Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 23, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Penalty u/s 271-B – failure to get accounts audited u/s 44AB - penalty proceedings for the A.Y. 2000-01, 2001-02, 2002-03 & 2003-04 were initiated after the period of more than 4.5, 3.5, 2.5 & 1.5 years respectively after the completion of assessment. Therefore in wake of Section 275(1)(c), no penalty can be imposed - HC
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Capital OR Revenue expenditure - When expenses are incurred to increase the share capital and it was immaterial for what purpose the share capital was utilized by the assessee. - AT
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Amount received for surrender of tenancy rights – applicability of section 10(3) – the cost of acquisition of tenancy was capable of ascertainment but the Revenue had taken a contrary stand that the cost of acquisition was incapable of being ascertained.- decided against the Revenue - HC
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Special audit u/s 142(2A) - Search and seizure - Time limitation - twin conditions of 'complexity of accounts' and 'the interests of the revenue' - order quashed - HC
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Penalty u/s 271B - Delay in filling of audit report - It was the duty of the petitioner to ensure that the accountant does his job properly. The delay in this case is almost eight months - penalty confirmed - HC
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Bad debts versus Provisions for bad and doubtful debts - rural banking - Scope and ambit of the proviso to Section 36(1)(vii) - provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields - SC
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DTAA with Singapore – Singapore company entered into contract with IOCL for residual offshore construction work and Installation of SPM - contract with L&T Ltd for installation and construction services for Single Point Mooring (SPM) - the applicant has a PE in India in terms of Article 5.5 of the DTAA and falls within the ambit of Section 44BB of the Act. The consideration received by the applicant for mobilization and demobilization is taxable in India u/s 44BB of the Act. - AAR
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Levy of interest for assessment years prior to the introduction of the section 234D- Regular assessment was completed on 30 March 2004 the provision on interest is not introduced with reference to any assessment year but with effect from 1 June 03 - Assessee is liable to pay interest on the excess refund amount received. - HC
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Deduction under 35E - Business of Prospecting Exploring and mining of Diamonds and also Consultancy - Assessing Officer was indeed in error in capitalizing the expenses which were not directly attributable to the prospecting of diamonds as also in restricting the deductibility of expenses to 30% of the consultancy revenues received by the assessee. - AT
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TDS - lessee deducted Tax at 15% instead of 20% - Owner paid differential tax with interest - no liability on the part of the assessee to pay any interest for short deduction of TDS as the owner has paid the said tax. - HC
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Tribunal went wrong in allowing deduction under section 80HH and Section 80-I from the gross total income before granting deduction under section 35(2) of the Act, deduction under Section 35(2) has to be first allowed in the computation of business income as a whole and thereafter deduction under Section 80HH and Section 80-I have to be granted only from the net income attributable to the eligible industrial unit - HC
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Capital gain - If the object of the legislature is to tax the gains arising on transfer of a capital acquired under a gift or will by including the period for which the said asset was held by the previous owner in determining the period for which the said asset was held by the assessee, then that object cannot be defeated by excluding the period for which the said asset was held by the previous owner while determining the indexed cost of acquisition of that asset to the assessee - HC
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Trust - Transfer versus Donation - Transfer of assets for consideration, from one society to another, which has been received by way of book entries and cannot be a donation - Taxable as "Capital Gain". - AT
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Validity of Re-assessment under 147 where notice u/s 143(2) has been issued - if the Assessing Officer is of the view that materials available with him or discovered by him are such as to justify income escaping assessment under Section 147, he is free to record the reasons for the belief and proceed to make income escaping assessment under Section 147 without proceeding to make a regular assessment under Section 143(3) of the Act. - HC
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Interest Tax under section 5 of the Interest-tax Act - Once we find that monies given by the assessee to SWC did not fulfil the aforesaid criteria thereby bringing it within the expression "loan", the question of applicability of section 2(7) of the Interest-tax Act would not arise. - HC
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Ownership - Mere non-mentioning of the status in the Agreement of purchase or sale does not alter the character of the property especially when the source of funds and that the status of HUF is governed by the investments which were made out of HUF funds and the HUF can purchase property in the name of any member of family. - HC
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There is no requirement that once the Notification is issued by the CBDT the said Institute has to be approved by any other authority. Once Notification is issued donor is qualified for weighted deduction referred in Sec.35 of the Act. - HC
