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TMI Tax Updates - e-Newsletter
March 10, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Registration of a trust under section 12AA(3) - the activities of the trust would fall within the ambit of 'education and 'advancement of any other object of general public utility' though the objects and the activities of the trust are towards a group of person/employees engaged by the settlers and not for the purpose of general public at large - HC
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Recovery of demand - attachment of account whereas the appeal was pending - AO refused to grant stay - non deduction of TDS - attachment vacated - CIT(A) to hear the appeal as early as possible - HC
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Computation of MAT credit - Assessee has relied on the ITR–6 format to arrive at the total liability as well as the MAT credit calculations and paid tax accordingly. In our view, the assessee had followed the procedure properly and the Assessing Officer had made the calculations applying his own interpretation or relied on the programme, we are not sure whether it is programme hitch or the interpretation of Assessing Officer was not in line with the calculations proposed in ITR-6. Therefore, we delete the addition made. - AT
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The monetary limit of ₹ 10 lakhs for filing appeals before the ITAT would apply equally to cross objections under section 253(4) of the Act. Cross objections below this monetary limit, already filed, should be pursued for dismissal as withdrawn/not pressed.
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U/s 245 of Income Tax Act 1961 revised timeline for verification of arrear of demand - In case no response is received from the AO within thirty days. CPC would issue the refund without any adjustment. The responsibility of, non-adjustment of refund against outstanding arrears, if any, would lie with the Assessing Officer.
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The grant of tenancy rights by the assessee trust and the premium of ₹ 51.00 lakhs received in lieu thereof from the tenants is a capital asset in the hands of the assessee and is therefore liable for capital gains and is not advance rent exigible to tax under the head income from house property. - AT
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Disallowance of interest on borrowed capital u/s 24(b) - whether property should be let out for claiming deduction of interest? - the assessee’s claim has no tenability as neither property is self-occupied nor its reasonable rental ALV is offered for tax and at the same time a claim of deduction of interest is made. - AT
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Set off of business loss against interest income taxable under the head income from other sources - as the assessee has not carried out any business activity during the year under appeal, then there remains no possibility of set off of business loss against interest income taxable under the head income from other sources. - AT
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Capital gain - conversion of the partnership firm into company - the conditions laid down under section 47(xiii) of the Act have been fulfilled in this case. Therefore, no capital gain is chargeable under the provisions of section 45(4) of the Act. - AT
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Disallowance u/s 14A - if at all any indirect expenses is to be attributable, then same has to be estimated having regard to the accounts and nature of expenditure incurred by the assessee. The blanket application of Rule 8D(iii) that is 0.5% of the average investment may not be acquired to do so because it is not commensurate with the nature of activity of investment carried out and the expenses debited by the assessee which is mostly for its business activities - AT
Customs
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Entitlement of benefit - import against Advance Licence as Actual user manufacturer-exporter - it misused the advance licence and contravened the Customs Notification by diverting the duty free imported raw materials instead of utilizing the same for manufacture of resultant export products, hence not entitled for benefit - demand confirmed - AT
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Classification - Whether the goods imported are Heavy Melting Steel Scrap or Secondary Welded Pipes - The pre-shipment inspection certificate clearly indicates that HMSS supplied was 'unshredded' and justifies the bonafide of appellant being an actual user. Therefore, the goods imported are "Heavy Melting Steel Scrap" and the clearance is allowed after mutilating the goods under customs supervision- AT
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Valuation - The rate in the contract would not show whether it is FOB/ CIF basis. It is particularly noted that the certain size of tiles imported by the appellant are not tallied with the contract. Therefore, the contract is discarded and the price of contemporaneous imports at / around the time of import of impugned goods at higher value, as evident from 4 Bills of Entry is adopted - AT
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100% EOU - Denial of exemption - Even the supplier reimbursed the amount towards shortage noticed in weight which also supports the view that there was no diversion of the duty free goods. Thus none of the conditions of the exemption Notification No. 53/1977-Cus. are violated - AT
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CHA - Some inadvertence or lack of efficiency took place on part of the CHA and that is because of a regular dealing with the said importers and not because of gross negligence or misconduct in discharge of duty. Therefore, the appellant needs to be visited with some penal action in view of violation of Regulation 13(n). - AT
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The domestic passengers who board international flights in the domestic leg are not required to file the Customs Baggage declaration form.
Service Tax
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The demand of service tax along with interest is confirmed under the category of “Transport of Export Cargo” as there was no exemption of service tax on the said service from 16.06.2005 to 23.06.2005 - AT
Central Excise
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Cenvat Credit denied of service tax paid on club membership of Association - the expenses incurred on the membership of the business club is an “input service” and appellant can legally take Cenvat Credit of the expenses incurred on the membership of the club - AT
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Jute mattings manufactured - whether are floor coverings or not ? - Notification No. 29/95-CE dt 16/3/1995 benefit claimed - as per this meaning the mattings can also be used & understood as floor coverings. The argument taken by the Revenue that floor coverings of jute should be exclusively used for floor covering is not supported by as such specific mention in the exemption notification. - AT
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Rejection of refund claim - export of goods - in appellants case the ARE 2 for export has to be filed within 24 hours of clearance and as such, there is no scope for prior verification of the goods by the officers. The cleared goods have been exported and all the relevant customs clearance documents have been filed. - Refund allowed - AT
Case Laws:
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Income Tax
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2016 (3) TMI 251
Estimation of NP - Additions at 12% of the receipt - Held that:- In the present case, we are therefore of the view that the net profit of 5.55% for the year under consideration also cannot be considered for working out the average profits because, it is after considering the land leveling expenses of ₹ 24.24 lacs which is also disputed by the Revenue. In such a situation, when the books of accounts are rejected, then for estimating the profits, for the reasons stated hereinabove, we are of the view that the average profits should be determined but after excluding the net profit for the impugned year and if that is considered, the average profit (after excluding the year under consideration is worked out), the average net profits works out to 12.79% and against which ld. CIT(A) has estimated the net profits from Kailash Developers at 12%, which in own view in the present facts, is at not much variance with the average profits of 12.79%. In such a situation, we are of the view that no interference to the order of ld. CIT(A) in estimating the net profits @ 12% of the Revenue from Kailash Developers is called for - Decided against assessee Denial of deduction u/s.80IB(10) - Non obtaining completion certificate within a period of 4 years - Held that:- When the housing project was approved on 10.03.2004 by the competent authority, condition for obtaining completion certificate within a period of 4 years from the date of approval being eligible for deduction u/s.80IB(10) of the Act was not applicable and therefore assessee was eligible for deduction u/s.80IB(10) of the Act - See ITO vs. Saket Corporation [2015 (6) TMI 460 - GUJARAT HIGH COURT ] - Decided against revenue
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2016 (3) TMI 250
Penalty u/s 271(1)(c) - Held that:- The assessee has shown cash creditor of ₹ 4 lacs in the name of Smt. Veena Khatri, Indore. The assessee had not furnished confirmation before the Assessing Officer, at the time of quantum addition as well as at the time of imposing penalty. The payment received and repaid through banking channel does not make the transaction sacrosanct. The assessee also had not furnished copy of PAN, copy of return to prove the identity, genuineness and creditworthiness of the creditor. As held by the Hon'ble Supreme Court that penalty U/s 271(1)(c) is a civil liability, therefore, intention/mens rea need not to be required to prove by the Assessing Officer. The case laws relied by the assessee are not squarely applicable on the facts of the assessee's case. Therefore, we uphold the order of the ld CIT(A). - Decided against assessee
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2016 (3) TMI 249
Registration of a trust under section 12AA(3) cancelled - Held that:- The assessee imparts education to both employed or to be employed, skilled and unskilled workers and the Tribunal further observed that there are other objects which can be said that 'any other object of the public utility'. Commissioner of Income Tax vs Gujarat Martitme Board [2007 (12) TMI 7 - SUPREME COURT OF INDIA] Tribunal was correct in holding that the trust is entitled for registration under Section 12AA and the activities of the trust would fall within the ambit of 'education and 'advancement of any other object of general public utility' though the objects and the activities of the trust are towards a group of person/employees engaged by the settlers and not for the purpose of general public at large. - Decided in favour of assessee.
