Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 13, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
News
Highlights / Catch Notes
Income Tax
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Penalty under Section 271D - Period u/s 275(i)(c) - the period of limitation for the purpose of such penalty proceedings was not to be reckoned form the issue of first show cause, but from the date of issue of first show cause for initiation of such penalty proceedings - HC
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Disallowance u/s 40A(3) - Cash payment - Section 40A(3) is not applicable when the net profit rate was applied by the AO and once a net profit rate is applied the expenses are deemed to be considered while applying the net profit rate. - HC
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Addition u/s 40A (3) - cash payment in excess of Rs. 20,000 - assessee was only an agent of RCIL and therefore question of any disallowance in the hands of the assessee was not attracted. - HC
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Computation of income - under the head business income OR capital gains - entries in the books or classification of a particular item in the annual accounts does not determine the character of income or asset - HC
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Deduction u/s 80HHC - DEPB Credit - Tribunal committed an error in coming to the conclusion that on transfer of DEPB credit by an assessee only the amount in excess of the face value thereof would form part of profit as envisaged in clause (iiid) of section 28 - HC
Customs
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DEPB - confiscation - release of goods - the prolonged detention of the goods in question can only be held to be arbitrary and illegal - HC
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Unjust enrichment - As the appellants have obtained a certificate from CA confirming that the duty liability of SAD has not been passed on to the buyers by the appellants, the same is sufficient - AT
Service Tax
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Consulting Engineer - Designs and drawings which were imported and assessed as ‘goods’, cannot be subjected to Service tax - AT
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Cenvat Credit - input services - appellant is availing the services of the sub-contractor for providing an output service on which he is discharging the -Service tax liability - prima facie in favor of assessee - AT
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Construction of complex on own land and sale of flats thereafter - explanation added on 1.7.2010 - such explanation is prospective in nature - AT
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Penalty - Payment of service tax before issuance of show cause notice - section 73(3) - show cause notice is not required to be issued. - penalty waived - AT
Central Excise
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As appeal against the order of Commissioner (Appeals) is pending before the Tribunal, the adjudicating authority dared to pass the impugned order. - This shows that the officers of the department have no respect for the orders passed by the Tribunal and they are following their own law which results in unnecessary litigation before Tribunal - AT
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Corrugation gum made - shelf-life 3 to 4 days - Marketability - burden of proving that a particular product produced by a manufacturer is marketable is on the Department and the Department has not produced any evidence - AT
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For claiming the refund of excess duty paid, the assessee has to prove that the incidence of duty whose refund has been claimed has been borne by him and had not been passed on to any other person. - AT
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By not supplying of relied upon documents amounts to violation of principle of natural justice and accordingly, we hold that in this case there is a violation of principle of natural justice. - AT
VAT
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Application for interim relief - Stay granted to the extent of 55% of tax liability - Court must apply its mind as to whether the appellant has a strong prima facie case on merit and financial conditions - HC
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Spot inspection -cheque forcibly demanded from assessee - It is not proper for the revenue to demand the payment of tax, by the petitioner without issuing a prior notice / an assessment order - HC
Case Laws:
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Income Tax
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2013 (3) TMI 223
Deduction u/s 80HHC denied - Audit Report in Form No.10CCAC was not originally filed along with the return of income but was duly filed during the assessment proceedings - Held that:- No hesitation in coming to the conclusion that the expression “alongwith return of income” as occurring in subsection (4) of Section 80HHC could always be interpreted as directory so far it relates to the time of filing of the report and hence, even if the report is filed during assessment proceedings, the assessee cannot be denied the claim of deduction. See CIT Vs. Gupta Fabs [2005 (1) TMI 48 - PUNJAB AND HARYANA HIGH COURT] & Commissioner of Income-Tax Versus Dr. L. M. Singhvi [2005 (8) TMI 100 - RAJASTHAN HIGH COURT] Thus while filing of the accountant's report in sub-section (4) of Section 80HHC, could be considered to be a mandatory requirement for the purpose of the assessee being entitled to claim deduction but the time of filing of the same could only be considered directory in nature and such report cannot be removed out of consideration only because of having not been filed at the time of filing of the return. The order as passed by the Tribunal does not call for any interference and stands confirmed insofar it is held that the assessee cannot be denied the benefit of deduction under Section 80HHC. However, the other part of the directions of Tribunal, where the benefit of deduction under Section 80HHC has directly been allowed at Rs. 37,08,019.97 only on the basis of the amount stated in the audit report in Form No.10CCAC, the same stands modified in the manner that the issue about quantification of the eligible deduction under Section 80HHC is restored to the file of the Assessing Officer who shall re-examine the matter as regards the amount eligible for deduction and then, shall pass appropriate consequential orders in accordance with law.
