Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 28, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Addition on account of unexplained marriage expenses - The statement of the partner cannot be the sole criteria for making an addition - AT
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TDS u/s 194I - payment to CIDCO as lease premium - Once, the payment is for acquisition of land rights and then, the same is to be reckoned as capital expenditure - No TDS - AT
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Expenditure incurred on wire mesh fitted on the buses plied by assessee for the school children - it is not in the capital field but is of revenue in nature and there is no enduring benefit to the assessee - AT
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TDS u/s 195 - availing transponder facility - CIT (A) cannot hold that same payment would fall in the nature of ‘royalty’ and at same time would be reckoned as ‘FTS’ also. - AT
Customs
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Whether the imported goods were Rubber Crumb under CTH 4017 00 90 or were ground waste of vulcanized rubber tyre powder under CTH 40040000 and is restricted item for import? - the goods are restricted goods and liable to confiscation in the absence of licence - AT
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Imposition of penalty - If any liability arises against the partnership firm i.e. shifted on partners of partnership firm in the sharing ratio of the partners, therefore, the partners cannot be treated different then the partnership firm - AT
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Seeking of permission to make amendment in IGM - The authorities cannot refuse to act merely because there is an allegation of a wrongful act or there is a protest raised. - HC
Service Tax
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Waiver of penalty imposed u/s 77 & 78 of the FA, 1994 - Construction of Residential Complex Services - as the data of taxable value was correctly declared by the appellant in the books of account - waiver of penalty justified - AT
Central Excise
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CENVAT credit - wooden pallets used for stacking and movement of finished goods within the factory - It cannot be said that these goods are used in relation to the manufacture in or in relation to the manufacture of the final products - No credit - AT
VAT
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Sale u/s 2(ac) of the Act - spare parts given to the customers by way of replacement under warranty scheme - once amount is charged from the customer, sales tax cannot be avoided - HC
Case Laws:
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Income Tax
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2016 (12) TMI 1358
Revision u/s 263 - non deduction of TDS u/s 194A on interest expenditure - Held that:- A.O. has examined the issue of disallowance u/s 40(a)(ia) of the Act, towards interest payments at the time of assessment. The assessee has furnished details of declarations received from the recipient of interest and the A.O. after satisfied with the explanations offered by the assessee has chosen to accept interest payment, therefore, the CIT was incorrect in holding that the A.O. has not examined the issue at the time of assessment proceedings. In the present case on hand, on perusal of the materials available on record, we find that the recipients have furnished declarations in form 15G/15H before the due date of payment of TDS to the credit of the Government account. Since, the recipient has furnished statutory forms in form 15G/15H, the assessee need not to deduct TDS u/s 194A of the Act, consequently, no disallowance can be made u/s 40(a)(ia) of the Act, accordingly, there is no prejudice is caused to the interest of revenue. Since, the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, the CIT was incorrect in assuming jurisdiction u/s 263 of the Act. Therefore, we set aside the order passed by the CIT u/s 263 of the Act and restore the assessment order passed by the A.O. u/s 143(3) of the Act. - Decided in favour of assessee
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2016 (12) TMI 1357
TCS demands - improper collection - Held that:- There is hardly any dispute by now that the instant case is not that of non-collection of TCS but that of improper collection. The assessee has not only filed its all requisite details of TCS collected from its timber buyers, but also it has given all cogent reasons to have sold the timber in question after various discounts, rebates and settlements. We afforded ample opportunity to the Revenue to quote any specific material in the case file for the purpose of rebutting the above stated factual findings. There is no such material in all of assessee’s paper-book which could pin-point any irregularity or infirmity in the above extracted lower appellate findings. It has further come on record that the assessee had collected Form No.27C in support of its TCS collection. The CIT(A) sought a remand report thereupon. The Assessing Officer did not comment any adverse material in his remand report dated 08.06.2012 forming part of the paper-book at pages 81 to 91. We thus uphold CIT(A)’s common order under challenge in both the appeals.
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2016 (12) TMI 1356
Set off of unabsorbed depreciation loss of the amalgamating company carried forward - Held that:- If the text and context of the relevant provisions of section 72A in this regard are taken into consideration, we find that the period of three or more years as specified therein clearly signifies three or more calendar years and not certainly three or more previous years as defined in section 3 of the Act. The term 'previous year' as defined in section 3 of the Act is altogether different and the same, therefore, cannot be adopted to give meaning to the word 'year' used in the relevant provisions of section 72A going by it text and context. The said word clearly signifies the calendar year and since the amalgamating company in the present case was not engaged in the business, in which the accumulated loss occurred or depreciation remained unabsorbed, for three or more calendar years, we are of the view that the condition stipulated in the relevant provisions of section 72A was not satisfied and the assessee-company being amalgamated company was not entitled to claim set off of the brought forward loss of the amalgamating company against its income for the year under consideration. We, therefore, set aside the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue and restore that of the Assessing Officer. Addition on account of belated payment of employees' contribution towards P.F. and E.S.I. after the expiry of due dates prescribed in the relevant Statute but before the date of filing the return of income for the year under consideration - Held that:- Both the sides have agreed that the same is squarely covered in favour of the assessee, inter alia, by the decision of the Hon'ble Supreme Court in the case of CIT -vs.- Alom Extrusions Limited [2009 (11) TMI 27 - SUPREME COURT ] and CIT -vs.- Vinay Cement Limited [2007 (3) TMI 346 - Supreme Court of India]. Respectfully following the ratio laid down by the Hon'ble Supreme Court in these cases, we uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue Addition on account of short-term capital gain on sale of property by applying the provisions of section 50C - Held that:- We find merit in this contention of the ld. D.R. and since the ld. counsel for the assessee also has not raised any objection in this regard, we restore this issue to the file of the Assessing Officer for deciding the same afresh after examining/verifying the contention of the assessee that the property in question transferred during the year under consideration being in the nature of booking rights and not land and building, section 50C has no application. The Cross Objection of the assessee is accordingly treated as allowed for statistical purposes.
