Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 14, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Entitlement for deduction U/s 80IB - amount under the head VKGUY [Vishesh Krishi Gram Udhyog Yojana] and on account of DEPB - these benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80IA/80IB - AT
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Correction of error in the return & intimation u/s 143(1) - Assessee has probably chosen a wrong path for seeking correction of the alleged error committed by the assessee itself. The AO (ACIT-CPC Bangalore) cannot be blamed for merely accepting an erroneous return filed by an assessee - AT
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Expenditure incurred for re- possession of the club - capital or revenue in nature - when as per the JDA, the ownership is vested in the assessee and the plot owners have no right in the assets of the club, it cannot be said that creating the asset of the club is a revenue expenditure - AT
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Transfer Pricing (T.P) adjustments - notional interest on receivables from Associated Enterprises (A.E) - the credit period extend by the assessee to its AE is very longer period, sometime it is more than one year the contention of assessee that there can be no separate transfer pricing adjustments towards notional interest on outstanding receivables rejected - AT
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TPA - ALP determination - AO/TPO directed to adopt CUP method for the medical transcription services and TNMM for the software development services - AT
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Enterprise Resource Planning (ERP) software installed by the assessee denied on the ground of it representing capital expenditure, inadmissible u/s. 37(1) - AT
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Revision u/s 263 - levy of penalty u/s .271(1)(c) - CIT is not competent to direct the AO to redo the assessment with a view to initiate and levy penalty in respect of erroneous claim of deduction u/s 10B. - AT
Customs
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Prohibited item - import of Drone - in order to import a drone, prior clearance of the Director General of Civil Aviation and import license from DGFT is required. - HC
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Misdeclaration of imported goods - Levy of penalty - even if a concerned person has not submitted Bill of Entry, if he is found to be an abettor in illegal import, penalty u/s 112 (a) of the Act is imposable. - HC
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The imported goods were not ‘marble’ but ‘other calcareous stones’ which the Geological Survey of India reported to be a variety of limestone without metamorphic recrystalisation and such goods being restricted could be imported only against licence - AT
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Benefit of N/N. 21/20102- Cus - denial on the ground that the goods which were imported are “Used Rails” in the guise of “Heavy Material Scrap” - the findings of the Tribunal in the impugned order treating, the goods as Heavy Material Scrap and not Rails are clearly erroneous - SC
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Levy of ADD - vitrified/Porcelain tiles - these Producers have a much wider relationship network than what was declared by them. This puts the whole claim and basis of New Shipper Review under jeopardy - AT
Service Tax
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When the appellants sold the cars and recovered the amount including the dealers’ margin the intention was to sale the car not to provide free after sales service, Free sale service is only to promote sale – No service tax can be levied - AT
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Refund claim - Notification No.41/2007-ST - In case the refund claim is in excess of ₹ 5 lakh, the declaration should also be certified by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of Companies Act, 1956 - AT
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CENVAT credit - Job-work - though the job work activity was exempt under N/N. 8/2005-ST dated 01.03.2005, Job workder paid the service tax - principal have availed credit on the strength of such job bills - credit allowed - AT
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Rebate claim - export of services - the claim of rebate of Service Tax under Export of Service Rules, 2005 and refund of CENVAT Credit u/r 5 of the CCR are mutually exclusive schemes - both rebate as well as refund of input service credit cannot be availed in respect of same set of inputs invoices - AT
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CENVAT credit - appellants are engaged in providing services of commissioning and installation and they have availed credit only to those services which are used in the said activity - credit allowed - AT
Central Excise
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Returned goods - Rule 16 - the period of six months was not provided under Rule whereas it is provided by way of trade notice which is procedural one. Under any circumstances duty paid goods cannot be levied duty twice only because it is not cleared within six months from the factory of the appellant - AT
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Manufacture - appellants have assembled the kit of bought out items - Chapter 85/87 - the activity of packing of various parts into small retail packing and sale thereof to various customers does not fall under the purview of manufacture. - AT
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Even for recovery of interest, no SCN is required As the statutory provisions mandate for payment of interest. The interest is piggyback of the duty demand, it goes hand in hand. Therefore, for the purpose of demand of interest no separate proceedings are required - AT
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Shortage of inputs as well as finished good - without any evidence of removal of inputs and/or finished goods, merely on the basis of the difference between the excise records and financial records demand cannot be made - AT
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CENVAT credit - input service used for disposal of the press mud, a by-product, which was generated during the course of manufacture of sugar - credit allowed - AT
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CENVAT credit - whether the appellants are eligible to avail credit at their factory, when the entire input services have been received and utilized for their business activity at their head office which was not registered as ISD? - Credit allowed - AT
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CENVAT credit - outdoor catering services - appellant is recovering 50% of the element of the basic value from the worker only and not the service tax - if the service tax /Cenvat amount is not recovered from the employee the credit is admissible in respect of outdoor catering services - credit allowed - AT
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CENVAT credit - inputs - Non maintenance of records by the dealer, cannot be the ground for denial of cenvat credit - AT
VAT
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DVAT refund - Apex Court stays the order of Delhi High Court in which the authorities were directed to process the refund claim under DVAT without seeking original paper declarations in CST Forms C, E1, E2, F, H, I etc.