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2016 (3) TMI 248
Interest u/s 244A - refund arising on account of Double Taxation Relief u/s 90 - Held that:- Examining the claim for interest on refund granted, considered the fact that the relief under Section 90 of the Act is available in respect of the income tax which is payable both in India as well as in the other Countries with which India has DTAA. Therefore, relief under Section 90 of the Act is to be allowed while computing the tax liability in India by virtue of credit being given to the extent that tax has been paid abroad. Therefore, the tax payable is to be computed on the income to be assessed. Thereafter the credit which is available to the assessee in view of DTAA is to be taken into account and if there is any excess which the assessee has paid into the Indian Treasury, then, he is entitled to the refund of the same which would also carry interest in terms of Section 244A of the Act.
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2016 (3) TMI 247
Short term capital gain v/s business income - transaction of shares - Held that:- All the authorities under the Act have on consideration of facts and in particular the statement of short term capital gain which was annexed to the return of income by the Appellant and also annexed as Exh.A-1 to the Appeal Memo rendered a finding of fact that the profit claimed to be on account of purchase and sale of investment in shares was in fact on account of trading in shares. This conclusion was recorded after taking into account all factors laid down in the Circular No.4 of 2007 issued by the CBDT. We also find from the statement of short term capital gains annexed to the Memo of Appeal that in a large number of cases, the holding of shares is for a short period i.e. less than 30 days and in any event not more than 75 days in any case as noted in the CIT(A) in his order. No substantial question of law.
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2016 (3) TMI 246
Recovery of demand - attachment of account whereas the appeal was pending - AO refused to grant stay - non deduction of TDS - a proceeding under Section 201(1) read with Section 201(1A) - Held that:- In the light of the proviso to Clause (b) of subsection (1) of Section 201 of the Act, there can be no escape from the conclusion that if the person, who fails to deduct, whole or part of the tax, at source, shall not be deemed to be an assessee in default if in respect of such tax, the deductee has furnished his return of income under Section 139 of the Act and, while furnishing the return, has taken into account such sum for computing income in such return of income and has paid the tax due on the income declared by him in such return of income coupled with a certificate to this effect from an accountant in such form as may be prescribed. Having, therefore, regard to the factual aspects of the present case and the law relevant thereto, we are clearly of the view that the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, is duty bound to take up the appeal at the earliest and if it is found that the taxes, which were to be deducted, at source, by the present petitioner while making payment to the said two Corporations, have been paid by the said two Corporations as deductees, the impugned demands, raised by the respondent No.2, namely, Commissioner of Income Tax (Appeals)-II, Patna, shall be set aside and the attachment of the account of the petitioner, maintained with the Government Treasury, Patna, shall be vacated without delay.
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2016 (3) TMI 245
Computation of MAT credit - AO excluded surcharge and education cess while arriving at the amount of total tax payable under the normal provisions of the Income Tax Act, 1961 and under sec. 115JB of the Act - Held that:- On careful reading, the sub-section 2A, the tax credit to be allowed shall be the difference of tax paid for any AY under sub-section (1) of 115JB and the amount of tax payable on his total income computed in accordance with the other provisions of this Act. The important word used is tax paid and as per the Hon’ble Apex Court decision in the case of K. Srinivasan (1971 (11) TMI 2 - SUPREME Court ), the term ‘tax’ includes surcharge. The tax liabilities for normal provisions as well as MAT are calculated with surcharge and cess. The MAT credit in row “7” are calculated automatically using the prescribed algorithm, this is nothing but balancing figure i.e., the difference between tax liability as per normal provisions and MAT provisions. Both the above tax liabilities are calculated with surcharge and cess. These are the standard format, which are expected to be followed by all the assessees and also important to note that the above format of ITR 6 was amended w.e.f. AY 2012-13 by CBDT. Moreover, this is more relevant for the department also. These formats are regulated by CBDT. Assessing Officer cannot overlook these formats and (interpret it in his own method of calculating tax credit while making assessment u/s 143(1) of the Act.) proceed to calculate the MAT credit to compute assessment u/s 143(1) applying different methods when the proper and correct method as proposed by CBDT in ITR-6. The Assessing Officer is expected to follow the ITR-6 format to complete the assessment u/s 143(1) or 143(3) of the Act. Assessee has relied on the ITR – 6 format to arrive at the total liability as well as the MAT credit calculations and paid tax accordingly. In our view, the assessee had followed the procedure properly and the Assessing Officer had made the calculations applying his own interpretation or relied on the programme, we are not sure whether it is programme hitch or the interpretation of Assessing Officer was not in line with the calculations proposed in ITR-6. Therefore, we delete the addition made.
