held that:- Difference between the assessee and the Revenue is with regard to the scope of the expenditure envisaged in section 42(1) of the Act. The relevant discussion in the assessment order or even in the penalty order passed by Assessing Officer, does not reflect that the claim of the assessee was fanciful or was patently erroneous so as to suggest any concealment of income or furnishing in accurate particulars of income within the meaning of section 271(1)(c) of the Act. The mere claim made by the assessee which is found to be unsustainable by the Assessing Officer does not ipso-facto lead to a penalty under section 271(1)(c) of the Act as held by the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT ) . In our considered opinion in the present case the difference between the assessed and the reported income on the aforesaid aspect is based on varying perception of the scope of section 42(1) of the Act and it is not a case reflecting any concealment or furnishing of inaccurate particulars by the assessee within the meaning of section 271(1)(c) of the Act. - Decided in favour of assessee.
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2016 (12) TMI 1291
Income from "distribution activities" - Income taxability in India - assessable profits arising from Indian operation to be attributable for the functions performed by the "independent agent PE" in India - Held that:- If admittedly Taj India is being remunerated at arm‟s length, then, no further income/profit can be said to be attributable to the assessee in India from PE. It is an undisputed fact that the TPO has accepted the transaction between the assessee and Taj India at an arm‟s length price. Hence, we also hold that if the arm‟s length price of the transaction has been accepted, between the assessee and Taj India, then nothing further should be attributable to the assessee which is to be taxed in India. Thus, on this reasoning we allow the assessee‟s ground No.1. We are making it clear that, so far as the issue of PE qua the advertisement revenue is concerned, same is kept open. See DIT Vs Morgan Stanley & Co. reported in [2007 (7) TMI 201 - SUPREME Court ] Allowance u/s 40 (a) (i) - Held that:- We hold that no disallowance u/s 40 (a) (i) can be made on account of “programming cost” paid to various non-residents and also payments made to PanAmSat and other non-residents.
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2016 (12) TMI 1290
Penalty under section 271(1)( c ) - addition on basis of loose paper found in search - Held that:- Addition made by the AO on the basis of loose papers was reduced to 10% of the said addition and thus the addition which survived at FAA level was ₹ 21,47,795/-. We further find that the addition was made by the AO on the basis of impounded documents which contains entries which the assessee could not explain and added the entire amount as appearing in the said loose papers which according to the assessee were working and estimates. The assessee used to claim 90 to 95% expenditure. We are of the opinion that the penalty in view of Explanation (1) to section 271(1) of the Act can only be imposed where the assessee failed to offer the explanation or offer an explanation which is found by the AO to be false or the assessee offered explanation which is not able to substantiate and not otherwise. In the present case, both these conditions are not existence and we therefore, are not in agreement with the conclusion drawn by the tax authorities. Accordingly, we delete the penalty. - Decided in favour of assessee
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2016 (12) TMI 1289
Deemed dividend u/s 2(22)(e) - Held that:- The provisions of Section 2(22)(e) impose a deeming fiction and the conditions imposed therein call for strict and concurrent satisfaction being (i) payment by closely held company, (ii) of the nature of an advance or loan, (iii) to a share holder or beneficial owners of shares, (iv) with more than 10% voting power, (v) for his individual benefit. In the present case, the credit arises by virtue of a contractual obligation and a business transaction and has been settled the very next year. There is no individual benefit derived by the Assessee. Moreover, the credit does not satisfy the definition of advance or loan . The fiction thus fails on several counts. In the present case, there are no withdrawals and as the findings of fact by the lower authorities reveal, the frequency of advances by the Assessee to the company was more than in the reverse. The Calcutta High Court, in the case of M.D.Jindal [1986 (4) TMI 17 - CALCUTTA High Court ], dealt with a transaction that was found to be colourable. The concurrent finding of fact in that case was to the effect that the transaction was a device designed to circumvent the provisions of Section 2(22)(e) of the Act. The veil was thus lifted and the true facts brought to light. In the present case, there is no such allegation and on the contrary, the concurrent finding is to the effect that no benefit has accrued to the assessee, the credit is the result of a business transaction and is neither in the nature of a loan or a deposit. The decisions relied upon by the revenue do not advance its case, being distinguishable on facts. - Decided in favour of the Assessee
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2016 (12) TMI 1288
Revision before the Commissioner u/s 264 against in intimation u/s 143(1) - Refund - Exemption of income u/s 10(8) claimed - whether there was no assignment of duties as such in terms of section 10(8) and that under the Agreement between the United States of America and the Indian government there was no specific exemption of salary from tax, therefore, as the prerequisites mentioned in section 10 (8) are not satisfied, the petitioner was held to be disentitled to the claim raised? - Held that:- The return was processed under section 143(1) of the Act 1961, thereafter the assessee was advised that the income which had been taxed was in fact exempt under Section 10(8) of the Act, therefore, she filed a revision petition under Section 264 which has been dismissed, although for different reasons, but now before the writ court the same argument is being raised on behalf of the Department, as had been raised before the Jammu & Kashmir High Court. In view of the above discussion the contention of Shri Mishra, as noted hereinabove, have no legal basis and are accordingly rejected. In the Delhi High Court judgement in Vijay Gupta's case (2016 (3) TMI 977 - DELHI HIGH COURT ) this plea was specifically raised, but repelled by observing that the use of the expression 'any order' under section 264 would imply that the section does not limit the