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Recovery of tax dues under MVAT - priority of banks over statutory dues - the priority of the Secured Creditor who stand outside the winding up is confined to workmens portion as defined in Section 529 (iii) (c) - The petitioner bank has a priority claim over the statutory dues - HC
Case Laws:
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Income Tax
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2017 (3) TMI 483
Disallowance of deduction u/s 80IB(10) - Held that:- There is no dispute with regard to approval, development and building housing project. As per the AO, the assessee was required to furnish Completion Certificate of Project for claiming the deduction. The ld. CIT (A) has given finding that the assessee has furnished Completion Certificate in respect of 11 blocks out of 13 blocks i.e. except block A-5 & A-6. This fact is not controverted by the revenue. In respect of remaining two blocks, the assessee had applied to the concerned authority and sent various reminders. It is observed by the ld.CIT (A) that as per the regulations governing the issuance of Completion Certificate, in case the assessee makes an application and the Completion Certificate is not issued within 30 days from the receipt of such application, the assessee would give a notice to the competent authority. After expiry of 15 days, it would be deemed that completion certificate has been issued. This fact is also not controverted by the revenue by placing any contrary material on record. Therefore, in our considered view the AO was not justified in declining the deduction on this ground. We, therefore, do not see any reason to interfere into the finding of ld. CIT (A). Another objection of the AO was that the assessee has violated the provisions of section 80IB(10(f). It is pointed out by the ld. Counsel for the assessee that this provision came into effect from w.e.f. 01.04.2010 whereas the flats were sold in between 01.04.2009 and 31.03.2010. Therefore, the provisions were not applicable. The ld. CIT (A) has also recorded this fact in his order. The fact that the provisions of section 80IB(10(f) was introduced in the Statute Book with effect from 01.04.2010. Therefore, the transactions related to prior period do not come within the ambit of newly introduced provision. - Decided in favour of assessee TDS u/s 194C - disallowance of expenses on account Interest expenses under section 40(a)(ia) - Held that:- We find that the ld. CIT (A) has deleted the addition by taking into consideration the judgment of the Hon’ble Allahabad High Court in the case of Vector Shipping Services Ltd. (2013 (7) TMI 622 - ALLAHABAD HIGH COURT) also been followed by the Coordinate Bench of the Tribunal in the cases of Girdhari Lal Bargoti (2015 (11) TMI 746 - ITAT JAIPUR) thereby allowing the claim of the assessee. - Decided in favour of assessee
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2017 (3) TMI 482
Entitlement for deduction U/s 80IB - amount under the head VKGUY [Vishesh Krishi Gram Udhyog Yojana ]and on account of DEPB - Held that:- The Hon'ble Supreme Court in the case of Liberty India Vs. CIT (2009 (8) TMI 63 - SUPREME COURT) has held that Section 80IB/80IA are the code by themselves as they contain both substantive as well as procedural provision. It is evident that Section 80IB provides for allowing of deduction in respect of profits and gains derived from the eligible business. It is held by the Hon'ble Supreme Court that the words “derived from” is narrower in connotation as compared to the words “attributable to”. After analyzing the provision, it was held by the Hon'ble Supreme Court that the DEPB is an incentive. It is given under Duty Exemption Remission Scheme. Essentially, it is an export incentive. No doubt, the object behind DEPB is to neutralize the incidence of customs duty payment on the import content of export product. This neutralization is provided for by credit to customs duty against export product. Hon'ble Supreme Court has held that the duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80IA/80IB of the Act. - Decided aganst assessee
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2017 (3) TMI 481
Denial of natural justice - correction of error in the return & intimation u/s 143(1) - grievance of assessee that demand raised on the assessee is without granting the benefit of payment of remuneration to its partners which is already disclosed in their respective returns - whether the return filed by the assessee itself ought to have been processed differently or an opportunity before raising the demand ought to have been given? - Held that:- As per the scheme of the Act, a return filed under the IT Act shall be processed in the manner to correct arithmetical error etc. and after making certain prima-facie adjustment as enumerated in section 143(1) of the Act. A bare reading of the section 143(1) suggests that the income returned by the assessee is the starting point and all the adjustments suggested to the returned income