Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 14, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Renewal of exemption Section 80 (G) denied - non furnishing of the documents - non furnishing of the documents - despite 5 adjournments, because of the lapse on the part of the some employees of the petitioner institution, exemption has been refused, in the interest of justice one more opportunity is to be allowed - HC
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Personal expenses - whether can be taxed in the hands of assessee u/s 2 (24)(iv) as the amount was routed through the franchisee, which was the HUF of the assessee - remand order by ITAT is perfectly justified. - HC
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Reopening of assessment - disallowance u/s 36 & 37 - at present, only proceeding has been initiated. Prima facie,it cannot be said that the notice is without jurisdiction. - HC
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Depreciation on building and interest paid to the bank - AO has brought nothing on record to show that the appellant has not incurred expenditure on labour payment and for purchase of material - HC
Customs
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Duty drawback - recovery of erroneously sanctioned claim under Rule 16 of Drawback Rules where no time limit is prescribed - recovery proceedings are valid - CGOVT
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Classification - special boiling spirits cannot be considered as part of the main heading motor spirit but they have to be grouped under light oils and preparations which is preceded by “– –”. - AT
Service Tax
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Waiver of penalty u/s 80 - repair and overhaul of aircrafts of India Air Force, Army, Coast Guard and navy under the Ministry of Defence, Govt. of India - penalty waived - AT
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Service Tax - valuation - reimbursable expenditure - payment of statutory fees on behalf of their clients and the same is recovered separately as shown in the invoices - prima facie in favor of assessee - AT
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Commercial or Industrial Construction Services/Works Contracts Services - appellants have constructed a Boys and Girls Hostel - not commercial in nature - not liable to pay service tax - AT
Central Excise
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Ordinarily produces v/s incidentally produces - differential duty - the duty paid in respect of alloy steel castings under the Compounded Levy Scheme was in accordance with law and thus,the Commissioner’s Order is not sustainable. - AT
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Remission of Central Excise duty on storage loss of molasses - losses up to 2% - there is no evidence indicating clearance of molasses, remission of duty is required to be granted to the appellant - AT
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Search - The order for conducting the search cannot be voided on the ground that the empowered officer has not personally recorded the reasons. - There cannot be general order for search - HC
VAT
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Information of rate of tax on “Kattal Gitti“ - upto 90 MM of stone, whatever name may be called, is gitti and attract the tax @ 4%. Only more than 90 MM pieces will not be covered by the said entry and will be treated as unclassified item - HC
Case Laws:
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Income Tax
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2013 (3) TMI 249
Renewal of petitioner institution under exemption Section 80 (G) denied - non furnishing of the documents - Held that:- For furnishing aforesaid information, the petitioner had sought 5 adjournments as such information was required to be furnished by the petitioner, as the staff of the petitioner was busy in the examination work, petitioner institution had sought such time, but it was denied. Though on earlier occasions, five opportunities were allowed to the petitioner and petitioner was under an obligation to furnish such information but looking to the fact that before the impugned order, the petitioner institution was enjoying the benefit of Section 80(G) but because of the lapse on the part of the some employees of the petitioner institution, aforesaid exemption has been refused, in the interest of justice one more opportunity is to be allowed to the petitioner to furnish all the informations within a period of 30 days from today as agreed by the parties. So far as the consideration of the Book 'Sikh Ethos' in the impugned order is concerned, petitioner may explain its status that it is a charitable institution, notwithstanding the fact that some opinion has been expressed by the author of the book.