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2016 (12) TMI 1355
Claim of deduction on account of provision made for warranty - Held that:- Following the ratio laid down in Rotork Controls India P. Ltd. Vs. CIT (2009 (5) TMI 16 - SUPREME COURT OF INDIA) , we hold that the value of Contingent Liability by way of recognizing the warranty liabilities, by making a provision and also following systematic method of its write back and / or utilization is an accepted accounting method adopted by the assessee and the provision made by the assessee is to be allowed as deduction in the hands of assessee. It may be clarified herein that the CIT(A) had rejected the claim of assessee in assessment year 2008-09 observing that the assessee had made provision to the extent of ₹ 32.74 crores, whereas none of the provisions made in the earlier years were much utilized. The learned Authorized Representative for the assessee in this regard has clarified that inadvertently, the same was created at ₹ 32.74 crores but ₹ 31.07 crores was written back and the deduction by way of provision of warranty was claimed only at ₹ 1.67 crores. AO had also disallowed sum of ₹ 1.67 crores only. In view thereof, we find no merit in the observations of CIT(A) in denying the claim of assessee. Applying the ratio laid down by the Hon’ble Supreme Court in Rotork Controls India P. Ltd. Vs. CIT (supra) , the assessee having fulfilled the conditions laid down by the Apex Court, we find merit in the claim of assessee and accordingly, we direct the Assessing Officer to allow the deduction on account of provision for warranty made at ₹ 1.67 crore - Decided in favour of assessee.
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2016 (12) TMI 1354
Addition on account of unexplained marriage expenses - Held that:- As in case of Girdhari Lal Nannelal Vs. Sales Tax Commissioner, M.P. (1976 (3) TMI 51 - SUPREME Court) wherein it was held that in the absence of any material, the mere absence of explanation regarding the source of the expenses would not justify the conclusion that the sum in dispute represented profits of the firm derived from undisclosed sales. The said case law apply in the present case as the explanation was given by the Assessee during the assessment proceedings but the documents which were shown was not taken congnizance by the Assessing Officer for the expenses incurred. The statement of the partner cannot be the sole criteria for making an addition. Thus the CIT(A) was not right in confirming the addition in the hands of the Assessee firm. - Decided in favour of assessee Disallowance of the salary - Held that:- No discrepancy was pointed out in the salary expenses claimed by the assessee or the item of any inflated salary. The Assessing Officer has disregarded the books of accounts produced by the assessee during the assessment proceedings under Section 143(3) of the Act and other primary record solely on the ground that the assessee has made a confessional statement during the survey proceedings and voluntary payment of tax against the income from undisclosed source surrendered during the survey proceedings. The copy of the attendance register with details of salary was submitted during the assessment proceedings. The Assessing Officer has not pointed out any payment which is in excess of the actual payment in the assessment order. Thus the relevant material to establish the genuineness of the assessee firm was established which was overlooked by the CIT(A) as well as by the Assessing Officer. - Decided in favour of assessee
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2016 (12) TMI 1353
Re-characterisation of income received from licensing of software as ‘Royalty’ - DTAA between India and Netherlands - disregarding the claim of the assessee that the aforesaid income was in the nature of business income - existence of PE in India - Held that:- No corresponding amendment has been made in the provisions of the DTAA. Under these circumstances, the assessee would be entitled to the provisions, which are more beneficial to the assessee out of the provisions of Indian Income-tax Act and DTAA between India and the Netherlands, in view of provisions contained in section 90(2) of the Act. We have already held that as per the provisions of India Netherlands DTAA, the amount received by the assessee on account of sale of software would not fall within the definition of ‘Royalty’ as provided in Article 12(4) of the DTAA. Under these circumstances, it will not be legally permissible for us to refer to the provisions of the Act to decide the taxability of this amount in the hands of the assessee in India. Thus, in our considered view, based upon the facts and circumstances of the case and legal position as discussed above, the impugned amount received by the assessee is in the nature of business profits assessable under Article 7 of India Netherlands DTAA and would not be taxable as ‘Royalty’ under Article 12 of the DTAA. Thus, this ground is decided in favour of the assessee.
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2016 (12) TMI 1352
Levy penalty u/s 271AAA - undisclosed income as represented by the seized papers was duly admitted in the statements recorded u/s 132(4) by assessee - Held that:- In respect of undisclosed income of ₹ 1,16,30,103/- admitted by the appellant and offered to tax in the return of income, the appellant is eligible for immunity from penalty in terms of section 271AAA(2) of the Act as he has fulfilled all the conditions stated therein. In respect of penalty imposed qua the addition of ₹ 3,00,000/-, the said addition has been deleted except for an amount of ₹ 50,000 on an estimated basis by the Coordinate Bench in the quantum proceedings. The penalty which thus survives relates to estimated addition of ₹ 50,000 which has rightly been deleted by the ld CIT(A). We do not see any reason to interfere with the order of ld. CIT(A), which is hereby upheld. - Decided against revenue
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2016 (12) TMI 1351
Addition on account of Profit on Sale of office premises as Short Term Capital Gain - Held that:- The assessee has brought on record affidavit of Mr. Vinod Shankar More, Peon stating that the files have been transferred by him to the afore-stated office premises i.e. shop No. 8(A), Plot No. 260, Sector 10, Kharghar, Navi Mumbai during the previous year and the asset was put to use. The A.O. wanted to verify the said contentions of the assessee and accordingly issued summons to said Sh. Vinod Shankar More,Peon to appear before him , but the said person Sh. Vinod Shankar More did not appeared before the AO and also could not be produced by the assessee before the A.O. No evidence has been brought on record that the assessee has put the said office premises to use prior to end of the financial year, hence, we reject the contentions of the assessee. With respect to the finding of the ld. CIT(A) that the assessee has added ₹ 16,27,010/- to the block of assets which are in the nature of repairs, this is a new claim made by the assessee before the learned CIT(A) which was never claimed before the A.O. during assessment proceedings. In fact no application u/r 46A of Income Tax Rules, 1962 has been filed before the learned CIT(A) with respect to said claim of ₹ 16,27,010/-. The assessee has only stated that they were repairs by nature and the learned CIT(A) rejected the contentions of the assessee for inclusion of ₹ 16,27,010/- to the block of asset, and hence short term capital gain of ₹ 9,25,880/- was brought to tax by the ld. CIT(A) while the assessee has contended that the same being the payment of stamp duty for purchase of office, this has to be further enquired and verified by the authorities below and finding of the facts has to be recorded by the A.O. on merits after due enquiry /verifications for which we deem it fit and proper to set aside and restore this issue back to the file of the A.O. for necessary verification and enquiry so that the AO can record his finding of fact. Needless to say proper and adequate opportunity of hearing shall be provided by the AO to the assessee in accordance with the principles of natural justice and in accordance with law. We also direct the A.O. to compute the short term capital gain , if any chargeable on the sale of office premises No. 605, 6th Floor, Maithili's Signet, Plot No.39/4, Sector-30A, Vashi, Navi Mumbai being depreciable asset in accordance with provisions and scheme of Act in accordance with the directions as contained in this order.