are broadly of detrimental nature. It is beyond scope of the AO under s.143(1) to engage in a long drawn process and make the adjustment proposed by the assessee while processing the return under the aforesaid provision. The AO is not expected to chase a will-o the wisp as demanded by the assessee. The purported error committed by the assessee cannot be visualized under s.143(1) by any stretch of imagination. Thus, the relief urged on behalf of the assessee is clearly beyond the scope and ambit of section 143(1) of the Act. Hence, the action of the AO cannot be modified as sought. We note that as a remedial measure, s.139(5) provides for revision of the return filed within stipulated time where any person having furnished a return of income discovers any omission or any wrong statement therein. Therefore, scheme of Income Tax is not entirely without remedy for the purported mistake claimed to have been rectified by the assessee in the present appeal. The assessee has probably chosen a wrong path for seeking correction of the alleged error committed by the assessee itself. The AO (ACIT-CPC Bangalore) cannot be blamed for merely accepting an erroneous return filed by an assessee. Therefore, we are not in a position to travel beyond the scope of section 143(1) to entertain the relief sought. - Decided against assessee
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2017 (3) TMI 480
Expenditure incurred for re- possession of the club - capital or revenue in nature or is an allowable expenses for determining real income - said expenditure though paid by the assessee for an amount already spent by the SP for earlier years after taking the loan from the bank - Held that:- The undisputed facts are that as per the joint development agreement the ownership of the assets of the club to be developed by the assessee was belonging to the assessee and the purchasers of the plots were not having any right in those assets. In the same, this is also provided that purchasers of the plots are to be admitted as members of the club subject to payment of necessary admission fees and other fees. This is also provided in the agreement that other persons can also be admitted as member of the club on payment of donations, entry fees and other fees. This is also agreed position of facts that the club was built by SP and the assessee was sharing revenue with SP. From these facts, it comes out that the providing of club facility and running of club is a doing of business in the present case because the assets of the club is property of the assessee and any accretion in the value of asset will be a gain to the assessee. Similarly, the club can charge admission fees and other fees without any cap and it will result in to income which was initially shared between the assessee and SP and after 20207. it was fully accruing to the assessee. The impugned payment of Rs. I Crore in the present year to PNB in settlement of the liability of SP had resulted into ownership of assets of the club to the assessee and therefore, it is as cost of purchase of assets of club and it cannot be allowed as revenue expenditure. Had the ownership of the assets of the club was required to be vested in the purchasers of plots or their association, there might have some merit in the claim of the assessee but when as per the JDA, the ownership is vested in the assessee and the plot owners have no right in the assets of the club, it cannot be said that creating the asset of the club is a revenue expenditure. Regarding commercial expediency aspect, we are of the considered opinion that this may be helpful in those cases where the expense is revenue in nature but the objection of the revenue is this much only that it is not for the purpose of business of the assessee. If the assessee is incurring some maintenance loss because the facility is provided free of cost or at subsided prices, such loss may be held to be allowable as business expenditure but even then, the cost of construction of the Guest House cannot be considered and allowed as revenue business expenditure. In the present case, this is not the case of the assessee that there is some loss in day to day running of club and such loss should be allowed by applying the principle of commercial expediency. The assessee is claiming the cost of the assets of the club as revenue expenditure which is akin to allowing of Guest House construction cost in the given example, which is not allowable by any stretch of imagination. Hence, there is no merit in the claim of the assessee. - Decided against assessee
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2017 (3) TMI 479
