TMI Tax Updates - e-Newsletter
December 30, 2015

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI SMS

• Import of goods without having the IE Code at the time of importation - though penalty can be levied, but a fit case for no levy - Tri

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• Demand of service tax with arbitrary quantum while doing best judgement assessment makes a mockery of the quasi-judicial process - Tri

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• MAT - Book Profit u/s 115JB - AO has no power to recompute the book profit even if the Auditor gave qualified report under companies act -HC

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News

1. First meeting of the Governing Council of the National Investment and Infrastructure Fund (NIIF); Selection Process for Appointment of CEO, NIIF initiated

2. RBI Reference Rate for US $

3. Auction for Sale (Re-Issue) of Government Stock

4. Over 53 crore beneficiaries being allocated wheat at ₹ 2 /kg and rice at ₹ 3 /kg under National Food Security Act

5. Relaxation of guidelines for selection of customers for domestic gas available from small isolated fields

6. Bharat Petroleum’s New Crude Distillation unit in Mumbai dedicated to the Nation

7. Petroleum Minister meets the Chief Minister of Maharashtra to discuss issues concerning the oil and gas sector

8. Benefit of LPG subsidy will not be available if the consumer or his/her spouse had taxable income of more than Rs Ten lakh in previous financial year

Notifications

Customs

1. 147/2015 - dated 23-12-2015 - Cus (NT)

CBEC - hereby specifies the class of goods, namely ‘crude’, imported and stored in underground rock caverns.

2. 146/2015 - dated 23-12-2015 - Cus (NT)

Appointment of Common Adjudicating Authority

3. 03/2015 - dated 14-12-2015 - Cus (NT)

Arackappady Village of Kunnathunadu Taluk of Ernakulam District in Kerala declared to be warehousing station of setting up of 100 EOU

SEZ

4. S.O. 3517(E) - dated 23-12-2015 - SEZ

Set up a sector specific SEZ for Electronic Hardware and Software including IT/ITES at Ranga Reddy, Telangana

5. S.O. 3507(E) - dated 16-12-2015 - SEZ

D-notifies an area of 6.37 hectares - sector specific Special Economic Zone for IT/ITES at Visakhapatnam, Andhra Pradesh

Circulars / Instructions / Orders

VAT - Delhi

1. 33/2015-16 - dated 29-12-2015

Regarding e-commerce

Income Tax

2. 19/2015 - dated 29-12-2015

Issuing Questionnaire in cases selected for scrutiny

3. 23/2015 - dated 28-12-2015

TDS under section 194A of the Act on interest on fixed deposit made on direction of Courts

Highlights / Catch Notes

Income Tax

• Interest on Court-Directed Fixed Deposits Exempt from TDS Until Court Decision, Clarifies CBDT.

  Circulars : Interest on FDRs made in the name of Registrar General of the Court or the depositor of the fund on the directions of the Court, will not be subject to TDS till the matter is decided by the Court - CBDT clarified
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• High Court Rules AO Cannot Recompute Book Profit; Must Rely on Certified Financial Statements u/s 115JB.

  Case-Laws - HC : MAT - Income from capital gain - whether should be included for the purpose of computing Book Profit under Section 115JB? - AO has no power to recompute the book profit and has to rely upon the authentic statements of accounts of the company, the accounts being scrutinized and certified by the statutory auditors though with a qualification - HC
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• Income from regular business activities qualifies for Section 10A deduction for 100% Export Oriented Unit in SEZ.

  Case-Laws - AT : The said surrender was related to the regular business of the assessee and it is not brought on record that the assessee earned the said income from any other source. Therefore, the deduction u/s 10A of the Act was allowable to the assessee being 100% Export Oriented Unit established in SEZ on this income also. - AT
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• Profit Split Method Allegation Rejected as Unsubstantiated; PSM Relevant for Complex International Transactions Only.

  Case-Laws - AT : Transfer pricing adjustment - the conclusion of the TPO that the PSM is adopted by the assessee only to camouflage loss at the net level is merely an allegation and hence devoid of merit - the Profit Split Method is applicable mainly in international transactions which are so interrelated that they cannot be evaluated - AT
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• Denial of Registration u/s 12A(a) Overturned; Entry Fees for Tournaments Not Commercial Operations.

  Case-Laws - AT : Registration u/s 12A(a) denied - Collection of entry fee and subscription /contribution and utilising the same for incurring expenditure on tournaments etc. cannot be a reason for coming to conclusion that the activity of the assessee is on commercial lines. Thus rejection of registration on this ground is bad in law. - AT
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Customs

• Court Denies Customs and Duty Exemptions Request for Imports Before Foreign Trade Policy 2015-2020 Implementation.

  Case-Laws - HC : Goods imported against advance authorization scheme - claim of exemption towards (1) whole of the Customs Duty (2) whole of the Additional Duty (CVD) (3) Anti- Dumping Duty and (4) Safeguard Duty - the Petitioner in effect wants us to direct the Government to grant an exemption which was never granted in the first place until it framed the Foreign Trade Policy 2015-2020. - no merit in this Writ Petition - HC
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• Exemption for Coking Coal Under S. No. 68/68A of Notification No. 21/2002-Cus: No Specific End-Use Required.

  Case-Laws - AT : The exemption to coking coal under S. No. 68/68A of Notification NO. 21/2002-Cus would also be available to coal "suitable" for use in admixture with other coal for making coke - The exemption to coking coal was not linked to any particular end-use and that any coal which fulfilled the criteria of being a coking coal was eligible for the benefit of exemption - AT
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• Importing Without IE Code Risks Confiscation; Penalty u/s 112 May Not Be Essential for Code Absence.

  Case-Laws - AT : Import of goods without having the IE Code at the time of importation - No doubt penalty can be imposed for rendering the goods liable to confiscation. - But, for the only offence of not having the IE Code at the time of importation, imposing penalty under Section 112 may not be necessary - AT
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• Customs House Agent License Revoked for Misdeclaration of Goods, Violating Rule 13 of CHALR 2004.

  Case-Laws - AT : Revocation of CHA License - Misdeclaration of goods - the appellant totally failed to discharge its duties as CHA with utmost speed and efficiency and thereby grossly violated Rule 13 of CHALR, 2004 - AT
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Corporate Law

• Disputes u/ss 397-403 of Companies Act cannot be referred to arbitration u/s 8 of Arbitration Act.

  Case-Laws - Board : Application u/s 8 of the Arbitration and Conciliation Act, 1996 - Whether the dispute raised in a properly filed petition under sections 397, 398, 402 and 403 of the Companies Act can be referred to arbitration in accordance with the agreement between the parties? - Held No - CLB
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Service Tax

• Service tax demand criticized for arbitrary assessment; lacks analysis and undermines quasi-judicial process, deemed non-speaking and absurd.

  Case-Laws - AT : Demand of service tax - arbitrary quantum while doing best judgement assessment - the order fatally suffers from lack of analysis/discussion regarding the contentions and arguments of the appellant and makes a mockery of the quasi-judicial process in-as-much-as it is not merely non-speaking, but also absurd in parts. - AT
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• Buyer's Location as "Place of Removal" Makes Freight Charges Eligible for CENVAT Credit Under Input Service Definition.

  Case-Laws - AT : CENVAT Credit - since the title or ownership of goods passed on to the buyer at their site, such site of the buyer will be considered as the "place of removal" and as per the definition of input service, the freight payable for such transportation of goods will be considered as input service for the purpose of taking cenvat credit. - AT
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Central Excise

• Undervaluation Claims Fail Without Proof of Mutual Interest, Non-Normal Price, or Related Parties.

  Case-Laws - SC : Undervaluation of goods - Related person - When department fails to prove any one of the following condition the allegation of under valuation is not sustainable (i) mutuality of interest, (ii) price is lower to the normal price and (iii) buyer and seller are related persons - SC
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• Denial of Provisional Assessment u/r 7 Challenged Due to Department Delays in Finalizing Assessments.

  Case-Laws - AT : Denial of provisional assessment of the goods as per the provisions of Rule 7 of the Central Excise Rules, 2002 - rejection of request of provisional assessment only for not providing the records to finalize assessment, cannot be a reason as the department in many cases have undertaken the exercise of finalizing the provisional assessment belatedly - AT
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• Appellant Rightfully Allowed CENVAT Credit Despite Supplier's Error in Paying Excise Duty on Ethyl Alcohol.

  Case-Laws - AT : Denial of CENVAT Credit - whether the appellant who has procured ethyl alcohol from M/s Andhra Sugars, on payment of duty of excise can be disallowed the credit of the said duty on the ground that the supplier of the inputs should not have paid the duty - Held No - AT
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• No Excise Duty Needed if No Credit Taken for Non-Manufacture Activities; Reversing Input Credit Prevents Revenue Loss.

  Case-Laws - AT : CENVAT Credit - Assuming that no credit has been taken for the activities not amounting to manufacture then there was no scope for payment of any Central Excise Duty on removal of final product. However, since the final product has suffered duty, reversal of credit taken by the Respondent on the inputs will not result in any loss of Revenue to the Government exchequer - AT
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• CENVAT Credit Fully Reversed; No Basis for Rule 6(2) and 6(3) Application, Duty Demand Unsustainable.

  Case-Laws - AT : Reversal of CENVAT Credit - if the appellant have fully reversed the credit in respect of common services or in other words not taken any Cenvat credit in respect of the common services there would be no justification for invoking Rule 6 (2) readwith Rule 6 (3) and the duty demand would not be sustainable at all. - AT
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VAT

• Court Rejects Settlement Proposal Under Tamil Nadu Sales Tax Act; Full Payment of Collected Tax Required.