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2016 (3) TMI 244
Allowance of puja expense and temple expenses - whether such expenses are non-business expenditure? - Held that:- We find that the puja expense incurred on occasion of Diwali and Mahurat are customary expenses and going by the turnover of the assessee-company and the nature of the business of the assessee, we feel that these are incurred for the harmony of the assessee-company’s employees and these are for the purpose of business. Similar are the reasons for incurring temple expense. Hence expenditure allowed - Decided in favour of assessee Addition made on account of cess on green leaf - Held that:- This issue is covered by the decision of AFT Industries Ltd. V. CIT (2004 (7) TMI 81 - CALCUTTA High Court) wherein it has been decided by Hon’ble jurisdictional High Court that cess on green leaf is a normal business expenditure and once the Hon’ble jurisdictional High Court decides the issue in favour of assessee, same is covered.- Decided in favour of assessee Non-deduction of TDS on expenses of commission payment u/s. 195(1) - Held that:- The commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. According to assessee, assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments. This issue is covered by the decision of Hon’ble Supreme Court in the case of GE India Technology Centre P. Ltd. v. CIT (2010 (9) TMI 7 - SUPREME COURT OF INDIA ) in favour of assessee Disallowance of Nursery Expenses - revenue v/s capital expenses - Held that:- We find that the assessee has incurred expenditure for replantation in the existing area and plants grown in the nursery were used for replacement of dead plants within the plantation area. This fact has not been denied by revenue before CIT(A) or before us now. The AO also noted that this is re-plantation in the existing area and replacement of dead plants but by going through the volume of expenditure he made disallowance and Hon’ble jurisdictional High Court in the case of Tasati Tea Ltd., (2003 (2) TMI 42 - CALCUTTA High Court ) has considered the issue and allowed the claim of replacement of plants in existing area against dead plants. The expenditure claimed by appellant is to be allowed as revenue expenditure - Decided in favour of assessee MAT computation - deduction of wealth tax while computing book profit u/s. 115JB - Held that:- No infirmity in the order of CIT(A) as he allowed the claim of assessee by relying on the decision of ITAT Kolkata in the case of Usha Martin Industries Ltd., (2000 (3) TMI 170 - ITAT CALCUTTA-E ). CIT(A) didn't erred in law in directing the AO to deduct Wealth Tax from the net profit to ascertain book profit u/s. 115JB. - Decided in favour of assessee
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2016 (3) TMI 243
Transfer of tenancy rights to long term capital gains - deduction under section. 54EC to the extent of investment of the capital gain - Held that:- Taking into account the factual matrix and circumstances of the case on hand and the legal position on this issue espoused in section 2(14) and 2(47) of the Act and the ratio of the judicial pronouncements on the issue of grant of tenancy rights similar to the facts of the case on hand, inter-alia, laid down by the Hon’ble Apex Court in Parbani Tea Company (1965 (4) TMI 19 - SUPREME Court ), and R.K.Palshikar (HUF) (1988 (5) TMI 3 - SUPREME Court ) and Ratilal Tarachand Mehta(1976 (11) TMI 37 - BOMBAY High Court ) we concur with and uphold the finding of the CIT(Appeals) that the grant of tenancy rights by the assessee trust and the premium of ₹ 51.00 lakhs received in lieu thereof from the tenants is a capital asset in the hands of the assessee and is therefore liable for capital gains and is not advance rent exigible to tax under the head income from house property. Reopening of assessment - investment in NABARD for acquiring Bonds/Debentures - Held that:- Assessing Officer did not make any addition to the assessee’s income in respect of the investment of ₹ 25.00 lakhs made by it in NABARD Bonds/Debentures; which formed the sole basis of the Assessing Officer’s recorded reason to believe income had escaped assessment for initiation of proceedings u/s.147 of the Act (supra). In these circumstances, the Hon’ble Bombay High Court in the case of Jet Airways (I) Ltd. (2010 (4) TMI 431 - HIGH COURT OF BOMBAY ) has held that when no addition is made in respect of such income which formed the basis for the recorded reasons for belief of income escaping assessment, the Assessing Officer cannot make any other addition to the assessee’s income in respect of any other income which has escaped assessment. Since the Assessing Officer ostensibly accepted the assessee’s claims regarding the investment of ₹ 25.00 lakhs in investment in NABARD Bonds/Debentures and no addition has been made in this regard, the Assessing Officer ought to have dropped the re-assessment/ assessment proceedings initiated u/s. 147/148 of the Act for assessment year 2005-06. - Decided in favour of assessee
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2016 (3) TMI 242
Penalty under S.271D - Appellant made cash borrowings from near relatives who are staying in village, having agricultural incomes and not having bank accounts - Held that:- Turning to the circumstances under which loans had to be obtained in cash, we find that as far as Shri Kondiah and Smt.Venkata Subbamma are concerned, in the absence of any evidence brought on record to controvert the claim of the assessee that they are agriculturists living in a village, having no banking facilities, the cause shown by the assessee for making the borrowals in question from them in cash, has to be accepted as reasonable. Merely because the third lender, Shri Nageswara Rao is also a teacher, the factum of he, being also an agriculturist and living in a village, cannot be ignored. It may be noted, at this juncture, that we are not concerned here with any addition made in the quantum proceedings on account of violation of provisions of S.269SS of the Act, but penalty leviable under S.271D of the Act, in relation to the loans/deposits accepted by the assessee in violation of the provisions of S.269SS of the Act. Penalty, being punitive in nature, warrants a liberal approach, while examining the existence or otherwise of a reasonable cause for the borrowals made in cash. Moreover as seen from the assessment order AO accepted borrowal at ₹ 9,60,000 only. The balance of the amount was considered for estimation of income. How the amount could be taken at ₹ 10.10,000 was not explained. Part of the amount was already been taxed separately. In addition assessee has purchased property along with his brother the fact of which was accepted in assessment itself. It was the explanation that the family transactions (HUF) were accounted in assessee bank account as he did not have any other bank account. This explanation was reasonable considering the fact that property for which monies were borrowed was registered in joint names. At best, assessee liability can only be half the amount. This aspect was also ignored by Revenue. Considering the totality of facts and circumstances of the case, and also the fact that the issue involved in these proceedings is not of a quantum but of a penalty, we are of the considered opinion that it is not a fit case for the imposition of penalty under S.271D - Decided in favour of assessee
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2016 (3) TMI 241
