Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 12, 2014
Case Laws in this Newsletter:
Income Tax
Customs
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Existence of PE in India - Mutual Agreement Procedure - The MAP procedure and agreement, is no doubt relevant but cannot be determinative or the primary basis to decide whether the assessee had PE in India. - HC
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Reasons recorded after order of reference for valuation of the registered valuer is not the substitute of pre-decisional formation of opinion thus, there is no applicability of clause (b) of section 55A which is meant for other purpose - AT
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Income earned by JOPL, is taxable at Singapore and the Double Taxation Avoidance Agreement would also come to their rescue as the income earned by the said concern, are not liable to be taxed in India - HC
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Addition made u/s 2(22)(e) - The loan or advance taken from the company may have been ultimately repaid or adjusted but that will not alter the fact - additions confirmed - AT
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Protective assessment - no addition can be made in the hands of the assessee - the protective addition made in the hands of the assessee for these three assessment years, was not justified - AT
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Addition made u/s 69B - Merely because the assessee's father was a director in RDPL along with some other family members is no ground to make addition of the amount, sources of which has been wholly explained - AT
Customs
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Exemption certificate in respect of defence items imported - certificate have been issued by the Inspector General who is equivalent to Joint Secretary level officer in the Cabinet Secretary - exemption allowed - AT
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Levy of CVD on MRP basis - MCCBs are not intended for retail sale - MCCBs imported by the Appellants are not commodities in packaged form - demand set aside. - AT
Service Tax
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Condonation of Delay - deemed service of order - The date of communication of the order on 01.08.2012 to the Ld. Advocate would be treated as the date of receipt of the Order. - AT
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Export of services - marketing of foreign Principals products in India - ule 3(1)(iii) of the Export of Service Rules, 2005 - all the conditions of export satisfied - AT
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Renting of immovable properties - waiver of penalty u/s 80 - amendment of Section 80 of the Finance Act, 1994 could be applicable to the payment made by assessee even prior to 28.05.2012 - penalty waived - AT
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Whether the applicant is liable to pay service tax on receipt of IATA commission from various airlines for the disputed period - Conditional stay granted. - AT
Central Excise
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Re-Credit of CENVAT Credit previously debited - suo moto credit - Once the refund claim is withdrawn, the assessee is entitled for credit of CENVAT which was debited as a condition to such refund claim. - AT
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Waiver of pre deposit - The Tribunal has recorded factual findings that the hardship pleaded by the appellants on the basis of balance sheet for 2001-2002 is not sufficient - no hardship - HC
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Area based Exemption - Notification No.50/2003-CE - it would not be correct to deny the exemption on the ground that enhancement capacity of production is merely by processed improvement - AT
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Short payment of duty - extended period of limitation - Short payment is attributable to lack of due diligence on the part of Jurisdictional Central Excise authorities and not on account of wilful default on the part of the assessee. - AT
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Short payment of duty - extended period of limitation - Short payment is attributable to lack of due diligence on the part of Jurisdictional Central Excise authorities and not on account of wilful default on the part of the assessee. - AT
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Various Common inputs on which credit has been availed has nothing to do with the generation of electricity and therefore, there is no need to reverse any credit taken in respect of these inputs. - AT
Case Laws:
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Income Tax
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2014 (2) TMI 442
Business Connectioin - India-US DTAA - dependency test - Held that:- The assessees have business connection in India, but the tribunal has given a wide and broad meaning to the term business connection‖ and what is attributable and taxable as business connection‖ has not been adjudicated and decided. This is because both the Assessing Officer and the assessees have proceeded that in terms of Section 90(2) of the Act, provisions of the DTAA were more beneficial to the assessee. Existence of PE in India - Mutual Agreement Procedure (MAP) - Held that:- The MAP procedure and agreement, is no doubt relevant but cannot be determinative or the primary basis to decide whether the assessee had PE in India. - Conditions of Articles 5(4) are not satisfied in the present case. It is not the case of the Revenue that e-Fund India was authorized and habitually exercised authority to conclude contract or was maintaining stock or merchandise from which it delivered goods or merchandise on behalf of the assessee or secured orders on behalf of the assessee. Therefore, the conditions and requirements of subclauses (a), (b) and (c) to Article 5(4) are not satisfied. - assessees did not have "permanent establishment" in India The transactions between the assessees and e-Fund India were at arms length and were taxed on arms length principle. There was no allegation or considered finding of the tribunal that the transactions were not in ordinary course of business. In these circumstances, even otherwise requirements of Article 5(5) are not satisfied in the present case. Real and intimate connection must exist between operations carried out in India and business by nonresident outside India, and profits of business outside India attributed to operations carried out in India, can be only subjected to tax. This is clear from the explanation to Section 9(1)(i) and only such income operations carried out in India have to be attributed and taxed. When DTAA and provisions of the Act apply to an assessee, then the Article of DTAA or the provision of the Act will apply depending upon, which one of the two is more beneficial or advantageous to the assessee. Reassessment u/s 147 - Held that:- non communication of reasons to believe was inconsequential and did not prejudice the assessee. Tribunal has on examining the original records came to a factual finding giving cogent reasons, why reasons to believe were in fact recorded before issue of notice. Challenge to the proceedings under Section 147/148 of the Act is therefore, rejected.
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2014 (2) TMI 435
Deletion made on account of LTCG Valuation of capital asset Held that:- The conditions prescribed in section 55A of the Act have not been complied with by the AO, the DVO's report cannot be considered Relying uponCommissioner of Income-tax Versus Umedbhai International P. Ltd. [2010 (2) TMI 631 - Calcutta High Court] - the formation of opinion of the Assessing Officer that the value claimed by the assessee less than its fair market value is sine qua non - Reasons recorded after order of reference for valuation of the registered valuer is not the substitute of pre-decisional formation of opinion thus, there is no applicability of clause (b) of section 55A which is meant for other purpose - Decided against Revenue. Expenses on income from other sources 50% allowed Held that:- The AO has brought out adequate reasons for disallowing of said expenditure The AO has allowed the expenditure on an adhoc basis and has not met out the issues raised by the AO - The assessee has not shown what is the nature of the accounting charges nor the expenditure A/c nor the retaining fees - In the absence of any evidence in respect of the nature of the expenditure, the same cannot be allowed - the deletion of disallowance to the extent of @50% by the CIT(A) is erroneous and liable to be reversed Decided in favour of Revenue.