  Case-Laws - HC : Rejection of applications for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 - A person who had collected tax from the customers and allowed to retain it under a deferred payment scheme, cannot claim that he would pay 40% of what was collected by him together with interest calculated from the date of assessment. - HC
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Case Laws:

• Income Tax

• 2015 (12) TMI 1423
  Disallowance under Section 14A - whether the ITAT was correct in affirming the order of CIT(A) which had confined the disallowance under Section 14A - whether the ITAT could read down Rule 8D (2)(ii) of the Income Tax Rules 1962 and whether that was beyond the jurisdiction of the ITAT? - Held that:- In the case in hand, in Note 4 of the computation of income submitted by the Assessee, the total interest debited to the profit and loss account was Rs. 5,52,83,131. There was an entry regarding interest on loans given to two entities. After accounting for the other interest expenditure, the Assessee computed the total interest expenditure which was allowable as Rs. 83,90,178. In the computation drawn up by the Assessee, the entire interest expenditure was incurred for earning either taxable income or exempt income. There was no interest amount which was not directly attributable to either the tax exempt or taxable income. The ITAT, therefore, correctly observed in the present case "no portion of interest really survives for allocation under Rule 8D (2) (ii)". However, as rightly pointed out by the ITAT, since the Assessee did not challenge the order of the CIT (A) to the extent it restricted the disallowance, that part of the order of the CIT (A) remained. The point concerning Rule 8D (2) (iii) does not appear to have been urged by the Revenue before the ITAT and therefore not considered by it. In any event that does not affect the interpretation of Rule 8D (2) (ii) which was the only issue considered by the ITAT in the impugned order. For the aforementioned reasons, the impugned order of the ITAT does not call for any interference - Decided in against revenue.

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• 2015 (12) TMI 1422
  Entitlement for exemption under Section 11 - nature of interest income from FD with the banks - the respondent being a Trust not having submitted Form No.10 and not having applied 85% of income towards Charitable & Religious purposes - Held that:- Assessee is a statutory authority created under the Karnataka Improvement Boards Act to carry out public purposes. Therefore, ratio of judgement in the case of CIT v. Gujarat Maritime Board [2007 (12) TMI 7 - SUPREME COURT OF INDIA ] is applicable to the facts of this case wherein held that Section 10(20) and Section 11 of the 1961 Act operate in totally different spheres. Even if the Board has ceased to be a "local authority", it is not precluded from claiming exemption under Section 11(1) of the 1961 Act. Therefore we have to read Section 11(1) in the light of the definition of the words "charitable purposes" as defined under Section 2(15) of the 1961 Act.. - interest earned by parking the funds received from the Government also assumed the character of funds provided by the Government and cannot be brought to tax as Income from other sources. In the premise, we are of the considered view that the argument advanced on behalf of the Revenue that assessee was not entitled for exemption under Section 11 of the Act for the reasons recorded by the Commissioner of Income Tax, is untenable and deserves to be rejected and accordingly rejected. - Decided in favour of assessee

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• 2015 (12) TMI 1421
  Entitlement to the benefit of long term capital gains u/s 54 - Held that:- Providing for short term and long term capital gains is a beneficial piece of legislation, whereby certain benefit in taxation is given to the assessee on fulfillment of certain conditions. Every such legislation is to be construed liberally in favour of the assessee, as it is for the benefit of the assessee. When the purpose is to give a benefit, then technicalities in law should not come in the way of such benefit being given. In the facts of the present case, applying the ratio of the decision of the Apex Court in the case of Sanjeev Lal (2014 (7) TMI 99 - SUPREME COURT ), in our opinion, the assessee would be entitled to the benefit of long term capital gain. - Decided in favour of the assessee

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• 2015 (12) TMI 1420
  Addition u/s.41(1)- unclaimed 'stale draft and pay orders' - ITAT deleted the addition - Held that:- Section 41(1) can be pressed into service when an allowance or deduction is sought to be made in respect of loss, expenditure or trading liability is incurred by the assessee. In the instant case, the sum of Rs. 58,38,581/- has remained with the assessee owing to the fact that the payees or holders of the draft/pay orders had not encashed them. The language employed by the legislature being unambiguous, it would be incongruous to construe the said sum as either a loss, expenditure or trading liability incurred by the assessee. Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar (1996 (9) TMI 1 - SUPREME Court) held that the provisions of s.41(1) were not attracted in the facts of this case because the assessee's liability to pay back the amounts to its customers had not ceased. - Decided in favor of assessee Depreciation on investments on government securities "held to maturity" - whether such securities were held as a investments and not as 'stock-in-trade'? - Held that:- Admittedly in the instant case, assessee was following the method of accounting namely, "at cost or market value, whichever is lower". Further, it is not in dispute that this practice was accepted by the Revenue throughout. Thus, in the light of the above pronouncement in the case of United Commercial Bank (1999 (9) TMI 4 - SUPREME Court) notwithstanding the preparation of the balance sheet and describing the security under a particular nomenclature in compliance with the directions/instructions issued by the RBI, the assessee would be lawfully entitled to submit the tax returns on the real taxable income in accordance with the method of accounting consistently and regularly adopted.- Decided in favor of assessee

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• 2015 (12) TMI 1419
  Income from capital gain - whether should be included for the purpose of computing Book Profit under Section 115JB? - Held that:- The proviso to the said Section 211(3)(C) of the Companies Act makes it clear that the standards of accounting specified by the Institute of Chartered Accountants of India shall be deemed to be the accounting standards until the accounting standards are prescribed by the Central Government under the subsection 3(C). The Assessing Officer has placed reliance on the accounting standards, vide No.9949 dated 25.1.1996 and has held that the transaction of sale property should have been brought into the profit and loss account as an extraordinary item since the assessee has failed to follow the accounting standards, determined the book profit after allowing the deduction towards cost as per provision to Section 115JB (2) of the Act. This order is confirmed by the appellate authority as well as by the ITAT. However, this exercise of the assessing authorities, in recomputing the book profit of the assessee is contrary to the principles of law laid down by the Apex Court in Appollo Tyres (2002 (5) TMI 5 - SUPREME Court) wherein held that the only power vested with the Assessing Officer is to make increases and deductions as provided in the explanation to Section 115JB of the Act. Assessing Officer has no power to embark upon a fresh enquiry in regard to the entries made in the books of accounts of the company. In the light of the judgment of Apollo Types (supra), we are of the opinion that the Assessing Officer has no power to recompute the book profit and has to rely upon the authentic statements of accounts of the company, the accounts being scrutinized and certified by the statutory auditors though with a qualification, approved by the company in general body meeting and thereafter filed before the Registrar of Companies, who has a statutory obligation to examine and be satisfied that the accounts of the company are maintained in accordance with the requirements of the Companies Act. - Decided in favour of assessee.

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• 2015 (12) TMI 1418
  Addition u/s 68 - CIT(A) deleted the addition - Held that:- Assessing Officer had received information from the Director of Income Tax (Investigation), New Delhi that those five share applicants have provided accommodation entry to the assessee. The persons who provide money to the taxpayers through cheques against receipt of cash are called as accommodation entry providers. However, we have also noted that the Assessing Officer did not carry out any independent inquiry in respect of the alleged accommodation entry provider, nor brought on record the statement or confession of alleged entry providers given before the officers of the Investigation Wing of Income Tax Department. The Assessing Officer has merely described theoretical information in respect of the informations collected by the Investigation Wing. He did not bring on record any documentary evidence leading to conclusion that those five share applicants were accommodation entry providers, whereas the assessee has submitted confirmation letter certificate of incorporation of share application money, a copy of PAN certificate, copy of acknowledgment of income tax return filed, copy of balance sheet and profit and loss account of share applicants. In the case of Gangeshwari Metal (P.) Ltd (2013 (1) TMI 624 - DELHI HIGH COURT ), the Hon’ble High Court has held that when there was a clear lack of inquiry on the part of the Assessing Officer, once the assessee had furnished all the material, then in such eventuality, no addition could be made under Section 68 of the Act - Decided in favour of assessee

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• 2015 (12) TMI 1417
  Addition on account of suppression of stock and difference in books of accounts and in not allowing the deduction u/s 10A - Held that:- The assessee disclosed the gold recovered from the wastage in its books of accounts after the survey and the same was sold which was also entered in the stock register. The department had accepted the books of accounts maintained by the assessee in its regular course of business. The assessee disclosed the sale of the gold weighing 12kg which was recovered from the wastage. When the assessee itself disclosed the sale of the gold obtained on recopying the wastage and disclosed the profit on the said sale in the books of accounts which had been accepted by the department. In our opinion, the value of 12kg gold recovered by the assessee from its customer in regular course of business was its income but the assessee was eligible for deduction u/s 10A of the Act on the said income of Rs. 1,20,00,000/-. In the present case, the deduction u/s 10A of the Act has not been denied by the AO. Therefore, the addition of Rs. 1,20,00,000/- made by the AO and sustained by the ld. CIT(A) was justified but the assessee is entitled for deduction u/s 10A of the Act on the said addition because the said income was directly related to the export business of the assessee. As regards to the another addition of Rs. 11 lakhs is concerned, the said amount was disclosed by the assessee itself to cover up the various discrepancies found during the course of survey but that discloser was also related to the regular business of the assessee and it was not from the sources other than the business. On the said income of Rs. 11 lakhs disclosed by the assessee, the exemption u/s 10A of the Act was available In the present case, the assessee agreed during the course of survey for the addition only when discrepancies in the loose papers were found. The assessee surrendered Rs. 11 lakhs to cover up the irregularities of the business and short coming found during the course of survey. The said surrender was related to the regular business of the assessee and it is not brought on record that the assessee earned the said income from any other source. Therefore, the deduction u/s 10A of the Act was allowable to the assessee being 100% Export Oriented Unit established in SEZ on this income also. We order accordingly. In view of the above we uphold the addition made by the AO and sustained by the ld. CIT(A), however, the AO is directed to allow the deduction u/s 10A of the Act. - Decided partly in favour of assessee

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• 2015 (12) TMI 1416
  Rectification of mistake - registration as per the provisions of Section 12AA granted w.e.f. 31.03.2003 by the Commissioner of Income Tax whereas the first day of the financial year would be 01.04.2002 as per assessee - whether order under Section 154 of the Act in respect of section 12AA of the Act was not included in the list of orders which are appealable, the appeal filed against the said order is not maintainable? - Held that:- It is undisputed that the order of rectification to the order passed under Section 12AA of the Act is not in the list of the orders appealable to the Tribunal. The legislature has included the order passed under Section 154 amending the order under Section 263 of the Act, however, the order rectifying order under Section 12AA of the Act has not been included. It is the settled position of law that there is no inherent right of appeal to any assessee and the right of appeal is only statutory one. Therefore, unless the statute specifically provides for filing an appeal against a particular order, no right of appeal can be said to be conferred upon an assessee. See case of Pradeep Singh Vs. Deputy Commissioner of Income Tax [2005 (2) TMI 459 - ITAT DELHI-F ]. The appeal filed by the assessee against the order passed under Section 154 of the Act to the order under Section 12AA is not maintainable. However, the assessee may file an appeal against the order passed under Section 12AA of the Act by the Commissioner of Income Tax in compliance to the direction of the Tribunal with a request of condonation of delay, if so advised.

