Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 25, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Deduction on Payment basis u/s 43B - electricity charges to the APSEB cannot be termed as "fees" - electricity charges are in the nature of statutory liability - Deduction allowed even if unpaid - HC
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Unexplained Cash Credit – temporary loan from friends and relatives abroad for the purpose of filing immigration application for L1 visa for USA - Assessee had established the necessary ingredients - No addition - HC
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Writing off the debts which had already become bad in the hands of amalgamating company – Condition of Sec. 36(1)(vii) fulfilled - Claim of bad debts allowed - Sec. 72A has no application - HC
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Deduction u/s 80IA - AO directed to compute the profits u/s 80IA(5) if such eligible business is the only sources of income and only the losses of the years beginning from the initial AY are to be brought forward and not losses of earlier years which have been already set off against the income - AT
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Addition u/s 41(1) – Revenue's case is that there was no genuine trading liability incurred by the assessee. Question of remission or cessation thereof would not arise - No addition - HC
Customs
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Recovery during the operation of stay order - Claim of appellant for refund of the excess amount has to be allowed not only as a relief to the appellant but also as a lesson for the department - AT
Central Excise
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Exemption - goods manufactured at site of construction for use in construction work at such site - construction of flyover / tunnel / viaduct - stay granted - AT
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CVD - Cenvat Credit - Endorsed Bills of Entry - duty has been paid by the Bellary Unit but they have not taken credit which fact has been verified by the adjudicating authority - Stay granted - AT
Case Laws:
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Income Tax
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2013 (2) TMI 533
Reopening of Assessment – As per AO calculation of deduction under section 80HHC, is not as per the definition of “indirect cost” given in Explanation (d) to sub-section (3) of section 80HHC - Assessee firm has claimed excess deduction which has resulted to that extent in escapement of income – As per assessee assessment/intimation passed under section 143(1)(a) has become final and therefore, the reopening is bad in law because it was done merely on the basis of a change of opinion – Held that:- Main provision of section 147 covers the case of the intimation for the purposes of reassessment. Thus if the AO has ‘reason to believe’ that income had escaped assessment, it confers jurisdiction to reopen the assessment. So long as ingredients are fulfilled, the officer is free to initiate proceedings under section 147 of the Act. In the case of Asst.CIT Vs. Rajesh Jhaveri Stock Brokers P.Ltd [2007 (5) TMI 197 - SUPREME COURT] it was pointed out that expression “reason to believe” in section 147 would mean cause or justification. If the AO has cause or justification to know or suppose that income had escaped assessment, it could be said to have reason to believe that income had escaped assessment - Further case of an intimation under section 143(1)(a) is also covered by the main provision of section 147 as substituted with effect from 1.4.1989 - Grant of relief u/s.80HHC of the Act in deducting the indirect cost was contrary to the provisions therein, under Explanation (b) to sub-section (3), the AO took steps to reopen the assessment u/s.147 of the Act – Case was referred back to CIT(A) to decide after considering the above mentioned decision - Appeals partly allowed for statistical purposes.