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MAT - book profit u/s. 115JB - AO is required to determine amount of loss brought forward or unabsorbed depreciation for each of years without taking said adjustment into consideration and allow deduction in respect of lesser of two amounts. - HC
Customs
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Refund - Customs duty - revenue authorities have not issued any demand notice under Section 28 or under any other provisions. - refund allowed - AT
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Classification of 'Electronic Automatic Regulators' - in view of the Notification issued by the Central Government, the goods, namely Electronic Automatic Regulators would fall under Chapter sub-heading 9032.89 - SC
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Advance Licensing - Notification No. 30/1997, dated 1-4-1997 - export obligation - Public Notice dated 7-11-2002 - the assessee was entitled to seek extension of export obligation period of six months from the date of Public Notice for fulfilment of certain conditions - assessee has fulfilled the export obligation though belatedly - Decided in favor of the assessee - HC
DGFT
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Amendment in Chapter 10 of Schedule 2 of ITC(HS) Classification of Export and Import Items relating to export of Basmati Rice. - Ntf. No. 97 (RE-2010) /2009-2014 Dated: February 21, 2012
FEMA
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FERA 1973 - Release of foreign exchange in violation of the instructions of the RBI resulting in a violation of the relevant provisions of the FERA 1973 - Imposition of penalty upheld - HC
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Release of Foreign Exchange for Imports – Further Liberalisation. - Cir. No. 82 Dated: February 21, 2012
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Export of Goods and Services - Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year . - Cir. No. 81 Dated: February 21, 2012
Corporate Law
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Offence committed under Negotiable Instrument Act - non-payment of debts arising out of dishonour of cheques - sanction of a scheme u/s 391 of the Companies Act, 1956 - Scheme u/s 391 of the Companies Act cannot have the effect of overriding the requirement of any law. - SC
Service Tax
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Toll in the nature of ‘user charge’ or ‘access fee’ paid by roads users - regarding. - Cir. No. 152/3 /2012-ST Dated: February 22, 2012
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Manpower Recruitment and Supply Agency Services - findings of the original authority that the appellant was not educated and that the tax demand related to initial stages of levy on manpower recruitment services which got enlarged to include services of manpower supply later on - order of imposition of penalty is set aside - AT
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Business Auxiliary services - job work - considering the nature of raw materials, the processes undertaken on the said raw materials and the end-product, appellants are undertaking manufacture of excisable goods on job work basis - pre-deposit waived - AT
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Mere appearance of the figures in the consolidated balance sheet of Sai Computer Pvt. Ltd. does not bring the appellant to the tax liability when from the beginning, Revenue authorities relied upon the agreement dated 13.03.01 as RUD-I and treated the Appellant as a different taxable entry granting a separate registration to it - AT
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Issuance of SCN - assessee contested that they have taken service tax registration at Mumbai as their registered office is situated in Mumbai and service has been rendered in Mumbai and, therefore, the Assistant Commissioner at Ratnagiri does not have jurisdiction to issue notice and recover service tax - Decided in favor of the assessee - AT
Central Excise
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Interest of bank guarantee encashed earlier - the appellant will be entitled to interest @ 12% p.m., after three months from the date of receipt of the application - HC
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Search - Registration after search - filing of consolidated return would not entitle to file an application before settlement commission - HC
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RG 1 vis a vis Daily production record - Product comes out of reactor in very hot conditions and daily production report maintained on rough estimate basis - Demand on the basis entries made in daily production report which are on estimate basis is not sustainable. - AT
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Valuation under central excise - Whether administrative fee/export fee etc are liable to be included in the assessable value - held no - AT
VAT
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Whether the Commissioner under the DVAT Act can exercise suo motu power of revision under Section 74A of the DVAT Act in respect of assessments that have been completed under the Delhi Sales Tax Act, 1975 - held no - HC
Case Laws:
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Income Tax
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2012 (2) TMI 284
Validity of reopening of assessment previously framed after scrutiny beyond 4 years from the end of relevant A.Y. - wrong cliam of depreciation since business was yet to commence – no failure or omission on the part of the petitioner to furnish fully and truly all material facts – Held that:- Petitioner had disclosed full and true particulars relating to the claim of depreciation at the time of original assessment. The notice u/s 148 has been issued beyond the period of 4 years from the end of relevant A.Y. Therefore, primary jurisdictional condition for issue of such notice has not been satisfied – Decided in favor of assessee.
