TMI Tax Updates - e-Newsletter
February 25, 2012

Case Laws in this Newsletter:

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

Articles

1. INTERPRETATION OF TAX STATUTES

   By: Dr. Sanjiv Agarwal

2. COGNIZANCE OF OFFENCE.

   By: DR.MARIAPPAN GOVINDARAJAN

3. Stamp papers some suggestions about timely use though they may not have any expiry period ,the limitation is only for claiming refund against unused stamp papers.

   By: DEVKUMAR KOTHARI

4. DE FACTO DOCTRINE.

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. India Ratifies the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and becomes the First Non-OECD, Non-Council of Europe Country to become A Party to the Convention.

2. Anand Sharma attends first meeting of the reconstituted NMCC.

3. Amendments to the Combination Regulations – Relief to Corporate entities by making process of filings simpler.

4. Task Force on an Aadhaar Enabled Unified Payment Infrastructure Submits Report to Finance Minister.

5. Fourth INTOSAI-Doner Steering Committee Meeting begins at Jaipur.

Notifications

Central Excise

1. 02/2012 - dated 22-2-2012 - CE (NT)

Amends Notification No.21/2004-Central Excise (N.T.), dated the 6th Sept., 2004.

Customs

2. 13/2012 - dated 22-2-2012 - ADD

Rescinds Notification No. 58/2011-Customs, dated the 8th July, 2011.

DGFT

3. 99 (RE-2010)/2009-2014 - dated 23-2-2012 - FTP

Permission for export of wheat through Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border.

4. 98 (RE-2010)/2009-2014 - dated 23-2-2012 - FTP

Permission for export of non-basmati rice through Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border.

Income Tax

5. 10/2012 - dated 21-2-2012 - IT

Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Notified undertakings.

Circulars / Instructions / Orders

Income Tax

1. 02/2012 - dated 22-2-2012

Section 119 of the Income-tax Act, 1961 - Instructions to subordinate authorities - Condonation of delay in filing return of income under section 119(2)(b) in case of applicants who have made investment in 8% Savings (Taxable) Bonds, 2003 issued by Government of India and opted for scheme of cumulat

DGFT

2. 100 / (RE-2010)/2009-2014 - dated 23-2-2012

Corrigendum in description of export item at Sl. No 915, Product Code-62 of the DEPB Rate Schedule.

Customs

3. 05/2012 - dated 23-2-2012

Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 – regarding.

Highlights / Catch Notes

Income Tax

• Court Rules No Capital Gains Calculable in Slump Sale Due to Inability to Allocate Consideration to Individual Assets.

  Case-Laws - HC : Slump sale – it was not possible to attribute the consideration which was paid, towards the individual assets which form a component part of the transfer of the business hence not possible to compute any chargeable capital gain on the sale of the undertaking as a going concern. - HC
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• Trust Can Keep Registration Despite Section 13(1)(b) Violation, But Loses Section 11 Tax Exemption Benefits.

  Case-Laws - AT : Trust - When condition under Section 13(1)(b) are violated exemption u/s 11 are not given, it shall not effect the registration. CIT(A) to allow registration. - AT
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• Payments for conversion charges reimbursed by turnover, excluding profit, not subject to TDS u/s 194C.

  Case-Laws - AT : TDS - When Conversion Charges and Administrative expenses were paid without any formal agreement and the actual expenses were reimbursed or shared on the basis of turnover and cost without including any profit element. Such payments are not subject to TDS under 194C. - AT
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• High Court Appeal Not Allowed for Tax Effects Under Rs. 10,00,000 as per Instruction No. 3/2011.

  Case-Laws - HC : In view of Instruction No. 3/2011 which prohibits filing of an appeal to the High Court, where the tax effect is less than Rs. 10,00,000 - Instruction No. 3/2011 issued on 9.2.2011 is applicable to pending proceedings also, this appeal preferred by the Revenue is not maintainable. - HC
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• Insurance Profits from Investment Sales Included in MAT Book Profits Calculation; No Exclusions for Tax Purposes.

