Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 21, 2013
Case Laws in this Newsletter:
Income Tax
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Validity of revised return - when the assessee was not entitled to sale proceed of land, obviously, tax cannot be levied on such receipt from the sale of land. CIT(A) was fully justified in directing the AO to consider the revised return furnished by the assessee - AT
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DTAA – Since contract was for less than six months, it becomes absolutely clear that the assessee did not have a permanent establishment in India as per article 5(3) of the treaty - HC
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Waiver of interest u/s 220(2) – all the three conditions were to some extent satisfied, and the refusal of CCIT to grant reduction in interest is not justified - partial relief granted - HC
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Revenue or Capital Expenditure - Temporary structure by means of false ceiling and office renovation had not resulted in any capital expenditure - HC
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Royalty Income – Finance Act, 2010 has substituted the explanation to section 9 - such income shall be included in the total income of the non-resident, whether or not (i) the non-resident has a residence or place of business or business connection in India, (ii) the non-resident has rendered services in India. - HC
Indian Laws
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Boost to Manufacturing Needed to Address the Job Creation Challenge : Anand Sharma
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Department of Commerce’s Statement on import of gold jewellery from Thailand
Service Tax
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Whether Cenvat credit can be used towards payment of dues arising as a result of adjudication order – Held yes - there is no requirement that the same requires approval of any authority - AT
Central Excise
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CENVAT Credit on Capital goods – Acquisition of capital goods was made prior to registration - Credit Allowed - AT
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Refund - wherein duty has been paid under protest and the said protest has not been vacated by a speaking order. In that case, limitation of Section 11B is not applicable - AT
Case Laws:
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Income Tax
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2013 (2) TMI 458
Validity of revised return - Revenue contested that there was no omission or wrong statement in the original return which may be revised - Held that:- As in the original return, the assessee has shown the profit of Rs.9.73 crores from the sale of land. However, as per the decision of Hon’ble High Court dated 09.03.2009, the assessee was not entitled to any profit from the sale of land but it was entitled only to the expenditure to the extent of actual investment and the cost of litigation. Therefore, there was no profit from the sale of land and, to that extent, there was certainly an omission in the original return. Though the order of the High Court was subsequent to the end of the relevant previous year, but nevertheless, it has effected the transaction entered into during the previous year which was liable to be taxed in the assessment year under consideration. Since the assessment of the said year was still pending, the assessee was fully justified in revising its return in the light of the decision of Hon’ble Jurisdictional High Court. None of the decisions relied upon by the Revenue is applicable on the facts of the assessee’s case. Thus when the assessee was not entitled to sale proceed of land, obviously, tax cannot be levied on such receipt from the sale of land. CIT(A) was fully justified in directing the AO to consider the revised return furnished by the assessee - against revenue.
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2013 (2) TMI 457
DTAA agreement with Netherlands – Permanent Establishment – Whether PE exist in india, when contract period is for less than 6 months – dredging back filing works - It was claimed that in view of clause (3) of article 5 of the treaty, a building site or construction, installation or assembly project constituted a permanent establishment only where such project conti-nue for a period of more than six months – Held that:- Entire duration of the contract was from December 27,1993, till June 26, 1994, i.e., less than six months - Article 5(3) of the treaty provided that in order to constitute a permanent establishment such site or project should continue for a period of more than six months. Such site or project, is provided under article 5(2) of the treaty. Since contract was for less than six months, it becomes absolutely clear that the assessee did not have a permanent establishment in India as per article 5(3) of the treaty - Article 5(3) provides a specific provision which covers the provision of article 5(2) of the treaty – Specific provision would prevail over the general provision - No permanent establishment was constituted by the assessee in India during the assessment year in question - No part of the Revenue earned by the assessee was taxable in India – In favour of assessee.
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2013 (2) TMI 456
Valuation - valuation done by the Stamp Valuation Authorities would be taken as sale consideration or - valuation done by the D.V.O. should be taken - Assessee entered into an agreement for sale for a consideration of Rs.51,75,000 - Stamp Authorities levied the stamp duty on a value of Rs.1,38,00,000/- as per the circle rate - A.O. invoked the provisions of section 50C i.e. sale consideration Rs.1,38,00,000 – Held that:- Section 50C provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both is less than the value adopted or assessed by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration - Further where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair market value of the property as on the date of transfer, the Assessing Officer may refer the valuation of the relevant asset to a Valuation Officer in accordance with section 55A of the Income Tax Act - This preposition of law has been upheld in the case of C.W.T. vs. Dr. H.Rahman[1991 (2) TMI 97 - ALLAHABAD HIGH COURT] - It is crystal clear that generally, when the A.O. has obtained the D.V.O. Report then the same is binding – Against the revenue.
