Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 25, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Highlights / Catch Notes
Income Tax
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The amounts which were paid by the assessee for the purpose of purchase of its shares, to its shareholder for subsequent cancellation was an expenditure incurred only to enable smooth running of the business - held as revenue expenditure - HC
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Lifting of the corporate veil - Liability of directors - competent officer to formulate the ground and thereafter, to give a notice for treating the company as private limited company by lifting of the corporate veil and thereafter, to take steps, if any, available u/s 179 - HC
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Deduction in respect of lorry charges paid in cash exceeding ₹ 20,000 under section 40A(3) denied - If the assessee has to claim exemption under section 40A(3), necessarily he has to comply with the statutory provision and the rules framed thereunder - HC
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Liability to pay TDS on freight charges - disallowance u/s 40(a)(ia) - The intention of the assessee was wrong - Tribunal did not err with reference to disallowance under section 40(a)(ia) - HC
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Violation of the principles of natural justice - AO showed undue hurry in concluding the assessment proceedings, even though the time limit for completing the same was available till March 31, 2014 - Matter remanded back - HC
Customs
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Refund rejected - even if more than one claim in a month is filed the same can not be denied only because of the reason that circular prescribed only one refund claim in a month otherwise statutory time limit of one year provided in the notification will become redundant. - AT
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Confiscation of Hydrogenated Vegetable oil - Non compliance with the provisions of Prevention of Food Adulteration Act, 1954 - prohibited goods - Confiscation upheld but redemption fine reduced - AT
Corporate Law
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Admissibility of Winding up application - Non payment to bond holder on maturity - Interest of public - it would not be in the fitness of things to admit the petition for winding up against the respondent-company - HC
Indian Laws
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Cheque dishonoured - Section 138 of the Negotiable Instrument Act - complainant had no source of income to lend a sum of ₹ 14 lakhs to the accused and he failed to prove that there is legally recoverable debt payable by the accused to him. - SC
Central Excise
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Goods manufactured before the cut of date - entry in RG-1 register as proof - once the stock, as declared in the register, has been verified and accepted, then, the Revenue could not have subsequently argued to the contrary. - HC
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Cutting of carpet rolls into smaller sizes and subjecting such cut sizes to a process of stitching linings at the edges would not amount to manufacture nor result in emergence of a distinct independent commodity - Not exigible - Section 2(f) of the Central Excise Act, 1944 - AT
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CENVAT Credit taken on differential duty paid based on supplementary invoice - admittedly the assessment at the end of principal manufacturer was provisional and was finalized by a final assessment later - there is no malafide intention - credit allowed - AT
VAT
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Refund of amount deposited as the Entry Tax - the petitioner was not liable to pay any Entry Tax on Carbon Black Feed Stock (CBFS) - refund allowed with 12% interest - HC
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Denial of refund claim - Excess tax paid - Section 40 of UP VAT - the contention of the revenue that since no order of refund was passed by the appellate authority, the respondents were not obliged to refund the amount is not correct - refund of excess amount paid allowed - HC
Case Laws:
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Income Tax
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2015 (2) TMI 890
Disallowance u/s 40(a)(ia) - due date for the subject assessment year was 15/11/2007 and the latest TDS was remitted on 24/10/2007 - whether the case of the assessee was covered by the amended provisions of section 40(a)(ia), which have a retrospective effect? - Held that:- As held in the case of CIT vs. Rajinder Kumar [2013 (7) TMI 454 - DELHI HIGH COURT] the impugned amendment to section 40(a)(ia) permits remittance of TDS to the Central Government account on or before the due date of filing return of income u/s. 139(1) of the Act is retrospective in nature. Same view has been taken by the jurisdictional High Court in the case of CIT vs. PEC Electricals Pvt. Ltd., [2015 (2) TMI 889 - ANDHRA PRADESH HIGH COURT]. The assessee in present case paid the TDS to the Central Government account before filing the return of income and the same is to be allowed as held by the above judgements. No infirmity in the action of the CIT(A) in directing the Assessing Officer to delete the addition made u/s 40(a)(ia) - Decided in favour of assessee.
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2015 (2) TMI 889
Addition u/s 68 - Tribunal deleted the addition - Held that:- Tribunal has decided this point on fact that the company received the amount of capital from the Managing Director.Hence, the addition cannot be made on account of the company. This decision has been rendered on factual finding. No reason to interfere with the same, as no element of law is involved. - Decided in favour of assessee Disallowance made u/s. 40(a)(ia) - Tribunal deleted the disallowance - Held that:- Tribunal by following the decision of the Kolkata High Court in CIT vs. Virgin Creations (2011 (11) TMI 348 - CALCUTTA HIGH COURT ), wherein it has been held that the amendment to the provisions of Section 40(a)(ia) is retrospective in operation and consequently in respect of any payment of TDS made before the due date for the filing of the return of income, the provisions of Section 40(a)(ia) cannot be invoked. No reason to interfere. - Decided in favour of assessee
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2015 (2) TMI 864
Period of limitation to submit/prefer the rectification application u/s 254(2) - what will be the date of commencement of the period of limitation of four years as provided under section 254(2) of the Income-tax Act ? - whether period would commence from the judgment and order passed by the Tribunal, which is sought to be reviewed or the date on which the petitioner-assessee actually received the judgment and order passed by the Tribunal, which is sought to be reviewed/rectified ? - Held that:- In the present case, the Tribunal passed the judgment and order on February 20, 2007, which is sought to be rectified, which has been admittedly received by the assessee on November 19, 2008. The petitioner- assessee preferred the application on May 9, 2012, i.e., after a period of three years, six months and twenty days from the date of receipt of the judgment and order passed by the Tribunal dated February 20, 2007, however, beyond the period of four years from the actual date of the judgment and order passed by the Tribunal, i.e., February 20, 2007. Income-tax Appellate Tribunal has committed a grave error in dismissing the rectification application on the ground that the same is barred by limitation. From the date of receipt of the impugned judgment and order passed by the Tribunal, which is sought to be reviewed, it can be seen that the rectification application has been submitted within the period of four years from the date of actual receipt of the judgment and order and, therefore, it is to be held that the same is within the period of limitation as per section 254(2) of the Income-tax Act. Under the circumstances, the impugned order passed by the Income-tax Appellate Tribunal cannot be sustained.Tribunal was within the period of limitation as provided under section 254(2) of the Income-tax Act and the matter is now remanded to the Income-tax Appellate Tribunal to decide the rectification application/ miscellaneous application submitted by the petitioner-assessee in accordance with law and on its own merits. - Decided in favour of assessee.
