TMI Tax Updates - e-Newsletter
December 9, 2013

Case Laws in this Newsletter:

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

Articles

1. PROVISIONS RELATING TO ‘CHARGES’ UNDER COMPANIES ACT, 2013

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Trade with African Countries

2. Performance of Sezs

3. Relaxation of Norms for Sezs

4. Fdi Cap

5. Industrial Townships

6. Economic Industrial Corridor

7. Special Economic Zones

8. Moving Financial Capability Forward: Innovation Scale and Impact (Intervention by Dr. Deepali Pant Joshi, Executive Director, Reserve Bank of India at the 10th Anniversary of the Citi-FT Financial Education Summit at Hongkong on December 7, 2013)

9. Corporate Social Responsibility

10. RBI Reference Rate for US $ and Euro

11. Issue of Rs.10 Banknotes with incorporation of Rupee symbol (Rs.) and inset letter 'L'

Circulars / Instructions / Orders

Income Tax

1. F. NO. 500/59/2003-FTD-I - dated 6-12-2013

CENTRAL BOARD OF DIRECT TAXES (CBDT) - REVISION OF WORK DISTRIBUTION IN FOREIGN TAX AND TAX RESEARCH (FT&TR) DIVISION.

Highlights / Catch Notes

Income Tax

• Court Rules Long-Term Losses Can Offset Capital Gains from Depreciable Assets Sales u/s 50.

  Case-Laws - HC : Whether long term loss can be set-off against capital gains u/s 50 from sale of depreciable assets - Held yes - HC
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• Interest u/s 158BFA(1) of Income Tax Act Cannot Be Reduced or Waived During Block Assessments.

  Case-Laws - HC : Interest under Section 158BFA(1) - No authority has power to reduce or waive the interest levied under Section 158BFA for the block assessment - HC
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• Assessing Officer Must Include All Tax Payments and Credits u/s 115-JAA When Calculating Tax Payable.

  Case-Laws - HC : When the AO determines the tax payable he has to give credit for all taxes paid either by way of deduction at source, advance tax, self-assessment tax or tax paid otherwise which would include or which cannot exclude tax credit under Section 115-JAA( - HC
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• Court Rules No Penalties for Cheque Discounting Business u/ss 271D and 271E, Violating Sections 269SS and 269T.

  Case-Laws - HC : Violation of section 269SS and 269T - cheque discounting business - The assessee had to discount the cheque for cash - There was no question of levying any penalty under section 271D / 271E - HC
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• ITAT Has Authority to Stay Penalty Proceedings, Ensuring Efficient Management of Tax-Related Matters Under Its Jurisdiction.

  Case-Laws - HC : Power of ITAT to stay the proceedings initiated for levy of penalty - ITAT have jurisdiction and/or power of doing all such acts, or employing such means, as are essentially necessary to its execution - HC
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• Fabric Design Services Deemed Technical; Subject to TDS u/s 195 for Garment Processing and Sale Transfers.

  Case-Laws - AT : abric design is made available to the assessee and the assessee can apply such fabric design to process and produce garments and it can also sell and transfer such fabric design - held as fees for technical services (FTS) liable to TDS u/s 195 - AT
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• Court Rules Arm's Length Transaction Findings Inapplicable Due to Interrelation and Tax Evasion by Assessee Parties.

  Case-Laws - AT : Computation of LTCG – The findings in the case of arm's length transaction cannot be applied to the transaction of the assessee, where the parties were interrelated and the assessee was involved in tax evading methods - AT
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• Cash Payment to South Western Railway Exempt u/r 6DD(b) of Section 40(A)(3) Income Tax Act.

  Case-Laws - AT : Cash payment - section 40(A)(3) - The payment made by the assessee in cash to the south western railway, who insisted for cash payment were covered by the exception laid down in Rule 6DD(b) - AT
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• Surplus from Mutual Arrangements Not Taxable Income, Says Tax Law Interpretation.

  Case-Laws - AT : Applicability of principle of mutuality – The surplus-excess of receipts over the expenditure as a result of mutual arrangement, could not be said to be 'income' for the purpose of the Act - AT
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• Civil Construction Firm Ineligible for Section 80IA Tax Deduction Due to Non-Company Status.

  Case-Laws - AT : Deduction u/s 80IA – The assessee is a partnership firm carrying on the business of civil constructions, contractors, engineers and builders – not being a company, not entitled for deduction u/s 80IA - AT
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• Partners Avoid Penalty for Not Deducting Tax at Source on Interest Payments Due to Reasonable Cause u/s 271C.

  Case-Laws - AT : Penalty u/s 271C – reasonable cause - The assessees are partners in a firm – Both the assessees has paid interest to firm without deducting tax at source - No penalty - AT
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• Section 35DDA: VRS Tax Implications Hinge on Voluntary Participation, Even Amid Government Pressure and Retrenchment Threats.

  Case-Laws - AT : Applicability of Section 35DDA - VRS - It may be a different thing that the government persuaded or pressurized all the employees to accept the scheme giving threat of retrenchment - It is voluntary because only when a scheme is voluntary, there is question of anybody opting to avail or not to avail - AT
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• Income Recognition and Tax Claims: Firms, Not Partners, Entitled to Advance Tax or TDS Claims Under Income Tax Law.

  Case-Laws - AT : When income is accepted in the hands of firm then the claim of advance tax / TDS should also be given to the firm and not to the partners - AT
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Customs

• Exemption Granted: Registered Society's Free Distribution to Poor Qualifies Under Notification No. 148/94, Serial No. 8.

  Case-Laws - AT : As per Notification No. 148/94, serial No. 8, the only condition is that the assessee should be a registered society for free distribution to the poor and needy. As the appellant has produced the said certificate, exemption allowed - AT
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Service Tax

• Refunds Under Notification No. 41/2007-ST: Terminal Handling Charges Eligible, Once Paid Not Subject to Recovery.

  Case-Laws - AT : Benefits under exemption Notification No. 41/2007-ST dated 16.10.2007 - Terminal handling charges - eligible for refund - refund once paid is not to be recovered - AT
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• CENVAT Credit Denied for Non-Integral Services Like Catering and Photography in Coaching Classes Context.

  Case-Laws - AT : Denial of CENVAT Credit - Once the student passed their coaching classes these activities of catering and photography and tent services cannot be said to have been used to provide output service. - AT
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Central Excise

• CENVAT Credit Rule 15(2) Penalty: No Suppression or Misdeclaration Found, Credit Reversed After Audit Findings.

  Case-Laws - AT : Penalty under Rule 15(2) of CENVAT Credit Rules - credit has been reversed when the audit pointed out the same – it cannot be said that there was suppression of fact or misdeclaration with intent to evade duty - AT
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• Interest Demand Beyond One Year from Show-Cause Notice Deemed Unsustainable in Central Excise Cases.

  Case-Laws - AT : Demand of interest - the demand of interest which is beyond the period of one year from the date of issuance of show-cause notice is unsustainable - AT
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• SSI Exemption Applies: Mobike Parts with Other Logos Qualify for Central Excise Exemption for Identification Purposes Only.

  Case-Laws - AT : Benefit of SSI Exemption - Brand name - Mobike parts sold under own brand name and Logo of different mobike manufacturers mentioned for their identification only - exemption allowed - AT
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• Saccharine Addition to Scented Supari Doesn't Alter Classification, Exemption Notification 6/2003 Tax Relief Applies.