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2013 (2) TMI 532
Interest free Loans and Advances – Whether interest expenditure being relatable to interest free advances made out of interest bearing funds should be allowed or not –Assessee had shown loans and advances to the tune of Rs.6,24,61,649 – Assessee was paying interest on the loans received by it, but no interest was charged on the aforesaid advances – Held that:- Section 36(1)(iii) of the Income Tax Act, 1961, provides for deductions of interest on loans raised for business purposes. Once the assessee claims any such deduction in the books of account, the onus will be on the assessee to satisfy the Assessing Officer that whatever loans were raised by the assessee were used by business purposes. If in the process of examination of genuineness of such a deduction, it transpires that the assessee had advanced certain funds to sister concerns or any other person without any interest, there would be a very heavy onus on the assessee to discharge before the AO to the effect that in spite of pending term loans and working capital loans on which the assessee is incurring liability to pay interest. Once it is borne out from the record that the assessee had borrowed certain funds on which liability to pay tax is being incurred and on the other hand, certain amounts had been advanced to sister concerns or others without carrying any interest and without any business purpose, the interest to the extent the advance had been made without carrying any interest is to be disallowed under section 36(1)(iii) of the Act. Even where the interest free advances were made in the earlier years and the assessee incurs the liability of interest expenditure on secured loans in the later years – Interest relatable to such interest free advances is to be disallowed. The first advance is on account of amount outstanding under the head “M/s Rassini” totaling Rs.31,86,478 – Explanation of the assessee was that it was proposing to enter into a joint venture with M/s Rassini – certain expenditure incurred by its employees/Directors during the financial years 2000-01 to 2004-05 was not booked under the Profit & Loss Account but was booked under the head “Rassini” – And was reflected under “Loans & Advances” on the asset side of the balance sheet – Assessee had furnished an application under Rule 29 of the Tribunal Rules alongwith additional evidence i.e. correspondence between the assessee and M/s Rassini during the period 2001 to 2004 to establish its claim of proposal and entering into a joint venture agreement – This issue was restored back to AO to re-decide taking into consideration the additional evidence sought to be furnished by the assessee before us under Rule 29 of the Tribunal Rules – The issue is thus set aside to the file of the AO for statistical purposes. In respect of the advances due from different parties - were made interest free - The assessee has failed to file any evidence to prove the business expediency in respect of the said advances - The assessee has failed to controvert the findings of the CIT (Appeals) - Interest relatable to the advances made to M/s A.Nitin & Co. held to be disallowable. In respect of M/s Associated Capital Market, there was a transfer entry to the said account - Transaction could not be established by the assessee being for the purpose of business - The interest on such advances is to be disallowed under section 36(1)(iii) of the Act. Explanation of the assessee that it had advanced Rs.3,56,838/- to Fatu S/o Imamuddin for purchase of factory land could not be established by the assessee – In the absence of any evidence the interest on the said advances disallowed. Advances due from different parties - It were made interest free - Assessee failed to file any evidence to prove the business expediency in respect of the these advances – Therefore Disallowed. Advances of to M/s Bliss Holding Pvt.Ltd.,to M/s Penwell Ltd. and to M/s Novika Investment and Trading Co.Ltd. - It were on account of interest overcharged - Necessary certificates were furnished in this regard - where the interest was excess charged by the assessee and the amount was shown as receivable from the said parties and the same did not relate to the principal loan advanced to the parties - No disallowance is warranted out of such outstanding amounts. Appeal of the assessee partly allowed and the appeal of the Revenue dismissed
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2013 (2) TMI 531
Assessee company is engaged in the business of generation of electricity through windmills - claimed deduction under section 80IA - disallowed in a reassessment proceedings undertaken under section 147 - This claim was accepted in the order passed under section 143(1) on 24.02.1998 - later on 10th November 2003, through notice under section 148 reassessment proceedings were initiated and the reassessment was completed on 29.10.2004 – Grievance of the assessee company is against this increase of tax demand resulting from charging of interest under section 220(2) of the Act on the tax demand – The grievance of the assessee is based on the premise that when the tax demand got vacated as a result of order dated 27th February, 2006 passed by the Assessing Officer to give effect to the order of the Commissioner of Income Tax(Appeals) dated 30.01.2006, no such interest could be charged because interest under section 220(2) is not chargeable when there is neither existing demand nor any default attributable to assessee. Held that:- On this ticklish issue, there are decision in the cases of Seshasayee Paper & Boards Ltd. Vs.CIT [2002 (9) TMI 59 - MADRAS HIGH COURT ] as well as the latest decision of Hon’ble Delhi High Court in the case of Girnar Investment Ltd. Vs. CIT[2012 (1) TMI 10 - DELHI HIGH COURT ] dated 5th January, 2012 . Issue remanded back to the CIT(A) so that he can also consider the decision of Girnar Investment Ltd (supra) recently rendered by the Delhi High Court - and has to pass a speaking order as to which decision actually applicable to the facts of the case and why - Accordingly, on this issue he has to pass a reasoned order which speaks about the application of the case laws - Accordingly, all the appeals are allowed both of assessee as well as Revenue for statistical purposes