  Case-Laws - AT : MAT - Profit and gains of any business of insurance - there is no provision for excluding from the book profits any profit accruing on account of sale of investments. - AT
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• Advance on Commission Considered Deemed Dividend, Subject to Tax for Employee with Salary and Profit Commission.

  Case-Laws - HC : Deemed dividend - assessee (employee) entitled to both salary and commission of profits - the advance of commission on profits over and above that amount drawn during the course of the year before the profits was determined and accrued to the petitioner, would be treated as deemed dividend subject to tax. - HC
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• Condonation of Delay for Late Tax Returns on 8% Savings Bonds under Income-tax Act, Section 119(2)(b) Explained.

  Circulars : Section 119 of the Income-tax Act, 1961 - Instructions to subordinate authorities - Condonation of delay in filing return of income under section 119(2)(b) in case of applicants who have made investment in 8% Savings (Taxable) Bonds, 2003 issued by Government of India and opted for scheme of cumulat - Cir. No. 02/2012 Dated: February 22, 2012
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• Tax Deductions for Profits from Infrastructure Development u/s 80-IA of Income-tax Act, 1961.

  Notifications : Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial infrastructure undertakings, etc. - Notified undertakings. - Ntf. No. 10/2012 Dated: February 21, 2012
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• Garnishing Order Issued Over TDS Default; Funds Attached, Case Under Appeal Before Commissioner of Income Tax (CIT.

  Case-Laws - HC : Garnishing order passed in pursuance of order passed for default in deduction of TDS - said orders are subject matter in the appeal before the CIT - money lying in the bank account of the petitioner attached by the department ... - HC
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• "Served" in Income Tax Act Section 143(2) Means Issue Date, Not Receipt Date, Ensuring Compliance and Certainty.

  Case-Laws - HC : Meaning of expression ‘Served’ / 'issued' - Notice u/s 143(2) - The date of receipt of notice cannot be left to be undetermined dependent upon the will of the addressee. Therefore, to bring certainly and to avoid attempts of the addressee to evade the process of receipt of notice, the purpose of the statute will be better served, if the date of issue of notice is considered as compliance of the requirement of proviso to Section 143(2) of the Act. - HC
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• Court Rules Trust Income Taxable Due to Violation of Income Tax Act Sections 13(1)(c) and 13(3) Provisions.

  Case-Laws - HC : Contravention of provisions of Section 13(1)(c) and 13(3) of the Income Tax Act, 1961 - in view of clause (c) of Section 13(1) rendering the entire income of Trust or charitable institution on liable to tax even if only part of income is directed to be applied for the benefit of the specified persons - Decided against the assessee - HC
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Customs

• "Extruded Aluminium Products" in Item 7 Limited to Standardized Items Like Pipes and Tubes.

  Case-Laws - SC : DEPB - The expression "including pipes and tubes" following the words "extruded aluminium products" in Item 7 is restrictive in nature and will give 'extruded aluminium products' a restrictive meaning in order to include the standardized products such as pipes and tubes within the meaning of the term extruded aluminium products.e - SC
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• Understanding 'Importer' in Confiscation Cases: Section 2(26) of Customs Act, 1962 & Its Legal Implications Explained.

  Case-Laws - AT : Confiscation - importer - the definition of 'importer' under Section 2 (26) of the Customs Act, 1962 - AT
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• Customs Notification 13/2012 Rescinds 58/2011, Amends Anti-Dumping Duties from February 22, 2012.

  Notifications : Rescinds Notification No. 58/2011-Customs, dated the 8th July, 2011. - Ntf. No. 13/2012-Customs (ADD) Dated: February 22, 2012
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• Circular No. 05/2012 Streamlines Electronic Processing for Courier Imports and Exports Under 2010 Regulations.