  Case-Laws - AT : Benefit of Exemption Notification 6/2003 – addition of saccharine would not result in sweetened scented supari rather than only scented supari - exemption allowed - AT
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Case Laws:

• Income Tax

• 2013 (12) TMI 333
  Whether long term loss can be set-off against capital gains u/s 50 from sale of depreciable assets - Held that:- Following CIT v. Ace Builders (P.) Ltd [2005 (3) TMI 36 - BOMBAY High Court] - By virtue of Section 50 of the Act only the capital gains is to be computed in terms thereof and be deemed to be short-term capital gains. However, this deeming fiction is restricted only for the purposes of Section 50 of the Act and the benefit under other sections of the Act will be available to the gains computed under this section - Decided against Revenue.

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• 2013 (12) TMI 319
  Cost of improvement - Held that:- Proper opportunity was not provided to the assessee to raise the objection pertaining to the report submitted by the D.V.O. It is violation of the principle of natural justice - The A.O. without providing proper opportunity of hearing, passed the assessment order in a hurried manner on the same day - This aspect was not examined either by the first Appellate Authority or by the Tribunal - Decided in favour of assessee.

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• 2013 (12) TMI 318
  Criminal proceedings - Failure to furnish returns of income - Held that:- The case of the applicant is not with regard to evasion of tax, but it merely relates to the jurisdictional error in filing the returns and there are no proceedings pending against the Applicant by Income Tax Department either for evasion of tax or any other default as prescribed in the Income Tax Act, 1961, other than the instant proceedings under challenge under Section 276 CC of Income Tax Act, 1961 - The order passed by the court concerned is non-speaking order and has been passed without application of mind - The issue was restored for fresh adjudication.

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• 2013 (12) TMI 317
  Unaccounted purchase - block assessment - Held that:- Assessee firm is engaged in the trading of gold items of the gold ornaments and certainly, not in Air Conditioner or electrical goods - The parties in Amritsar were not having the creditworthiness. Most of them are not assessed to tax and even if one or two are assessed to tax, their worth is low, even lower than the jewellery lend by them to the assessee - There is no evidence of genuine transaction with the assessee except in one or two cases - No entry was found in the books of account mentioned by the assessee or party concerned. Nothing was reflected in the books of account of the six creditors - The explanation furnished by the assessee is not found acceptable - New gold ornaments were given and old gold ornaments were taken by the Amritsar parties - Decided against assessee. Cash found during search - Held that:- The same was deposited by one Sri B.P. Saxena as explained in the statement by Sri Kanhaiya Lal, at the time of search - Inspite of ample opportunities given, neither Sri Saxena was produced nor any other documentary evidence was filed in support of the claim - Decided against assessee. Interest under Section 158BFA(1) and 220(2) - Held that:- Following Punjab Skin Co. vs. Union of India [2001 (2) TMI 18 - SUPREME Court] - No authority has power to reduce or waive the interest levied under Section 158BFA for the block assessment - The charging of interest is mandatory - Decided against assessee.

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• 2013 (12) TMI 316
  Interest under Section 234B and C on the MAT credit - Held that:- Following Commissioner of Income Tax Vs. Tulsyan Nec Ltd. [2010 (12) TMI 23 - Supreme Court of India] - Once the conditions mentioned in Section 115-JAA are fulfilled, the grant of such credit is not dependent upon determination by the AO - The ultimate amount of tax credit to be allowed will be dependent upon the final determination of the total income for the first assessment year - There is no provision under Section 115-JAA which postpones the right of the assessee to claim set-off to the determination of the total income by the AO in the first assessment year - Entitlement/right to claim set-off is different from the quantum/quantification of that right - When the AO determines the tax payable he has to give credit for all taxes paid either by way of deduction at source, advance tax, self-assessment tax or tax paid otherwise which would include or which cannot exclude tax credit under Section 115-JAA(1) - Decided against Revenue.

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• 2013 (12) TMI 315
  Nature of amount received from company - deemed dividend - load or advance against sale of asset - Held that:- The amount was received by the assessee from PESPL against the sale of the land and thus the receipt is not in the nature of loans or advances - Following assessee s own case for A.Y. 2005-06 - As per agreement to sale, the amount for purchase was agreed to be given to the assessee by the purchaser and part of the payment was received through cheque - The assessee was also supposed to get conversion of the land within two months - It was a loan or an advance to the assessee - The contents of the sale agreements are very much clear that it was a clear cut agreement of sale - No contrary facts or decision was brought to our notice by either side and more specifically the Revenue - Decided against Revenue.

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• 2013 (12) TMI 314
  Violation of section 269SS and 269T - Held that:- the assessee being a "shroff" has two lines of business cheque discounting business and money-lending business - The assessee had to discount the cheque for cash - The assessee had not taken any loan or deposit from the agriculturist by such transaction and, therefore, neither section 269SS nor section 269T are attracted - There is no question of any breach of section 269SS and/or section 269T of the Act as alleged - There was no question of levying any penalty under section 271D and section 271E of the Act - Decided against Revenue.

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• 2013 (12) TMI 313
  Power of ITAT to stay the proceedings initiated for levy of penalty - Held that:- With a view to avoid multiplicity of proceedings and harassment to the assessee and considering section 275(1)(a) of the Income-tax Act, when the Commissioner of Income-tax (Appeals) will get further six months time to dispose of the penalty proceedings from the end of the month in which the order of Tribunal is received by the Commissioner/Chief Commissioner, when the Tribunal has stayed the penalty proceedings during the pendency of the appeal before it - The Tribunal has not exceeded in its jurisdiction - Not the said order is illegal - The Income-tax Appellate Tribunal in exercise of the powers under section 254 of the Income-tax Act would have jurisdiction and/or power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory and the Appellate Tribunal has the power to grant stay as incidental to its jurisdiction - Decided against Revenue.

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• 2013 (12) TMI 312
  Rectification of mistake - Held that:- Whether or not, there was a delay in the proceedings and to whom is such delay is attributable is a question of fact, requiring investigation - The investigation of the cause for the delay would itself make it a debatable issue as both the respondent-assessee and the Revenue would have different perspective on the same - Following T. S. Balaram, ITO v. Volkart Brothers [1971 (8) TMI 3 - SUPREME Court] - A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there could be two possible opinions - Decided against Revenue.

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• 2013 (12) TMI 311
  Depreciation on fixed assets - charitable trust - the entire expenditure incurred towards purchase of fixed assets has already been claimed in entirety either in the current year or in earlier years Held that:- Following CIT v. Institute of Banking [2003 (7) TMI 52 - BOMBAY High Court] - The concept of normal commercial accounting principles should be applied while computing the income of the trust - Depreciation is a necessary charge in computing the net income - Decided against Revenue.

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• 2013 (12) TMI 310
  Tax effect - Held that:- In view of Board Circular dated dated 27.3.2000 issued under Section 268-A of the Act where the monetary limit has been fixed for filing an appeal under various forums and the limit fixed for this High Court is four lacs - As in the present case monetary effect is less than four lac and there being neither any question of recurring nature nor has any cascading effect - Decided against Revenue.

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• 2013 (12) TMI 309
  Provisions on ascertained liability - Held that:- The Tribunal on examining each of the contract entered into between the respondent-assessee and its clients has recorded a finding of fact with regard to the provisions made and determined that some of the provisions are made on the basis of ascertained liabilities, while others are not - The Tribunal on the basis of the results of its examination of the facts allowed the provisions made to the extent they were ascertained in nature and disallowed those which were made on the basis of the estimates - Decided against Revenue. Software development expenses - Held that:- The expenses were in the nature of software maintenance expenses - These expenses cannot result in any benefit of enduring nature so as to be called capital expenses - Decided against Revenue.