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2013 (2) TMI 454
Authorization issued under section 132(1) – Whether search action on the basis of the authorization of the Additional Director of Income-tax is permissible or not – Search and seizure operation under section 132A was conducted – The Additional Director required to produce certain documents under section 132A of the Act – Held that:- By the amendment of the Finance (No. 2) Act, 2009, the words "Additional Director" has been inserted in section 132(1) of the Act, with effect from June 1, 1994, and the same is applicable in the present appeals. Unless the amendment incorporated by the Finance (No. 2) Act,2009, is challenged and it is declared ultra vires by the court for all practical purposes, it shall be operative being existing in the statute book. Therefore search action can be conducted on the basis of authorization of Additional Director – In favour of revenue.
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2013 (2) TMI 453
Waiver of interest u/s 220(2) – Whether partial relief is allowed or not – Assessee sold land – AO computed tax and raised the demand – Arrears of tax was deposited by assessee - After making payment assessee made an application under section 220(2A), for waiver of interest demanded under section 220(2) – Held that:- It is clear from section 220(2A), that the Commissioner or the Chief Commissioner need not always waive amount of interest in full but can grant waiver or reduction partially – Relief to be granted under section 220(2A) should be proportionate to the extent of satisfaction of the conditions stated therein - section 220(2A) is an incentive to defaulter-assessee to co-operate with the Department and to remit the tax voluntarily at the earliest and, therefore, compliance should be rewarded by taking a liberal view and approach. In this case all the three conditions were to some extent satisfied, and the refusal of the Chief Commissioner to grant reduction in interest is not justified – Therefore assessee is entitled to partial relief - AO was directed to grant reduction of interest by 25 per cent.
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2013 (2) TMI 452
Share application money – Whether deposits in shape of share application money can be treated as genuine – Held that:- In CIT v. Lovely Exports P. Ltd.[2008 (1) TMI 575 - SUPREME COURT OF INDIA] it was held that if the assessee produces the names, addresses, PAN details of the shareholders then the onus on the assessee to prove the source of share application money stands discharged – If the AO was not satisfied with the credit worthiness of the shareholders, it was open to the assessing authority to verify the same in the hands of the shareholders concerned – Further if the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law - Therefore Department is free to proceed to reopen their individual assessments of the shareholders whose names and details were given to the AO.
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2013 (2) TMI 451
Instruction of CBDT – Monetary limits for the Revenue to file appeals before the High Court - Revenue has filed appeals – contention of the assessee is that since the tax effect is less than the monetary limit of ₹ 10 lakhs prescribed in Instruction No. 3 of 2011 issued by the CBDT, appeals are not maintainable – Held that:- section 268A has been introduced on the statute book with retrospective effect. Section 268A carves out an exception for filing of appeals and references under section 260A of the Act – Further the Legislature has prescribed that the CBDT is empowered to issue circulars and instructions from time to time, with regard to filing of appeals depending on the tax effect involved – Instruction No. 3 of 2011 provides that appeals shall not be filed in cases where the tax effect does not exceed ₹ 10 lakhs. Delhi High Court in the case of CIT v. Delhi Race Club Ltd. [2011 (3) TMI 1488 - High Court of Delhi] has held that, CBDT circular raising the monetary limit of the tax effect to ₹ 10 lakhs would be applicable to the pending cases also – Therefore circulars or instructions issued under section 268A of the Income-tax Act by the CBDT are applicable not only to new cases but to pending cases as well. Such circulars have been issued under section 268A of the Income-tax Act, which is an exception to the provisions of section 260 of the Act. The CBDT being mindful of this position has issued the aforesaid instructions - The main objective of such instructions is to reduce the pending litigations where the tax effect is considerably small – Therefore tax appeals are required to be dismissed.