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2012 (2) TMI 283
Validity of reopening of assessment – A.Y. 06-07 sought to be reopened on the basis of an order of assessment for A.Y. 07-08 framed after scrutiny - Petitioner, wholly owned subsidiary of a non resident shipping line – retention of US $ 1.5 per day per container collected on behalf of the principal between 1993 to 2009 as administration charges in accordance with norms prescribed by RBI - offered the same as its own income during the period 1993 to 2009 for A.Y. 2010-11 – Held that:- The Assessee in the present case had made a disclosure in the notes forming part of the accounts of the nature of payments required to be made to the foreign principal on account of Container Detention Charges. Moreover, entire amount has been offered to tax. There was no tangible material, no new information and no fresh material which came before the Revenue in the course of assessment for A.Y. 2007-08 which can justify the reopening of the assessment for Assessment Year 2006-07 – Decided in favor of assessee.
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2012 (2) TMI 282
Validity of reopening of assessment beyond 4 years from the end of relevant A.Y – A.Y. 04-05 sought to be reopened on the basis of an order of assessment for A.Y. 07-08 framed after scrutiny - Petitioner, wholly owned subsidiary of a non resident shipping line – retention of US $ 1.5 per day per container collected on behalf of the principal between 1993 to 2009 as administration charges in accordance with norms prescribed by RBI - offered the same as its own income during the period 1993 to 2009 for A.Y. 2010-11 – Held that:- Beyond a period of four years the test is not merely whether there has been an escapement of income, but whether, there has been a failure on the part of the Assessee to disclose fully and truly all material facts necessary for the assessment. Since there was a disclosure by the Petitioner of the material facts necessary for the assessment. Hence, primary jurisdictional requirement under the proviso to Section 147 has not been fulfilled – Decided in favor of assessee.
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2012 (2) TMI 281
Validity of reopening of assessment previously framed after scrutiny beyond 4 years from the end of relevant A.Y – A.Y. 04-05 sought to be reopened on the basis of an order of assessement for A.Y. 06-07 – A.O. did not specifically deal with the eligibility to claim a deduction u/s 10A – Held that:-The order for A.Y. 2006-07 is based on disclosures made by the assessee during the course of assessment proceedings for that year and it is not the submission of the assessee before this Court that the same disclosures were also made during the course of A.Y. 2004-05. In the circumstances, we are of the view that though the reopening of the assessment in the present case has taken place beyond a period of four years, the jurisdictional condition for reopening the assessment u/s 147 has been fulfilled – Decided against the assessee.
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2012 (2) TMI 280
Penalty u/s 271-B – failure to get accounts audited u/s 44AB - A.Y. 2000-01 to 2003-04 – Tribunal deleted the penalty on ground that penalty proceedings having been initiated long after the completion of the assessment – Held that:- In the given case, penalty proceedings for the A.Y. 2000-01, 2001-02, 2002-03 & 2003-04 were initiated after the period of more than 4.5, 3.5, 2.5 & 1.5 years respectively after the completion of assessment. Therefore in wake of Section 275(1)(c), no penalty can be imposed – Decided against the Revenue.
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2012 (2) TMI 279
Expenditure Incurred on Increasing authorized Share Capital - Capital OR Revenue - Held That:- When expenses are incurred to increase the share capital and it was immaterial for what purpose the share capital was utilized by the assessee. Reliance placed on CIT vs Kotak India (2001 -TMI - 6052 - SUPREME Court). - Decided against the assessee. Employees’ contribution to the provident fund after the due date under relevant act - Held That:- CIT Vs. Nexus Computer P. Ltd.(2008 - TMI - 33881 - MADRAS HIGH COURT) and in view of Vinay Cement (2007 - TMI - 102762 - Supreme Court of India), payments made before date of filing return under 139(1), deduction allowed. Deemed Dividends - Deposits from common shareholders having more than 20% equity - Deposits for office space - Held That:- It could not be brought to notice that assessee and the creditor were in the line of the same business of garment export and as to whether there was any business relation earlier to this transaction. As the facts are not clear we remand the matter back to AO.
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2012 (2) TMI 278
Deduction - Projects to be completed within time after "approvals" - Facts: "Hill Side" and "Silver Valley" different projects - Land transferred on 9.02.05 and 10.02.05 - Building Plan approved and Commencement Certificate received on 30.04.05 - Held That:- Completion time for above projects were 31.03.10 and when the above projects are completed on 18.11.09 it is well within stipulated time. Decided against revenue.