Disallowance of interest on borrowed capital u/s 24(b) - whether property should be let out for claiming deduction of interest? - Held that:- It is evident from the record that the assessee did not offer the amount of rent for which IT is reasonably accepted to let in terms of Section 23(1) of the Act. Besides the assessee has claimed depreciation thereon on the property without using the said flat B-2. Thus the assessee has unjustifiably claimed deduction of interest; on one hand property is treated as business asset and claimed depreciation thereon though disallowed by AO. Even if house property income in terms of Section 23(1) is concerned, no amount has been shown for which property might be reasonably expected to be let. Thus the assessee’s claim has no tenability as neither property is self-occupied nor its reasonable rental ALV is offered for tax and at the same time a claim of deduction of interest is made. Since the assessee has not complied with any of these statutory conditions, the lower authorities have rightly disallowed the proportionate interest wrongly claimed by the assessee as allowable. - Decided against assessee
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2016 (3) TMI 240
Eligibility of deduction of Section 80IB(10) - grievance of AO was that claim was made in the return filed u/s.139(1) - Held that:- CIT(A) recorded a finding to the effect that both the original return was filed well within the time limit prescribed under the law and the revised return filed before the AO completing the assessment that the assessee has fulfilled all the conditions u/s.80IB(10), therefore, entitled for deduction in respect of housing project. The findings recorded by the CIT(A) have not been controverted by department by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the order of CIT(A) in allowing assessee’s claim for deduction u/s.80IB(10) of the Act. - Decided in favour of assessee
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2016 (3) TMI 239
Set off of business loss against interest income taxable under the head income from other sources - non existence of business activity - Held that:- As assessee has accepted that no business activity has been carried out during the year under appeal and the expenditure claimed in the profit and loss account was a write off of asset which was standing in the books of account. Such write off could have been allowed only if there had been a business activity running during the year. We, therefore, are of the view that as the assessee has not carried out any business activity during the year under appeal, then there remains no possibility of set off of business loss against interest income taxable under the head income from other sources. Therefore, we find no reason to interfere with the order of ld. CIT(A) and uphold the same. - Decided against assessee
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2016 (3) TMI 238
Revision u/s 263 - Claim of receipt of gift - Section 56 v/s 68 - Held that:- Section 56 of the Act grants exemption for bringing into tax such income under the head income from other sources. But, however, section 68 of the Act contemplates that with respect to any credit in the books, it is an obligation cast upon the assessee to explain the credit as appearing in the books of the assessee to the satisfaction of the A.O. by establishing the identity and creditworthiness of the creditors and genuineness of the transaction. This initial and primary burden is cast upon the assessee u/s 68 of the Act to establish the identity and creditworthiness of the donor and to substantiate that the transaction is genuine. Thus, both the sections viz. Section 56 and 68 of the Act operate in different field whereas Section 56 of the Act deals with computation of the income of the tax payer under the head ‘Income from other sources’ which provides relief in case of receipts from close relatives as defined u/s 56 of the Act while Section 68 of the Act is placed under Chapter VI of the Act which deals with ‘Aggregation of income and set off or carry forward of loss’ and Section 68 of the Act cast primary onus on the assessee to explain nature and source of cash credit as appearing in the books of the assessee to the satisfaction of the AO and failure to explain the cash credit to the satisfaction of the AO shall lead to computation of income from undisclosed sources under the head ‘Income from other sources’. Thus, in our considered view based on the facts as emanating from the records, the A.O. has not made any enquiry or verification before accepting the gift of ₹ 1.48 crores received by the assessee from his maternal uncle, Mr Chimanlal Mehta and has merely accepted the submissions of the assessee with respect to receipt of said gift and the Pr. CIT has rightly invoked the provisions of section 263 of the Act directing the A.O. to make proper enquiry and reframe the assessment. The case laws relied upon by the assessee are not applicable in this case as in the instant appeal, the AO has not made any inquiries or verification which should have been made to satisfy the ingredients of Section 68 of the Act and has merely accepted the submissions of the assessee with respect to the gift of ₹ 1,48,00,000/- received by the assessee from his maternal uncle . - Decided against assessee
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2016 (3) TMI 237
Treatment to royalty payments - AO treating the royalty payments being 3% of the sales of the year, as capital expenditure and disallowing 75% of the same after allowing depreciation @ 25% - Held that:- Judgment of the jurisdictional High Court in the case of CIT vs Hitech Arai Ltd, [2014 (8) TMI 459 - MADRAS HIGH COURT] is applicable in his case wherein held that where the royalty payment made by the assessee under renewal agreements were for grant of license to an existing company for manufacture and sale of automobile parts and components for subsequent periods, after the expiry of original period of license and it was not technical know-how for setting up a new plant or for manufacturing a completely new product with aid and assistance of foreign company, payment made was purely revenue in nature, more so, when Department had for the nine earlier assessment years accepted the fact that the payment made towards royalty was revenue expenditure and had not raised dispute thereon.. Accordingly, in our opinion, the assessee’s claim has to be allowed and it is to be treated as revenue expenditure only. - Decided in favour of assessee Disallowance u/s 14A - CIT(A) made disallowance of 2% of the exempt income earned - Held that:- The assessment year under consideration is 2007- 08 and, therefore, the provisions of rule 8D cannot be applied. Rule 8D came into operation with effect from 24.3.2008 i.e from assessment year 2008-09. Disallowance 2% of the exempt income earned is reasonable. CIT(A) is justified in computing disallowance of 2% of the exempt income earned. We do not find any infirmity in the order of the CIT(A) and the same is confirmed.- Decided in favour of assessee in part
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2016 (3) TMI 236
Excise duty refund, interest subsidy and insurance subsidy - Deductions u/s 80-IB - capital or revenue receipt - Held that:- Excise Duty refund, interest subsidy and insurance subsidy are to be treated as ‘capital receipt’ not liable to be taxed. See Shree Balaji Alloys v. CIT and Another [2011 (1) TMI 394 - Jammu and Kashmir High Court ] - Decided in favour of assessee
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2016 (3) TMI 235