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2013 (2) TMI 450
Repairs and renovation expenses - Revenue or Capital Expenditure - Whether the repairs and renovation expenses incurred on the leased business premises is capital expenditure or revenue expenditure – Assessee is in the occupation of the leased premises – Assessee carried on renovation work by providing false ceiling and furniture modification - Held that:- Temporary structure by means of false ceiling and office renovation had not resulted in any capital expenditure – As decided in CIT v. Madras Auto Service P. Ltd. [1998] 233 ITR 468 (SC) expenditure incurred in respect of the maintenance of the leased premises was deductible as revenue expenditure – In favour of assessee.
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2013 (2) TMI 449
Proceedings u/s 153C - whether the initiation of proceedings u/s 153C is bad in law - Held that:- In the case on hand, a joint venture agreement was found in which the assessee is a party. The assessee has certain rights and duties as per terms and conditions of this agreement. It cannot be said that the agreement does not belong to assessee – Joint venture agreement belongs to all three parties including the assessee – invoking the provisions of section 153C is not bad in law. - Decisions in the case of Vijaybhai N. Chandrani (2010 (3) TMI 770 - GUJARAT HIGH COURT) and in the case of Meghmani Organics Ltd. (2009 (1) TMI 344 - ITAT AHMEDABAD) distinguished - Decided against the assessee. Abatement – only the assessments pending before the AO for completion shall abate and that under section 153A the issues decided in the assessment cannot be reconsidered and re-adjudicate, unless there is some fresh material found during the course of search in relation to such points - In this case, there is no incriminating material found or seized in the search –Regular assessment made in case of the assessee will not abate. Addition u/s 68 - only joint venture agreement was found during the course of search – Assessment was based on, the return of income, the documents attached with it and the books of account produced by the assessee – Assessee has received all the loans through banking channels by way of crossed cheques and that interest has been paid to these parties and that the loans were repaid through banking channels by way of crossed cheques - Assessee has filed confirmation letters from each and every creditor, PAN, bank account copy of each of the lender/ creditor – Assessee has proved the identity of the persons as well as the genuineness of the transactions. The assessee in this case has done all that he could to provide documentary evidences, in support of his claim that the credits are genuine – No addition should be made u/s 68. In the case of Sarogi Credit Corporation [1974 (12) TMI 28 - PATNA HIGH COURT], and Rohini Builders [2001 (3) TMI 9 - GUJARAT HIGH COURT], it was held that it not for the assessee to prove the source of the source. The assessee was expected to prove the genuineness of the credits in his books of account only - All the three criteria i.e. identity of the person, the genuineness of the transaction as well as the capacity of the lenders are proved and in such circumstances, no addition can be made u/s 68 – Consequently, the grounds of the assessee to allow interest expenses pertaining to these loans for both assessment years 2003-04 and 2004-05 as well as for the assessment year 2005-06 are allowed – All the three appeals of the assessee are allowed. Undisclosed Sales – The business premises of the assessee was surveyed u/s 133A of the Act on 05-01-2007. In the course of the survey, Mr. Mansukhbhai Sureja, partner of the assessee firm, had admitted that there were cash sale receipts amounting to ₹ 5 Crores in addition to cheque sale receipts amounting to ₹ 10.50 crores. The partners had offered to account the cash sale receipts in the books and to pay the tax on the same. Assessee responded that the declaration of ₹ 5 crores is towards regular sales in the project and not as profits of ₹ 5 crores for the assessment year 2007-08 - Addition made by the AO is incorrect Therefore, unless there is a finding to the effect that investment by way of incurring the cost in acquiring the goods which have been sold has been made by the assessee and that has also not been disclosed. In the absence of such finding of fact the question whether the entire sum of undisclosed sale proceeds can be treated as income of the relevant assessment year answers by itself in the negative. The record goes to show that there is no finding nor any material has been referred about the suppression of investment in acquiring the goods which have been found subject of undisclosed sales. As decided in Abhishek Corporation vs. DCIT[1998 (8) TMI 110 - ITAT AHMEDABAD-C ], Even though it is established from seized documents that assessee was receiving premium/'on money' on booking of flats belonging to third parties, entire receipts of 'on money'/premium cannot be treated as undisclosed income of assessee; only net profit rate can be applied on unaccounted sales/receipts for making addition - Appeal filed by the Revenue is dismissed.
