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Income Tax
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2013 (12) TMI 1386
Determination of annual letting value u/s 23(1)(a) - Whether interest free deposit received is part of annual lettable value u/s 23(1)(a)- Held that:- The assessee has himself declared the actual rent which is much higher than the municipal value of the property - The assessee, otherwise could have insisted the AO to adopt the municipal value which is less than the actual rent claimed by the assessee - This act of the assessee itself shows that the claim is bona fide in nature which prima facie appears that there is no concealment in respect of the actual rent received by the assessee and also the assessee has not inflated/deflated the rental income by reason of any extraneous consideration - Decided against Revenue.
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2013 (12) TMI 1372
Interest earned on non-SLR funds - Held that:- Following CIT v. The Goa Urban Co-operative Bank Ltd [2009 (7) TMI 1150 - BOMBAY HIGH COURT] - Whether the business is derived from or attributable to SLR or non-SLR funds would not make any difference for the purposes of qualifying the interest earned by the cooperative bank under Section 80P (2) (a) (i) as the deposits of surplus idle money available from working capital, including reserves, excess collection of interest tax and other incomes are all attributable to the business of banking - The interest from such deposits cannot be said to be beyond the legitimate business activities of the bank - Decided against Revenue.
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2013 (12) TMI 1371
Whether sale proceeds claimed during assessment proceedings be accepted - Held that:- It is a question of fact which has been decided by the Tribunal - The Tribunal has accepted the claim of the assessee - No substantial question of law arises before High Court - Decided against Revenue. Interest u/s 234A, 234B and 234C - Held that:- Following CIT Vs. Ranchi Club Ltd [2000 (8) TMI 79 - SUPREME Court] - Even if any provision of law is mandatory and provides for charging of tax or interest - Such charge by the assessing officer should be specific and clear and assessee must be made to know that the assessing officer has applied its mind and has ordered charging of interest - The mandatory nature of charging of interest and the actual charging of interest by application of mind and the mention of the proviso of law under which such interest is charged are two different things - Decided against Revenue.
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2013 (12) TMI 1370
Difference in value of stock as per stock statement submitted to bank and stocks as per books - Held that:- The assessee's income was to be assessed on the basis of the material required to be considered for the assessment and not on the basis of the statements given to third party - The burden of showing undisclosed income was on the revenue - That burden cannot be said to be discharged by referring to the statements given by the assessee to the bank, and making it the foundation for adding the difference in the stock as his income - The CIT had accepted the books of accounts and had found that all the purchases and sales are vouched - The stock registers were maintained by the assessee in ordinary course of business - No defects were pointed out in maintenance of such registers, nor there was any other information or material to doubt their correctness - The statements given by the assessee to the bank for obtaining overdraft facility, in the practice prevalent to overstate the stocks to obtain overdraft facility could not be treated to add the entire difference and that too in respect to only one of the items namely the 'zinc' - Decided against Revenue.
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2013 (12) TMI 1369
Share application money received - Held that:- The disputed share application money was received through banking channels and names, address, PAN Nos. supported by confirmation, copies of bank account, copies of application for return of shares, copies of annual accounts of share applicants, copies of return of income of share applicants and affidavits of the office bearers of the applicant companies were submitted before the revenue authorities and all these details were confronted to the Assessing Officer - When the identity of the share applicants is proved by the assessee and the AO has not brought any adverse material or fact against the share applicants, then no addition can be made in the hands of appellants - The Assessing Officer could not prove that the money received by the assessee from alleged three companies in the form of share application money had come from the own sources of the assessee - Following C.I.T. vs Lovely Export P. Ltd [2008 (1) TMI 575 - SUPREME COURT OF INDIA] - No evidence has been brought on record by the Assessing Officer to prove that the share application money emanated from the coffers of the assessee and the Assessing Officer has not made any inquiries from the concerned authorities nor did he examine the assessment record of the share applicants - Decided against Revenue. Correlation between cash deposits and cheques issued - Held that:- The disputed cash deposits were made out of cash withdrawals made from the same bank on earlier occasions and as per remand report, the Assessing Officer was satisfied about the source of cash deposited in the bank account of the assessee - When the balance matches with the balance sheet and cash book, no addition u/s 68 of the Act is sustainable - Decided against Revenue.
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2013 (12) TMI 1368
Disallowance of interest free advances - Held that:- CIT (A) has failed to pass a speaking order regarding whether the judgement in case of Reliance Utilities and Power Ltd [2009 (1) TMI 4 - HIGH COURT BOMBAY] is applicable or not - The assessee failed to demonstrate with evidences and details about the nexus between the interest free advances given and the interest free loans taken by the assessee - The issue was restored for adjudication. Profit on sale of shares - Held that:- Profits cannot be taxed twice, one on account of assessee's own offer in the AY 2009-2010; and secondly on account of taxation by the Assessing Officer - CIT (A) needs to take a consistent stand in this regard and is required to pass a speaking order considering the fact that the same income should not be taxed twice - The issue was restored for adjudication.