Capital gain - conversion of the partnership firm into company - whether transfer of factory land and building, etc., and holding that the conditions stipulated in sub-section (xiii)(c) and (d) of section 47 were not fulfilled? - Held that:- The aggregate of the shareholding in the company of the partners of the firm was not found less than 50 per cent. of the total voting power in the company and their shareholding continues to be as such for a period of five years from the date of the succession. The learned Commissioner of Income-tax (Appeals), on examination of the record specifically found that aggregate of the shareholding of the companies by the partners is not less than 50 per cent. of the total voting powers because though the shares of Shri Vijay Sood were transferred, Shri Rajat Sood and erstwhile partners' share in the company were more than 50 per cent. and these were retained as such for a period of more than 5 years. Therefore, the same would not disqualify the assessee from exemption under section 47(xiii) of the Act. This finding of fact recorded by the learned Commissioner of Income- tax (Appeals) have not been rebutted through any evidence or material on record. Further, the findings of fact recorded by the learned Commissioner of Income-tax (Appeals) under section 47(xiii) have not been challenged by the Revenue Department in the present appeal. It may be noted here again that since on the registered agreements dated April 1, 1999 and December 30, 1999, the business of the assessee-firm was taken over by the limited company which have been signed by Shri Vijay Sood as well on behalf of the firm, therefore, story made up by Shri Vijay Sood later on and accepted by the Assessing Officer, will demolish the entire case of the Revenue. In view of the above discussion, the learned Commissioner of Income- tax (Appeals) has correctly held that no consideration, what-so-ever has gone to Shri Vijay Sood, partner of the assessee-firm on the basis of the alleged agreement dated December 7, 1998. The learned Commissioner of Income-tax (Appeals) also correctly held that the conditions laid down under section 47(xiii) of the Act have been fulfilled in this case. Therefore, no capital gain is chargeable under the provisions of section 45(4) of the Act. Thus, there is no merit in the Departmental's appeal, the same is accordingly dismissed. - Decided against revenue
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2016 (3) TMI 234
Addition on low household expenses - Withdrawals for meeting the household expenses - Held that:- Details of withdrawals for meeting the household expenses were submitted before the lower authorities by the assessee, however, the same were just brushed aside and ad-hoc addition of ₹ 4 lakhs was ordered by the AO. We take note that the AO has made the addition on account of low household expenses without any material before him and the impugned addition is a product of pure guesswork and can be safely inferred that the impugned addition is not based on any specific valid reason or documents or enquiry report brought on record. CIT (A) has erred to sustain the impugned addition without any material on record to justify the low household expense. In view of the above, we are of the opinion that the Ld. CIT (A) erred in upholding the addition made by the AO on account of low household expenses and accordingly, we delete the addition - Decided in favour of assessee.
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2016 (3) TMI 233
Disallowance u/s 14A - Held that:- Hon'ble Jurisdictional High Court in the case of CIT v. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT ] has laid down the proposition that, if the assessee's capital, profits, reserves and surplus and current account deposits are higher than the investments in tax free securities, then it would be presumed that the investments made by the assessee would be out of interest free funds available with the assessee. Respectfully following the decision of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra) we concur with the contention of the assessee that no disallowance of interest can be made u/s 14A r.w. Rule 8D of the Act. Otherwise also Ld. Counsel has specifically pointed out before us, the source of investments, which were from interest free funds. Thus, on these facts also, no disallowance of interest can be made. Coming to the indirect expenses, we find that assessee has debited sum of ₹ 8.92 crores on the ‘employees costs’ which majorly constituted “salary” of the employees. As pointed out by the Ld. Senior Counsel, the only activity in relation to the investment carried out by the assessee was Switching of one HSBC Mutual Fund account to Reliance Mutual Fund account. Thus, if at all any indirect expenses is to be attributable, then same has to be estimated having regard to the accounts and nature of expenditure incurred by the assessee. The blanket application of Rule 8D(iii) that is 0.5% of the average investment may not be acquired to do so because it is not commensurate with the nature of activity of investment carried out and the expenses debited by the assessee which is mostly for its business activities. Looking to the fact that the assessee has earned dividend income of ₹ 38.19 lakhs, we estimate the indirect expenses at ₹ 5 lakhs which in our opinion, is still on a higher side, but it will take into account all other indirect expenses. Thus, the disallowance u/s 14A is restricted to ₹ 5 lakh and balance addition made by the AO and confirmed by the CIT(A) stands deleted - Decided partly in favour of assessee
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Customs
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2016 (3) TMI 222
Validity of Commissioner (Appeals) order - Record does not show whether any personal hearing was granted by that authority or any appeal was heard by that authority and a sheet showing personal hearing available on record and an order sheet are also not under signature of learned Commissioner (Appeals) - Held that: the maintenance of public record shows that an empty formality was followed by the Commissioner (Appeals) for disposal of appeal. The entire action of the Commissioner (Appeals) is contrary to law and there is no disposal of appeal as yet on his record. If this is the manner an appellate authority acts, and his undated order comes for judicial review, it is difficult to appreciate the very existence of the impugned order itself as to whether that has seen the light of the day. Therefore, The order of learned Commissioner (Appeals) has no existence in law and accordingly, the remarks made by appellate Commissioner shall also have no legs to stand. As the adjudicating authority summarily disposed of the proceeding without a speaking order, he is directed to issue appropriate notice to the importer clearly bringing out allegations if any for the defence of the later and granting reasonable opportunity of hearing and shall pass a reasoned and speaking order considering defence plea as well as evidence if any led by the importer. - Matter remanded back
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2016 (3) TMI 221