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2013 (3) TMI 222
Penalty under Section 271D - Tribunal deleted the penalty levy as it was not imposed within the prescribed period u/s 275(i)(c) - Held that:- Even if the matter had otherwise been in appeal before the CIT(A) against the original assessment order and the appeal was decided on 13.02.2004, the same was hardly of relevance so far the penalty proceedings under Section 271D were concerned. As held in Hissaria Bros. (2006 (7) TMI 163 - RAJASTHAN HIGH COURT) completion of appellate proceedings arising out of assessment proceedings has no relevance over sustaining such penalty proceedings The first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned. Thus even when the authority competent to impose penalty under Section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned form the issue of first show cause, but from the date of issue of first show cause for initiation of such penalty proceedings - thus setting aside the order of penalty - in favour of assessee.
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2013 (3) TMI 221
Disallowance u/s 40A(3) - AO disallowed 20% of the purchase price alleged to be paid in cash in respect of alternative purchases & also rejected books of account and estimated 6% extra profit in respect of purchases made from Kothari Group - Held that:- CIT (Appeal) and the Tribunal, for deleting the said disallowance, placed reliance on the judgment of this Court in the case of Commissioner of Income Tax Vs. Purshottamlal Tamrakar [2003 (3) TMI 10 - MADHYA PRADESH HIGH COURT] wherein held that Section 40A(3) is not applicable when the net profit rate was applied by the AO and once a net profit rate is applied the expenses are deemed to be considered while applying the net profit rate. As in the present case also net profit rate was applied by the AO there was no scope for further disallowance of any expenditure - no substantial question of law arises in the matter - against revnue.
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2013 (3) TMI 220
Wavier of interest seeked pursuant to notification dated 23.05.1996 issued u/s 119(2)(a) - additional demand of tax and interest - status of a registered firm disallowed - Held that:- Clause (d) of the notification which is relied on for waiver is applicable in a case where tax has been paid relying on the judgment of the High Court or Supreme Court and that subsequently, the liability got increased on account of reversal of the judgment relied on by the assessee. Having closely perused the assessee's applications no ground raised by the petitioners, which can be traced to Clause(d) of the notification dated 23.05.1996 also evident from the orders passed by the respondents rejecting the applications.
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2013 (3) TMI 219
Addition u/s 40A (3) - cash payment in excess of Rs. 20,000 - ITAT deleted the addition - Held that:- The Tribunal while accepting the plea of the assessee had categorically held that the money was directly deposited in the bank account of RCIL. Reference was also made to the paper book which had been filed before the Tribunal. Also that the assessee was only an agent of RCIL and therefore question of any disallowance in the hands of the assessee was not attracted. The aforesaid findings have not been shown to be perverse or erroneous in any manner - no substantial question of law arises in this appeal - in favour of assessee.