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2014 (2) TMI 434
Requirement to deduct tax Permanent Establishment DTAA between India and Singapore Applicability of Section 44B of the Act Held that:- The income arising out of the transaction between the assessee and non-resident company, is taxable in Singapore and not in India Relying upon GE INDIA TECHNOLOGY CENTRE P. LTD. V. COMMISSIONER OF INCOME TAX AND ANOTHER [2010 (9) TMI 7 - SUPREME COURT OF INDIA] - In the words of Section 195(1) in clear terms, lay down that tax at source is deductible only from "sums chargeable" under the provisions of the Income-tax Act, i.e., chargeable under sections 4, 5 and 9 of the said Act - the transactions between the assessee firm (appellant/writ petitioner) and JOPL are held not taxable in India and the assessee firm is held not liable for payment of tax under Section 195. The tax at source can be deducted only from "sums chargeable" under the provisions of the Act - The facts would disclose that the income earned by JOPL, is taxable at Singapore and the Double Taxation Avoidance Agreement would also come to their rescue as the income earned by the said concern, are not liable to be taxed in India and would be taxable only in Singapore - the payment made to JOPL by the appellant/writ petitioner/assessee, will not come within the ambit of deduction of tax at source - the writ petition is allowed relating to Assessment Year 2010-11, insofar as it relates to the disallowance u/s 40(a)(i) for non-deduction of tax at source in terms of Section 195(1) of the Income Tax Act, is quashed Decided in favour of Assessee.
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2014 (2) TMI 433
Disallowance of Interest u/s 40(b) of the Act Interest paid to Partners Deletion made as unexplained cash credits Survey u/s 133A of the Act Held that:- The assessee has explained the source of the money in its hands and has, therefore, also explained the source of meeting the expenditure - The addition made by the Income-tax Officer, was, therefore, rightly deleted by the Commissioner of Income-tax (Appeals) - Dr. Gaur Hari Singhania has failed to establish that he has refunded the amount, the challenge to the finding is implicit - even if it is assumed that the question contains a challenge to the finding of the Tribunal, it is sufficient to say that the findings recorded by the Tribunal are based on the material and oral statement of Dr. Gaur Hari Singhania and this Court, while deciding the reference, shall not sit in appeal against the said findings Decided in favour of Assessee. Justification of admitting oral evidences Burden to prove - Whether the ITAT was justified in accepting the oral evidence of the assessee and submissions against the material evidence in the form of books of accounts Held that:- The burden of proof is not a fixed concept it keeps on shifting from stage to stage - The burden of assessee was discharged when the statement was recorded of the cashier and of Dr. Gaur Hari Singhania on the same day, when the survey was made, subsequently, oral statement was made by Dr. Gaur Hari Singhania, giving the date of refunding - The authority has to take decision on the basis of evidence on record - The Tribunal has returned the findings after considering the evidence on record Decided in favour of Assessee.
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2014 (2) TMI 432
Addition made u/s 69B of the Act Investment in mutual fund Unexplained investment Held that:- The decision in Krinaben Patel [2014 (2) TMI 416 - ITAT AHMEDABAD] followed - The addition has been made only for the sake of addition - The assessee had litigation and between the litigants a compromise order - The assessee has also filed the copy of the bank account of "RDPL" wherein the amount in question of Rs. 30 lakhs has been debited to their account with Bank of Baroda on 05.12.2006 - Merely because the assessee's father was a director in "RDPL" along with some other family members is no ground to make addition of the amount, sources of which has been wholly explained by the assessee the CIT(A) has not given any cogent reason for upholding the addition made under section 69B by the A.O - the assessee has satisfactorily explained the source of credit entries in its bank account and the investment by her in the mutual fund with Standard Chartered Bank thus, no case of addition under section 69B as undisclosed investment could be made out by the department and the addition made is accordingly deleted Decided in favour of Assessee.
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2014 (2) TMI 431
Disallowance of interest u/s 14A of the Act Held that:- The details of the investment made by the Assessee are also reproduced by CIT in his order - no amount of interest has been disallowed in earlier years and further no borrowed funds were used for the purpose of investments as the Assessee was having sufficient interest free funds Relying upon CIT vs. Reliance Utilities Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - if interest free funds available to an Assessee are sufficient to meets its investment and at the same time the Assessee has raised the loan, it can be presumed that the investments were from interest free funds available with the Assessee - nothing has been brought on record by Revenue to demonstrate that interest bearing funds have been used by Assessee to make investments - no disallowance in is called for and the deletion of disallowance made by AO directed Decided in favour of Assessee. Deduction u/s 80IB of the Act - Freight receipt income Held that:- Assessee neither submitted the details before A.O. or CIT(A) - assessee has not given any reason for non submission of the details before the lower authorities thus, one more opportunity be given to the Assessee to present before A.O. the required details in support of its claim deduction under section 80IB Matter remitted back to the AO for adjudication.
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2014 (2) TMI 430
Deletion made on account of protective basis Held that:- The commission income has already been estimated by him thus, there is absolutely no justification in estimating the same amount again as business receipts of the assessee, and the action of the AO is just a matter of conjecture and surmises and deleted entire addition - The assessee is merely receiving commission income on booking of trucks from its clients and the freight payments were made by the clients to the truck owners and that the commission income has already been estimated by the Revenue, could not be controverted by Revenue thus, the same amount could not be taxed as business receipts in the hands of the assessee thus, there is no mistake in the order of the CIT(A) in deleting the addition on the issue Decided against Revenue. Deletion made on account of low household expenses Held that:- The CIT(A) has recorded that the assessee is living a simple life in village and did not have any car or membership of club and has shown withdrawal for family of five members in the accounting year 2004-2005, which were sufficient for meeting household expenses - there is no justification for making any addition on account of low household expenses Decided against Revenue. Estimation of commission income Held that:- The CIT(A) has passed a well reasoned speaking order on the issue - the assessee receives common income from the truck owners, but the assessee was not able to furnish any details about the owners' names and addresses - there is no way to find out the exact amount of commission earned by the assessee - the estimate of commission income of the assessee at Rs.10,00,000/- instead of Rs.6,19,625/- as shown by the assessee could not be said to be arbitrary Decided against Assessee. Deletion made on account of unexplained investment Held that:- The CIT(A) has recorded that no addition on this account is called for since the investment in trucks is duly reflected in the accounts of two ladies as also the income - there is no justification in making the addition in the hands of the assessee - The two ladies were existing income tax assesses, and there is no material brought on record to justify the addition made in the hands of the assessee Decided against Revenue. Deletion made u/s 44AE of the Act Held that:- The addition made by estimating the income from trucks under section 44AE of the Act was deleted by the CIT(A) on the ground that the trucks did not belong to the assessee, but belonged to two ladies - income from the trucks could not be considered in the hands of the assessee - the trucks were reflected in the accounts of the two ladies, who were existing income tax assesses - the income from the trucks in question could not be assessed in the hands of the assessee Decided against Revenue.