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• 2015 (12) TMI 1415
  Registration u/s 12AA denied - CIT(A)'s first conclusion is that amendment carried out through supplementary deed was illegal and unacceptable - Held that:- In the case in hand also the amendment has been carried out under the authority granted by the settler company and it was registered with Registration Authorities rather than court. The supplementary deed was otherwise not found to be fictitious or shame by the learned Commissioner of Income-tax in case in hand. We find that in view of clear judgment of the Hon’ble High Court of Rajasthan in the case of Laxminarayan Lath Trust (1987 (5) TMI 12 - RAJASTHAN High Court) the amendment carried out in the trust deed through supplementary deed without approval of Court was a valid one and there was no illegality in the same. The second conclusion of the ld. Commissioner of Income-tax that certain provisions of the trust deed were not clear. We are of the opinion that non10 clarity of one or two words in the deed can’t be a ground for refusing the registration if otherwise the trust fulfills the conditions for registration. The third conclusion drawn by CIT(A) that certain clauses of trust deed envisage control of the company over the activities of the trust and serve the interest of the settler company. It is seen that, sometimes settler wants to have some sort of control over the affairs of the trust so as to ensure that Trust work in the direction of its objects and for this purpose , the settler also become one of the trustee of the trust and exercise control over the affairs of the trust. In the case in hand, the settler has not become trustee. Further, CIT(A) has not brought on record how the trust has served the interest of the company. If it was so , before refusing the registration, he was required to clearly record such activities in his order. We are of view that doubt raised by the CIT(A) that the trust would serve the interest of the settler company, is without any evidences and based only on the presumptions and possibilities. The object clauses containing welfare of the employees had already been removed through supplementary deed and now there was not any object which was in violation of charitable object as defined in section 2(15) of the Act. Fourth conclusion also the CIT(A) has expressed general notion that trustees being employees of the company look forward toward corporate office and do not carry out activities of the trust independently. We find nothing wrong in taking certain assistance of ministerial or clerical level for carrying out meeting etc. from the office of settler. The CIT(A) was required to examine whether taking any assistance rendered the activities of the trust not genuine. He has not given any finding in this respect. Further, the last conclusion drawn by the CIT(A) is that the activities of the trust were very little and did not instill any confidence. It was the first year of the activity of the trust and the trust had started the activities in the nature of relief to poor like distribution of blanket etc. The activities were not started as large scale as there were no funds in the trust. As regards to the activity, the ld. Commissioner has not concluded that same were not genuine, might be at small scale. The discrepancies observed by the ld. Commissioner in recording bills or minutes of meeting are not material in sense when we look the activities which were carried out were charitable in nature. The learned Commissioner of Income-tax (Departmental Representative) has made allegations that the trust was acting as subsidiary of the company. We find that all the allegations are devoid of evidences as far as the charitable activities carried out by the trust are concerned. - Decided in favour of assessee

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• 2015 (12) TMI 1414
  Penalty u/s.271(1)(c) - Held that:- As decided in assessee's own case for the assessment year 2004-05 case for levy of penalty for concealment of income has to be evaluated in terms of provisions of Explanation 1 to Section. 271(1)(c), as per which if in relation to any addition in the assessment, the assessee offers no explanation or offers explanation which is found to be false or is not able to substantiate the explanation and is also not able to prove that the explanation is bonafide, the addition made would amount to concealment of particulars of income. It is a settled legal position that penalty proceedings are different from assessment proceedings and the findings given in the assessment though it may constitute good evidence but same is not conclusive in the penalty proceedings Further, merely because additions have been confirmed in appeal it cannot be the sole ground for coming to the conclusion that the assessee had concealed any income. We are of the view that in the absence of complete and convincing corroborative evidence, the Revenue may justify addition, but in the matter of penalty proceedings, the onus lies heavily on the Revenue to prove that the assessee had concealed its income or has filed inaccurate particulars of its income. Further the decision relied upon by Revenue is distinguishable on facts and therefore cannot be applied to the facts of the present case. In view of the aforesaid facts we are of the view that in the present case no penalty is leviable u/s 271(1)(c) and therefore direct its deletion - Decided in favour of assessee

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• 2015 (12) TMI 1413
  Undisclosed income - Held that:- The assessee submits that this addition sum comprises of access money collection of Rs. 2,02,350/- as per a diary seized . The same is stated to have been received from four parties namely; Prasam Hajarnis, Mrs Anila, Mr. Dinesh, Mr. Kaushik and Mr. Jai Prakash to the tune of Rs. 20,750/- each in first two cases and Rs. 95,125/- , Rs. 45,125/- and Rs. 20,600/- respectively. These figures form part of record Annexure A- 4 page 65 of the paper book. The assessee claims to have returned these sums back to its above stated parties. We put up a specific query in the course of hearing as to whether it had filed any material on record in the shape of seized diary or other evidence proving the same. The reply given is in negative. This leads us to a conclusion that since the impugned excess collection is proved without any rebuttal of its being returned back to the payers, the Assessing Officer has rightly made the corresponding addition of Rs. 2,02,350/- in assessee’s case. - Decided against assessee Disallowance of expenditure - Held that:- The Assessing Officer has accepted assessee’s expenses claimed regarding brokerage, misc. items and the once pertaining to specific payees in question. The assessee takes us to paper book containing names of four parties to have received the same. However, we do not find any vouchers, bills, and other documentary evidence forthcoming from the case file. The same appears to be the reason on Assessing Officer’s part in disallowing these expenses. This position continues before us as well. We uphold the Assessing Officer’s corresponding findings and hold that the assessee has not been able to substantiate its expenditure claim - Decided against assessee

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• 2015 (12) TMI 1412
  Addition on account of low GP - CIT(A) deleted the addition of Gross profit at 10% of total turnover made by the Assessing Officer - Held that:- Decided in favour of the assessee by decision of a coordinate bench, in the group cases of ITO vs. S. N. Rathi & Others [2015 (12) TMI 766 - ITAT AHMEDABAD] Assessing Officer did not point out any comparable cases or any special material which has an influence for giving rise to such a profit. The other discussion made by Assessing Officer in assessment order relates to the issue, as to why alleged books of accounts should not be rejected. But after rejection of the books, the ld. Assessing Officer failed to substantiate his conclusion for computing the profit at @ 10% of the turnover. Taking into consideration the finding of the Commissioner of Income Tax(A), we do not see any reason to interfere in his orders in all the assessment years. Thus, grounds of appeal of the assessee as well as by the revenue on this issue, in all these assessment years are rejected. The Ld. Assessing Officer shall compute the profit from the benami bank accounts @ 2.45% of the turnover - Decided against revenue. Addition on account of cash credit - CIT(A) deleted the addition - Held that:- In the absence of any infirmities having been pointed out in the reasoning adopted by the ld. CIT(A), we see no reasons to disturb the conclusions arrived at in respect of addition for unexplained credits of Rs. 3,00,000/- and Rs. 2,00,000/- having been deleted. The interest disallowance is only consequential in nature, and, there is no good reason to disturb the same either.- Decided against revenue.

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• 2015 (12) TMI 1411
  Entitlement for deduction u/s 80P - CIT(A) deleted the addition holding that the assessee being Cooperative Credit Society is not a Co-operative bank hence is entitled for deduction - Held that:- CIT(A) is justified in directing the AO to allow the deduction claimed by the assessee u/s 80P of the Act on the reason that the assessee, a cooperative credit society is not a bank for the purposes of section 80P(4) of the Act. - Decided against revenue.