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2016 (12) TMI 1350
Allowability of LTCL to be carried forward - Held that:- Following the decision of the Coordinate Bench in the case of Raptakos Brett & Co. Ltd. (2015 (6) TMI 529 - ITAT MUMBAI ), we direct the Assessing Officer to allow the assessee’s claim for carry forward of LTCL on sale of shares of NOCIL Ltd. for set off in subsequent years in accordance with law. - Decided in favour of assessee.
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2016 (12) TMI 1349
Penalty levied u/s 271(1)(c) - Held that:- AO did not specify the charge for which penalty proceedings were initiated and further he has issued a notice meant for calling the assessee to furnish the return of income. Hence, in the instant case, the assessing officer did not specify the charge for which the penalty proceedings were initiated and also issued an incorrect notice. Both the acts of the AO, in our view, clearly show that the AO did not apply his mind when he issued notice to the assessee and he was not sure as to what purpose the notice was issued. - Decided in favour of assessee
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2016 (12) TMI 1348
Revision u/s 263 - Assessee had advanced money to subsidiary company in South Africa in order to establish its products in that market - Held that:- The money advanced by the assessee to the subsidiary company which was incorporated with sole object of marketing the products of the assessee and any advances given to the said subsidiary were out of business consideration and in order to promote the interest of the assessee and thus were given out of commercial consideration and business interest of the assessee. In our opinion, during the year the writing of such advances owing to non recovery was a admissible deduction and therefore, the said advance was rightly claimed as deduction by the assessee company. Therefore, to invoke the provisions of section 263 by exercising the revisionary power by the Commissioner is not justified and cannot be sustained. Accordingly, we set aside the order of Commissioner and restore that of AO. - Decided in favour of assessee.
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2016 (12) TMI 1347
Reopening of assessment - as per AO assessee had borrowed funds from HDFC towards financing the construction of building and residential quarters and capitalized the interest portion before the assets are put to use - Held that:- So far as addition on account of payment of commission in respect of transactions entered under “Oil for Food Programme” of the United Nations are concerned, the same is covered in favour of assessee as discussed in the year 2003-04. Following the same reasoning we delete the addition made on account of commission payment. The issue with regard to applicability of proviso inserted in Section 36(1)(iii) by the Finance Act 2003 is concerned, the same is effective from assessment year 2004-05 as per verdict of Hon’ble Supreme Cout in case of Core Health and Care Ltd. [2008 (2) TMI 8 - SUPREME COURT OF INDIA] So far as disallowing the claim of interest on funds borrowed for financing construction of building and residential quarters is concerned, we find that the proviso inserted in Section 36(1)(iii) by the Finance Act 2003 was effective from assessment year 2004-05. However, the assessment year under consideration is 2002-03, therefore, no disallowance can be made for such interest payment. As an abundant caution, we direct the AO to verify if the interest payment has been added in the cost of construction, no depreciation is to be allowed thereon. We direct accordingly. In the result appeal of the assessee for the assessment year 2003-04 is allowed whereas appeal of the assessee for the assessment year 2002-03 is allowed in part, in terms indicated hereinabove.
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2016 (12) TMI 1346
Penalty u/s 271(1)(c) - Held that:- The evidence for delay in finalizing of taxaudit of the two concerns namely Neeta Developers and Choice Construction Chemicals in which the assessee was partner and which was handled by other partner could not be brought on record. In our considered view and in the interest of justice, we are inclined to set aside and restore this matter to the file of the ld. CIT(A) for fresh adjudication of penalty u/s 271(1)(c) of the Act de novo on merits after verification whether the contentions/explanation of the assessee are bonafide or not and whether the same constitute reasonable cause for said failure within mandate of Section 273 of the Act, as section 271(1)(c) of the Act is subject to Section 273 of the Act . The assessee is directed to appear before the ld. CIT(A) and submit all the evidences to substantiate his claim and to establish that the cause for failure to file return of income and pay taxes to Revenue are bonafide and constitute reasonable cause with in parameters of Section 271(1)(c) of the Act read with Section 273 of the Act.
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2016 (12) TMI 1345
Disallowance of the repairs and maintenance expenses treating the same as capital - expenditure after allowing depreciation - Held that:- Assessee has incurred expenses in the nature of current repairs u/s 30 of the Act and hence the same cannot be treated as capital expenditure in the absence of creation of any new asset of enduring nature and hold them to be revenue expenditure. However, consequently the depreciation allowed by the Revenue shall be adjusted accordingly in accordance with our above orders.