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2013 (12) TMI 1367
Unexplained cash deposits - Held that:- On perusal of documents impounded during search which are ways and means account and balance sheet and copy of bank statement of Andhra Bank, there were entries with reference to the deposits and corresponding withdrawals - The genuineness of these transactions have been demonstrated by Assessee by way of documentary evidence - Since the assessment was made based on the ways and means statement, the learned CIT(A) has rightly deleted the addition by giving a categorical finding that it is clear from the ways and means account that Assessee had sufficient funds to deposit the amounts in the Banks - Decided against Revenue. Discharge of income tax liability before proceedings - Held that:- Assessee had paid the tax before the appeal was heard by the CIT(A), therefore, the ground is not material - Facts on record indicate that assessee discharged the tax liability by the time CIT(A) heard the case - Decided against Revenue. Unexplained income - Held that:- Copy of ways and means account, and copies of bank statement of account from Andhra Bank, Tirupathi and Bank of Baroda are placed to establish that the entries of the said deposits have been appeared in the said statements - Since Assessee has proved the genuineness of his claim by way of documentary evidence - Decided in favour of assessee.
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2013 (12) TMI 1366
Unexplained investment in jewellery - Held that: - The assessee explained the source of acquisition of the jewellery worth about Rs. 38 lakhs with the help of jewellery reports and purchase bills - Though item-wise detail was not submitted, but the weight and the value of the jewellery was submitted by the assessee in the valuation report which was further verified by the AO during the remand proceedings and he did not point out any defect or suspicion regarding validity of the same - The balance of addition is explained by the fact of receiving of gifts - The evidences submitted by the assessee itself were sufficient in the absence of any contrary evidence to show any suspicion about the genuinity of the said documents - The assessee even has filed the statements of jewellery in his Income Tax Returns for the assessment year 2006-07 - It is also very common that as per the customs and practices prevalent in our country, the jewellery/gold etc. is gifted by the relatives and friends of a person at the time of certain occasions like marriages, birth of a child, birthdays, marriage anniversaries etc - The quantum and the worth of the gifts also depend upon the social as well as financial status not only of the donor but of the donee also - It cannot be said to be a case of unexplained jewellery - Decided in favour of assessee.
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2013 (12) TMI 1365
Validity of determining the ALV by adding notional interest on the interest free deposit - Held that:- When the actual rent declared by the assessee is more than the ratable value fixed by the municipal authorities, there is no reason to disbelieve the actual rent declared by the assessee - It is not warranted on the part of the AO to determine the income by taking the fair market rent of comparable properties let out in the localities by ignoring the ratable value fixed by the municipal authorities for arriving at the annual letting value - Decided in favour of assessee.
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2013 (12) TMI 1364
Issue regarding the relevant head of income - Held that:- If an income falls under more than one head, the assessee has the option of choosing for the purpose of income tax, such head which makes the burden on his shoulders lighter - In the absence of any evidence brought by the authorities below to disprove/disbelieve the claim of the assessee treating the impugned receipt under the head 'business income', the authorities below are not justified in treating the same under the head 'income from other sources' - Admission by the assessee made during the survey cannot be the sole basis for taking a decision by the revenue authorities during the assessment proceedings. Disallowance of interest paid to firm - Held that:- As per clause 12 of the Partnership deed, the partners are entitled to interest on the credit balance in the capital account, as prescribed u/s 40(b)(iv) of the I.T. Act 1961 @ 12% - The partners are also liable to pay interest on the debit balance in capital account on similar basis - the claim of the assessee is emanating out of contractual obligation and is in consonance with the provisions of law - Decided in favour of assessee.
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2013 (12) TMI 1363
Validity of order u/s 263 - Revision by CIT - Erroneous and prejudicial to revenue order - Held that:- Following assessee's own case for the A.Y. 2004-05 - The deprecation claimed by the assessee has been accepted by the Assessing Officer - The items are in the same block and hence, depreciation cannot be disallowed this year - the Revenue cannot be allowed to change its view with regard to a fundamental aspect of a transaction taken in earlier assessment year unless it is able to demonstrate a change in circumstances in the subsequent assessment year - The respondent cannot under Sec.263 interfere on an issue which has been accepted by the Revenue for a number of years particularly when the Assessing Officer in the assessment order for the assessment year 2006-07 takes the same view by terming it erroneous as the respondent is able to demonstrate a change in circumstances in the said assessment year - Decided in favour of assessee.
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2013 (12) TMI 1362
Penalty u/s 271(1)(c) - Held that:- The assessee declared income from capital gains as when realized by him that such income has inadvertently not returned - No show cause notice was issued before 20.02.2004, the revised computation filed by the assessee on the said date cannot be said to declare additional income of the assessee after detection of concealment by the department - Following AVR Prasad vs. ITO [2005 (8) TMI 308 - ITAT HYDERABAD-B] - Penalty cannot be levied if any income is voluntarily declared before any concealment is detected - The Assessing Officer has not found the explanation furnished by the assessee to be false - Penalty cannot be levied if any bona fide mistake is involved - Decided against Revenue.
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2013 (12) TMI 1361
Bond issue expenses - Capital or revenue in nature - Held that:- Following 'India Cement Ltd. vs. CIT [1965 (12) TMI 22 - SUPREME Court] - A loan obtained cannot be treated as an asset or an advantage for the enduring benefit of the business of the assessee; that where the borrowal was incidental to the carrying on of the assessee's business, the expenditure was for securing the use of the money for a certain period - The bond issued was not entitled for conversion into shares and that being so, raising of funds through such bond issue cannot be termed as raising of capital by issuance of shares - Decided against Revenue.