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2013 (3) TMI 218
Disallowance of stock loss - FAA deleted the addition - Held that:- As per AO it is the case of less purchases whereas as per the assessee it is a case of receipt of less stock due to flood as 2600 MT of goods got washed away into the sea at Paradeep Port. Supplier had insurance with ICICI Lombard General Insurance who got Rs.1,45,77,724 & appellant had to bear loss of Rs.20,88,189. On carefully analyzing the impugned orders of both the authorities below in the light of the submissions of both the parties and considering the material made available to the Tribunal, it is found that both the authorities have not properly examined the issue in the light of facts on record and evidence produced by the assessee. Therefore set aside the impugned order of the CIT(A)and restore this issue to the file of the AO for fresh adjudication strictly following the principles of natural justice - in favour of revenue for statistical purposes. Addition u/s 40(a)(ia) - reimbursement of freight charges - CIT(A) deleted the said addition relying on the decision of DCIT v. Hasmukh J. Patel (2011 (3) TMI 353 - ITAT, AHMEDABAD)wherein held that where payment made by the assessee is nothing but reimbursement of freight charges for which necessary memos were issued by the shipping agent, Section 194C was not applicable - Held that:- The payments in question have been made by AERL and the assessee had only reimbursed the amount corresponding such payments. The CIT(A) has observed that the AO has not come out with any contrary finding on the claim of the assessee. Therefore, no infirmity in the order of the CIT(A) duly supported by the decision of ITAT, Ahmedabad (supra) - in favour of assessee. Disallowance of electricity charges - CIT(A) deleted the disallowance - Held that:- The assessee claimed to have paid service connection fees deposited with Executive Engineer office at Jajpur. In the cases of CIT v. Excel Industries [1979 (10) TMI 68 - BOMBAY HIGH COURT], CIT v. Anand Gum Industries [1985 (4) TMI 58 - RAJASTHAN HIGH COURT] and Sarabhai M Chemicals v. CIT [1980 (7) TMI 77 - GUJARAT HIGH COURT] it is held service connection fee is a revenue expense as the advantage was not of an enduring nature. Thus no infirmity in the order of CIT(A) deleting the addition being the fees for service connection of electricity - in favour of assessee.
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2013 (3) TMI 217
Computation of income - under the head "business income" OR "capital gains" - whether assessee entitled to a deduction of interest paid by it on loans under Section 36(1)(iii) - Held that:- Admittedly the Memorandum of Association of the assessee-company provided that the assessee can carry on the business of investment, financing, buying, selling, investing, transferring, disposing off and otherwise dealing in shares, stocks etc. There is also no dispute that the assessee is registered with the R.B.I. as a "non-banking financial company" allowed to carry on the acquisition of shares, stocks etc. or other marketable securities as it is also a financial institution. Therefore from these facts, it is clear that it is the intention of the assessee to do business of investment in shares and to sell them. As during the financial year 2001-02 admittedly the assessee had borrowed Rs. 51.32 crores from 3 companies and repaid it at the end of the said financial year. Again in the financial year 2002-03 it had taken the loan & out of the said loan purchase of 10,33,323 shares of another group company. The assessee sold 8,70,000 shares of the said company during the financial year 2002-03. This shows that in order to acquire the shares, the assessee has been borrowing funds from its sister concerns and repaying the outstanding loan with interest at the end of each financial year and again taking a loan at the beginning of the following financial year. This policy was being followed without a break and the borrowing of funds by the assessee had assumed the characteristic of a continuing loan. Merely because the assessee had shown the receipts on sale of part of shares as "long term capital gains", that is not conclusive and the Tribunal has rightly held that entries in the books or classification of a particular item in the annual accounts does not determine the character of income or asset. Tribunal has correctly appreciated the evidence to conclude that the business of the assessee is to invest in shares, that the borrowing was for the purpose of business and that the entire amount paid by the assessee on the loans taken by it is allowable as a deduction under Section 36(1)(iii) - no substantial question of law arises - in favour of assessee.
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2013 (3) TMI 216
Deduction u/s 80HHC - DEPB Credit - Application of AS-2 - held that:- Tribunal committed an error in coming to the conclusion that on transfer of DEPB credit by an assessee only the amount in excess of the face value thereof would form part of profit as envisaged in clause (iiid) of section 28. - Decided in favor of assessee.
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Customs
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2013 (3) TMI 214
Unjust enrichment - Claim of Refund and Special Additional Duty on the goods imported for subsequent sale as provided under Notification No. 102/2007-Cus. dated 14-9-2007 - Held that:- CBEC had clearly stated that in order to fulfill the requirement of the condition that the incidence of duty burden has not been passed on by the importer to any other person for the purpose of refund of 4% CVD certificate given by their statutory auditor should be enough. Bar of unjust enrichment is applicable to the facts of this case when the appellants have filed a refund claim of SAD paid by them at the time of import of goods which were cleared by them on payment of VAT. As the appellants have obtained a certificate from Chartered Accountant confirming that the duty liability of SAD has not been passed on to the buyers by the appellants, the same is sufficient as per the Board’s Circular No. 18/2010-Cus., dated 8-7-2010, to discharge the liability of bar of unjust enrichment and the bar of unjust enrichment is not applicable to the case of the appellants. Accordingly, the appellants are entitled for refund claim - in favour of assessee.