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2013 (2) TMI 530
Deduction on Payment basis – Unpaid electricity charges - Assessee has debited to the profit and loss account a sum of Rs. 1,67,10,388 towards "power consumed" – It was a demand from Andhra Pradesh Electricity Board - Assessee had paid only a sum of Rs. 1,14,86,598 and the remaining amount of Rs. 52,23,790 was not paid either during the relevant previous year or on or before the time provided under section 139(1) - Held that:- Section 43B of the Act does not speak about the electricity charges - The proviso to the section says that an assessee has to pay the actual liability on or before the due date applicable in his case for furnishing the return of income - Nowhere it is mentioned in the section or proviso to it that unpaid electricity charges are not deductible. Assessee challenging the balance electricity charges of Rs. 52,23,790 filed a writ petition before this court against the APSEB and this court granted interim stay and the writ petition is pending - As such, the assessee has shown the said amount as liability - Provisions of section 43B of the Act would not attract to such unpaid electricity charges. Further, non-payment of such disputed electricity charges to the APSEB cannot be termed as "fees" and that the Revenue has to give deduction to the said amount - such electricity charges are in the nature of statutory liability - Revenue has to allow them as deduction irrespective of whether or not the same has been paid and notwithstanding that the assessee has disputed any liability to pay any part of such charges - Against the Revenue
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2013 (2) TMI 529
Undervaluation of Closing Stock – Assessee is an authorized dealer of Hero Honda Motors Ltd. at Patiala – AO found that the assessee was maintaining quantitative tally of vehicles but no stock register was maintained in respect of spare parts - AO was of the view that the assessee had undervalued its stock – Held that:- various models of the motor cycles were differently priced and there was no merit in adopting an average cost for the different models of motor cycles - Further pointed out that the valuation of the closing stock is made after including the incidental cost i.e. freight and insurance, CST etc. Some of the supporting bills for the valuation of stock of spare parts are placed at pages 85 to 90 of the paper book – The valuation worked out by the assessee is further backed by the bills maintained by the assessee - there is no merit in the addition of Rs. 5,04,235/- as no defect in the working of closing stock – In favour of assessee. Addition of purchases of stationery & printed material - Addition of Rs.1,00,000/- out of purchases of stationery & printed material in Mohali Branch - No value of stock was left at the end of the year. – Held that:- Having regard to the entirety of the facts and circumstances of the case, disallowance of Rs.50,000/- is fair and reasonable - Appeal of the assessee is partly allowed. Rent paid for guest-house – Firm is maintaining a guest house at Mohali for the stay of officer of Maruti Udyog Ltd. and has paid rent – Held that:- Having regard to the fact situation of the case and the evidences filed by the assessee, not found any justification in the addition made - In favour of ssessee. Addition on the ground of personal element – Assessee had shown Staff Tea Expenses at Rs.3,59,739/-, House Keeping Expenses at Rs.1,52,117/- and General Expenses at Rs.13,44,597/- AO made disallowance on account of personal use by the assessee – Held that;- The addition made by the AO, on the ground of personal element in use of such services by the partners and in view of un-vouched expenses, cannot be brushed aside. However, keeping in view the factum of reasonableness of such expenses, the addition made by the isconfirmed to the extent of Rs.80,000 - Assessee gets partial relief.
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2013 (2) TMI 528
Addition on account of net profit - assessing officer made an addition towards net profit on the ground that there was lower rate of net profit compared to the preceding year – Held that:- This addition is made on ad hoc basis – AO was directed to complete the assessment after examining the books of accounts of the assessee and the disallowance if any to be made, that is to be specific and not on ad hoc basis. Disallowance of depreciation in computers on the addition - In the interest of justice, AO was directed to give an opportunity to the assessee to prove its case by producing valid bills and usage of said computers in its business – AO was directed to verify all purchase bills and using of computers in assessee’s business and decide the issue in accordance with law. Addition of Rs.221.10 crores being fixed deposits made by the assessee - According to the assessee 237.04 crores received from M/s. Cargill International Trading Pvt. Limited, Singapore through State Bank of India, Overseas Branch and he has not been given proper opportunity to explain the same – Held that:- Request of the assessee was acceded remitted this issue back to the file of the assessing officer for fresh consideration to decide the same in accordance with law after affording an opportunity of being heard to the assessee. Addition on account of share capital - There was an addition of Rs.1,04,70,000/- towards share Capital - share capital said to have been received from some parties –Held that:- Issue was set aside to the file of AO with a direction to to the assessee prove the identity, creditworthiness and genuineness of the transaction by filing necessary information from the investors to the satisfaction of the assessing officer. Enhancement of the amount - on account of difference between the receipt of funds from Cargill, Singapore and the deposits made in the SBI , Overseas Branch - Since this issue has been set aside in related issue raised in this appeal to the file of the assessing officer for fresh consideration in accordance with law, this issue also should go back to the file of the assessing officer for fresh consideration in accordance with law - appeal filed by the assessee is treated as allowed for statistical purposes.