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2013 (12) TMI 1360
Validity of reassessment proceedings - Held that:- The assessee has submitted and disclosed fully and truly all material facts necessary for assessment such as enclosed copies of the detail of commitment charges paid, copies of the rental receipts and rental payments - The Assessing Officer had no reason to believe that the income chargeable to tax has escaped assessment due to non-disclosure - The Commissioner of Income Tax(A) rightly held that the assumption of jurisdiction u/s 147 and 148 of the Act was based on change of opinion - Having second thoughts on the same material and omission on the part of Assessing Officer to draw the correct legal presumption during the assessment proceedings cannot be a basis of initiation of reassessment proceedings u/s 147 of the Act - The Commissioner of Income Tax(A) rightly held that reassessment proceedings do not survive the test of judicial scrutiny and the same are not sustainable - Decided against Revenue.
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2013 (12) TMI 1359
Computation of Long term and short term capital gain (LTCG / STCG) - development of the property and to convert the house into apartments - Quantum of assessment u/s 147 of the act – Held that:- Sale consideration received towards the land should be assessed as long-term capital gain and the profits arising out of the superstructure is to be assessed as short-term capital gain - the assessee is entitled to the benefit of exemption provided under sections 54 and 54F of the Act - The authorised representative has given detailed computation of long-term and short-term capital gain arising out of sale of land and built-up area falling in the share of the assessee - the assessee has conceded the short-term capital gain arising from sale of built-up area - As per the computation, the assessee has earned the long-term capital gain from the sale of land to the developer as Rs. 1,41,33,400 and the long-term capital gain arising out of sale of share of undivided land at the time of sale of built-up area was Rs. 1,14,81,000 - The assessee has invested a sum of Rs.1,60,00,000 in capital gains bonds and Rs. 1,15,00,000 in capital gains scheme totalling Rs. 2,75,00,000 and has claimed deduction under sections 54 and 54F of the Act – Decided against Revenue.
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2013 (12) TMI 1358
Penalty u/s 271(1)(c) of the act – Bogus and unexplained gifts – Held that:- The assessee has furnished particulars of gifts in the return of income originally filed by him – the particulars are not found false as no such satisfaction is found recorded in the orders of the authorities below - There is also no finding by the authorities below as to whether any details supplied in the return are incorrect, erroneous or false – thus, it could not be a case of furnishing inaccurate particulars by the assessee for inviting penalty under section 271(1)(c) of the Act - Following CIT v. Reliance Petroproducts (P.) Ltd. [2010 (3) TMI 80 - SUPREME COURT] - The assessing authority made no enquiry but jumped to the conclusion of imposition of penalty on the basis of quantum addition sustained by the Appellate Tribunal - Even the satisfaction as envisaged by section 271(1B) of the Act is not discernable from the body of the assessment order - The explanation furnished by the assessee is found bona fide – thus, the penalty imposed is set aside – Decided in favour of Assessee.
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2013 (12) TMI 1357
Denial of claim of additional depreciation u/s 32(1)(iia) of the act – New Plant and machinery eligible for depreciation – Held that:- First requirement for being eligible for the claim of additional depreciation is that it should be on a new machinery or plant - A machinery is new only when it is first put to use - Once it is used, it is no longer a new machinery - the machinery on which additional depreciation has been claimed, was already used in various preceding previous years – thus, for the assessment year, it is no more a new machinery or plant - Relying upon The Deputy Commissioner of Income-tax Versus M/s. Brakes India Ltd. [2012 (3) TMI 31 - ITAT, CHENNAI] - Once it is not a new machinery or plant, allowance under Section 32(1)(iia) cannot be allowed - There is nothing in the statute which allows such claim of additional depreciation every year on machinery acquired in earlier year - CIT(Appeals) was justified in confirming the disallowance of additional depreciation – Decided against Assessee.
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2013 (12) TMI 1356
Transfer pricing adjustment on account of payment of royalty – Held that:- Following M/s. SC Enviro Agro India Pvt. Ltd. Versus Dy. Commissioner of Income tax [2012 (11) TMI 1107 - ITAT MUMBAI] - there was no justification for payment of royalty on the ground that it was a case of contract manufacturing - under transfer pricing provisions, the TPO was required to determine arms-length-price and then recommend adjustment which had not been done - The disallowance had been made on the ground that there was no justification for royalty which was not correct - the royalty was payable as per agreement for using of technical know-how on value added price to the principal - Thus royalty payment was independent of manufacturing of goods - royalty had been paid not on entire sale price but only value added price which was worked out separately - The royalty had also been paid on sale to third parties which had been allowed but royalty on sales to AE had not been allowed when rate of royalty was the same - no disallowance had been made in the earlier year – the order of CIT(A) set aside – Decided in favour of Assessee.
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2013 (12) TMI 1355
Whether transfer fees, non-refundable security deposit and nominee occupancy charges are exempt on basis of mutuality - Held that:- Following assessee's own case for the A.Y. 2007-08 - All these expenses are exempt form tax on account of principle of mutuality - Decided against Revenue.