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• 2015 (12) TMI 1410
  Transfer pricing adjustment - whether the PSM is the appropriate method as adopted by the assessee or TNMM method as adopted by the AO? - Held that:- In the present case, we have to see as to whether the PSM is the appropriate method as adopted by the assessee or TNMM method as adopted by the AO. In the present case, the different activities performed by the Infogain India i.e. assessee and Infogain US are inextricably linked and both the entities are contributing significantly to the value chain of provision of software services to the end customers. In the instant case Global Delivery Organization Group (GDO) in India is responsible for delivery of services to the customers globally. The primary objective of the group is to bring synergies amongst geographic groups and project, to make efficient use of the available resources, to broaden areas of service offerings, to improve opportunity fulfillment ration, and to maximize customer satisfaction with each project execution. However, the TPO had not considered the role of the GDO. In the present case, the TPO mentioned that the shifts in the assessee’s case started from 2005 onwards, however, the assessee chose to change the method in the financial year under consideration, the explanation of the assessee was that though the transition process started from September 2005 which was very gradual and led to the complete shift in the functional matrix of Infogain Group over a period of 2-3 years, therefore, the pricing model was changed w.e.f April 2007, the said explanation appears to be a plausible. In the instant case, the assessee assigned weights to each activity keeping in view the relative importance in the entire value chain, based on interviews with the key management personnel and the functions in the value chain of software services provided by the Infogain Group to the customers based in the US were identified and weights were assigned to the functions having regard to their relative importance in the value chain, which is evident from page nos. 229 to 234 of the assessee’s paper book wherein the functions are clearly designed in a tabular form. In the present case, both the parties i.e. Infogain India (assessee) and Infogain US are making contribution. Therefore, the Profit Split Method is the most appropriate method for determination of ALP. Therefore, we are of the view that the conclusion of the TPO that the PSM is adopted by the assessee only to camouflage loss at the net level is merely an allegation and hence devoid of merit. In the present case, the assessee adopted Profit Split Method, for application of the said method, the provisions are contained in Rule 10B(1)(d) of the Income Tax Rules, 1962. According to the said provisions the Profit Split Method is applicable mainly in international transactions which are so interrelated that they cannot be evaluated separately, for the purpose of determining the arms’ length price. How the allocation is to be done for residuary profits? - Held that:- It is well settled that as per the Rule 10D, the benchmarking should be done with the external uncontrolled transactions, however, in the present case, it is not possible to get a comparable. Therefore, such allocation can be done on the basis that how much each independent enterprise might have contributed. Therefore, relative contribution has to be determined, based on key value drivers because benchmarking is not practicable. In the present case, as the comparables having similar transactions would be difficult to find out, therefore, in such a situation, a harmonious interpretation of the provisions is required to make the rule workable, so as to achieve the desired result of the determination of the ALP. Both the OECD Transfer Pricing Guidelines as well as the UN draft method of transfer pricing for developing countries, suggest that an allocation of residual profits under PSM should be done, based on contributions by each entity. In the present case, since the department has accepted in the preceding year and the succeeding year 40:60 ratio between the Infogain India and Infogain US and if the facts are similar for the year under consideration then no deviation is to be done. We, therefore, set aside the issue to file of the AO/TPO to decide the issue following the clear directions given in former part of this order as well as by the Coordinate Bench in the aforesaid referred to orders and after providing due and reasonable opportunity of being heard to the assessee.

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• 2015 (12) TMI 1409
  Registration u/s 12A(a) denied - Held that:- When the assessee has produced certain evidence regarding free coaching camps distribution of kits etc. registration can not be denied on the ground that the activity is insignificant. Collection of entry fee and subscription /contribution and utilising the same for incurring expenditure on tournaments etc. cannot be a reason for coming to conclusion that the activity of the assessee is on commercial lines. Thus rejection of registration on this ground is bad in law.The finding that the assessee society has no activity after 2003 is contrary to the facts on record, as evidenced by the income and expenditure account for the year ended 31st March, 2013. In view of the above discussion we direct the Ld. CIT(A) to grant registration to the assessee u/s 12A/12AA of the Act. - Decided in favour of assessee

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• 2015 (12) TMI 1407
  Estimation of Gross Profit rate - Gross Profit rate of 11.5% confirmed by CIT(A) - Held that:- It is undisputed that the books of accounts were never produced before the Assessing Officer. Certain other alarming facts were also found by the Assessing Officer, the obvious conclusion made by him was to reject the books of account. The assessee preferred not to press the ground related to rejection of books of accounts before us. In such a scenario the estimation of Gross Profit rate is a must. The assessee cannot plead to accept the Gross Profit rate as declared by him, when books of A/c and details were not produced before authorities below. The CIT(A), in this case has given a very detailed reasoned finding as to the fact that, why a Gross Profit rate of 11.5% may be applied. Considering facts of case it is clear that there is increase in turnover of assessee as compared to earlier years. The Ld. CIT(A) considered past history of assessee for estimating profit when no books were produced before AO. We rely on decision of Punjab & Haryana High Court in case of CIT Vs. Rajinder Parshad Jain, [ 2014 (12) TMI 567 - PUNJAB & HARYANA HIGH COURT] - No infirmity in the order of CIT(A) on this issue. The Gross Profit rate 11.5% as estimated by the CIT(A) seems reasonable in the facts & circumstances of the case. As we have upheld the estimation of Gross Profit @ 11.5% while adjudicating the earlier grounds, no other disallowance of any expenses separately is called for. In view of the above, income having been estimated. Any other disallowance is not warranted. - Decided in favour of assessee.

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• 2015 (12) TMI 1406
  Transfer pricing adjustment - DRP/AO/TPO benchmarking the foreign currency loan transaction using the fixed deposit rate of scheduled commercial banks and ignoring the internal CUP analysis performed by the assessee - Held that:- The comparable adopted by the assessee, in his transfer pricing analysis, is the rate at which the Exim Bank of India had extended similar foreign currency loan to the assessee, and the TPO has rejected the same on the basis that such a rate constitutes costs of funds to the assessee which is irrelevant, in the considered view of the TPO, for the purpose of benchmarking the loan to its AE. What, however, the TPO overlooks is the fact that the credit rating of the AE, which is a newly formed and one hundred percent subsidiary of the assessee, is, in the normal course, expected to be the same as that of the subsidiary and if a credit institution like Exim Bank is offering the foreign currency loan to the assessee at a particular price, it is reasonable to proceed on the basis that the foreign currency loan, on similar terms, to the AE could be an arm’s length transaction - Decided in favour of assessee. Adjustment on account of interest on outstanding interest receivable from AE - Held that:- In the present case, however, ALP adjustment by way of charging interest is in respect to delay in payment of interest itself, and APL determination of interest is also before us. While dealing with the preceding ground of appeal, we have already held that the loan arrangement with Exim Bank is a valid internal CUP for this international transaction as well, and, therefore, even the question as to whether the delayed payment of interest will invite compounding of interest can be addressed in the light of the terms of the internal CUP. For this limited purpose, the matter is restored to the file of the Assessing Officer. Whatever be the rate of interest and terms applicable in a materially similar situation of delay in payment of interest to Exim Bank will apply mutatis mutandis in this fact situation as well.- Decided in favour of assessee for statistical purposes. Determining the ALP of the Guarantee fee @ 2% of the Guarantee amount extended by the appellant on behalf of its AE - DRP/AO/TPO rejecting the internal Comparable Uncontrolled Price (‘CUP’) submitted by the Appellant and instead considering external data - Held that:- There is no scientific basis for coming to the conclusion that 2% guarantee commission is an arm’s length price of the corporate guarantee commission, but then there was no information furnished by the assessee to assist in ascertainment of the ALP. The assessee has not even given complete details about the guarantees issued by the assessee, nor has he offered any assistance whatsoever in ascertaining the arm’s length price of the corporate guarantee issued by the assessee. In view of these discussions, as also bearing in mind entirety of the case, we deem it fit and proper to remit the matter to the file of the TPO for the limited purposes of ascertaining the arm’s length price of the corporate guarantee issued by the assessee. The assessee is directed to fully cooperate by furnishing necessary information and inputs to the TPO and assist in expeditious disposal of the remanded matter. As the matter is being remitted to the file of the TPO for adjudication de novo, we consider it appropriate to give liberty to the assessee to raise such legal and factual arguments as the assessee may deem appropriate. With these directions, while the ALP adjustment is upheld in principle, the quantification of ALP adjustment is restored to the file of the TPO for adjudication de novo in accordance with the law, by way of a speaking order and after giving yet another opportunity of hearing to the assessee.- Decided in favour of assessee for statistical purposes. Non granting exemption under section 10(1) of the Act in respect of agricultural income - Held that:- The issue is covered against the assessee, by Hon’ble Karnataka High Court’s judgment in assessee’s own case for the assessment year 2001-02, inasmuch as the matter has been thus remitted to the file of the Assessing Officer for fresh adjudication. Disallowance under section 40(a)(ia) of the Act on account of non-deduction of tax at source on procurement and processing charges - Held that:- The payments did not attract tax deduction under section 194C and, as such, there is no occasion for invoking disallowance under section 40(a)(ia).- Decided in favour of assessee Disallowance of deduction in respect of employees’ contribution to Provident Fund (PF)- amount paid beyond the due date but before the due date of filing the return of income - Held that:- Respectfully following the esteemed views of Hon’ble jurisdictional High Court in assessee’s own case, and in the light of undisputed factual position to the effect that the payments were made before the due date of filing of income tax return, we uphold the grievance of the assessee and direct the Assessing Officer to delete this disallowance - Decided in favour of assessee Depreciation on goodwill - Held that:- A petition dated 16th April 2015 seeking admission of additional evidence in support of this grievance, and contended that “on becoming aware of the decision of Hon’ble Supreme Court in the case of CIT vs SMIF Securities Limited (2012 (8) TMI 713 - SUPREME COURT ), the assessee has raised a ground in respect of allowability of deduction for goodwill” and prayed that the same may be adjudicated on merits. A reference is also made to Hon’ble Supreme Court’s judgment in the case of NTPC Ltd Vs CIT (1996 (12) TMI 7 - SUPREME Court) in support of the contention that this issue can be raised even at this stage. We are of the considered view that the matter should be remitted to the file of the Assessing Officer for adjudication on merits on this issue.- Decided in favour of assessee for statistical purposes.

