Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 30, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
DGFT
- 48/2015-2020 - dated
29-12-2016
Procedure for claiming Duty Credit Scrips under Chapter 3 of FTP -14 for shipments where LEO date is upto 31.03.2015 but date of export is on or after 01.04.2015
Customs
- 182/2016 - dated
23-12-2016
Procedure in respect of clearance of import FCL (Full Container Load) containers involving Participating Government Agencies (PGAs)-reg.
- 174/2016 - dated
15-12-2016
Standard Operating Procedure consequent to commencement of “Document Processing Area” in the Parking Plaza and Gate Automation for Export & Import through NSICT/NSIGT, GTI & JNPCT; reg.
- 50/2016 - dated
9-12-2016
Export Heavy And Bonded Cargo Terminal
- 169/2016 - dated
8-12-2016
Registration of Shipping Lines, Freight Forwarders and Non vessel operating common carrier (NVOCC) under “Handling of Cargo in Customs Areas Regulations, 2009”; clarification about Public Notice No 158/2016-17, dated 25.11.2016; with a objective to reduce the dwell time for clearance of imported/export goods: reg.
- 36/2016 - dated
5-12-2016
Administrative control over the Public and Private Warehouses consequent to closure of erstwhile Customs Division, Bangalore
- 166/2016 - dated
5-12-2016
Simplified procedure for the obtaining Rotation Number reg.
- 167/2016-17 - dated
5-12-2016
Issue of SMTPs in respect of cargo destined to ICDs by Rail– Reg.
- 168/2016 - dated
5-12-2016
Computation and publishing of average dwell time by CFS on their website and communication to Customs, instruction issued under “Handling of Cargo in Customs Areas Regulations, 2009”: reg.
- 165/2016 - dated
2-12-2016
Scanning Procedure in case of OOC given by DPD/RMS Facilitation Centre at JNCH -Reg.
- 163/2016 - dated
1-12-2016
Standard Operating Procedure consequent to commencement of “Document Processing Area” in the Parking Plaza and Gate Automation for Export & Import through NSICT/NSIGT, GTI & JNPCT; reg.
- 162/2016 - dated
30-11-2016
Procedure of Refund, Demand, Adjudication, Review and Appeal of Units located/registered in SEZ’s within the Jurisdiction of JNCH consequent to Notification No 772(E) dated 05.08.2016 (F. No 6/40/2012-SEZ) - regarding.
- 164/2016 - dated
30-11-2016
Mandatory filing of Advance Filing of Bill of Entry– Reg.
- 160/2016 - dated
29-11-2016
Creation of DPD/RMS Facilitation Centre at JNCH -Reg.
- 159/2016 - dated
28-11-2016
Renewal of Self Sealing and Self Certification Permission to the Exporters upto 31st December, 2020 – reg.
- 161/2016 - dated
28-11-2016
Extension of facility of Direct Port Delivery to main importers and other steps taken for ease of doing business- Regarding.
- 157/2016 - dated
25-11-2016
Reduction of Time Gap Between Berthing Of Vessel And Entry Inwards, Reg.
Companies Law
- 16/2016 - dated
26-12-2016
Removal of names of companies from the Register of Companies - clarification regarding availability of Form STK on MCA-21 portal- reg.
Highlights / Catch Notes
Income Tax
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Expenses incurred for buy back of shares are revenue expenses because there is no permanent change in the capital structure of the company, nor a benefit of enduring nature and the purchases are effected for company’s free reserves which are otherwise capable of being freely distributed to the shareholders - AT
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Whether the provisions of Section 36 and Section 43-B are mutually exclusive and the Assessee is legally entitled to claim deduction of employees' contribution to provident fund and ESI u/s 43-B as amended vide FA, 2003, even if the said deduction was not admissible u/s 36(1)(va) - Held Yes - HC
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Addition u/s 28(iv) - huge increase in the capital - revaluation of the jewellery - This is merely a book entry passed by the assessee - the auditor who has admitted to have made mistakes in describing the gold pledged as capital of the assessee, whereas, in the eyes of law it is a contingent liability and since the error has been corrected, no additions - AT
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Since the assessment year 1999-2000 and 2000-2001 became final prior to 30th September, 2004, i.e. the introduction of the amended Section 142A, the respondent No.1/ITO could not have reopened the issue in February, 2005 - HC
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TDS u/s 195 - taxability of a sum in the hands of the recipient on account of a subsequent retrospective amendment would not expose the payer of income to an impossible situation of requiring deduction of tax at source on the anterior date of payment of such income - AT
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Setting off the brought forward unabsorbed depreciation against the Income from House Property - effect must be given to Section 32(2) of the Act for that assessment year - claim allowed - AT
Customs
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Valuation of imported goods - spares and components of Car audio systems - Since the appellant has already accepted the enhancement of the value in the first assessment after examination, there is no reason to further enhance the value - AT
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Valuation - rule 9 relates to the supply of engineering, development, art work, design work and plans and sketches, etc. by the buyer to the supplier. In the instant case, it is the supplier who has sent the technical know-how to the buyers. Thus, Rule 9(1)(b)(iv) has been wrongly invoked - AT
Service Tax
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False VCES declaration - rejection due to difference of taxable value taken by the department and as claimed by the appellant for calculation of service tax dues - appellant should be given an opportunity to explain their case regarding quantification - AT
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By incorporating the explanation in Rule 6, the restriction was imposed for the first time that in case of transaction between associated enterprises, service tax has to be paid immediately on entry of the transaction in the books of account, the said amendment will be considered as prospective in effect, otherwise the doctrine of 'fairness' would be defeated. - AT
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CENVAT credit - appellant is entitled to avail cenvat credit on these cables either as capital goods or input as per cenvat credit rules 2004 - AT
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CENVAT credit - providing erection, commissioning and installation agency service - The appellant held to be eligible to avail and utilize CENVAT credit of tax charged on the consideration paid for construction of roads to contractors of the appellant - AT
Central Excise
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Valuation - inspection charges - cost of additional testing conducted at customer's request and borne by the customer is not includible in the assessable value of the goods - AT
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SSI exemption - use of brand name and the logo belonging to others - they have concealed the factual information from the department and therefore they are not entitle to SSI exemption - AT
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Valuation - Ethion Technical - clearance of goods to sister concern - captive consumption - In view of the revenue neutral situation, in the facts and circumstances of this case, it is held that the demand and the interest liability is unsustainable - AT
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Duty on intermediate goods - The final product supplied by the appellant against CT-2 certificate cannot be treated as nil duty or exempted goods. In such a case the intermediate goods will be entitled for N/N. 67/95-CE, hence the demand on the intermediate product i.e. phosphoric acid is not tenable - AT
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Valuation - value of duty paid on chassis to be included in assessable value or not? - benefit of exemption N/N. 6/2003 dated 01/03/2003 and N/N. 241/86 dated 03/04/86 - In case the benefit of Cenvat Credit was not availed, value of chassis to be excluded - AT
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CENVAT credit - certificate of the Chartered Accountant is not based on the visit of the CA to the factory but it is based on the books of accounts and the balance sheet. The credit cannot be allowed simply on the basis of the entry made in the books of accounts without actual receipt of the goods. - AT
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Rebate - Rule 18 of the Central Excise Rules, 2002 - Period of limitation - In absence of shipping bill it would have not been possible for the claimant to make an application in accordance with law to claim the rebate - HC
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Evasion of duty - Underbilling - penalty on the partner as well as the partnership Firm can be simultaneously imposed and of course, imposition of penalty both on the Firm and its partners, depends upon the facts of each case - HC
VAT
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Merely because “steel structurals” or “angles” or “joists” etc are manufactured by the process of welding, would not take it outside the scope of section 14(iv)(v) of the CST Act or Schedule Entry C- 55(v) of the MVAT Act respectively - HC
Case Laws:
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Income Tax
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2016 (12) TMI 1493
Disallowance made u/s 40(a)(ia) - No tax deducted at source on the expenditure of job work - time of depositing TDS before the due date of filing return - Held that:- From going through the judgment of Hon. Jurisdictional High Court in the case of CIT vs. Omprakash R. Chaudhary (2015 (2) TMI 150 - GUJARAT HIGH COURT ) and the appellate order of ld. CIT(A) and various other judicial pronouncements it is now settled issue that amendment u/s 40(a)(ia) of the Act, by the Finance Act, 2010 is only an amendment in continuation of earlier amendment made in 2008 with retrospective effect from 1.4.2005 and amendment in the year 2010 has been brought to cure the defect so that benefit of the extended time of depositing TDS before the due date of filing return is given to the assessee. Respectfully following the judgment above we find that facts of the assessee are squarely covered by this judgment and as observed by ld. CIT(A) in a right perspective, we do not find any reason to interfere with the order of ld. CIT(A) and uphold the same. - Decided against revenue
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2016 (12) TMI 1492
Revision u/s 263 - error in the claim of deduction u/s 10B - Held that:- We find from the perusal of the said contents of the paper book, that there is absolutely no error in the claim of deduction u/s 10B of the Act made by the ld AO and for the sake of clarity, we would like to state that the assessee had claimed deduction u/s 10B of the Act only to the extent of ₹ 5,12,79,987/- in the return of income which was also duly supported by a Chartered Accountant certified in Form No.56G to that extent. This return was initially processed u/s 143(1) of the Act wherein the ld. AO had granted deduction u/s 10B of the Act for an amount of ₹ 5,12,79,987/-. Later on in the scrutiny proceedings u/s 143(3) AO while examining the claim of deduction u/s 10B went through the entire workings of the assessee and found that the assessee is not entitled for deduction u/s 10B of the Act in respect of certain receipts to the tune of ₹ 86,85,103/- which according to him are not attributable to 100% EOU and accordingly made disallowance u/s 10B of the Act thereon to that extent. While completing the assessment u/s 143(3) of the Act, the ld. AO started the computation of the total income from the “assessed income u/s 143(1) of the Act – ₹ 16,46,29,551/-“ and later on proceeded to make regular disallowances in the assessment to that income. Hence it is very clear that the AO had granted deduction only to the extent of ₹ 5,12,79,987/- u/s 10B of the Act. Hence, we are thoroughly convinced that there is no error in the order of the ld. AO warranting revisionary proceedings u/s 263 - Decided in favour of assessee
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2016 (12) TMI 1491
Validity of reopening of assessment - Held that:- Since the reopening of the assessment u/s 147 of the Act was solely based on the objection of audit para, therefore the reassessment proceedings are not valid. The assessment framed u/s 147 is null & void. - Decided in favour of assessee
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2016 (12) TMI 1490
Revision u/s 263 - A.O. failed to examine cost of acquisition of an asset claimed by the assessee even though registered deeds shows cost of acquisition, which is less than the cost of acquisition claimed by the assessee - Held that:- On perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined the issue of computation of cost of acquisition in the reassessment proceedings. The re-assessment proceeding was initiated for a specific purpose of examination of cost of acquisition claimed by the assessee. In the re-assessment proceedings, the A.O. after satisfied with the explanations offered by the assessee, has accepted explanations and completed assessment by accepting the income assessed in the original assessment. Once, the issues on which CIT wants further verification, have been considered by the A.O. at the time of assessment, the CIT cannot assume jurisdiction unless proved that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. In the present case, the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interest of the revenue, therefore, the CIT was erred in assuming jurisdiction to revise the assessment order u/s 263 of the Act. We, therefore, set aside order passed by the CIT u/s 263 of the Act and restore assessment order passed by the A.O. u/s 143(3) r.w.s. 147 of the Act. - Decided in favour of assessee
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2016 (12) TMI 1489
Expenditure for reduction of authorized share of the company - Held that:- Procedure for reduction in share capital (section 100-104 of the Companies Act, 1956) and for amalgamation (section 390-394 of the Companies Act, 1956) are similar as they both require application to and sanction of the High Court and requirement with respect to disclosures are similar. Even the powers of the High Court with respect to the two procedures are similar. Ld.AR also submitted a copy of the ITAT Kolkata in ACIT Vs. Britannia Industries Ltd. [2010 (8) TMI 635 - ITAT KOLKATA ] it has been held that expenses incurred for buy back of shares are revenue expenses because there is no permanent change in the capital structure of the company, nor a benefit of enduring nature and the purchases are effected for company’s free reserves which are otherwise capable of being freely distributed to the shareholders. It was further submitted that reduction in share capital and buy back are essentially the same and neither result in a benefit of enduring nature as well as Section 77 of the Companies Act, 1956 prescribes the same procedure for buy back and reduction in the case of limited companies. For these reasons, the decision of the ITAT Kolkata would be applicable to the assessee’s case as there is no permanent change in capital expenditure. - Decided in favour of assessee for statistical purpose.