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2012 (2) TMI 277
Assessee exporting human hair - Cash purchases - AO: disallowed 25% cash & cheque purchases - CIT(A) restricted disallowance upto 20% - Held That:- Quantitative details cannot be accepted to be true and correct because internally prepared purchase memos are not reliable at all in absence of name, address and signature of the vendors. What is surprising is that even signature or thumb impression has not been taken on any memo, which leads to the conclusion that some or all of them have been prepared by the assessee at its convenience. CIT(A) was correct in disallowing 20%. All details were provided for cheque purchases thus no disallowance required. Addition on account of purchases from director - CIT(A): Purchases were made by cheques and duly accounted in stock register - Purchases at Rs.2806/- per kg. as against overall average purchase price of Rs.3233 per kg. - Held That:- When relevant material were on record, additions cannot be made. On the above factual matrices, purchases cannot be disallowed.
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2012 (2) TMI 262
Bad debts versus Provisions for bad and doubtful debts - rural banking - Scope and ambit of the proviso to Section 36(1)(vii) - whether deduction of the bad and doubtful debts actually written off in view of Section 36(1)(vii) limits the deduction allowable under the proviso to the excess over the credit balance made under clause (viia) of Section 36(1) – rural advances - Held that:- U/s 36(1)(vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year, while the proviso will operate in cases under clause (viia) to limit deduction to the extent of difference between the debt or part thereof written off in the previous year and credit balance in the provision for bad and doubtful debts account made under clause (viia). The proviso to Section 36(1)(vii) will relate to cases covered under Section 36(1)(viia) and has to be read with Section 36(2)(v) of the Act. Thus, the proviso would not permit benefit of double deduction, operating with reference to rural loans. Therefore, we hold that provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields – Decided in favor of assessee.
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2012 (2) TMI 261
Waiver of penalty u/s 271AAA – search & seizure conducted – disclosure of income in a statement u/s 132(4) – underpayment of self assessment taxes – shortfall paid within permissible time, upon receiving the notice of demand u/s 156 – Held that:- On the facts of the present case wherein entire tax and interest has been duly paid well within the time limit for payment of notice of demand u/s 156 and well before the penalty proceedings were concluded, the assessee could not be denied the immunity u/s 271AAA(2) only because entire tax, along with interest, was not paid before filing of income tax return or, for that purpose, before concluding the assessment proceedings – Decided against the Revenue.
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2012 (2) TMI 260
DTAA with Singapore – Singapore company entered into contract with IOCL for residual offshore construction work and Installation of SPM - contract with L&T Ltd for installation and construction services for Single Point Mooring (SPM) - applicant contending non-existence of PE in India and presence in India for less than 180 days – taxability of revenue - 'FTS' or 'Royalty' – applicability of Section 44BB in respect of the contract with L&T - Held that:- In case of Ishikawajima-Harima Heavy Industries Ltd.(2007 - TMI - 3467 - Supreme Court) it is specified that where consideration of each portion of the contract is separately specified, it can be separated from the whole. Since payment in respect of contract with IOCL specifies separately consideration for mobilization and demobilization falling under the definition of royalty under Article 12.3(b) of the DTAA , consideration for actual installation falling under the definition of FTS as per Article 12.4(a) of the DTAA, and the rest relating to pre and post execution work and drawing/design documentation. Therefore, part of consideration is in nature of FTS and part of consideration is in nature of royalty u/s 9(1)(vii) & (vi) of the Act and under Article 12 of DTAA In respect of contract with L&T – it is noted that services and facilities being rendered by the applicant go beyond installation and include pre-installation services, post-installation services, procurement and transportation and sub-contract is effective as of 23.04.2008 and obligations under the contract continued to exist even after the vessels left the shores of India. The applicant's plea of counting the duration of services from 3.12.2008 when the applicant's vessels were mobilized to India till 19.05.2009 when the vessels left the shores of India is untenable and unacceptable. Hence the applicant has a PE in India in terms of Article 5.5 of the DTAA and falls within the ambit of Section 44BB of the Act. The consideration received by the applicant for mobilization and demobilization is taxable in India u/s 44BB of the Act.