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• Customs

• 2015 (12) TMI 1390
  Goods imported against advance authorization scheme - claim of exemption towards (1) whole of the Customs Duty leviable thereon; (2) whole of the Additional Duty under section 3 of the CTA, 1975; (3) Anti- Dumping Duty under section 9A of the CTA, 1975; and (4) Safeguard Duty under section 8B of the CTA, 1975 subject to the terms and conditions set out in the said Notification. - Notification No.96/2009-Cus. dated 11th September, 2009 - Held that:- in the Foreign Trade Policy 2015-2020, the Government for the first time in its Policy decided to also exempt the Transitional Product Specific Safeguard Duty (imposed under section 8C), in addition to Safeguard Duty (imposed under section 8B). This Transitional Product Specific Safeguard Duty is the duty imposed under section 8C of the CTA, 1975 for imports from the People's Republic of China. Up until 2015 no exemption was ever granted from payment of Safeguard Duty levied under section 8C of the CTA, 1975. Notification No.96/2009-Cus. dated 11th September, 2009 only granted exemption from payment of Safeguard Duty imposed under section 8B. This being the case, we, in our jurisdiction under Article 226 of the Constitution of India, cannot direct the Government to grant an exemption that was never granted earlier. No person has a vested right in the grant of an exemption. An exemption by its very nature is a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption under a statutory provision in a taxing statute is by its nature a concession granted by the Government so that the beneficiaries of such a concession are not required to pay tax or duty they were otherwise liable to pay under such statute. The recipient of the concession has no legally enforceable right against the Government to grant of such a concession, save and except to enjoy the benefits thereof during the period of its grant. Even if the Petitioner is called upon to pay the Safeguard Duty levied under section 8C on Carbon Black imported by it from the People s Republic of China, no prejudice would be caused to the Petitioner because the Petitioner could always claim a drawback of the same on establishing that the very same product imported on payment of Safeguard Duty was ultimately used in the manufacture of final products that were exported out of India. In fact, to be fair to the Respondents, this is also the stand taken by them in their affidavit in reply to this Writ Petition. We therefore do not think that in these circumstances, this is a fit case where we ought to exercise our equitable, extraordinary and discretionary jurisdiction under Article 226 of the Constitution of India in favour of the Petitioner. Provisions of sections 8B and 8C of the CTA, 1975 operate in two different fields. The Safeguard Duty imposed under section 8B is on a specific article that may be imported from any country. On the other hand, the Transitional Product Specific Safeguard Duty under section 8C is not only article specific but also country specific. In other words, the Safeguard Duty imposed under section 8C is on a particular article specifically imported only from the People s Republic of China. There is therefore a clear distinction between the Safeguard Duty imposed under section 8B and under section 8C. The two sections operate in a totally different fields and are a category by themselves. It is not as if by granting exemption from payment of Safeguard Duty imposed under section 8B and denying the exemption from payment of Transitional Product Specific Safeguard Duty imposed under section 8C, the Government has created any sub-classification excluding one sub-category even when both the sub-categories are of same genus. The Safeguard Duty imposed under section 8B and 8C fall in separate categories by themselves and can never be classified as sub-categories of the same genus. It is not as if the payment of Transitional Product Specific Safeguard Duty imposed under Section 8C was exempted under the Notification No.96/2009-Cus. dated 11st September, 2009 and the same was thereafter retracted without any justification. As stated earlier, this exemption was never granted by the Government. In fact, it is the case of the Petitioner that by not granting this exemption the Government has committed an error or mistake. A party can never have a vested right in claiming an exemption that was never granted in the first place as held by the Supreme Court in the case of J. K. Udyog. ( 2004 (9) TMI 381 - SUPREME COURT OF INDIA) In this view of the matter, we find that the reliance placed by Mr. Sridharan on the decision of the Supreme Court in the Indian Express Newspaper s case (1984 (12) TMI 65 - SUPREME Court) is of no assistance to the Petitioner. - Supreme Court held that there must be rational basis of discrimination between one commodity and another for the purpose of imposing or not imposing the tax. As stated earlier, in the present case, any Transitional Product Specific Safeguard Duty imposed under section 8C of the CTA, 1975 was never exempted under Notification No.96/2009- Cus. dated 11th September, 2009. It is not as if the exemption was initially granted and was thereafter withdrawn without any justification. In the case before us, the Petitioner seeks a mandamus, which in effect, would be to direct the Government to grant an exemption which was never granted earlier. In these facts, we find that the judgment of the Supreme Court in the case of Deepak Fertilizers (2007 (5) TMI 323 - SUPREME COURT OF INDIA) has no application to the facts of the present case and the reliance placed thereon is also wholly misplaced. It was only in the Foreign Trade Policy 2015-2020 that Transitional Product Specific Safeguard Duty imposed under section 8C of CTA, 1975 was sought to be exempted so long as the goods imported were used in the manufacture of final products that were exported out of India. Keeping in tune with this Foreign Trade Policy, a Notification was issued on 1st April, 2015 whereby apart from the Safeguard Duty imposed under section 8B, Transitional Product Specific Safeguard Duty imposed under section 8C was also exempted. It is in this light that we have come to the conclusion that there was no conflict between the Foreign Trade Policies framed by the Government of India from time to time and the corresponding Notifications issued to implement the said Policies. - There is no doubt that the exercise of power, whether legislative or administrative, would be set aside if there is a manifest error in exercise of such power or the exercise of the power is manifestly arbitrary. We do not find any such case before us. In fact, in the present case, the Petitioner in effect wants us to direct the Government to grant an exemption which was never granted in the first place until it framed the Foreign Trade Policy 2015-2020. - no merit in this Writ Petition - Decided against assessee.

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• 2015 (12) TMI 1389
  Whether the coals imported by M/s. JSW Steel Ltd (JSWSL for short), the appellant, i.e. for use in Corex Furnace and declared as weakly Coking/Soft Coking/Semi Soft Coking/Corex Coal are "Coking Coal" classifiable under tariff item 27011910 of the Customs Tariff Act and eligible for exemption from payment of customs duty under Sl. No. 68 to notification No. 21/2002-Customs dated 1.3.2002 or these were in fact thermal coal/ Steam Coal classifiable under tariff items 27011920 and 27011990 leviable to Customs duty @5% Adv - Held that:- The issue is covered by the judgment of the Tribunal in their own case, reported in [2013 (1) TMI 301 - CESTAT, CHENNAI], wherein it was held that the exemption to coking coal under S. No. 68/68A of Notification NO. 21/2002-Cus would also be available to coal "suitable" for use in admixture with other coal for making coke. It was held that the mere adoption of a new technology enabling the use of coal without first converting the same into coke in admixture with other coal cannot be a ground for denying the benefit of the exemption. It was further held that the criteria regarding 1 CSN and 0.60 MMR, which were introduced in the Notification granting exemption to coking coal with effect from 1.3.2011, cannot be given retrospective effect. - coking coal imported by the appellant for its Corex Plant had weak caking properties with CSN of more than 1 and less than 3 clearly comes out from the statements of Shri AVRP Dasu, General Manager - 4MT (Iron Making) dated 19.9.2011 and of Shri B.M. Reddy, Deputy General Manager - 10MT (Iron Making - Quality Management Centre) dated 29.9.2011. The evidence resumed show that before approving the use of any soft/semi-soft/weakly coking coal from a particular mine, the same was first type-tested for its suitability for use in the Corex process. During the course of investigations, the hard disk of Shri Arvind Rajagopalan (GM Commercial) had been seized and sent to the Central Forensic Science Laboratory, Hyderabad. From the said seized hard disk record, a report dated 29.5.2008 tabulates the CSN of the various coals, being used in the Corex process from the various mines, to be between 1 to 1.5 The exemption to coking coal was not linked to any particular end-use and that any coal which fulfilled the criteria of being a coking coal was eligible for the benefit of exemption. It is settled law laid down in the following judgments that where a notification contemplates an end use, the Central Government has to necessarily provide for a mechanism to monitor the said end-use. - it would be useful to refer to some of the technical literature on the characterization and categorization of various kinds of coal. From the IS standards 770-1977, we find that in Table 2 of the standards, the bituminous coal is classified into categories such non-caking, weakly caking, medium to strongly caking, weakly to medium caking, strongly caking. And further in comparison with the IS standards 1353:1993 we note that the weakly caking, medium to strongly caking and weakly to medium caking categories have a CSN number which is greater than 1 whereas non-caking has a CSN less than 1. In the remarks column in table 2, against strongly caking coal, the purpose of utilization is 'metallurgical Coke making'. According to learned Spl counsel only such coal can be considered as coking coal. However we notice that against the weakly/medium caking coal varieties, the purpose of utilization is written as 'blending'. This indicates that such coal can be used for blending with the strongly caking coal for steel making. An interesting aspect is that the appellant in one case of import at Goa, which is not related to the imports in the present case, requested for retest of samples in which the chemical Examiner at Goa found the CSN to be 1 in respect of four consignments. We are informed that on retesting the CSN of the same samples was found to be 5 to 5.5. The appellant requested for cross examination of the chemical Examiner. From the records of cross-examination, it transpired that the samples were not drawn in the manner prescribed in IS 436 not was the procedure for testing prescribed in IS 1353"1993 completely adhered to in as much as against three readings of CSN, only one reading of CSN was recorded. It has been held by the Hon'ble apex Court in the case of Tata Chemicals Ltd. It versus Commissioner [2015 (5) TMI 557 - SUPREME COURT] that if samples are drawn contrary to the provisions of law, the test reports cannot be relied upon. We realize that the testing does not pertain to the consignments in dispute. But having noted the difference in the results of internal tests by the appellant (not brought on record by revenue) and the testing in Govt Laboratory in the present case, the benefit of doubt must go to the appellants in view of our detailed findings from all angles. The onus was on Revenue in the preceding paras to disprove the appellant's own reports. Noting the totality of evidence in favour of the appellant, we do not agree with the findings of the Commissioner in confirming the demand of duty in respect of 21 bills of entry. - Impugned order is set aside - Decided in favor of assessee.

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• 2015 (12) TMI 1388
  Import of goods without having the IE Code at the time of importation - Penalty u/s 117 - Confiscation of goods - goods are not available and have already been released on payment of duty - Held that:- There is no indication as to what is the value of the goods imported, what is the duty liability involved. No doubt the goods may be liable to confiscation strictly going by the proviso to Section 111(d) read with Foreign Trade Act. However the Revenue never chose the option of imposing penalty under Section 112 at the original stage in both these cases and not resorting to confiscation, in my opinion it is too late or the matter to be reopened. The proper course to be adopted would have been to remand the matter to the original authority so that the importers are given an opportunity to contest proposal for confiscation, imposition of redemption fine (in the absence of goods) and imposition of penalty under Section 112. It is settled law that when goods are not available and have already been released on payment of duty, they cannot be confiscated. Only in the case of provisional assessment where goods are released conditionally, confiscation can be resorted to and fine can be imposed if the goods are not available. - No doubt penalty can be imposed for rendering the goods liable to confiscation. In my opinion, for the only offence of not having the IE Code at the time of importation, imposing penalty under Section 112 and remanding the matter for that purpose may not be necessary - Decided against Revenue.