power to correct the errors committed by the subordinate authorities, but could even be exercised where the errors are committed by assessees. It would even cover the situations where the assessee, because of an error, has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264. The Delhi High Court held that the intimation under Section 143(1) is regarded as an 'order' for the purposes of Section 264 of the Act. In view of the above, the remuneration paid by the AVSC to the assessee- petitioner was clearly exempt under section 10(8) of the Act 1961 and as the exemption had not been claimed in the income tax return for the assessment year 1998-99, 1999-00 and 2000-01 erroneously and in ignorance of the legal provision, the same is liable to be refunded. The plea raised by Shri Mishra based on Section 297 etc. is nothing but a technicality, which cannot be allowed to come in the way of refund of an amount which otherwise was not taxable under the Act 1961, in view of Article 265 of the Constitution of India, and the reasons mentioned hereinabove as also section 240 of the Act 1961. In this context it is also relevant to mention that the revisional authority has not dismissed the revision petition on the ground that it is not maintainable, therefore, the objections raised in this regard by Sri Mishra are not tenable for this reason also. In fact the revisional authority has consciously condoned the delay in filing the revision and has decided the same on merits, al beit, on a misreading and misconstruction of the provisions of law as also the documents on record. It is not out of place to mention that in similar circumstances the Commissioner (Appeals) has allowed a similar claim for refund for duties assigned to one Sri B P Singh in connection with the same agreement and the same employer i.e. AVSC. A copy of the judgement passed in the appeal is annexed as Annexure-8 to the writ petition, therefore, for this reason also there was no occasion for the revisional authority to take a different view in the matter. The order of the Commissioner passed under section 264 is accordingly quashed. As the petitioner has been litigating since the year 2003 i.e. for past 13 years, there is no justification for remanding the matter back to the revisional authority, as it would only perpetuate her agony, especially as this court has already recorded the reasons hereinabove entitling her to the relief claimed, therefore, the assessing authority or whosoever is competent in this regard is directed to refund the amount of tax deducted from source by the employer from the petitioner's remuneration for the assessment years 1998-99, 1999-00 and 2000-01 with interest at the rate of 6% per annum after modifying the intimation under section 143(1), if necessary.
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2016 (12) TMI 1287
Validity of reopening of assessment - Held that:- Explanation 3 was introduced by Finance (No. 2) Act, 2009 with retrospective effect from 01.04.1989. Explanation 3 only provides that the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and which comes to his notice subsequently in the course of the proceedings, notwithstanding that the reasons had not been included in the reasons recorded under Section 148(2). Even if the reasons recorded do not refer to a particular issue, the Assessing Officer would be entitled to assess the income or reassess the computation of the income with regard thereto if the same comes to his notice during the course of the proceedings for reassessment. That, however, posits a valid notice in the first place for it is a valid notice under Section 148 that gives the Assessing Officer the jurisdiction to adopt proceedings under Sections 147 and 148. In these circumstances, it is held that the notice under Section 148 was illegal and issued without jurisdiction. The reassessment proceedings, therefore, are invalid. - Decided in favour of assessee
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2016 (12) TMI 1286
Stay of demand - Held that:- It was not disputed during the course of the arguments at bar that such a demand can be adjusted against the pending refund for the previous year, if any. The dispute is really about the extent of such adjustment. While it is claimed by the respondents that the entire amount of the refund shall be adjusted as against the impugned demand as a condition for stay, on behalf of the petitioner, it is contended that 15% of the impugned demand may be adjusted, out of the total amount due, which is in excess of ₹ 12 crores. Presently, we are only concerned with the issue of grant of stay of the impugned demand. Considering the overall circumstances and para 4(A) of the O.M., we find that the impugned order can be stayed, subject to an amount of ₹ 2,53,61,907/- (15% of the total demand of ₹ 16,90,79,380/-) being adjusted out of the refund, which is due for the Assessment Years 2006-07 and 2007- 08. Thus, the petition is partly allowed. The impugned communication/order, rejecting the application for stay, is set aside. There shall be interim stay of the impugned demand, pending disposal of the appeal before the CIT (A), on condition of an amount of ₹ 2,53,61,907/-, from out of the refund for the Assessment Years 2006-07 and 2007-08, being retained towards 15% of the amount as stipulated in O.M. Dated 29.02.2016.
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2016 (12) TMI 1285
Reopening of assessment - genuineness of the transactions with respect to the share capital /share holders /share investment doubted - Held that:- As in response to the notice under Section 142(1) of the Income Tax Act in scrutiny assessment under Section 143(3) of the Income Tax Act the petitioner – assessee furnished necessary particulars, more particularly, with respect to the details of the share capital and share application money received alongwith the name of the members of share holders with their confirmation alongwith copy of the income tax return and copy of the bank account and their PAN Number and only thereafter the Assessing Officer framed the issue under Section 143(3) of the Income Tax Act without making any addition. Under the circumstances, it cannot be said that there was non disclosure on the part of the petitioner – assessee in not disclosing true and correct facts necessary for the purpose of assessment. All the necessary facts /material, which were required, which were called for, were given by the petitioner – assessee. Under the circumstances, the condition precedent to exercise the jurisdiction under Section 147 of the Income Tax Act to reopen the assessment for the Assessment Year 2010-11 beyond four years are not satisfied. - Decided in favour of assessee.