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2013 (3) TMI 248
Personal expenses - whether can be taxed in the hands of assessee u/s 2 (24)(iv) as the amount was routed through the franchisee, which was the HUF of the assessee? - reopening of assessment - Revenue contented that ITAT instead of looking into the contents of the transaction, has chosen to look into the form of the transaction and ought to have upheld the orders of the AO as company has simply used the medium of HUF of the Directors in whose name the franchisee stood, to make payment towards their personal expenses and therefore ought - Held that:- A perusal of the records reveals that the assessees have various avathars in various establishments. The assesses are Directors in the company called 'M/s.C.R.S.Sons & Co. Ltd.,'. They are the partners, representing the Hindu Undivided Family, so far as 'CRS Holdings' are concerned. Two out of the four assesses represent the HUF in 'M/s.Sri Sundaravalli Collections', which is the purchasing arm for the M/s.CRS Sons & Co. Ltd., Apart from that, they also represent as franchisees (owned by the HUF, of which they are the co-parceners and karthas). Each of the unit has different composition. Each unit has varied number of members. Under such circumstances, the acceptability of the finding given by the Income Tax Appellate Tribunal has to be considered that the amounts paid by the company towards personal expenses of the assessee cannot be taxed in its hands under Section 2 (24)(iv). So far as the commission from SSVC is concerned, ITAT ordered remand of the issue on the ground that the commission by SSVC was not received by the assessees, but by the HUF of the assessees. The reasoning given by the Tribunal was that when the assessees claimed that the commission payments were made to the CRS Holdings, which is an income tax assessee and whereas, the CIT (A) held that commission was paid to HUF of the assessees and to sort out this contradiction, the Tribunal felt it appropriate to remand the matters to the AO. It is the contention of the Revenue that CRS Holdings did not file any return of income before the survey and the entire things were stage managed after survey. Only based on this statement of the Revenue, ITAT felt that it is a case to be investigated by the AO. It is also relevant to point out that the assessee in all these cases did not file any return in their individual capacity and notices under Section 147 were issued only on the ground that they did not file any return disclosing the perquisites and benefits received by them from the company and that they are guilty of omission to file the returns. ITAT has ordered remand only after considering the nature and circumstances of the transaction and in fact, after considering the modus operandi of the entire group. Learned counsel for the respondent has also filed the assessment order for the assessment year 2000-2001, by way of additional typed set of papers. Under such circumstances, the order of remand made by the Income Tax Appellate Tribunal is perfectly justified. No interference, having regard to legal and factual aspects discussed above - revenue appeal dismissed.
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2013 (3) TMI 247
Eligibility for deduction u/s 80-HHC - Income surrendered on account of increased valuation of closing stock during the course of a survey under Section 133-A conducted at the business place of assessee - ITAT allowed the claim - Held that:- Deduction under section 80HHC is available only on showing fulfillment of the conditions specified therein & as categorically held by the two appellate authorities below that there is no case made out against the respondent assessee that there was any violation of conditions prescribed under Section 80HHC of the Act. The said findings of facts are indisputably binding on this Court under Section 260A while dealing with substantial question of law already framed. ITAT was justified in allowing the deduction under Section 80HHC on the excess stock valuation found during the course of survey and surrendered as business income of the assessee during the assessment year and the same being treated as “profits of business” for the relevant assessment year, were eligible for the deduction under Section 80HHC to the extent prescribed under sub-section (1B) of Section 80HHC - in favour of assessee.
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2013 (3) TMI 246
Eligibility for deduction u/s 80-HHC(3C) - two separate Divisions of same business - setting off of loss in Unit III against the profit of Unit No.1 - Whether the turn over and profits/losses of the two Units being Unit No.1 and 3 could be clubbed together to determine the average profit/proportionate profits for the purpose of computing the deductions u/s. 80 HHC? - Held that:- The words “assessee being an Indian company or a person (other than a company) resident of India” is used in Section 80HHC. The different units of the same assessee company engaged in manufacturing of different goods viz. Granite slabs and tiles in Unit-I and Marble slabs and tiles in Unit-III does not make separate Units of the same assessee company as separate and different assessable units for the purposes of Section 80-HHC of the Act. Merely because for the purpose of its accounting politices or describing different units for the different goods manufactured and exports by it, the assessee has described the same as Unit, I, II and III in the present case, it does not mean that benefit of Section 80HHC can be given for Unit-I separately on its profit earned by exports while the loss of Unit-III remains unadjusted against such profit of Unit-I. The purpose of giving benefit of deduction under Section 80-HHC is to encourage the exports and profits derived by the assessee as such during the relevant year would form the basis for determining the extent of such deduction. As decided in IPCA Laboratory Ltd. case (2004 (3) TMI 9 - SUPREME COURT) deduction u/s 80HHC (3) (c) can be allowed only if there is a positive profit income in trading goods and if there is a loss in either of the two, then that loss has to be taken into account for the purposes of computing the profits. Deduction u/s 80HHC (3) (c) can be allowed only if there is a positive profit income in trading goods and if there is a loss in either of the two, then that loss has to be taken into account for the purposes of computing the profits - in favour of Revenue.