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2016 (12) TMI 1488
Levy of penalty u/s. 271B - non furnish of the required Tax Audit Report - Held that:- The undisputed fact is that the return of income was filed electronically and being a paperless return, there was no requirement to file the Audit Report along with the return of income. It is also an undisputed fact that complete details of Auditors were furnished in the return of income itself. Details as required in Form 3CD were also furnished with the E-return so filed which is evident from the copy of return exhibited at pages 54 to 80 of the paper book. Merely because due to some unforeseen circumstances, the assessee could not furnish the physical Audit Report before the A.O. that would not justify the levy of penalty u/s. 271B of the Act. More so, because the details of the Auditors, the details of the Audit Report and the Audited Financial Statements were placed before the A.O. in the form of E -return of income. - Decided in favour of assessee
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2016 (12) TMI 1487
TDS u/s 194J - transaction charges paid to the Stock Exchange - Held that:- Revenue very fairly states that the issue raised herein is now concluded against the Revenue by virtue of the decision of Apex Court in CIT4 v/s. M/s. Kotak Securities Ltd [2016 (3) TMI 1026 - SUPREME COURT] wherein it has been held that the transaction charges paid to the Stock Exchange are not subject to deduction of tax at source under Section 194J of the Act. Application of Rule 8D of the Income Tax Rules to disallow expenses on exempt income - Held that:- Tribunal followed the decision of this Court in Godrej & Boyce Manufacturing Co. Ltd., v/s. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT ] wherein it has been held that Rule 8D of the Income Tax Rules can be invoked only from Assessment Year 2008-09 onwards. No substantial question of law.
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2016 (12) TMI 1486
Addition u/s 28(iv) - huge increase in the capital - revaluation of the jewellery - Held that:- Opening balance of gold is 27.927 gms and on 31.03.1999 the closing stock of gold pawned was 31,183 gms and ₹ 5,14 ,897/- was lended by the assessee, which matches with the figures shown in the balance sheet as on 31.03.1999. Thus we note that the pawned jewellery stock of 31,183gms as on 31.3.1999 was reduced to approx 28 kgms as noted by AO as on 31.3.2007 pursuant to various redemptions that had happended during the period from 1999 to 2007. The assessee during the financial year 2006-07 thought it fit merely to revalue the said already accounted jewellery and give the effect of revalued portion of the jewellery to the tune of ₹ 1.52 crores and included the same in the jewellery account on assets side and corresponding credit to his capital account. This is merely a book entry passed by the assessee to give effect to the revaluation of the jewellery which was already disclosed in the balance sheet. Hence in any case there is no case made by the AO for framing an addition u/s 28 (iv) of the Act. The assessee was able to explain with the evidence of the auditor who has admitted to have made mistakes in describing the gold pledged as capital of the assessee , whereas, in the eyes of law it is a contingent liability and since the error has been corrected by audited reconciliation statement before the AO at the very first instance itself, we do notfind any infirmity in the order passed by the ld. CIT(A) in directing the deletion of the addition made by the AO u/s 28(iv) of the Act. Therefore we confirm the order of the ld. CIT(A) and dismiss the ground of appeal raised by the revenue on this issue. - Decided in favour of assessee Addition made u/s 68 - Held that:- the undisputed fact that the assessee was maintaining accounts under Bengali conversion single entry system upto Asst Year 2006-07 (i.e immediately preceding previous year) and given the fact that the same were duly converted into English double entry system during the financial year 2006-07 relevant to Asst Year 2007-08 wherein these entries together with other entries were reflected in the books , we are persuaded to believe the version of the assessee in this regard. Respectfully following the Hon’ble Supreme Court’s decision in H.H.Sri Rama Verma vs CIT (1990 (9) TMI 4 - SUPREME Court) we hold that the provisions of section 68 of the Act cannot be invoked in the facts and circumstances of the case and the ld CITA had rightly deleted the addition in this regard. Hence we do not find any infirmity in the order of the ld CIT-A.- Decided in favour of assessee
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2016 (12) TMI 1485
Validity of reopening of assessment - report of the valuation officer relied upon - applying the amendment under Section 142A retrospectively - Held that:- This Court finds adequate reasons to accept the submissions of Sri Biswas that at each of the above noted stages from the ITO to the ITAT, the legal position was uniformly ratified that assessment could not be opened on the basis of a reference and subsequent report of the valuation officer. This Court also concurs with the stand taken by the writ petitioner that the procedure for reopening of assessment on the basis of a valuation report by the valuation officer can be applied only in terms of the amendment to Section 142A of the IT Act which was introduced by the Finance Act of 2004, retrospectively. Therefore, at the relevant point of time when the impugned notices under Section 148 were issued against the writ petitioner in respect of the assessment years 1999-2000 and 2000-2001, only the un-amended Section 142A of the IT Act applied. The unamended Section 142A ought to be read in conjunction with the law applicable at the relevant point of time In Re: Amiya Bala Paul (2003 (7) TMI 4 - SUPREME Court ). This Court must also concur with the stand taken by the writ petitioner that since the assessment year 1999-2000 and 2000-2001 became final prior to 30th September, 2004, i.e. the introduction of the amended Section 142A, the respondent No.1/ITO could not have reopened the issue in February, 2005 by then applying the amendment under Section 142A retrospectively. - Decided in favour of assessee
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2016 (12) TMI 1484
Deduction u/s. 80IB (10) - Housing Project consisted of commercial area exceeding the maximum area of 2000 sq. ft. as prescribed under section 80IB(10) - Held that:- The issue has also now been concluded by the decision of the Apex Court in CIT Vs. Sarkar Builders [2015 (5) TMI 555 - SUPREME COURT] against the Revenue and in favour of the respondent-assessee wherein held the housing project contemplated under sub-section (10) of Section 80IB includes commercial establishments or shops also. Now, by way of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. - Decided in favour of assessee. Violation of Section 80IB(10)(c) - the enquiries made by the A.O. clearly established that the combining of the 3 flats are technically not feasible unless the necessary alteration in basic RCC structure of building is made and which can be made by the builder assessee itself and not by the purchaser - Held that:- The respondent-assessee had not sold 3 flats after combining them in one flat having an area of excess of 1500 sq. ft. In fact, it renders a finding of fact that the respondent-assessee had sold 3 independent flats to one buyer, namely, Dr. Oomer K. George. Further before the Authority, Dr. Oomer K. George has also filed evidence affirming that he has purchased 3 flats and combined them all into 1 flat, after purchase. Dr. Oomer K. George also further pointed out that the respondent-assessee had no role to play in his joining the 3 flats into 1 flat. In view of the above, concurrent finding of fact the question proposed does not give rise to any substantial question of law. Thus, not entertained.