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2013 (2) TMI 448
Royalty Income – Whether fees received can be treated as royalty as defined under section 9(l)(vi) – Assessee i.e. Synopsys International Limited, Ireland has been granted a licence by Synopsis U.S., owner of the copyright - The technical license agreement is for a consideration to enable the assessee to use and commercially exploit the intellectual property in the Electronic Design Automation(EDA) Tool and Software in certain geographies - Special Bench of the Tribunal was of the view that "the crux of the issue is "whether the payment is for copyright or for a copyrighted article". If it is for copyright, it should be classified as royalty both under the Income-tax Act and under the DTAA and it would be taxable in the hands of the assessee on that basis. If the payment is really for a copyrighted article, then it only represents the purchase price of the article and, therefore, cannot be considered as royalty either under the Act or under the DTAA. Issue - Whether the consideration paid by the Indian customers or end-users, to the assessee for transfer of the right to use the software/computer programme is in respect of the copyright and falls within the mischief of 'Royalty' as defined under Sub-clause (v) to Explanation 2 to Clause (vi) of section 9(1) of the Act. Held that:- As is clear from the description of the agreement it is an end-user software licence agreement - Synopsys hereby grants licencee a non-exclusive, non-transferable license, without right of sub-licence of use the licensed software and design techniques only in the quantity authorized by a licensee in accordance with the documentation in the use area. Licensee may make a reasonable number of copies of the licensed software for backup and/or archival purposes only. Merely because the words non-exclusive and non-transferable is used in the said licence it does not take away the software out of the definition of the copyright. The word licenced software has been defined. Similarly, the words design, design technique is also defined. The word documentation is also defined and it is not in dispute what is granted is a license. Even if it is not transfer of exclusive right in the copyright, the right to use the confidential information embedded in the software in terms of the aforesaid licence makes it abundantly clear that there is transfer of certain rights which the owner of copyright possess in the said computer software/programme in respect of the copyright owned. In terms of the DTAA the consideration paid for the use or right to use the said confidential information in the form of computer programme software itself constitutes royalty and attracts tax. It is not necessary that there should be a transfer of exclusive right in the copyright as contended by the assessee. The consideration paid is for rights in respect of the copyright and for the user of the confidential information embedded in the software/computer programme. Therefore, it falls within the mischief of Explanation (2) of clause (vi) of sub-section (1) of section 9 of the Act and there is a liability to pay the tax. If there was any doubt regarding the taxability of this income the parliament by Finance Act, 2010 has substituted the explanation to section 9 which gives a clear intention of the legislature insofar as the liability of tax under this provision is concerned. A perusal of the said explanation makes it clear that as there was a doubt earlier, they want to remove the doubts by introducing this explanation. By the explanation they have declared that for the purpose of section 9 which deals with income deemed to accrue or arise in India, under clauses (v), (vi) and (vii) of sub-section (1), such income shall be included in the total income of the non-resident, whether or not (i) the non-resident has a residence or place of business or business connection in India, (ii) the non-resident has rendered services in India. Therefore, the object is to levy tax on the income of a non-resident, if it has accrued or arisen in India and one such income is the income from royalty – Appeals allowed - In favour of revenue.
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Corporate Laws
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2013 (2) TMI 464
Penalties imposed for violation of regulations 3 of the SEBI(Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - whether regulation 4(2)(q) is applicable only to intermediaries and not on trades - SEBI conducted investigations into the trading activity of Shri Kanaiyalal Baldevbhai Patel ( 'KB') an individual trader and Passport India Investment (Mauritius) Ltd.( 'Passport') it was noted that KB had placed and executed orders before the order of Passport and consequently squared off his position when the orders of Passport were placed in the market. Dipak was the portfolio manager of Passport and is also cousin of KB thus providing information regarding forthcoming trading activity of Passport - Held that:- There is no hesitation in holding that the alleged transactions of the appellant are in the nature of "front running" As it is an admitted position on both sides that the regulation 4(2)(q) applies only to intermediaries and not to traders trading in the securities market the appellants were right in stating that front running has been prohibited only by intermediaries. In the absence of any specific provision in the Act, rules or regulations prohibiting front running by a person other than an intermediary, it is opined that the appellants cannot be held guilty of the charges levelled against them. On considering the fact that when the appellants placed their order, these were screen-based and at the prevalent market price. Admittedly Passport was the major counter-party for trading in the market and was placing huge orders and, hence, possibility of order of traders placing orders for smaller quantities matching with orders of Passport cannot be ruled out. Therefore, it cannot be said that they have manipulated the market. The alleged fraud of Deepak may be a fraud against its employer for which the employer has taken necessary action. In the absence of any specific provision in law, it cannot be said that a fraud has been played on the market or market has been manipulated by the appellants. thus SEBI has erred in holding the appellant guilty of violating regulation 3.