  Circulars : Courier Imports and Exports (Electronic Declaration and Processing) Regulations, 2010 – regarding. - Cir. No. 05 / 2012 - Customs Dated: February 23, 2012
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DGFT

• DGFT Issues Corrigendum for Export Item at Serial No. 915, Product Code-62 in DEPB Rate Schedule, Circular No. 100.

  Circulars : Corrigendum in description of export item at Sl. No 915, Product Code-62 of the DEPB Rate Schedule. - Cir. No. 100 / (RE-2010)/2009-2014 Dated: February 23, 2012
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• Wheat Export Permitted via Land Custom Stations on India-Bangladesh and India-Nepal Borders per DGFT Notification No. 99.

  Notifications : Permission for export of wheat through Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border. - Ntf. No. 99 (RE-2010)/2009-2014 Dated: February 23, 2012
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• Export of Non-Basmati Rice Allowed via Indo-Bangladesh and Indo-Nepal Borders per DGFT Notification No. 98 (RE-2010.

  Notifications : Permission for export of non-basmati rice through Land Custom Stations (LCS) on Indo-Bangladesh and Indo-Nepal border. - Ntf. No. 98 (RE-2010)/2009-2014 Dated: February 23, 2012
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Corporate Law

• High Court Rules: Stamp Duty Required on Property Transfers from Amalgamation or Demerger under Companies Act, 1956.

  Case-Laws - HC : Whether stamp duty is payable on the transfer of properties pursuant to the sanction of any scheme of amalgamation or demerger under the Companies Act, 1956 - Held yes - HC
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Service Tax

• Service Tax Confirmed on Loan Application Processing for Commercial Vehicles u/s 65(19) as Business Auxiliary Service.

  Case-Laws - AT : Business auxiliary service - Section 65 (19) - processing of loan application for commercial vehicle which resulted in promotion of business of the bank as well as the vehicle seller - Demand confirmed within normal period - AT
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• Turnkey Projects and Composite Contracts in Consulting Engineering: Service Tax Implications and Limitations on Extended Periods.

  Case-Laws - AT : Turnkey Projects - Composite Contracts - Consulting Engineering Services - the matter was within the knowledge of the department - extended period of limitation not invokable - AT
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Central Excise

• Revenue's Demand to Reverse Credit on Packing Materials of Capital Goods u/r 3(5A) Deemed Unjustified by Authority.

  Case-Laws - AT : Credit on packing materials of capital goods – Revenue demanding reversal for same considering it to be clearance of waste & scrap of capital goods, relying on sub-rule (5A) of Rule 3 of Cenvat Credit Rules, 2004 - Held no - AT
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• Molasses in Ethyl Alcohol Production: Pay 8% Clearance Value Under Notification 67/95 for Central Excise Compliance.

  Case-Laws - AT : Notification 67/95 - Manufacturing Sugar & Molasses - Molasses used to produce Etyl Alcohol - Paid 8% of the value of clearance of such undenatured ... - AT
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• Amendment to Central Excise Notification No. 21/2004: Updates to Excise Regulations Effective February 22, 2012.

  Notifications : Amends Notification No.21/2004-Central Excise (N.T.), dated the 6th Sept., 2004. - Ntf. No. 02 / 2012-Central Excise (N.T.) Dated: February 22, 2012
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• Tribunal Upholds Favorable Entry for Assessee as Executed by Adjudicating Authority in Tax Dispute Resolution.

  Case-Laws - SC : Classification - an entry which is beneficial to the assessee requires to be applied and the same has been done by the adjudicating authority, which has been confirmed by the Tribunal - SC
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• Slagwool and Rockwool Classified Under Tariff Sub-heading 6807.10 According to Case Law and Excise Guidelines.

  Case-Laws - SC : Classification of Slagwool and Rockwool under Chapter sub-heading No.6807.10 – the goods in issue are appropriately classifiable under Sub-heading No.6807.10 of the tariff entry. - SC
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VAT

• Maharashtra VAT Act: Petitioner Entitled to Refund u/s 51 Due to Unjustified Delay by Department.