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2016 (12) TMI 1344
Share transaction treated as ‘Income from Other Sources’ - bogus transaction - income from speculation business - Held that:- In the case on hand, the assessee was directed by the Tribunal to lead evidence in support of her claim that delivery of the shares was infact taken and given. However, it is seen that inspite of being afforded opportunities in this regard, the assessee failed to bring on record any basic verifiable evidence to support the claim that delivery of shares had taken place. The assessee failed to give even the name and address of the main broker so that enquiries/verification as to the genuineness of the assessee’s claim could have been carried out. It is in that view of the matter, that the learned CIT(A) held that income earned in the bogus share transaction as ‘Income from Other Sources’. Even before us, no evidence has been brought on record to controvert the findings rendered by the learned CIT(A). In these peculiar facts and circumstances of this case we find no reason to interfere with the findings rendered by the learned CIT(A) on this issue and therefore uphold the same - Decided against assessee
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2016 (12) TMI 1343
Addition on upward adjustment in the international transaction related to sales - Held that:- Assessing Officer /TPO has not given any justification for adopting the CPM. Even in remand report, Assessing Officer /TPO has not given comments in respect of each and every ground and submission of assessee even though the TPO has sent the report after long time. All these things show that the TPO/Assessing Officer does not have any justification or valid reason for their upward adjustment. If the order of the Assessing Officer /TPO does not signifies that as to why assessee’s calculations were wrong and why TNMM adopted by assessee has to be rejected and why the CPM was correct as adopted by the Assessing Officer /TPO. These cases do not appear to be comparable for the reason discussed above. In view of above, CIT(A) was justified in deleting the addition made by TPO/Assessing Officer. This reasoned factual finding of CIT(A) needs no interference from our side. - Decided against revenue
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2016 (12) TMI 1342
TDS u/s 194I - payment to CIDCO as lease premium - Held that:- Hon’ble Delhi High Court in the case of CIT Vs Indian News Paper Society (2015 (12) TMI 984 - DELHI HIGH COURT) wherein it has been held that lease premium paid to MMRDA is capital expenditure. Once that is so, then there is no requirement to deduct TDS. Thus, following the view taken by this Tribunal that such payment of lease premium does not fall within the meaning of “rent” as contemplated u/s 194-I, we hold that the assessee is not liable to deduct TDS on such payment. The main reason being that the lease premium was paid to acquire plot of land with substantial rights so as to become the owner of the plot. Once, the payment is for acquisition of land rights and then, the same is to be reckoned as capital expenditure. Thus, we uphold the order of the learned CIT (A) and dismiss the grounds raised by the Revenue. - Decided in favour of assessee
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2016 (12) TMI 1341
Determining long term capital gain in respect of sale of property - assessee co-owner to the extent of 1/8th share - substituting the actual sale consideration with the amount determined by the DVO by applying provisions of section 50C - Held that:- In the case of one of the co-owners, the assessment order has been passed u/s 143(3). No addition has been made in her hands. Ld. Counsel has rightly relied upon the aforesaid wherein it has been held that identical treatment deserves to be given in the hands of all the co-owners. Thus, on this ground itself, the action of the lower authorities in making addition in this regard is not sustainable. In addition to the above, it is also noted by us that while finding out comparable rate of neighbouring properties sold at that time, Ld.CIT(A) had inadvertently taken the rate of a property which was not pertaining to the same building, but located in Sidhwa Building, whose stamp duty has been given at ₹ 7,733 per sq.ft. On the other hand, rates of other properties located in the same building, i.e. BMP building are lesser than the sale price shown by the assessee and average rate of those properties were below the rate shown by the assessee. Thus, if correct sale instances were taken into consideration, no addition would have been called for. Further, it is clear from the evidences shown to us that the building of the assessee was constructed prior to 1940, whereas the aforesaid sale instances considered by the Ld. CIT(A) pertain to the building constructed in 1965. Thus, there cannot dispute on the point that appropriate adjustment on account depreciation must be given while determining the fair market values of two properties constructed at two different points of time. Further, none of the authorities has considered the aspect of providing discount with respect to sale price of properties owned by more than one person. It is noted by us that, if we properly consider all the objections raised by the assessee, the actual sale consideration shown by the assessee @ ₹ 6,000 per sq.ft., would not be less than the fair market value in view of the facts brought before us. Under these circumstances, there is actually no case of any addition. Ld. CT(A) ought to have deleted the addition fully. Thus, amount of the addition sustained by the Ld. CIT(A) is directed to be deleted.
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2016 (12) TMI 1340
Eligibility of deduction u/s 35(1)(iii) - alternative claim of assessee u/s 80G - Held that:- Insofar as the deduction u/s 35(1)(ii)/(iii) of the Act is concerned, assessee failed to submit before us as to how the deduction is allowable in the absence of approval by the CBDT. Thus, the order of CIT(A) on this issue is sustained. However, in respect of the alternative claim of assessee that the donation paid by it to “Research Foundation for Jainology” is to be allowed as deduction u/s 80G, we are inclined to set aside this matter to the file of Assessing Officer to examine this issue afresh in accordance with law. CIT(A) should have entertained the claim of assessee as there are no restrictions in his appellate powers to entertain any claim of assessee which is not made in the return of income. This position is clearly explained by the jurisdictional High Court in the case of CIT vs. Pruthvi Brokers & Shareholders Pvt. Ltd. (2012 (7) TMI 158 - BOMBAY HIGH COURT ). Thus, respectfully following the said decision, we direct the Assessing Officer to consider the alternative claim of assessee u/s 80G of the Act in accordance with law. Expenditure incurred on wire mesh fitted on the buses plied by assessee for the school children revenue or capital expenditure - Held that:- We are of the view that the expenditure incurred by assessee on the Aluminium mesh fitted on the buses is not an asset which is creating an enduring benefit to the assessee. Every addition to the asset is not a Capital expenditure. The Aluminium mesh provided to the buses is not in the capital field but is of revenue in nature and there is no enduring benefit to the assessee. Thus, we reverse the orders of the authorities below and direct the Assessing Officer to allow the expenditure as Revenue expenditure.
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2016 (12) TMI 1339
Penalty order u/s 271(1)(c) - computation of long term/short term capital gain/loss undisclosed - surrender of additional income by way of revised returns - Held that:- After going through the record it can be seen that the assessee has filed return of income for almost ₹ 1,31,64,117/-and for which almost 45,69,387/- tax was paid. If the assessee wanted to conceal the income or filed inaccurate particulars then he would have not filed letter dated 6/12/2010 before the Assessing Officer and immediately paid the amount taxable on the income which inadvertently not place before the authorities at the relevant time. This was mentioned in the affidavit produced before the CIT(A). As per the Hon'ble Supreme Court in case of CIT Vs. Suresh Chandra Mittal (2001 (6) TMI 63 - SUPREME Court ) wherein it is held that though the assessee surrendered additional income by way of revised returns after persistent queries by AO once the revised returns have been regularized by Revenue the explanation of the assessee that he has declared additional income to buy peace and to come out of vexed litigation could be treated as bona fide and penalty under Section 271(1)(c) was not leviable. Thus, the act of the assessee cannot be termed as inaccurate furnishing of income or concealment of income. Therefore, the CIT(A) as well as the Assessing Officer should have taken this aspect into consideration. This was totally ignored by both the authorities. - Decided in favour of assessee.