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2013 (2) TMI 527
Unexplained Cash Credit – AO found that the amount was credited in the account of assessee - Assessee contended that he had taken temporary loan from friends and relatives abroad for the purpose of filing immigration application for L1 visa for USA – Held that:- Confirmation of the cash credits of eight persons were submitted - As per e-mail under question, the appellant's son Shri Janak Patel informed his father about collection of US $ 67260 from the different persons who have credited the same in his bank account at USA - The assessing officer has also admitted that the confirmations letters were filed before him on 29.10.2003 but the same were not accepted by him due the reasons that they were not notarized – However, at the remand report stage, the assessing officer has accepted that later on notarized confirmations were received by him from the appellant. Since the notarized confirmations have been received by the assessing officer as required by him and as he has not given any adverse comments on the same in the remand report, the same is acceptable. AO was directed to accept the credits as stated in notarized confirmation letters, after proper verification of the same from the bank statements - Assessee had established the necessary ingredients for the cash credit received and notably before the CIT(Appeals) the assessee had produced notarized confirmation which was also sent to the Assessing Officer and remand report was called for – Assessee's case was found acceptable – Against the revenue.
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2013 (2) TMI 526
Writing off the debts which had already become bad in the hands of amalgamating company – Mulberry Investment & Trading Co. Ltd. has merged with the assessee-company whether the assessee company would have been entitled to claim the bad debts – Held that:- In the case of CIT vs. Veerabhadra Rao, K. Koteshwara Rao & Co.[ 1985 (7) TMI 2 - SUPREME COURT] it has been held that if a business, along with its assets and liabilities, is transferred by one owner to another, a debt so transferred would be entitled to the same treatment in the hands of the successor. . If the law permits the transfer to treat the whole or part of the debt as irrecoverable and to claim deduction on that account, the same right should be recognized in the transferee. It is merely an incident flowing from the transfer of the business, together with its assets and liabilities, from the previous owner to the transferee. It is implied in the transfer of a business be regarded as belonging to the new owner. Assessee becomes the owner of the assets and liabilities of the subsidiary company, i.e. Mulberry Investments & Trading Co. Ltd. and accordingly the ratio of the judgment of the Honble Supreme Court referred to above would be applicable and the assessee is entitled to write off the principal amount and arrears of interest as irrecoverable – Against the revenue. Further assessee has fulfilled all the conditions laid down in section 36(1)(vii) the bad debts where written off in the books of accounts the assessee is not trying to set off carry forward loss or unabsorbed depreciation and, therefore, section 72A has no application - Against the revenue.
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2013 (2) TMI 525
Deduction u/s 80IA - Initial Assessment Year - Assessee runs a spinning mill and has installed three wind mills first in A/Y 2003-04, second in A/Y 2005- 06 and the third in A/Y 2006-07 – A/Y 2007-08 was opted as initial Assessment Year for the purpose of claiming deduction u/s 80IA - Initially the loss from windmills was set off against profit of spinning mill division - Deduction u/s 80IA was not claimed during those years when it resulted in loss – As per AO the initial year should be taken as the year of commencement of business. Held that:- Respectfully, following the decision of the Hon'ble Jurisdictional High Court in the case of M/s Sri Velayudhasamy Spinning Mills [P] Ltd[2010 (3) TMI 860 - MADRAS HIGH COURT] the AO is directed to compute the profits u/s 80IA(5) of the Act as if such eligible business is the only sources of income of the assessee and only the losses of the years beginning from the initial Assessment Year are to be brought forward and not losses of earlier years which have been already set off against the income of the assessee. - Appeal of the Revenue is dismissed – Against the revenue.