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• 2015 (12) TMI 1387
  Revocation of CHA License - Misdeclaration of goods - goods were grossly mis-declared in respect of quantity, quality, value and weight etc. and the intention was obviously to defraud the Government by availing of inadmissible drawback amount - Held that:- Apart from goods being mis-declared in description and value, even the weight was much less than the weight declared. In respect of one Shipping Bill, the actual weight was only about 3800 kgs. while the declare weight was more than 10000 kgs. CHAs are required to follow the provisions of CHALR, 2004, in terms of which (Regulation No. 13) the Custom House Agent is inter alia required to obtain authorisation from each of the companies/firms by whom he was being employed, ensure that all documents, such as bills of entry and shipping bills delivered in the Customs Station by him show the name of the importer or exporter, as the case may be, and also ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay. In the present case, it is evident that the appellant had not obtained any authorisation from M/s H.M. Impex, a firm which was non-existent at the address given in the IE Code and whose proprietor (as mentioned in the IE Code) never contacted the appellant. The appellant filed documents in the name of a nonexistent firm without any verification whatsoever. The documents filed by CHA are treated with a certain degree of trust by the Customs and such trust was completely violated in the present case. The documents filed by CHA are treated with a certain degree of trust by the Customs and such trust was completely violated in the present case. Nothing can possibly be a graver mis-conduct on the part of a CHA than to file Shipping Bills of such high value in the name of a non-existent firm without making even preliminary enquiries about the genuineness of firm/company in the name of which the documents were filed. Such dereliction of duty on the part of a CHA, can potentially have even graver financial/security consequences. Thus the appellant totally failed to discharge its duties as CHA with utmost speed and efficiency and thereby grossly violated Rule 13 of CHALR, 2004. Such serious violation on the part of the CHA can hardly deserve any condonation or leniency. CESTAT judgement in the case of Pranil Shipping cited by the appellant is hardly applicable to the present case because in that case the importer was not non-existent. - Impugned order is upheld - Decided against Appellant.

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• 2015 (12) TMI 1380
  Maintainability of appeals - Held that:- applicant had not complied with the said order and the order sent by the Registry on 22.5.2015 was not returned as undelivered by the postal authorities. Since the applicant had not complied with the direction of pre-deposit their appeals are liable for dismissal under section 129E of the Customs Act, 1962. - Decided against assessee.

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• 2015 (12) TMI 1379
  Refund claim for the Special Additional Duty (SAD) - Bar of limitation - Held that:- Notification No.102/2007-Customs did not have any provision relating to time limit within which the refund claim has to be filed. The Notification was amended on 01/08/2008 and the time limit of one year was prescribed for filing the refund claim. Since the SAD refund claim was filed by the appellant in April 2008, the refund claim was to be considered in accordance with the Notification as it existed at the time of payment of SAD - decision in the case of Audioplus Vs. CC(Imports), Raigad 2010 (11) TMI 361 - CESTAT, MUMBAI] followed wherein while considering the refund claims filed on 01/12/2008, 20/10/2008, it was held that limitation of one year would not be applicable - Decided in favour of assessee.

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• Corporate Laws

• 2015 (12) TMI 1378
  Application u/s 8 of the Arbitration and Conciliation Act, 1996 - Whether the dispute raised in a properly filed petition under sections 397, 398, 402 and 403 of the Companies Act can be referred to arbitration in accordance with the agreement between the parties? - Held that:- The arguments look attractive at the first blush but when examined closely find that it lacks substance. A perusal of para 22 of the petition which contains prayer for various relict reliefs would show that the petitioners have prayer for restoration of the shareholding of the petitioner, reinstatement of the Petitioners as directors and staying diversion of business/clients of respondent No. 1 company to a related party Respondent No. 5- Ayushman Ropes & Tapes Pvt. Ltd. All such relief would fall within the jurisdiction of the Company Law Board and are founded on 'oppression and mismanagement'. It has flavor of public interest and the rights of parties are not right in personam. In any case the jurisdiction of Company Law Board cannot be excluded by a clause in an agreement between the parties including provision of arbitration. The other argument advanced by Mr. Nayyar equaily lacks merit. It emerges from para 27 of the judgment of Hon'ble Supreme Court rendered in the case of Everest Holding Ltd. (2008 (10) TMI 629 - Supreme Court Of India ) wherein observed that Arbitrator can find out and adjudicate as to whether or not a company is functional and if it was not functional then he could always find out the nature and status of its assets and can also issue directions and pass orders regarding dues and liabilities and also for taking recourse to appropriate remedy. The aforesaid observations were made in the teeth of the view taken by Hon'ble Supreme Court in the case of Haryana Telecom Ltd. (1999 (7) TMI 545 - SUPREME COURT OF INDIA ) that Arbitrator would have no power to order for winding up of a company for which a sole fora has been provided by the Companies Act. I do not think that para 27 of the judgment of the Supreme Court advances the case of applicant-petitioner. It cannot be concluded that arbitrator enjoys all those powers which are vested in a CLB under sections 397, 398, 402 and 403 of the Companies Act. I don't feel the necessity of refereeing to various other judgments of Company Law Board on which reliance has been placed by Mr. Nayyar. - the prayer for making reference to the arbitration stands rejected

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• Service Tax

• 2015 (12) TMI 1405
  Denial of refund claim - Notification No.17/2009-ST dated 7.7.2009 - claim for refund on transportation/freight - Held that:- Board Circular seeks to explain the scope of Section 154 of the Customs Act. This provision enables correction of arithmetical mistake in any decision or order passed by the Central Government, Board or any officer under the Customs Act, 1962. The corrigendum dated 14.8.2012 was however explicitly issued in exercise of powers under Section 74 of the Finance Act, 1994. Section 74 authorizes rectification of any mistake apparent from the record. It is axiomatic and this is also not contested by the respondent/Revenue that appellant was entitled to refund of service tax on transportation/freight charges incurred on transportation of exported goods from the place of clearance to the port of export though not on transportation of empty containers. A clarification dated 19.7.2012 addressed by the appellant, in response to the departmental notice dated 24 21.6.2012 contains the clear assertion that transportation and freight charges were not incurred on empty containers. - appellant is entitled to succeed. - Decided in favour of assessee.

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• 2015 (12) TMI 1404
  Demand of service tax - Goods Transport Operator service - Notification Nos, 42/97-ST & 43/97-ST both dated 05.11.1997 read with Rule 2 (c) (d) of Service Tax Rules, 1994 - Held that:- Issue is squarely covered by the earlier ruling of this Tribunal in the cases of L.H. Sugar Factories Ltd. (2005 (7) TMI 106 - SUPREME COURT OF INDIA) &. Hi-Tech Carbon (2004 (8) TMI 7 - CESTAT (NEW DELHI)). Accordingly, the impugned order is set aside - Appellant, has pointed out that the total demand of Rs. 8,03,076, was raised on the Assessee, out of which, Rs. 3,74,294/- was paid by them before issuance of show-cause notice and during investigation, they also paid Rs. 4,28,782/- on 27.11.2003 before passing of the Order-in-Original. In the present circumstances, it is not an issue of unjust enrichment involved and the Appellant is also entitled to refund - Decided in favour of assessee.

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• 2015 (12) TMI 1403
  Demand of service tax - franchise service - presumption and arbitrary quantum while doing best judgement assessment - Suppression of facts - invocation extended period of limitation - Held that:- Adjudicating authority has observed that the appellant “deliberately tried to suppress the facts from the Department” and then adds that “M/s. Carlsberg India Pvt. Ltd. wilfully suppressed all the material facts regarding nature of service provided by them in respect of “Intellectual Property Services other than Copyright” and the gross amount received by them during the aforesaid period as royalty / franchisee service and at no stage did they enquire about taxability of their services”. It is obvious that the paragraph has been written without application of mind because in the present case no amount was received by the appellant “as royalty/franchise service”; indeed the appellant paid the amount to foreign based company. The appellant did not provide the alleged services, but was the recipient of the alleged services. In the Show Cause Notice dated 18.10.2012, the figures for 2011-12 have been taken to be 10 times those for 2010-11 under the “best judgment assessment” without any basis / reason which almost smacks of outright mala fide and the adjudicating authority blindly adopted those figures under “best judgment assessment” without even a whisper as to how such a quantum jump (tenfold) in the assessable value was justifiable as 'best judgement assessment' under Section 72 ibid Appellant made elaborate arguments in its written submissions that the service received by it did not satisfy the definition of franchise service under Section 65 (105) (zze) ibid, but the adjudicating authority summarily states (without any analysis) that its contentions do not hold ground. Indeed, as brought out hereinabove, perusal of paragraphs 36 to 41 of the impugned order quoted above makes it so amply clear that the order fatally suffers from lack of analysis/discussion regarding the contentions and arguments of the appellant and makes a mockery of the quasi-judicial process in-as-much-as it is not merely non-speaking, but also absurd in parts. In the absence of analysis/reasoning with reference to the contentions of the appellant, the conclusions drawn in the impugned order are rendered lifeless - we set aside the impugned order and remand the case to the adjudicating authority for de novo adjudication after giving the appellant an opportunity of being heard. - Decided in favour of assessee.