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2016 (12) TMI 1338
TDS u/s 195 - taxability of the payment made by the assessee to ‘Intelsat Corporation US’ and ‘Intelsat Global Sales and Marketing Limited, UK’ for availing transponder facility in pursuance of Service Agreement read with Service orders - P.E. in India - busniss connection - Held that:- The payment made by the assessee to Intelsat is not taxable as royalty in India and, therefore, assessee was not required to deduct TDS or withhold any tax on such payments. This proposition has been upheld by Hon’ble Supreme Court in the case of GE Technology Centre [2010 (9) TMI 7 - SUPREME COURT OF INDIA ] So far as the issue relating to FTS is concerned, we find that, this Tribunal in B4U International Holdings (2012 (6) TMI 15 - ITAT MUMBAI) on similar payment made to Panamsat, it was held that they do not satisfy the test of “make available” as enshrined in Article 12(3) in Indo-US-DTAA and thus, the said payment cannot be held to be taxable as being for technical services and secondly, on this ground also, the provision of TDS is not attracted. In any case Ld. CIT (A) cannot hold that same payment would fall in the nature of ‘royalty’ and at same time would be reckoned as ‘FTS’ also. As regards the issue of business communication in India, simply because the transponders have been used in for business in India will tantamount to business connection of Intelsat in India and, accordingly, such an observation and finding of the CIT(A) is hereby rejected by us. - Decided in favour of assessee. Interest u/s 244A on refund of extra TDS deposited under section 195 - Held that:- Issue should be remanded back to the file of the Assessing Officer to decide the matter after considering the latest CBDT Circular No.11 of 2016 dated 26th April, 2016. We order accordingly
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Customs
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2016 (12) TMI 1314
Benefit of nil rate of duty under Notification No. 21/2002 - interpretation of notification - denial on the ground that appellant is not appointed as a contractor or as a sub-contractor - Held that: - the lower authorities have erred in conceiving the exemption Notification. On perusal of the records we find that the agreement entered into between MSRDC, a Government of Maharashtra undertaking, and the appellant herein clearly indicates that the appellant is the contractor for collection of toll on various toll stations. The said contract is a tripartite contract between MSRDC, M/s Ideal Road Builders Pvt. Ltd. and the appellant herein M/s MEP Toll Road Pvt. Ltd. Reliance placed on the decison of the case of ITS SOLUTIONS INDIA PVT. LTD. Versus COMMISSIONER OF CUS., CHENNAI [2010 (10) TMI 149 - CESTAT, CHENNAI], where it was held that appellants contractor in the contract between the Govt., of Tamil Nadu and the Tamil Nadu Road Development Corporation (TNRDC) and hence they are satisfying clause (a)(iii) of Condition No. 40 of notification no. 21/2002, and entitled for benefit of notification. Appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 1313
Imposition of penalty u/s 112(a) and (b) of the Customs Act, 1962 - seperate penalties imposed on firm and partners of the firm - Held that: - M/s Navmi Enterprises and its partner Shri Vinod Manjrekar were actively involved in helping for smuggling of contraband goods. Therefore the adjudicating authority has rightly imposed the penalty on M/s Navmi Enterprises. As regard penalty on Shri Vinod Manjrekar partner of the partnership firm M/s Navmi Enterprises, the partnership firm consists of it’s partners, the firm does not have an independent status without the partners. If any liability arises against the partnership firm i.e. shifted on partners of partnership firm in the sharing ratio of the partners, therefore, the partners cannot be treated different then the partnership firm. With this logic if the penalty imposed on the partnership firm, a separate penalty on the partner will tantamount to double penalty on the same person - if the penalty is imposed on the partnership firm, a separate penalty on its partners should not be imposed. Appeal disposed off - penalty on firm upheld, whereas penalty on partner withheld.
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2016 (12) TMI 1312
Seeking of permission to make amendment in IGM - Held that: - it is entirely for the authorities to act in terms of the powers conferred by the Act of 1962. The authorities cannot refuse to act merely because there is an allegation of a wrongful act or there is a protest raised. There is nothing in the Act of 1962 which would enable the authorities to adjudicate any civil dispute and as if it is a Court of law - the concerned authority directed to consider the application for amendment or substitution to the Import General Manifest, provided, the petitioner executes an indemnity bond in favour of the authorities indemnifying them of the claims and protests raised by the private parties regarding the goods in question - petition allowed - decided partly in favor of petitioner.
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2016 (12) TMI 1311
Import of restricted item - classification of imported goods in dispute - confiscation - whether the imported goods were Rubber Crumb under CTH 4017 00 90 or were ground waste of vulcanized rubber tyre powder under CTH 40040000 and is restricted item for import? - Held that: - The entry under CTH 4017 reads as “Hard rubber (for example, ebonite) in all forms, including waste and scrap; articles of hard rubber.” - The Commissioner (Appeals) has rejected the said claim of classification of the goods under CTH 4017 00 90 as the goods imported were “other than hard rubber” according to the test report. He classified the goods under CTH 40040000 – “waste, parings and scraps of rubber (other than hard rubber) and powders and granules obtained therefrom.” The appellants have not produced any evidence to contradict the test report - Since the goods under CTH 4004 are “Restricted” and needs license for import of the same, there is also no infirmity in holding the goods liable to confiscation - redemption fine reduced to ₹ 15,000/- on fair consideration - penalty also waived - appeal partly allowed - decided partly in favor of appellant.
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2016 (12) TMI 1310
Imposition of redemption fine and personal penalty - valuation of goods - rejection of declared value as found to be abnormally low - is quantum and imposition of fine and penalty justified? - Held that: - the redemption fine and the penalties imposed in the present cases are not excess keeping in view the past conduct of the appellants. The goods imported are rightly confiscated under Section 111(d) of the Customs Act 1962 read with Section 3(3) of Foreign Trade (Development and Regulation) Act, 1992. The appellant had a mens rea in importing repeatedly the same thing knowing well that it is not permitted under the law. Therefore, the redemption fine and the penalty should be upheld - appeal dismissed - decided against appellant-assessee.
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2016 (12) TMI 1309
Fraudulent sale of advance licence - Held that: - in absence of rebuttal of the charges leveled against them, the learned Commissioner had no option but to decide the case on the basis of the evidences available on record - I am of the opinion that M/s R.K. Impex be given an opportunity to defend their case before the Adjudicating Authority, to which both sides fairly accept - appeal allowed by way of remand.
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2016 (12) TMI 1308
Release of seized goods - denial on the ground of the impugned show-cause and the fact that, the documents to the goods, which were seized by the DRI, have not been made over by the DRI to the Customs Authorities - Held that: - the DRI had issued show-cause dated August 18, 2009 in respect of the very same goods directed to be released. The DRI had also applied for permission before the Division Bench to proceed with the show-cause. By an order dated October 16, 2012 such permission was denied and the application of the DRI for such purpose was dismissed. The order dated October 16, 2012 allows the DRI to take appropriate action as may be advised. No material has been placed on record to suggest that, the DRI has taken any steps subsequent to the show-cause dated August 18, 2009 - In view of the order dated October 16, 2012 passed by the Division Bench in relation to the show-cause dated August 18, 2008, in my view, the DRI is no longer in a position to proceed with such show-cause. The DRI not having taken any further steps in terms of the order dated October 16, 2012, it would be appropriate to direct the DRI to make over the documents of title to the goods to the customs. The customs authorities on receipt of the same will make over the goods to the petitioner forthwith thereafter - petition disposed off - decided in favor of petitioner.