  Case-Laws - HC : Maharashtra VAT Act 2002 - Refund - Petitioner falls within Section 51(3)(a)(3) relating to holders of a certificate of entitlement under any Package Scheme of Incentives. In view of provisions of Section 51, department is not justified in keeping the refund application pending inordinately without explanation. - HC
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Case Laws:

• Income Tax

• 2012 (2) TMI 327
  Slump sale – A.Y. 1994-95 – Tribunal held non-applicability of capital gains in view of the fact that the IMFL business has been transferred as going concern and therefore a slump sale – Revenue contesting the same – Held that:- In the present case, the position as it existed prior to the insertion of the provisions of Section 50B by the Finance Act of 1999 is dealt with. Neither authorities nor Tribunal were in dispute that transfer of the entire business as a going concern was involved. The Tribunal has corrected the view taken by the authorities by holding that it was not possible to attribute the consideration which was paid, towards the individual assets which form a component part of the transfer of the business hence not possible to compute any chargeable capital gain on the sale of the undertaking as a going concern. View of Tribunal is thereby affirmed. See PNB Finance Ltd vs CIT (2008 - TMI - 31364 – Supreme Court) – Decided against the Revenue.

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• 2012 (2) TMI 326
  Sales Promotion, Staff food expense, Advertisement expenses - Business OR Personal Expense - AO: Self made vouchers and bogus claim - Held That:- AO has not given any basis for making disallowance of these expenses and even CIT(A) has not given any basis for restricting the disallowance at 10,000/- in each of the expenses. Decided in favour of assessee. Assessee engaged in job contract - payment to transporter - AO made additions on account of non-deduction of tax under 194C - Work Sub-contracted thus liable to tax deduction - Held That:- In view of ACIT Vs Smt. Keya Seth (2011 - TMI - 209123 - ITAT KOLKATA), decided in favour of assessee. AO disallowed claim of Sundry Creditor related to labour charge - Station wise break up provided - Held That:- Total labour charges outstanding are on account of sundry creditors, which remains payable as on 31.03.2006 and these are particularly on account of payments for the month of February and March, 2006. Similar liability for AY 2004-05 and 2005-06 was accepted by revenue while framing assessment u/s. 143(3) of the Act for the reason that this is normal practice in this line of business that this type of payment remains outstanding as on the year ending i.e. in the month of March. Decided in favour of assessee.

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• 2012 (2) TMI 325
  Stay Application - Demand raised 24,66,51,870 amount paid 16,31,14,700 - Hardship: Term loan 200 Crores instalment of Rs 11.50 Lacs - Held That:- Assessee already has paid more than 50% of demand, in the interest of revenue the assessee is required to pay Rs.50 lacs before 31.01.2012 and the balance demand is stayed till disposal of the appeal or six months, whichever is earlier .

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• 2012 (2) TMI 324
  Trust - Registration declined as Scholarship provided to needy poor jain treating as helping a particular religious community - Held That:- When condition under Section 13(1)(b) are violated exemption u/s 11 are not given, it shall not effect the registration. CIT(A) to allow registration. Deduction under 80G - Held That:- As the trust is eligible for registration CIT to reconsider the application under 80G. Reliance placed on Umaid Charitable Trust V/s Union of India (2008 - TMI - 31890 - RAJASTHAN HIGH COURT)

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• 2012 (2) TMI 323
  Rectification of Tribunal order - Contradiction in para 11 and 13 - Held That:- Assessee have agreed to change in investments from 282.41 Lacs to 337.32 lacs thus tax free incomes have been earned further there was also increase in current capital. Tribunal took view after considering all facts and figure. Therefore, apparently there was no error or apparent mistake committed by the Tribunal. Reliance also placed on Reliance Utilities & Power Ltd. (2009 - TMI - 32150 - HIGH COURT BOMBAY) & Hero Cycles(2009 -TMI - 35238 - PUNJAB AND HARYANA HIGH COURT). Application rejected.