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2015 (2) TMI 863
Development agreement - whether capital gains can be said to have arisen in the subject assessment year to the extent of the value of 18,000 sq.feet of constructed area to be provided by the developer even though the same was not provided for? - Held that:- The income accrued and earned under the subsequent agreement dated 6.7.2002 was offered as capital gains in the subsequent years. Therefore, on the application of the real income theory, the Tribunal held that on these facts there would be neither accrual nor receipt of income to warrant bringing to tax to the constructed area of 18,000 sq.ft which has not been received by the respondent-assessee. No occasion to tax the same can arise. The Tribunal on consideration of facts has reached a finding of fact that no income in respect of 18000 sq.ft of constructed area has been accrued or received. This finding cannot be said to be perverse or arbitrary. - Decided in favour of assessee. Purchase and subsequent cancellation of the shares belonging to an estranged brother of the person in the management of the company - whether is in the nature of revenue expenditure or not? - Held that:- Tribunal records a finding of fact that in view of the dispute between the two warring groups of shareholders the business of respondent assessee had suffered. It records that the total sales of the respondent-assessee which was in the range of ₹ 20 to 25 crores per annaum during the predispute period had come down to around ₹ 9 crores in the financial year 1999-2000 when dispute arose and remained in the range of ₹ 10 to 14 crores during the period of litigation between its two groups of shareholders spanning over six years. It also records that after the settlement of dispute in the financial year 2005-06 there was a substantial increase in the sales touching nearly ₹ 18 crores per annum. The impugned order of the Tribunal also notes that after settlement of the dispute new products were launched by the respondent assessee company. All this was evidence of the fact that the dispute between two groups of shareholders had affected the business of the company. The amounts which were paid by the respondent assessee for the purpose of purchase of its shares, to its shareholder for subsequent cancellation was an expenditure incurred only to enable smooth running of the business. Thus, the expenditure was incurred for carrying on its business smoothly and therefore, was a deductible expenditure. Thus, the impugned order of the Tribunal is essentially a finding of fact. - Decided in favour of assessee.
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2015 (2) TMI 862
Reopening of assessment - Whether the bar of four years provided by first proviso of section 147 of the Income Tax Act can be made applicable to the facts of the present case or not? - Held that:- When even as per the respondent, all the relevant facts were disclosed and produced at the time of earlier assessment pertaining to the claim of depreciation and when there is no ground for non-discloser of true and correct relevant material, bar of 4 years, as per first proviso to Section 147 of the Act, would apply and the action under Section 147 of the Act for reopening of the assessment could be said as without jurisdiction and the action cannot stand in the eye of law. As decided in the case of General Motors India (P) Ltd. (2012 (8) TMI 714 - GUJARAT HIGH COURT) if the objections are not decided to the reasons for opening of reassessment and the department has proceeded for reassessment, the assessee would be well within his right to invoke the jurisdiction of this Court under Article 226 of the Constitution. As the mandatory procedure is not followed for disposal of the objection before proceeding with reassessment, initiation of the action as well as the subsequent order for reassessment would be required to be quashed. - Reassessment quashed - Decided in favour of assessee.
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2015 (2) TMI 861
Condonation of the delay rejected by CIT(A) u/s 119(2)(b) - application against the rejection by CIT(A) dismissed by ITAT as non maintainable - ITAT has allowed the rectification application wanted to convey/direct the Commissioner to consider the case afresh including the issue of condonation of delay - Held that:- Tribunal dismissed the appeal as not maintainable and as such rightly held that the appeal was not maintainable. Once the appeal itself was held to be not maintainable, it is not appreciable how the rectification application in an appeal which was held to be not maintainable, can be said to be maintainable. The rectification application in the appeal which was held not maintainable, ought not to have been entertained by the learned Tribunal, unless in a rectification application it was submitted that the learned Tribunal has committed an error in holding that the appeal is not maintainable and the learned Tribunal takes the view that the appeal was maintainable. In the present case, that is not so. Neither there was any contention that the appeal was maintainable against the order passed by the Commissioner nor infact there is any finding given by the learned Tribunal in the impugned order that the appeal is held maintainable. Under the circumstances, as such the order passed by the learned Tribunal in rectification application/miscellaneous application is wholly without jurisdiction, as if in the original order, Tribunal was of the opinion that the order passed by the Commissioner was not appealable, in exercise of rectification powers the Tribunal simply could not have given directions to the Commissioner to pass fresh order on the respondent’s application. As such by passing the impugned order in the rectification application, the Tribunal has nullified the original order of the Commissioner and directed him to pass a fresh order after hearing the respondent. - Decided in favour of revenue.
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2015 (2) TMI 860
Satisfaction Note preceded notice under Section 158BD dated 03.06.2002 - validity of notice rejected by Tribunal - Held that:- There is no dispute about the fact that the receipt was signed by the assessee which indicated that the total consideration was ₹ 33 lakhs. Even though it alluded to an agreement to sell dated 08.06.1999, the fact remains that no written agreement apparently was executed; what is a matter of fact, however, is that possession of the property was with the searched party, i.e. Batra brothers and their firm. Furthermore, the searched party had disclosed the consideration received at ₹ 4 lakh only. It is also not in dispute that the amount was in fact received by the assessee. Given these circumstances, that the Satisfaction Note, prima facie, recorded that the owner of the property was B.L.Goel (assessee’s father) and that the amount was received by the assessee on the father’s behalf cannot be determinative in the facts of this case. Since the amount was received, as a matter of fact, and the books of the purchaser showed that a fraction of that sum was disclosed as sale consideration, the Revenue was entitled to issue notice to the respondent, ascertaining whether such amount was actually received by him and, if so, on whose behalf, and proceed further. Thus the ITAT’s order narrowly confirming the invalidity of the notice of the assessment, that the entire amount was received by the assessee on behalf of his father cannot be upheld. The property did not belong to Mr.B.L.Goel and the impugned order is not sustainable, it is accordingly set aside. The matter is remitted back to the ITAT to decide the assessee’s appeal in accordance with law. - Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 859
Exemption under Section 10(29) denied - letting of godowns or warehouses - incomes from supervision charges, fumigation activities and weigh bridge receipts - Held that:- When once goods are stored in the warehouses, it is the duty of the warehousing authorities to ensure that no damage or loss is caused to the same. Therefore, the warehousing authorities maintain security for supervision of the warehouses and the goods therein. Similarly, maintaining weigh bridge is essential for the purpose of carrying on warehousing business. Likewise, for proper maintenance of the goods from pests, fumigation is also essential. Therefore, all the three activities, referred supra, are integral part of the business of warehousing and hence, they would squarely fall within the ambit of Section 10(29) of the Act and are eligible for grant of exemption. Tribunal without understanding the nature of the warehousing business, on an erroneous interpretation of the decision of the Supreme Court in Orissa State Warehousing Corporation / Rajasthan State Warehousing Corporation v. CIT [1999 (4) TMI 3 - SUPREME Court] has come to the conclusion that the above said three activities are not in relation to warehousing business. - Decided in favour of the assessee
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2015 (2) TMI 858
Disallowance of interest - ITAT deleted the addition - Held that:- Revenue was unable to point out any mistake in the reasoning of the CIT which was approved by the learned Tribunal. Whether the payment of interest was allowable is basically a question of fact or at any rate a mixed question of law and fact. The learned Tribunal has for appropriate reasons upheld the views expressed by the CIT (Appeal) as A.O. himself has computed the interest income under the head “Business Income” and has disallowed the claim of interest payment of ₹ 7,43,926/-. If there is a temporary lull in the business activities, it does not mean that the appellant has closed its business and even if the A.O’s contention is acepted that the interest income was assessable as income from other sources, the interest payment would be allowable as deduction u/s. 57 of the Act and other expenses debited in P&L A/c would be allowable as business loss. In that situation also, there would be no effect on the total income.- Decided against revenue. Deemed dividend u/s 2(22)(e) - Tribunal deleted addition - Held that:- As assessee did not dispute that the Karta is a member of the HUF which has taken the loan from the Company and, therefore, the case is squarely within the provisions of section 2(22)(e) of the Income Tax Act. - Decided in favour of revenue.