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Corporate Laws
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2013 (3) TMI 213
Rehabilitation scheme - demand on account of water cess payable by the petitioner, imposing the penalty of equivalent amount as well as interest - Held that:- here in respect of an industrial company, amongst other things, a sanctioned scheme is under implementation then notwithstanding anything contained in any other law, no proceedings for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and no suit for the recovery of money or for the enforcement of any security against or of any guarantee in respect of any loans or advances granted to the industrial company is to lie or be proceeded with further except with the express permission of the BIFR or the AAIFR as the case may be. As decided in Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd. [2000 (5) TMI 954 - SUPREME COURT OF INDIA] that for successfully invoking the applicability of section 22 of the SICA, it has to be established that a sanctioned scheme is under implementation and it could not be said that despite the aforesaid situation the provisions of section 22 would not be attracted. Therefore, it is evident that the BIFR has permitted respondents Nos. 2 and 3 to accept the payment of water cess as based on actual discharge till the company was in operation as per past average. The payment has to be made over a period of 12 months from the date of sanction of the scheme and to waive the entire interest, penalty etc. This aspect has also been highlighted by the appellate authority in its order dated March 15, 2011 although it has been left to the wisdom of the assessing authority. Accordingly, the relief claimed by the petitioner is meritorious and deserves to be accepted even on this additional ground. The impugned order passed by the Assessing Authority for Cess-cum-Member Secretary, Haryana State Board for Prevention and Control of Water Pollution, under section 11 of the Water (Prevention and Control of Pollution) Cess Act, 1977 raising the demand of Rs. 8,16,851 on account of water cess payable is set aside. The respondents are directed to implement the rehabilitation scheme in so far as it concerns them and, as approved by the BIFR, vide order dated January 10, 2007 (P5). The needful shall be done within a period of one month from the date of receipt of a copy of this order.
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Service Tax
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2013 (3) TMI 228
Consulting Engineer - By the Agreement dated 16-7-1998 the appellant was to supply imported designs and drawings to be delivered in India at purchaser’s and Engineer’s Office valued at Japanese YEN 211,200,000 (Rs. 8.86 crores). The said Agreement also stipulates services of supervision of detailed engineering, design and drawing originating in India, supervision of manufacture of indigenous equipment at Indian works, supervision of erection and start-up & commissioning. - The second Agreement dated 6-6-1998 relates to supply of indigenous design & drawing to be delivered in India at purchaser’s & engineer’s office valued at ₹ 1,75,79,000/-. Held that:- In the case of Solitz Corporation v. Commissioner of Service Tax, New Delhi - [ 2008 (10) TMI 35 - CESTAT NEW DELHI] where the facts are more or less similar to present one, following an earlier decision viz. Kirloskar Electric Co. Ltd. v. Commissioner - [2006 (10) TMI 26 - CESTAT, BANGALORE], the Tribunal has held that drawing and designs ought to be treated as ‘goods’ and the said finding cannot be considered unreasonable. - The Hon’ble Supreme Court in the case of Associated Cement Companies Ltd. v. Commissioner of Customs [2001 (1) TMI 248 - SUPREME COURT OF INDIA], has held that drawings, plans, manuals, etc., specified in Chapter 49 of the Tariff Act are thus statutorily regarded as goods attracting a specified rate of Customs duty on their import into India. Designs and drawings which were imported and assessed as ‘goods’, cannot be subjected to Service tax, hence, no Service tax is chargeable on that part attributing towards the value of designs and drawings. Regarding levy of service tax on import services - Supervision services - held that:- levy of Service tax on the service provided by a foreign service provider and availed by an Indian receiver has been introduced by an amendment to Section 66 of Finance Act, 1994 i.e. by inserting a new Section 66A in the Finance Act w.e.f. 18-4-2006. The Service tax, it is held, cannot be charged for services rendered for the period prior to 18-4-2006 by a foreign service provider to a service receiver in India irrespective of the fact whether the service is received in India or outside India on the basis of a Rule prescribed in the Service Tax Rules, 1994. - Decided in favor of assessee.
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2013 (3) TMI 226
Cenvat Credit - input services - Service tax paid by the sub-contractor - appellant is hiring sub-contractors for doing the basic work at the site for such erection, installation of the DG sets - held that:- appellant is availing the services of the sub-contractor for providing an output service on which he is discharging the -Service tax liability under the head Erection, Installation and Commissioning services. - prima facie case is in favor of assessee - stay granted.