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2013 (2) TMI 524
Re-opening of assessment u/s.147 – Reassessment of assessment previously framed after scrutiny - Entire issue of deduction under Section 80I was examined threadbare by the AO while framing original assessment – Issue is that such reopening is permissible or not – Held that:- Issues on which the reopening has been done are not touched upon in the original proceedings. In the original proceedings only the prior period expenses were considered and adjusted. Therefore there cannot be case of change of opinion as to whether head office expenses were properly and reasonably allocated to Baroda Unit or not. Explanation 2 of Section 147, as amended with effect from 01-04-1989, provides that if allowances under this act have been computed excessively, then it will be the case of deemed escapement assessment - Assessee for A.Y.1992-93 has escaped assessment, therefore notice u/s.148 is issued for re-assessment of income of the assessee – From the perusal of the records, reopening was valid reopening within 4 years - Since it is not a case of change of opinion and deduction under section 80I has not been correctly computed - Reopening of the assessment is justified– Appeal filed by the assessee dismissed - Against the assessee.
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2013 (2) TMI 523
Addition u/s 41(1) – In A/Y 2002-03, assessee has shown creditors of Rs.52.53 lakhs which included number of creditors brought forward from earlier years and were shown as outstanding even in later returns furnished by the assessee including the year 2004-2005 - Assessee furnished to the AO only list of creditors without their addresses and PAN numbers – As per AO these creditors were not genuine and invoked Section 41(1) – Held that:- As decided in Sugauli Sugar Works(P) Ltd.[ 1999 (2) TMI 5 - SUPREME COURT ] unless there is a cessation of liability or there is a remission of liability by the creditor, the liability subsists and, therefore, even if the entries are made to write back the expenditure, the amount so written back cannot be added in the income of the assessee as per the provision of section 41(1) of the Act - Assessee has not obtained any benefit either by way of remission or cessation of any liability while the aforesaid liabilities are continually admitted by the assessee in their balance sheet. Further section 41(1) of the Act would naturally not apply. Section 41(1) applies in a case where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee and subsequently, during any previous year he has obtained whether in cash or in any other manner any amount in respect of such loss or expenditure or trading liability by way of remission or cessation thereof, the amount obtained. In the present case, Revenue's case is that there was no genuine trading liability incurred by the assessee. Question of remission or cessation thereof would not arise – Against the revenue.
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Customs
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2013 (2) TMI 522
Recovery by enforcing Bank Guarantee furnished for provisional release of the subject goods - assessee contested to be have taken stay - Held that:- Claim of appellant for refund of the excess amount has to be allowed not only as a relief to the appellant but also as a lesson for the department to be circumspect in similar situations without precipitating unsavoury controversies as the department was aware of the stay order passed by this Bench as early as on 12.7.2012 - refund within two weeks from the date of receipt of a certified copy of this order. The miscellaneous application stands allowed to this extent.
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Corporate Laws
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2013 (2) TMI 521
Penalties imposed under section 15HA of SEBI Act, 1992 - violation of regulations 3 and 4 of the SEBI(Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 - the appellants while trading through B P Equities Pvt. Ltd., was trading ahead of the trades of CGMMPL and had prior information of the order details of CGMMPL and had sold shares prior to the selling of the shares of CGMMPL subsequently earning profits - Held that:- Cannot agree with the submissions of the appellant that the impugned transactions were in the nature of ordinary market operations. Thus no hesitation in holding that the alleged transactions of the appellant are in the nature of "front running". The appellants in the present case are traders and not intermediaries. So, following decision in the case of Dipak Patel (2013 (2) TMI 464 - SECURITIES APPELLATE TRIBUNAL, MUMBAI), it is hold that the appellant cannot be held guilty of violating the provisions of regulations 3 and 4 of the FUTP Regulations as that the provisions of regulation 3 are wide in their sweep and application. However, the fact remains that regulation 4(2)(q) of the FUTP Regulations has made a specific provision in respect of manipulative, fraudulent and unfair trade practices indulged in by an intermediary. When a specific provision is available in respect of violation of the regulations it is necessary to apply the specific regulation & the general provisions contained in regulation 3 of the FUTP Regulations cannot be applied to the facts of the case since it is squarely covered by specific provision contained in regulation 4(2)(q) of the FUTP Regulations. There is no specific provision in the Act, rules or regulations prohibiting front running by a person other than an intermediary. Since the appellants are not intermediaries they cannot be held to have violated the provisions of regulations 3 and 4 by indulging in front running. Set aside the impugned order of the adjudicating officer and allow the appeal with no order as to costs.