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• 2012 (2) TMI 322
  TDS - Held That:- When Conversion Charges and Administrative expenses were paid without any formal agreement and the actual expenses were reimbursed or shared on the basis of turnover and cost without including any profit element. Such payments are not subject to TDS under 194C. Dis allowance of Conversion charges and Administrative charges under 40A(2) - No additions by AO as entire amount is dis-allowed under 40a(ii) - Held That:- Case remanded back to CIT(A) to decide afresh. Claim for Bad debt - Held That:- Assessee has filed no evidence to show that debt have been accounted in earlier year. Even at this stage, the assessee has filed no material on record to show that the assessee has issued bills/debit notes to the party and has duly accounted for the corresponding income in the relevant A.Y. Case referred back to CIT(A).

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• 2012 (2) TMI 308
  Period of Limitation to revise an order by CIT – CIT's order dated 28.03.2003 passed u/s 263 setting aside the Assessment Order dated 26.03.2002 passed u/s 143 r.w.s. 147 - disallowance u/s 36(1)(vii), (viia) and in respect of foreign exchange rate difference - Held that:- Original A.O. allowing such expenses was passed on 10.03.1999 u/s 143(3). However aforesaid issues were not raised & decided either in the first reassessment dated 22.02.2000 or in the second reassessment dated 26.03.2002. Where the jurisdiction u/s 263(1) is sought to be exercised with reference to an issue which is covered by the original order of assessment u/s 143(3) and which does not form the subject matter of the reassessment, as in the present case, limitation must necessarily begin to run from the order u/s 143(3). See Ashoka Buildcon Ltd. Vs. ACIT (2010 - TMI - 76630 - Bombay High Court). Therefore invocation of the jurisdiction u/s 263 held to be barred by limitation by Tribunal u/s 263(2) is upheld. See CIT vs Alagendran Finance Ltd (2007 - TMI - 40388 - Supreme Court) – Decided against the Revenue.

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• 2012 (2) TMI 307
  Payments above Rs.10,000/- made in cash – A.Y. 1992-93, 1993-94 and 1994-95 – dis-allowance u/s 40A(3) - Rule 6 DD (j) of the Income Tax Rules, 1962 – assessee contending exceptional/unavoidable circumstances for making payment in cash – Held that:- Assessee had furnished explanations on the basis of the bank statements as well as the ledger accounts of the payees to show that the assessee did not have sufficient cash balance. This position is clear and cannot be doubted. Further it would have missed out on the business opportunity, if had failed to make cash payments. These were relevant and material aspects which were required to be considered and examined by the tribunal but have been overlooked. Therefore dis-allowance is deleted – Decided in favor of assessee.

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• 2012 (2) TMI 306
  Garnishing order passed in pursuance of order passed for default in deduction of TDS - said orders are subject matter in the appeal before the CIT - money lying in the bank account of the petitioner attached by the department – assessee contends no amount is due from it since amount has been paid by the deductee – validity of garnishing order – assessee also apprehends that once the money has been taken away by the department under garnishing order, revocation of the notice will be of no consequence - Held that:- The attachment is only interim arrangement and it also does not attain the finality with the payment to the person who is entitled to receive the amount for whom the garnishing order was passed till liability of that defaulter attains finality and money is adjusted under lawful order. Attachment order would itself will fell if the garnishing order and the notice itself is withdrawn by the A.O. requiring re-payment of the money by the department to the Bank. In that situation, petitioner may approach the A.O. for revocation of the garnishing order and further we direct the CIT to proceed with the appeal preferred by the petitioner expeditiously.