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2016 (12) TMI 1284
Deduction claimed against the gain in repayment of foreign loans due to fluctuations in Foreign Exchange Rate - Held that:- The decision in Woodward (2009 (4) TMI 4 - SUPREME COURT ) was correctly applied. Section 43A of the Income Tax Act, 1961 which applies in such circumstances, inter alia requires the treatment of foreign exchange fluctuation to follow the purpose of the borrowing; yet it also highlights that, “the amount by which the liability aforesaid is so increased or reduced during the previous year shall be added to, or, as the case may be, deducted from, the actual cost of the asset.” This Court notices that there is no finding by the AO that the cost of the asset had been reduced or increased, as the case may be, on account of foreign exchange fluctuation. In the circumstances, the findings rendered are not only factual but, in our opinion, in conformity with the previous rule in Woodward (supra). The question of law sought to be urged by the revenue is answered against it. Allowance of advertisement and promotion expenses - Held that:- Under the Trade Mark Act, especially Section 48, as long as the arrangement existed, the assessee, who was a licensee of the products, was entitled to claim them as business expenditure though in the ultimate analysis they might have enhanced the brand of the overseas owner. No doubt, if the arrangements were terminated, the brand presence of the overseas owner of the articles/IPR would have subsisted. But that would nevertheless subsist in any event on the theory of trans-national reputation of the IPR owner. In the circumstances, disallowing a certain proportion on an entirely artificial and notional basis from the expense otherwise deductible, in our opinion, was not justified. The question of law is answered against the revenue.
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2016 (12) TMI 1283
Validity of reopening of assessment - Held that:- Re-opening the assessment is permissible only when it (i) does not amount to “change of opinion”; (ii) is based on tangible material/evidence but is not opposed to the existing record and (iii) points to suppression of material facts by the assessee in the original return. See Commissioner of Income Tax v. Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA) In the present case there is none of these elements ex facie exists to justify the impugned notice. It is therefore quashed as well as all proceedings emanating from the impugned notice. - Decided in favour of assessee
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2016 (12) TMI 1282
Validity of reopening of assessment - notice to dead person - Held that:- In the present case, admittedly, the reassessment proceedings have been initiated against the dead person and that too after a long delay, therefore, even if Section 159 of the Act is attracted, in that case also, the notice was required to be issued against and in the name of the heirs of deceased assessee. Under the circumstances, in the facts and circumstances of the case, Section 159 of the Act shall not be of any assistance to the Revenue. - Decided in favour of assessee
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2016 (12) TMI 1281
Validity of reopening of assessment - assessee entitlement to exemption under Section 10(38)- Held that:- From the assessment order passed by the Assessing Officer, which was passed after scrutiny assessment and which was passed after calling for the relevant materials from the petitioner – assessee, the Assessing Officer considering the purchase of shares of Unitech International Ltd. purchased in the year 2007 granted the exemption accordingly, and therefore, the subsequent reopening would tantamount to change of opinion and as held by the Hon’ble Supreme Court and this Court in catena of decisions mere on change of opinion the reopening of the assessment is not permissible. At this stage, it is required to be noted that as such there is no tangible material available with the Assessing Officer in support of the claim to treat the purchase of the shares in the year 2010-11. On the contrary it is evident from the record that the petitioner – assessee purchased the shares of Unitech International Ltd. in physical form in the year 2007 and the same were reflected /disclosed in his books of accounts produced with return of income in the earlier years, more particularly, in the preceding year of Assessment Year 2011-12. The aforesaid is evident from the material produced on the query raised by the Assessing Officer in the scrutiny proceedings. Under the circumstances also the impugned notice to reopen the assessment cannot be sustained. - Decided in favour of assessee Non deduction of TDS - Held that:- It is an admitted position that the petitioner – assessee did not claim any interest under Section 40(a)(ia) of the Income Tax Act, and therefore, on the aforesaid ground the Assessing Officer is not justified in reopening the assessment.- Decided in favour of assessee
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2016 (12) TMI 1280
Revision u/s 263 - computing the petitioner’s capital gain - stamp duty valuation - Held that:- No illegality in the order of the Commissioner. Commissioner substantially accepted the grievances of the petitioner. The petitioner’s case that the income did not arise during the Assessment Year 2006–2007 but 2005-06 was accepted. As a natural corollary, the income as contended by the petitioner himself had to be accounted in the year 2005–2006. The petitioner had also contended that there could be no nil cost of acquisition, a contention which the Commissioner accepted. It is only on the background of such facts, the Commissioner also provided that the Assessing Officer would obtain a report from the DVO and adopt the valuation in such report for the purpose of computing the petitioner’s capital gain. What is prejudicial to the assessee must be examined in the background of the facts of the case. Therefore when the Commissioner accepted the assessee’s contention that the income did not pertain to the Assessment Year 2006-2007 but pertained to Assessment Year 2005-2006, he merely accepted the petitioner’s ground. His direction, therefore, not to tax the income for the Assessment Year 2006-2007 but could be tax only for the year 2005-2006, therefore, must be seen in light of the petitioner’s own contention. The direction to adopt a correct cost of acquisition of the property was also in favour of the petitioner by accepting his contention. The further direction for obtaining DVO’s report, in any case, was a passing remark, and as noted, flowed from the provisions contained in Section 50C of the Act. We, therefore, propose no interference in such revisional order. Coming to the validity of the valuation by the DVO, the same obviously cannot be examined in a writ petition jettisoning the appeal provisions contained in the Act. Before deciding to relegate the petitioner to such appellate remedy, we had a cursory glance at such report. Contrary to what the counsel for the petitioner contended before us, the factors of the property being under litigation, there being encumbrances and tenancy was not lost sight of by the DVO. The report elaborately refers to these factors before coming to the final assessment of the valuation. Whether such assessment is correct or not, cannot be a subject matter of a writ petition. We would leave it open to the assessee to avail the appellate remedy. We would, therefore, relegate the petitioner to avail the appellate remedy in which the validity of the report of the DVO would also be the subject matter.