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2013 (3) TMI 225
Construction of complex on own land and sale of flats thereafter - explanation added on 1.7.2010 - retrospective or prospective - held that:- The decision of the case of G S Promoters [2010 (12) TMI 34 - PUNJAB AND HARYANA HIGH COURT] is on the issue of constitutional validity of the explanation added by Finance Act, 2010. The decision does not examine the question whether the explanation has retrospective validity. This issue is examined in detail by the Tribunal in the case of Skynet Builders [2012 (4) TMI 427 - CESTAT, NEW DELHI] - The Ld. A. R. for Revenue is not able to make any reason why the present cases should be treated differently. - following the reasoning given in the said decision of Skymet Builders [2012 (4) TMI 427 - CESTAT, NEW DELHI], decided in favor of assessee.
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2013 (3) TMI 224
Penalty - Payment of service tax before issuance of show cause notice - section 73(3) - held that:- it is a mandate of the Act that if any assessee does not pay service tax in time and does not file the return in time, but later on, on their own ascertainment they pay service tax along with interest and file the return and inform the department in writing, in that case show cause notice is not required to be issued. Same has been clarified by the Board circular. - No merit in the impugned order qua imposition of penalty on the appellant. - Decided in favor of assessee.
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Central Excise
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2013 (3) TMI 231
Joint recovery orders - omissions and commissions in perpetuating the fraud and causing loss of revenue - Fraudulent rebate of Central Excise duty demanded - Held that:- No question of law arises. Tribunal merely remanded the proceedings for fresh consideration in light of the fact that individual liability was required to be fastened. Further, while doing so, it was provided that the revenue should supply the relied upon documents and give proper opportunity to the respondents to present their case. Surely if the documents relied upon by the Department were already supplied previously, direction of the Tribunal would be innocuous. If on the other hand, such documents were not supplied, the Department cannot escape the liability to supply such documents without running the risk of exposing its action being opposed to principle of natural justice. Further the observations of the Tribunal to give opportunity to the respondent to present their case,also would not give rise any question of law.
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2013 (3) TMI 212
Non payment of excise duty on waste and scrap generated at the job workers' end - two show cause notice issued dated 18.1.2008 and 2.5.2008 - Jurisdictional Asst. Commissioner dropped the proceedings initiated under the aforesaid show-cause notices - Against the said order the department filed appeal on the ground that the appellant had given an undertaking that they would discharge the duty liability on waste and scrap generated at the job workers' premises in case they failed to bring back such waste and scrap - lower appellate authority accepted the plea of the department and held appellants liable to pay excise duty - During the pendency of the appeal the adjudicating authority reassessed the show-cause notices and confirmed the demand against the appellant - Held that:- Commissioner (Appeals) who vide order passed appeal of the revenue and set aside the order of the original adjudicating authority there was no direction given by the Commissioner (Appeals) for re-adjudication of the show cause notices. Despite that the adjudicating authority in over-enthusiasm re-adjudicated the show-cause notices and passed the order dated 29.1.2010 confirming the demand against the appellant despite the facts that it was brought to the notice of the adjudicating authority that the appeal has been filed before this Tribunal against the order of the Commissioner (Appeals) dated 21.8.2009. The adjudication order was further challenged before the Commissioner (Appeals) and before the Commissioner (Appeals), the appellant submitted that the operation of the order dated 21.8.2009 has been stayed by this Tribunal vide order dated 29.3.2010, despite that the Commissioner (Appeals) disposed of the appeal instead of keeping the appeal pending. The action of both authorities, i.e. adjudicating authority and Commissioner (Appeals) are not appreciable. Moreover as appeal against the order of Commissioner (Appeals) is pending before this Tribunal, the adjudicating authority dared to pass the impugned order. This shows that the officers of the department have no respect for the orders passed by this Tribunal and they are following their own law which results in unnecessary litigation before this Tribunal. Thus neither re-adjudication nor any order was required to be passed by the Commissioner (Appeals) till the final disposal of the appeal by the Tribunal. Therefore, set aside the impugned order and allow the appeal with consequential relief.