Entitlement of benefit - Exemption Notification No. 30/97 dt. 1.4.1997 and 48/99 dt. 29.4.99 as amended availed for import of duty-free materials under Advance Licence as Actual user manufacturer-exporter - Appellants obtained Advance Licence with actual user conditions declaring themselves as manufacturing exporter for import of SS coils/sheets by availing the benefits of the above said Notifications. But Department contended that it misused the advance licence and contravened the Customs Notification by diverting the duty free imported raw materials instead of utilizing the same for manufacture of resultant export products, hence not entitled for benefit - Held that: by following the Hon'ble High Court decision in the case of CC Vs CESTAT Chennai/Gaur Impex 2009 (4) TMI 83 - MADRAS HIGH COURT which was upheld by Hon'ble Supreme Court, appellants are not eligible for the benefit of exemption notifications 38/97, 51/2000 and 48/99 as amended on the goods imported under the said advance licences as the appellants had no factory for manufacturing finished goods at the declared premises and have not used the SS coils/sheets imported under DEEC Advance Licences and cleared without duty under customs exemption Notification 30/97 as amended by 51/2000, 48/99 as amended for manufacture of finished goods exported. Therefore, the benefit should not be granted and the demand of customs duty and interest and confiscation, and penalty upheld. - Decided against the appellant
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2016 (3) TMI 220
Classification - Whether the goods imported are Heavy Melting Steel Scrap or Secondary Welded Pipes - Held that: there is no misdeclaration by appellant as seen from the purchase order/sales contract, sales confirmation report and pre-shipment inspection certificate, wherein appellants have placed orders for supply of 1000 MTs of HMSS, and imported the said goods and cleared in terms of purchase order. The test report relied by Revenue in a private laboratory is not the competent authority approved by CRCL or Customs and even as per the test report, the goods were found to be 'secondary pipes' which clearly confirms that they are 'scrap'. Also the appellants are registered Central Excise assessee having foundry for manufacture of billets, TMT bars as evident from the Central Excise registration and paying central excise duties on the final products and is not a trader of imported goods in the guise of scrap for trading purpose. The pre-shipment inspection certificate clearly indicates that HMSS supplied was 'unshredded' and justifies the bonafide of appellant being an actual user. Therefore, the goods imported are "Heavy Melting Steel Scrap" and the clearance is allowed after mutilating the goods under customs supervision followed by the decision of Hon'ble Madras High Court, uphelded decision of the Tribunal in the case of COMMR. OF CENTRAL EXCISE, MADURAI Versus SRI RENGA STEEL CORPORATION 2014 (9) TMI 522 - Madras High Court. - Decided against the Revenue
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2016 (3) TMI 219
Finalisation of the assessment of 13 Bills of Entry - Appellant imported Ceramic Tiles and filed 17 Bills of Entry out of which 13 Bills of Entry was assessed provisionally and 4 Bills of Entry were cleared after assessment to loaded value which was accepted by the appellant. After that the 13 Bills of Entry was finalised at the same rate as in the case of finally assessed 4 Bills of Entry and directed the appellant to pay differential duty but the appellant opposed it and produced contract in respect of 13 Bills of Entry and submitted that proving of under valuation lies on Department - Held that: the 4 Bills of Entry was assessed after loading the value as per contemporaneous import data (NIDB Data) and the same was accepted by the appellant and clearance was affected on payment of duty. Also the appellant produced contract in which no date has been mentioned nor any period of validity has been mentioned. The invoices are totally bereft of any mention of contract number. It is significant to note that they have imported only 113x20 containers of Ceramic tiles from supplier but, as per contract they are supposed to import 60x20 containers per month. The contract does not indicate the Port of import for the consignment. The rate in the contract would not show whether it is FOB/ CIF basis. It is particularly noted that the certain size of tiles imported by the appellant are not tallied with the contract. Therefore, the contract is discarded and the price of contemporaneous imports at / around the time of import of impugned goods at higher value, as evident from 4 Bills of Entry is adopted . - Decided against the appellant
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2016 (3) TMI 218
100% EOU - Denial of exemption - Reimbursement of goods short received - Appellant imported cotton on the basis of procurement certificate issued by the designate authority of Customs Central Excise based on which the Custom authorities at the port allowed clearance thereof duty free. Thereafter, at the time of weighment while re-warehousing goods found to be short (in weight), although the number of bales were the same as imported and were intact. The appellant raised debit notes on the supplier for the quantity short received and the supplies reimbursed the same - Held that: the entire quantity of bales of cotton imported was received in the factory were intact and there is neither any allegation of diversion nor any evidence to that effect. Even the supplier reimbursed the amount towards shortage noticed in weight which also supports the view that there was no diversion of the duty free goods. Thus none of the conditions of the exemption Notification No. 53/1977-Cus. are violated. Therefore, the demand can not be raised. - Decided in favour of appellant
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2016 (3) TMI 217
Charges under Regulation 13(d), (e), (i) & (n) of CHALR, 2004 - Revokation of CHA licence - Department contended that appellant is a CHA and was involved in gross irregularities such as misdeclaration in description, quantity as well as undervaluation and was was aware about the actual description as well as actual quantity of goods imported which is evident from the original copy of Bill of Lading bearing the details of the actual description and quantity, as the appellant on the backside of Bill of Entry had appended the same by putting signature and rubber stamp. However, the appellant-CHA had filed Bills of Entry with wrong description as well as less quantity of the imported goods and had facilitated and connived with the importer in the fraud to put loss to the Govt. exchequer - Held that: importers have resorted to giving forged and fabricated documents through fax to the appellant-CHA for filing the Bill of Entry by making minor alteration in the quantity or description or value, which cannot be noticed by a man of ordinary prudence. No facts are coming on record to indicate that the appellant-CHA have aided and abetted the importers in evasion of customs duty. However, evidences which have come on record indicate that the importers have misled successfully the CHA, Revenue and Bank by fabrication and forgery of documents being minor manipulation, which is not easily made out unless one compares the documents with the investigative eyes. The original and forged documents look all the same at the first glimpse. Only on careful scrutiny the difference and/or manipulation committed could be noticed. Therefore, in absence of any finding of aiding and abetting, the charges can not be hold under Regulations 13(d) & (e). The act of forgery of official documents or signatures were committed by the importer. Therefore, it cannot ipso facto form the ground for charging CHA under CHALR, 2004 for violation of Regulation 13(i). Some inadvertence or lack of efficiency took place on part of the CHA and that is because of a regular dealing with the said importers and not because of gross negligence or misconduct in discharge of duty. Therefore, the appellant needs to be visited with some penal action in view of violation of Regulation 13(n). The period of revocation restricts up to 30-11-2015 and also the amount of forfeiture reduced to 50% of security deposit. - Partly decided in favour of appellant with consequential relief