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2013 (12) TMI 1354
Deletion on account of Short Term Capital Gains – Difference of the value of transfer of shares - Applicability of Section 148 - Held that:- Section 153C in fact corresponds to earlier section 158BD relating to assets, documents etc. of any other person found during search or requisition as per chapter XIVB - In such a case, books, documents etc. have to be handed over to the AO having jurisdiction over such third person who will initiated the proceedings and issue a notice to such person u/s 153C of the Act – Following MANISH MAHESHWARI and INDORE CONSTRUCTION P. LTD. Versus COMMISSIONER OF INCOME-TAX [2007 (2) TMI 148 - SUPREME COURT OF INDIA] - if procedure laid down in Sec.158BD is not followed, the block assessment proceedings would be illegal - The provisions of section 153BC are exactly similar to the provisions of section 158BD under block assessment proceedings - The AO has grossly erred in not issuing notice u/s 153C and in not making asstt u/s 153C read with section 153A of the Act - The provisions of section 153C specifically exclude the applicability of provisions of section 148 of the Act. In the various statement recorded, none of the witnesses was questioned about the sale of shares by the appellant, much less any witness stating that the appellant had been paid any amount over and above the face value of the shares by the buyer of the shares - The AO could have summoned the persons who had negotiated the deal of purchase of shares from the appellant and ascertained whether any amount over and above the face value of the shares was paid to the appellant - there is not an iota of evidence to establish that the appellant received any money over and above the face value for the transfer of shares – Decided against Revenue.
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2013 (12) TMI 1353
Professional and consultancy fee – Held that:- Assessee’s business model is concerned of providing various support services to its parent company located in USA - Service Agreement clearly provides that assessee company would be reimbursed the expenditure incurred with the markup of 8% - The assessee has availed the services of Control Risk Group, Singapore in order to carry out the due diligence and risk analysis with the target hotels, for rendering service to its parent company - These expenses are incurred in the normal course of the business of the assessee and accordingly are revenue in nature. Consultancy fee for office space – Held that:- The brokerage has been paid for arranging the office space - The premises were not purchased during the year - It was only a case of rental of office space for a limited period – Decided against Revenue. Advertisement and sales promotion – Held that:- Following C.I.T. vs. Salora International [2008 (8) TMI 138 - DELHI HIGH COURT] - There is no element of brand building or acquisition of brand by incurring such expenses - The concerned brands were not owned by the assessee, but it belongs to the assessee's overseas group entity - Assessee has been reimbursed the entire advertisement and sale promotion expenses by the overseas group entity on cost plus basis – The total expenditure works out approximately 1.9% of the total expenditure - Decided against Revenue.
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Customs
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2013 (12) TMI 1351
Waiver of pre-deposit of penalty - Misdeclaration of goods - Held that:- applicant in his statement dated 24.09.2009 recorded under Sec.108 of the Customs Act admitted that he had earlier passed several overvalued consignments to various exporters on monetary consideration. Further we find that one Smt. Kirti Rathod, Preventive Officer of Customs who examined the shipping bills in question and found that the declared value was on higher side and thereafter she personally brought this fact to the notice of the applicant and the applicant informed her that valuation is not her responsibility and that it is the work of the superintendent and field officer. In these circumstances, we find that the applicant has not made out a prima case for total waiver of the penalties - Conditional stay granted.
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2013 (12) TMI 1350
Waiver of pre-deposit of penalty - Order passed under Sec. 129E - Held that:- as per the provisions of Sec. 129A of the Customs, the tribunal has jurisdiction to entertain the appeal against the order passed by the Commissioner of Customs as an adjudicating authority or an order passed by the Commissioner of Customs (Appeals) under Sec. 128A of the Customs Act. The present order is passed under Sec. 129E of the Customs Act. Hence as per the provisions of Sec. 129E, no appeal lies to the tribunal against such order - Stay denied.
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2013 (12) TMI 1349
Denial of refund claim - Import made in 1986 - Goods released on payment of redemption fine - Bar of limitation - Held that:- appellant has imported the goods in 1986 and paid the duty and redemption fine at the time of clearance, the said order was challenged by the appellant before the Commissioner (Appeals). Till date, neither the appellant tried to obtain a copy of the order of Commissioner (Appeals) even after they got the communication in 2005 that the appeal has been decided in the year 1987 nor the order of 1987 passed by the Commissioner (Appeals) is on record. In the absence of the fate of the assessment, refund claim is not maintainable. We have further observed that the goods have been imported in 1986 and refund claims was filed in the year 2005-06 which is highly time barred - in the absence of the fate of their assessment refund claim is not maintainable - Decided against assessee.
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2013 (12) TMI 1348
Import of goods duty free under the value based advance Licensing Scheme - Notification No. 203/92-Cus. - Held that:- appellant is a merchant manufacturer is not in dispute and to that fact they have produced a certificate issued by the Divisional Deputy Commissioner certifying that the appellants are the merchant-manufacturer. Therefore, they have not availed the Cenvat credit. This certificate has also not disputed by the adjudicating authority also - appellant have discharged their onus to prove that they have not availed inputs stage credit of the imported goods, which were used in the manufacture of the exported goods. Further, in the case of Consumers Plastic Pvt Ltd., (2001 (7) TMI 456 - CEGAT, MUMBAI) this Tribunal has categorically held that the burden is to prove that the appellants have availed input stage credit is on Revenue. Admittedly, in this case the Revenue has not produced any documentary evidence to show that the appellants or supporting manufacturer have availed input stage credit - Decided in favour of assessee.