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Customs
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2016 (12) TMI 1270
Denial of benefit of N/N. 17/2001-Cus. dated 01.03.2001 - import of the bulk drug i.e. PSS - denial on the ground that the imported goods was not used by the appellant in their own factory, there is a violation of the condition of said notification - the goods were used on behalf of the appellant in their loan licensee (job work factory) on behalf of the appellant only - whether denial justified? - Held that: - In the case of G.R. International [2006 (11) TMI 450 - CESTAT, CHENNAI], the Tribunal held that following common law principal that what is done by duly constituted agent will be treated as having done by the principal and thus the condition as to manufacturer set out in Customs (import of goods at concessional rate of duty for manufacture of excisable goods) Rules, 1996 will include the premises of loan licensee. Even though the factory is of the loan licensee but use is on behalf the appellant therefore there is no violation of condition of the Customs Rules, 1996 - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2016 (12) TMI 1252
Scheme of Amalgamation - Held that:- Having considered the Scheme of Amalgamation, together with relevant documents on record, the Court finds it appropriate to grant sanction to the proposed Scheme of Amalgamation. Thus the Scheme of Amalgamation is sanctioned. It is, however, directed that the petitioner Transferor Companies shall preserve their books of accounts, papers and records and shall not dispose of the records without the prior permission of the Central Government under Section 396 A of the Companies Act, 1956. It is further observed that the sanction of this Scheme shall not absolve the Transferor Companies from statutory liability, if any.
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2016 (12) TMI 1251
Scheme of Amalgamation - Held that:- This Court is of the view that the observations made by the Regional Director, Ministry of Corporate Affairs, no longer survive. After perusal of the material on record, it appears that the present Scheme of Amalgamation is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned. It is hereby sanctioned.
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Insolvency & Bankruptcy
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2016 (12) TMI 1253
NCLT territorial jurisdiction over the Winding up petition - what amounts to a notice under Rule 26 of the Companies (Court) Rules, 1959 for the purposes of transfer of pending winding up petitions under Clause (e) of Section 433 of the Companies Act, 1956 to NCLT within the meaning of the relevant transfer provisions? - Held that:- Every winding up petition under clause (e) of Section 433 which is pending before the High Court and which is not served by the petitioner on the respondent company shall stand transferred to NCLT under Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016. If such pending petition is served by the petitioner on the respondent, the petition will continue to be dealt with by this court and the applicable provisions will be the provisions of 1956 Act. As noticed above, these petitions, which have been served by the Petitioners on the Respondent in pursuance of the acceptance order, are to be treated as served as required under Rule 26 of the Companies (Court) Rules 1959. Accordingly, these petitions shall not be transferred to NCLT and shall continue to be dealt with by this court in accordance with the provisions of 1956 Act.
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PMLA
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2016 (12) TMI 1249
Money laundering - order of provisional attachment - Held that:- Section 5 has employed the expression "reason" and not "reasons", which means that even if there is one cause which is sufficient for the Deputy Director to believe that a particular property is proceeds of a crime, action u/s 5(1) can be initiated. This Court cannot step into the shoes of the Deputy Director and appraise the material that formed the basis for initiating action u/s 5, since this Court is not sitting in appeal over the order. In this case, before taking action u/s 5, the Deputy Director has conducted a thorough enquiry by issuing summons to Sridhar, his wife Kumari, his younger brother Senthil, his daughter Dhanalakshmi and Ramesh Pothi. She has obtained the income tax particulars of Sridhar, his wife Kumari, his younger brother Senthil, his daughter Dhanalakshmi and Ramesh Pothi, and also the land particulars. She has also recorded the statement of the POTHYS. Only thereafter, she has initiated the proceedings u/s 5 and therefore, this Court cannot say that there are no sufficient materials for her to proceed u/s 5. Here, after the Deputy Director has initiated proceedings u/s 5 and attached the property for 180 days, she has lodged a complaint with the Adjudicating Authority, based on which, the Adjudicating Authority has stated that he has reason to believe that the property in question is a property derived or obtained as a result of criminal activities. Along with the show cause notice, a copy of the complaint and the documents appended thereto have also been furnished to the POTHYS. Now, it is for the POTHYS to appear before the Adjudicating Authority and place their defence.