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2016 (12) TMI 1483
Application of Rule 8D of the Income Tax Rules to disallow expenses on exempt income - Held that:- Tribunal followed the decision of this Court in Godrej & Boyce Manufacturing Co. Ltd., v/s. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT ] wherein it has been held that for the assessment years prior to Assessment Year 2008-09, Rule 8D of the Income Tax Rule will not be invoked to work out the disallowance of expenditure under Section 14A of the Act. The Court held that till Assessment Year 2008-2009, the disallowance of expenditure has to be done on a reasonable basis. The impugned order of the Tribunal on application of the reasonable method, disallowed expenditure to the extent of 1% of exempted dividend income under Section 14A of the Act. No substantial question of law Entrance fees paid for club membership - revenue or capital receipt - Held that:- The impugned order of the Tribunal has allowed ex-parte membership fee following the order of this Court in Otis Elevator Co. (India) Ltd. Vs. CIT [1991 (4) TMI 53 - BOMBAY High Court] paid for admission in a club as revenue expenditure. No substantial question of law
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2016 (12) TMI 1482
Treating the trading loss as a speculation loss - Held that:- If the transactions of the assessee are considered in the light of the definition of speculation transaction given hereinabove, in our considered opinion, the transactions of the assessee cannot be considered to be speculative transactions. The assessee has purchased and sold the shares during the day itself which may, at the most, be considered as trading in shares. Any loss arising out of this cannot be considered as a speculation loss. We, therefore, do not find any error in setting off of loss with the profits by the assessee. The revenue authorities have grossly erred in treating the trading loss as a speculation loss. Without prejudice to our aforementioned findings and for the sake of the completeness of adjudication on the facts in hand, provisions of Section 73 as mentioned hereinabove do not apply at all. Since the assessee has not set off the alleged speculation loss from the business profit but in fact has set off business loss from the alleged speculation profit. The transactions of the assessee do not fit into the definition of speculation transaction given u/s. 43(5) of the Act (supra). We find the order of the First Appellate Authority erroneous and are accordingly set aside. The A.O. is directed to allow the set off of losses as claimed by the assessee. - Decided in favour of assessee
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2016 (12) TMI 1481
Exemption u/s 54 EC eligibility - Held that:- The shares were registered in the name of the transferee on 31.12.2009 and accordingly recorded in the books of account of the transferor. The said shares after complying with the formalities as per the original agreement which provided for carrying out all due diligence within a period of 60 days from the date of original agreement dated 29.7.2009 which was revised from time to time. Also as during the pendency of due diligence the shares with duly executed transfer deeds and consideration for shares were deposited with the escrow agent by both transferor as well as transferee. After completion of all the formalities both the parties approached the escrow agent to finally transfer the shares as all the formalities were completed and consequently all the equity shares were transferred in the names of transferee on 31.12.2009. We are in agreement with the finding of facts recorded by the ld.CIT(A) as has been reproduced above that the shares were transferred on 31.12.2009 and therefore the investment was made within a period of six months from the date of transfer on 29.6.2010. We therefore inclined to uphold the order of ld. CIT(A) by dismissing the appeal of the revenue. - Decided in favour of assessee
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2016 (12) TMI 1480
Disallowance of deferred revenue expenses - Held that:- The undisputed fact is that the assessee had a brought forward balance of ₹ 4,03,633/- in the deferred revenue expenses account. It is also an undisputed fact that the assessee has further debited a sum of ₹ 13,14,870/- and out of the total expenditure, the assessee has written off 20% in its Profit and Loss account. What is surprising to note is that the balance of 80% has been claimed as deduction in the computation of income. We fail to understand how this Act of the assessee justifiy the basic accounting principles and in doing so, the assessee has also written off the brought forward balance which does not even pertain to the year under consideration. No doubt, the assessee company is assessed to tax at the same rate of tax every year but it does not mean that expenditure can be allowed defying the basic principles of accountancy - Decided against assessee Disallowance on account of depreciation - assessee has claimed depreciation on two cars which were in the name of the directors of the assessee company - Held that:- The assessee is entitled for claim of depreciation on the vehicles used by it even though they have been purchased in the name of the directors. We draw support from the decision of the Co-ordinate Bench in the case of V-Tex Overseas Pvt. Ltd. [2015 (12) TMI 1618 - ITAT MUMBAI] - Decided against revenue Disallowances made u/s. 14A r.w.r. 8D - Held that:- The undisputed fact is that the assessee did not earn any exempt income during the year under consideration; therefore, disallowance u/s. 14A is unwarranted. We find that while making the disallowances, the A.O. drew support from the decision of the Special Bench of the Tribunal in case of Cheminvest Ltd.[2009 (8) TMI 126 - ITAT DELHI-B ]. However, the said decision of the Special Bench has been reversed by the Hon’ble High Court of Delhi in [2015 (9) TMI 238 - DELHI HIGH COURT ] which was subsequently followed by the Hon’ble Jurisdictional High Court of Gujarat in Commissioner of Income Tax –I Versus Corrtech Energy Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT ].Respectfully following the said ratio, we set aside the findings of the ld. CIT(A) and direct the A.O. to delete the addition - Decided against revenue Addition being loss treated as speculation loss - Held that:- Assessee has not demonstrated anything by bringing any cogent material evidences on record in justification of its loss. The assessee has also not brought on record the relevant contract notes qua the manufacturing and selling of finished products. The onus is upon the assessee to demonstrate its claim of loss. Merely by filing the copy of the ledger account would not do any good. However, in the interest of justice and fair play, we restore this issue to the files of the A.O. The assessee is directed to demonstrate the loss with its manufacturing and selling activities. The Assessee is also directed to furnish details in respect of any contract cancelled before the due date. The assessee is also directed to furnish details in respect of unexpired/outstanding contracts at the end of the year. The A.O. is directed to verify such details and decide the issue afresh after giving a reasonable opportunity of being heard to the assessee. Disallowance of foreign traveling expenses - Held that:- The undisputed fact is that these expenditures pertained to the foreign travel of the directors. We find that such expenditure include air ticket + visa charges. Since the traveling was done in the month of April, 2008 i.e. next financial year, the air tickets have to be booked prior to the date of traveling and the visa have to be taken accordingly. It is not the case of the revenue that such expenditures were not incurred for the purposes of business. Considering the nature of expenditure, we do not find any merit in the impugned disallowance.- Decided against revenue
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2016 (12) TMI 1479
Entitlement to claim deduction of employees' contribution to provident fund and ESI under Section 43-B - Whether the provisions of Section 36 and Section 43-B are mutually exclusive and the Assessee/appellant is legally entitled to claim deduction of employees' contribution to provident fund and ESI under Section 43-B as amended vide Finance Act, 2003, even if the said deduction was not admissible under Section 36(1) (va) of the Income Tax Act, 1962? - Held that:- By way of First Proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax duty cess or fee is paid before the date of filing of the return under Act 1961, Assessee would than be entitled to deduction. This relaxation/incentive was restricted only to tax, duty, cess and fee. It did not apply to contributions to labour welfare funds. The reason appears to be that the employer should not sit on the collected contributions and deprive workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to the welfare funds. But when implementation problems were pointed out for different due dates, uniformity was brought about in first proviso by Finance Act, 2003. Hence, amendment made by Finance Act 2003 in Section 43B is retrospective, being curative in nature and apply from 01.04.1988. In the result when contribution had been paid, prior to filing of return under Section 139(1), Assessee/employer would be entitled for deduction and since deletion of Second Proviso and amendment of First Proviso is curative and apply retrospectively w.e.f. 01.04.1988. Irrespective of the fact that deduction in respect of sum payable by employer contribution was involved, but Court did not restrict observations, findings and declaration of law to that context but looking to the objective and purpose of insertion of Section 43B applied it to both the contributions. It also observed clearly that Section 43B is with a non-obstante clause and therefore over ride even if, anything otherwise is contained in Section 36 or any provision of Act 1961. Therefore, we are clearly of the view that Section 43B is rightly applied in respect to both contributions i.e. employer and employee - Decided in favour of Assessee.
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2016 (12) TMI 1478
TDS u/s 195 - Disallowance u/s 40(a)(i) - whether the payment made to HRD constitutes “fees for technical services” or not? - India-Belgium DTAA - Held that:- We affirm the conclusion of CIT(A) that the impugned payment cannot be characterised as “fees for technical services” having regard to the meaning and scope of the expression “fees for technical services” provided in the India-United Kingdom DTAA, which is amenable for application in the instant case having regard to MFN clause in the India- Belgium DTAA. As a consequence, once it is held that such payment is not to be regarded as “fees for technical services”, as inferred by the Assessing Officer, and considering that HRD does not have any PE in India, the CIT(A) has rightly concluded that such payments are not liable to be taxed in India in the hands of HRD. Thus, there was no justification for the Assessing Officer to have invoked Sec. 40(a)(i) of the Act citing failure of the assessee to deduct tax at source u/s 195(1) of the Act. In the result, we hereby affirm the decision of CIT(A) on this aspect and Revenue fails. Retrospective amendment is determinative of the tax liability in the hands of a recipient of income, but so far as the present case is concerned, what is held against the assessee is the failure to deduct tax at source at the time of payment of such income. Ostensibly, de hors the aforesaid amendment, the impugned income was not subject to tax deduction in India as per the prevailing legal position when the payments were made. Thus, the taxability of a sum in the hands of the recipient on account of a subsequent retrospective amendment would not expose the payer of income to an impossible situation of requiring deduction of tax at source on the anterior date of payment of such income. Thus, on this count also, assessee cannot be held to be in default for not deducting tax at source so as to trigger the disallowance u/s 40(a)(i) of the Act. In the absence of any contrary decision, the aforesaid plea of assessee is also liable to be upheld and thus, the disallowance made by Assessing Officer by invoking Sec. 40(a)(i) of the Act stands correctly deleted by the CIT(A), which we hereby affirm.- Decided in favour of assessee. Claim for Additional depreciation @ 20% in terms of Sec. 32(1)(iia) - activity of cutting and polishing of diamonds - Held that:- The decision of the Tribunal in the case of Sheetal Diamonds Ltd. (2011 (3) TMI 1044 - ITAT, MUMBAI ) is quite eloquent wherein the entire process involved in the activity of cutting and polishing of rough diamonds into polished diamonds has been examined and it has been held that it constituted manufacture. CIT(A) made no mistake in holding that the activity of cutting and polishing of diamonds amounts to manufacture so as to enable the assessee to claim Additional depreciation u/s 32(1)(iia) of the Act. Thus, on this aspect also, Revenue fails.- Decided in favour of assessee.