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• 2013 (12) TMI 308
  Whether payment made to consultant is covered by the definition of the term 'fees for technical services' under article 13 of the India-U.K. Double Taxation Avoidance Agreement – Held that:- As per article 13 of the India U.K. treaty, clause (c) of sub-article 4 the consultant, i.e., Texoplast Ltd. is required to transfer the fabric design to the assessee and those fabric designs are to be developed by the consultant – The party is required to provide detailed quantity progress report in writing to the assessee along with specific or new design developed - The services rendered by the consultant to the assessee-company are fees for technical services. – Fabric design is made available to the assessee and the assessee can apply such fabric design to process and produce garments and it can also sell and transfer such fabric design to outsider for consideration - There is no restriction on the assessee in this regard in the agreement between the assessee and the consultant - The services received by the assessee and provided by the consultant is fees for technical services - Tax is deductible by the assessee from the payments made by the assessee, to the consultant - Decided against assessee.

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• 2013 (12) TMI 307
  Computation of long term capital gains – Earlier the assessee has entered into a development agreement with Sri Gourisanker Gupta, Smt. Saritha Gupta and M/s. Vansh Builders, for development of the property situated at 8-3-949/1, Punjagutta, (Ameerpet), Hyderabad - Later, the said agreement was cancelled - The assessee entered into an agreement to sell for transfer of land with M/s G. S. Builders P. Ltd., for a total consideration of Rs. 13 crores – Sri Gourisanker Gupta and Smt. Saritha Gupta are directors in M/s. G. S. Builders P. Ltd - Apart from sale consideration of Rs. 13 crores the assessee also received an amount of Rs. 2,66,26,000 vide agreement dated December 26, 2001 and Rs.11 lakhs on February 28, 2008 - Held that:- The consideration received through earlier agreement is nothing but a part of the sale consideration received by the assessee towards transfer of the property – Judgement of Smt. Smita N. Shah v. Joint CIT [2004 (7) TMI 285 - ITAT BOMBAY-H] cannot be followed - The findings in the case of arm's length transaction cannot be applied to the transaction of the assessee, where the parties were interrelated and the assessee was involved in tax evading methods – Decided against assessee.

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• 2013 (12) TMI 306
  Addition u/s 68 – The assessment was completed u/s 144 adding income on account of introduction of share capital – The assessee failed to submit the confirmation in respect of share capital introduced and other information – Held that:- Following CIT v. Stellar Investment Ltd. [2000 (7) TMI 76 - SUPREME Court] - The burden of proving the existence of shareholders is still upon the assessee and in the instant case, the assessee failed to discharge its burden – The assessee failed to prove the genuineness and creditworthiness of the parties - Decided against assessee. Re-examining of records of the share applicants – The lower authorities has not examined the documents carefully - Held that:- Following CIT v. Sophia Finance Ltd. [1993 (8) TMI 62 - DELHI High Court] - The assessee is required to prove not only the identity of the parties, genuineness of the transaction has to be proved – Decided in favour of Revenue – The matter was restored for fresh decision.

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• 2013 (12) TMI 305
  Penalty u/s 272A(2)(k) – Income-tax is deducted from the contractors’/ suppliers’ bills and credited to the respective head of Central Government through book adjustment - E-TDS was filed through a franchise holder for filing of e-TDS on behalf of Government - Held that:- The reason for delay in filing the e-TDS for PH Division is due to delay in uploading the data by the concerned franchise holder although data regarding quarterly e-TDS of different quarters pertaining to the FY 2008-09 has been handed over much earlier to him – Decided in favour of assessee.

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• 2013 (12) TMI 304
  Disallowance of cash payments towards purchase of scrap u/s 40(A)(3) - the assessee has made cash payments to the tune of Rs.32,58,905/- to Railway Department by tendering cash towards purchase of scrap – Held that:- The south western railway for its public auction sale put the general condition that the payment of balance of sale value and delivery of lots should be paid in cash only - Following CIT Vs. Rhydburg Pharmaceuticals Ltd. [2004 (1) TMI 37 - DELHI High Court] – When the payee insisted on cash payment and the transactions were found to be genuine and bonafide – The expenditure shall be allowed - The payment made by the assessee in cash to the south western railway, who insisted for cash payment were covered by the exception laid down in Rule 6DD(b) of the Income-tax Rules 1962, as such, it was outside the purview of the provision contained in sec.40A(3) – Following Sri Devendrappa M Kalal [2012 (8) TMI 188 - ITAT BANGALORE] – Decided in favour of assessee.

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• 2013 (12) TMI 303
  Validity of re-assessment u/s 147 – The original assessment was completed at a total loss of Rs. 12,55,47,111/- vide order dtd. 28-3-2005 passed u/s 143(3) – Later on the AO issued notice u/s 148 based on the reasons that there was excess allowance of the bad debts deduction to the extent of Rs. 2.3 crores on account of the failure to adjust the credit balance in the account u/s 36(1)(viia)(b) and the book profit u/s 115JB should have been computed at Rs. 12.3 crores - Held that:- The course of original assessment proceeding the assessee has disclosed all the material facts including the amount of bad debts written off in the chart of computation of total income along with note, statement of computation of income u/s 115JB of the Act, audit report u/s 115JB computing the book profit of the company - There is no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment – In fact the Revenue has failed to prove that the assessee has not disclosed all the relevant material – Following Mrs. Parveen P. Bharucha vs. Dy. CIT [2013 (1) TMI 295 - Bombay High Court] - Fresh application of mind by the Officer on the same set of facts amounts to a change of opinion and does not warrant reopening - Decided against Revenue.

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• 2013 (12) TMI 302
  Applicability of principle of mutuality – The assessee is a sports club registered under section 12A – The facilities provided by the club are for its members only - The banquet hall/ground are given only to the members of the club and their families - Only the members or their families and guests are allowed to participate in the club activities - Some professionals/contractors are engaged in organising the club activities from whom the club derives royalty/commission at fixed rate 20 per cent on total receipts - Held that:- Following CIT v. Bankipur Club Ltd. [1997 (5) TMI 392 - SUPREME Court] - the receipts for the various facilities extended by the clubs to its members, as part of the usual privileges, advantages and conveniences, attached to the membership of the club, could not be said to be 'a trading activity'. The surplus-excess of receipts over the expenditure as a result of mutual arrangement, could not be said to be 'income' for the purpose of the Act" – Decided against Revenue. Applicability of section 11 to 13 – Held that:- Following Chembur Gymkhana [2009 (8) TMI 839 - ITAT MUMBAI] - The appellant is holding a valid registration under section 12A - None of the terms of the registration is violated – The assessee is entitled for exemption in respect of donation, annual subscription and entrance fees from the members under the provisions of sections 11 to 13 subject to compliance of other requirements – Decided against Revenue. Disallowance of provision for expenses – The assessee has made provision of Rs.77,209/- for payment of expenses – Held that:- The provision was made on the basis of actual liability and not on the estimation of unascertained liability – The assessee has also produced the ledger accounts and vouchers clearly showing that the expenses of Rs. 74,509/- has actually been paid in next month – Disallowance was restricted to Rs. 2700 - Decided against Revenue.