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2015 (2) TMI 857
Lifting of the corporate veil - Liability of directors - notice to concerned person - Held that:- The person concerned is required to be put to notice by formulation of the tentative ground as to why the concept of lifting of the corporate veil should not be invoked. The Director of the company may show justifiable ground to satisfy the authority that no case is made out for lifting of the corporate veil and thereafter, the competent officer may form an opinion whether to lift the corporate veil or not. But, in any case, as neither has happened in the present case, it can be said that the order passed based on the lifting of the corporate veil even if it is, would be in breach of the principles of natural justice and hence, cannot be sustained. Thus the impugned order dated 19.11.2013 at Exhibit 1 is quashed and set aside, but with the observations that it would be open to the respondent - competent officer to formulate the ground and thereafter, to give a notice for treating the company as private limited company by lifting of the corporate veil and thereafter, to take steps, if any, available in accordance with law under section 179 of the Act. At that stage, the petitioner may show cause by resisting the ground for contending that it is genuinely a public limited company and the corporate veil should not be lifted. - Decided partly in favour of assessee.
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2015 (2) TMI 856
Reopening of assessment - un-accounted payment made to the subcontractor - Tribunal set aside reopening notice - Held that:- The Tribunal having considered the record, correctly found that when the earlier assessment was made before the AO, one of the query was in respect to the payment made to the subcontractor and the assessee had furnished all details. In this manner, all preliminary informations were already there on record. The Tribunal also found that the possibility of forming an opinion about the expenditure claimed by assessee could not be ruled out at the time when the earlier assessment was made and therefore, thereafter, the AO is not entitled to change the opinion and thereby again reopen the assessment within the period of four years.Issue is already covered by the decision of this Court in the case of Gujarat Power Corporation Ltd. (2012 (9) TMI 69 - Gujarat High Court). - Decided in favour of assessee.
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2015 (2) TMI 855
Levy of interest under section 234B - terminal point for the levy of interest - Whether would be up to the date of the order u/s 245D[1] or up to the date of the order of settlement u/s 245D[4]? - tribunal went to the extent of saying that the judgment in Brij Lal [ 2010 (10) TMI 8 - SUPREME COURT] was obiter dicta Held that:- In our opinion to term the decision of the Supreme Court as obiter dicta and deciding not to follow it was gross misdemeanor on the part of the Commission. The order of the Special Bench of the Commission and that of the additional Bench, Kolkata Are quashed and set aside.The Settlement Commission (Income Tax Wealth Tax), Additional Bench, Kolkata is directed to pass an appropriate order on the basis of this order following Brij Lal reported in [SUPRA ] wherein held the terminal point for the levy of interest under section 234B would be up to the date of the order under section 245D[1] and not up to the date of the order of settlement under section 245D[4] - Decided in favour of assessee.
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2015 (2) TMI 854
Rectification of mistake - disallowing the claim for interest paid by the petitioner to the sister concern, in connection with the borrowal of money in the course of transactions when the sister concern of the petitioner has already satisfied the entire tax and there is absolutely no rhyme or reason to have proceeded against the petitioner - Held that:- The remedy available to the petitioner, if at all aggrieved, is by way of section 260A of the Income-tax Act. It is open for the petitioner to pursue such remedy in accordance with law and subject to available or valid and sustainable grounds. So as to enable the petitioner to pursue such exercise, coercive proceedings against the petitioner shall be kept in abeyance for a period of "two weeks", on condition that the petitioner satisfies one-third of the balance liability to be cleared in both the cases, which shall be effected within "one week".
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2015 (2) TMI 853
Block assessment - total undisclosed income of ₹ 7,81,85,884 by making the addition of ₹ 7,66,28,884 - CIT(A) deleted the addition also confirmed by ITAT - Held that:- The attempt of the Revenue is to have a re-appreciation and reappraisal of the factual materials. The only two papers which the AO relied upon, namely page 17 of bundle No. 2 and paper No. 55 of bundle No. 2 have been referred to in details. After the seizure, the managing director of the company was required to explain the contents of the paper. The two statements were recorded. The matter has been discussed in detail by the CIT (Appeals) and the Tribunal. Upon a perusal of the explanation given by the managing director and the assessee, the Tribunal concluded that the matter has been elaborately and properly discussed by the CIT(Appeals). Once the version of the assessee and in details deserves acceptance, then, we do not find that any substantial question of law arises from the exercise undertaken by the CIT(Appeals) and the Tribunal. The Assessing Officer had a statement of the accountant before him but he did not examine the said accountant. The author of the document/paper also was not examined during the assessment proceedings. She, however, appeared before the CIT (Appeals). The CIT(Appeals) not only examined her but allowed the Assessing Officer to cross-examine the said deponent. The statement made in chief and the cross-examination, both have been referred by the Tribunal in adequate details. We do not find any perversity or error of law apparent on the face of record in the order passed by the CIT(Appeals) and which has been affirmed by the Tribunal. - Decided in favour of assessee.
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2015 (2) TMI 852
Penalty under section 271D - Held that:- While referring to the scope of section 269SS read with section 271D , the burden is on the assessee to establish what was the reasonable cause for not receiving the loan or deposit by way of account payee cheque or a demand draft. It is not a single transaction but several transactions which have to be explained by the appellant-assessee. Though there is no specific consistent stand as stated on behalf of the appellant-assessee, since the matter is remitted back to the Assessing Officer for fresh consideration, so far as the factual situation whether all transactions were ₹ 20,000 and above, we are of the opinion, no prejudice would be caused to the Revenue if an opportunity is given to the appellant- assessee to explain such transactions which are ₹ 20,000 and above. After giving an opportunity to the appellant-assessee, the Assessing Officer shall proceed with the matter and decide the controversial issue either accepting or rejecting the explanation depending upon the nature of the explanation.