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2016 (12) TMI 1477
Setting off the brought forward unabsorbed depreciation against the Income from House Property - Held that:- As decided in CIT vs. Spel Semi Conductors Ltd [2012 (12) TMI 81 - MADRAS HIGH COURT] revenue does not deny the fact that as far as the income from other sources are concerned, there could be no set off of business loss or carried forward loss. Section 72(2) is as regards set off of business loss as against the income from profits and gains of business or profession and if there is loss as well as unabsorbed depreciation, the set off shall be first on the business loss as against the business income and then on unabsorbed depreciation. What is spoken to under Section 32(2) is as regards set off of unabsorbed depreciation as per clause (ii) of sub section (1) and when the unabsorbed depreciation could not be set off as against the income from business or profession by reason of there being no income available under the said heads and where there is income from other sources, effect must be given to Section 32(2) of the Act for that assessment year - rejecting the Revenue's plea, there by confirming the order of Tribunal Allow the claim of the assessee of adjusting the Brought Forward Unabsorbed Depreciation Loss against current year’s income and accordingly, allow the appeal of the Assessee.
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2016 (12) TMI 1476
Addition on sale of investment on the basis of suspicion - proof of identity - Held that:- We are of the opinion that mere furnishing of the confirmation of the parties, such as name, address and permanent account number does not prove the identity, creditworthiness, genuineness of the transaction where the assessing officer has got the information from the investigation wing and further the same were also corroborated by the bank statement obtained by the Ld. assessing officer from the bankers of the buyer companies where the cash was deposited of the identical amount on the same day and the cheques were issued to the assessee towards the purchase of those shares. Despite the opportunity given by the Ld. assessing officer to the assessee to produce the parties same could not be produced by the assessee because of the paucity of time as the assessee was asked to produce the parties on 13/12/2010 and merely within 14 days the assessment was framed on 27th /12 /2010. The assessment was framed by the the Ld. assessing officer because of the time barring limitation arriving for passing of the above said assessment order. In view of this we set aside the addition of ₹ 19.50 lakhs back to the file of the Ld. assessing officer and direct the assessee within 3 months of this order to produce the directors of the above company along with the requisite details such as the sources of funds deposited by those companies into the bank account in cash before issue of the cheques and the transaction price of purchase of shares of the companies to the satisfaction of the assessing officer to prove the identity, creditworthiness, and genuineness of the transaction of the sale of shares of futuristic Ltd by the assessee. - Decided in favour of assessee as directed Disallowance being 20% of the expenses - disallowance has been made by the Ld. assessing officer as the assessee has failed to produce the books of accounts with supporting bills and vouchers - Held that:- The assessee could not produce the books of accounts before the Ld. assessing officer and therefore the disallowance has been made by the Ld. assessing officer estimating 20% of the all the expenditure of the assessee including the opening stock as disallowable. The Ld. 1st appellate authority has reduced the above amount by the amount of opening stock, but confirmed the balance disallowance of expenditure. Such disallowances has resulted because the assessee could not produce the books of accounts before the Ld. assessing officer due to the death of one of the key directors. Therefore, assessee is granted one more opportunity to produce the books of accounts of the assessee before the Ld. assessing officer for verification of the above expenditure as estimated disallowance cannot be upheld, When the assessee is ready to produce the books of accounts. In the result ground No. 8 of the appeal of the assessee is set aside back to the file of the assessing officer with a direction to the assessee to produce the books of accounts along with all supporting vouchers and bills within three months of this order to satisfy the assessing officer about the genuineness of the claim of expenditure of the assessee.
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2016 (12) TMI 1475
Claiming deduction u/s 80P - Held that:- To avail benefit under section 80P(2)(a)(i), the underlying principle is that the assessee organization has to carry out its activities on the principle of mutuality. Once, the assessee failed to carry its activities on the above principle, the assessee is not entitled to get benefit under section 80P of the Act, as it will come within the purview of section 80P(4) after 01/04/2007. In the present case, it is very clear that the assessee is carrying its business activities with members and non-members. Once non-members entered into the organization, the principles of mutuality will automatically exists. Insofar as license of RBI is concerned, it is not a basis for considering the assessee is eligible for section 80P or not, the only basis is whether the assessee is carrying its activities on the principles of mutuality or not. In the present case, by considering the objects of the assessee and also activities carried out by the assessee, it cannot be said that the assessee is working on the basis of principle of mutuality and therefore not eligible for benefit under section 80P of the Act. The assessee has also failed to fulfill the conditions as laid down in sub-clause (4) of section 80P to avail the benefit of section 80P of the Act. - Decided against assessee Accrual of interest - Disallowance of overdue interest - Assessee treated the interest amount not received for more than 90 days as sticky loans and the interest which is accrued and already credited is reversed by creating reserve account and debiting the same as expenditure - Held that:- interest on a loan whose recovery is doubtful and which has not been recovered by the assessee-bank, but has been kept in a suspense account and has not been brought to the P&L a/c of the assessee, could not be included in the income of the assesse. The CIT(A) rightly deleted the additions towards interest on NPAs. There is no error or infirmity in the order of CIT(A). Accordingly, we direct the A.O. to delete the additions made towards interest on NPAs. See DCIT v. The Gandhi Co-op Urban Bank Ltd. [2015 (11) TMI 1626 - ITAT VISAKHAPATNAM] - Decided in favour of assessee
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Customs
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2016 (12) TMI 1440
Refund of excess fine and penalty paid - time limit for disposal of revision - application for refund were not processed, later on the petitioners have been served with Notices from the Revisional Authority viz. Under Secretary to Government of India, Ministry of Finance, Department of Revenue, New Delhi, stating that the Commissioner of Customs, Chennai, has preferred Revision Petitions as against the orders passed by the Commissioner of Customs - Held that: - no time limit is fixed for disposal of the Revision Applications filed by the Central Government, the third respondent has to necessarily consider and pass orders on the petitioners' Applications dated 10.03.2016 - there will be a direction to the third respondent to consider the Refund Applications filed by the petitioners dated 10.03.2016, and after affording an opportunity of personal hearing, shall pass orders on merits and in accordance with law - appeal allowed - decided in favor of petitionerx.
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2016 (12) TMI 1439
Natural justice - exemption from statutory obligation for submitting extension application - Section 28 of the Customs Act - Held that: - the matter deserves consideration as the learned Counsel for the petitioners is prima facie correct in contending that the demand for the period in question could not have been justified on the face of it in light of the provisions of Section 28 of the Customs Act. Even assuming for the sake of examining without holding that in a given case, the same is permissible then also, so far as the merit of the demand if concerned, unfortunately, prima facie, there appears to be no justification whatsoever for treating the consumed goods to be goods warranting any extension application - appeal allowed by way of remand.
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2016 (12) TMI 1438
Jurisdiction of revisional authority - absolute confiscation - penalty - Held that: - reliance placed on the decision of the case of NVR Forgings vs. Union of India [2016 (5) TMI 7 - PUNJAB AND HARYANA HIGH COURT], where it was held that the Joint Secretary of the Central Government has no jurisdiction to decide the revision. There has not been proper examination as to whether the goods which were brought by the petitioner are prohibited goods - matter is remanded to conduct appropriate examinations and find out that whether the goods in question are prohibited goods and whether they would fall under the definition of Section 2(33) of the Customs Act, 1961. Appeal allowed by way of remand.
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2016 (12) TMI 1437
Compliance with condition of Notification No.44(RE-2000)/1997-2002 dated 24.11.2000 - Boll Bearings imported from China - end use test - whether the goods imported were for retail sale or for industrial customers and whether condition of notification need to be fulfilled? - Held that: - I find that there were certain requirements specified by the notification dated 24.11.2000, not complied with by the importer/appellant. However, the importers were eligible to rectify those shortcomings to fulfill the requirements of said Notification dated 24.11.2000 by applying Public Notice No.16/2013, referred to earlier and if the importers are allowed to rectify the shortcomings in the information, required as per said notification No.24.11.2000, before the goods are cleared from Customs Control, there would not be any violation requiring the goods to be confiscated and redeemed - I direct Principal Commissioner of Customs Noida, Customs Commissionerate to allow the importer to fulfill the requirement for compliance of Notification No.44 (RE-2000)/1997-2000 dated 24.11.2000, by pasting stickers on the goods imported when the goods are still under the control of Customs before their clearance and after satisfying that the said requirements have been fulfilled, allow the clearance of goods on payment of appropriate duty of Customs. Appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1436
Revocation of CHA licence - forfeiture of security deposit - period of limitation - Held that: - The issue of Show Cause Notice is to be followed within a period of 90 days by submission of Inquiry Report by Asst. Commissioner/Dy. Commissioner and ultimate passing of the order by the Commissioner within a period of 90 days from the date of submission of Inquiry report - the initial Show Cause Notice under Regulation 20 has been issued on 14.09.2012, even though the licence was suspended on 15.02.2010. In a number of decisions, adherence to time limit strictly has been held - reliance placed on the case of Saro International Freight System Vs. CC, Chennai [2015 (12) TMI 1432 - MADRAS HIGH COURT], where Hon'ble Madras High Court has emphasised the observance of time limits strictly under the CHALR, 2004/CBLR, 2013. The order of the lower authority which was issued without adhering to the time schedule is liable to be set aside on these grounds - appeal allowed - decided in favor of appellant-CHA.