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• 2013 (12) TMI 301
  Assessment u/s 143(3) – Disallowance u/s 40(a)(ia) – The assessee has paid surveyor fee without deducting tax at source and – Held that:- The taxability of the amount-in-question has not been properly examined by the AO. FAA has also not dealt the subject in proper perspective - AO had made a mistake in adding the same amount on three different accounts while determining the tax liability of the assessee - The FAA should have examine the case properly and give a finding based on the available material and as per law - Solely relied upon the two cases for deciding the issue without referring to any of the papers that were filed before - He did not call for any report from the AO in this regard - He has nowhere mentioned as how the facts emerging out of the paper filed before him were identical to the facts of the case relied upon by him for deciding the issue – The issue set aside for fresh adjudication.

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• 2013 (12) TMI 300
  CBDT Instruction No. 3 of 2011 dated 09.02.2011 - Monetary limit for filing the appeal to Tribunal revised to Rs. 3,00,000 with retrospective effect from 01.04.1999 – Held that:- Following CIT v. Delhi Race Club Ltd. [2011 (3) TMI 1488 - High Court of Delhi] - The instructions issued in the Circulars by CBDT are applicable for pending cases also - Tax effect in the appeal is less than Rs. 3,00,000 – The appeal of Revenue is dismissed.

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• 2013 (12) TMI 299
  Deduction u/s 80IA – The assessee is a partnership firm carrying on the business of civil constructions, contractors, engineers and builders – Held that:- The deduction u/s 80IA is applicable to the assessee is owned by a company registered in India or by a consortium of such companies or by an authority or a board or a corporation or any other body established or constituted under any Central or State Act – A partnership firm is not a creation of statute but it is a body of individuals regulated by the statute namely Partnership Act - The assessee fails to satisfy the applicability clause of the provision as envisaged under section 80IA(4)(i) - In the interest of the justice – To avail deduction u/s 80IA all the necessary conditions have to be satisfied first – Decided against assessee.

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• 2013 (12) TMI 298
  Penalty u/s 271C – reasonable cause - The assessees are partners in a firm – Both the assessees has paid interest to firm without deducting tax at source - Held that:- The assessee’s belief that they were not liable to deduct tax at source on the interest paid by them can be considered as a "reasonable cause" in view of the legal position existing between a partner and the partnership firm - The partners and partnership firm are not two different legal entities, though they are two different taxable entities - The partnership firm have duly included the same in its return of income filed before the department and the said partnership firm was not liable to pay any tax, since it declared loss – Following case of Muthoot Financiers [2005 (10) TMI 224 - ITAT COCHIN] - The penalty should be avoided, if there is no loss to Revenue – Decided in favour of assessees.

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• 2013 (12) TMI 297
  Depreciation on block of assets – Asset not put to use – Manufacturing activity not carried out during the year - Held that:- The facts of the year under consideration and assessment year 2004-05 are identical - The Assessing Officer is not justified in taking a view inconsistent with the view taken by the Department in AY 2004-05 – Decided in favour of assessee. Applicability of Section 35DDA – Payment under the Voluntary Separation Scheme - Held that:- All the conditions specified u/s 35DDA were satisfied by the scheme - The assessee had incurred the expenditure by way of payment to its employees - The payment was under the scheme framed by the employer - The scheme is voluntary and not compulsory based on the fact - "The Govt. of India has decided to close the business and the scheme is not voluntary in nature, it is compulsory and is to be opted by all the employees and if it is not availed by certain employees then in that circumstance those employees will be compulsorily retrenched." - It may be a different thing that the government persuaded or pressurized all the employees to accept the scheme giving threat of retrenchment - It is voluntary because only when a scheme is voluntary, there is question of anybody opting to avail or not to avail - The Revenue itself has allowed the deduction in the earlier year – Decided against Revenue.

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• 2013 (12) TMI 296
  Disallowance u/s 40(a)(ia) – The assessee has made a payment of Rs. 4.61 crores as labour charges without deucting tax at source - Held that:- The labour charges were paid to sub contractors for the labour procured by them and to individual labourors amount paid was less than Rs.50,000 cannot be held as a payment to sub-contractor and thus payment to them reached the benchmark of Rs.50,000 – The provisions of Section 194C could not be invoked because the labourors were not the same at the different sites – Decided in favour of assessee. Credit of prepaid taxes – Held that:- The payments have been received by the firm so the tax deduction would not be in the hands of partners – The claim can be verified from the information submitted by the deductors – When income is accepted in the hands of firm then the claim of advance ta should also be given to the firm and not to the partners – Decided in favour of assessee.

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• 2013 (12) TMI 295
  Disallowance u/s 40(a)(ia) – The assessee has made a payment of Rs. 6.58 Crores as labour charges without deucting tax at source - Held that:- The labour charges were paid to sub contractors for the labour procured by them and to individual labourors amount paid was less than Rs.50,000 cannot be held as a payment to sub-contractor and thus payment to them reached the benchmark of Rs.50,000 – The provisions of Section 194C could not be invoked because the labourors were not the same at the different sites – Decided in favour of assessee. Credit of prepaid taxes – Held that:- The payments have been received by the firm so the tax deduction would not be in the hands of partners – The claim can be verified from the information submitted by the deductors – When income is accepted in the hands of firm then the claim of advance tax should also be given to the firm and not to the partners – Decided in favour of assessee.

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• 2013 (12) TMI 294
  Bad debts written off – Held that:- Prior to April 1, 1989, the assessee had to establish the debts have become bad and cannot be recovered in any case but after amendment to section 36(1)(vii) – The word “establish” has been deleted - Following T. R. F. LTD. v. CIT [2010 (2) TMI 211 - SUPREME COURT] - The assessee need not to establish that the debt has become irrecoverable. It is enough that the bad debt is written off as irrecoverable in the accounts of the assessee – The assessee has filed all the details showing break-up of amounts written and the services rendered to them - Decided against Revenue. Legal and professional charges paid to director of company – Held that:- There was a consultancy agreement and the payment in question prima facie is a payment for professional services rendered and could not be treated as a payment of salary - Once commercial expediency of a payment is accepted and TDS has been effected, the deduction will have to be allowed – The provisions of section 192 being outside the purview of section 40(a)(ia) - Decided against Revenue.

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• Customs

• 2013 (12) TMI 293
  Imposition of penalty u/s 114A - Confiscation of goods - Notification No.21/2002 dt. 1/3/2002 - Commssioner reduced penalty - Held that:- respondents had wrongly claimed the exemption available to software as there was no software separately imported and cleared. The impugned software formed part of the hardware and was liable to duty as hardware. The impugned goods were liable to confiscation under Section 111 (m) of the Act and appropriate fine could be validly imposed. The original authority had imposed penalty equal to the duty found to have been evaded under Section 114A of the Act. Commissioner (Appeals) reduced the fine from Rs. 1,35,000/- to Rs. 75,000/- considering the various submissions made by the respondents. They had submitted that the value of the offending goods was Rs. 2,90,000/- and that the original authority had taken into account the entire value of the two consignments covered by the Bills of Entry which was Rs. 5,43,170/-. I find that even considering the value of the entire goods imported, the fine of Rs. 75,000/- imposed by the Commissioner (Appeals) is reasonable. The authorities have not shown that the offending goods would have fetched a profit of Rs. 1,35,000/- were the goods sold in the market - Following decision of CC, Bangalore Vs. Protocol Solutions Pvt. Ltd. [2009 (11) TMI 449 - CESTAT, BANGALORE] - Decided partly in favour of Revenue.