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Service Tax
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2013 (2) TMI 538
Utilizing Cenvat credit for discharge of service tax liability on GTA services - Held that:- As decided in COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH Versus M/s NAHAR INDUSTRIAL ENTERPRISES LTD and Others [2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT] there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services, hence, the assessee were well within their right to utilize the Cenvat credit for the purpose of payment of service tax and has not to be necessarily in cash - in favour of assessee.
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2013 (2) TMI 537
Service tax on commission received from the Govt. of Indiafor collecting and making payments towards Employees Provident Fund and Employees State Insurance - appellant M/s. State Bank of India is providing taxable services falling under the category of Banking and Other Financial Services and registered with the department - Held that:- Since the assessee, State Bank of India has discharged the service tax liability before the issuance of show cause notice and there being a claim that the records are lost in flood in the year 2005, the certificate produced issued by the Chief Manager, Main Branch, Surat, which indicate discharge of service tax liability from September 2004 to July 2005 is to be correct as on date. Since the appellant, State Bank of India has already discharged the service tax liability such service tax liability need not have been paid by them as per the decision given by this Bench in the case of Canara Bank (2012 (6) TMI 274 - CESTAT, AHMEDABAD) - no reason for visiting the appellant with penalty that has been imposed by the lower authorities. Accordingly, the assessee's appeal for setting aside the penalties imposed by the lower authorities is allowed and Revenue's appeal for imposing penalty under Section 76is rejected.
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2013 (2) TMI 536
Stall charges and Event conducted abroad – Whether Stall charges and Event conducted abroad is liable to service Tax – Appellant are providing services of event management, Busjiness Exhibition and sale of space – It was noticed that there is Short payment of ST, due to non-payment of service tax on Stall charges, events conducted abroad. – Held that:- appellant is not liable to pay service tax on the services rendered for conducting events at Srilanka, as it is export of services and is exempted from levy of Service tax – Appeal allowed – In favour of assessee. Second issue is whether demand is hit by limitation of time - Ground on which the proviso to extended period of time was invoked is that the appellant had not disclosed the disputed activities in ST 3 forms or in any other manner to the Department. The appellant had submitted a copy of letter dated 23-9-2004 addressed to the Jurisdictional Deputy Commissioner duly acknowledged by the Jurisdictional Superintendent of STC wherein they had informed their activities to the Department. So the allegation that the disputed activities were not disclosed to the department fails.There is no suppression of facts in the present case with an intention to evade payment of Service tax and the proviso to extended period of limitation of time cannot be invoked in the present case. Therefore demand raised by the Department for the period 2003 to October 2007 vide SCN dated 16-10-2008 is barred by limitation – Appeal allowed – In favour of assessee.
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2013 (2) TMI 535
Cargo Handling Service – Whether the activity of transshipment of household articles is classifiable under ‘Cargo handling service’ – Assessee is engaged in transshipment of household articles and are registered under the category GTA – It was noticed by the department that the assessee is rendering the service of transshipment of household goods and they had not registered under Service tax and had not paid Service tax for such services – Held that:- Handling of bulk cargo or goods would alone fall under Cargo Handling Services. Transportation of household articles will not be equated with the cargo or goods handling. The name ‘cargo’ itself suggests that it is relating to handling of cargo in bulk. The name ‘goods’ would suggest that it relates to the same goods/items in commercial quantity. Whereas the household articles consists of various used items which cannot be equated with bulk cargo or goods and hence cannot be brought under Cargo Handling Service – In favour of assessee. Assessee had applied for Centralized registration for various services and that the Department had also issued the same, there cannot be suppression of fact on the part of the appellant with an intention to evade payment of Service Tax – Show Cause Notice was issued after issuing Centralized Registration therefore proviso to the extended period of limitation of time cannot be invoked – In favour of assessee.