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2014 (2) TMI 429
Addition made to interest payment Disallowance of Interest free loans - Held that:- There is no finding recorded by the revenue authorities that whether the reserves and surplus of the assessee for the relevant year were more than the interest free advance of the assessee the matter remitted back to the AO for fresh adjudication to decide the issue of disallowance of interest after recording a clear cut finding with regard to the amount of reserves and surplus available with the assessee and the amount of interest free advance made Decided in favour of Assessee.
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2014 (2) TMI 428
Validity of Penalty u/s 271(1)(c) of the Act Held that:- In the absence of complete and convincing corroborative evidence, the Revenue may justifiably disallow certain part of the expenses claimed by the assessee - but the onus lies heavily on the Revenue to prove that the assessee had concealed its income or has filed inaccurate particulars of its income - The Revenue has failed to prove that the claim of the expenses under the head "wages to workers" were non-genuine or were inflated by the assessee. Merely because certain expenses have been claimed by the assessee to have incurred in cash and were not supported by documentary evidence to the satisfaction of the Revenue authorities, it could not be said that the Revenue has proved that the expenses claimed were inflated or non-genuine Relying upon CIT Vs. Reliance Petro Products P. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - it is not a fit case to levy penalty under section 271(1)(c) of the Act, which was rightly cancelled by the CIT(A) Decided against Revenue.
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2014 (2) TMI 427
Disallowance of commission payment payment of commission to the son of the partner of the firm - genuineness of commission paid - Held that:- From the details of commission paid, it is seen that during the year under consideration, commission was only paid to Mr Keval Patel and no other party was paid commission but in AY 2006-07, 2008-09 and 2009-10, apart from commission to Mr Keval Patel, Assessee had also paid commission to other parties - The details of commission further reveals that commission @ 2% has been paid to Mr. Keval Patel in all the years but on the other hand, the commission to other parties has been paid at 1%, 1.5% and 2% - he would be entitled to commission at 2% of sales and will be paid at the year end on the basis of yearly statement and further in case of credit sales, only after the realization of the sales, commission would be paid - nothing has been placed on record about the sales made to various parties, whether the sales were on credit and in case the same were on credit, whether the commission was paid only after realisation of sales thus, the disallowance is restricted to Rs. 2 lacs as against Rs 4,83,256/- made by the AO Decided partly in favour of Assessee.
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2014 (2) TMI 426
Rectification or order u/s 254(2) of the Act Mistake apparent from record - Held that:- The onus placed upon the assessee u/s 68 of the Act to prove the cash credits are well settled Relying upon CIT Vs. K. Chinnathamban [2007 (7) TMI 204 - SUPREME Court] - the onus of proving deposits lies upon the person in whose name the deposit stands - the Tribunal has decided the issue by considering the facts of the case in a detailed manner, since the facts that prevailed was peculiar and the issue was purely a question of fact - thus, it cannot be said that the order of the Tribunal suffers from mistake on account of non-discussion of the case laws relied upon by the assessee and which were considered as not applicable by the Tribunal thus, the short fall, if any, in not discussing about the relevancy/irrelevancy of the case law cannot be made good u/s 254(2) of the Act. Opportunity of being heard Held that:- The manner and method of investigation is decided by the tax authorities and in fact, it is their prerogative to decide about the modalities - the Tribunal also did not find any infirmity in the decision reached by them - it is the responsibility of the assessee to disprove the view entertained by the assessing officer on the basis of materials gathered by him - the bank authorities can depose about the "apparent" only, whereas, the case of the revenue is that the apparent is not real - the revenue has substantiated their contentions with adequate materials - Thus, the evidences considered by the Tribunal cannot be considered as material and the true facts could have been ascertained by examining the bank manager If the error sought to be pointed out has to be established in a long drawn process of reasoning with number of arguments, then they cannot be considered as a mistake apparent from record there was no merit in the petitions filed by the assessee Decided against Assesssee.
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2014 (2) TMI 425
Addition made u/s 2(22)(e) of the Act Deemed dividend - Held that:- Inspite of the request of the Assessee, the company was unable to release the property from the mortgage - the advance given was not a gratuitous advance to the shareholder but was given to protect the interest of the Company and therefore the advance was held not to be in the nature of deemed dividend Relying upon P. Sarada Vs CIT [1997 (12) TMI 1 - SUPREME Court] - The assessee must be deemed to have received dividends on the dates on which she withdrew the aforesaid amounts of money from the company - The loan or advance taken from the company may have been ultimately repaid or adjusted but that will not alter the fact that the assessee, in the eye of law, had received dividend from the company during the relevant accounting period - the amount received by the Assessee will have to be considered as deemed dividend and therefore we find no infirmity in the order of A.O. and CIT(A) - Decided against Assessee. Denial in deduction of Interest Interest paid on borrowings Repayment of housing loan Held that:- There are no details of the parties from whom the Assessee had borrowed funds and the interest paid to him - there is no certificate of Bank certifying the repayment of loan and closure of the bank loan account of Assessee the Assessee has not submitted any evidence to support that the interest payment was allowed while making assessments in past and in subsequent years the issue needs to be re-examined at the end of AO thus, the matter remitted back to the AO for fresh adjudication Decided partly in favour of Assessee.
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2014 (2) TMI 424
Valuation of property Cost of acquisition valued at FMV Held that:- reference by the Assessing Officer to the DVO under section 55A for valuation of FMV of the property as on 1-4-1981 is not valid for the reasons that FMV declared by the assessee as per Government registered valuer's report was more than the FMV as estimated by the DVO. Since determination of the FMV as on 1-4-1981 was based on the report of the DVO, the same is held to be invalid. - the order of the CIT(A) set aside and the AO is directed to adopt the valuation as given and relied upon by the assessee Decided partly in favour of Assessee.
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2014 (2) TMI 423
Deletion of penalty u/s 271(1)(c) of the Act inaccurate documents furnished - Held that:- The decision in Asst. Commissioner of Income-tax Versus M/s. Universal Medicare Pvt. Ltd.[2012 (8) TMI 993 - ITAT MUMBAI] followed - Penalty u/s 271(1)(c) of the Act cannot be imposed for furnishing inaccurate particulars/concealing the particulars of income - Penalty is imposed where an assessee conceals his income, so that it does not suffer taxation here, assessee-company was cheated by its employees and the AO has admitted the fact by allowing defalcation in subsequent A.Y - In these peculiar circumstances, if the assessee could not support the claim made by it, during the assessment proceedings, it cannot be held that it had filed inaccurate particulars thus, if wrong claims were made by the assessee-company, on the basis of the material supplied by the employee-CA, penal provisions should not have been invoked - there was no omission or commission on part of the assessee-company for which it should have been visited by penalty u/s 271(1)(c) of the Act order of the CIT(A) upheld Decided against Revenue.