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• 2013 (12) TMI 292
  Benefit of Notification No. 148/94-Cus., dated 13-7-1994, Serial No. 8 - goods were provisionally released on an undertaking executed by the appellant that the imported goods will be distributed to the poor and the needy - Failure to produce registration certificate from the Ministry of Social Justice and Empowerment under Indo-US Agreement which is required for the purpose of availing the benefit of the notification - Held that:- As per Notification No. 148/94, serial No. 8, the only condition is that the assessee should be a registered society for free distribution to the poor and needy. As the appellant has produced the said certificate, therefore, the denial of benefit of exemption under Notification No. 148/94 is not justified as in the impugned order - Decided in favour of assessee.

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• 2013 (12) TMI 291
  Exemption under Notification No. 21/2002-Cus., dated 1-3-2002. Serial No. 114 - Import of PVC tray - Held that:- There is alternative claim of exemption for another notification, which was available at the time of import of the goods - There are procedural requirements for execution of bond at the time of import of the goods. However, we feel that such requirement of execution of bond is primarily to ensure the re-export of the goods within six months from the date of importation or within the period further extended by the jurisdictional Assistant Commissioner. If the appellant is in a position to establish export of said goods within six months from the date of importation from other collateral evidence, we are of the view that the benefit of notification should be made available to the assessee. However, as observed earlier the claim of the appellant does not stand examined by the lower authorities. However, the facts of export of the very same goods, which were imported by the appellant have to be established and identity of the imported and re-exported goods is required to be examined by the lower authorities, we set aside the impugned order and remand the matter to the adjudicating authority for examining the appellant’s claim of exemption of Notification No. 104/94-Cus., dated 16-3-1994. We make it clear that the original claim of the appellant under Notification No. 21/2002-Cus., dated 1-3-2002 stands rejected - Decided partly in favour of assessee.

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• 2013 (12) TMI 290
  Refund of duty - Import of machinery - Held that:- in cases involving Central PSUs where the COD had declined permission prior to 17-2-2011, when the Apex Court pronounced its judgment in the case of ECIL (2011 (2) TMI 3 - Supreme Court), either party cannot pursue the appeals. Prior to 17-2-2011, such appellants were bound to obtain clearance from the COD as per the judgments recalled by the ECIL judgment - Decided against Revenue.

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• 2013 (12) TMI 289
  Discharge of duty liability on the quantity of goods imported and received - Whether the assessee is required to discharge the duty liability on the imported bulk liquid cargo on the shore tank receipt quantity or on the ship ullage quantity - Held that:- duty liability has to be paid on the transaction value which is a price payable for the goods irrespective of the quantity received by the assessee in the shore tanks. There are contradictory judgments available - udgment and orders in the case of MRPL (2006 (2) TMI 518 - CESTAT, BANGALORE) is has taken a view that duty liability has to be paid on the transaction value which is a price payable for the goods irrespective of the quantity received by the assessee in the shore tanks, while the judgment of Ruchi Infrastructure Ltd. (2007 (11) TMI 210 - CESTAT, BANGALORE) holds otherway round - There seems to be a contradiction in the judgments given by this Bench as cited herein above on an identical issue. Since there is a contradiction, we direct the Registry to place the records along with the case-laws as referred in this order before the Hon’ble President for consideration of constitution of a Larger Bench to sort out the contradiction - matter referred to larger bench.

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• Corporate Laws

• 2013 (12) TMI 288
  Non-usage for a period in excess of five years and one month of registered Trade Mark – The appellant filed rectification application for deregistration of trademark “KOHINOOR” in favour of the respondent in respect of rice in class 30 on the plea that the respondent had got the trademark “KOHINOOR” registered without bonafide intention to use it and there was no bonafide use of the trademark by the respondent for a period of 5 years and 1 month preceding the date of filing of the application for rectification. - Held that:- Section 46(1)(b) provides that that up to a date one month before the date of the application, a continuous period of five years or longer had elapsed during which the trademark was registered and during which there was no bonafide use thereof in relation to the goods for which it was registered by the proprietor for the registered trademark - Onus to prove non-use rests upon the applicant who has filed the application for rectification. The applicant who has filed the application for rectification to give prima facie evidence for non-use of the mark during the relevant period of five years from the date of one month before the date of the application for rectification. Once it is prima facie shown, then the onus shifts to the registered proprietor to prove the use of the trademark during the relevant period - Relying upon Hardie Trading Ltd. & Anr. V. Addisons Paint and Chemicals Ltd. [2003 (9) TMI 542 - SUPREME COURT OF INDIA ] – where the evidence on record does not show absolute non-user of trademark during the period of 5 years and one month prior to the application for rectification and it was not economically possible for the owner of the registered trademark to put its goods manufactured abroad immediately due to restrictions imposed by the Import Trade Control Policies for the relevant years, the application for rectification could not be allowed on the ground of alleged non-user as the case is covered under the term “special circumstances”. There was no non-user of the trademark ‘KOHINOOR” in respect of rice in class 30 for five years and one month prior to the date of the rectification application – there was no error in the inclusion of another District also for selling the rice and later extending the benefit of the trademark to the respondents to the whole State of Uttar Pradesh - restricting the trademark to few cities would create lot of complications and litigations as to the exact boundary of a particular city or District - It will also be impossible for the respondents to ensure that its products are not sold to retailers outside the six cities - Putting geographical restrictions was unjust – Decided against Appellant.

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• Service Tax

• 2013 (12) TMI 330
  Denial of refund claim - Benefits under exemption Notification No. 41/2007-ST dated 16.10.2007 - Terminal handling charges - Assistant Commissioner sanctioned refund claim - Revenue claims partial recovery claiming exemption inapplicable in respect of terminal handling charges - Held that:- Notification No. 17/2009-ST is an exemption Notification issued by the Central Government in exercise of powers conferred under Section 93(1) of the Finance Act, 1994 (the Act). By this Notification, the taxable services specified in column (3) of the table (appended to the Notification) received by an exporter of goods and used for export of goods pertaining to the enumerated sub-clauses of Section 65(105) as specified in the corresponding entry in column (2) of the table are exempted from the whole of the service tax leviable under Section 66 and 66A of the Act, subject to the conditions set out in the table. On a true and fair construction of the relevant entry at Sl. No. 2 of the table under exemption Notification No. 41/2007-ST, the inference is compelling that any service provided in relation to port services in a port, in any manner to an exporter and where such service is used for export is exempted from whole of the service tax leviable under Section 66 and Section 66A of the Act - By reference to the exemption provided at Sl. No. 16 of the table in Notification No. 17/2009-ST, the adjudicating authority inferred; and in the considered view of this Tribunal erroneously, that terminal handling charges when provided within the port do not fall under port services vide the Notification No. 41/2007-ST. This conclusion of the adjudicating authority which found resonance in the order of the Commissioner (Appeals), is in my considered view erroneous and proceeds on a fallacious interpretation of the provisions of Notification No. 41/2007-ST - Decided in favour of assessee.

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• 2013 (12) TMI 329
  Non-availability of CENVAT credit - Rent-a-Cab Service - eligibility of CENVAT credit of service tax paid on ‘Outdoor Catering Service’ - Held that:- As far as outdoor catering service is concerned, there is no law laid down anywhere that such service will be in relation to manufacture only if the number of employees is more than 250 - The ratio of the decisions quoted by the Respondent cannot be understood to mean that catering will qualify as input service only if number of employees is more than 250. The effect of providing canteen within the factory is same whether the number of employees is more than 250 or less than 250. I am satisfied that providing catering services in the factory premises will improve their manufacturing efficiency - Following decision of CCE, Delhi-III Vs. Suzuki Powertrain India Ltd. [2010 (4) TMI 742 - CESTAT, NEW DELHI] - Decided in favour of assessee.