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Service Tax
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2016 (12) TMI 1279
Suppression of facts - Penalty u/s 78 of the Finance Act, 1994 - failure to discharge liability of tax - intention to evade duty present or not - extended period of limitation - Held that: - in any event there is no material pointing to deliberate inaction - where the appellant claims not to have been aware of its liability before its registration, in 2009. However, at the same time, having regard to the phraseology of Sections 76 and 77 of the Finance Act, this court is unable to disturb the findings of the authorities below on this aspect. Although the non compliance with Section 78 of the Act does not per se invalidate the penalty, at the same time, given that the option was not granted, and also that the appellant had deposited a substantial amount at the stage of adjudication and did not contend that it was not liable, we are of the opinion that limited relief in terms of that provision is justified in the peculiar circumstances of the case - The assessee/appellant has the option to deposit the balance service tax together with accumulated interest and penalty of 25% of the entire tax due, within the period indicated in the third proviso to Section 78(1). Appeal allowed - decided partly in favor of appellant-assessee.
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2016 (12) TMI 1278
Challenge to the show cause notice - period from April 2012 to March 2015 - the petitioner has already submitted their reply to the show-cause notice, vide reply dated 08.12.2015 and in the reply, the petitioner has raised various grounds, including the ground that the issue is pending before the CESTAT. The petitioner has sought for two reliefs from the first respondent and the second relief is an alternative relief to the first relief. The first relief is to drop the proceedings, by accepting the reply. The second relief is to defer the proceedings till the conclusion of the matter before the CESTAT. To consider the second issue, it would be necessary for the adjudicating authority to examine as to whether the issues which are pending before the CESTAT are identical to that of the issues, which are raised in the impugned show cause notice. Held that: - Court cannot interdict the impugned show cause notice and the petitioner should participate in the adjudication process. However, this Court is inclined to issue appropriate directions, so that the plea for deferring the proceedings is considered as first among the several issues by the first respondent. This should not be understood that the issue is to be considered as a primary issue, but it shall be considered as first among the several issues raised by the petitioner. - Matter to be heard on merit.
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2016 (12) TMI 1277
Cement - C&F services - period October, 2002 to March, 2007 - imposition of penalty - Held that: - the agreement clearly indicated that the cement has been sold to the appellant. From the nature of transaction, it is evident that the activity cannot be classified under the C&F agent service. Consequently, demand of Service Tax is not justified for the period April, 2002 to September , 2006, during which the appellant acted as sales promoter . The matter needs to be remanded back to the original adjudicating authority to requantify the demand of Service Tax under the category of C & F agent services with effect from 1.10.2006, from which date, it is an admitted fact that the appellant has provided the C & F agency services - The original adjudicating authority will also take into account the Service Tax already paid by them and demand the differential Service Tax, if any, not paid by the appellant - the demand for Service Tax for the period upto 30.9.2006 stands set aside. Appeal allowed by way of remand.
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2016 (12) TMI 1276
Refund claim - unjust enrichment - time bar - Held that: - The refund claim finally stands settled only with the order of the apex court. Hence the date of the judgment of the Hon. Supreme Court is to be considered for determining the relevant date in this case i.e. 4.7.2012. The refund claim stands filed on 21.8.2012, which is within a period of 1 year as permitted under Section 11(B) - refund claim filed in time. Unjust enrichment - Held that: - the appellant has made considerable efforts to refund the Service Tax benefits to the various subscribers. For current subscribers, it has been passed on as credit in future bills. However, it is also on record that many of the cheques issued to the subscribers who have closed the corrections, have not been encashed. Such funds would continue to lie in the books of accounts of the appellants. In such cases, it cannot be held that the test of unjust enrichment has been satisfied - amount need to be credited to consumer welfare fund, where found reasonable. Matter remanded back to undertake verification of the correct amount of service tax already passed on by the appellant to the ultimate subscribers which may be refunded in cash - Where such evidence has not been produced, the original authority will credit such amounts to the Consumers Welfare Fund - appeal allowed by way of remand.
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2016 (12) TMI 1275
Business auxiliary services - amount of commission/discount received from BSNL Telecom - franchise agreement - respondent is selling the BSNL services to BSNL customers and receiving certain commissions or discounts on the sale of services. On the amount received by the respondent, BSNL has already discharged service tax - whether respondent liable to pay service ttax under BAS? - Held that: - the issue is no more res integra, similar issue decided in the case of M/s. Daya Shankar Kailash Chand Versus CCE& ST, Lucknow [2013 (6) TMI 340 - CESTAT NEW DELHI], where it was held that activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for - respondent is not liable to pay service tax under the category of BAS - appeal dismissed - decided against Revenue-appellant.