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2013 (3) TMI 245
Reopening of assessment - disallowance u/s 36 & 37 - Held that:- The provisions of Section 147 clearly prescribe that if the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment, he can initiate proceeding. So, at present, only proceeding has been initiated. Prima facie,it cannot be said that the notice is without jurisdiction. The petitioner is at liberty to participate in the proceeding. The petitioner has already participated in the proceeding and tomorrow is the date of hearing. In such circumstances, it would not be just and proper to entertain the petition at this stage. It is hereby dismissed.
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2013 (3) TMI 244
Disallowance on lease rent - ITAT affirmed the order of CIT(A) in deleting the addition - Held that:- Referring to the decision of CIT Vs. Shaan Finance (P.) Ltd (1998 (3) TMI 8 - SUPREME COURT) and Rajshree Roadways Vs. Union of India & Ors (2003 (3) TMI 50 - RAJASTHAN HIGH COURT) the findings of the CIT (A) and the Tribunal, allowing lease rental as business expenditure, not calling for any interference - in favour of assessee.
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2013 (3) TMI 243
Disallowance of depreciation on building and interest paid to the bank - ITAT affirmed the order of CIT(A in deleting disallowance as AO has nowhere in the assessment order pointed out any defect in the books of account - revenue appeal - Held that:- The grounds as urged and the questions as suggested all essentially relate to the matters of appreciation of evidence for a factual enquiry and rendering of findings on facts about the factory building construction. AO has brought nothing on record to show that the appellant has not incurred expenditure on labour payment and for purchase of material AO disallowed a part of the claim made by the assessee with reference to his view of the material on record. However, the CIT(A) disagreed with the findings of the AO after analyzing the material on record and also after referring to the ground realities as well as obvious inconsistencies in the order of the AO. Then, the Tribunal found no reason to interfere while proceeding on relevant considerations. The matter essentially related to the facts but the approach of the AO could not have been approved when the same had been either too theoretical or carried obvious inconsistencies like total disallowance of the claim towards labour payment despite there being addition to the factory building during the period in question. Thus the findings on facts have been rendered by the two appellate authorities in accordance with law and the orders impugned do not appear suffering from any perversity or wrong application of any principle of law - in favour of assessee.
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2013 (3) TMI 242
Unexplained purchase of medicine, unaccounted fees and unaccounted expenditure - Tribunal affirmed the order of CIT(A) in deleting the additions - assessee runs a nursing home and also owns a marble cutting plant - Held that:- The grounds as urged and the questions as suggested essentially relate to the matters of appreciation of evidence for factual enquiry and rendering findings on facts about the expenditure. Though the AO made the additions with reference to his opinion on the material found and impounded during the course of survey proceedings, however, the CIT(A) disagreed with the findings of the AO after thoroughly analyzing the material on record and after referring to the inconsistencies in the assessment order on accounting aspects and the fact that the trading additions had already been made in the original assessment. Thereafter, the Tribunal found no reason to interfere while scrutinizing the findings recorded by the CIT(A) on relevant considerations. Thus the findings on facts have been rendered by the two appellate authorities in accordance with law - the orders impugned do not suffer from any perversity or wrong application of any principle of law - in favour of assessee.
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Customs
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2013 (3) TMI 241
Duty drawback - recovery of erroneously sanctioned drawback claim - It was noticed after audit of export documents i.e. the exported item of “woollen garments” were not covered by the duty drawback schedule for the year 1999-2000 and that as per schedule woollen garment namely suits/blazers/trousers and jackets excluding those made from shoddy fabric/yarn only are classifiable under sub-serial No. 62.09 and eligible for drawback and required the department to recover the amount paid as drawback. - Hence demand notice was issued Held that:- the case laws cited by respondent are of no help to him. The respondent has also contended that the demand was issued under Section 28 of Customs Act, 1962 and therefore subject to time limitation prescribed under this Act. In this regard. Government notes that the adjudicating authority has ordered recovery of erroneously paid drawback under Rule 16 of Drawback Rules where no time limit is prescribed. Respondent has wrongly stated that demand was issued under Section 28 of Customs Act, 1962. - Decided in favor of revenue.