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2014 (2) TMI 422
Rectification of mistake u/s 154 of the Act - Validity of reference made to valuation officer u/s 50C of the Act Computation of capital gain Held that:- The reference u/s 50C of the Act is limited only in respect of the value of the transferred property as on the date of its transfer and secondly such reference can be made only when the value adopted by the stamp valuation authorities is objected to by the assessee, and not otherwise - the value of the property as on 1.4.81 furnished by the valuation officer by way of his order dated 22.12.2009, u/s 50C of the Act received by the AO on 5.1.2010 is illegal the transaction is not covered by the provisions of section 50C thus, the AO is directed not to consider the FMV of the property as on 1.4.1981 as given by the valuation officer in his valuation report dated 22.12.2009 for the purpose of computing capital gains from the impugned transaction the order of the CIT(A) upheld decided against Revenue.
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2014 (2) TMI 421
Deletion made on addition made by AO on protective basis - Whether the CIT(A) was justified in deleting the protective addition when the land companies are in appeals against the confirmation of substantive addition and thus the issue of substantive addition has not yet reached finality Held that:- There was no evidence to support the Revenue's case that a huge figure, whatever be its quantum, over and above the figure booked in the records and accounts changed hands between the parties, no addition could therefore be made u/s. 69C of the Act to the income of the assessee - The Tribunal has already given a finding that no addition can be made in the hands of those companies on substantive basis on the basis of material found during the course of search - Neither there was any evidence to show that any cash has changed hand nor there was any confirmation from the sellers from whom the land in question was purchased and after analyzing all these facts the Tribunal came to the conclusion that no addition can be made in the hands of the companies the additions could not be sustained. Protective assessment can be made if the same amount is added in one hand and the same amount is added in another hand on protective basis - the AO made substantive addition in the hands of land companies and protective basis in the hands of assessee for these three years - The Tribunal has taken a decision that no addition can be made on the basis of material found during the course of search - In the case of the assessee, the addition cannot be deleted merely on the basis of the findings of the Tribunal, even on merit no addition can be made in the hands of the assessee - the protective addition made in the hands of the assessee for these three assessment years, was not justified - the order of the CIT(A) confirmed, who deleted the addition in the hands of the assessee made on protective basis Decided against Revenue.
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2014 (2) TMI 420
Application for restoration of registration u/s 12A of the Act - Registration cancelled u/s 12AA(3) of the Act - The basic of cancellation of registration is the import of section 2(15), brought in by the legislature - the department has nowhere mentioned that "social inter-course among members" was not one of the objects of the trust, when it was originally formed on 04.10.1934 Relying upon Income-tax Officer(E) Versus Khar Gymkhana [2014 (1) TMI 745 - ITAT MUMBAI ]- The DIT should have taken into consideration the orders of the higher judicial authority, at least on the aspect of reliance on newly inserted provision of section 2(15), which he ignored - none of the revenue authorities have made any observation/comments on the objects recited as early as 04.10.1934 of the assessee trust, the twin conditions existing in section 12AA(3) and ignoring the existing orders of the coordinate Bench in the case of the assessee - the revenue authorities have erred in cancelling the registration u/s 12AA(3) - the revenue authorities is directed to restore the registration as granted u/s 12A Decided in favour of Assessee.
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2014 (2) TMI 419
Exemption u/s 11(1) of the Act Interest income not shown in P&L account Accumulation of income under Explanation-2 of section 11of the Act allowed Held that:- There is no dispute that the mistake was committed while exercising option for allowing accumulation of income assessee contended that such mistake is bona fide and the assessee cannot be deprived of legal claim on the basis of that the claim was not made within time, since the requirement of exercising option is directory in nature - CIT(A) ought to have considered the submissions of the assessee that the requirement of exercising option is being directory in nature, therefore a liberal approach to have been adopted Relying upon Trustees Of Tulsidas Gopalji Charitable And Chaleshwar Temple Trust Versus Commissioner Of Income-Tax [1993 (9) TMI 75 - BOMBAY High Court] the issue has been decided on wrong basis Decided against Revenue and in favour of Assessee.
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2014 (2) TMI 418
Addition made u/s 68 of the Act Held that:- The modus-operandi explained during the course of survey was that the assessee was receiving the amount in cash and the same were being returned vide cheques through bank accounts - the assessee failed to produce the books of account nor give any explanation vis-ΰ-vis the source of cash deposits in the bank account - In the absence of any explanation or any evidence being produced by the assessee - The onus cast upon the assessee not being discharged, the said cash credits are to be included as income of the assessee in view of the provisions of section 68 of the Act. The assessee failed to file any confirmation in respect of the said cash credits nor any of the persons were produced for examination before the Assessing Officer, though specific direction in this regard was given by the Assessing Officer within the course of recording of statement of the assessee, during assessment proceedings - The assessee even failed to produce the books of account - In the absence of the assessee having discharged his onus of proving the identity, credit worthiness and genuineness of the cash transaction of the cash credits in the bank account, there was no merit in the plea of the assessee - the provisions of section 68 of the Act are applicable. Applicability of peak credit theory Held that:- The peak credit theory is not applicable as the assessee had deposited cash in the bank account and thereafter, cheques were issued to different parties - there are deposits in cash but as against the said cash deposited, various cheques were issued and the assessee was unable to explain the source of cash deposited in his bank account there was no legal infirmity in the order of the Tribunal Decided against Assessee.
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2014 (2) TMI 417
Applicability of section 50C of the Act Deletion made u/s 50C of the Act - Nature of income Business OR capital gain Sale of flat Held that:- The decision for the same assessee in earlier years followed - No addition can be sustained in the case, as neither there is any investigation whatsoever made by the assessing officer nor was any evidence gathered by him - Merely because the market value as per the stamp valuation authorities and the said price are at variance, no addition can be made to the business income - The AO neither found any defects in the books of account nor has rejected the same - provisions of section 50C are not applicable to cases where income is computed under the heads "Profits and Gains under business or Profession" Decided against Revenue.