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2013 (2) TMI 446
Violation of provisions of the takeover code - Non making of Public offer - Guilty of violating regulations 7 and 10 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 - penalty imposed u/s 15 A(b) and 15 H of SEBI Act, 1992 - Held that:- Findings arrived at by the adjudicating officer with regard to violation of the provisions of takeover code calls for no interference as the allotment of preferential shares was made to the connected parties & provisions of regulation 7(1) of the takeover code specifically provide that any acquirer, who acquires shares or voting rights which, taken together with shares or voting rights, held by him, would entitle him to more than five percent shares or voting rights in a company, in any manner whatsoever, shall disclose the aggregate of a shareholding or voting rights in that company, to the company. Regulation 10 of the takeover code provides that no acquirer shall acquire shares or voting rights which taken together with shares or voting rights, if any held by him or by persons acting in concert with him, entitle such acquirer to exercise fifteen per cent or more of the voting rights in a company, unless such acquirer makes a public announcement to acquire shares of such company in accordance with the regulations. Violation of these two provisions by the appellant is writ large on the face of it, therefore not inclined to agree with the appellant that the order has been passed merely on conjectures or surmises as adjudicating officer has relied on documents or material collected behind the back of the appellant. As stated in the impugned order itself that the appellants were afforded opportunity to cross-examine the persons whose statements were recorded and consequent to the cross-examination, the appellants filed their reply it is not clear what further principles of natural justice were required to be complied with. Thus to conclude each of the violator is liable to the penalty in accordance with law and such penalty cannot be clubbed treating it as a single violation. Not inclined to interfere with the findings arrived at by the adjudicating officer. Delay in passing order - Held that:- As alleged violation took place in the year 2000 and the Board started investigation into the matter as early as in 2003, it issued the show cause notice to the appellant only in February, 2009 and passed the impugned order only in April, 2012. There is no justification available on record to explain this inordinate delay on the part of the respondent Board. The laxity on the part of the Board to punish the guilty within reasonable time is not a good practice. Thus no justification on record as to why the show cause notice was issued after nine years of violation of the regulations and then taking another three years to pass a final order. Keeping in view the penalty that could have been imposed at the relevant time and the inordinate delay in finalization of the case the ends of justice would be met by reducing the penalty to ₹ 1 lac as against ₹ 4 lacs in respect of each of the appellant.
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2013 (2) TMI 445
Oppression & mismanagement - Restraining from selling, alienating, encumbering, transferring or creating any third party rights and/or interests in respect of the shares - Company Petition filed by invoking provisions of Sections 397 and 398 - Held that:- Petitioners do not have any cause of action in view of the allegations of misuse of the Company's assets, infrastructure and other resources for the Petitioners own businesses, the R-1 Company's profitability in the absence of R-2 has been not only reduced to NIL rather the R-1 Company's losses are increasing year after year. In such facts and circumstances of the case R-2 was constrained and was justified to call an EOGM for voluntary Winding up of the R-1 Company. No reason whatsoever given referring to this admitted position on record with respect to the shareholding of the Appellants/Original Petitioners. There is force in the contentions so raised. The Board has not at all dealt with the aspect, which, goes to the root of the matter while deciding the maintainability of the Company Petition. Another factor, though recorded by the Board, yet failed to consider that Bipin C. Mehta, who admittedly expired after filing of the Company Petition, had transferred his shares to these legal heirs, just cannot be overlooked 30% overall shareholding of the Appellants/Original Petitioners. The situation was totally different on the date of filing of the Company Petition, specially in view of the admitted position so recorded. The Board ought to have considered the date of filing of the Petition, as well as the admissions so given by the contesting Respondents, before rejecting the Company Petition in such a fashion on the ground of maintainability. The order is contrary to the law and the record. They are awaiting transfer order to be passed by the majority. As this rejection itself goes to the root of the matter as ultimately that resulted into dismissal of the Company Petition even on merits. Therefore, remand the matter by keeping all points open for all the parties to reconsider the matter by giving opportunity to the parties to put up their case on merits also.