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Service Tax
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2013 (12) TMI 1385
Denial of Cenvat credit – Debit notes not in a prescribed format under Rule 9 of Cenvat credit Rules, 2004 – Waiver of Pre-deposit – Held that:- Following Pharmalab Process Equipments Vs. CCE, Ahmedabad [2009 (4) TMI 142 - CESTAT AHMEDABAD] – and MISSION PHARMA LOGISTICES (I) PVT. LTD. Versus COMMISSIONER OF C. EX., RAJKOT [2012 (11) TMI 117 - CESTAT, AHMEDABAD] - CENVAT Credit can be availed on the basis of debit notes which contained all the ingredients as required under the invoices - the applicant has a strong prima facie case in their favour - Pre-deposit waived till the disposal – Stay granted.
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2013 (12) TMI 1382
Waiver of pre-deposit of CENVAT Credit - Valuation – inclusion of value of the diesel which was purchased for testing, the DG sets manufactured and supplied by the appellant - Held that:- On perusing the terms and conditions of the purchase order, we find that the condition of erection, installation and commissioning is not mentioned in the purchase order and the delivery is considered as effected the moment the DG sets are delivered at the purchaser’s site. The condition of erection, installation and commissioning is not a part of the sales contract or the purchase order placed for the DG sets manufactured by the appellant and if the same is not a part of the sales contract, we are unable to understand how the cost of the diesel used by the appellant while taking the trial run of the DG sets at the customer’s premises, would form a part of the assessable value of the DG sets and is liable to duty. Accordingly, the application for waiver of pre-deposit of balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Following decision of assessee's own case [2013 (4) TMI 128 - CESTAT AHMEDABAD] - Prima facie case in favour of assessee - Stay granted.
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2013 (12) TMI 1381
Stay application - Demand of service tax - Commercial or Industrial Construction services - Held that:- sub-contractor is also liable to discharge the Service Tax liability. We find from the records that for the years 2006-2007 and 2007-2008, the appellant has been filing the Service Tax returns, indicating therein the amount of Service Tax paid by them. At this juncture, we find that the Service Tax liability within the period of one year from the date of issue of show cause notice would be leviable on the appellant. The show cause notice was issued on 08.09.2009. It is the claim of the ld. Counsel that the appellant is facing financial hardships, though not substantiated by any document on record - Partial stay granted.
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2013 (12) TMI 1380
Stay application - Commercial and Industrial Construction services - Interpretation of provisions of Rule 3(3) of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007 - Held that:- an assessee is eligible to opt for the Service Tax only if he exercises an option prior to payment of Service Tax on the works contract - appellant had followed the said procedure. Be that as it may, we also find strong force in the contentions raised by the ld.Counsel that if the Revenue authorities want to tax the services under Commercial or Industrial Construction services, they are eligible for abatement of 67% of the value which has been charged and collected by them - Stay granted.
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2013 (12) TMI 1379
Demand of service tax - Advance tax paid - Suo moto adjustment of service tax - Held that:- appellant had reflected the payment of advance tax particulars both in the returns for the period October 2008 to March 2009 and April to September 2009. From these returns it is evident that what the appellant has made was advance payment of tax and not any excess payment as concluded by the adjudicating authority. The liability to pay the tax arose only in April 2009, but the payment was made in December 2008. Thus the payment made in December 2008, can only be an advance payment of tax and not an excess payment of tax. Even though this contention was raised before the adjudicating authority in the reply to the show-cause notice, the same has not been rebutted by the adjudicating authority in any manner. He has simply dismissed the appeal saying that it is only an afterthought to cover up their lapses in not intimating the excess payment of service tax to the service tax authorities. There was no need for the appellant to make such a submission when they have paid the tax in advance. The order of the adjudicating authority reflects complete non-application of mind - Decided in favour of assessee.
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2013 (12) TMI 1378
Proportionate distribution of service tax – Input service distributor - Credit availed on exempted units excluded – Held that:- Proportionate distribution of service tax was not required under the Rules as applicable at the material time – Following Ecof Industries (P.) Ltd. Versus Commissioner of Central Excise, Bangalore [2009 (10) TMI 171 - CESTAT, BANGALORE] - the appellants are eligible for relief – Order set aside and the matter remanded back to the adjudicating Commissioner for the limited purpose of re-quantification by demand – Decided in favour of assessee.
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2013 (12) TMI 1377
Waiver of pre deposit - Demand of service tax - Commercial training or coaching services - Held that:- commercial and coaching center excludes the institute or establishments from the levy of service tax which were engaged in providing pre-school coaching and training or the center or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. The applicants are not issuing any certificate/diploma/ degree. They are only providing the coaching and training in the area of aircraft maintenance and training is only for the practical experience. Prima facie we are of the view that the applicant does not fall under the exclusion category of the services - Conditional stay granted.