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2012 (2) TMI 259
Long term capital gains period of holding property sold was transferred to trust on 05.01.1996 acquired by previous owner prior to 01.04.1981 Revenue contending indexed cost of acquisition from 05.01.1996 Held that:- The expression held by the assessee used in Explanation (iii) to Section 48 has to be understood in the context and harmoniously with other Sections. The cost of acquisition stipulated in Section 49 means the cost for which the previous owner had acquired the property. The term held by the assessee should be interpreted to include the period during which the property was held by the previous owner. See CIT v. Manjula J.Shah [ 2011 (10) TMI 406 - BOMBAY HIGH COURT] Decided against the Revenue.
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2012 (2) TMI 258
DTAA with Australia – Australian company entered into distribution agreement with Indian Company(IMI Ltd) for the distribution and sale of its software and hardware products in India - sale and collection of software product is made through the distributor - no physical delivery of the product is made to the distributor - taxability of the payments made by distributor for the software product, and for the right to downloand/receive version updates for the software products of the applicant – applicant submitted that payment received are for sale of copyrighted article - Held that:-In the Income-tax Act, royalty is defined as consideration for the transfer of all or any rights (including the grant of license) in respect of any Copyright. Article 12 of the India-Australia DTAC defines royalties to mean payment made as consideration for the use of or the right to use any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right. The definition in article is seen to be wider than the one contained in the Income-tax Act. Therefore, payments concerned would be royalty as defined in Article 12 of the DTAA between India and Australia and u/s 9(1)(vi) of the Income-tax Act. Payment received by way of Subscription for the updates would also be royalty and not 'FTS' under DTAC & Income Tax Act. Applicant contention about non-existence of PE in India – Held that:- Since payment received is royalty, the amount is liable to be taxed in India under Article 12.2 of the DTAC. Further, distributor IMI Ltd is required to withhold taxes in India in terms of Section 195 of the Income-tax Act at the rate of 10% of the gross amount of royalty, as provided under Article 12.2 of the DTAC.
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2012 (2) TMI 257
Maintainability of application before Advance Rulings – Return of Income filed for A.Y. 2009-10 - application filed on 17.05.2010 raising the identical questions – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings)
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2012 (2) TMI 256
Maintainability of application before Advance Rulings - transaction based on which Rulings on various questions are sought, was entered into on 1.10.2006 - assessments for the A.Y. 2007-2008 have been completed - Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2) , and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred by clause (i) of the proviso to section 245R(2) of the Act. See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings) – Application dismissed.
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2012 (2) TMI 255
Maintainability of application before Advance Rulings – Return of Income filed u/s 139(1) on 31.03.2010 - transaction based on which Rulings on various questions are sought, was entered into on 26.4.2008 and 26.11.2008 – application filed on 17.6.2010 – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings)
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2012 (2) TMI 253
Maintainability of application before Advance Rulings – Return of Income filed u/s 139(1) on 31.03.2010 - transaction based on which Rulings on various questions are sought, was entered into on 31.10.2007 – application filed on 06.07.2010 – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings).
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2012 (2) TMI 252
Proprietor firm converted into partnership - Cost of acquisition - Asset acquired by succession - "Book Value OR Fair Market Value" - Held That:- AO had not examined as to whether the cost value given by the assessee firm is correct or otherwise, We remand the matter back to AO with a specific direction to examine as to whether the value [FMV] shown by the assessee firm is correct as on 1.4.1981 and to take appropriate action in accordance with the provisions of the Act at that relevant period. - Reliance placed on Sunil Siddharthbhai vs CIT (1985 -TMI - 5909 - SUPREME Court)
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Customs
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2012 (2) TMI 267
Goods detained on alleged mis-declaration in the description of the goods - Revenue contends goods imported was machine declared as heavy melting scrap – appellate authority held that detained goods can be released upon mutilation rendering it as scrap and clearance upon payment of duty as scrap - Held that:-There is no evidence to controvert averment of appellant about life and condition of goods. Neither revenue had any material to prove that the goods imported was not 20 50 years nor proved that the same is usable for more than the period certified by Chartered Engineers without major repair and renovation and also looking to lapse of 18 months from the import. Accordingly there is no scope to reverse the first appeal order – Appeal of Revenue dismissed.
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2012 (2) TMI 242
Classification of 'Electronic Automatic Regulators' - Revenue classified it under Chapter sub-heading 8543.89 – Central Government vide Notification dated 01.03.2002 classified it under Chapter sub-heading 9032.89 - Held that:- For the period after 01.03.2002, in view of the Notification issued by the Central Government, the goods, namely Electronic Automatic Regulators would fall under Chapter sub-heading 9032.89 – Decided in favor of assessee.