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Central Excise
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2013 (2) TMI 520
Waiver of pre-deposit - Stay of recovery - Notification No.1/2011-C.E(N.T) dated 17.2.2011 - section 3 of the Central Excise Act, 1944 - Exemption from payment of duty of excise on "goods manufactured at site of construction for use in construction work at such site" - Pre-stressed concrete girders/kerbs manufactured by the assessee - brought to a construction site - used in the construction of a flyover - Section 11 C of the Central Excise Act - Held that:- The structural components were manufactured by the assessee at sites proximate to the construction site, brought to the construction site and used in the construction of flyover/tunnel/viaduct. If the benefit of the notification is available to those assessees, the same cannot be denied to the appellant-company. stay applications also stand disposed of - Appeal decides in favour of assessee
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2013 (2) TMI 519
Clearance of goods by 100% EOU to DTA - Notification No.23/2003-CE dated 31.3.2003 - Imported paraffin wax use in the manufacture of pesticides - Whether paraffin wax is raw material or consumable - With reference to the manufacturing process and the final product that is emerging - Held that:- The paraffin wax was forming part of the final product hence which was not in agreement with the argument of applicant. Therefore, direct the applicants to make pre-deposit 20% of the duty demand. - applicants to make pre-deposit 20% of the duty demand.
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2013 (2) TMI 518
CVD credit - Denial of Cenvat Credit on the strength of the Endorsed Bills of Entry - Differential value of the commercial invoice and value appearing in the Bills of Entry - Unit of the assessee is situated at Bellary imported M.S scrap - Later on it was decided to send it to Salem unit of the assessee - The goods were sent to assessee's factory, The Bills of Entry were endorsed in the names of the assessee - The assessee took the credit of CVD paid by them as Cenvat credit - Held that:- Assessee are entitled for credit of the duty paid by them. Though, in this case duty has been paid by the Bellary Unit, they have not taken credit which fact has been verified by the adjudicating authority. Therefore, the applicants are entitled to take credit on the strength of the duty paid documents of 9 Bills of Entry. In view of this observation we find the applicants have made out a case for 100% waiver. Waiver allowed
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2013 (2) TMI 517
Stay of Operation of the Order - Procure raw materials duty free - Removal of goods at concessional rate of duty for manufacture of excisable goods Rules, 2001 - Such materials could be used as inputs in the manufacture of tower parts to be cleared under exemption - Notification No.108/95-C.E. dated 28.8.1995 - Held that:- The materials sought to be procured by the assessee were not specified under any exemption notification and such materials could not have been procured by following the procedure laid down under the aforesaid Rules. Therefore order is ex facie illegal, its operation has to be stayed lest the respondent should take undue benefit on the strength of the impugned order. Stay of operation of the order granted. In favour of revenue
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2013 (2) TMI 516
Waiver of penalty - Stay petition - Period of limitation - Delay of 53 days in filing of appeal - Section 35 of the Central Excise Act - Commissioner (Appeals) noted this legal position and held the assessee's appeal to be time-barred However, he proceeded to consider the appeal on merits - Held that:- The assessee's appeal against the order-in-original was delayed by more than 30 days. The Commissioner (Appeals) does not have the power to condone such delay, a legal position well settled in the case of SINGH ENTERPRISES (2007 (12) TMI 11 - SUPREME COURT OF INDIA). Commissioner (Appeals), even after holding the assessee's appeal to be time-barred, chose to address the merits of the case was without jurisdiction. A time-barred appeal could only be rejected on that ground by the Commissioner (Appeals) where the delay was found to be beyond the condonable period of delay. Stay petition rejected
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2013 (2) TMI 515
Waiver of pre-deposit - Stay of recovery - DTA clearances of the EOU - Interest on duty u/s 11AB - Penalty u/s 11AC – Penalty under Rule 25 - Penalties on the Managing Director and another Director – Penalty under Rule 26 - Appellate authority dismissed the appeals on the ground of non-compliance with Section 35 F – Held that:- On the basis of decision in earlier case the total amount of duty demanded from the assessee is Rs. 29,32,036/-, towards which an amount of Rs.11,79,922/- paid by them stands appropriated. The Commissioner (Appeals) only required them to pre-deposit an amount of Rs 3.75 lakhs, which they did not deposit. Had they deposited this amount, their total payments would have amounted to a little over 50% of the demand only. Following our stay order dated 30/11/2011 ibid, we therefore direct the company to pre-deposit the above amount of Rs.3.75 lakhs and pre-deposit should be waived in respect of the Managing Director and Director of the Company.