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Service Tax
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2013 (2) TMI 462
Interest on delayed payment of refunds - whether the provisions of Section 11B of the Central Excise Act, 1944 are applicable for the purpose of service tax - Held that:- There being no dispute regarding belated sanction of refund to the appellant, the appellant is eligible for the interest on such belatedly sanctioned refunds. The amount of interest needs to be calculated by the lower authorities, period after three months of filing of the refund claim by the appellant with the authorities, till the amount is refunded to them. See NIRMA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD [2011 (3) TMI 1257 - CESTAT, AHMEDABAD] Notification No. 41/07. dated 6-10-2007 itself provides clearly that the relevant date for determination of limitation is the date on which proper officer of Customs makes an order permitting clearance and loading of the goods for exportation. Therefore the finding that the claim is time-barred because it is filed beyond the period when counted from the date of ARE-1 is appears to be against the provisions of Notification No. 41/07-S.T., dated 6-10-2007. Provisions of Section 83 of Finance Act, 1994 clearly provide that provisions of Section 11BB are made applicable to service tax matters, there is no reason as to why this aspect has not been verified before rejecting the refund claim by both the lower authorities - the impugned orders are required to be set aside and the matter is remanded to the original adjudicating authority to verify the facts, correctly record them and also apply the statute correctly to the facts of the case - in favour of assessee as directed.
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2013 (2) TMI 461
Cenvat Credit of Service Tax paid on GTA services - outward freight for direct sales to customers and freight for transportation of goods to their depots treating the same as input service in terms of Rule 2 (l) CCR 2004 - period from January, 2005 to June, 2006 - Held that:- Issue regarding availment of CENVAT Credit on outward freight for the period prior to 01.04.2008 has been settled by in the case of ABB Ltd. (2011 (3) TMI 248 - KARNATAKA HIGH COURT) in favour of assessee
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2013 (2) TMI 460
Intellectual Property Service – Whether the assessee is liable to pay service tax on the royalty charges paid by them to their foreign collaborator during the disputed period under the category “Intellectual Property Rights” – Assessee is manufacturers of Ceramic Fibre Bulk, Ceramic Fibre Product sentered – Entered into know-how agreement dated 1-2-1995 and pays royalty at 1.3% of the salesof the Ceramic Refractory Fibre manufactured using the Spun Fibre process for which the know-how was importe – Not registered with the Department nor paid the Service tax on the royalty under “Intellectual Property Service” – Held that:- The continuous payment of royalty by the appellant proves that the transfer of technical know-how is not on one time affair and the up-gradation of the same is taking place for which the royalty charges are being paid during the disputed period. Assessee is liable to pay Service tax under IPR Service – Against the assessee. Further Section 66A was inserted by Finance Act,2006 w.e.f. 18-04-2006 – because of the enactment of Section 66A, a person who is resident in India or business in India becomes liable to be levied service tax when he receives services outside India from a person who is non-resident or is from outside India – Therefore assessee is liable to pay Service tax along with interest on Royalty payments w.e.f. 18-4-2006 – Against the assessee.
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2013 (2) TMI 459
CENVAT credit – Whether Cenvat credit can be used towards payment of dues arising as a result of adjudication order – The appellant is engaged in providing photography services. The Service Tax, Interest and penalty has been demanded, on the ground that the appellant had not paid the full amount due - The appellant had actually debited the CENVAT Credit. But, the Department, while working out the Service Tax amount due, has not taken this into account. Held that:- Debit of CENVAT credit made by the appellant has to be accepted by the department in view of the fact that the same has not been challenged and according to the law, in the self assessment procedure, the assessee is free to utilize the credit and if the department has any problem, department can take action. Reversal of CENVAT credit made by the appellant has to be taken as payment towards service tax and other dues confirmed against the appellant – legal position is that appellant is entitled to avail credit on his own in accordance with the provisions of the CENVAT Credit Rules, 2004. The details of the credit are required to be furnished in the statutory returns. It is upto the assessee to utilize the credit for payment of tax and there is no such requirement that the same requires approval of any authority – The appeal allowed with consequential relief.