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Service Tax
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2016 (3) TMI 232
Demand of Service tax - Transport of Cargo by air under Section 65(105) (zzn) of the Finance Act, 1994 for the period from 15.3.2005 to 23.6.2005 - Held that: there was an exemption of service tax in transport of cargo by air vide Notification No. 28/2004-ST dated 17.09.2004. which was withdrawn vide Notification No. 10/2005-ST dated 03.03.2005 w.e.f. 15.03.2005. Again another notification was issued for exemption vide Notification No.29/2005-ST dated 15.07.2005. Since the appellant's service do not quality under the Export of Service Rules for the period 15.03.2005 to 23.06.2005 and the payment was received in Indian currency, the appellants w.e.f 24.06.2005 started collecting the service tax from their customers and started paying the service tax. Therefore, by referring the case of M/s. Srilankan Airlines Vs. CST, Chennai [2012 (8) TMI 437 - CESTAT, CHENNAI], the demand of service tax along with interest is confirmed under the category of “Transport of Export Cargo” as there was no exemption of service tax on the said service from 16.06.2005 to 23.06.2005 and penalties are not to be imposed under Section 76 & 78. - Decided partly in favour of appellant
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2016 (3) TMI 231
Refund claim - Service Tax paid on specified services for authorized operation in SEZ - Revenue contended that appellant constructed a transmission line outside the SEZ area and supplies electric power to Domestic Tariff Area do not fulfill the criteria of wholly consumed services as defined in explanation (i), (ii) or (iii) to Para 2(a) of the notification and seem to be carrying a different business. - Held that:- mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra, directed the assessee to claim refund in terms of Para 2(c) of the notification, then, rejection of refund claims considering under Para 2(d) of notification by the Adjudicating authority is totally unwarranted and cannot be sustained. As decided by the Tribunal in the case of Tata Consultlancy Services Ltd Vs CCE & S.T. (LTU), Mumbai - [2012 (8) TMI 500 - CESTAT, MUMBAI] that once the Approval Committee has given the nexus and the justification, it was totally unwarranted on the part of the adjudicating authority and the appellate authority to go into this question and come to their own findings in the matter. Decided against the revenue
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Central Excise
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2016 (3) TMI 230
Inclusion of assessable value of acoustic enclosures in assessable value - ROM applications - Held that:- In the present case, we find that the Tribunal has given its detailed findings and held in favour of the respondents except acoustic enclosures. Therefore, the citation relied by the respondents are clearly distinguishable and we do not find any merit in the applications filed by respondents for restoration of appeals. Accordingly, all the three ROA applications are dismissed. As regards ROM applications, we find that there is no apparent mistake on records and respondent’s plea for rectification of certain facts beyond the scope of SCN amounts to re-appreciation of the Tribunal’s order and the Tribunal has not empowered to review its order making a long drawn exercise to ascertain the error if any which is not intention of law relating to rectification of mistake. In the guise of MA (ROM), appellant requires the Tribunal to review its own order to accommodate the present applications, which is not the power conferred on the Tribunal. In this regard we rely on the decision of the Hon’ble Supreme Court in the case of Airport Authority of India Vs. Commr.(2015 (11) TMI 135 - SUPREME COURT ), Hon’ble High Court decision in the case of Unworth Ltd. Vs. CCE, Raipur (CG) (2014 (10) TMI 185 - CHHATTISGARH HIGH COURT ) and the Tribunal’s decision in the case of Shalimar Ispat Udyog Vs. CCE, Raipur (2014 (2) TMI 716 - CESTAT NEW DELHI), are relevant to the facts of the present case. By respectfully following the Apex Court and the Hon'ble High Court decisions and the Tribunal order as above, we hold that there is no apparent mistake in the final order dated 03.07.2013 and any relook to the order as a whole to bring a change to the result of the order, shall amount to review and Tribunal lacks power for the same. Accordingly, all the three ROM applications are rejected.
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2016 (3) TMI 229
Cenvat Credit denied of service tax paid on club membership of Association - membership of the club does not fall within the definition of input service, and the same is not related to manufacturing activities - Held that:- The membership of the business club like the Entrepreneur organisations is indirectly related to the promotion of the business of the appellant. The expenses incurred on membership of the club are forming part of the assessable value and as per the judgment in the case of Coca Cola P. Ltd. (2009 (8) TMI 50 - BOMBAY HIGH COURT) wherein observed that “Once the cost incurred by the service has to be added to the cost, and is so assessed, it is a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test will also apply in the case of sales promotion.” Therefore keeping in view the judgments cited (supra) the expenses incurred on the membership of the business club is an “input service” and appellant can legally take Cenvat Credit of the expenses incurred on the membership of the club. - Decided in favour of assessee
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2016 (3) TMI 228
Eligibility of exemption under notification no.3/2004-CE dated 8.1.2004 - machineries, appliances and components required for setting up of water supply plants - certificate issued by Dy.Commissioner of the District in which the project is located not produced - Held that:- Perusal of the invoice dated 4.5.2005, the purchase order dated 16.2.2005 placed by M/s.VATECH WABAG Ltd. and excise duty certificate issued by M/s/ VATECH WABAG Ltd. and other correspondence submitted by the appellants make it clear that the impugned goods have been cleared by the appellant to the specified units. The appellants supplied the items as sub-contractor for the project. We find that exemption available to sub-contractors in similar type of notifications was examined in the case of Hy-TUF Steels Pvt. Ltd. (2013 (10) TMI 1382 - CESTAT AHMEDABAD )Madras) as relying on Caterpillar India Pvt. Ltd. [2013 (7) TMI 244 - MADRAS HIGH COURT] held that when the machineries were ultimately put in use by the sub-contractor, who are given the job, the exemption cannot be denied. It was observed that in the absence of allegation of possible mis-use of the goods, for unintended purposes, the beneficial notification issued in public interest cannot be denied. In the present case, we find that the denial of exemption is only on the ground that the appellant s name is not figuring in the certificate issued by the District Authority. We find that on perusal of the records, it is clear that the certificate issued in the name of M/s. ONDEO NALCO INDIA LTD also mentions the purchase order placed on M/s. VATECH WABAG Ltd. , who placed the purchase order on the appellants. These facts were established by the documentary evidences. As such, we find no justification for denial of exemption.- Decided in favour of assessee.