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2015 (2) TMI 851
Profit earned from sale of shares - income from adventure in the nature of trade or as short-term capital gain - Held that:- As find from the totality of facts and circumstances of the case that this income cannot be treated as the assessee's business income from adventure in the nature of trade because this is an investment in shares and sale of some of the shares in order to repay the loan in the condition when the price of shares has quickly risen. Any income derived from the sale of shares has to be treated either long-term capital gain or short-term capital gain subject to holding of the shares. In this case, this income has to be treated as short-term capital gain and not as a business income. Revenue was unable to show that the activity undertaken by the assessee was an adventure in the nature of trade. - Decided in favour of assessee.
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2015 (2) TMI 850
Deduction in respect of lorry charges paid in cash exceeding ₹ 20,000 under section 40A(3) denied - lorry hire charges to strangers for one-time transportation in cash exceeding the prescribed limit of ₹ 20,000 is out side the ambit of business expediency as provided under the proviso to section 40A(3) as held by Tribunal - relationship of the drivers of the lorries hired for transportation of goods towards the appellant - Held that:- The assessee is neither the owner of the goods nor the owner of the vehicle carrying the goods. If the assessee has to claim exemption under section 40A(3), necessarily he has to comply with the statutory provision and the rules framed thereunder. Only in instances where the assessee falls under any of the exemptions covered in rule 6DD, he is entitled to claim the said amount as an exemption under section 40A(3). In so far as both the authorities had found that the claim of the assessee is not justifiable, we do not think that the questions of law projected by the assessee arises for consideration in the above appeal and the same is therefore dismissed. - Decided against assessee.
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2015 (2) TMI 849
Increase in work-in-progress - whether the income determined by the Assessing Officer on account of increase in work-in-progress is permitted in law ? - whether the notification bearing No. S. O. 69(E), dated January 25, 1996 has application to the facts of the present case? - Held that:- Tribunal while dismissing the appeals filed by the Revenue,without entering into the merits of the case and/or considering the findings recorded by the Assessing Officer. Also appears from the judgment of the Tribunal and so also, the appellate authority that both have also not considered the effect of the notification on the facts of the present case. Thus remand the matters to the Tribunal for its consideration afresh - Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 848
Expenditure on account of municipal tax, repairs and insurance - disallowance of the said expenditure in respect of guest house under section 37(4)- Held that:- Decided against assessee as relying on Britannia Industries Ltd. v. CIT reported in [2005 (10) TMI 30 - SUPREME Court]. Disallowance of deduction under section 33AB - Interest income from deposits with Nabard whether connected with the business of growing and manufacture of tea - Held that:- Whether such deposit was made in connection with the business of growing and manufacture of tea, as contended by the learned counsel, should have appeared from the order of the Assessing Officer or the order of the Commissioner of Income-tax or the order of the learned Tribunal. It appears that at all the three stages this position was not clarified by any of the authorities. Whether the income of ₹ 1,07,29,555 actually arose from deposits integrally connected with the business of growing and manufacture of tea is a pure question of fact. Unless a finding is recorded with regard thereto, it is not possible to answer the question whether that income can be taken into account for the purpose of allowing deduction under section 33AB of the Income-tax Act. Therefore, it appears to us that the adequate attention was not given to the matter when the same was dealt with at different stages. - Decided in favour of assessee for statistical purposes.
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2015 (2) TMI 847
Liability to pay TDS on freight charges - disallowance u/s 40(a)(ia) - whether the assessee gets any benefit or his obligation is absolved if the recipient of the said amount has already paid taxes on the amounts received by them in the light of the amendment to the second proviso to section 40a(ia)? - Held that:- Reading of section 40(a)(ia) along with the second proviso and section 201(1) along with the proviso, it would mean that the mandate or requirement on the part of the payer to deduct tax at source is not so strict if they are able to show that the payee or the recipient of the amounts has paid tax in accordance with the provisions of section 201(1) and the proviso. This was not the claim made by the assessee before the Assessing Officer. The claim was on a different stand, initially reflecting the amounts as loan in the account books though shown as freight charges in the returns and later explained that it was not the loan amount but freight charges. It was never the case of the assessee that there was no mandate subsequent to the amendment, to deduct tax as TDS in the light of above provisions. The assessment year in question is 2007-08 and the amendment giving breathing space to payer of amounts is with effect from April 1, 2013. Therefore, the said benefit is not applicable to the assessee. Even otherwise, on factual situation, the very fact that these amounts were claimed as loan initially, till the scrutiny came up for consideration before the assessing authority would only indicate the real intention of the assessee-firm, i.e., not to disclose this amount as freight charges but something else as repayment of loan. Thus Tribunal did not err so far as the assessment year 2007-08 with reference to disallowance under section 40(a)(ia). - Decided against assessee.
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2015 (2) TMI 846
Defective application for registration under section 12A - approval under section 10(23C)(vi) denied - Review petition - whether the observation of the court that the application is withdrawn should be modified or not? - Held that:- It is clearly indicated that though an application was filed under section 12A dated November 28, 2007, which was received on November 30, 2007, there were certain defects and deficiencies for which the assessee was called upon to cure the same. The case was also posted for hearing on May 5, 2008. The time limit for disposal of application was on May 30, 2009. In the meantime, the applicant had filed an application under section 10(23C)(vi) before the Commissioner of Income-tax on June 15, 2008. Under such circumstances, the official records indicate that the application under section 12A is withdrawn. When the time limit for considering the said application is already complete and the matter has been considered by this court we do not think that the learned single judge has committed any error of law in dismissing the writ petition filed by the petitioner as it is evident that the stand taken by the petitioner regarding pendency of the application for registration under section 12A is not true and correct. Since such an application is not pending disposal before the authority concerned, the relief sought for could not be granted. - Decided against assessee.
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2015 (2) TMI 845
Violation of the principles of natural justice - Denial of reasonable opportunity to the petitioner to represent its case - Held that:- AO showed undue hurry in concluding the assessment proceedings, even though the time limit for completing the same was available till March 31, 2014, as pointed out to us by the learned counsel for the petitioner. When the petitioner was granted time till 03.30 p. m. on November 22, 2013, to reply to certain queries and when the petitioner had applied for extension of time indicating valid reasons, the Assessing Officer, in our opinion, ought not to have brushed aside such a request for adjournment and proceeded to a pass final order of assessment, that too, on the same day. Significantly, the application of the petitioner for time was not even decided. Without refusing time as prayed for and without communicating such refusal of adjournment to the petitioner, the Assessing Officer on the very same day, on which the hearing was fixed, proceeded to pass the order of assessment. This has resulted into gross violation of the principles of natural justice to give a fair hearing to the petitioner, on which short ground, we are inclined to quash the assessment order and remand the assessment proceedings before the Assessing Officer and disposal of the same in accordance with law. - Decided in favour of assessee for statistical purposes.