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2013 (12) TMI 1376
Waiver of pre deposit - Demand of service tax - Valuation - Business support services - Collection of adda fees - Held that:- adda fees is collected as a statutory fees and secondly land used for parking stands specifically excluded from the provisions of renting of immovable property. If that be so, we are prima facie opinion that collection of adda fees at the specifically rates prescribed by the Govt., cannot be held to be a service provided to the transporters/operators of buses - adda fees levied by District Magistrate as per authorization of Govt. is a statutory levy and cannot be held to be issue of any specific service provided and is not leviable to service tax under category of ‘business support services’ - appellant should not be directed to deposit any amount of tax on this count in view of the above order of Commissioner (Appeals). Otherwise also we find that the demand stands raised by invoking longer period of limitation which cannot be held to be justified. The matter at the most involves interpretation of legal provision and cannot be held to be on account of any mala fide intent on the part of the appellant - Following decision of Kadamba Transport Corporation Ltd. reported as [2010 (6) TMI 667 - COMMISSIONER OF CUSTOMS, CENTRAL EXCISE AND SERVICE TAX (APPEALS), GOA] - Stay granted.
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2013 (12) TMI 1375
Rejection of rebate claim - Notification No. 12/2005-S.T., dated 19-4-2005 - Input services used in development of software exported out of India - Availment of CENVAT Credit - Held that:- The input services in respect of which rebate has been claimed are internet/telecommunication services, housekeeping services, professional services, outdoor catering services, renting of immovable property services, maintenance & repair services, security agencies services, rent-a-cab operator services, etc. In my view all these services would be necessary input for a software unit and hence, it would be totally incorrect to deny rebate on the ground that the same are not the services required for development of software more so, when during the period prior to the period of dispute and they paid after the period of dispute, the department has been granting rebate in respect of these very services. Appellant are a 100% EOU i.e. a STP unit and their domestic transactions are rare, there would not be no occasion for them to utilize the Cenvat credit if any availed when it is not the case of the Department that they have also claimed cash refund of accumulated Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004. It would not be correct for the department to conclude that they have availed Cenvat credit just on the basis of Col. 5b of the ST-3 Return without checking the records, which are required to be maintained by the appellant for availment of Cenvat credit in respect of the provisions of Rule 9(6) of the Cenvat Credit Rules, 2004. The availment of Cenvat credit in respect of input or input services is a matter of fact which has to be verified from the records maintained by the appellant and no inferences can be drawn in this regard merely from the ST-3 Returns, when the appellant, from the very beginning are pleading that the entry in Col. 5b regarding availment and utilization of the Cenvat credit was made by them due to mistake and that the figures regarding utilization of Cenvat credit mentioned in this col. is actually the figure of rebate claim which has been granted to them. Matter is remanded back to the original adjudicating authority for deciding the rebate claim filed by the appellants afresh. If from the records maintained by the appellant, it is clear that they have not availed any Cenvat credit the rebate claim would have to be accepted - Decided in favour of assessee.
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2013 (12) TMI 1374
Levy of penalty when service tax has been paid before issuance of show cause notice - Engineering consultancy services - Held that:- appellants did not have qualified staff and they paid the Service Tax after the amounts were paid by them for the services received from time to time and discharged the liability in full which is not in dispute would show that extended period could not have been invoked in this case. Moreover entire duty liability was discharged by July, 2008 which is less than nine months from the visit of the officer which would again show that the payment was made promptly without any delay. Having regard to these facts and having regard to the fact that appellant was eligible for Cenvat credit, we find that this was a case where provisions of Section 73(3) was applicable and no show cause notice should have been issued. Further we also find that this is a case where appellants have been able to show reasonable cause for non-payment of the tax even if it is assumed that there was delay in payment in view of the revenue-neutral situation and lack of availability of qualified staff - amount paid towards Service Tax and interest thereon demanded and appropriated is sustained and penalties imposed on the appellant are set aside - Decided partly in favour of assessee.
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2013 (12) TMI 1373
Demand of service tax - Notification No. 32/2004-S.T., dated 3-12-2004 - GTA service - Held that:- The notification does not intend a specific stationery to prove the stand of the appellant fulfilling the conditions as above. Therefore, if separate sheet is showing proper declaration that shall also form an integral part of the invoice, if there is mention in the separate sheet about the primary document which is invoice. There is nothing negative evidence by Revenue to this effect in the order. Therefore, the appellant should not suffer the consequences of adjudication - Stay granted.
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Central Excise
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2013 (12) TMI 1347
Availment of Cenvat credit - Waiver of Pre-deposit – Held that:- The container number which is indicated on the bill of entry is reflecting clearly on the transport documents i.e. on the LR issued by the transporters as having been delivered to the appellants – Relying upon COMMISSIONER OF CUSTOMS & C. EX., VAPI Versus DNH SPINNERS [2009 (7) TMI 130 - CESTAT, AHMEDABAD] - this correlation definitely demonstrates that appellant has received the consignment, though the bill of entry is in the name of their Head Office - there is no dispute as regards the receipt of consignment at the appellant’s factory, non-mentioning of appellant’s name in the bill of entry or endorsement by the Head Office is a curable defect – Prima facie the appellant is able to establish case in their favour – stay granted.