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2016 (12) TMI 1435
Valuation of imported goods - spares and components of Car audio systems - mixed lot of goods i.e. various spares and components of car audio system manufactured by different entities - goods undervalued - Held that: - the entire case of the revenue is built upon the enhancement of the value based upon the price list received from Kenwood Corporation, Sony India Ltd. and Pioneer. There is nothing on record to show that the consignments which are imported were procured by the appellant directly from the manufacturers. It is also seen from the records that the main appellant has been taking a consistent plea that these are stock lot purchased from a trader and they were outdated models, he has also been taking a consistent view that the supplier who had exported the consignment to him had collected all these items from different places and then collated and despatched at a value which is the transaction value. In our considered view, on the perusal of the consignment details, we find that the case of the main appellant needs to be accepted as the speakers and other spares of car audio accessories did indicate that consignment is of mixed lot. Since the appellant has already accepted the enhancement of the value in the first assessment after examination, we do not find any reason to further enhance the value as has been held by the adjudicating authority. Reliance placed on the decision of the case of EICHER TRACTORS LTD. Versus COMMISSIONER OF CUSTOMS, MUMBAI [2000 (11) TMI 139 - SUPREME COURT OF INDIA], wherein the apex court has specifically stated the price list of the foreign supplier manufacturer is not a proof of the manufacturing value and existence of the price list cannot be the sole reason for rejecting the transaction value. In the case in hand, revenue s contest on the value of the goods which are imported in the consignment is not based on the finding that these were mixed lot and manufactured by different manufacturers. Appeal is allowed upholding the value which has been accepted for assessment and discharge of duty in the first instance - decided in favor of appellant.
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2016 (12) TMI 1434
Confiscation - penalty - goods cleared from SEEPZ area - Appellants removed garbage and sweeps from SEEPZ area and subsequently recovered precious metals from such garbage - Held that: - the appellant was not an authorised agent for removing of garbage and sweeps from SEEPZ area. The said contract was awarded to some other person and that person had outsourced the removal of garbage and sweeps from SEEPZ without any authorisation from authorities. This would indicate the appellants were undertaking the activity of removal of garbage and sweeps in unauthorised manner which itself calls for imposition of penalty on the appellant - appeal dismissed - decided against appellant.
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2016 (12) TMI 1433
Maintainability of petition - Confiscation of 6452 grams of gold - Held that: - whether absolutely prohibited or banned items in respect of which Parliament’s intent is to be gathered should be seen after an overall consideration of the provisions of the Act as well as other authorities applicable. In the circumstances that exercise would be best left to be considered by the appropriate appellate authorities. In these circumstances, the court is of the opinion that this petition ought not to be entertained under Article 226 of the Constitution since the importer has an alternative efficacious remedy - It is open to the petitioner to file appeal to the Commissioner (Appeals) - petition dismissed as not maintainable.
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2016 (12) TMI 1432
Refund - Direction to the respondent to implement the final order passed by the Customs Excise and Service Tax Appellate Tribunal dated 11.06.2012 - order not implemented despite several representations - writ of mandamus - Held that: - the respondent is bound to comply with the direction. Accordingly, there will be a direction to the respondent to consider the representations of the petitioner dated 02.05.2013 ; 10.07.2013 ; 13.08.2013 and 02.09.2013 respectively and pass appropriate orders on merits and in accordance with law, as directed by the Customs excise & service Tax Appellate Tribunal within a period of eight weeks from the date of receipt of a copy of this order - petition allowed - decided in favor of petitioner.
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2016 (12) TMI 1431
Carriage of contraband item - baggage rules - brownish-green packet of a gum like substance wrapped in a transparent plastic sheet - hashish - it was presumed that the accused persons were found in possession of ‘Charas’ and hence the burden to prove that they were innocent, was shifted on them. Both the accused were charged with offences punishable under Section 8(c) read with Sections 21, 23(c), 28 and 29 of the NDPS Act, for entering into a criminal conspiracy to possess, smuggle and illegally transport the narcotic drug out of India. Held that: - the Bangalore International Airport being a busy place, the failure of the prosecution in taking down the contact details or address of the independent witnesses has committed a grave error in not complying with the mandatory provisions providing strict safeguards to the accused as the act alleged to have been committed amount to grave offences. This in turn leads this Court to draw an adverse inference under Section 114(g) of the Indian Evidence Act, 1872. The reasoning of the trial court in coming to the conclusion that the accused were found in possession of the contraband and that they were trying to transport the same out of India without any legal permit and thereby convicting them under Sections 21(c) and 28 of the NDPS Act is found to be erroneous. As the material seized during the proceedings forms the basis of the investigation, the inability of the prosecution to prove the case, especially the genuineness of the search and seizure proceedings, beyond all reasonable doubt, vitiates the case of the prosecution. The accused are acquitted - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1430
Valuation - related party transaction - fee paid to the foreign collaborator - Held that: - after examining the third party imports to different countries, the transaction value was accepted. It is seen that in the appeal before the Commissioner (Appeals), the Revenue as well as Royle Extrusion Systems Ltd. have not challenged this issue. In view of that it is not open to either party to challenge that Royle Extrusion Systems Ltd. and foreign collaborator are related and that relationship has affected the import price in terms of Rule 4 (3) of the Customs Valuation Rules. Includability of fee paid to the foreign collaborator in terms of technical collaboration agreement in terms of Rule 9 of the Customs Valuation Rules - Held that: - rule 9 relates to the supply of engineering, development, art work, design work and plans and sketches, etc. by the buyer to the supplier. In the instant case, it is the supplier who has sent the technical know-how to the buyers. Thus, Rule 9 (1) (b) (iv) has been wrongly invoked in this case. We set aside the impugned order and remand the matter back to the original adjudicating authority for deciding the issue afresh after giving an opportunity to the appellants - appeal disposed off - matter remanded back.
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Corporate Laws
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2016 (12) TMI 1427
Reliefs seeked including declaring appointment of R3 as invalid and also resignation of R2 as director from R1-Company as null and void - Held that:- It is the petitioner who suffered in between these two brothers i.e. R2 &R3. Since R2 admitted in his affidavit that he was forced to sign on some papers, it is in between R2 & R3 to decide whether any transfer taken place or not. As long as such transfer in a private company governed by clause 7 of Articles of Association has not come before the Board for approval, the transfer in between them cannot be considered as valid. For there being a grave allegation against R3 that he has siphoned more than ₹ 85 lacs from the company by withdrawing from the Bank, A. Bafna &Co., Chartered Accountants. K-2, Keshav Path, Ahinsa Circle, C-Scheme, Keshav Path-302001, Jaipur, Rajasthan (Ph. : 01414003005) is hereby appointed to find out as to whether funds of the company have been swindled by R3. Since R3 is no body in the company, he has no right to operate bank account and conduct the affairs of the company; he is answerable to his acts in the company. To know as to whether R3 siphoned the funds of the company, the Chartered Accountant is directed to inspect the accounts and file his report within two months from hereof. As to remuneration. R1-company is directed to pay remuneration as agreeable to the Chartered Accountant. R3 has asked this Bench to investigate the whole affairs of the company, forgetting R3 is neither a shareholder nor a director in the company. For he being nobody in the company, he cannot seek any relief u/s 397 and 398 of the Act. Therefore, no investigation has been ordered in relation to the affairs of the company as asked by R3. For having R2 filed affidavit today, R3 has asked time to file reply to the affidavit. Since this Bench has not gone against R3 basing on the averments of the affidavit filed by R2, the reply by R3 to R2 reply will not make any difference to the findings made by this Bench because this case has been decided solely on the ground that the petitioner's consent was not there, either for appointment of R3 as director or for the alleged transfer of shareholding from R2 to R3. For these two reasons, the allegations inter se in between R2 and R3 do not have any bearing on the present adjudication. This petition is hereby disposed of directing R3 or through any other person, not to deal with the affairs of the company or its Hotel situated at Alwar from hereof.
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2016 (12) TMI 1426
Compounding of offences - Held that:- In the present Application, the Applicants have not taken approval of the Board either prior to any of the related party transactions or within three months of entering into such contracts as per Section 297 of the Companies Act, 1956. There is also no approval obtained from the Central Government for any of the related party transactions during the Financial Years 2009 - 14 which is mandatorily required as per the law. Further the application does not have any facts on number of transactions carried out in a year within the meaning of related party transaction as per Section 297 of the Companies Act, 1956. Thus in the interest of justice, the prayer as sought by the applicants is premature and cannot be considered at this stage. Therefore, the applicants are directed to approach the Board and the Central Government for approval of each of the related party transaction, which took place through the Financial Years 2009 to 2014 in accordance with section 297 of the Companies Act, 1956 and they are at liberty to approach this Tribunal subsequently in accordance with law. In terms of above, the present Company Application is disposed off accordingly.
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Service Tax
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2016 (12) TMI 1474
False VCES declaration - rejection due to difference of taxable value taken by the department and as claimed by the appellant for calculation of service tax dues - demand - Held that: - I find that as per the submissions made by the Ld. Advocate as reproduced above and the findings of the Ld. Commissioner there are variations in the stand taken by both sides. In my view, the appellant should be given an opportunity to explain their case regarding quantification as observed by the adjudicating authority viz-a-viz claimed by the appellant. I therefore of the view that matter needs to be remanded to the original adjudicating authority - appeal allowed by way of remand.