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• 2013 (12) TMI 328
  Waiver of predeposit of tax - Survey and Exploration of Mineral Services - Assessee contends that it has already discharged the service tax liability hence no demand arises - Held that:- prima facie the applicant has undertaken the job of survey and exploration of mineral services. Therefore, they are liable to discharge tax liability. It is seen that one of the sub-contractors M/s. Sri Sai Engineering & Drilling certified that they paid the tax which was not considered by the adjudicating authority - letter dt. 1.8.2013 produced by learned advocate is in respect of discharge of service tax by M/s. Shivani Oil & Gas Exploration Services Ltd. and it cannot be accepted as a discharge of tax liability by the applicant. Ld. advocate also pleaded financial hardships and the applicant-company is suffering from losses and it is also contended that applicant is a proprietorship concern - Assessee directed to make a pre deposit - Partial stay granted.

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• 2013 (12) TMI 327
  Denial of CENVAT Credit - Commercial training or coaching services - Availment of Cenvat credit of service tax paid on catering , photography, tent (mandap keeper), maintenance & repairs (motor vehicles), rent for hiring examination hall and travelling expenses - Held that:- as regards catering and photography service, tents these services are used by the appellants to encourage the students who succeeded in coaching. This is an admitted case that these services have been used after commercial training or coaching is over. The celebrations are organized by the appellants during the academic sessions to encourage the existing students and to motivate the new students. During these celebrations students who have done exceptionally well are awarded so that they set an example for the other students. In these celebrations that service of catering and photography, tents are used by the appellants. I find that these activities takes place after the students passed the commercial training or coaching session conducted by the appellants. The appellants are paying service tax under the output service of commercial coaching or training. Once the student passed their coaching classes these activities of catering and photography and tent services cannot be said to have been used to provide output service. Similarly, the maintenance and repair of the motor vehicles is also an activity which is used by the appellants during the course of their business and there is nothing on record to say that these maintenance and repairs have any nexus to commercial training or coaching. Therefore, the Cenvat credit in respect of this service has rightly been denied by the Commissioner (Appeals). Similarly the travelling expenses incurred by the appellants for the business tours cannot be related to provision of commercial coaching or training and lower authorities have rightly held that Cenvat credit in respect of these services is also not admissible. Appellants are conducting examination of students under coaching to enhance their performance. For this purpose i.e. conducting of examination of the students, examination hall is hired by them and since renting of immovable property is a taxable service, service tax paid on renting of the examination hall will be admissible to the assessee as the Cenvat credit, as commercial coaching or training. Accordingly, I hold that the appellants are eligible for the Cenvat credit in respect of service tax paid on hiring of examination hall on rent. In view of the above, I hold that appellants are eligible for Cenvat credit in respect of hiring of hall and in respect of other activities the Cenvat credit is not admissible to the appellants - Decided partly in favour of assessee.

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• 2013 (12) TMI 326
  Demand of Service Tax - GTA Service and Cargo Handling Service - Penalty u/s 78 - Held that:- demand has been raised on the basis of figures shown in the respective balance sheets and that were shown in the Return even though it has been mentioned that on scrutiny of the records it revealed that the Appellant had rendered all these services & received taxable value against these services but not discharged appropriate Service Tax the same. On going through the reply to the show cause notice filed by the appellant, we find that they had furnished necessary break up, of taxable services and the non-taxable service, relating to the site formation and clearance service. Along with the reply they have also enclosed copies of work orders and other relevant documents to show that the services rendered by them fall under the category of exclusion clause contained in the definition of site formation and clearance. Even though the Appellant had produced all relevant documents in support of their claim that most of the services rendered by them were under the category of non-taxable services and hence no Service Tax is payable, these evidences/documents had not been scrutinized nor considered by the Ld. Commissioner. In these circumstances, we find it is an appropriate case for remand to the adjudicating authority to decide the issues afresh, after taking into consideration all relevant documents - Decided in favour of assessee.

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• 2013 (12) TMI 325
  Availment of CENVAT Credit - Utilization of service of transportation for outward transportation of goods from their factory - Assessee paid service tax by debit in their entry in the Cenvat account - Whether service was an output service - Held that:- This is an issue on which there is no clear provision under the Rules. But considering the overall scheme of the Cenvat Credit Rules, I am of the view that the provisions that are applicable on the date of payment would apply. Therefore, I do not give any relief in the matter of duty demanded. However, on payment of such amount in PLA along with the interest, they are allowed to take credit of the Cenvat credit utilized for the purpose on 28-11-2008. The appellate authority has come to the conclusion that there was no mala fide intention on the part of appellants but he has not given full waiver of penalty. This is not justified. Once Section 80 of Finance Act, 1994 is invoked, full waiver from penalty is to be given and not just partial relief. This is the legal point raised in the appeal by Revenue. But the legal point is to be resolved by giving full relief from penalty rather than increasing penalty. There is no case for sending the order for de novo consideration - Penalty set aside - Decided partly in favour of assessee.

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• 2013 (12) TMI 324
  Waiver of pre-deposit - Stay of recovery - Demand of service tax - Denial of Cenvat credit on Employees Group Health Insurance Service and Construction Service - Nexus between output services and input service - Held that:- Commercial Coaching and Training Centre was not exclusively used for rendering ‘output services’ during the material period. It was as well used as in-house mechanism for training the new recruits of the company - in the context of determining penal liability of the appellant under Section 78 of the Finance Act, 1994, the adjudicating authority recorded a finding to the effect that the ingredients for such a penalty under Section 78 did not exist in the case. There is no independent finding in the impugned order with reference to the proviso to the Section 73(1) of the Act. Prima facie, ingredients for a penalty under Section 78 and for invoking the extended period of limitation under the proviso to Section 73(1) being identical, the learned counsel has made out a case against the demand of duty for the extended period - Assessee directed to make a pre deposit - Partial stay granted.

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• 2013 (12) TMI 323
  Cenvat credit - Insurance premium towards insurance policy taken for workers’ compensation - Held that:- on the basis of insurance policy which shows the amount of premium involved and Service Tax credit can be taken. It is also not correct to say that Cenvat credit is taken on the document not serially numbered since insurance policy always has a serial number - it is a purely a technical ground and would not justify denial of credit - Decided against Revenue.

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• 2013 (12) TMI 322
  Stay application - Availment of services of GTA for outward transportation - Benefit of Notification No. 35/2004-C.E., dated 3-12-2004 - Held that:- supplier of the inputs cannot be held to be an agent of the appellant, as construed by the lower authorities. The goods are admittedly supplied by the supplier on FOR destination basis and it is supplier who is liable to pay service tax which according to the appellant stands paid by them - Following decision of CCE, Vapi v. Neral Paper Mills P. Ltd. [2008 (12) TMI 121 - CESTAT AHMEDABAD] - Stay granted unconditionally.