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2014 (2) TMI 416
Addition made u/s 69B of the Act Investment in mutual fund Unexplained investment Held that:- The addition has been made only for the sake of addition - The assessee had litigation and between the litigants a compromise order - The assessee has also filed the copy of the bank account of "RDPL" wherein the amount in question of Rs. 30 lakhs has been debited to their account with Bank of Baroda on 05.12.2006 - Merely because the assessee's father was a director in "RDPL" along with some other family members is no ground to make addition of the amount, sources of which has been wholly explained by the assessee the CIT(A) has not given any cogent reason for upholding the addition made under section 69B by the A.O - the assessee has satisfactorily explained the source of credit entries in its bank account and the investment by her in the mutual fund with Standard Chartered Bank thus, no case of addition under section 69B as undisclosed investment could be made out by the department and the addition made is accordingly deleted Decided in favour of Assessee.
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Customs
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2014 (2) TMI 408
Exemption certificate in respect of defence items imported - Notification No. 39/96-Cus dated 27.7.1996 - Whether the benefit of Notification No. 39/96-cus dated 23.7.1996 as amended, in respect of the import made against the four Bills of Entries was available to the appellant or not, on the basis of the exemption certificate produced by the appellant at the time of import - Held that:- import of items for the purpose of Bomb Disposal under Sr. No. 20 of notification no 39/1996-Cus can be allowed in the case of imports by special Frontier Force on the basis of certificate issued by the Inspector General, HQ, Special Frontier Force, New Delhi in the Cabinet Secretariat, who is a Joint Secretary level officer in the Cabinet Secretary level officer in the Cabinet Secretary GOI. Regarding the goods, mentioned at Sl. No. 10 and 20 of notification No. 39/1996-Cus dated 23.07.1996 it is observed that Battery Packs have not been mentioned at Sl. No. 10 and 20. These battery pack are being used in Bomb detection and Bomb Disposal as other equipments/parts/accessories and thus eligible for duty free clearance. So we allow these packs against exemption certificate keeping in mind the factual matrix that imports are against exemption certificate issued by competent authority to be used by security forces - certificate have been issued by the Inspector General who is equivalent to Joint Secretary level officer in the Cabinet Sectt. As such we consider that the certificate has been issued by the competent authority - goods have rightly been imported availing exemption under notification No. 39/96-Cus dated 23.7.2006. In view of the aforesaid fact, confirmation of the customs duty/imposition of penalty is not justified and requires to be set aside - Decided in favour of assessee.
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2014 (2) TMI 407
Levy of CVD on MRP basis - Import of Molded Case Circuit Breakers and Plugs and Sockets - Confiscation of goods - Demand of differential duty - Imposition of penalty u/s 114A and 112 - Held that:- Admittedly the imported plugs and sockets were imported in bulk packing - department could not show that the factors, as per decision of Apex Court in Jayanti Food Processing (P) Ltd [2007 (8) TMI 3 - Supreme Court], are applicable to imported plugs and sockets. Therefore the learned Commissioner's order regarding the assessment for the purpose of CVD in case of plugs and sockets is not sustainable and hence set aside - MCCBs imported by the Appellants are not commodities in packaged form and the packing is meant only for the purpose of ease of transportation. From the capacity rating of the MCCBs also it is revealed the MCCBs are not intended for retail sale. The persons on whose statements the department relied upon in the cross-examination/re-examination they stated that the MCCBs were not sold by them in retail - Decided in favour of assessee.
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FEMA
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2014 (2) TMI 441
Misdeclaration of goods - Violation of Section 8(3) and (4) of the Foreign Exchange Regulation Act, 1973 (FERA) - Levy of penalty - import of scotch whisky and malt to be used in upgrading locally manufactured liquor products through blending - alcoholic strength in excess of 42.8% V/V. - Held that:- the order of the SD holding that there was misdeclaration of the goods, because what was imported was scotch whisky of 63% strength, is not sustainable in law. Interestingly, the SD notes that the imported CAB of 63% concentration was to be used for blending of Indian liquor at 42.8%. In other words, what was imported by SMPL could not be sold as such for consumption and answered the definition of CAB. The AT too appears to have overlooked the fact that CAB of a concentration higher than 42.8% V/V could not be sold as such and had to be diluted or blended to bring it to 42.8% V/V concentration. The mere fact that the exporters declared the goods to be wholly imported scotch whisky did not mean that they were alcohol of a concentration that rendered them fit for consumption. - Order set aside - Decided in favor of appellant.
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Service Tax
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2014 (2) TMI 440
Condonation of Delay - deemed service of order - appeal filed after initiation of recovery proceedings - Held that:- order-in-Appeal dated 18.07.12 was delivered by Regd. A/D, which was returned back as undelivered as per postal remarks. Further, that the order was served on the Ld. Advocate on 01.08.2012. Furthermore, the order was displayed in the notice board as required under the law. A perusal of Section 37C (a) indicates that in case the decision is tendered to the person or his authorised agent, the same shall be deemed to be served in accordance with the Act. In the present case, the Advocate of the appellant who is authorised agent within the meaning of Section 37C, being present on the date of the order, the service of the order shall be deemed to be made to the authorised agent on the same date. Ld. Advocate received the order dated 1.8.2012 and also informed the applicant in the month of November, 2012, to file appeal. The date of communication of the order on 01.08.2012 to the Ld. Advocate would be treated as the date of receipt of the Order. The applicant had not taken any initiative despite the advise of the Ld. Advocate. In our considered view, there is a gross negligence and inaction on the part of the applicant for delay in filing the appeal. - Delay not condoned.
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2014 (2) TMI 439
Export of services - marketing of foreign Principals products in India - Rule 3(1)(iii) of the Export of Service Rules, 2005 - Held that:- Since in this case, the respondents clients to whom the service has been provided are located outside India and the same has been used by them for their business, the first two conditions of Rule 3(1) read with Rule 3(2) are satisfied. The other condition regarding export of service prescribed in Rule 3(2) is also satisfied inasmuch as payment of this service has been received in convertible foreign exchange - Decided in favor of assessee.
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2014 (2) TMI 438
Adjustment of service tax under Rule 6(3) - excess payment of service tax due to refused / cancelled of policies - taxable service which is not provided either wholly or partially for any reason - Held that:- . For deciding this case the question whether refunds reached only up to intermediary and not to the person who actually took the policy is a relevant fact on which clarity is required. The issue does not seem to be deliberated upon and decided by the Tribunal in order dated 26-06-12. [2012 (9) TMI 772 - CESTAT, CHENNAI] - Matter remanded back for de-novo adjudication.