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2016 (12) TMI 1274
Classification of services - work orders executed by the appellants - whether the service would fall under the head erection, commissioning or installation service so as to attract service tax or would constitute manufacture so as to attract excise duty? - Held that: - the definition of the service of erection, commissioning or installation has undergone repeated changes during the disputed period. Before finalizing the classification of the activity carried out and crystallizing the demand of service tax, we are of the view that the activities covered in each work/job order needs to be examined with reference to the entry as it stood at the relevant time. The activity of erection was not part of the statute for the period 01/7/2003 to 09/9/2004. The scope of the entry during the period 10/9/2004 to 15/6/2005 was also limited Reliance placed in the case of M/s Neo Structo Construction Ltd. Versus CCE & C Surat I and vice versa [2010 (3) TMI 252 - CESTAT, AHMEDABAD], where the Tribunal has held that wherever fabrication of structures amounts to manufacture under Section 2 (f) of the Central Excise Act, in such cases no service tax can be demanded under the category of erection of plant, machinery or equipment as no civil work was undertaken - We find that this decision of the Tribunal is relevant to the present case. Demand of service tax is to be excluded wherever such fabrication activity amounts to manufacture, leading to a structure classifiable under Section 73.08 of the Central Excise Tariff. Appeal allowed by way of remand.
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2016 (12) TMI 1273
Taxability - commission received - business auxiliary services - Held that: - reliance placed on the decision of the case of Surendra Singh Rathore [2013 (8) TMI 149 - CESTAT NEW DELHI], where the demand of service tax under Business Auxiliary Service stands confirmed and it is held that service tax will be chargeable on the commission received by the distributor (such as the appellant ) on the products purchased by his sales group. However, it has been held hat the service tax is not leviable on the commission earned by the distributor on the basis of the volume of the purchases made by the group of second level of distributors appointed by FSL on being sponsored by the distributor. The demand also has been restricted to the normal time limit Matter remanded to the Original Adjudicating Authority for restricting the demand strictly in terms of the observations and directions in this order - penalty set aside - appeal disposed off - matter on remand.
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2016 (12) TMI 1272
Pre-deposit - interpretation of statute - Section 35F of the Central Excise Act,1944 - Held that: - In clause (iii) it is unambiguously prescribed that any person aggrieved by a decision or order referred to Clause (b) of sub- Section (1) of Sec. 35B of Central Excise Act, unless deposits 10% of the duty/penalty or duty and penalty, as the case may be, the appeal shall not be entertained. I do not find any reason to read the said provision in any other manner, so as to come to the conclusion that the Appellant is required to deposit 2.5% and not 10% as prescribed under the said provision, in view of the settled principle of statutory interpretation. Appeal dismissed - decided against appellant.
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2016 (12) TMI 1271
Principles of natural justice - legality of revision petition - imposition of penalty u/s 78 of the FA, 1994 - revision petition allowed without affording assessee any opportunity of being heard - Held that: - reliance placed on the decision of the case of UMA NATH PANDEY Versus STATE OF UP [2009 (3) TMI 526 - SUPREME COURT], where it was held that natural justice is essence of fair adjudication and to be ranked as fundamental. Purpose of following principle of natural justice is to prevent miscarriage of justice. Notice and hearing required as per principle of natural justice - penalty set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2016 (12) TMI 1269
Imposition of penalty u/s 11AC - duty paid after detection by Department - Clandestine removal - short payment of duty - suppression of facts - reliance placed in the decision of the case of Dharmendra Textile[2008 (9) TMI 52 - SUPREME COURT] and Rajasthan Spinning and Weaving Mills[2009 (5) TMI 15 - SUPREME COURT OF INDIA] - in the case of Rajasthan Spinning, the tribunal had taken a view that there was no warrant for levy of penalty since the assessee had deposited the balance amount even before the show cause notice was issued. However, the Revenue contended that in the case of Dharmendra Textile, the Hon'ble Supreme Court had taken a view that mere non payment or short payment of duty, without anything else would inevitably lead to imposition of penalty equal to the amount by which duty was short paid. Held that: - After noting the facts at length, the arguments of both sides, the Hon'ble Supreme Court of India concluded that The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of section 11AC - we see no reason to overturn or reverse the view taken by the tribunal. The view taken in its order passed and in the year 2005 cannot be said to be perverse or vitiated by any error of law apparent on the face of the record. Appeal dismissed - decided against appellant-Revenue.
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2016 (12) TMI 1268
CENVAT credit - job-work - denial on the ground that the appellant has not discharged any duty on TMT bars - Held that: - the Larger Bench of the Tribunal in the case of Sterlite Industries (I) Ltd. [2004 (12) TMI 108 - CESTAT, MUMBAI], held that job-worker received goods from the principal under Rule 57E of the erstwhile Central Excise Rules, 1944, entitled to take credit of duty in respect of other inputs used by him in the manufacture of job-worked goods without payment of duty for further utilization in the manufacture of the final products by the principal, which are cleared on payment of duty by the principal manufacturer - credit allowed - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 1267
Denial of benefit of N/N. 67/95-CE - manufacture and captive consumption of packing boxes for toys - denial on the ground that since the final product is exempted from payment of excise duty and the appellants have not discharged their obligation under Rule 6 of CCR, 2000 - Held that: - though the exemption is not available to the intermediate goods used in the exempted goods but exception was provided that even if the final product is exempted and the assessee discharge the obligation prescribed in Rule 6 of CCR, 2001 then in spite of the final product is exempted, the exemption on the intermediate goods is available in terms of the notification - as per Sub-Rule (1) of Rule 6, the asseessee is not required to avail the Cenvat Credit in respect of the inputs used in the manufacture of exempted goods. The appellant has not availed the Cenvat Credit in respect of any of the inputs used either in the final product or in the intermediate product i.e. packing boxes. Therefore the condition of Sub-Rule (1) of Rule 6 stands complied with - appeal allowed - benefit of notification allowed - decided in favor of assessee.