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2016 (12) TMI 1473
CENVAT credit - denial on the ground that before availing credit of capital goods installed in other unit, the appellant, must get centralized registration, which is taken afterwards in the case - Held that: - there is no dispute as to the facts that the capital goods are received and used by the appellant for providing taxable output services and the same are covered under the definition of capital goods - similar issue decided in the case of mPortal India Wireless Solutions Pvt Ltd v. Commissioner of Service Tax, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT], where it was held that Registration not compulsory for refund - credit allowed - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1472
CENVAT credit - erection, commissioning and installation agency service - construction of roads to contractors to make installation sites ready to carry out project - Held that: - Rule 3 of the CENVAT Credit Rules 2004, as claimed by the learned Authorised Representative, is the foundation for allowing of CENVAT credit on tax which is leviable under Finance Act, 1994. However, Rule 4 of the said Rules limit the taking of CENVAT credit to the amount including the service tax component paid to such service provider. The scheme of CENVAT credit is intended to prevent the cascading effect of tax. A tax, whether rightly or wrongly paid, needs to be set-off if the cascading effect is to be avoided and that is the rationale for the scheme of CENVAT credit to be operated on the invoice received from suppliers of goods or service and the invoice raised on recipient of the output service. There is no dispute on the authenticity of the invoice. The taking of CENVAT credit, therefore, cannot be faulted. The appellant held to be eligible to avail and utilize CENVAT credit of tax charged on the consideration paid for construction of roads to contractors of the appellant - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 1471
SEZ unit - refund claim - refund of tax paid on various input services used/utilized in the authorized operation of the SEZ unit - rejection on the ground that refund claim does not pertains to the relevant quarter of the financial year - Held that: - On a conjoint reading of clause (e) and (f) contained in the Notification, it transpires that the statutory requirement of time limit for filing the refund application is contained in clause (e), which has to be strictly adhered to by the assessee for the purpose of claiming refund - Since Clause (f) is procedural in nature and the appellant in this case has compiled with the statutory Provisions of filing the refund application within one year from the date of payment of Service Tax to the service provider, in my opinion, rejection of refund claim of ₹ 4,64,114/- by the authorities below is not in conformity with the conditions laid down in Notification dated 01.07.2013 - appeal allowed - refund allowed - decided in favor of appellant.
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2016 (12) TMI 1470
Banking and Other Financial services - reverse charge mechanism - payments made by appellant to Visa for the services rendered - Held that: - The service tax liability under the reverse charge mechanism was introduced on 18.04.2006 and the entire issue was under litigation till the Hon'ble High Court of Bombay settled the law in the case of Indian National Ship Owners Association which indicated that the service tax liability arises from 18.04.2006 - this is a fit case for invoking the provisions of Section 80 of the Finance Act, 1994 and set aside the penalties imposed on the appellant - penalties set aside - tax and interest upheld - decided partly in favor of appellant - appeal disposed off.
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2016 (12) TMI 1469
Management or Business Consultant's services - associated enterprises - Rule 6 of the Service Tax Rules, 1994 - whether, the amendment in Rule 6 ibid is retrospective or prospective and whether it would apply to the outstanding balance available as on 10.05.2008 or only prospective in respect of entries made in the books of accounts post 10.05.2008? Held that: - The effect of amendment of Rule 6 ibid is that service tax would be required to be paid by the person liable to pay service tax on the taxable services provided to associated enterprises, even where the consideration for the taxable services provided, is not actually received. In such cases, service tax is required to be paid immediately upon crediting/debiting of the amount in the books of accounts or receipt of payment, whichever event occurs earlier. By incorporating the explanation in Rule 6 ibid, the restriction was imposed for the first time that in case of transaction between associated enterprises, service tax has to be paid immediately on entry of the transaction in the books of account, the said amendment will be considered as prospective in effect, otherwise the doctrine of 'fairness' would be defeated. Further, Notification No. 19/2008 introducing Explanation to Rule 6 ibid, no where specifies that the same will have retrospective application to deal with the past transactions. Appeal allowed - tax demand not sustainable - decided in favor of appellant.
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2016 (12) TMI 1468
CENVAT credit - cable - input services - denial on the ground that the appellant has claimed Cenvat Credit on cables as capital goods which is not capital goods as per Rule 2A of Cenvat Credit Rules 2004 and the appellant has not produced documentary evidence to avail cenvat credit of input services as per Rule 9 of the Cenvat Credit 2004. Whether appellant is entitled to avail Cenvat Credit on capital goods which does not fall under Rule 2 A of Cenvat Credit Rules 2004 as input under rule 2 K of Cenvat Credit Rules 2004 or not? - Held that: - the cable has been procured by the appellant and used in providing output service. Therefore, appellant is entitled to avail cenvat credit on these cables either as capital goods or input as per cenvat credit rules 2004. - credit allowed. Whether matter can be remanded back for verification of the documents pertaining to input services credit availed by the appellant or not? - Held that: - As the appellant has produced the acknowledgment for submission of documents pertaining to input services before Ld Commissioner (A) and the same has not been considered by the Ld. Commissioner (A) while passing the impugned order. In that circumstances, the matter needs examination of the documents produced by the appellant - matter on remand. Appeal allowed by way of remand.
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2016 (12) TMI 1467
Sub-contract - liability to pay tax as sub-contractor - Board Circular No. 96/7/2007-ST dated 23.08.2007 - Held that: - The Commissioner (Appeals) has confined his discussion only to the issue whether the appellant is liable to pay service tax even though the main contractor has discharged the service tax liability on the entire contract. The Commissioner (Appeals) had relied upon the Board Circular No. 96/7/2007-ST dated 23.08.2007. Needless to say that the Board Circular is not binding upon the assessee. However, the other contentions have not been considered at all - the appellant has paid service tax for some services which he was main contractor. However, there is no clarity on the amount which the appellant has discharged liability as main contractor and regarding the amount which the appellant contends that he is not liable to pay as a sub-contractor. It is therefore fit to remand the matter - appeal allowed by way of remand.
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2016 (12) TMI 1466
Imposition of penalty u/s 77 and 78 of the FA, 199 - GTA services - failure to discharge tax - Held that: - the appellants have taken a credit of the Service Tax voluntarily paid by them on the Goods Transport Agency services. It is a revenue neutral situation. There is no specific evidence produced by revenue to allege suppression or the mis-representation on part of the appellant as apparently they have nothing to gain by avoiding or by evading this duty. In view of the above, penalty under Section 78 cannot be upheld - However, the appellant had not disclosed the value of transportation in their ST-3 returns and when the same was pointed out by the Revenue, they paid voluntarily. In view of the above, the penalty imposed under Section 77 is upheld - appeal allowed - decided partly in favor of appellant.
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2016 (12) TMI 1465
Rectification of mistake - refund - Held that: - the amount of service tax discharged by the appellant is under reverse charge mechanism, which is in respect of the payment made by the appellant to their principal situated abroad for the contribution made to the pension of the Board members. This service cannot be classified under Business Auxiliary Service by any stretch of imagination. The definition of Business Auxiliary Service will not cover the payment made by the appellant as it is towards the pension fund and not any services rendered - no error apparent on the face of records - application of ROM dismissed.
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2016 (12) TMI 1464
Waiver of penalty imposed u/s 76,77 & 78 of the FA, 1994 - GTA service - payment of tax with interest on pointing out by Department, before issuance of SCN - is penalty justified invoking provisions of Section 80 of FA, 1994? - Held that: - The reason given for not paying service tax is that there is change of management in the company. From the data, service value was retrieved from the balance sheet of the appellants, that shows that the appellants have no intention to avoid the payment of service tax - appellants deserve the waiver of the penalties imposed under section 76 and 78. However, the penalty imposed under section 77 appears to be proper - penalties imposed u/s 76 and 78 waived and penalty imposed u/s 77 by maintained, invoking the section 80 of the FA, 1994 - appeal allowed - decided partly in favor of appellant.
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Central Excise
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2016 (12) TMI 1463
CENVAT credit - MS items under the category of capital goods - Held that: - the amount of ₹ 18,00,168/- has been utilised for pre-heater, staircase, coal mill building, platforms, silo, coal mill platform etc - The appellant is eligible for that part of the MS items which were used for fabrication and manufacture of capital goods / parts / components - credit allowed for this part. The credit of ₹ 11,88,607/- availed by the appellant on MS items used for civil construction as well as temporary structures is not eligible for credit. The same is disallowed. The appellant has reversed the credit to the tune of ₹ 29,88,775/- even before the issuance of the show-cause notice - The irregular credit having been reversed prior to the utilisation, so, the appellant is not liable to pay interest Appeal disposed off - decided partly in favor of appellant.
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2016 (12) TMI 1462
Clandestine removal - demand of duty with interest and penalty - denial of SSI exemption - value of clearances including clearances done clandestinely, exceeds the exemption limit - time limitation - Held that: - apart from the statement of managing director no other evidence has been brought by the revenue on record to show that the goods have been manufactured how the inputs for these goods have been procured and how these goods have been cleared i.e. mode of transportation. The authors of these loose slips have not been called for clarification of clandestine clearances of the goods. In the absence of such corroborative evidence demand is not sustainable against the main assessee - the charge of clandestine removal of goods against the main assessee is not sustainable. Therefore, the demand of duty along with interest and penalty on both the assessee is not imposable. Extended period of limitation on charge of clandestine removal - Held that: - as the charge of clandestine removal has been set aside against the parties, therefore, revenues appeal deserves no merits and the ld. commissioner (A) has rightly allowed the benefit of limitation to the main assessee more over on merits. Appeal dismissed - decided against Revenue.
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2016 (12) TMI 1461
Clandestine removal of finished products - 94.500 MT of M.S. Angles - Held that: - Since the Director has categorically admitted non-accountal of raw-material and clandestine removal of the finished goods and the statements has not been retracted before the Central Excise Officers, I am of the view that Central Excise duty alongwith interest and penalty confirmed against the appellant by the authorities below is proper and justified - since the entire duty alongwith interest is paid within one month from the date of receipt of the Adjudication Order, the benefit of reduced amount of penalty provided under Section 11AC of the Central Excise Act, 1944 should be available to the appellant - quantum of penalty reduced to 25% - appeal allowed - decided partly in favor of appellant.