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2014 (2) TMI 437
Renting of immovable properties - waiver of penalty u/s 80 - Held that:- provisions of Section 80(2) of the Finance Act, 1994 which was inserted w.e.f . 28.05.2012 has been interpreted by the lower authorities is being effective from that date and any payment made prior to that date is not eligible to get the benefit. - the said amendment of Section 80 of the Finance Act, 1994 could be applicable to the payment made by assessee even prior to 28.05.2012, as the spirit of the law is to not to penalize the assesses, but had defaulted the payment of service tax of renting immovable property, due to ratio of judgment which held field during the relevant period. - penalty waived.
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2014 (2) TMI 436
Management, maintenance or repair service - erection, commissioning or installation service - services being provided to Central Power Distribution Company of Andhra Pradesh and other State distribution companies - Held that:- in view of retrospective exemption vide Notification No. 45/2010-ST dt. 20/07/2010, the service tax liability of the petitioner for the several taxable services provided to electricity distribution companies of Andhra Pradesh during 01/04/2004 to 30/11/2009, stands eclipsed. - Demand set aside - Decided in favor of assessee.
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2014 (2) TMI 413
Waiver of pre-deposit - Demand of tax - Whether the applicant is liable to pay service tax on receipt of IATA commission from various airlines for the disputed period - Held that:- there is no proof of payment of the tax and the documents were not produced before the lower authorities Therefore, the payment already made cannot be accepted as deposit - applicant is directed to pre-deposit 50% of the tax demanded - Conditional stay granted.
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2014 (2) TMI 412
Validity of credit taken - Cenvat credit availed on Input Service Distributors Proportionate distribution made or not Held that:- Following Eveready Industries India Ltd. Versus CCE [2013 (12) TMI 1378 - CESTAT CHENNAI] - proportionment done by the applicant is correct - there appears to be calculation error in the quantification of the demand of tax - the applicant directed to deposit a sum of Rupees Ten lakhs as pre-deposits upon such submission rest of the duty to be stayed till the disposal Partial stay granted.
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2014 (2) TMI 411
Waiver of pre-deposit - Abatement Benefit of Notification No. 1/2006 - Erection, Commissioning and Installation Service service provided by the assesse to telecom operators by way of fabrication and installation of telecom towers the assesse paid in cash claiming abatement to the extent of 67% of the total value under Notification No. 1/2006 - Whether the benefit of abatement under the Notification No. 1/2006 could be claimed by the assessee Held that:- The assesse was prima facie liable to pay the entire amount of service tax demanded u/s 11D of the Central Excise Act - Assesse reversed the CENVAT credit thereby qualifying themselves for the benefit of abatement - After claiming such abatement they paid the amount towards the demand - the plea of limitation as well as the plea of financial hardships had also been considered. - stay granted partly.
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2014 (2) TMI 410
Waiver of pre-deposit - Renting of immovable property service - Held that:- Appellant in this case has already deposited an amount of by depositing Rs.72.22 lakhs as against the confirmed demand of Rs.87.67 lakhs, we consider the said amount as enough deposit to hear and dispose the appeal. Accordingly, application for the waiver of pre-deposit of the balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Stay granted.
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2014 (2) TMI 409
Waiver of pre-deposit - application for modification of stay order - Royalty charges - Intellectual Property Right Services - Whether applicant is liable to pay service tax on royalty charges paid to foreign company as service recipient under Intellectual Property Right Services - Held that:- Prima facie, it appears from the record that applicant paid royalty to the foreign company. no royalty payment was made by applicant has been considered in the stay order - Extension for period of compliance granted - Decided partly in favour of assessee.
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2014 (2) TMI 401
Effect of introduction of Section 71A of the Finance Act, 2003 - Liability to file return is cast on the providers of such services only under Section 71A - Held that:- It is a settled principle of law that in order to examine as to whether the law down by the Supreme Court in a particular case is applicable to the facts of the case or not, what is first required to be seen is the facts of case in hand and then, the law has to be applied with a view to find out as to whether the factual issues can be decided in favour of the assessee or in favour of the Revenue. So long as therefore facts are not appreciated, mere quoting of the law would not suffice - we are constrained to allow this appeal and set aside the impugned order passed by the Tribunal. The appeal is accordingly remanded to the Tribunal for its decision on merits - Following decision of COMMISSIONER OF CENTRAL EXCISE, MEERUT-II Versus LH. SUGAR FACTORIES LTD. [2005 (7) TMI 106 - SUPREME COURT OF INDIA] - Decided in favour of Revenue.
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Central Excise
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2014 (2) TMI 443
Bogus transactions - appellant is a dealer of excisable goods - Penalty in terms of provisions of Rule 13 of Cenvat Credit Rules, 2002, and Rule 15 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 - Held that:- the entire case of the Revenue is based upon statement of Shri Sachin Aggarvanshi, proprietor of M/s. Sidh Balak Enterprises. - Reliance by the Revenue on the statement of Shri Sachin Aggarvanshi cannot be appreciated inasmuch as the said statement was in connection with the goods traded through M/s. Ved Trading Company. Shri Sachin Aggarvanshi in his statement has nowhere mentioned that the goods received by him from other manufacturer were also bogus and were not actually received by him. Revenue has also not bothered to conduct further inquiries either from the appellant or from the transporters or the actual manufacturer of the goods or from the recipient of the goods. In the absence of any such investigation, reliance on the sole statement of Shri Sachin Aggarvanshi which in any case does not apply to the goods dealt with by the present appellant, cannot be appreciated. I fail to understand as to why no statement of appellant was recorded or no inquiries were conducted by the actual manufacturer i.e. M/s. Patiala Strips Pvt. Ltd.. Further, no statement of representative of M/s. Ved Trading Company was recorded so as to arrive at the correct factual position. In the absence of any such inquiries and in view of the fact that statement of Shri Sachin Aggarvanshi is not applicable - Decided in favour of assessee.
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2014 (2) TMI 406
Classification of the product Bleach-9 made by the appellant during the period 15.04.1999 to 23.08.1999 - Whether the same should be classified under CETH 38.02 as activated earth as claimed by Revenue or as a product of CETH 25.05 as claimed by the appellant - Held that:- It is clear from the earlier order dt. 12.07.2006 passed by the first appellate authority that it was directed that the lower authorities will send two conflicting test reports to Chief Chemist, Central Revenue Laboratory, New Delhi for his opinion alongwith the defence of the appellant and that any adverse report of the Chief Chemist received should also be made available to the appellant. This order dt. 12.07.2006 has not been appealed against by the Revenue and has become final. However lower authorities at this stage cannot say that opinion of Chief Chemist is not necessary or required when specific directions were given by the first appellate authority. The matter is, therefore, again remanded back to the adjudicating authority to strictly follow the directions given by the first appellate authority in para 8 of the OIA dt. 12.07.2006 and give proper opportunity of personal hearing to the appellant at the appropriate time after getting report from the Chief Chemist, New Delhi - Decided in favour of assessee.