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Customs
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2015 (2) TMI 872
Refund rejected - More than one Refund filed in a month - Violation of Board's Circular No. 06/2008 dated 28/4/2008 - Held that:- It is very obvious that it is not intention of the Board Circular that even though the period of one year is getting expired, the assessee is not allowed to file more than one refund claim in a month. In my view even if more than one claim in a month is filed the same can not be denied only because of the reason that circular prescribed only one refund claim in a month otherwise statutory time limit of one year provided in the notification will become redundant. In similar situation this Tribunal in the case of B.S.L. Ltd. [2007 (10) TMI 233 - CESTAT NEW DELHI] has held that the refund under Rule 5 is permissible despite the claim having been second time in a month which is violation of condition of 11/2002-C.E. (N.T.) dated 1/3/2002. In my view this was held keeping in mind that though there is procedure to file one refund in a month or in the quarter as case may be but since time limit of one year is prescribed for filing refund claim the said procedure infraction should not come in way of the substantial claim of the assessee. Decided in favour of appellant.
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2015 (2) TMI 871
Waiver of pre deposit - Non compliance of pre deposit - Compliance report submitted erroneously - Held that:- High Court modified the stay order passed by the Commissioner (Appeals). We find that the appellant inadvertently filed the compliance report in the O/o Commissioner and therefore the Commissioner (Appeals) dismissed the appeal for non-compliance of the stay order. In our considered view, it is appropriate that the matter should be remanded to the Commissioner (Appeals) to decide the matter after considering the order of the Honble High Court and its compliance report. Accordingly, we set aside the impugned order and remand the matter to the Commissioner (Appeals) to examine the compliance of the stay order in the light of the order of the Hon’ble High Court. Appeals are allowed by way of remand - Matter remanded back - Decided in favour of assesse.
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2015 (2) TMI 870
Extension of stay order - Power of Tribunal to extend the stay - Held that:- if the delay in disposal of the appeal is not on account of the any commission or omission on the part of appellant and where the Tribunal is satisfied that the appellant was ready and willing for disposal of the appeal and/or had not indulged in any protractive strategies, extension of stay could be granted (beyond the period of 365 days) by passing a speaking order. In the present case, we are satisfied that the delay was not on account of any omission or commission on the part of the appellants but due to the huge pendency of appeals before this Tribunal. Accordingly, we extend the stay beyond the period of 365 days and till the disposal of the appeals. - Following decision of M/s. Haldiram India Pvt. Ltd. & Others [2014 (10) TMI 724 - CESTAT NEW DELHI (LB)] - Stay extended.
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2015 (2) TMI 869
Waiver of predeposit of duty - Cancellation of DRRC Licenses - misdeclaration of goods exported - Held that:- As there is conflicting of views of the Tribunal on this issue, and since the Tribunal in the recent decision [2013 (6) TMI 637 - CESTAT NEW DELHI] dismissed the Revenue's appeal, we waive the predeposit of duty along with interest and penalty and stay its recovery till disposal of appeal - Stay granted.
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2015 (2) TMI 868
Confiscation of Hydrogenated Vegetable oil - Non compliance with the provisions of Prevention of Food Adulteration Act, 1954 - Imposition of redemption fine and penalty - Held that:- The liability of the goods to confiscation is not disputed inasmuch as the goods under importation did not meet with the requirements of PFA Act and consequently became prohibited goods under Section 2 (33) of the Customs Act and became liable to confiscation under Section 111 9d). The total value of the goods imported is ₹ 93.3 lakhs. The fine of ₹ 7.5 lakhs imposed works out to 8% of the value of the goods. Normally fine is imposed to take way the profit margin. In the present case when the goods are ordered to be re-exported, the question of sale of the goods and making a profit would not arise and therefore, the redemption fine of ₹ 7.5 lakhs imposed is on the higher side. Considering the demurrage and other charges incurred by the appellant, I reduce the fine from ₹ 7.5 lakhs to ₹ 3.75 lakhs. As regards the penalty of ₹ 50,000/-, imposed under section 112(a), no mens rea required to be established for imposition of such penalty and the penalty imposed cannot be said to be harsh or unreasonable. Therefore, I do not interfere with the penalty imposed. To sum up, the redemption fine is reduced to ₹ 3.75 lakhs. But for the above modification, the impugned order is upheld. - Decided partly in favour of assessee.
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Corporate Laws
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2015 (2) TMI 867
Admissibility of Winding up application - Non payment to bond holder on maturity - Interest of public - Held that:- As far as the issue as to whether in the facts and circumstances of the case, the petition against the respondent-company should be admitted or not is concerned, the plea raised by the petitioner is that once the debt is admitted and there is default in payment thereof, the only inescapable conclusion is that the company is unable to pay its debt and deserves to be wound up, the first step in the process being admission of the petition. The event of default having been admitted in the present case, the petition deserves to be admitted, whereas the respondent-company has raised the issue that even if there is admission of debt, it is still the discretion of the court, which is to be exercised considering many factors, namely, whether the company is functional, number of employees working, contribution to the State etc. Hon'ble the Supreme Court in M/s IBA Health (India) Private Limited [2010 (9) TMI 229 - SUPREME COURT OF INDIA], while making observations regarding public policy to be kept in mind by the Company Court, observed that publication of an admission notice may damage creditworthiness or financial standing of the company, which may also have other economic and social ramifications. The Company Court, at times, has not only to look into the interest of the creditors, but also the interests of the public at large. In Canara Bank's case [2000 (4) TMI 757 - SUPREME COURT OF INDIA], this court opined that despite the debt being admitted, still considering the fact that the company was employing about 3,000 workmen and officers and paying their salaries regularly; honouring its tax liability; as there were number of shareholders and dealers, who were having indirect financial nexus with the company and it was established that the company was progressing towards revival, the petition was not admitted. It was opined that admission would be a loss to one and all, though debt of the petitioning-creditor may be paid of. Considering the aforesaid factual matrix, in my opinion, it would not be in the fitness of things to admit the petition for winding up against the respondent-company. However, it is expected that the respondent-company will make all out efforts to generate funds either out of cash profits or by sale of non-core assets to pay of the petitioner or get the debt restructured to maintain its creditworthiness. 25% of the amount due to the balance bond holders be arranged to be paid within a period of six months and balance thereafter, unless re-scheduled. The respondent company is restrained from creating any further charge on its assets, which may prejudice the right of the petitioner, being un-secured creditor.- Petition for winding up application not accepted.