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2016 (12) TMI 1266
Clandestine removal - unaccounted manufacture - very few evidences available - preponderance of probability and not mathematical precision - Held that: - the activities like unaccounted production and clandestine removal without payment of due taxes to the National Exchequer gravely hurts the economy of the Nation, and cannot, therefore, be taken lightly. Whenever the perpetrators of such offences get caught, such evils and evil doers are to be tackled and combated effectively by applying the relevant laws and by taking the law and law enforcement to their logical conclusion. However, it does not mean that offenders could be booked without evidences. In fact, when there is no evidence, there is no offence and no offender - The point is that when such evil activities are done in utter secrecy and in an organized manner, there would be only very few evidences available; therefore, whenever such a few evidences are available, the inferences have to be made out of those evidences on the yardstick of preponderance of probability and offenders are to be strictly dealt with accordingly. The appeals where, allowance are made, the matter is remanded to Commissioner, who shall take decision afresh - appeal allowed by way of remand.
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2016 (12) TMI 1265
Valuation - Demand of differential duty - Penalty - Interest - Price escalation on the goods - Held that: - The value was escalated subsequent to the clearance of the goods by the buyer. The appellant have paid the duty without any contest to the demand. In this fact there is no reason to invoke Section 11AC for the penalty. Moreover, the issue of interest is still debatable; therefore there cannot be malafide intention on the part of the appellant with intention to evade payment of duty. Considering the legal position of chargeability of interest which is highly debatable issue and therefore it cannot be said that the appellant had any malafide intention, therefore this is not a case for imposition of penalty under Section 11AC of the Act - Appeal dismissed - decided in favor of the assessee.
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2016 (12) TMI 1264
Refund - notification No.142/78 - principles of unjust-enrichment - Held that: - the amount sought for refund was pre-deposit of revenue paid pending disposal of respondents’ petition before Hon’ble High Court of Delhi - We further observed that the amount was credited to exchequer in 1986 and provisions for unjust-enrichment were enacted in 1991 without any retrospective effect - Appeal dismissed - decided in favor of the assessee.
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2016 (12) TMI 1263
Valuation - Scope of show cause notice - NN 85/1985 dated 17.03.1985 and NN 175/1986 - Held that: - Since the show cause notice is vague and does not make any sense on reading the same, we consider that the proceedings arisen out of said show cause notice are totally vitiated. It is requirement of the law that a person who has been called upon to show cause should clearly understand the contentions of Revenue for raising the demand - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1262
Valuation - transaction value or MRP based value - P.P. Medicines - bulk supply to institutional consumers like Hospitals - Intention to evade duty - Held that: - Para 6 of Circular No.625/16/2002-CX dated 28.02.2002 issued by Central Board of Excise and Customs clarified that in respect of all goods (whether notified under Section 4A or not) which are not statutorily required to declare the retail sale price on the packages under the provisions of the standards of Weights and Measures Act, 1976, or the Rules made thereunder valuation shall be done under Section 4 of Central Excise Act, 1944 and also stated that thus, there could be instances where same notified commodity would be partly assessed on the basis of MRP under Section 4A and partly on the basis of normal price i.e. transaction value under Section 4 of the said Act - the appellant have followed the Circular dated 28.02.2002 issued by CBEC, therefore, intention to evade payment of duty has not been established - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1261
Classification - Synthetic Web Equipments - Held that: - in the case of MKU Pvt. Ltd. Vs. CCE, Kanpur reported [2012 (7) TMI 832 - CESTAT NEW DELHI] This Tribunal in the said Final Order has held that classification of Pack with aluminum frame, Haversack, Pouches Ammunition, Frog Bayonet is under Sub Heading No.4202 and the classification of Belt Waist is under 63.07 - Appeal allowed by of remand.
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2016 (12) TMI 1260
Valuation - transfer of goods to own unit - cost plus method - Rule 8 of Central Excise Valuation Rules, 2000 - Held that: - The Central Board of Excise and Customs issued standing instructions that under said Rule 8 when the assessable value of goods manufactured is to be arrived at then proforma CAS4 should be made use of and such CAS certification should be done by a registered Cost Accountant. We find that unless cost accountant certifies the cost of manufacture in the form CAS4, the provision of said Rule 8 cannot be applied - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1259
Valuation - supply of bought out item with the manufactured goods - Held that: - N.M.S. and L.C.T. softwares loaded on computers does not interfere with the normal telephone traffic and transmission equipments such as STM-1, STM-4 and STM-16 manufactured and supplied by them on whose assessable value duty was paid and that the respondents manufacture transmission equipment which are capable of functioning, without N.M.S. and L.C.T. software and that therefore they are independent entities and that just because they are supplied together, the value of N.M.S. and L.C.T. cannot become eligible to be included in the value of goods manufactured by them - Appeal dismissed - decided in favor of the assessee.