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2013 (3) TMI 211
Exemption Notification No. 67/95-C.E., dated 16-3-1995 benefit denied - as per dept. certain quantity of the corrugation gum made in the factory is used within the factory in the manufacture of corrugated boxes, cartons and other articles cleared at nil rate of duty - whether the corrugation gum in question has shelf-life? - Held that:- The corrugation gum is made by mixing starch and borex with caustic soda in certain proportion and the same is used captively in the manufacture of corrugated packing material and trays. The department simply relies upon the statements of Shri V.S. Gupta of M/s. Sankla Chemicals and Shri Sushil Garodia of M/s. Progressive Packaging Industries, according to whom, the corrugation gum made in those factories has shelf-life 3 to 4 days. As found that no chemical test of the corrugation gum has been done by the department to establish that the same was containing any preservatives or not. In absence of such chemical test report, merely on the basis of statements of employees of some other factories, it cannot be concluded that the corrugation gum manufactured in the appellant’s factory also has shelf-life of 3 to 4 days and on this basis marketable. The burden of proving that a particular product produced by a manufacturer is marketable is on the Department and the Department has not produced any evidence in support of this contention. Thus the corrugation gum made by the appellant in their factory is not marketable and hence not excisable. The impugned order confirming the duty demand against the Appellant is, therefore, not sustainable - in favour of assessee.
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2013 (3) TMI 210
Refund claim in respect of the quantum of excess production of sugar - Duty paid on the clearances of sugar at the full rate - whether this refund claim would be subject to the bar of unjust enrichment under Section 11B - exemption Notification No. 132/82-C.E., dated 21-4-1982 invoked - Refund claim pertains to the period from May, 1982 to September, 1982, since it had not been sanctioned till 19th Sept., 1991 - Held that:- According to sub-section (3) of Section 11B notwithstanding anything contrary contained in any judgment, decree, order or direction or any court or any other provision or Rules no refund shall be made except as provided in sub-section (2). Sub-section (3) of Section 11B is a non-obstante clause whose provisions shall have overriding effect. According to the sub-section (2) of Section 11B, except for the exceptions (a) to (f) mentioned in the proviso to sub-section (2) of Section 11B, in all other cases, the duty amount refundable shall be credited to the Consumer Welfare Fund. Rebate in respect of excess production of sugar during lean season in terms of Notification No. 132/82-C.E. is not mentioned among the exceptions. Clause (d) of proviso to Section 11B(2) covers those cases when the incidence of duty paid by the manufacturer had not been passed on to any other person. Thus, for claiming the refund of excess duty paid, the assessee has to prove that the incidence of duty whose refund has been claimed has been borne by him and had not been passed on to any other person. In view of the non-obstante clause of sub-section (3) of Section 11B, all the refund claims made during the period w.e.f. 20-9-1991 would be subject to the principle of unjust enrichment. As decided in Sahkari Khand Udyog v. CCE reported in 2005 (2005 (3) TMI 116 - SUPREME COURT OF INDIA) with regard to the grant of rebate in respect of excess production of sugar in terms of the Notification No. 108/78-C.E. held that the same would be subject to the principle of unjust enrichment. In view of this judgment irrespective of the purpose for which the duty exemption had been granted under Notification No. 132/82-C.E. in respect of the excess production of sugar during the lean period from May, 1982 to September, 1982, the refund on account of this exemption notification would be subject to the principles of unjust enrichment. The impugned order is not correct. Revenue’s appeal is allowed.
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2013 (3) TMI 209
Rebate - The conditions of the Notification No. 46/94-C.E. (N.T.) allowed rebate of duty only to certain foreign countries having land frontiers with India. These countries do not include Nepal. Hence it appeared to revenue that the supply of ATF to Nepal bound Flight should be on payment of appropriate rate of duty i.e. 16% ad valorem. Held that:- A harmonious reading of the above notification and the executive instructions issued would reveal that through statutorily rebate of duty is not admissible on exports of mineral oil in a country or territory with common land frontier with India the said rebate was allowed under executive instructions. The Commissioner of Central Excise, Delhi vide C. No. 111-11(1)PR/98/130 dated 4-3-1999 has also reported that rebate of duty on export of ATF is paid, as per prescribed rates, for all international flights including flights to Nepal. - Decision in the case of INDIAN OIL CORPORATION LTD. Versus UNION OF INDIA [2011 (7) TMI 778 - BOMBAY HIGH COURT] followed - Decided in favor of assessee.