Transfer Pricing (T.P) adjustments - notional interest on receivables from Associated Enterprises (A.E) - TPO jurisdiction - Held that:- In the present case, the assessee parked a huge amount of funds for a longer period with its AE. It was only because the pricing of international taxation has been accepted for ALP test, it is not possible to hold that the TPO should not go into this question of parking of huge funds with its AE. If the funds are repatriated to India, the assessee would have been in a position to earn better profit from appropriate investment of those repatriated funds. This potential loss is definitely a factor to be considered while evaluating the financial impact of the international taxation concluded by the assessee with its AE. Therefore, in our opinion, it is required to keep the TP adjustments towards notional interest on receivables. The purpose of TP adjustments is in the larger context of anti-evasion measures. The outstanding balance of the receivables from the AE did not generate out of domestic transactions. Those receivables did generate from international transactions carried on by the assessee with its AE outside India. Therefore, there is no basis for argument that no adjustment could be made towards notional interest or receivables from AE. The outstanding receivables from AE is financial result of international transactions concluded by the assessee and therefore, the income effect arising, if any, to that outstanding receivables is very much relevant aspect of ALP. Therefore, the TPO is having the jurisdiction to examine the issue of outstanding receivables or non-charging interest thereon. As in the present case, the credit period extend by the assessee to its AE is very longer period, sometime it is more than one year the contention of assessee that there can be no separate transfer pricing adjustments towards notional interest on outstanding receivables rejected.- Decided against assessee
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2017 (3) TMI 478
TPA - ALP determination - MAM - Held that:- Assessee and Ckar India are in the same line of business i.e., medical transcription services and Co-ordinate Bench in the above said case of ACIT Vs. M/s. Ckar Systems (P) Ltd.[2013 (2) TMI 65 - ITAT HYDERABAD ] has upheld the Ld.CIT(A)’s order that CUP method is the most appropriate method for computing ALP for the international transactions entered into by assessee with its AE in that case. Since the facts are similar, we are of the opinion that TPO should have adopted CUP method only for analysing the assessee’s International transactions. Accordingly, we uphold assessee’s objections with reference to the adoption of method and direct the AO/TPO to adopt CUP method for the medical transcription services and TNMM for the software development services. AO/TPO is directed to re-do the exercise afresh giving due opportunity to assessee and determine the ALP accordingly. Exclusion of certain companies selected in ITES segment - Held that:- Since we have not accepted the method adopted by the TPO and directed the AO/TPO to re-do the entire exercise afresh, appeal of Revenue becomes infructuous. Revenue, however, is free to raise any issue in case it is aggrieved on the TPO/DRP’s orders in the consequential proceedings. With these observations, Revenue’s appeal is considered infructuous accordingly, dismissed
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2017 (3) TMI 477
Disallowance u/s.40(a)(i) - payments to various resident parties - non deduction of tds - retrospectivity - Held that:- As held in the case of CIT Vs. Ansal Land Mark Township (P) Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT ) the insertion of the second proviso to section 40(a)(ia) was inserted by the Finance Act, 2012 with effect from 1st April 2013 wherein the assessee failed to deduct tax in accordance with the provisions of Chapter-XVII B as long as the payee or resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default. Hence, in our opinion, if the recipient of the payment has disclosed the impugned receipt as their income, then the assessee cannot be considered as the assessee in default in terms of sec.201(1) of the Act so as to invoke the provisions of the section 40(a)(i) of the Act. Accordingly, we remit this issue to the file of AO to examine the applicability of the said proviso to Sec.40(a)(i) of the Act and decide accordingly. Therefore, the issue is remitted to the file of AO for fresh consideration. This Ground is partly allowed. Payments made to agents of non-resident ship owners/charters - Disallowance u/s.40(a)(i) - Held that:- In this case Sec.172 only applies and there is no necessity of deduction on the above payments as it is not a “Royalty”. In our opinion, the applicability of Sec.172 to be examined after verifying the relevant agreement entered by the assessee with Foreign Shipping company and accordingly, we remit to the file of AO to examine the concern agreement with the Foreign Shipping company entered by the assessee and decide in the light of the Order of Tribunal cited in the case of Sical Logistics Ltd. (2017 (2) TMI 1099 - ITAT CHENNAI). Accordingly, this issue is remitted to the file of ld. Assessing Officer to consider afresh and decide accordingly. TPA - comparability - Held that:- Comparable as engaged in cargo handling, logistics and freights, segmental wise details are available for comparing with the assessee company are acceptable.