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• 2013 (12) TMI 321
  Availment of CENVAT Credit - Credit on input service - Contravention of Rules 3, 4 and 9 of Cenvat Credit Rules, 2004 - Availment of Credit not due - entire Service Tax/Cess amount paid to service provider - Interest on tax not paid - Held that:- Appellant availed the Cenvat credit which was not due to them at the material time. The demand of interest is for the period from the date of irregular availment of Cenvat credit till the date of payment of Service Tax amount to the service provider in terms of Rule 4(7) of Cenvat Credit Rules. There is no dispute that the Appellant had retained the amount which was not due to them and for which the Appellant became entitled only at a subsequent date. Therefore, they are liable to pay the interest in terms of the provisions of Rule 14 of the Cenvat Credit Rules. As regards the contention of the Appellant that Tax has not been determined in accordance with the provisions of Section 11A(2), it is pertinent that the recovery of interest is for irregular availment of Cenvat credit which was not available to them, since they had not paid the Service Tax amount to the service provider. The Service Tax amount to service provider, was paid at a later date, the payment of which has never been contested or challenged at any stage - Appellant utilized the credit only after paying the Service Tax amount to the service provider, the penalty imposed in this case set aside - Following decision of Union of India v. Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court] - Decided partly in favour of assessee.

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• Central Excise

• 2013 (12) TMI 287
  Scope of Section 35-B (2) of the Central Excise Act – Appeal could be dismissed or not – Filing of counter Affidavit – Held that:- The opinion of the Board of Commissioner of the Central Excise under Section 35B is not justiceable on merits in Court - The opinion to be formed by the Board of Commissioners is a prima facie opinion and is not conclusive in nature which may be subject to challenge by the assessee on merits - If such an order is subjected to judicial review, it may give rise to taking ground to be agitated in almost every case and will cause unnecessary delay in disposal of the appeals under Section 35B of the Act - the object and purpose of enacting Section 35-B (2) of the Act is to avoid filing of frivolous and unnecessarily appeals, and to safeguard the interest of the revenue. Relying upon Collector Vs. of Central Excise, Vadodara Vs. Rohit Pulp Paper Mills [1998 (4) TMI 138 - SUPREME COURT OF INDIA] - The record clearly demonstrates that the Committee of Commissioners have signed on the note, which contains the reasons, and the proposed order giving grounds on which the appeal has to be filed - the Committee of Commissioners have applied their mind before authorizing to file the appeal - Granting time to the respondent to file a counter affidavit, especially when we perused the original records cannot be allowed – Decided in favour of Appellant.

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• 2013 (12) TMI 286
  Penalty under Rule 15(2) of CENVAT Credit Rules - Tempered documents – Mis-declaration with intent to evade duty – Held that:- The allegation of tampering of delivery challans and showing the wrong date in the delivery challan has not at all been established - There is no clear finding that in the verification report the AC has mentioned that there was tampering - when the table itself is compared with the documents and in the absence of an extra column to show the actual date of dispatch and actual date of delivery challan in the table, it cannot be said that the Revenue has made out a case of tampering against the appellant - the credit has been reversed when the audit pointed out the same – it cannot be said that there was suppression of fact or misdeclaration with intent to evade duty unless it is shown by way of statements of the concerned officers of the company or any other evidence to show that there was an intention on the part of the appellant to evade duty or to suppress facts - no investigation has been conducted as regards the manipulation of any records. There was considerable force in the argument that no penalty could have imposed under Section 11AC in the absence of determination of CENVAT credit to be reversed as per the provisions of Section 11A (2) of Central Excise Act 1944 - penalty under Rule 15(1) as well as penalty under Rule 15(2) cannot be sustained – Decided in favour of assessee.

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• 2013 (12) TMI 285
  Condonation of Delay – Delay of 23 days - Held that:- The reasons given by the appellants for condonation of delay are totally unacceptable, inasmuch as having delayed the proceedings before the adjudicating authority and subsequently stating that on receipt of adjudication order they were under bona fide belief that the adjudication having passed beyond the stipulated period, is misconceived and incorrect - it is totally unacceptable reason for condonation of delay - any delay would be considered with pragmatism in a justice oriented approach, rather than the technical detection of sufficient cause - it cannot attributed to the adjudicating authority - no other valid reason or justifiable cause was propagated by the appellant before the first appellate authority – thus, the first appellate authority was correct in coming to the conclusion that appellant had not justified the belated filing of appeal before him – Decided against Assessee.

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• 2013 (12) TMI 284
  Demand of interest – Held that:- Assessee contended that there is no intention to evade any excise duty by undervaluing the goods merits consideration as there is no dispute that the appellant’s sister concern has consumed the goods cleared by the appellant and has discharged Central Excise duty on the final products so manufactured - there can be no intention to evade the duty, as any duty paid by the appellant would have resulted in CENVAT Credit to the appellant’s sister concern – Following Commissioner of Central Excise & Customs, Vadodara-II Vs. Gujarat Narmada Fertilizers Co. Ltd. [2012 (4) TMI 309 - GUJARAT HIGH COURT ] - the demand of interest which is beyond the period of one year from the date of issuance of show-cause notice is unsustainable - As regards the demand of interest, within a period of one year from the date of issue of show-cause notice, such demand is upheld – Decided partly in favour of Assessee.

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• 2013 (12) TMI 283
  Goods to be considered as capital goods or not – Waiver of Pre-deposit – Held that:- MS channels, angles, platforms, structures etc. cannot be considered as machinery under CETH 8419 - Machinery is something used for manufacture or processing or working upon some materials. -The platform does not do any of these and, therefore, from a common sense perception, platform is not machinery but it is only a supporting structure for the machinery – Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ] - cement and steel items used for foundation or building supporting structures for capital goods cannot be considered as capital goods or parts or accessories of capital goods - iron and steel structures manufactured and captively used cannot be considered as capital goods eligible for Modvat/Cenvat credit - The appellant is directed to make a pre-deposit of the entire amount of CENVAT credit taken wrongly along with interest as pre-deposit - upon such submission rest of the amount to be stayed till the disposal – Stay granted.

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• 2013 (12) TMI 282
  Recall of appeal - Reversal of cenvat credit amount directed – Held that:- The dismissal of the customs appeal for non-compliance with Section 35F of the Central Excise Act was an apparent error which crept into the final order dated 10.9.2012 on account of inadvertent oversight - Only the excise appeal was liable to be dismissed on the stated ground - the final order dated 10.9.2012 is recalled insofar as it affects the customs appeal, and the appeal is restored to its original number – Decided in favour of Assessee.

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• 2013 (12) TMI 281
  Benefit of reversal of proportionate CENVAT Credit of inputs or input services - Waiver of Pre-deposit – Held that:- It would be covered by the retrospective amendment to the provisions of Rule 6 of CENVAT Credit Rules, 2004 and the appellant is entitled to reverse the proportionate CENVAT Credit availed on the Service Tax paid on the common input services - In the post 01.04.2008 scenario, the provisions of Rule 6(3A) was inserted which specifically require the assessee to follow the procedure in order to avail the benefit of reversal of proportionate CENVAT Credit of inputs or input services attributable to the exempted goods manufactured and cleared from the factory premises - the appellant has not followed the said procedure - the appellant has already deposited an amount of Rs.13.65 lakhs along with during the pendency of the matter - the appellant is directed to deposit further an amount of Rupees Ten Lakhs as pre-deposit – Upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.

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• 2013 (12) TMI 280
  Benefit of SSI Exemption - Brand name of goods – Held that:- Where Mobike parts sold under own brand name and Logo of different mobike manufacturers mentioned for their identification only, it is required to be known as to which particular manufacturer of mobike they were meant for, held that use of logo/words was not such as to deny SSI exemption to the SSI - the Respondent was putting his own brand name to the goods manufactured by him - The reference to various modal of the car was only for the identification of specific use of the goods in that particular model - floor mats of the size of Zen car cannot be placed in the car of another model, which may require different specifications and seizes - for the purpose of identify the specific use, the marks of such models has to be mentioned on the goods – Following Magnum Automotive Industries V/s. CCE-Noida [2003 (3) TMI 444 - CEGAT, NEW DELHI] - mark of various modal on the goods manufactured by the assessee cannot be held to be covered by debarring clause of small scale exemption notification – Decided against Revenue.