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Service Tax
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2015 (2) TMI 888
Sale of all assets and liabilities on going concern basis - Lump sum consideration as well as royalty received - Scientific or technical consultancy service - Held that:- We find that for services to get covered under the said service category, there has to be a scientific or technical institution or organisation and they should have rendered the services in a one or more disciplines of science or technology as an institution; or scientists or technocrats, it is on record that the appellants herein are manufactures of pharmaceutical goods and had their own set up, which they have sold to Universal Medicaments Pvt. Ltd. On this factual matrix, we find that the judgement of the Tribunal in the case of Modi-Mundipharma Pvt. Ltd. [2009 (4) TMI 113 - CESTAT, NEW DELHI] squarely covers the issue in favour of the appellants. The same views was taken in the case of Just Textiles Ltd. [2014 (10) TMI 280 - CESTAT MUMBAI]. In view of the foregoing and the judicial pronouncements and factually appellants being manufacturers; not rendering any advice or consultancy, we find that impugned orders are liable to set aside and we do so. Decided in favour of appellant.
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2015 (2) TMI 887
Manpower Recruitment or Supply Agency Services - Assessee contends that activity does not fall under the said category - Held that:- Issue came up before this, Tribunal in the case of Bhogavati Janseva Trust Vs. Commissioner of C.Ex., Kolhapur reported in [2014 (9) TMI 482 - CESTAT MUMBAI] held that the activity of Harvesting and transportation of sugarcane from the farmer's field to the sugar factory does not fall under the category of Manpower Recruitment or Supply Agency Services. In the case of Amrit Sanjivni Sugarcane Transport Co. Pvt. Ltd. vide [2013 (8) TMI 58 - CESTAT MUMBAI] that Tribunal has taken the same view. In these circumstances, the issue is no more res integra, therefore, we hold that in all these matters the appellants are not liable to pay service tax under the category of Manpower Recruitment or Supply Agency Services. - Impugned order is set aside - Decided in favour of assessee.
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2015 (2) TMI 886
Demand of tax on notional interest - whether the appellant is required to pay service tax on notional interest accrued on security deposits for renting of immovable property is liable to service tax or not - Held that:- issue has been extensively considered by this Tribunal in the case of Magarpatta Township Developers & Construction Co. (supra), wherein this Tribunal held that notional interest on security deposit cannot be added to rent agreed upon between the parties for the purpose of levy of service tax for renting of immovable property. Therefore, we hold that the appellant is not required to pay service tax on notional interest on security deposit under the category of renting of immovable property service. Impugned order is set aside - Decided in favour of assessee.
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2015 (2) TMI 885
Rectification of mistake (ROM) apparent on order - Review of application - Rent a cab service/ Tour operator service - Bus reservation charges - Held that:- In para 6 of our order, we have discussed the issue at length and we have observed that the bus reservation agreement is for booking of bus for the tours undertaken to Nasik, Ellora, Ghrisneshwar, Siddharth Garden, and so on and it is in relation to the conduct of the tours and therefore, rightly forms part of the tour operator's service as defined in law. We have also noted that for the previous period in appellant's own case, the matter had been examined by this Tribunal and it was held that the appellant would be liable to discharge service tax liability under the category of 'tour operator's charges' w.e.f. 10/09/2004. Therefore, we do not find any merit in the rectification application with regard to the confirmation of service tax demand on the bus reservation charges collected by the appellant in respect of the tours undertaken for the period prior to 01/06/2007. It is a settled position that in any ROM application, the mistake should be apparent on the face of the record. If the issue involves detailed reasoning or re-appreciation of evidence it would be beyond the scope of an ROM application and would amount to review of the order which is not permissible as held by the apex Court in the case of RDC Concrete (India) Pvt. Ltd. [2011 (8) TMI 25 - SUPREME COURT OF INDIA] and ACSU Ltd. [2002 (12) TMI 87 - SUPREME COURT OF INDIA]. In the present application, what the appellant is seeking is review of the order by re-appreciation of the arguments which is not permissible. - Decided against the assessee.
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Central Excise
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2015 (2) TMI 882
Advalorem duty or Compounded duty - goods manufactured before the cut of date - entry in RG-1 register as proof - revenue contended that, there was no occasion for the Assessee to have entered this stock as "loose" - Goods Covered under Hot Air Stenter Independent Processors Annual Capacity Determination Rules, 1998 - Held that:- It is clear from the argument of the Assessee that once the stock, as declared in the register, has been verified and accepted, then, the Revenue could not have subsequently argued to the contrary. In such circumstances, when their findings of fact were termed perverse, the Tribunal, as the last fact finding authority, performed its duty in law and interfered with the orders, though concurrently rendered. Once they were interfered because they were found to be perverse and vitiated by error of law apparent on the face of the record, then, the impugned order of the Tribunal in that behalf does not raise any substantial question of law. - Decided against the revenue.
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2015 (2) TMI 881
Waiver of pre deposit - Held that:- the appeals filed by other appellants against the same order was disposed of via [2014 (12) TMI 1032 - CESTAT BANGALORE] and in that case, in respect of appeals filed by all appellants on whom only penalties had been imposed, the cases were remanded to the original authority without requirement of any predeposit. In view of the above, in respect of this appellant also, the impugned order is set aside and the matter is remanded for fresh decision after giving reasonable opportunity to the appellant to present their case. - Decided in favour of assessee.
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2015 (2) TMI 880
Waiver of pre deposit - CENVAT Credit - Imposition of equivalent penalty u/s 11AC - Business Support Service - Held that:- Prima facie, in as much as, M/s. ABMCPL is a separate legal entity and cannot be considered as an extended arm of the applicant like Head office or Branch office. In the result, the applicant could able to make out a prima facie case for waiver of pre-deposit of dues adjudged. Consequently, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Stay granted.
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2015 (2) TMI 879
Waiver of pre deposit - fabrication of the bins and clearance from the factory with the chassis which is supplied by other manufacturers - Held that:- Applicant fabricated bins which are kept at various places for collecting the garbage and the dumper placer are used to lift these bins from one place to another. It is also seen that the applicant prepared two sets of invoices showing that the description of goods as supply of bins in the invoice copy of the buyers while the description of goods was shown as fabrication and mounting of Dumper Placer body on chassis in the copy of invoices intended for the Department claiming the benefit of exemption Notification No. 6/2006-CE dated 1.3.2006. So, we find that there is a factual dispute in respect of the description of the goods in the documents. Prima facie, we find that they have manufactured the bins only. So, the submission of the learned counsel would be examined at the time of hearing the appeal at length. Hence, the applicant s have not made out a strong prima facie case for waiver of predeposit of entire amount of dues. - Partial stay granted.