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2013 (3) TMI 240
Classification - Exxsol Hexane RD and Hydrosol n-hexane - classification under Chapter 29 or classification under Chapter 27 - held that:- According to general explanatory notes in the rules for interpretation of the schedule, when the description of an article or group of articles is preceded by “– – –” or “– – – –”, the said article are group of articles shall be taken to be a sub-classification of the immediately preceding description of the article or group of articles which has “–”or “– –”. In this case in Chapter 27, the heading motor spirit is preceded by “_ _ _” the special boiling sprits under three sub-heading are preceded by “– – – –”. This would clearly show that the special boiling spirits cannot be considered as part of the main heading motor spirit but they have to be grouped under light oils and preparations which is preceded by “– –”. Since special boiling spirits are not sub-headings of the heading motor spirit in the present tariff, the claim of the appellant is that Revenue has to establish that the product is suitable for use in spark ignition engine in admixture with other products cannot be sustained and the decisions cited by the learned counsel also are of no help to the appellants. However, we cannot straightway classify the product as a special boiling spirit without rejecting or considering the competing heading under Chapter 29. The very fact that no purity has been prescribed for n-Hexane or Hexane and the definition of impurities given in the HSN and the fact that there can be two terms namely pure and commercially pure would, in our opinion, support the appellants’ case. The technical expert has also stated that improving the purity by decreasing the range of boiling points would involve abnormal conversion cost and render the product commercially unviable. This has not been challenged or proved otherwise. Therefore the submission of the appellants on the basis of supplier’s letters and technical expert opinion and the terminology used for pure and commercially pure to say that the product imported by them even if it contains only 40% or more of Hexane would still be classifiable as Hexane since the impurities or other products found in the product are covered by the definition of impurities, would come under Chapter 29 appear sustainable. As already stated, the mixtures are not ruled out from Note 1(a). Even the Central Board of Excise and Customs as submitted by the appellants had clarified that while classifying a product under Chapter 29, Rule 3(b) of Interpretation Rules has to be applied. The product is called Hexane. Further 88.7% of the total content consists of n-Hexane and its isomers. There is no evidence to show that the product is not a mixture of different components. In this case from the evidences on records and reports available and the opinion of technical expert and literature, it emerges that the essential character of the product is derived from Hexane. In the explanatory notes to Chapter 29.01 of HSN, at (A) it is specifically stated that saturated acyclic hydrocarbons of the heading include Hexanes, with six atoms of carbon. The use of word ‘Hexanes’ and not Hexane supports the case of appellants and if we take the heading as hexanes, hexanes percentage in the product is more than 88%. This would satisfy the predominance test also. - Decided in favor of assessee. Regarding penalty - held that:- it would not be appropriate to sustain imposition of penalty since the issue is one of interpretation of different tariff headings, the application of Interpretative Rules, technical literature, etc., and two views are possible. In such a situation, imposition of penalty on the appellants is not correct. - appeal allowed with consequential relief to the appellants.
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Corporate Laws
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2013 (3) TMI 239
Violation of Section 297 - Non obtaining of approval of the Board of Directors of the Company in respect of contracts entered into by the company in which its directors are interested - also in case of a company having paid up capital of Rs.1 Crore and above previous approval of the Central Government is required in respect of contracts in which directors are interested which was not obtained - petitioners submits that petitioners 2 and 3 resigned from the directorship of the company on 11.8.2000 and the first petitioner resigned from the directorship from 16.8.2000 - Held that:- Ongoing through Annexure A5, it is clear that the contention raised by the petitioners that they had submitted their resignations to the Company is true. Since it was the duty of the Secretary of the Company to fill up Form No.32 and to submit the same to the Registrar of Companies, the petitioners cannot be found fault with or saddled with the criminal liability for not submitting Form No.32. Since the resignations were not rejected or returned, they must be deemed to have come into effect in the year 2000 itself. If so, the prosecution initiated against the petitioners for the non-filing of returns or for any of the violations pertaining to the year 2003 and made mention of in the Inspection Report cannot be sustained. The fact that the petitioners had moved the Company Law Board long prior to the institution of these complaints would make it clear that the resignations were duly submitted to the Company. The Company had no case that the resignations were not accepted. As the petitioners had disassociated themselves from the business of the Company ever since they submitted their resignation in August 2000 as referred to earlier and as such, for the violations of non- compliance noticed in 2003, the criminal liability cannot be saddled upon the petitioners.