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Corporate Laws
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2012 (2) TMI 269
Offence committed under Negotiable Instrument Act - non-payment of debts arising out of dishonour of cheques - sanction of a scheme u/s 391 of the Companies Act, 1956 – whether such sanction amounts to compounding of an offence u/s 138 read with Section 141 of the N.I. Act - High Court held aforesaid in negative and also held that such sanction will not have the effect of termination or dismissal of complaint proceedings under N.I. Act – Held that:- In the instant appeal in most of the cases the offence under the N.I. Act has been committed prior to the scheme. Therefore, the offence which has already been committed prior to the scheme does not get automatically compounded only as a result of the said scheme. Scheme u/s 391 of the Companies Act cannot have the effect of overriding the requirement of any law. Further, basic mode and manner of effecting the compounding of an offence under Section 320 of the Criminal Procedure Code cannot be said to be not attracted in case of compounding of an offence under N.I. Act in view of Section 147 of the same. However, the main principle of such compounding, namely, the consent of the person aggrieved or the person injured or the complainant cannot be wished away nor can the same be substituted by virtue of Section 147 of N.I. Act. For the reasons aforesaid - Appeal stands dismissed.
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2012 (2) TMI 240
Period of Limitation – Petition filed u/s 433(e) & 433(f) of Companies Act, 1956 seeking to wind up the Respondent-Company – non-payment of salary of the petitioner (part-time employee) for period March 2002 to June 2002 – Held that:- Period of limitation for claiming salary is 3 years and u/s 18 of Limitation Act, acknowledgment of liability should be before the expiry of period of limitation. In present case, limitation starts from 1.7.2002 and ends on 30.06.2005. However, the first letter had been addressed on 22.9.2007 which itself is beyond the period of said three years. Therefore, documents of alleged acknowledgment of liability dated 25.09.07 onwards produced do not constitute an acknowledgment of liability. Hence, no debt is enforceable against the Respondent and consequently no ground u/s 433 of the Companies Act, 1956 – Decided against the petitioner.
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FEMA
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2012 (2) TMI 268
FERA 1973 - Release of foreign exchange in violation of the instructions of the RBI resulting in a violation of the relevant provisions of the FERA 1973 - allegation against the Appellants is a failure to discharge their responsibilities under the law and to ensure legal compliance - Section 68(1) & 68(2) – Held that:-The burden of establishing a defence in terms of the proviso to subsection (1) of Section 68 lies upon the person against whom the contravention is established under the substantive part of the provision. Having failed to establish their burden, the absence of connivance cannot come to the aid of the Appellants. Hence, no substantial question of law would arise in these appeals. The Appeals are accordingly dismissed.
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Service Tax
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2012 (2) TMI 271
Whether proceeding dropped before revalidation law shall revive after revalidation – GTA services - proceeding initiated by SCN dated 31.12.98 ended with no liability - said proceeding was revalidated by SCN dated dated 9.2.2004 u/s 116 of Validation Act, 2000 - Held that:- Under the provision of law at the relevant point of time when recipient was not required to discharge tax liability for availing GTA service filing of return did not arise. Once such legal obligation was not there, it cannot be said that Section 73 of Finance Act, 1994 is invokable. Accordingly, appeal is allowed without re-adjudication.
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2012 (2) TMI 265
Cenvat credit on services used for outward transportation of goods from the factory to the buyers premises - period involved prior to 01.04.2008 – appellant provided evidences showing satisfaction of conditions specified in Circular no. 97/6/2007-ST dated 23.8.07 for availment of credit - Held that:- Matter was not contested at earlier stages by the Appellants and they did not have opportunity to adduce evidence. Now evidences are submitted which should be examined and credit allowed if they are legally eligible. The impugned order is set aside and the appeal is allowed by remand to the original authority.
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Central Excise
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2012 (2) TMI 266
Availment of non- existent Cenvat Credit by Second stage dealer on goods – non-manufacturing & non-payment of duty by manufacturer of goods – assessee claimed credit on basis of invoices showing payment of duty – Held that:- Prima facie there are evidences appearing to show that the credit that was passed on was not against proper duty payment. The real merit in the matter can be decided only during final hearing. Thereby, appellants are directed to make pre-deposit.
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