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2015 (2) TMI 878
Valuation of goods - Inclusion of transportation charges - Whether the transportation charges for transportation of storage tanks from factory to godown in the cases where buyer takes the delivery of the final product i.e. storage tank from the godown of the respondent are includable in the assessable value or not - Held that:- As the goods have been cleared to the customers from their godown by the respondent therefore, whatever transportation charges being paid for transportation of the goods from the factory to the godown are includable in the assessable value. In these circumstances, it is immaterial whomsoever has paid the transportation charges, the same are includable in the assessable value as the goods have been cleared to the customers from the godown only. Therefore, the impugned order is not sustainable on merits. We further find that the respondent has raised the issue of limitation but while filing their price list, they have not stated the fact that in rare cases they are charging transportation charges for the transportation of the goods from the factory to godown when the customer takes the delivery from the godown. As the facts were not made known to the department, therefore extended period was rightly invoked by the Revenue. Therefore, we hold that show-cause notice was issued within time. - impugned order is set aside. The matter is send back to the Adjudicating Authority for quantification of the actual demand to be recovered from the respondent - Decided in favour of Revenue.
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2015 (2) TMI 877
CENVAT Credit -Invoices addressed to head office and not to the appellant's premises - Held that:- since the issue relates to initial period of introduction of new procedure for registration of principal manufacturer in the case of garments and not the job workers, the mistakes happened and accordingly has allowed the credit of ₹ 2.39 crores, out of demand for more than ₹ 2.53 crores. However, he has disallowed credit of ₹ 13,44,955/- on the ground that no documentary evidence was produced to indicate actual receipt and use of inputs/capital goods under the invoices mentioned in the table either at Bommasandra or at job working units. It is surprising that out of demand for more than ₹ 2.53 crores probably arising because of the observations based on sample invoices, the Commissioner chooses to allow the credit of more than ₹ 2.39 crores but disallows only the balance which are covered by the sample invoices collected at random. Nevertheless, the learned counsel submitted that she will be able to show that the goods have been received, utilized and finished goods have been manufactured and duty has been paid.Therefore both sides agreed that the matter should be remanded to consider these evidences. At this stage, we also observe that now that the impugned order has been passed, either the seized documents or the copies of the seized documents should be provided to the appellants before fresh adjudication is taken up. Appellants have already reversed the amount disallowed which according to them has been wrongly taken. She submits that ₹ 9,33,163/- should not have been disallowed and credit has been taken correctly. This also can be verified when the matter is adjudicated again. -In respect to wrong availment of credit on plastic crates, pellets etc. appellants have deposited the entire amount of CENVAT credit disallowed and a small amount according to the learned AR has not been paid. The learned counsel undertook to verify the correctness of the reversal made by them and ensure that entire amount disallowed would be paid. - Mater remanded back - Decided in favour of assessee.
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2015 (2) TMI 876
SSI exemption under Notification No.8/2003 dt. 1.3.2003 - brand name "AKAS" is owned by M/s. Akas Medical Equipment, Trichy, an another entity - Held that:- Brand name "AKAS" is owned by M/s. Medical Apparatus and Instruments who is also engaged in the business. Prima facie, we find that applicant used the brand name of another firm. On perusal of Certificate of Registration of Trade Mark, it is clear that brand name was issued to M/s. Medical Apparatus and Instruments which is owned by Shri V. Arjun Sooraj and Shri K. Vijayarangan, trading as Akas Medical Equipment. On a query from the Bench, the learned advocate submits that Shri Arjun Sooraj is the common partner of the applicant firm and other firm. In view of that prima facie we are not impressed with this submission of the learned advocate. In the case law relied upon in the case of Anil Pumps (P) Ltd. (2004 (12) TMI 134 - CESTAT, NEW DELHI), the brand name was owned by Anil who is the director of the appellant-company. Hence the said case law would not be applicable to the facts of the instant case. In view of that, applicant failed to make out a prima facie case for waiver of predeposit of the entire amount of duty along with interest and penalty. However, considering the submissions made by the applicant, we direct the applicant to predeposit further amount of ₹ 2,00,000 within 8 weeks. Upon deposit of the said amount, predeposit of balance amount of duty along with interest and penalty would be waived and recovery thereof stayed till disposal of the appeal. - Partial stay granted.
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2015 (2) TMI 875
Manufacture - Whether the process of cutting of carpet matting in rolls and stitching the edges and providing a lining to the cut sizes, to facilitate use as floor mats, amounts to manufacture and the emerging product is exigible to excise duty – Held that:- cutting of carpet rolls into smaller sizes and subjecting such cut sizes to a process of stitching linings at the edges would not amount to manufacture nor result in emergence of a distinct independent commodity, exigible to duty under provisions of Section 2(f) of the Central Excise Act, 1944 - Following decision of Assessee's own previous case [2013 (12) TMI 79 - CESTAT CHENNAI] - Decided in favour of assessee.
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2015 (2) TMI 874
Denial of CENVAT Credit - Outdoor Catering service - Renting of immovable property - Held that:- in an inter partes order dated 23.04.2014 (2015 (2) TMI 479 - CESTAT NEW DELHI) the cenvat credit on outdoor catering services in identical circumstances though for a previous period had been permitted. I am not inclined to not follow the precedent of the said CESTAT order in the assessee's own case and therefore do not feel it necessary to indulge in a discussion on this issue. As regards the credit pertaining to renting of immovable properties, there is no doubt that the rent has been paid to install their towers which are used for boosting their signals to provide output services. Therefore, it is evident that the premises have been rented for the purpose of providing their out-put service and thus the renting of immovable property has a clear nexus thereto - Decided in favour of assessee.