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• 2012 (2) TMI 305
  Power of Commissioner - Sale of Scrap deductible under 80HHC - Held That:- profits of the business was neither restored by this Tribunal to the AO nor decided by the AO nor otherwise originated from the assessment order passed by the AO u/s 143(3)/254. The ld. CIT(A), however, proceeded to examine them. In our view, the ld. CIT(A) had no jurisdiction to decide upon the issues which were not restored by this Tribunal to the file of the AO. Eligibility under 80HHC - Duty Entitlement Pass Book (DEPB) and Duty Free Replenishment Certificate (DFRC) - Held That:- In view of Topman Exports (2009 - TMI - 208946 - ITAT MUMBAI) case remanded back to AO for fresh perusal.

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• 2012 (2) TMI 304
  Penalty for non-quoting of PAN in TDS return - Held That:- Appellant deducted TDS correctly and revised PAN and filed the revised statement on Form No. 26Q, hence there is sufficient compliance of the provisions of section 139A. Reliance placed on Financial Co-operative Bank Ltd. v. ITO (Tribunal). Show Cause Notice - Held That:- In absence of issue of show cause notice penalty cannot be levied.

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• 2012 (2) TMI 303
  Additions on account of undervaluation of Stocks - Held That:- Sales of 40,000 pieces of HUB PH/Type, sales have been reflected in stock register, assessee has not been able to fully substantiate his argument and, therefore, taking into consideration the totality of the circumstances, the addition of Rs.7,60,000/- (40000 pieces x Rs.19/- ) is confirmed, out of the addition of Rs.8,17,050/- and the relief allowed is Rs.57050/- is justified. Dis-allowances to the tune of 7,53,949 as CIT(A) has not given any categorical finding - Held That:- Assessee had been following consistent method of accounting for valuing at cost or market value, whichever is less, and also most of the items in the closing stock are out of the opening stock and, whatever, items had been purchased, they have been sold and thus, the AO was not justified to adopting the rates which have been mentioned in the stock register in an adhoc manner. Thus, the assessee is entitled to relief of a sum of Rs.7,53,949/- .” AO disallowed interest as advances were given without any business expediency - Held That:- In view of S.A.Builders(Supreme Court), held that the advances were made for commercial use, hence impugned disallowance was deleted.

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• 2012 (2) TMI 302
  Validity of Re-assessment under 147 - Held That:- The amount of deduction claimed u/s 80IB amounting toRs.78,82,237/- was required to be deducted from profits and gains of business while calculating deduction u/s 80HHC. This has resulted in excess allowance of deduction u/s 80HHC to the extent of Rs.38,59,364 therefore issue of show cause under 148 is valid. Deduction under 80HHC and 80IA - Held That:- In view of CIT V Sharon Vencers (P) Ltd.(Madras High Court), CIT vs Great Easter Exports (2010 - TMI - 202426 - DELHI HIGH COURT) and Olam Exports India Ltd. V CIT (2009 - TMI - 204204 - KERALA HIGH COURT), held that deduction u/s 80HHC has to be calculated after deduction of the relief claimed u/s 80IA. Appeal of assessee rejected.

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• Customs

• 2012 (2) TMI 313
  Whether "aluminium grills" can be termed as "Extruded aluminium products" and assessee can take the benefit of the Item 7 of Code 61 - Held that:- The expression "including pipes and tubes" following the words "extruded aluminium products" in Item 7 is restrictive in nature and will give 'extruded aluminium products' a restrictive meaning in order to include the standardized products such as pipes and tubes within the meaning of the term extruded aluminium products. Further, in various earlier decisions it is held that word "includes" may in certain contexts be a word of limitation and used in the sense of 'means'. In view of the aforesaid reasons, aluminium grills cannot fit into Item 7 of the Product Code 61 of the DEPB Schedule in order to claim benefit of the DEPB Scheme and therefore, we cannot sustain the order passed by the Tribunal – Decided in favor of Revenue.

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• 2012 (2) TMI 292
  Valuation adopted by first appellate authority under Customs Valuation (DPIG) Rules, 2007 – Revenue contesting such valuation – Held that:- When the authority examined the issue under touch stone of Valuation Rules to come to conclusion, we do not propose to interfere with the order – Decided against the Revenue.