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2017 (3) TMI 476
Addition u/s 14A - Held that:- In the present case, the shares are admittedly not held as stock-in-trade and, accordingly, yield dividend income or, in case of their transfer, capital gains, so that there is no scope for scaling down the disallowance u/s. 14A.In fact, the said reduction is only with reference to interest expenditure, direct or indirect, and not indirect, administrative expenditure, for which only disallowance stands made in the instant case, so that it would hold in any case (refer: Damani Estates & Finance (P.) Ltd. (2013 (8) TMI 457 - ITAT MUMBAI). The disallowance of impugned indirect, admissible expenditure under section 14A read with rule 8D (2) (iii) is, in view of the foregoing, apposite and upheld. We may, before parting, though clarify that we have based our decision on, apart from the clear language of the provision of sec. 14A read with rule 8D, the decisions in Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ), which itself draws on several by the Apex Court. In fact, we observe an inconsistency insofar as the tribunal directs non-invocation of s. 14A r/w r. 8D (2)(iii) in case of strategic investments - which would though need to be proved, while at the same time approving the application of r. 8D(2) (i)/(ii) in case of borrowed capital used for such investments. Either s. 14A applies or not so in respect of such investments. If the investment being strategic is a relevant consideration - which would require defining it as well as a finding in the matter, it would exclude application of s. 14A in whole, and not in part. Disallowance u/s. 14A, it needs to be appreciated, is only qua expenditure actually incurred and claimed in relation to such investments bearing tax exempt income, and there could be no disallowance in the absence of expenditure. Therefore, to say that one limb of the said rule shall not apply for the reason that the investment is strategic, as (say) for acquiring controlling interest, while upholding the other limb, may not be proper. Besides being incongruent with the law in the matter as explained by the higher courts of law as well as the larger benches of this tribunal, the premise is internally inconsistent. Admissibility of expenditure of Enterprise Resource Planning (ERP) software - revenue or capital expenditure - Held that:- Clearly, therefore, ERP is, functionally speaking, a tool, a part of the profitmaking apparatus, of the business, for enabling it’s management and operations in a manner not possible or feasible otherwise, improving productivity in short. The assessee has not placed any material on record at any stage to exhibit or substantiate its case, nor has in any manner rebutted the findings by the Revenue or impugned the reliance/s made by it. Its’ case thus rests on and is therefore no more than a bald statement of the expenditure yielding no enduring benefit, which being allied to the functional test, is precisely question that is to be determined. Rather, broadly speaking, we do not think there is much difference, i.e., conceptually or in principle, between the hardware (computer) and the software, which are two integral components of one composite computerized environment/system, working in unison for the purpose of the assessee’s business, so that regarding one as capital, merely because it is tangible, and the other as revenue, because it is not, may not be proper. Thus Enterprise Resource Planning (ERP) software installed by the assessee denied on the ground of it representing capital expenditure, inadmissible u/s. 37(1) of the Act
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2017 (3) TMI 475
Revision u/s 263 - Penalty proceedings u/s 271(1)(c) - assessment/reassessment proceedings in respect of deduction under S.10B - revision u/s 263 - Held that:- In the instant case, there is no order in so far as penalty proceedings are concerned. The proceedings in respect of assessment and penalty are different and distinct notwithstanding the precondition that later has to be initiated in the course of former proceedings. Though expression ‘assessment’ is used in the Act with different meanings in different context, in so far as Section 263 is concerned, it refers to that particular proceeding which is being considered by the Commissioner. It is not possible to expand the scope of assessment proceeding and assessment, which is subject matter of revision, for the purposes of initiating a new and distinct penalty proceedings of onerous nature. Failure of AO to initiate or impose penalty cannot be a factor capable of vitiating the assessment order in any respect. An assessment, in our considered view, cannot be said to be erroneous or prejudicial to the interest of revenue owing to such failure with respect to initiate a distinct proceedings with a view to evaluate imposition of penalty therein. In view of the forgoing discussion, the Pr. CIT/ CIT is not competent to direct the AO to redo the assessment with a view to initiate and levy penalty in respect of erroneous claim of deduction under S. 10B. No perceptible enquiry was shown to have been made by AO in discharge of quasi judicial function which may reveal any application of mind on the sustainability of claims made arising out of addition to fixed assets, salary expenses, nature of consultancy expenses and proof of services rendered, allowability of donation etc. The quasi- judicial view of the AO on the subject claims are sorely missing. The course charted by the CIT is founded upon the premise that basic evidence to support the claims are not discernible in records and