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• 2013 (12) TMI 279
  Denial of Cross examination – Held that:- There was no merit in the reasons adjudicated by the Commissioner for denying the cross examination's request - the appellant cannot be attributed to any melafide intention to delay the adjudication proceedings on account of cross examination - Following Laxman Exports Ltd. V/s. CCE [2002 (4) TMI 66 - SUPREME COURT OF INDIA] - the assessee specifically asked to cross examine the representatives to establish that the goods had been accounted for - Matter remitted back to the Commissioner for fresh adjudication after observing the principles of natural justice – Decided in favour of Assessee.

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• 2013 (12) TMI 278
  Provisional assessment - Principle of unjust enrichment - Adjustment of the excess paid with the short-paid duty – Held that:- Excel Rubber Ltd. v. CCE, Hyderabad [2011 (3) TMI 527 - CESTAT, NEW DELHI (LB)] - even in respect of provisional assessments, no adjustments can be held to be permissible at the time of finalization of the assessment - the assessment were not provisional and as such the benefit of neutralization cannot be extended. Admissibility of the Notification No. 53/2001 – Held that:- The benefit of the notification in respect of the differential demand of duty could not have been availed by them at the time of original clearance of the goods - The appellant had availed the benefit, without any objection, at the time of the original clearance of the processed fabrics, relatable to the duty paid by them at that time - If the Revenue is subsequently making a demand of the differential duty, the same has to be subject to the benefit of the notification available. Extended period of Limitation – Held that:- An assessee is required to pay duty on the correct assessable value at the time of clearance of the goods - the variation in job charges amount was known to the assessee prior to the clearance of the processed fabrics - the less payment of duty was not intentional and was on account of error on the part of the assessee - Had it been intentional, the appellant would not have paid higher duty on the other clearances - it is clear that there was no ulterior motive on the part of the assessee to evade payment of duty - the extended period of limitation would not be available to the Revenue – order set aside and the matter remanded back to the adjudicatory authority for recalculation of duty demand within the period of limitation and by extending the benefit of Notification No. 53/2001- there was no mala fide intention on the part of the appellant, imposition of any penalty on them is not justified – Decided in favour of Assesse.

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• 2013 (12) TMI 277
  Valuation of Goods u/s 4A OR 4 of Central excise Act,1944 - Pet jars cleared as retail package and not as wholesale package -Waiver of pre-deposit and interest – Held that:- Relying upon SWAN SWEETS PVT. LTD. Versus COMMISSIONER OF C. EX., RAJKOT [2006 (1) TMI 269 - CESTAT, MUMBAI] and ROYS INDUSTRIES LTD. Versus COMMISSIONER OF C. EX., HYDERABAD [2010 (9) TMI 257 - CESTAT, BANGALORE] - the entire issue needs to be gone into detail as regards the definition of net quantity, multi piece package and retail package viz-a-viz a wholesale package, as mentioned in the SWM (Package Commodity) Rules, 1977 - in appellant’s own case, the Tribunal had already held in their favour holding that these packages are not retail packages but whose sale package - the appellant has made out a case for the waiver of pre-deposit of the amount - Application for the waiver of pre-deposit of the amounts involved allowed till the disposal – stay granted.

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• 2013 (12) TMI 276
  Remission of duty of molasses stored in steel tanks – Held that:- Losses is below 2% and the reasons stand advanced by the assessee are on account of evaporation, handling and chemical reaction etc - The Central Board of Excise and Customs vide its letter No. 261/CC/1/80-CX-B dated 6.2.1982 and instruction No. 74/1989 dated 1.6.89 of Meerut Collectorate, storage losses of molasses upto 2% are allowable - The Commissioner has not advanced any reasons for not following the said instructions - there is no allegation that losses occur due to clandestine removal of molasses – order set aside – Decided in favour of Assessee.

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• 2013 (12) TMI 275
  Benefit of Exemption Notification 6/2003 – Addition of saccharine to scented supari – Held that:- Addition of saccharine to the flavoured supari would not take away it from the category of scented supari – Following CCE, Guntur v. Crane Betel Nut Powder Works [2007 (3) TMI 6 - SUPREME COURT OF INDIA] - addition of sweetening material to the betel nut would not result in new and distinct or different product - addition of saccharine would not result in sweetened scented supari rather than only scented supari - Decided against Revneue.

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• CST, VAT & Sales Tax

• 2013 (12) TMI 332
  Modification in eligibility certificate u/s 4-A of U.P. Trade Tax Act, 1948 - Reduction in the period of Exemption of Tax on sale – Held that:- The certificate issued to the assessee is referable to one which has been issued in accordance with Clause (d) of Sub-Section 2 of Section 4-A of the Act and not by the High Court, meaning thereby that the Commissioner had the authority to amend and cancel the same - The discontinuance of business by the assessee was not directly and substantially involved in the writ petition, the principles of constructive res-judicata would not come into play so as to debar the authorities from exercising the statutory power under Section 4-A (3) of the Act to amend the eligibility certificate in the event they find that the assessee had discontinued its business for a continuous period of six months at a stretch - There was discontinuance of business by the assessee for a continuous period of six month – Thus, the Commissioner committed no error of law in limiting the exemption from tax granted to the assessee – Decided against Petitioner.

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• 2013 (12) TMI 331
  Waiver of pre deposit of tax, interest and penalty - Set off of VAT paid on purchase of gold for subsequent yeras - Set off available when sales is less than 50% of the total receipts - Interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules, 2005 - Held that:- The orders impugned in the petition viz. order dated 29 July 2013 of the Maharashtra Sales Tax Tribunal and order dated 3 September 2013 have been passed on application to stay the order of the Assessing Officer pending disposal of the appeal by the first appellate authority. Therefore the merits of the controversy and the interpretation of Rule 53(6)(b) of the Maharashtra Value Added Tax Rules 2005 would be gone into in depth by the Appellate Authority at the final hearing. However, as the issue involved is one of interpretation of law, no deposit of amounts attributable to penalty should be insisted upon for the purpose of stay - Order modified - Decided partly in favour of assessee.

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• Indian Laws

• 2013 (12) TMI 320
  Improper reply - Held that:- When the information sought by the applicant under the RTI Act and information provided by the CPIO in response to the RTI application are read together, it appears that the CPIO should have handled the application with the seriousness expected of him as a responsible Group A officer entrusted with the task of implementation of the provisions of the RTI Act - Regarding non-reply to an application, it is possible that CPIO could have genuinely missed them by an oversight, since these appear to be two identical applications addressed to different authorities but onus came on the CPIO, since the circular was issued by the section for which CPIO is responsible - The application, grounds of appeal and views expressed during the hearing, CPIO is directed to provide information for items A to D of the application, on the basis of files available on this subject, in his section; regarding E and F, he should transfer the relevant portions to the CPIOs concerned under intimation to the RTI applicant; regarding G, he should allow the RTI applicant to inspect (on a mutually convenient date) all the files, records, documents, correspondence, note sheets and registers relating to the information sought by him - Decided in favour of assessee.

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