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• Corporate Laws

• 2012 (2) TMI 315
  Failure to pay Consideration - recovery - Purchase Order for Conveyor System - Rs 1,67,19,053 were paid out of Rs 1,90,83,443 - Agreement entered: Respondent Co. to pay balance amount petitioner to help in working of conveyor belts - Cheques dishonored - Draft Can-celled - Co.is in winding up - Held That:- Defense of respondent co. is sham. Liquidator to take over the entire assets. Respondent company, its directors, officers, employers, authorised representatives are restrained from selling, transferring, alienating, encumbering and parting with the possession of any movable and immovable assets and funds of the respondent company. They are also restrained from withdrawing any money from the accounts of the respondent company.

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• 2012 (2) TMI 312
  Whether stamp duty is payable on the transfer of properties pursuant to the sanction of any scheme of amalgamation or demerger under the Companies Act, 1956 - Held that:- Order sanctioning a scheme of amalgamation or demerger u/s 394 of the Companies Act, 1956 would amount to an instrument and conveyance within the meaning of the Stamp Act applicable in this State and is, accordingly, exigible to stamp duty. No property transferred pursuant to any scheme of amalgamation of merger or demerger in this State would be effective unless appropriate stamp duty thereon has been paid.

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• 2012 (2) TMI 291
  Companies Act 1956 - Plea filed under Rule 9 of the Companies (Court) Rules, 1959 seeking a direction to the Official Liquidator to release the land from attachment - Trust claims to have entered into an agreement to sell with company – Held that:- In present case, agreement to sell was executed with the Company under liquidation after the filing of the winding up petition against it and even the sale consideration is paid. In view of the provisions of Sections 531 and 531-A of the Companies Act, the transaction between the applicant Trust and the Company under liquidation has to be declared invalid and not enforceable. Ignorance of Trust of filing of the winding up petition will not validate the transaction in question – Decided against the applicant.

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• Service Tax

• 2012 (2) TMI 319
  Waiver of pre-deposit - Sale of Naphtha and furnace oil on high sea basis - Additional handling charges and facilitation charges liable to tax under "Business Auxiliary Services" - Held That:- These charges are to be included in assessable value therefore, they are not liable for service tax. Waiver granted.

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• 2012 (2) TMI 310
  Cenvat credit in respect of service tax paid on courier services and telephone services – Held that:- In view of decision in case of CCE vs Apar Industries Ltd (2010 - TMI - 203341 - CESTAT, Ahmedabad), Keltech Energies Ltd Vs CCE (2008 - TMI - 4051 - CESTAT Bangalore), balance of convenience lies in favour of appellants justifying full waiver of dues arising from the impugned order for admission of the appeal. There shall be stay on collection of dues arising from the impugned order during pendency of the appeal – Decided in favor of assessee.

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• 2012 (2) TMI 299
  Business auxiliary service - Section 65 (19) of the Finance Act, 1994 – marketing efforts - appellant promoted business of ICICI Bank providing the services of processing of loan application for commercial vehicle which resulted in promotion of business of the bank as well as the vehicle seller – Held that:- The nature of activity carried out falls within the ambit of Business Auxiliary Service. Further, Appellate order does not demonstrate any mala fide of the assessee to bring it to the fold of penalty u/s 76 and 78 of the Finance Act, 1994. However penalty u/s 77 is confirmed – Decided partly in favor of assessee.

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• 2012 (2) TMI 298
  Turnkey Projects - Composite Contracts - Consulting Engineering Services - first appellate authority held turnkey contract can be vivisected - allowed the appeal on merit but also on limitation – Held that:- earlier & present show cause notices demonstrates that activities of the appellant was well within the knowledge of the Department. When Revenue intended the respondents to be taxed under the category of Consulting Engineer Service , they should have issued notice forthwith. Therefore, the first Appellate order granting relief to respondent on time bar does not appear to be erroneous – Appeal dismissed.