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2013 (3) TMI 208
MRP Based Valuation - Claim of refund on the basis of Downward revision in MRP - SCN was issued proposing to reject the refund claim as there is no provision under Sec. 4A of the CEA, 1944 read with Standards of Weights and Measures (Packaged Commodities) Rules, 1977 to grant refund. - held that:- Since a depot is defined as one of the places of removal, the department was demanding duty as and when there was higher duty on account of increase in MRP. In fact, in the instant case, there were such payments. In the same analogy, the appellant is seeking refund under Sec. 11B. Therefore, once the depot is treated as place of removal, and the department, in fact, is demanding duty in the case of increase in MRP and consequent duty increase, there is no justification to deny the refund of excess duty paid once the person seeking refund fulfills all the conditions. When the department extends its arms up to the depot price, the same facility is available to the appellant also as the principle of equity demands. The Central Excise laws work on the principle that what is due to the Govt. only to be demanded and what is not due is to be refunded once the test of unjust enrichment is passed. In view of the above legal position, the appellant is entitled to get refund subject to the provisions of Sec. 11B - Decided in favor of assessee.
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2013 (3) TMI 207
Allegation of clandestine removal of their finished goods and availment of inadmissible CENVAT Credit on the inputs - relied upon documents are traceable - held that:- in absence of relied upon documents, the case cannot be proceeded against the appellants. - In the case of Kellogg’s India Ltd. (2005 (10) TMI 98 - HIGH COURT OF JUDICATURE AT BOMBAY), the Hon’ble High Court of Bombay has observed that “where the petitioner has been denied the opportunity to have contents of test reports relied upon by the department before the adjudicating authority. The natural justice principle requires the Revenue to supply all the documents on which reliance is going to be placed by them for establishing case against the assessee. Therefore, we hold that by not supplying of relied upon documents amounts to violation of principle of natural justice and accordingly, we hold that in this case there is a violation of principle of natural justice. On merits, the fact that only buyers of conductors manufactured by the appellants are the State Electricity Boards is not in dispute. - It is also admitted position that the State Electricity Boards/PSUs received the goods against the duty paid invoices and made the payment through A/c payee cheques. - the allegation of clandestine removal is not sustainable as discussed above and denial of Modvat Credit is not sustainable in view of the decision of this Tribunal in the case of M/s. Pooja Enterprises (2006 (10) TMI 36 - CESTAT, MUMBAI) - Demand set aside - Decided in favor of assessee.
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CST, VAT & Sales Tax
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2013 (3) TMI 230
Application for interim relief - Stay granted to the extent of 55% of tax liability - Held that:- As decided in I.T.C. Ltd. vs. Commissioner (Appeals), Custom & Central Excise, Meerut-I [2003 (10) TMI 70 - HIGH COURT OF JUDICATURE AT ALLAHABAD] while considering the application for stay/waiver of a pre-deposit, as required under the law, the Court must apply its mind as to whether the appellant has a strong prima facie case on merit. Keeping in view the settled position of law on the point in issue and from the perusal of the appellate order passed by the appellate tribunal thereby passing the impugned orders, the said authorities have not indicated its mind so far as the existence of the prima facie case on merits on appeal as well as the financial condition which are to be considered by them while passing the impugned orders on an application for stay pending in the first appeal. The said mandatory condition is to be taken into consideration while disposing of an application for interim relief moved by the assessee by the appellate authority as well as tribunal during the pendency of appeal.
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2013 (3) TMI 229
Spot inspection - demand of payment of tax - cheque forcibly demanded from assessee - Held that:- Second respondent and his officers had no power or authority to take a cheque from the petitioner, forcibly, during the inspection of the business premises of the petitioner. It is not proper for the second respondent and his officers to demand the payment of tax, by the petitioner without issuing a prior notice and without passing an assessment order, after giving an opportunity to the petitioner to file its objections, if any. As such, this Court finds it appropriate to direct the respondents to return the cheque, dated 7.9.2012, bearing cheque No.406492, to the petitioner, within a period of fifteen days from the date of receipt of a copy of this order. However, it is made clear that it would be open to the respondents to demand the payment of tax, payable by the petitioner, if any, by following the procedures established by law.
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