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2016 (12) TMI 1460
CENVAT credit - whether the appellant is entitled to avail Cenvat Credit in respect of input services used in the mine area which is outside the factory premises or not? - Held that: - The said issue came up before the Hon’ble High Court of Bombay in the case of CCE Aurangabad Vs. Endurance Technology Pvt. Ltd. [2015 (6) TMI 82 - BOMBAY HIGH COURT] wherein it was held that Rule 3 and 4 provide that any input or capital goods received in the factory or any input service received by manufacture of final product would be susceptible to CENVAT credit. Rule does not say that input service received by a manufacturer must be received at the factory premises. The appellant has received certain input services in their search and development unit, although the same is located outside the factory premises but these services are ultimately used for manufacturing of final product. Therefore, these services are in relation to manufacturing of their final product - credit allowed - appeal allowed in favor of appellant.
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2016 (12) TMI 1459
Maintainability of appeal - Section 35G of the Central Excise Act, 1944 - issue involved is of rate of duty - Held that: - As the issue involved in the present appeals is pertaining to the rate of duty with reference to exemption under N/N. 1/93-CE dated 28.02.1993, we find that the present appeals are not maintainable before this Court - appeal not maintainable - liberty to the appellant to avail of its appropriate remedy - appeal dismissed - decided against appellant.
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2016 (12) TMI 1458
Valuation - inspection charges - The inspection agency is deputed by the customer/government body. Payment for such inspection are paid by the customer directly to the inspecting agency. However, in few cases the payment of inspection charges was made by the respondent to the inspecting agency on behalf of the customer and subsequently such payment was collected as reimbursement - whether inspection charges to be included in assessable value? Held that: - As per Section 4, any amount which is paid or payable on behalf of the goods will form the transaction value. In the present case, as per the contract, the respondent is not under obligation to undertake the inspection and bear the expenses thereof. As regards the inspection it is a contract between the inspection agency and the customer and the payment transactions invariably made between both of them. Therefore, in few cases, whatever payment was borne by the respondent, for the inspection, the same was collected from the customer as reimbursements which cannot form part of transaction value as the subject amount is not paid or payable on account of sale of goods. Reliance placed in the case of Commissioner of Central Excise, Raipur v. Bhaskar Ispat Pvt. Ltd. [2004 (3) TMI 102 - CESTAT, NEW DELHI], where it was held that cost of additional testing conducted at customer s request and borne by the customer is not includible in the assessable value of the goods. The inspection charges is not includable in the assessable value - appeal dismissed - decided against Revenue.
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2016 (12) TMI 1457
Recovery of interest and penalty - revision of prices of manufactured goods - duty not paid on revised prices - on pointing out duty was paid - time bar - whether, extended period of limitation in terms of the Proviso to Section 11A ibid can be invoked for recovery of interest on delayed payment of principle amount; and penalty can be imposed where there is no element of suppression, fraud, misstatement etc, with intent to evade payment of duty? - Held that: - this Tribunal in the case of Emco Ltd. [2012 (4) TMI 609 - BOMBAY HIGH COURT], has held that period of limitation not only applies to the principle amount but also the same applies for recovery of interest - interest liability confirmed in the impugned order will not stand for judicial scrutiny. Imposition of penalty u/r 25 read with Section 11AC of the Central Excise Act - Held that: - the authorities below have not specifically brought on record any evidence regarding the malafides on the part of the appellant to defraud the Government Revenue. Since Rule 25 ibid is subject to the provisions of Section 11AC ibid, which clearly provides that in case of fraud, collusion, willful misstatement, suppression of facts, equal amount of penalty shall be imposed, and in absence of any specific findings to that effect by the authorities below, I am of the view that penalty imposed in the adjudication order and confirmed in the impugned order is not sustained in the eyes of law. Demand of interest and penalty set aside - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1456
Misdeclaration of value - Interest - Penalty - Rule 6 of the Valuation Rules, 2000 - Held that: - it is an admitted case of revenue that the appellant have not brought the bought out items in their factory of manufacture and it is further admitted fact that the control panels are not cleared along with bought out items from the factory of manufacture - Under the facts and circumstances that the appellant have placed the orders on third-party vendors for supply of the bought out items directed to their customers and have paid the applicable sales tax/VAT, the same does not attract levy of excise duty - It is an admitted fact that the bought out items have never entered the factory premises of the appellant so as to become part of the manufactured control panel nor the same have been cleared along with the control panels - Appeal allowed - decided in favor of the assessee.
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2016 (12) TMI 1455
CENVAT credit - input service distributor - denial on the ground that ISD could avail credit only in respect of input services received at its own address - Held that: - I find that the Pune marketing office of the appellant is registered as ISD and it was availing credit of various services availed by marketing office located at Aurangabad, Ahmednagar, Jalgaon, Nasik, Beed etc - It can be seen that sales promotion, marketing research are specifically covered in the inclusive part of the definition of input. In these circumstances, the credit availed by the appellant in the various offices would qualify as input service. Whether the credit can be availed if the documents are not addressed to the ISD but to its offices not registered as ISD? - Held that: - I find that the input services received by the respondent are entitled to be taken credit. It is not restricted to the input services received by the respondent at their factory. Input services received by the appellant at its Head Office or other offices are also eligible for credit and the facility of ISD has been granted to facility taking of such credit. Reliance was placed in the decision of the case of Doshion Ltd. [2012 (10) TMI 952 - CESTAT AHMEDABAD], where it was held that The omission to take registration as an Input Service Distributor can at best be considered as procedural irregularity, credit available. Credit allowed - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1454
SSI exemption - use of brand name and the logo belonging to K. Dhandapani and Co., who were claimed to be traders and not manufacturers, by appellant - Held that: - the appellants have used the brand name and the logo belonging to K. Dhandapani and Co. and they have not declared the same in their classification and therefore they have concealed the factual information from the department and therefore they are not entitle to SSI exemption. Imposition of penalty - as per the provisions of law if the interest and penalty is deposited within 30 days from the date of the order then the proceedings shall stand concluded and the appellant is not required to pay the equal penalty - the appellant has deposited 14,17,640.28 before the issue of show-cause notice and the same was appropriated by the Order-in-Original and the learned Additional Commissioner has given them the opportunity to deposit the penalty of 25% along with interest within 30 days and the appellant has deposited the same within the stipulated period and therefore penalty not imposed. Appeal disposed off - decided partly in favor of appellant.
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2016 (12) TMI 1453
Valuation - Ethion Technical - clearance of goods to sister concern - captive consumption - duty to be paid in value by considering the cost of production and profit margin as held by Revenue is correct or the duty paid by appellant on transaction value is justified? - whether the assessable value which has been considered by the appellants for the clearances made to their sister concern is correct or otherwise and whether the demand is untenable due to the revenue neutrality of the issue involved or otherwise? - extended period of limitation. Held that: - It is undisputed that the product in question is cleared to their own sister concern and the sister concern is eligible to avail the cenvat credit of the duty paid by the appellant. If that be so, there cannot be any mens-rea attached to the clearances made by the appellants to the sister concern and discharge of duty by adopting a particular assessable value. The law is fairly settled on this issue inasmuch that if the clearances are made to their own sister concern and if other unit is eligible to avail cenvat credit, there cannot be any intent to evade central excise duty - In view of the revenue neutral situation, in the facts and circumstances of this case, it is held that the demand and the interest liability is unsustainable in respect of the product in question Ethion Technical. As regards the penalty imposed by the adjudicating authority, we are of the view that appellant could have entertained a bone fide belief that they have to discharge the duty liability of the goods cleared to their sister concern, on the value of the clearances made to independent buyers - Since the issue is of interpretation, we find that there is no necessity to visit the appellant’s with penalty for the duty liability discharged by them as recorded hereinabove - penalty set aside. Appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1452
Duty on intermediate goods - Phosphoric Acid - manufacture of Sodium Tripoly Phosphate (STPP) and cleared without payment of duty under N/N. 49/94-CE(NT) dt. 22.9.1994 - demand of duty on intermediate product on the ground that the final product is exempted from whole of the duty of excise - Held that: - the appellant have cleared the final product against CT-2 certificate issued by the buyer of the goods in terms of N/N. 49/94-CE (NT). As per this notification the goods supplied by the appellant is meant for use in the export goods - from the conditions of notification it is clear that the goods supplied by the appellant is meant for use in the export goods. Moreover the supplies under N/N. 49/94-CE(NT) is against the advance licence to the holder of the advance licence. This supplies are also treated as deemed export in terms of Export and Import Policy. For all this reasons the supplies made by the appellant under bond which is meant for use in the export goods cannot be treated at par with the non duty paid goods or exempted goods. The final product supplied by the appellant against CT-2 certificate cannot be treated as nil duty or exempted goods. In such a case the intermediate goods will be entitled for N/N. 67/95-CE, hence the demand on the intermediate product i.e. phosphoric acid is not tenable - appeal allowed - decided in favor of appellant-assessee.
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2016 (12) TMI 1451
Valuation - value of duty paid on chassis to be included in assessable value or not? - benefit of exemption N/N. 6/2003 dated 01/03/2003 and N/N. 241/86 dated 03/04/86 - Held that: - there is no substantial difference between the language of two notifications and therefore, the decision of the Tribunal in the case of Rubi Coach Builders Ltd. [1998 (11) TMI 309 - CEGAT, NEW DELHI], relied upon in the impugned order and the clarification issued by CBEC vide Circular No.350/3/86-TRU dated 10/12/86 is equally applicable to the instant case - it was held in the case of Rubi Coach Builders Ltd. that duty of excise paid on chassis was excludible from the assessable value of the motor vehicle if Modvat credit was not availed on the chassis - duty of excise paid on chassis is excludible - appeal rejected - decided against Revenue.