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2014 (2) TMI 405
Re-Credit of CENVAT Credit previously debited - suo moto after withdrawal of refund claim - Imposition of penalty under Rule 15 of CENVAT Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944 - Held that:- Once the refund claim is withdrawn, the assessee is entitled for credit of CENVAT which was debited as a condition to such refund claim. This being not a case of refund of excess paid excise duty, no reason to doubt that the assesee has not been enriched unjustifiably. This is a case of availment of CENVAT credit legitimately eligible to the appellant in terms of CENVAT credit Rules, 2004. The revenue has not alleged or anything on record that the CENVAT credit in question was wrongly taken contrary to the provision such as non receipts of the input, documents are fake, duty payment on input is in dispute, input not used in the manufacture etc. So long such disputes do not exist, the CENVAT credit availed is as per the provision of CENVAT Credit Rules, 2004 and therefore neither said CENVAT credit can be disallowed nor provision of unjust enrichment is applicable in the present case - Decided in favour of assessee.
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2014 (2) TMI 404
Rectification - Legality of order passed - Imposition of penalty equivalent to differential duty under Section 11(AC) - Invocation of extended period of limitation - Held that:- There is a distinction between an erroneous order and an order which is par se illegal and without jurisdiction. An erroneous order is capable of being corrected by going higher but an order, which is par se without jurisdiction and a nullity, can be assailed in a collateral proceedings. Had it been a case of the petitioner that the show cause notice is issued by an authority, not competent under the statute and the entire proceedings is carried out by an authority not competent therefor, the proposition of law, as tried to be contended by the petitioner, could very well be accepted. This Court, therefore, feels that the said plea cannot be allowed to be reagitated by the petitioner. Furthermore, the principle of estoppel should also be made applicable. The plea which was available to the petitioner before the competent authority, and having taken so which did not yield fruitful and/or desired result, cannot be allowed to be re-agitated in another proceedings not originated from the original order - This Court, therefore, feels that if the plea, as tried to be taken by the petitioner, is allowed at this stage of the proceedings, it would open a Pandora box for all and the sundry and no lis could attain finality - Decided against assessee.
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2014 (2) TMI 403
Waiver of pre deposit - petitioner herein was assessed provisionally on the basis of the investigation done by the designated authority with reference to levy of anti-dumpting duty - petitioner pointed out that when the order had already been made by the Co-ordinate Bench on an identical circumstance, the first respondent should give exemption of duty and take up the appeal on merit - Held that:- question of pre-deposit or otherwise, only the prima facie case and balance of convenience is to be considered. The appellant is not only required, to plead undue hardship, but also to establish the same before the Tribunal. The order of the Tribunal refers to the financial hardship pleaded by the appellants in the course of hearing on the basis of balance sheet of 2001-02. The Tribunal has recorded factual findings that the said hardship pleaded by the appellants on the basis of balance sheet for 2001-2002 is not sufficient. Only considering the financial difficulties expressed by the appellant, the learned single judge directed the appellant to deposit Rs. 75 lakhs. The appellant has not produced any further material to establish undue hardship - Decided against assessee.
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2014 (2) TMI 402
Rejection of remission claim - Pecuniary liability - Held that:- Petitioners claim for remission is liable to be considered on its own merits. For enabling the petitioner to address the authority i.e. Respondent No. 2 on merits, it was necessary that the petitioner should have been given an intimation of hearing. The impugned order, prima facie, appears to have been passed without any formal hearing - rejection of remission would attract pecuniary liability hearing to the petitioner would have advanced the cause of justice - we set aside the impugned order dated 9-11-2012. The case be relegated to the stage of hearing - We, therefore, direct that the application for remission Annexure F to the petition would be heard and decided by Respondent No. 2 after giving an opportunity of hearing to the petitioner on all points - Decided in favour of assessee.
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2014 (2) TMI 400
Refund of duty paid on goods re-made and cleared on payment of duty - Whether the learned CESTAT was correct in setting aside the order of Commissioner (Appeals) and allowing the appeal of the party with consequential relief, ignoring the statutory provisions of Rule 173L of the erstwhile Central Excise Rules, 1944 - Held that:- what persuaded the Tribunal to allow the assessees appeal was the fact that the assessee as a fact was able to prove that they actually received the goods from their respective purchasers and the same were then actually used in remixing in their manufacturing process. Since the appellant (Revenue) was not able to dispute this factual aspect of the matter and hence the Tribunal held that the claim made by the assessee under Rule 173L appears to be genuine and cannot be rejected on the ground that a particular form was not maintained or not filed for cross checking. In other words, since the factum of receipt of goods and its consequent use in manufacturing process was conclusively held proved by documentary evidence and hence the benefit of refund of the duty paid on such sold goods was given to the respondent. No case whatsoever was made out for contravention of Rule 173L against the assessee and instead it was rightly held that due compliance of Rule 173L of the Rules was made by the assessee thereby holding them entitled to claim the refund of the duty paid by them on the finished goods sold and which were returned to them due to certain reasons by the respective purchasers and which they actually used in manufacturing process again - After all when the facts are established with adequate evidence and authorities are otherwise satisfied with the substantial compliances made by the assessee then Rules of procedure cannot be used against the assessee to deny them the benefit of Rules - Decided against Revenue.
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2014 (2) TMI 399
Clearance of goods u/s 4A - MRP based Valuation of goods - clearance to another unit - Held that:- goods were being cleared by the respondents from their Noida unit on payment of duty under Section 4A of the Central Excise Act, to their Faridabad unit, which were fixing the goods with MRP sticker and were again paying the duty on the MRP of the goods - entire situation is Revenue neutral and no duty can be said to have been evaded by the respondents - Once the duty confirmation is not upheld, [though the duty paid by the respondents and availed as credit by the Faridabad unit has not been interfered with by the Commissioner and rightly so], the question of imposition of penalty or confirmation of interest does not arise - Decided against Revenue.
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2014 (2) TMI 398
Valuation - sale to related parties - Rule 9 read with Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Held that:- Method of calculation adopted by the appellants is not proper way of calculation. We agree with the findings of learned Commissioner that under no circumstances, cost of production is less than Rs.8,25,955/- PMT. Differential duty arrived in earlier Original-in-Order and this Order-in-Original is the same - Method of calculation in these circumstances has to be based on monthly calculations as variations are very wide and average method cannot be adopted. On perusal of production and costing as given in the table in proceeding pass, it is evident that in some months production was very high and in some months, production recorded was too less. Considering overall circumstances, prima facie case is made by the Revenue - Conditional stay granted.