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• 2015 (12) TMI 1397
  Denial of CENVAT Credit - Service tax paid on outward transportation - Held that:- As per the provisions of section 4 (3) (c) of the Central Excise Act, 1944, the place or removal in this case shall be the buyers factory, where the goods are ultimately delivered by the appellant. Reading of the inclusive part of definition of 'input service' makes the position clear that if the place of removal is premises of consumer, then the assessee shall be entitled to cenvat credit of service tax paid on the freight element for movement of goods from the factory to such destination point - if under the terms of the contract, the sale takes place at the destination, then that place will be considered as the place of removal and service tax paid on GTA service for transporting the goods, up to the destination, will be available for Cenvat credit - since the freight amount inclusive of service tax has been charged in the bill and the billed amount was paid by the buyer to the appellant, in my considered opinion, the service tax component on which the appellant took Cenvat credit is forming an integral part of the price of goods. - No merit in impugned order - Decided in favour of assessee.

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• 2015 (12) TMI 1396
  Denial of CENVAT Credit - Manpower service for maintenance of garden - Held that:- In the case of Stanadyne Amalgamations Pvt. Ltd (2011 (2) TMI 644 - CESTAT, CHENNAI) , the statutory requirement under the pollution Control norms for maintenance of garden was not the issue before the Tribunal. Further, in the case of Grasim Industries (2010 (11) TMI 266 - CESTAT, CHENNAI) , no specific reason has been assigned by the Tribunal as to why service tax paid on the maintenance service shall not be eligible for cenvat credit. Since, the issue in hand is squarely covered by the decision in the case of Hindustan Zinc (2013 (11) TMI 407 - CESTAT NEW DELHI) , I am of the considered view that the appellant shall be eligible for cenvat credit of service tax paid on manpower supply service, utilized for maintenance of the gardens within the factory. - No merit in impugned order - Decided in favour of assessee.

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• 2015 (12) TMI 1394
  Denial of CENVAT Credit - service tax paid on the freight charges for transportation of goods up to the buyer's premises - transportation service has not been used either directly or indirectly in or in relation to manufacture of assesse's final product - Held that:- Facts are not in dispute that the ownership of the goods and the title in the goods remained with the respondent till delivery of the goods in acceptable condition to the purchaser at his door step; that the Respondent bore the risk of loss or damage to the goods during transit to the destination; and that the freight charges were an integral part of the price of the goods. The term 'place of removal' has been defined in section 4(3)(c) of the Central Excise Act, 1944, which also includes "any other place of removal where the excisable goods are to be sold after their clearance from the factory". In the present case, since the title or ownership of goods passed on to the buyer at their site, such site of the buyer will be considered as the "place of removal" and as per the definition of input service, the freight payable for such transportation of goods will be considered as input service for the purpose of taking cenvat credit. - Decided against Revenue.

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• Central Excise

• 2015 (12) TMI 1402
  Undervaluation of goods - Related person - Appeal against the decision of Tribunal [2006 (10) TMI 66 - CESTAT CHENNAI] - When department fails to prove any one of the following condition the allegation of under valuation is not sustainable (i) mutuality of interest, (ii) price is lower to the normal price and (iii) buyer and seller are related person - Held that:- Tribunal has arrived at the aforesaid findings by giving cogent reasons on the basis of evidence that was produced by the respondent(s)/assessee(s). - these are pure findings of fact arrived at by the Tribunal. In fact, in the appeal filed by the Department it is not even a ground that these findings are perverse - No question of law arises - Decided against Revenue.

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• 2015 (12) TMI 1401
  Denial of provisional assessment of the goods as per the provisions of Rule 7 of the Central Excise Rules, 2002 - Held that:- Legislature intent is very clear inasmuch as regards the provisional assessment is concerned, which is indicative that the Assistant Commissioner or the Dy. Commissioner of Central Excise, as the case may be, may order allowing payment of duty on provisional basis. There cannot be any other view from the plain reading of the provisions as reproduced herein above. In the case in hand, rejection of request of provisional assessment only for not providing the records to finalize assessment, cannot be a reason as the department in many cases have undertaken the exercise of finalizing the provisional assessment belatedly. Secondly, the reliance placed by the first appellate authority as well as the learned AR on the decision of the Hon'ble High Court of Kolkata is totally misplaced as the same is in respect of the provisions of Section 18 of the Customs Act, 1962 asking the provisions assessment of duty on direction of the proper officer. That is to say when an import takes place, assessee cannot claim provisional assessment as matter of right. While the Central Excise Act and the Rules made thereunder (the provisions of Rule 7) which are reproduced herein above, authorized the Assistant Commissioner or Dy. Commissioner of Central Excise to allow the clearance of the goods on provisional assessment. - Decided in favour of assessee.

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• 2015 (12) TMI 1400
  Denial of CENVAT Credit - the case of the Revenue that Associated Capsules Ltd. was not manufacturing aluminium foils but was engaged in cutting/slitting jumbo rolls into smaller rolls and the said activity does not amount to manufacture and the duty discharged by M/s Associated Capsules Ltd. is not Central Excise duty. - Held that:- department filed an appeal against the order of the Commissioner dropping the proceedings initiated against M/s Associated Capsules Ltd., before the Tribunal in appeal [2014 (2) TMI 721 - CESTAT MUMBAI] and the department's appeal was dismissed by the Tribunal as reported in [2014 (2) TMI 721 - CESTAT MUMBAI] and produced a copy of the same. I find that the Tribunal has upheld the duty discharged by M/s Associated Capsules Ltd. as correct and if that be so CENVAT credit taken by the respondent in the case in hand cannot be disputed, as the fulcrum of the revenue to deny credit on the ground that Associated Capsules could not have discharged duty, is now set aside. - Decided against Revenue.

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• 2015 (12) TMI 1399
  Denial of CENVAT Credit - whether the appellant who has procured ethyl alcohol from M/s Andhra Sugars, on payment of duty of excise can be disallowed the credit of the said duty on the ground that the supplier of the inputs should not have paid the duty - Held that:- Revenue has not raised any objection at the time of payment of duty by M/s Andhra Sugars. It stands held in number of decisions that the recipient of the goods/inputs cannot be denied the CENVAT Credit of duty paid by the supplier of the inputs on the ground that the supplier should not have paid such duty. One such reference can be made to a latest decision of the Tribunal in the case of Cummins Diesel Sales Service India Ltd Vs CCE Pune [2014 (11) TMI 238 - CESTAT MUMBAI]. Reference can also be made to the majority decision of the Tribunal in the case of Asian Colour Coated Ispat Ltd. Vs CCE Delhi [2014 (9) TMI 974 - CESTAT NEW DELHI] where originally there was difference of opinion between two Members and as per the majority decision it was held that CENVAT Credit cannot be denied to an assessee on the ground that manufacturer of final product was not required to pay duty by utilising the credit, as the activity at his end did not amount to manufacture. - there is no dispute that M/s Andhra Sugars cleared the inputs on payment of duty. As the issue is settled, I find no merits in the said stand of the Revenue - Decided in favour of assessee.

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• 2015 (12) TMI 1398
  Levy of personal penalties on the directors and partners of the defaulting company and firms for wrong claim of SSI Exemption - Appeal of the Main Assessee was already dismissed for non compliance of stay order - Heldthat:- A. R. Majmudar was involved in wrong availment of SSI exemption benefit. Thus, the imposition of penalty on Shri Majmudar as Director of M/s. Bakul is justified. We agree with the submission of the Learned Advocate that the imposition of penalty on Shri A.R. Majmudar as partner of M/s Pocono is liable to set-aside, as he is already penalized as Director of M/s. Bakul on the same transaction. The imposition of penalty on Smt. A.A. Majmudar proprietress of M/s Shonar, we find that Smt. A.A. Majmudar had knowingly involved in irregular availment of the SSI exemption by M/s. Bakul. Hence, the imposition of penalty on her is justified. - Rule 209A of the erstwhile Central Excise Rules, 1944 provides any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act, or these rules, shall be liable to a penalty. The expressions in any other reasons have wide amplitude. It is the case of Revenue that Mrs. Majmudar knowing fully was involved in wrong availment of benefit of SSI exemption by M/s. Bakul, who cleared the goods without payment of duty, liable for confiscation. - However, penalty imposed is reduced - Appeal disposed of.

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• 2015 (12) TMI 1395
  Denial of CENVAT Credit - No manufacturing activity is done - Held that:- Commissioner (Appeals) has allowed the benefit to the respondent on the ground that once the duty has been paid on the final product, the same should be treated as reversal of the ineligible credit taken on the inputs and there is no requirement for insisting the assessee again to pay/ reverse the cenvat credit. I find that the observations of the Ld. Commissioner (Appeals) are in conformity with Rule 3(5) of the Cenvat Credit Rules, 2004, which provides that in case of removal of inputs as such from the factory, the manufacturer of final products shall pay an amount equal to the credit taken in respect of the inputs. Further, I find that the dispute in the present case has arisen because of the fact of taking cenvat credit on the disputed inputs used for conversion of the final product. Assuming that no credit has been taken for the activities not amounting to manufacture then there was no scope for payment of any Central Excise Duty on removal of final product. However, since the final product has suffered duty, reversal of credit taken by the Respondent on the inputs will not result in any loss of Revenue to the Government exchequer. - no infirmity in the impugned order - Decided against Revenue.

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• 2015 (12) TMI 1393
  Denial of MODVAT Credit - appellant had removed molasses from the sugar factory to the Kachcha pit situated outside the factory premises - Held that:- Receipt of the disputed input i.e. molasses in the chemical unit of the appellant and their use within the factory for the intended purpose have not been disputed either in the adjudication order or in the impugned order. However, the modvat credit has been denied on the sole ground that the bill issued from the kachcha pit to the chemical unit is not a proper/ valid document prescribed under Rule 52A of the erstwhile Central Excise Rules, 1944 read with Rule 57G for taking the modvat credit - Notification dated 09.02.1999 issued by the Central Government has not been considered in proper prospective by the authorities below while denying the modvat benefit to the appellant. According to the said Notification, the modvat benefit shall not be denied, if the duty paid character of the input and its receipt and utilization in the factory for the intended purpose is not in dispute. In the circumstance of the present case, since the original authority has not carried out proper exercise, I am of the view that the matter should be remanded back to the jurisdictional Assistant/Dy. Commissioner of Central Excise, who shall verify the documents as provided under the said Notification and if maintenance of such documents are in conformity with the requirement of the said Notification, the Modvat benefit should be allowed to the appellant. - quantum of shortage/loss is negligible in comparison with the total material handled by the appellant. Thus, negligible difference due to various factors should be ignored and full credit should be allowed to the appellant - Appeal disposed of.