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CST, VAT & Sales Tax
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2013 (2) TMI 539
Writ of Mandamus - forbearing the respondents, their men, officers & subordinates from insisting upon the production of transit pass for moving the goods manufactured by the petitioner viz., Polyol, which is a chemical in liquid form - Held that:- Whether Polyol sold interstate will be entitled to be detained as goods falling under the Sixth Schedule requiring a transit pass or goods falling under the First Schedule, Part-B, Serial No.1 is a matter to be decided by competent authority, namely, by the first respondent Commissioner of Commercial Taxes and give proper direction to the authorities as to how they should proceed in the matter. The court at this stage is not inclined to go into the factual issue except to direct the first respondent Commissioner to consider the said plea made by the petitioner and pass appropriate order or direction as may be required either accepting the petitioner's version or rejecting the same. Petitioner is at liberty to challenge any such order that may be passed by the first respondent if still aggrieved.
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Indian Laws
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2013 (2) TMI 534
Section 4 of the Competition Act, 2002 - abuse of dominant position - Informant claimed to be a businessman who booked a commercial office space with DLF [opposite party] under Commercial Office Space Buyer's Agreement including completion and possession of the complex within 36 months from the date of execution of the agreement but no sign of construction as against promises made by opposite party found when informant visited the site - Informant charged OP with alleging contravention of section 4 abusing its dominant position by making him sign one-sided agreement and delaying project - Held that:- The relevant market proposed by the informant, namely 'real estate developer in Delhi and Gurgaon', seems incorrect. Though the OP may have a PAN India presence but the geographic conditions prevailing in different parts of the country require determination of relevant geographic market in context of that area.Gurgaon and Delhi are different relevant geographic markets for the purposes of case at hand. Gurgaon developed in last few years in a major way and various big projects were started by the OP Group in that area. However, in Delhi, opposite party is just one of the real estate developers. here were many other real estate developers in Delhi who offered similar commercial/office space. The informant in the present case was desirous of booking an office space. Therefore, the relevant market in the present case will be market for 'development of commercial/office space in the region of Delhi'. Section 19(4) of the Act states that the Commission needs to consider various factors stated under that section while assessing whether an enterprise enjoys a dominant position or not and as per the information available in public domain, it is clear that the OP was not the only real estate developer offering commercial office space in Delhi. There are other real estate developers as well, e.g., Ansal API, Unitech, BPTP, Omaxe, Parsavnath etc. Presence of other real estate developers offering commercial office space also indicates that the informant was not dependent upon the opposite party for provisioning of an office space. None of the factors stated under section 19(4) of the Act seem to support informant's plea of dominance of opposite party. Therefore, the opposite party does not appear to be dominant in the relevant market of 'development of commercial/office space in the region of Delhi Thus plea regarding abuse of dominance in instant case rejected a as the OP was not dominant in the relevant market determined by the Commission - there does not exist a prima facie case under section 4 to order DG investigation as allegations related to unfair trade practices, deficiency in services etc. may be pleaded at other appropriate forums, if the informant so desires, the same being not within the ambit and jurisdiction of the Commission - Commission deems it fit to close the proceedings in the instant case under section 26(2).
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