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2014 (2) TMI 397
Area based Exemption - Notification No.50/2003-CE dt. 10.06.2003 w.e.f. 09.01.2007 - Held that:- there is nothing in the Notification No. 50/2003-CE to suggest that there should be an increase in each and every unit of the plant to qualify for exemption by the way of 25% enhancement of capacity of production and that when as per the opinion obtained by Revenue from Chartered Engineer, annual capacity of production has been enhanced by more than 25%, the benefit of exemption cannot be denied. Un-disputedly the respondent have installed additional equipment and machinery by making additional investment, as a result at which the capacity of production has increased about 65%, it would not be correct to deny the exemption on the ground that enhancement capacity of production is merely by processed improvement - Following decision in case of Uttaranchal Iron & Ispat Ltd.(2008 (5) TMI 91 - CESTAT NEW DELHI) and Hetikuli Tea Estate (2008 (5) TMI 177 - CESTAT KOLKATA) - Decided against Revenue.
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2014 (2) TMI 396
Short payment of duty - extended period of limitation - Penalty u/s 11AC - Excess of the exemption limit on payment of duty - Held that:- for invoking extended period something positive other than mere inaction or failure on the part of the manufacturer or conscious or deliberate withholding of information when the manufacture knew otherwise, is required to be established - since the expression suppression of fact has been used in the company of such strong words as fraud, collusion or wilful misstatement, it has to be construed strictly and it would not mean any omission, that the Act must be deliberate, that when the facts are known to both the sides, the omission by one to do what he might have done and not that he must have done would not render it suppression. Record also show that besides this, the appellant every month were also addressing a letter to the Department mentioning the quantity and value of the cement cleared during the month and also the particulars of the duty paid through PLA and through Cenvat credit from which it was possible to calculate the quantity of cement cleared upto the month during the financial year. Though during the period of dispute, there was system of self-assessment, from the Board s Circular No. 249/83-96-CX dated 11/10/96 it is clear that even after the introduction of self-assessment system, the ER-1 returns filed by the assessee were required to be subjected to scrutiny by the Range Officer within three months after receipt and during scrutiny, in addition to checking arithmetical accuracy, duty payable and paid, the correctness rate of duty applied to the goods was also required to be checked. Short payment is attributable to lack of due diligence on the part of Jurisdictional Central Excise authorities and not on account of wilful default on the part of the assessee. Therefore, in our view, this is not the case where the extended limitation period under proviso to Section 11A (1) can be applied and, as such, the duty demand is time barred - Decided in favour of assessee.
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2014 (2) TMI 395
Availment of CENVAT Credit - inputs / input services used in generation of electricity - Appellant did not maintain any separate records in respect of consumption of inputs/input services used in the manufacture of electricity captively consumed and electricity sold - Held that:- appellant has generated electricity from bagasse. Baggase on burning generates heat and with the help of heat, steam is generated which is used to rotate turbines as a result of which electricity is generated. In view of the above the impugned demands confirmed against the appellant @10%/5% of the value of the electricity supplied to MSEB is clearly unsustainable in law - appellant would be liable to reverse the credit if any taken on such inputs/input services which have been used in the generation of electricity which have been sold to MSEB. Common inputs on which credit has been availed are (1) Sulphur, (2) HCL. (3) Caustic soda, (4) Lubricant Oil, (5) T-46 (6) Turbo Oil, (7) Boiler Chemicals, (8) Flocculants, (9) Colour Precipitate, (10) Grease and (11) Phosphoric acid. Of these inputs Sulphur, HCI, Caustic Soda, Boiler chemicals, Flocculants, Colour precipitate and Phosphoric acid has nothing to do with the generation of electricity and therefore, there is no need to reverse any credit taken in respect of these inputs. Inward Cane Transportation has nothing to do with electricity generation. Inspection and testing service will apply only when the same has been done in respect of equipment used for generation of electricity. So it is the case in respect of insurance services, maintenance & repair services. Similarly in respect of construction services also it has to be seen how the same has nexus with generation of electricity. Therefore, reversal of credit is required only in respect of input services which have nexus with generation of electricity. - For this limited purpose the matter has to go back to the adjudicating authority for re-computation of the demand - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2014 (2) TMI 415
Approbation or reprobation of a sworn statement - Held that:- There is no provision under the TNGST Act to enable the authority under the Act to adopt any other procedure followed by the Central Excise Department. In the absence of any enquiry conducted by the authority under the TNGST, in our view, the Revenue has not done its duty in a proper manner. Therefore, the question of approbation and reprobation does not arise - Decided against Revenue. Valuation of goods - Discrepancy in stock - Five times difference added in value of goods - Whether the Tribunal has erred in having dismissed the Enhancement Petition filed by the State in a preemptive manner - Held that:- Tribunal has confirmed the actual finding of stock discrepancy at 19.750 grams and not 2017.250 grams, based on a certificate produced before the it from Bombay Mint dated 29.3.1988 - The Tribunal, by applying the principle of proportionality, has fixed the stock deficit at ₹ 6,000/-, approximately, and by adding another 50% of ₹ 3000/-, has arrived the turnover at ₹ 9000/-, which cannot be said to be either irrational or against the principle of law. We are of the view that the Tribunal has in fact followed the proportionality theory, which cannot be found fault with - Decided against Revenue.
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2014 (2) TMI 414
Manufacturing of goods or not - Double taxation liability - Cutting of small paper from large paper reels - Whether process of cutting big size paper into small size of paper does not amount to manufacture of paper - Held that:- in order to establish manufacture a new and different article must emerge having a distinctive name, character and use - Following decision of Union of India Vs. Delhi Cloth & General Mills [1962 (10) TMI 1 - SUPREME COURT OF INDIA] - Decided in favour of assessee. Whether entry tax @5% having been paid by the seller of the applicant who had issued Form-E in respect of entire papers sold to the applicant and hence in view of notification no.732 dated 7.3.2005 issued under section 5 of U.P.Trade Tax Act, Trade Tax rebate was allowed to the full extent since entry tax was paid @ 5%. Accordingly, in view of Notification no.1307 dated 28.4.2005 no State Development Tax is leviable in view of clause (3) of the Notification dated 28.4.2005 - Held that:- where the rate of entry tax and trade tax is at 5%, consequently rebate has to be given on trade tax - Following decision of M/s Rana Papers Limited through Director Noor Salim Rana Vs. The State of U.P. and others [2013 (9) TMI 71 - ALLAHABAD HIGH COURT] - Decided against assessee.
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