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• 2015 (12) TMI 1392
  Duty demand - Manufacture - Whether the activity of the appellant installation of signaling system at site is manufacture of excisable goods and would be attract excise duty - Held that:- activity of the appellant no excisable goods come into existence. Moreover, it is also not disputed that similar show cause notices issued by jurisdictional Additional Commissioner, Bangalore, Ahmedabad and Mysore have been dropped by the concerned Additional Commissioners. We are also convinced with the contention that the elements required for invocation of extended period under proviso to section 11A(1) are absent in this case. Prima facie, the show case notice dated 31.10.2012 for demand of duty issued for the period October, 2007 to December, 2009 is therefore time barred. - stay granted.

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• 2015 (12) TMI 1391
  Reversal of CENVAT Credit - Duty demand u/r Rule 6 (3) - Department has alleged that common Cenvat credit availed input services have been used in or in relation to manufacture of dutiable final product (Carbon Black) and exempted final product (steam and electricity) and therefore in respect of sale of steam and electricity an amount equal to 5%/10% of the sale value would be recoverable under Rule 6 (3) of the Cenvat Credit Rules. The appellant's contention, however, is that the services being used are three type. The first type of services are those which are directly used in or in relation to manufacture of Carbon Black and in respect of such services the provisions of Rule 6 (2) readwith Rule 6 (3) would not apply. Held that:- The appellant's plea, however, is that they have reversed the total credit on all the common input services. If this is so, there would be no case for invoking Rule 6 (3) against them. Hon'ble Allahabad High Court, which is the Jurisdictional High Court, in the case of Hello Minerals Water Pvt. Ltd. vs. Union of India [ALLAHABAD HIGH COURT] has held that if the Cenvat credit initially taken is reversed subsequently it would amount to not taking Cenvat credit and same view has been taken by the Tribunal in the case of JCT Ltd. vs. CCE, Jallandhar [2015 (2) TMI 600 - CESTAT NEW DELHI]. Therefore if the appellant have fully reversed the credit in respect of common services or in other words not taken any Cenvat credit in respect of the common services there would be no justification for invoking Rule 6 (2) readwith Rule 6 (3) and the duty demand would not be sustainable at all. Without going into the question as to whether the steam and electricity are excisable goods or non-excisable goods, we set aside the impugned order and remand the matter to Commissioner for denovo adjudication. In denovo proceedings, the Commissioner should examine the appellant's plea that the input services are of three types as described above. In respect of the services which are exclusively used for manufacture of Carbon Black and the services covered by Rule 6 (5) in respect of which Cenvat credit has been taken upto 31/3/11 the provisions of Rule 6 (2) readwith Rule 6 (3) would not apply. If in respect of the common input services of third category, the appellant have fully reversed the Cenvat credit, the provisions of Rule 6 (2) readwith Rule 6 (3) would not apply and the demand confirmed under Rule 6 (3) would not be sustainable - Matter remanded back.

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• CST, VAT & Sales Tax

• 2015 (12) TMI 1386
  Rejection of applications for settlement under the Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 - Failure to produce the Books of Accounts and other connected records, despite service of summons on them - Held that:- In cases of settlement of disputes, the quantum of demand and the quantum of admitted amount may vary. Therefore, the parties may strike a deal for resolving the dispute and it is this deal that becomes known as settlement. But, in cases of settlement of arrears, the term 'settlement' connotes payment or payment terms. - Every Samadhan Scheme has to be understood and interpreted in the light of the provisions contained in the Scheme itself. It is not possible to invoke an external aid for the construction of a provision in an Act containing a Samadhan Scheme. - appellant had availed the benefit of deferred payment of sales tax under a particular scheme. They committed a breach of the agreement executed with the department. Therefore, as per the agreement and the interest free deferral scheme, they were liable to pay interest from the date of filing of monthly returns. The emphasis on bonafide conduct of an assessee made by the Division Bench in EID Parry is completely absent in this case. This case is governed not merely by the statutory provisions relating to payment of interest, but also by the agreement executed by the appellant with reference to the interest free deferral scheme. A person who had collected tax from the customers and allowed to retain it under a deferred payment scheme, cannot claim that he would pay 40% of what was collected by him together with interest calculated from the date of assessment. This is not the purport of the Samadhan Scheme. - Decided against assessee.

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• 2015 (12) TMI 1385
  Refund the excess Input Tax Credit (ITC) alogwith Interest for delayed refund - Held that:- Perusing the present petition and without expressing any opinion on the merits of the case, we dispose of the present petition by directing respondent No.3 to decide the application dated 16.6.2014 along with calculations, Annexures P-5 and P-6, in accordance with law by passing a speaking order and after affording an opportunity of hearing to the petitioner within a period of one month from the date of receipt of certified copy of the order. It is further directed that in case it is found that the petitioner is entitled to the amount of refund, the same be released to it within next one month.

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• 2015 (12) TMI 1384
  Stay of recovery of taxes - Imposition of condition for stay - Held that:- Tribunal was approached against such a conditional stay order of the First Appellate Authority and it found that the appellant has made out a prima facie case to the extent of stay of the direction to pay interest and penalty. However, as far as the taxes are concerned as against the sum determined at Rs,76,73,937/-, the Tribunal brought it down to Rs. 22,59,672/-. The Tribunal has assigned cogent and satisfactory reasons in paragraph 4 of the order under challenge. - No substantial question of law arising for determination and consideration by this Court. We do not see any reason to entertain the appeal - Decided against assessee.

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• 2015 (12) TMI 1383
  Levy of tax on TDS - Levy of penalty under Section 27(3) of the Tamil Nadu Value Added Tax Act, 2006 - Held that:- For the assessment year 2009-10 with regard to the dispute relating to TDS, the impugned order came to be passed under Sections 27(3) & 27(4) of the TNVAT Act - as against the order passed under Section 27(3) of the TNVAT adjudicating the dispute which is solely on TDS a revision alone will lie. - instead of entertaining the appeal, the 2nd respondent ought to have returned the papers to the petitioner so as to enable him to represent the papers before the revisional authority - court is inclined to set aside the impugned order - Decided in favour of assessee.

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• Indian Laws

• 2015 (12) TMI 1382
  Auction sale of properties purchased by the writ petitioner-appellant from Industrial Corporation Private Limited - Held that:- With regard to Rule 68B of Schedule-2 to the Recovery Rules under D.R.T. This is nothing but Rule 68 B of the Income Tax Recovery Rule. He states that the steps taken to sell the properties is now barred by limitation is provided under Rule 68B aforesaid. We are not impressed. As per the writ petitioner/appellant before us the attachment was made in the year 2009 when the writ petition was filed. The writ petition had been dismissed, there is an appeal pending. It is the attachment order that was challenged before this Court. If we read Rule 68B which was essentially made for recovery of tax assessment then sale had to take place within three years of attachment. This rule is applicable to proceeding before D.R.T. as far as possible. In 2009 the writ petition itself being filed and the attachment being of the year 2009, we see no ground how it could be submitted that the proceedings to sell the properties could be beyond time. It is next submitted that only there was the first attachment which was made on 23.08.2001 soon after the proceedings had been received from Civil Court and the objections were rejected. Again we could not agree. The proceedings would show that one after another objections of different natures were taken objecting to steps being taken for sale of the properties, naturally the Recovery Officer had to decide the issue. Validity of attachment was in question. That took the time and this objection was ultimately rejected in 2006 and ultimately fresh attachments were issued in 2009. For the reasons aforesaid, we are not inclined to take a different view of the matter from what has been taken by the learned Single Judge or for that matter by the Recovery Officer D.R.T.

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• 2015 (12) TMI 1381
  Whether Loan defaulters have Right of representation though an advocate before the Grievance Redressal Committee (GRC) of the Bank - willful defaulter - The appellant Punjab National Bank (PNB) in LPA No.589/2014 proposed to so classify the respondents No.1 to 3 i.e. Kingfisher Airlines Limited, United Breweries (Holdings) Ltd. and Dr. Vijay Mallya as wilful defaulters and gave an opportunity to the said respondents to represent thereagainst; the respondents, besides representing, sought a hearing - Held that:- The restriction placed by the Grievance Redressal Committee (GRC) of the appellant banks to appearance on behalf of borrowers of advocates before it, not by any law but otherwise, cannot be sustained and has to be held to be bad. We are also of the view that the entire opposition of the GRC of the appellant banks to appearance of is based on an illogical presumption of the same delaying the proceedings before it. We do not find any basis for such apprehension. There is no basis for the Bank / FIs to form an opinion that while the defaulting borrower and / or his representatives would not delay the proceedings, an advocate appearing for them would. Moreover the members of GRC can always control and guide the proceedings before it and as per the exigencies limit the time of hearing. We therefore conclude that the GRC of the appellant banks erred in denying representation through the advocates to the respondent. We further hold that the borrowers or the Banks/FIs who are proposed to be classified/ declared as wilful defaulters and are given an opportunity of hearing before the GRC are entitled to be represented therein through advocates. We however hasten to clarify that the GRC would be fully empowered to control including as to the duration and guide the hearing and if finds dilatory and vexatious tactics being adopted, to take suitable consequential actions. The appeals are accordingly dismissed. The appellant banks to proceed to fix a date of hearing before their GRC, to proceed with their proposal for declaring the respondents as wilful defaulters

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