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2016 (12) TMI 1258
Valuation - Held that: - there is no provision of law for including the value of goods received for job work into value of the goods manufactured by a manufacturer. The job work is separately covered by Notification No. 214 of 1986 - The goods received from job worker are returned to the principal and if the goods are returned to the principal by endorsement on the reverse of the Challans the transaction is completed - Appeal allowed - decided in favor of the assessee.
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CST, VAT & Sales Tax
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2016 (12) TMI 1257
Sale transaction or service - VAT liability or service tax - treatment to an indoor patient - medicines consumed on treatment of indoor patient would attract tax liability or not? - the case of Hindustan Lever Limited [2016 (7) TMI 76 - SUPREME COURT] referred - Held that: - in the case referred it was found that the consideration of sales tax in fixing the price of the goods and sale of such goods along with identical goods on which taxes are collected along with price has not resulted in an implied collection of tax in respect of such sales tax exempted goods also - Whether they would govern the set of facts brought before us in the present matter has to be determined at the hearing of the appeal. Equally, whether this is a case on par with a treatment during the course of which a stent is inserted in the body or not should equally be determined at the stage of final hearing. Whether drugs or medicines sold from the pharmacy and the case of a stent being fixed or inserted in the body are similar or not must be determined by the Tribunal - matter remanded back.
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2016 (12) TMI 1256
Levy of Entry Tax - goods purchased by individual consumers through electronic commerce portals for their personal use and consumption - Held that: - reliance placed on the decision of the case of [2016 (11) TMI 545 - SUPREME COURT OF INDIA], where it was held that seeking to levy Entry Tax on goods purchased by individual consumers through electronic commerce portals for their personal use and consumption, the constitutional validity which are challenged in the present writ petitions and the levy of Entry Tax on such goods purchased within the State of Gujarat are required to be held intra vires and constitutionally valid - petition fails - dismissed. The specified goods brought into the State of Gujarat by the respective petitioners, it has already suffered Central Sales Tax, and therefore, CST paid on such specified goods brought by the petitioners into the State of Gujarat, either there shall be set off to the extent the amount of tax/CST already paid and/or amount of tax leviable under the Entry Tax Act, 2001 is required to be reduced to the extent of amount of tax paid; if any, under the CST on the purchase of specified goods in the course of inter-state trade or commerce is concerned - the concerned importers have to make appropriate claim before the appropriate authority claiming the benefit under subsection (2) of Section 4 of the Entry Tax Act, 2001 as required under Rule 5 of the Entry Tax Rules and as and when such claims are made, the appropriate authority is required to consider the same in accordance with subsection (2) of Section 4 of the Entry Tax Act, 2001, however, subject to concern person to prove by producing necessary Challan, the payment of CST in other State on such goods brought/imported within the State of Gujarat and having followed the procedure as required under Rule 5 of the Entry Tax Rules, 2001 - Appeal disposed of.
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2016 (12) TMI 1255
Revision of tax - excess entry tax paid by the petitioner for the relevant assessment years - refund claim - unjust enrichment - Held that: - The specific case of the petitioner is that this liability has not been passed on to the customers. Thus, since there is a binding direction issued by this Court, the respondent ought to have passed an order within the time frame fixed by the Court. Failure to obey the order amounts to committing contempt and as long as the order has not been complied with, the disobedience continues and this Court can even at this juncture initiate contempt proceedings. The petitioner is entitled to know as to why the petitioner's applicable for refund should not be ordered. Therefore, the respondent has to necessarily passed a speaking order as this Court has found that the two primary reasons stated in the written instructions dated 02.08.2016 are not tenable - petition allowed by way of remand.
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2016 (12) TMI 1254
Whether on the facts and circumstances of the case, the Gujarat Value Added Tax Tribunal was justified in law in holding that under Section 62 of the Act, where there are two determination orders; the first will not hold the field till the second order? Held that: - the subsequent determination order shall not be applicable and/or affect the transaction/sale which had taken place prior to the second determination order, as, at the time when the transaction/sale had taken place, the first determination order was in force and in existence which was binding to all - appeal allowed - decided in favor of appellant-assessee.
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Indian Laws
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2016 (12) TMI 1250
Prohibition to licences for the sale of liquor along National and State Highways - constitutional validity of explanation appended to Rule 289(2)stating such part of National Highway or State Highway which are situated within the limits of any Municipal Corporation, Municipality or Town Committee, shall not be treated as restriction - Held that:- The Supreme Court very recently has directed that all States and Union Territories shall forthwith cease or desist from granting licences for the sale of liquor along National and State Highways and the prohibition shall also extend to and include stretches of such Highways which fall within the limits of a Municipal Corporation, City, Town or Local Authority. It is thus clear that the State Government is completely debarred from granting licences for the sale of liquor along National and State Highways including the stretches of such Highways which fall within the limits of Municipal Corporation, City, Town or Local Authority. We, accordingly, finally dispose of this writ petition with a recommendation to the State Government to immediately re-examine the impugned explanation in the light of above mentioned SC order. Also the petitioner has no choice, but to close his liquor shop on the State Highway.
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