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Service Tax
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2013 (3) TMI 253
Waiver of pre deposit - Cenvat Credit - Input Services - construction of residential units for employees - held that:- Hon'ble High Court of Bombay in the case of Manikgarh Cement [2010 (10) TMI 10 - BOMBAY HIGH COURT] laid down that establishing residential colony for employees may be welfare activity, and the same is not covered by the input service definition. - Since sufficient amount has already been deposited, balance amount is waived.
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2013 (3) TMI 252
Demand of service tax and penalty - waiver of penalty u/s 80 - repair and overhaul of aircrafts of India Air Force, Army, Coast Guard and navy under the Ministry of Defence, Govt. of India - held that:- the appellants were in correspondence with the Ministry of Finance seeking exemption on the maintenance and repair services of aircrafts pertaining to Ministry of Defence. Such correspondence resulted in denial of said request for exemption by Ministry of Finance on 26.7.2005. - In as much as the appellants were bonafidely contesting the issue before the appropriate authority and the appellants being a Govt. of India unit, no malafide with intent to evade the payment of duty can be attributed to them so as to invoke penalties. Provisions of section 80 of Finance Act, 1994 are required to be applied - there was a justifiable reason entertained by the appellants for non-payment of duty - While confirming the demand of duty, penalty set aside.
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2013 (3) TMI 251
Service Tax wrongly claimed as reimbursable expenditure and not included in the taxable value for payment of service tax - Held that:- The applicants are paying statutory fees on behalf of their clients and the same is recovered separately as shown in the invoices. Hence the applicants have made out a case for waiver of dues. Pre-deposit of the dues is therefore waived and recovery thereof stayed during the pendency of the appeal.
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2013 (3) TMI 250
Commercial or Industrial Construction Services/Works Contracts Services - appellants have constructed a Boys and Girls Hostel - Held that:- Considering the fact that building is constructed as hostel for the residence of students studying in medical institute and there is no allegation that the building is being used for any other purpose the Board Circular No. 80/10/2004-ST, dated 10.9.2004 is applicable to the facts of this case which clarified that such constructions which are for the use of organizations or institutions being established solely for educational, religious charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable being, non-commercial in nature. Thus from the above circular, appellant are not liable to pay service tax - in favour of assessee.
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Central Excise
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2013 (3) TMI 238
Notification No.6/2002 dated 1.3.2002 benefit denied - Cleared EOT cranes without payment of duty - Held that:- As the Notification provides at sr. No. 237 nil rate of duty of non-conventional devices specified in list-9 EOT cranes are not specified goods. No infirmity in denying benefit of the Notification No. 6/2002. Penalty under Rule 25 of the Central Excise Rules - Held that:- The appellant has given advance intimation to the jurisdictional Superintendent of Central Excise before the clearance of the EOT cranes by claiming the benefit of Notification No. 6/2002 and also produced a certificate issued by the jurisdictional Central Excise authorities, Faizabad and followed the procedure provided under Chapter X of the Central Excise Rules with all these facts mentioned in the monthly ER-1 return of the relevant period. Hence, the appellant is not liable to any penalty.
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2013 (3) TMI 237
Pre deposit demanded for the purposes of entertaining the appellant’s two appeals - as per dept. cost of the materials consumed to manufacture the intermediate goods has not been correctly taken leading to undervaluation - Held that:- As the deposit of Rs. 1.38 crores out of the aggregate demand of Rs. 9.04 crores in both the appeals as confirmed by the Commissioner of Central Excise is reasonable. This is particularly so as the issue of revenue neutrality would have to be examined on merits after ascertaining what is the exact amount which is paid by units at Pimpri, Goa and Rorkee receiving the intermediate goods on which credit of duty paid is taken. As the appellant has given details only with regard to Pimpri and Goa units and not with regard to the Rorkee unit. Consequently, the same would be a matter of examination at the time of final hearing of the appeals. Further the issue whether there was any intent to evade duty on the part of the appellant or not warranting invocation of extended period is itself a debatable issue. Therefore, the deposit of the admitted amount of Rs. 1.38 crores as per the final CAS-4 Certificate submitted by the appellant cannot be said to be arbitrary and perverse. Therefore, as the issues raised in the applications are contentious and require examination in greater depth at the time of final hearing of the appeals, no reason to interfere with the order of the Tribunal directing the appellant to deposit an amount of Rs. 1.38 crores on a prima facie view. However, the time to deposit the amount is extended by a period of another six weeks from today i.e. upto 11-1-2013.