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• Central Excise

• 2012 (2) TMI 311
  Credit on packing materials of capital goods – Revenue demanding reversal for same considering it to be clearance of waste & scrap of capital goods, relying on sub-rule (5A) of Rule 3 of Cenvat Credit Rules, 2004 - Held that:- Sub-rule (5A) of Rule 3 will apply to capital goods only. Packing material cannot be considered as capital goods even if it was used for packing capital goods. The matter is remitted to the adjudicating authority to verify whether only packing materials were cleared. If that is the case, the provisions of the said sub-rule will not apply and the appellants will not be liable for payment of any duty.

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• 2012 (2) TMI 290
  Rejection of appeal for not filing appropriate papers before Court - Exemption under Notification No.1/93 dated 28.02.2003 CESTAT allowed such exemption affirmed by High Court Revenue is in appeal - final order passed by CESTAT is not produced Held that:- In the absence of the such orders it would not be proper for us to decide between the parties and would be handicapped while appreciating the legal issues. Hence, appeal is rejected solely on the ground that the Revenue has not filed the appropriate papers before this Court.

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• 2012 (2) TMI 289
  Classification of Slagwool and Rockwool under Chapter sub-heading No.6807.10 – revenue contending it to be classified under sub- heading No.6803.00. - assessee submits that they are manufacturing `Min wool' using more than 25% of blast furnace slag by weight, right from 1993 - Held that:- Sub-heading No.6807 is specific to the goods in which more than 25% by weight, red mud, press mud or blast furnace slag is used. The heading is based entirely on material used on composition of goods. A tariff heading, based on composition of goods, is also specific heading like a heading based on commercial nomenclature. Therefore, we are of the view that the goods in issue are appropriately classifiable under Sub-heading No.6807.10 of the tariff entry. See CCE, Raipur Vs. Punj Star Insulation Fibre Co (2004 - TMI - 48995 - CESTAT, Northern Bench, New Delhi), M/s.Rockwool (India) Pvt. Ltd. Vs. CCE, Hyderabad (2005 - TMI - 54236 - CESTAT, South Zonal Bench, Bangalore) Further, in a classification dispute, an entry which is beneficial to the assessee requires to be applied and the same has been done by the adjudicating authority, which has been confirmed by the Tribunal – Decided in favor of assessee.

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• 2012 (2) TMI 288
  Non-reversal of proportionate credit on input service going into the manufacture of exempted product – slag generated during the course of manufacture of MS ingots – Revenue contended procedure under Rule 6(3A) has not been followed – reversed the credit and imposed demand & penalty – Held that:- Dispute is only about compliance with some procedure. Proportionate credit on inputs and input service going into the manufacture of exempted product stands reversed and hence a demand for 10% of the value of exempted goods is prima facie not warranted. Dues are waived – Decided in favor of assessee.

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• CST, VAT & Sales Tax

• 2012 (2) TMI 294
  Maharashtra VAT Act 2002 - Refund pending of VAT / tax paid on the inputs/purchases for the period january 11 to March 11 – assessee being manufacturer and seller of consumer durables - entitled to the benefit of the Package Scheme of Incentives, 1993 framed by the State Government – entitled to claim refund for the period 1 March 1998 to 31 March 2012 under eligibility certificate issued to it - bank guarantees furnished in August 11 for facilitating the grant of a refund - Held that:- Petitioner falls within Section 51(3)(a)(3) relating to holders of a certificate of entitlement under any Package Scheme of Incentives. In view of provisions of Section 51, department is not justified in keeping the refund application pending inordinately without explanation. The refund, if any, that is found due and payable to the Petitioner in accordance with law shall, subject to the due satisfaction of the competent authority in regard to the entitlement of the Petitioner and the validity of the bank guarantee furnished, be granted expeditiously and preferably within a period of one month from date of order - Decided in favor of petitioner.

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