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2016 (12) TMI 1307
Refund claim - by N/N. 93/2008-Cus, dated 01.08.2008, the earlier Notification, dated 14.09.2007, came to be amended - despite passage of two months, the refund claims have neither been processed nor sanctioned nor rejected by the Office of the respondent - Held that: - in the light of the fact that already Refund Applications (alongwith necessary enclosures), dated 05.10.2016, 17.09.2016 and June 2016, are pending with the respondent, and in view of the submission now made by the learned counsel for the petitioner, without going into the merits or otherwise of the matter, this Court is inclined to pass refund orders - petition disposed off - decided in favor of petitioner.
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Corporate Laws
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2016 (12) TMI 1303
Scheme of Amalgamation is sanctioned subject to the order that in Clause 13.4 of the Scheme, the words “….and change in the object clause” shall stand deleted. It is further directed that the petitioner Transferor Companies shall preserve their books of accounts, papers and record and shall not to 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 1302
Winding up petition - inability to pay debts - Held that:- The Company Petition is admitted and made returnable on 20 February 2017; The Petitioner is directed to advertise the Petition in two local newspapers, viz. “Free Press Journal” (in English) and “NavShakti” (in Marathi) and also in Maharashtra Government Gazette. Any delay in publication of the advertisement in the Maharashtra Government Gazette, and any resultant inadequacy of the notice shall not invalidate such advertisement or notice and shall not constitute noncompliance with this direction or with the Companies (Court) Rules, 1959; The Petitioner shall deposit an amount of ₹ 10,000/with the Prothonotary and Senior Master of this Court towards the publication charges, within a period of two weeks from the date of this order, with intimation to the Company Registrar, failing which the Petition shall stand dismissed for non-prosecution without further reference to the Court. After the advertisements are issued, the balance, if any, shall be refunded to the Petitioner; A copy of this order shall forthwith be served on the Company by hand delivery and by Registered Post AD by the Advocate for the Petitioner. On the application of Mr. Andhyarujina, learned Counsel for the Respondent, the Petitioner is directed not to advertise the petition for a period of four weeks from today.
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2016 (12) TMI 1301
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. The Scheme is, therefore, sanctioned.
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Service Tax
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2016 (12) TMI 1337
Refund claim - Rule 5 of CCR read with N/N. 5/2006-CE dated 14.3.2006 - the impugned order has been passed on the ground that the appellant failed to furnish the documents proving their claim of refund. Whereas on the other hand, the appellant has submitted that they have filed all the documents along with refund claim application but the same has not been considered by both the authorities and the refund has been rejected on flimsy grounds - Held that: - the case needs to be remanded back to the original authority with a direction to consider the documents filed by the appellant in support of their claim as per the N/N. 5/2006 dated 14.3.2006 - appeal allowed by way of remand.
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2016 (12) TMI 1336
SEZ unit - Refund claim - N/N. 9/2009-ST dated 3.3.2009 - telecommunication service - Held that: - reliance placed upon the decision of the CESTAT in the case of Keltech Engineering Pvt. Ltd. [2008 (1) TMI 96 - CESTAT BANGALORE] - wherein the Tribunal allowed the CENVAT credit on landline telephone and held that mobile phones and landline phones have been installed by the Company for business purpose and the bills are paid by the company and, it has to be considered as input services - appeal allowed - refund allowed - decided in favor of appellant.
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2016 (12) TMI 1335
Restoration of appeal - time bar - Held that: - the delay in filing the appeal before learned Commissioner (A) was not intentional and deliberate and therefore, the delay in filing the appeal condoned before the learned Commissioner (A) and impugned order set aside - Commissioner (A) directed to decide the appeal on merit after affording an opportunity of hearing to the appellant - appeal restored - delay condoned - decided in favor of appellant.
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2016 (12) TMI 1334
Benefit of abatement in terms of Notification No. 15/2004-ST dated 10.9.2004 and subsequent Notification No. 1/2006-ST dated 1.3.2006 - commercial and industrial construction activities - denial on the ground that the service provider has supplied the cement, steel and RMC, free of cost - Held that: - the issue now stands decided by the Larger Bench of the Tribunal in the case of M/s Bhayana Builders (P) Ltd. Vs. CST [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)], where it was held that such works contract is taxable only with effect from 1.6.2007 - Inasmuch as the period in the present case is prior to 1.6.2007, no differential demand can be raised against them - matter remanded for fresh consideration - appeal allowed by way of remand.
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2016 (12) TMI 1333
Recovery of irregularly availed CENVAT credit - whether the credit is admissible on input services used for construction of warehouse? - MS items which were used for fabrication of storage tanks - Held that: - reliance placed on the decision of the case of Sai Samhita Sotrages (P) Ltd [2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT], where it was held that assessee used cement and TMT bar for providing storage facility without which storage and warehousing services could not have been provided - credit allowed. Credit - interior furnishings - works contract service for modification of dining hall and other repair works - cleaning service at the terminal area - Held that: - It is for the appellant who is availing the benefit of credit to upkeep and maintain proper document if he intends to avail credit which the appellant has failed in the present case - disallowance of credit on above services justified on this ground. Credit allowed on insurance policy. Appeal allowed - decided partly in favor of assessee.
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2016 (12) TMI 1332
Rejection of Refund claim - refund collected and paid erroneously by the Developer - time limitation - Section 83 of the Finance Act, 1994 - Held that: - reliance placed on the decision of the case of M/s. MCI Leasing (P) Ltd. [2011 (9) TMI 447 - KARNATAKA HIGH COURT], where it was held that time limit under Section 11B of the Central Excise Act, 1944 is applicable even in cases of payment of Service Tax due to mistake of law - the claims filed by the appellants are time-barred - appeal dismissed - decided against appellant.