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2016 (12) TMI 1450
Cenvat credit - Penalty - Held that: - In the case of C.C.E., Jaipur sv. Rajasthan Spinning & Weaving Mills [2010 (7) TMI 12 - SUPREME COURT OF INDIA] wherein it was held that Applying the "user test" on the facts in hand, we have no hesitation in holding that the steel plates and M.S. Channels, used in the fabrication of chimney would fall within the ambit of "capital goods" as contemplated in Rule 57Q - Appeal allowed.
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2016 (12) TMI 1449
Cenvat credit - Business Auxiliary Service, Consultancy Engineering, IT enabled services - Held that: - the impugned order is not sustainable in law as the same has been passed without appreciating the definition of input services as contained in Rule 2(l) of CCR, 2004 and also without considering the judgments passed by higher judicial fora holding these services as input services - the impugned order is not sustainable in law and all the services on which Commissioner (A) has rejected the refund fall in the definition of input services - Decided in favor of the assessee.
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2016 (12) TMI 1448
Refund - Notification No. 51/2003-CEX (NT) dated 06.08.2003 - Held that: - The ratio of Hon'ble Tribunal's order in the case of M/s. Silwester Textiles Vs CCE [2003 (5) TMI 305 - CESTAT, MUMBAI] is applicable in this case.. Moreover, the Section 11C(2) of CEA '44 provides that refund application should be filed within six month from the date of issue of Notification. The respondent has filed refund application within six months from issue of Section 11C notification dated 06.06.2003 and even otherwise also refund claim could be treated under Notfn. No. 84/03 - CE (NT) dated 31.12.03. Thus, there is no time bar in present refund claim if looked into above angle also - Appeal dismissed - decided in favor of the assessee.
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2016 (12) TMI 1447
Rebate - Rule 18 of the Central Excise Rules, 2002 - Time limitation - Held that: - In the case in hand it is not in dispute that the shipping bill itself was delivered to the petitioner after a lapse of one year and the petitioner after having the same filed the application to have rebate at earliest - In absence of shipping bill it would have not been possible for the claimant to make an application in accordance with law to claim the rebate as per Rule 18 of the Rules of 2002. In view of it, we are of considered opinion that no justification was available with the respondents to reject the claim application without examining its merits. So far as the interpretation of Section 11-B of the Act of 1944 is concerned, no doubt that the golden principle of interpretation, at the first instance, is always required to be applied while interpreting a statute, but in relation to the provision in question it would be appropriate to notice that it mentions the ‘date relevant’ and further that a claim application can be filed by placing relevant documents alongwith it, as such, the provision is not conveying the simple meaning, as learned counsel appearing on behalf of the respondents want to put forth - decided in favor of the assessee by way of remand.
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2016 (12) TMI 1446
Evasion of duty - Underbilling - Penalty - Whether the Appellate Tribunal was justified in sustaining the penalty on the partner and partnership Firm simultaneously under Central Excise Act, 1944? - Held that: - In the case of Textoplast Industries and Anr. Versus Addl. Commissioner of Custom [2011 (7) TMI 402 - Bombay High Court], it has been held that for the purpose of imposing penalty, the adjudicating authority under Customs Act, 1962 may in an appropriate case impose a penalty both upon a partnership Firm as well as on the partners and whether the facts and circumstances of a case warrant imposition of penalty both on the Firm and its partners should be decided on the facts of each case. In the considered opinion of the Court, in the light of the above cited judgments, penalty on the partner as well as the partnership Firm can be simultaneously imposed and of course, imposition of penalty both on the Firm and its partners, depends upon the facts of each case - Appeal dismissed.
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2016 (12) TMI 1445
Cenvat credit on raw material - NNo.214/86-CE - Interest - Penalty - Held that: - It is the case of appellant that mentioning the notification number was due to mistake and as the invoices specifies the excise duty, the mention of notification number is not of much relevance. It is also not disputed that appellant has not filed an undertaking complying with the condition laid in the Notification No.214/86 so as to avail the exemption - The job worker has paid duty in the instant case and the appellant has availed credit on the said duty - Decided in favor of the assessee.
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2016 (12) TMI 1444
Reversal of CENVAT credit - Interest - Penalty - Held that: - conclusion arrived at by the Commissioner (Appeals) that the invoice No.s147, 148 & 151 dated 16/10/97 are not for reversal of duty on the pipes but are for some different products is fair and justified. As regards the demand for reversal of credit on capital goods - Held that: - the certificate of the Chartered Accountant is not based on the visit of the CA to the factory but it is based on the books of accounts and the balance sheet. The credit cannot be allowed simply on the basis of the entry made in the books of accounts without actual receipt of the goods. The appellants have failed to produce any evidence to establish the said capital goods are available in the factory. As regards the demand of scrap of ₹ 36,867/- I find that defence of the appellant is that there is no calculation given by the revenue as to how they are arrived at the quantity. The revenue has relied largely on a submission by the appellant during earlier adjudication to assert that there has been some generation of scrap and admission of duty. I find that without any evidence, the demand of duty on scrap cannot be sustained - Appeal partly allowed.
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2016 (12) TMI 1443
CENVAT credit - HR sheets, MS Angle, HR Plates, MS Flat, Channel Beams etc. - denial on the ground that the said goods do not qualify as capital goods in terms of the definition of capital goods given under Rule 2 of the Cenvat Credit Rules, 2004 - Held that: - the appellant has produced a C.A. certificate to assert that the said goods have been used for the inputs in the fabrication of Sand plant, Core sand plant, Mould handling system, Casting Cooling Conveyer etc. I have also gone through the contracts with certain parties in respect of installation of machines, the contracts involved certain fabrication work of structures to be done by the appellant - a Chartered Engineer's certificate has been given by the Chartered Engineer without going into the detail of the contracts. The facts regarding quantum of use of inputs in the fabrication of the part components and accessories of the machines needs to be quantified and credit to that extent needs to be allowed - appeal allowed by way of remand.
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2016 (12) TMI 1442
Benefit of N/N. 49/2008-CE(NT) - liquid cleaners - the goods were classifiable under Heading No.3402 but are not eligible for benefit of Notification, holding that there is a distinction between the descriptions appearing under the said Notification - Held that: - the issue is now squarely covered by the decision of the Tribunal in their own case Netway Home Products India P. Ltd. Versus Commr. of C. Ex., Bangalore-II [2016 (3) TMI 125 - CESTAT BANGALORE], where it was held that Sl. No. 40 does not cover organic surface active products, in liquid form and as such, their assessment to duty under Section 4A is not called for. The classification and eligibility to the exemption Notification needs to be reconsidered in each and every case, is a fallacious argument which needs to be rejected outrightly, and it has to be reiterated that the judgment of the higher judicial forum has to be followed unless they are set aside - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1441
SSI unit - wrongful availment of CENVAT credit - Rubber /Ebonite Roll - Held that: - Shri Chitan Dave appearing for the Department has filed an affidavit in the Civil Application to answer this contention of the petitioner. He has also produced xerox copy of the Registers of the concerned Department. Despite this position, the Court had called upon learned Advocate Shri Dave to personally verify the Registers and verify the claim made by the petitioner with regard to filing of the appeal before a wrong forum, to which Shri Dave states that he has personally verified the Inward Register maintained by the office where according to the petitioner the appeal was initially filed and has confirmed that such appeal was indeed filed before that authority. He therefore urges that he would not seriously object if the matter is remanded back to the stage of Commissioner (Appeals) - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2016 (12) TMI 1429
Classification of goods sold - Rigid Frame Columns (RFC) - classifiable under section 14(iv)(v) of the Central Sales Tax Act, 1956 read with Entry C-55(v) of the Maharashtra Value Added Tax Act, 2002 or are classifiable under the Residuary Entry of the Maharashtra Value Added Tax, 2002 - whether the RFCs manufactured by the Appellant would fall within section 14(iv)(v) of the CST Act and Schedule Entry C-55(v) of MVAT Act? - interprtation of statute - Held that: - Merely because “steel structurals” or “angles” or “joists” etc are manufactured by the process of welding, would not take it outside the scope of section 14(iv)(v) of the CST Act or Schedule Entry C- 55(v) of the MVAT Act respectively. It is merely a new process by which “steel structurals” are now manufactured considering the advancement in technology. This by itself, with nothing more, would not disentitle “steel structurals” from being classified under section 14(iv)(v) of the CST Act or Schedule Entry C-55(v) of the MVAT Act. The description of the goods in the invoice is not something which would determine classification of their goods in a particular Entry. What has to be seen is whether the goods sold by the Appellant fit the description of a specific Entry in the tariff schedule and only when it does not fall within a specific Entry, the residuary Entry should be resorted to. RFCs manufactured and sold by the Appellant would be squarely covered by Schedule Entry C-55(v) of the MVAT Act and section 14(iv)(v) of the CST Act - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1428
Legality of the imposition of tax of entry on goods as inserted by way of an amendment in the Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007 and Uttar Pradesh Tax on Entry of Goods into Local Areas (Amendment) Act, 2016 (UP Act No.18 of 2016) notified on 16th September, 2016 Held that: - amendment inserted by way of U.P. Act No.18 of 2016 is completely beyond the authority and competence of the State Legislature as it ex facie introduces the levy of tax which was not existing under the old Act and therefore, could not be introduced by way of the amendment as has been done now. Consequently, Clause 19 of Constitution (One Hundred and First Amendment) Act, 2016 does not in any way prima facie saves the imposition of the tax through Online Purchase or E-Commerce particularly for personal use. Thus there is a complete lack of legislative competence as such the impugned provisions are rendered unconstitutional. Interim relief granted during the pendency of writ petition - as an interim measure, the petitioner shall be entitled to trade through E-Commerce and on Online Purchase system but for the said purpose, the petitioner in order to secure the interest of the State shall furnish Bank Guarantee to the satisfaction of the authorities concerned by mentioning in the form prescribed for the said purpose in respect of such transactions - matter on remand.
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