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2013 (3) TMI 236
Ordinarily produces v/s incidentally produces - differential duty - proceedings against assessee for the alloy steel ingots and billets on the ground that Explanation to Rule 2 of the Induction Furnace Annual Capacity Determination Rules, 1997 covers only goods ordinarily manufactured and goods manufactured incidentally and the alloy steel goods are not produced incidentally - Held that:- Appellant had manufactured non-alloy steel ingots to the extent of 2503.252 MT and produced alloy steel castings only to the extent of 168.5 MT, which works out to around 5% of the totally manufactured quantity of the non-alloy steel castings as ‘notified goods’. Thus, the Appellant predominantly manufactured the ‘notified goods’, i.e. non-alloy steel castings. Thus the Appellant were manufacturing predominantly ‘notified goods’ (non-alloy steel castings) under the Compounded Levy Scheme. As such, the duty paid in respect of alloy steel castings under the Compounded Levy Scheme was in accordance with law and thus,the Commissioner’s Order is not sustainable. In favour of assessee.
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2013 (3) TMI 235
Miscellaneous application filed for restoration of appeal dismissed - delay in filing appeals - non-compliance of the provisions of Section 35F of the Central Excise Act, 1944 - Held that:- Insofar as the delay caused in filing the miscellaneous application for restoration is concerned, a perusal of the averments made therein indicates that all that is stated therein is that the petitioner-company had been suffering from financial difficulties. Such averments fly in the face of the statement made before this court on 10th September, 2004 whereby it was stated that the petitioner-company was then in a position to deposit Rs. 6 lacs. Under the circumstances, the submission that the petitioner was facing financial difficulties and that petitioners had shown their bona fides by depositing the amount towards pre-deposit does not merit acceptance. Thus in respect of such inordinate delay of more than five years and half years with a one sentence explanation that the petitioners were suffering from financial difficulties, can by no stretch of imagination be said to be a reasonable explanation. Also no application for extension of time was ever moved before the Tribunal. Under these circumstances, no infirmity can be found in the impugned order of the Tribunal in rejecting the restoration application. Even the present petition challenging the above tribunal order has been filed after a period of two years from the date of the impugned order without any explanation worth the name coming forth in the petition cannot be said to be a normal delay, which can be brushed aside without any reasonable explanation coming forth - petition deserves to be dismissed.
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2013 (3) TMI 234
Remission of Central Excise duty on storage loss of molasses denied - As per the dept. as per CBEC Circular No. 261/15/1/80-CX.8, dated 6-2-1982 vide which storage loss of molasses upto 2% is permissible - Held that:- On going through the Board’s Circular it is found that the same is to the effect that losses up to 2% in storage of molasses may be condoned. There is nothing in the said circular to restrict the said remission per tank basis. See SHETKARI SAHAKARI SAKHAR KARKHANA LTD. Versus C. C. E., AURANGABAD [1999 (4) TMI 256 - CEGAT, MUMBAI] Thus by following the Tribunal’s decision above & also by taking note of the fact that total loss of molasses condoned in all the tanks was well below 2%, as also by taking note of the fact that there is no evidence indicating clearance of molasses, remission of duty is required to be granted to the appellant - in favour of assessee.
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2013 (3) TMI 233
‘Kattha (Catechu) excluding Gambier - Exemption - held that:- Department cannot adopt discriminatory approach: the manufactured goods from Gambier cannot be treated as Kattha (and exempt it from excise duty) at some places and at others as an excisable item. The Department has to adopt one standard; either it is treated as Kattha and a non-excisable item by the excise department or is not treated as Kattha consequently an excisable item: there cannot be discrimination areawise. - matter remanded back. Search - reason to believe - held that:- The reasons are there in the note of the Superintendent. They are relevant and were in existence prior to the order for the search. It is on their basis, the search was ordered by the empowered officer on 25-3-2003. Thereafter, some officials were authorised and search was conducted on 4-9-2003. However, the question is, should they be personally recorded by the empowered office? The order for conducting the search cannot be voided on the ground that the empowered officer has not personally recorded the reasons. Regarding search in respect of units not mentioned - intelligence report to cover the similar units within jurisdiction of other commissionerates. - held that:- The search is a serious matter. There cannot be general order for search: either the report should have indicated the names of such units and then agreed upon by the empowered officer, or the empowered officer should have indicated the same. The search conducted on M/s. N.K. Laminates and Brij Kattha Industries is valid; whereas the search conducted on Kanchan Udyog is illegal.