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2016 (12) TMI 1331
Waiver of penalty imposed u/s 77 & 78 of the FA, 1994 - Construction of Residential Complex Services - benefit of doubt - no suppression of facts - Held that: - from Section 73(3) of the Finance Act, 1994 , it is clear that, if the assessee pays the Service Tax along with interest, no show-cause notice should be issued, when show-cause notice itself is not warranted, no adjudication is also required and therefore there is no question of imposition of any penalty - Taking into consideration the conduct of the appellant regarding immediate payment of Service Tax along with interest as well as the circumstances that the matter was under litigation in the court of law, the appellant has been able to show the reasonable cause for non-payment of Service Tax in time. It is also noted that the appellant did not try to hide anything, as the data of taxable value was correctly declared by the appellant in the books of account - waiver of penalty justified - also invocation of section 80, justified - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 1330
Pre-deposit - Evasion of tax - Works Contract Services - deliberate suppression of facts - Held that: - qualification of specific works executed by the appellants under the category of “Works Contract Services”, being (i) Ambedkar Vihar Awasiya Yojna, Allahabad (ii) Ambedkar Vihar Yojna, Allahabad & (iii) Ambedkar Vihar Awasiya Yojna, Allahabad, appear to be not taxable, being flats constructed for lower income groups - also in respect of all five projects as noticed in the impugned order, there is no findings by the ld. Commissioner if any residential block constructed have 12 or more residential units. Apparently, all the constructions appear to be for residential purposes and not commercial purposes - the levy of service tax appears to be doubtful in absence of details and findings recorded by the ld. Commissioner. Appellant directed to deposit 7.5% of the disputed tax by way of predeposit after adjusting tax already paid. Pursuant to such deposit, balance amount of tax, interest and penalty shall remained stayed till disposal of appeal.
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2016 (12) TMI 1329
CENVAT credit - Rule 6 of Cenvat Credit Rules, 2004 - demand with interest and penalty - Held that: - the issue is squarely covered in favor of the Revenue by the judgment of the Hon’ble Madras High Court in the case of M/s. FL Smidth Pvt. Ltd. Versus The Commissioner of Central Excise [2014 (12) TMI 699 - MADRAS HIGH COURT], where on similar activities credit was denied. As far as the imposition of interest and penalty is concerned, since the appellant has not declared in their ST3 Return that input service credit was used in relation to trading and this amounts to suppression of facts and, therefore, extended period is correctly invoked as the appellant has followed the self assessment procedure and are taking credit on their own. Appeal dismissed - decided against appellant-assessee.
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2016 (12) TMI 1328
Refund claim - Compounded Levy Scheme - Works Contract - construction of residential complex - rejection on the ground that the appellant is registered under ‘Works Contract Service’ whereas the Board Circular is regarding Construction of Residential Complex Service - time bar - unjust enrichment - whether the Board Circular No. 108/02/2009 ST dated 29.01.2009 is applicable? - Held that: - reliance placed on the decision of the case of Krishna Builders Vs. CCE, Raipur [2009 (3) TMI 160 - CESTAT, NEW DELHI], where in the similar issue the matter was remanded for examination - matter on remand.
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2016 (12) TMI 1327
Refund claim - period of limitation - Notification No.41/2007-ST - rejection of refund claims for non-corelation of duty paying documents with the export documents - Held that:- In the interest of justice the Order-in-Appeal dated 21.04.2011 passed by the First Appellate Authority is required to be set aside and the matter is remanded to the Adjudicating Authority to decide the issue denovo in the light of Order-in-Original dated 22.03.2010 passed in the case of M/s. S.K.Sarawagi & Co. (P) Ltd. As per the argument of the Appellant the issues involved in the present proceedings are identical to the facts in the case of Order-in-Original dated 22.03.2010 in the case of M/s. S.K.Sarawagi & Co. (P) Ltd. - Matter remanded back.
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Central Excise
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2016 (12) TMI 1326
Rectification of Mistake - Held that: - The Bench while passing the final order dated 19.08.2015 has considered the entire issue in its proper perspective. In paragraph 8 the Bench has come to a conclusion and has recorded that the base frame is not an integral part of the pump, it is only an accessory to the pump - Application is rejected.
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2016 (12) TMI 1325
Refund - Provisional assessment - Held that: - the proceedings of Provisional Assessment under Rule 7 of the Central Excise Rules, 2002 had not been completed in terms of the direction as contained in the finalisation Order where direction is given to the Range Officers to finally assess the monthly returns and determine the tax liability of the appellant - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1324
Reversal of Cenvat credit - Interest - Penalty - Notification No.203/1992-Cus, dt.10.5.1992 - Rule 173Q of erstwhile Central Excise Rules, 1944 - Held that: - the Appellant had, at the relevant time, availed the benefit of the notification, without complying the conditions, resulting into contravention of relevant provisions of the Central Excise Rules and rules made there under. Consequently, even though they have paid the entire amount of MODVAT Credit, availed earlier, however, the contravention cannot be obliterated - Appeal partly allowed.
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2016 (12) TMI 1323
Whether the appellant is eligible to avail the benefit as SSI during the financial years 1996-97 and 1997-98, of N/N. 1/93 and 16/97? Held that: - there is no dispute that the appellant has not included the correct value of goods manufactured and cleared by them while computing the aggregate value of clearances. It is also noticed that the appellant was unable to justify his claim that the value of the job work undertaken was indeed a job work - appellant not eligible for SSI exemption - appeal rejected - decided against appellant.
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2016 (12) TMI 1322
Cenvat credit - DEPB scheme - Shortage of stock during physical verification - Penalty - Held that: - There is no reason to deny the availment of credit of additional duty paid on imported inputs which has been discharged by debit under DEPB scheme. On shortage of goods during physical verification, the appellant-assessee claims that the registers were in the custody of the Central Excise officers during the investigation and appropriate entries could not be made therein. According to them, there was no shortage of stock. In the light of the physical verification carried out by the officers, and in the absence of any evidence to show that this allegation of Revenue was incorrect, we are of the opinion that there can be no conclusions other that that there was a shortage of stock. Interest on missing stock upheld - penalties set aside - appeal disposed off - decided partly in favor of appellant.
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2016 (12) TMI 1321
CENVAT credit - wooden pallets used for stacking and movement of finished goods within the factory - denial on the ground that the said goods are neither inputs nor capital goods - Held that: - the same issue was before the Hon’ble Supreme Court in the case of Gajra Gears Ltd. [2015 (5) TMI 629 - SUPREME COURT] where it was held that these pallets which are manufactured/assembled in the factory of the appellant are in the nature of material handling equipment, to keep and carry work in progress goods from one machine to the other. Thus, the use of the pallets is for carrying out the material from one machine to the other. It cannot, therefore, be said that these goods are used in relation to the manufacture in or in relation to the manufacture of the final products - denial justified - appeal dismissed - decided against assessee.