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2013 (12) TMI 1346
Supply of ‘Aromatic Compounds’ to various traders – Waiver of Pre-deposit – Held that:- Appellant had filed affidavit/ certificates of various traders who have categorically stated that ‘Aromatic Compounds’ purchased by them from the appellant are being sold to various small and tiny industrial units manufacturing Agarbatis etc. – Following UOI vs. Garware Nylons Limited [1996 (9) TMI 123 - SUPREME COURT OF INDIA] - the appellant had classified the product under Chapter heading 3302 on his knowledge of the product, if the department wants to reclassify the product under Chapter heading 3303, it is for the Revenue to adduce evidence to this regards - there was no evidence found which has been put forth by the Revenue for change of classification of the very same products which are cleared to the traders - Prima facie, the appellant has made case in their favour – Pre-deposits waived till the disposal – Stay granted.
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2013 (12) TMI 1345
Waiver of Pre-deposit of Interest and Penalty u/s 11AB and 11AC of Central Excise Act,1944 – Duty and interest amount already paid – Held that:- The applicants have themselves accepted the duty liability and paid the entire amount of duty without any protest - the interest on the said amount of duty is payable – the appellant directed to deposit the entire amount of interest – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.
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2013 (12) TMI 1344
Difference in the quantity of the granulated slag shown in their Annual Operational Statistical Report and the quantity shown in the monthly ER-I Return - Waiver of Pre-deposit – Held that:- Prima facie, without any corroborative evidence, it would be difficult to accept the difference in the quantities of granulated slag between the two statements, were the quantity cleared without payment of duty - the Applicant is able to make out a prima-facie case for total waiver of amount – Pre-deposits waived till the disposal – Stay granted.
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2013 (12) TMI 1343
Determination of assessable value - Goods processed/manufactured on job work basis – Waiver of Pre-deposit – Held that:- Held that:- The arrangement was processing/manufacturing of goods on job work basis and the job-worked goods were to be assessed in accordance with the principles laid down in Ujagar Prints Vs. Union of India 1989 (1) TMI 124 - SUPREME COURT OF INDIA] and Pawan Biscuits Co. Pvt. Ltd. Vs. UOI [2000 (7) TMI 78 - SUPREME COURT OF INDIA] – the processed/manufactured goods be assessed to duty at the price at which it was sold by Applicant No.2 - the issue of limitation is a mixed question of facts and law and would be considered at the time of disposal of the Appeal - Applicant No.1 directed to deposit Rupees seventy-five as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.
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2013 (12) TMI 1342
SSI Exemption - Brand Name – Mentioning of logo on the goods – Held that:- The goods R-Core Transformers manufactured are having a sticker with description "manufactured by Instruments & Electronics, Bhopal in Technical Collaboration with SEL" and also showing the logo of M/s. SEL - The fact is that the logo of SEL mentioned on the goods indicates a connection between the goods manufactured by the respondents with the Silcher Electronics Ltd. – Following COMMISSIONER OF CENTRAL EXCISE, TRICHY Versus GRASIM INDUSTRIES LTD.[2005 (4) TMI 64 - SUPREME COURT OF INDIA] - in context of trade name, a name or any writing would cover the name of the company so long as it is used in relation to the product and is used for the purpose of indicating the connection in course of trade between the product and the other person - The logo indicates a connection between the M/s. SEL and the goods manufactured by the asseessee and they are not entitled to the small Scale exemption. Extended period of limitation on interest and penalty u/s 11AC of the central excise act 1944 – Held that:- Assessee continued to use of logo of SEL up to Mar, 99 - statement given under section 14 of the Act by the partner of the respondents was not true and he suppressed the facts - The Original Authority has rightly invoked extended period and imposed the penalty under section 11AC of the Central Excise Act – R-Core Transformers manufactured by the Respondent and which were being cleared by them by affixing the brand name and logo of their collaborator "SEL, Baroda" were not eligible for SSI exemption and extended limitation period under proviso to Section 11A(1) is applicable to the facts of this case - Decided in favour of Revenue.
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2013 (12) TMI 1341
Application for Restoration of appeal – Clearance from the Committee on Disputes not taken – Held that:- The Board has decided not to pursue the matter and the same was also not listed before the COD for clearance at the relevant time and hence not pending –thus, the question of restoration of appeal does not arise at all - the application for Restoration of Appeal is not maintainable – Decided against Applicant.
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2013 (12) TMI 1340
Penalty under Rule 25 (1) (d) and Rule 26(1) of the Central Excise Rules, 2002 - Bogus invoice issued without selling the goods – Held that:- Just because the show cause notice invoked sub-Rule (2) of Rule 26 which could not be invoked, invoking of a wrong rule would not initiate, the show cause notice as the show cause notice clearly alleges that the appellant had issued a bogus invoice without supplying any material to enable his customer or fraudently avail the Cenvat credit and sought imposition of penalty for the offence – Following Vee Kay Enterprises vs. CCE2011 (3) TMI 133 - PUNJAB AND HARYANA HIGH COURT] – penalty would be attracted under Rule 25 (1) (d) as well as Rule 26(1) of the Central Excise Rules, 2002 – Decided against Assessee.