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2015 (2) TMI 873
CENVAT Credit - Credit taken on differential duty paid based on supplementary invoice - Held that:- authorities reliance on the provisions of Rule 7(1)(b) of erstwhile Cenvat Credit Rules is not proper inasmuch as the said Rule debars availing the Cenvat credit on the basis of supplementary invoices, where such additional duty became recoverable from the manufacturers on account of non-levy or short levy by reasons of fraud, collusion, or any willful misstatement or suppression of facts or contravention of any provisions with intent to evade payment of duty. As such, it is clear that said Rule would be invokable only in case of malafide on the part of principal manufacturer. - admittedly the assessment at the end of principal manufacturer was provisional and was finalized by a final assessment order dated 27.8.2002. It is on account of finalization of the provisional assessment that the shortfall to the extent of ₹ 28,78 lakhs approximately was arrived at, which the principal manufacturer paid vide supplementary invoice dated 10.2.03. As such, we agree with the learned advocate that this is not a case of any suppressed production or malafide intent so as to invoke Rule 7(1)(b). - principal manufacturer has given a certificate to the extent that supplementary invoices raised on 10.2.03 relates to invoices mentioned in the list of original invoices, and enclosed as annexure A, there is no rebuttal to the said certificate - no justifiable reasons to uphold the impugned orders of the authorities below - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2015 (2) TMI 884
Refund of amount deposited as the Entry Tax - In the light of the decision of the Tribunal, as affirmed by the High Court, the petitioner was not liable to pay any Entry Tax on Carbon Black Feed Stock (CBFS) - Held that:- A perusal of the Section 29 indicates that the assessing authority shall refund to dealer any amount of tax, which is paid in excess of the amount due from him under the Act along with interest @ 12% per annum after adjusting towards the tax or any amount outstanding against the dealer under the Act or under the Central Sales Tax Act. Sub-clause (3) of Section 29 of the Act further stipulates that no amount would be refunded where the dealer admits the liability to pay tax in its return. - In the light of the provision there is a specific direction of the Tribunal to refund the amount deposited by the petitioner as no amount of Entry Tax was payable on CBFS as it was not a notified item. The order of the Tribunal has been affirmed by the High Court and, consequently, the respondents were duty bound to refund the amount under Section 29 of the Act. The Tribunal also found that the petitioner had not admitted its liability to pay the tax and had deposited the same under protest in terms of the interim order passed by the High Court. This finding of the Tribunal has also become final and, consequently, it was no longer open to the respondents to reject the petitioner's application on the same ground, which has been dealt and decided by the Tribunal and which has been affirmed by the High Court. Impugned order passed by the assessing authority dated 16.7.2014 cannot be sustained and is quashed - writ of mandamus is issued commanding the assessing authority to refund the amount deposited towards Carbon Black Fee Stock (CBFS) for the assessment years 2006-07 and 2007-08, upto 31st December, 2007. - Interest payable under Section 29(2) of the Act of 1948 would also be calculated from the date of service of the order of the Tribunal @ 12 % per annum till actual refund is made. The said amount shall be paid within six weeks from the date of the production of a certified copy of this order. - Decided in favour of appellant.
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2015 (2) TMI 883
Denial of refund claim - Excess tax paid - Section 40 - Held that:- Section 40 of the UP VAT Act provides for a refund to the dealer for the amount of tax paid by him in excess to the amount due for him - petitioner deposited a sum of ₹ 16,06,94,740.00 for the month of April and May, 2013 under the VAT Act and under the CST Act, which orders have been set aside. The petitioner thereafter filed an application under Section 40 of the VAT Act, which was rejected on the ground that the amount has been adjusted towards the outstanding demand for the assessment year 2010-11. The petitioner thereafter filed a rectification application contending that the outstanding amount payable for the assessment year 2010-11 was only ₹ 11,25,88,286.00 and there were no other outstanding demand for any assessment year and, therefore, the balance amount of ₹ 4,81,06,454.00 should be refunded. This rectification application was also rejected. The Special Counsel for the State admitted that only ₹ 11,25,88,286.00 was outstanding for the assessment year 2010-11 but contended that since no order of refund was passed by the appellate authority in the appeal of the petitioner, the respondents were not obliged to refund the amount under Section 40 of the VAT Act. It is not necessary that an order of refund is required to be passed by the assessing authority in the assessment order or by the appellate authority. If no orders are passed, it is always open to the assessee to file an application under Section 40 of the VAT Act for refund of the amount upon which the competent authority is obliged to adjudicate on that application and pass an order for refund if after adjustment towards outstanding tax any amount is found to be in excess and which is required to be refunded. By not passing an order of refund when the amount is found to be refundable would amount to be judicial misconduct. We find that there was an error apparent on the record and the rectification application was rightly filed, which was rejected mechanically without application of mind. The outstanding amount due for the assessment year 2010-11 was only ₹ 11,25,88,286.00. The petitioner had deposited a sum of ₹ 16,06,94,740.00 and, consequently, an excess amount of ₹ 4,81,06,454.00 was liable to be refunded since admittedly there were no other outstanding dues against the petitioner. Similarly, for the assessment year 2009-10, an amount of ₹ 3,63,95,862.00 was also liable to be refunded in the absence of any outstanding dues against the petitioner. - Supreme Court [2008 (7) TMI 563 - SUPREME COURT OF INDIA] in its order had clearly directed the respondents to refund the excess amount deposited by the petitioner. - Decided in favour of Appellant.
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Indian Laws
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2015 (2) TMI 866
Cheque dishonoured - Section 138 of the Negotiable Instrument Act - Legally enforceable debt or liability - Held that:- In the present case the complainant and the accused were working as Lecturers in a Government college at the relevant time and the alleged loan of ₹ 14 lakhs is claimed to have been paid by cash and it is disputed. Both of them were governed by the Government Servants Conduct Rules which prescribes the mode of lending and borrowing. There is nothing on record to show that the prescribed mode was followed. The source claimed by the complainant is savings from his salary and an amount of ₹ 5 lakhs derived by him from sale of site No.45 belonging to him. Neither in the complaint nor in the chief-examination of the complainant, there is any averment with regard to the sale price of site No.45. The concerned sale deed was also not produced. Though the complainant was an income-tax assessee he had admitted in his evidence that he had not shown the sale of site No.45 in his income-tax return. On the contrary the complainant has admitted in his evidence that in the year 1997 he had obtained a loan of ₹ 1,49,205/- from L.I.C. It is pertinent to note that the alleged loan of ₹ 14 lakhs is claimed to have been disbursed in the year 1997 to the accused. Further the complainant did not produce bank statement to substantiate his claim. The trial court took into account the testimony of the wife of the complaint in another criminal case arising under Section 138 of the N.I. Act in which she has stated that the present appellant/accused had not taken any loan from her husband. On a consideration of entire oral and documentary evidence the trial court came to the conclusion that the complainant had no source of income to lend a sum of ₹ 14 lakhs to the accused and he failed to prove that there is legally recoverable debt payable by the accused to him. In our view the said conclusion of the trial court has been arrived at on proper appreciation of material evidence on record. The impugned judgment of remand made by the High Court in this case is unsustainable and liable to be set aside. Appeal allowed and judgment of acquittal passed by trial court is restored.
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2015 (2) TMI 865
Arbitration clause in the agreement - Matter refer to trial court & High court - Peremptory Section 8 of The Arbitration and Conciliation Act, 1996 - General law should yield to the special law - Generalia specialibus non derogant - Held that:- The attempt of the trial court and the approach made by the high court in bifurcating the cause of action, is fallacious. It would only lead to delaying and complicating the process. The said issue is also no more res integra. Already decided in case of Sukanya Holdings (P) Limited. [2003 (4) TMI 435 - SUPREME COURT OF INDIA]. Secondly, such bifurcation of suit in two parts, one to be decided by the Arbitral Tribunal and the other to be decided by the civil court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums.In Orix Auto Finance (India) Limited [2006 (2) TMI 625 - SUPREME COURT] referring to public policy, this Court has taken the view that if agreements permit the financer to take possession of the finances vehicles, there is no legal impediment on such possession being taken, unless the contract is held to be unconscionable or opposed to public policy Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statue, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law - generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievance and of course unnecessarily increase the pendency in the court. Decided in favour of appellant.
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