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2016 (12) TMI 1320
Refund - Time limitation - Held that: - I find that the appellant had originally paid the duty through Cenvat and on the directions of the Revenue, the same duty was again paid through PLA. Immediately after paying such duty in PLA, the appellant approached the Revenue for taking the credit of the Cenvat which was earlier paid by them. However, they were directed to file a refund claim before the Assistant Commissioner of the Division - Tribunal in the case of CCE, Ghaziabad Vs. Sharda Forging & Stamping Pvt. Ltd. [2008 (10) TMI 224 - CESTAT, NEW DELHI] wherein it was held that it is a case of adjustment of the amount of duty paid twice - It is not hit by limitation under Section 11B of the Act as it being merely an accountal adjustment - Appeal allowed.
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2016 (12) TMI 1319
Penalty - reversal of cenvat credit @8% on the removal of exempted goods before issuance of SCN - Held that: - it is correctly pointed out by the learned counsel that the amount of 8% of the value of the exempted goods is paid off by the respondent on being pointed out that the said amount is due from them and so it is to be noted that the products tractors were dutiable till July 2004 and were exempted by notification due to which there may be confusion - the confirmation of the amounts of 8% of the value of exempted goods is not akin any duty which is short levied or short paid - Appeal rejected - decided in favor of the assessee.
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2016 (12) TMI 1318
Cenvat credit - irregular availment - Time limitation - Rule 3 of CCR, 2002/04 - Held that: - all the transactions were duly recorded in the Books of Accounts already maintained and the appellant having cooperated with the Revenue both at the time of audit as well as in response to further query being made and the categorical stand taken as early as in December, 2005, the whole demand is barred by limitation, and extended period of limitation is not invokable under the facts and circumstances - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1317
Manufacture - marketability - Section 2(d) of the Central Excise Act, 1944 - during the process of manufacturing the transmission tower, zinc dross, zinc oxide, zinc ASH and zinc waste and scrap arise - clandestine removal - Held that: - learned counsel was correct in stating that the issue is now squarely covered by the judgment of the Hon’ble High Court of Bombay in the case of Hindalco industries Ltd. [2014 (12) TMI 657 - BOMBAY HIGH COURT] wherein it was held That is law declared under Articles 141 of the Constitution of India. That it is rendered in the case of identical issues, controversy and the Assessee makes these Judgments of the Supreme Court all the more binding. Their binding effect is not lost merely because the Tribunal has another occasion to consider the issue or another shade of the same controversy. So long as there are Supreme Court Judgments in the field, we do not see how the Revenue could have proceeded to disregard them - The Hon’ble Supreme Court listed the twin tests and which have to be satisfied before the goods can be said to be excisable to tax or Central Excise duty - Appeal allowed.
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2016 (12) TMI 1316
Deemed manufacture - demand of tax, Interest and Penalty - Time Limitation - Held that: - the Chapter note (1) to Chapter 52, which categorically states that doubling of cotton yarn would amount to manufacture and applicability of this chapter note is not disputed. As regards the penalty, we find that here also the appellant has no case as the Chapter note was there in the statue, which should have been considered by the appellant when they undertook the job working of doubling of yarn - Appeal rejected - decided against the assessee.
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2016 (12) TMI 1315
Cenvat Credit - fumigation services rendered for fumigating containers in which export goods were dispatched - Held that: - On perusal of the judgment of the Tribunal in appellant’s own case, I find that the issue is very same. Accordingly, following the same judgment, I find the impugned order is unsustainable and liable to be set aside - Appeal allowed.
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CST, VAT & Sales Tax
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2016 (12) TMI 1306
Detention of goods - goods detained on the basis of mere allegation - compounding of offences - jurisdiction of respondent to act as assessing officer - Held that: - the respondent could not have detained the goods by comparing the contents of the Invoice, which accompanied the subject goods with the Department's website, and then, gone on to detain the goods on the ostensible ground that the petitioner has not filed his returns - the Compounding Notice issued by the respondent is beyond his jurisdiction, as he has donned the robes of an Assessing Officer, which is not permissible in law. Petition allowed in favor of petitioner.
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2016 (12) TMI 1305
Sale u/s 2(ac) of the Act - spare parts given to the customers by way of replacement under warranty scheme - whether the transaction in question is a sale within the meaning of Section 2(ac) of the Act and consequently, liable to tax under Section 3 of the Act? - Held that: - There is no obligation on the part of the respondent-assessee under the warranty of the manufacturer to consumers to replace the defective parts. The respondent-assessee is not even a party to that warranty. The supply of parts by the respondent-assessee to consumers to replace the defective parts and receipt of consideration through credit notes in lieu thereof from the manufacturer is a separate transaction of sale. Credit notes received by the respondent-assessee for specific amount in terms of money towards price of the spare parts supplied by the respondent-assessee to consumers in fulfillment of the warranty obligations of the manufacturer towards consumer, construed valuable consideration in lieu of the price of such spare parts and thus a transaction of sale within the meaning of Section 2(ac) of the U.P. Act has emerged attracting liability to tax under Section 3 of the Act. The manufacturer is warrantor and the consumer is warrantee to whom the warrantor has made a statement or representation with regard to his product i.e. motor vehicle. Thus, in the present set of facts the manufacturer being warrantor has made certain promise with regard to its product to consumers (warrantee) called warranty. The respondent assessee has not given warranty to consumers. Supply of parts by him is a sale for consideration received by him through credit notes. Revision allowed - decided against Respondent-assessee.
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2016 (12) TMI 1304
Demand to deposit tax arrear - Entertainment tax - computation error - Held that: - It appears that number '452' is a typographical error since after deducting 302 cable connections from 759 cable connections, the balance would come to 457 cable connections. Thus, the fact of conducting the survey in presence of the petitioners and fact of 457 cable connections are admitted by the petitioners as per their grounds of appeal - no error or perversity in the findings of fact recorded by the appellate authority. The petitioners could not demonstrate even before this court any error in computation of entertainment tax - petition dismissed.
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2016 (12) TMI 1300
Seizure of goods with an option to pay penalty - Section 48(7) of the U.P. VAT Act, 2008 - Form-21 - Held that: - I find that the Tribunal has acted in a most arbitrary manner and has completely failed to discharge the statutory obligation under Rule 63(4) of the U.P. VAT Rules, 2008 - impugned order to be stayed.
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