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CST, VAT & Sales Tax
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2013 (3) TMI 255
Penalty under Section 69(3) of the M.P. Commercial Tax Act, 1994 - whether nonpayment of less than 80% of the tax alongwith return amounts to filing of a false return so as to attract the levy of penalty - Held that:- The petitioner was fully aware of its liability inasmuch as they knew the amount in terms of return, tax payable yet they have not deposited the tax. They deposited less than 80% of the due amount. This provision makes Section 69(3) of M.P.C.T.Act applicable in this case. The very fact that the petitioner knew as to what was its liability, non-payment of the said amount certainly amounted to negligence. The judgments cited by assessee does not come to rescue the petitioner. Here it was a case where the petitioner was fully aware of its liability yet decided not to deposit the tax which made it a defaulter within the definition of Section 69 of M.P.C.T.Act so as to call the return filed by him as false return. It is now well settled that the order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. To make the assessee liable for penalty fallacy should be in the disclosure of the facts required to be stated in the return. On perusal of the provisions of Section 69 and 26 of the M.P.C.T.Act it is clear that in Section 69, the liability for imposition of penalty arises on account of less payment of tax that also below 80%, when it was known fully well that it was their liability to pay full tax, whereas in the case of Section 26, the liability to pay penalty at the time of filing of the return and payment of tax, at that time of filing of the return, when tax is paid simultaneously. Both these situations are different and deals with the different situation. However, even otherwise fiscal statutes are to be construed strictly and on their plain reading reference can be made to a judgment of in the case of Catholic Syrian Bank Limited Vs.Commissioner of Income Tax, Thrissur(2012 (2) TMI 262 - SUPREME COURT OF INDIA) In these circumstances, while answering the issue framed above against the petitioner, no infirmity in the order of the revisional authority. However, in the facts and circumstances of the case, it is find appropriate to reduce the penalty from 5 times to 3 times. The petitioner would therefore be liable to pay penalty three times of the tax. If the tax un-paid and in case, he has already paid the penalty, as imposed by the assessing authority they would be entitled for refund of the balance.
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2013 (3) TMI 254
Information of rate of tax on "Kattal Gitti" - leviable @ 12.5% being unclassified item as held by department OR @ 4% as held by Tribunal - Held that:- As decided in Commissioner, Sales Tax, U.P. vs. Lalkuan Stone Crusher Pvt. Ltd. (2000 (3) TMI 58 - SUPREME COURT OF INDIA) observed that gitti, kankere, stone ballast etc. will have to be covered by the Entry 40 of the notifications being alike. It has carried the size of 90 MM or more. With effect from 01.01.2008, the tax is leviable @ 4% on the grit. Thus the Tribunal has followed the ratio laid down in the case of Lalkuan (supra) and held that upto 90 MM of stone, whatever name may be called, is gitti and attract the tax @ 4%. Only more than 90 MM pieces will not be covered by the said entry and will be treated as unclassified item - the revision filed by the Department is hereby dismissed - in favour of assessee.
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Indian Laws
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2013 (3) TMI 232
RTI Application - information regarding what action is contemplated by this Hon'ble Supreme Court of India for noncompliance of order marked against Govt. of India, concerned officers of which were responsible to decide the charge sheet - what liability can be fixed against the Govt officers for not taking any action - Held that:- CPIO has not withheld any information and has rightly held that it is beyond the jurisdiction and his duties to opine, comment or advice on matters under RTI Act or to take action against any authority or to direct any authority to take action. The Appellant is filing a number of RTI applications which do not seek any information as defined under Section 2(f) of the RTI Act. The Appellant must understand that information is something that must exist on records on paper or on computer. The PIO is now obliged to give his own opinion or get an opinion from anybody to answer the RTI application. Appeal is dismissed.
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