thus cannot be faulted. The assessment order has been demonstrated by the CIT to be marred by flippancy and non application of mind in relation to these claim under revisional scrutiny. Suffice to say, the CIT has assigned prima facie reasons to cause enquiry into claim of each of such expenses and deduction under dispute. Thus, exercise of power under S. 263 cannot be discredited. It will be expedient at this juncture to note that the action of the CIT is based on “record” present before it. The CIT has merely set aside the disputed claims for de novo assessment. The Assessee is at liberty to assist the Assessing officer in taking the matter to logical conclusion in accordance with law. Mere set aside of the assessment under S. 263 on demonstrable grounds does not cause prejudice to the assessee per se so long as the return of income filed is in accordance with law. The Assessee continues to enjoy fair opportunity to seek fresh assessment in accordance with law. We do not find any thing repugnant in the action of CIT in setting aside the assessment on the points of concerns in relation to various items of expenses and deductions etc. and consequently for causing appropriate enquiry to be made in this regard. The action of the CIT is amenable to S.263 of the Act and thus does not call for any interference. The plea on behalf of the assessee on this score thus requires to be discarded.
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2017 (3) TMI 474
Addition on defect in Books of Account - Shortages in oil and grease - Held that:- AR at the time of hearing further filed in the paper book a copy of order of the Excise department in assessee’s own case thereby it is absolutely clear that shortages had arose in view of the nature of the business of oil and grease while taking into the small containers for retain sale or in the normal course of business which is much incidental. Copy of the order of the Excise department is also on record as filed in the paper book. That further more the First Appellate Authority has to be a reasoned order regarding the issue and we do not find any infirmity with the same. Therefore the relief granted to the assessee is hereby sustained. This ground of appeal by the revenue is dismissed. - Decided in favour of assessee Addition on account of provision for leave encashment - Held that:- CIT(A) while adjudicating the rights and liabilities have examined the relevant portions of the assessment order, Tax audit report, computation of income and acknowledgement of return for A.Y.2002-03 to 2007-08. The issue that the appellant has actually added back the provision of leave encashment for all the years 2002-03 to 2007-08 is verified from these documents. The ld. CIT(A) has put forth a speaking order wherein the records itself being verified by the First Appellate Authority and it also finds mention in the order itself that the assessee has not claimed any provision for leave encashment written back as deduction in any of the previous year starting from A.Y.2002-03 and onwards. There is also that the total addition made by the assesse during A.Y.2002-03 to 2007-08 under the provision of section 43B(f) of the Act exceeds the claim made by the assessee on account of the reversal and therefore the claim of the assessee is to be allowed. That on these observations we find acceptance with the order of the ld. CIT(A) and the relief granted to the assessee is hereby sustained. This ground of appeal by the revenue is dismissed.- Decided in favour of assessee Addition on account of provision of doubtful debts - AO disallowed the claim as he assessee has taken the write off provision of doubtful debts in the profit and loss account but in the computation of income has taken it out of income which is not permissible as per the accounting policy - Held that:- CIT(A) however also verified from the records that the assessee has not claimed any provision for doubtful debts as deduction in any of the previous year. That with these observations the ld. CIT(A) held that in assessee’s own case for A.Y.2008- 09 on this issue more particularly when the assessee is adding back on a consistent basis the provision for doubtful debt to arrive at the total taxable income. The ld. CIT(A) held that deduction claimed by the assessee in regard to the provision for doubtful debts written back is to be allowed and therefore the AO was correctly directed to delete the disallowance on this account. - Decided in favour of assessee
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Customs
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2017 (3) TMI 497
Validity of reassessment - Classification of imported goods - solar re-chargeable emergency lights - appellant claim that proper officer of the Customs did not pass a speaking order on the re-assessment within fifteen days from the date of re-assessment of the bills of entry. The mandate in subsection (5) of section 17 of the CA, 1962 was not fulfilled and hence the re-assessment ought to have been set aside - Held that: - The order made by the proper officer on the bills of entry in changing the classification and value enhancement is an order of re-assessment attracting the provisions of sub-section (5) of section 17 of the Act as urged by the appellant which also appears to be the case from the affidavit filed by the Revenue - the proper officer was required to pass a speaking order on the re-assessment within 15 days of the re-assessment of the bills of entry. No speaking order was passed. In the circumstances, there is no hesitation to set aside the re-assessment - petition allowed - decided in favor of petitioner.