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2016 (3) TMI 227
Unaccounted clearance of dutiable items - sale of gutkha on cash basis - Held that:- In the present case, the Revenue is able to establish with different source of evidence by way of independent statements by the drivers of the transporting vehicles, corroborated by the Supervisor of the appellant's unit and finally fully corroborated and admitted by the Director of the appellant - unit. These facts have not been controverted by any material evidence by the appellant. Their only objection is that more corroboration regarding the actual buyers of the clandestinely removed goods and details of money received etc. is not available. As find that the statements given by the Director mention about sale of gutkha on cash basis without preparing any bill or entering in the statutory records. The purchase of raw materials is also on cash basis without any accounting. He also admitted that the entries and the contents of the private records in the form of kachcha slips recovered from the drivers of the vehicles. Similar kachcha slips covering the seized goods were admitted and not disputed even now. As mentioned earlier, all the evidences are similar for the seized goods as well as the goods earlier cleared on the same modus operandi except that in respect of 50 bags, there is a physical seizure of clandestinely removed goods. The private records were corroborated by three different persons and the statements are not retracted thereafter. It is relevant to note that the appellant approached the Settlement Commission for settling the case. However, the same was rejected by the Commission, which resulted in the continuation of departmental adjudication and appeals thereafter. The present case is not the one which is based only on statement of the Director of the appellant company. It is based on the private records seized from the transport drivers corroborated by three different persons. In the present case, unaccounted production and clearances were evidenced by the categorical admission of the Director and Supervisor of the appellant company and there were kachcha slips seized along with goods. Thus find that the appellant have not made out a case to interfere with the concurrent findings of the lower authorities and as such, reject the appeals. - Decided against assessee
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2016 (3) TMI 226
False CENVAT Credit - HR coils/sheets of thickness below 10mm on the basis of invoices without receiving goods - statement of Shri Naresh Singh, Foreman relied upon - appellant pleads that the cross-examination of shri Naresh Singh was denied and that vitiates the proceedings and pleaded that the case should be remanded for de-novo adjudication - Held that:- As find that the proprietor himself had categorically admitted in his statement dated 7/10/2006 that he never received any coil or plates of thickness below 10mm in his factory. There was no retraction of the statement nor any allegation that the same was obtained under duress. Not only that in his subsequent statement recorded much later on 2/4/2008, he reiterated that coils of thickens below 10mm were never received in his factory. The second statement also was never retracted. Thus proprietor’s statements are of full evidentiary value. His statements fully and decisively establish the alleged offence. As regards the contention of the Advocate, there is no corroborative evidence other than the statement of the proprietor suffice to say that proprietor’s statements, voluntary as those are fully and comprehensively cover and sustain the allegation and have full evidentiary value and therefore absence of corroboratory evidence is inconsequential because Revenue does not have to collect evidence beyond what is required to establish the case. In the case of K.I. Pavunny Vs. Astt Collector Cochin [1997 (2) TMI 97 - SUPREME COURT OF INDIA] held that “confessional statement, if found voluntarily, can form the sole basis for conviction - Decided against assessee
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2016 (3) TMI 225
Cenvat credit - input services utilised for manufacture of goods at ‘nil' rate of duty supplied to the SEZ as well as exported - entitlement to refund of the Cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 - Held that:- There is an exception provided in sub rule (6) of Rule 6 of Cenvat Credit Rules, 2004 to the application of sub-rule (1) to (4) thereof. Clearances made to SEZ are not governed by the denial provision. Appellant's submission is, therefore, certainly correct to say that any attempt to deny the refund of input credit shall make the services or goods exported costlier and will amount to export or ‘deemed export' of taxes which is not permitted in international trade practice as well as supply to SEZ domestically. Therefore, denial of refund to the appellant by the application of Rule 5 of Cenvat Credit Rules, 2004 is not reasonable, for which, the order of the authority below is set aside and appeal is allowed. The authority below granting refund shall act in accordance with law looking to the law on limitation, if any, applicable. - Decided in favour of assessee
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2016 (3) TMI 224
Jute mattings manufactured - whether are floor coverings or not ? - Notification No. 29/95-CE dt 16/3/1995 benefit claimed - Held that:- Both the Revenue as well as the Respondent has relied upon the same Dictionary description of the word “mattings” as neither the word “matting” nor “Floor covering” has been defined in Notification No. 29/95-CE. As per this dictionary meaning “matting” has been described as plaited or woven mats & similar articles made of coir fiber Jute Straw and the uses are for floor or wall covering & table mats. It is thus observed that as per this meaning the mattings can also be used & understood as floor coverings. The argument taken by the Revenue that floor coverings of jute should be exclusively used for floor covering is not supported by as such specific mention in the exemption notification. It has been correctly observed by the Adjudicating authority that jute mattings are neither specifically included in Sr. No. 1 nor excluded from Sr. No. 3 of the table annexed to Notification No. 29/95-CE dt 16/3/95. Revenue has also taken an argument that exemption to Jute Matting was available under earlier Notification No. 50/90-CE dt 20/3/90, therefore, Jute Mattings are different products. In this regard we observed that Notification No. 50/90-CE dt 20/3/90 does not say that Jute mattings are not floor coverings. Accordingly we hold that nothing bars the appellant to avail the benefit of Sr. No. 3 to Notification No. 29/95-CE for their product Jute Mattings when the products can also be capable for other uses. It is not the case of the Revenue that the goods manufactured by the Respondent can not be used at all as floor coverings. Accordingly we do not find any reason to interfere with the orders on merits passed by the Adjudicating authority in allowing the claim - Decided in favour of assessee Extended period of limitation - Held that:- There was no willful suppression or misstatement on the part of the Respondent to evade payment of duty and accordingly we also hold that extended period can not be invoked in the present proceedings.- Decided in favour of assessee
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2016 (3) TMI 223
Rejection of refund claim - export of goods - non following of prescribed procedure - period of limitation - Held that:- Appellants filing declaration intimating the export of goods manufactured during the year can be considered as sufficient fulfillment of the procedure in view of the appellant being SSI unit involved in 100% export. Regarding input/output norms, we find that same is not fixed by the Asstt. Commissioner for the impugned period, the appellants followed the adopted norms as per DGFT EXIM Policy. It is seen for the later financial year 2003-2004 Asstt.Commissioenr accepted the said norms after due verification. Regarding procurement of duty paid raw material, the appellants contended that said raw material are procured from the registered factory directly and duty paid documents for inputs have also been submitted along with refund claims. We find that in appellants case the ARE 2 for export has to be filed within 24 hours of clearance and as such, there is no scope for prior verification of the goods by the officers. The cleared goods have been exported and all the relevant customs clearance documents have been filed. These are not in dispute. The appellants also filed further evidence of bank realization documents certifying regular receipt of sale proceeds of exported goods. Thus we find that the substantial benefit of refund claim cannot be rejected in the present case. However, the claims which is filed beyond the period prescribed in section 11B will be hit by time bar. We find that the other claims can rightly be eligible to the appellants. To this extent, we set aside the impugned order and allow the appeal with consequential relief, if any.
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