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2013 (2) TMI 447
Refund claim - Service Tax on CHA for clearance of goods - Rule 5 of the CENVAT Credit Rules, 2004 - Notification No. 5/2006-CE (NT) dated 14.3.2006 - Bills are addressed to Mumbai HO - Held that:- Commissioner (Appeals) does not deal with the issue regarding non-production of Inputs Service Distribution invoices from the head office of the respondent. Both sides seek remand of the order to the Commissioner (Appeals) for fresh consideration. As the Commissioner (Appeals) has not dealt with the ground on which the original authority had rejected the claim, it is deemed appropriate to accept the unanimous request of the both sides. Remand the matter to the Commissioner (Appeals) for fresh consideration.
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Central Excise
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2013 (2) TMI 444
Tour Operator Service - admissibility of input service credit on Tour Operator Service - the same has not been considered by the adjudicating authority and the adjudicating authority held that the Respondents are entitled to take input service credit on rent-a-cab service - Held that:- In the absence of mentioning in the grounds of appeal that the adjudicating authority has not considered the admissibility of input service credit on Tour Operator Service. The appeal deserves no merits
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2013 (2) TMI 443
Extended period of limitation - Recovery under Rule 14 of the CENVAT Credit Rules, 2004 - Interest under section 11AB - Penalty under Rule 15(2) of the CENVAT Credit Rules 2004 - The appellate authority dismissed the assessee's appeal for non-compliance with Section 35F - Held that:- Appellant-company submits that the entire amount of CENVAT credit has been reversed, albeit under protest. The above claim of the appellant can be verified at the lower appellate level. Therefore, allow the present appeal by way of remand with a request to the Commissioner (Appeals) to deal with the said appeal of the assessee on its merits without insisting on any predeposit. Appeal allowed in favour of assessee
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2013 (2) TMI 442
Denial of CENVAT Credit on Capital goods – Acquisition of capital goods was made prior to registration - Rule 6 (4) of Cenvat Credit Rules, 2004 – Held that:- Following the decision in case of PROGRESSIVE SYSTEMS (2011 (2) TMI 477 - KARNATAKA HIGH COURT) When there is no dispute of acquisition of capital goods and use thereof not being found otherwise, there shall not be denial of cenvat credit because those goods were acquired before registration. In favour assessee
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2013 (2) TMI 441
Refund - Duty paid under protest - Whether limitation u/s 11B is invokable, where duty has been paid under protest and the said protest has not been vacated by a speaking order - Limitation under section 11B - Held that:- Following the decision in case of FINE COMPOSITE PVT. LTD. (1995 (1) TMI 211 - CEGAT, BOMBAY) wherein duty has been paid under protest and the said protest has not been vacated by a speaking order. In that case, limitation of Section 11B of the Central Excise is not applicable. In favour of assessee
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2013 (2) TMI 440
CENVAT Credit on GTA service for outward transportation - upto place of removal - from place of removal - Whether the service availed by the assessee for outward transportation of their final products from the place of removal should be treated as 'input service' in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 - Held that:- Following the decision in case of M/s ABB LTD.(2011 (3) TMI 248 - KARNATAKA HIGH COURT) that in relation to the period upto 31.3.2008, that the outward transportation of final products from the place of removal would be admissible for CENVAT credit. The assessees are entitled to claim CENVAT credit on GTA services availed for outward transportation of their final products from their factories (place of removal) to their customer's premises during the material period, all prior to 31.3.2008 In favour of assessee
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2013 (2) TMI 439
Valuation – Transaction value - Place of removal - Section 4(4) of the Central Excise Act - Valuation of the petroleum products cleared from terminal points to company owned and company operated outlets - Oil companies were receiving Petroleum products from various refineries located at different places in India - under bond without payment of duty - at their "terminal points" and storing at the Terminal Points without payment of duty - They were clearing the products on payment of duty from the said place Held that:- Following the decision in case of BPCL, IOCL and HPCL (2012 (12) TMI 471 - CESTAT, BANGALORE) that assessee were clearing the products on payment of duty from the said place. During that period, there is no basis to consider the COCO outlets as the "place of removal prior to 14.05.2003. In favour of assessee
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CST, VAT & Sales Tax
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2013 (2) TMI 463
Detention of goods - assessee challenging the Goods Detention Notice - Held that:- Since assessee had paid the disputed tax & the goods have already been released, the larger relief sought for to quash the impugned proceedings becomes infructuous. Insofar as the request for finalising the proceedings for composition is concerned, the respondent department is directed to complete the same as expeditiously as possible, preferably, within a period of two weeks from the date of receipt of a copy of this order.
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