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2013 (12) TMI 1339
Denial of cenvat credit – goods not received on the dates when credit taken – Held that:- The goods had subsequently been received, as the goods covered by the invoice No. 62, dated 31-10-2005 on the basis of which the credit was taken on 31-10-2005, had been received on 3-11-2005 and the goods covered by the invoice Nos. 91 and 92 each dated 31-12-2005 on the basis of which Cenvat credit had been taken on 31-12-2005, had been received on 3-1-2006 - When the goods were received in the factory, the Cenvat credit cannot be denied – thus, the department can charge only the interest as irregularly taken credit – Decided against Revenue.
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2013 (12) TMI 1338
Maintainability of Appeal – Held that:- The order was communicated to the appellants with a preamble in which the appellants were informed that an appeal against said order lies to Customs, Excise and Service Tax Appellate Tribunal, New Delhi - now Revenue cannot claim that no appeal can be filed against the order before the Tribunal - the demand has been confirmed on addition of pre-delivery inspection charges and also after sale service charges collected by the dealers and the issue was decided against them holding that duty is chargeable on the pre-delivery inspection charges and after sale service charges - The appellants had filed an appeal before the Hon’ble Supreme Court and the matter is pending for decision in the Supreme Court - To keep the matter alive on merits, the appellants have right to file an appeal before this Tribunal against the order - the request of the Revenue for non-maintainability of appeal cannot be accepted. Waiver of Pre-deposit – Payment of Interest – Held that:- The appellants have not claimed any financial hardship and the claim for financial hardship is a determining factor for deciding the quantum of pre-deposit and not for giving time for making pre-deposit - the contention of the Revenue that since no financial hardship was claimed by the appellants, ten weeks time was not required to be given to them cannot be accepted - The appellant has undertaken to make the payment of interest payable on the confirmed duty in the time limit given by the Tribunal in the stay order.
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2013 (12) TMI 1337
Transfer of the unutilized and accumulated cenvat credit - Inputs as well as the capital goods lying in the records – Waiver of Pre-deposit – Held that:- As per Rule 10 of Cenvat Credit Rules, 2004 is a beneficial piece of legislation allowing transfer of unutilized credit to the new assessee to whom the business stands transferred - The present assessee has undoubtedly been given central excise licence and has taken over all the liability of M/s Mound Trading Co. Pvt. Ltd. - all the assets in the shape of credit of the previous manufacturer have to be transferred to the appellant - The objection raised by Revenue on technical ground cannot be appreciated in the absence of any dispute of availability of credit to the appellant – thus, pre-deposits waived till the disposal – Stay granted.
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2013 (12) TMI 1336
Waiver of pre-deposit - Reversal of cenvat credit availed - Held that:- appellant has paid approximately Rs. 82 lakhs as duty on the final products clear from their factory premises. This has not been denied by the adjudicating authority. If that be so, in our considered view, the discharge of duty liability by the main appellant-company would amount to reversal of cenvat credit, if any, as held by the adjudicating authority being ineligible to the appellant. Prima facie, we are convinced that the appellant has made out a case for the waiver of the pre-deposit of the amounts involved. Accordingly, the applications for waiver of pre-deposit of the balance amounts involved are allowed and recovery thereof stayed till the disposal of appeals - Stay granted.
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2013 (12) TMI 1335
Waiver of pre-deposit of duty - Goods manufactured and cleared at nil rate of duty - Held that:- as per Rule 6 of Cenvat Credit Rules the applicant are liable to pay 10% of price in respect of goods cleared at nil rate of duty. In the present case, the demand is in respect of chhilka etc. which is a waste product generated during the manufacture of malt and malt extract - Pre-deposit of duty, interest and penalty is waived and recovery of the same is stayed till the disposal of the appeal - Stay granted.
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CST, VAT & Sales Tax
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2013 (12) TMI 1384
Liability to Sales tax - supply of printed materials - Whether the Sales Tax Appellate Tribunal is right in proceeding on the footing that since the printed materials supplied by the assessee have no commercial value in the sense that they cannot be marketed in the open market, the impugned transactions were purely ones of work and labour and not liable to tax - Held that:- what was supplied by the dealer was only labels on which certain particulars had been printed to suit the requirements of a particular customer. This Court observed that the labels by themselves could not really be sold in the open market and they had no use since the same were not of any use in the open market. This Court pointed out that on the contractor undertaking to do the work for the particular customer therein, the labels would not necessarily be deemed to sell the materials the fact that in the execution of the contract for work some materials were used and the property / goods so used, passed to the other party would not by itself make the transaction a sale. In other words, the dominant intention was not for sale of labels. Hence, the transaction could not be treated as deemed sale for the purpose of assessing the turnover - Decided against Revenue.
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2013 (12) TMI 1383
Principle of Natural Justice - Opportunity of personal hearing not given - Cancellation of registration certificate - Cancellation done with retrospective effect - Held That:- Issuing authority is competent to cancel certificate, however sub-section (15) of section 39 of the Act, what is contemplated is a personal hearing. Personal hearing is totally different from show-cause notice. Consequently, though the Department has issued a show-cause notice, that will not amount to granting an opportunity of being heard - Following decision of Indo Germa Products Limited Vs. Assistant Commissioner (CT) [2011 (9) TMI 530 - Madras High Court] - Decided in favour of appellant.
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