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2017 (3) TMI 496
Legality and validity of the attachment - liability of interest - petitioner argue that out of sheer compulsion and force a sum of ₹ 35 lakhs was paid to the respondents, but that does not mean that the petitioners admit the liability. In any event, the sum of ₹ 35 lakhs is not paid belatedly but promptly - Held that: - Once the petitioners have paid a sum of ₹ 35 lakhs, may be in the year 2013, as claimed by Mr. Jetly, appearing for respondent Nos.1 to 3, we do not allow the respondents to continue the attachment for any balance quantum or sum that is due and allegedly payable. It may be as interest but for that the respondents would have to institute appropriate legal proceedings. They may in such proceedings claim that they are entitled to attach or continue the attachment on the immoveable and moveable properties for the claim of interest - this Court has not expressed any opinion on the point of the legality and validity of the attachment - petition allowed - decided in favor of petitioner.
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2017 (3) TMI 495
Prohibited item - import of Drone - petitioner made true declaration regarding presence of Drone, however it is contended that the import of Drone is prohibited, and it is liable to be seized - Held that: - Ext.P3 Notification dated 27.07.2016 issued by the Ministry of Commerce & Industry, Department of Commerce, Government of India, under which a restriction is created with respect to import of drones along with other similarly functional Aircraft systems. As discussed above, in order to import a drone, prior clearance of the Director General of Civil Aviation and import license from DGFT is required. The question with respect to the restrictions made was on account of the liability to pay the import duty etc. etc. on goods imported in the context of 'prohibited' or 'non-prohibited'. Here is a case where the restriction made is securing prior permission/licence from the two statutory authorities of the Government of India. Therefore, the restriction is a pre-condition to import goods. Petitioner has not challenged Ext.P3 Notification issued by the Government of India. The reason for which Ext.P3 Notification was issued by the Government of India is not discernible. Petitioner is not entitled for a direction to release the goods detained under Ext.P1 receipt, provisionally to the petitioner. But, dismissal of this writ petition will not stand in the way of considering Ext.P2 application submitted by the petitioner, if and when situation demands - petition dismissed - decided against petitioner.
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2017 (3) TMI 494
Encashment of the Bank Guarantee - Held that: - The State cannot levy, retain or collect duty from the petitioner, which is based on an erroneous premise that the petitioner had not fulfilled his export obligations - the petitioner had slept over his rights, the best way forward, according to me, would be that, while, the State's action in forfeiting the sum of ₹ 3,55,000/-, will have to be declared as illegal, the petitioner should, in my view, pay costs for not approaching the court in time - petition allowed - decided partly in favor of petitioner.
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2017 (3) TMI 493
Scope of SCN - renewal of bond and bank guarantee - Debonding of unit - 100% EOU to EPCG scheme - Held that: - The SCN is confined to the appellant's failure to renew the bond and bank guarantee and the consequential entitlement of the respondent to enforce the bond and bank guarantee. The SCN did not contain any allegation with respect to the eligibility or ineligibility of the appellant for the benefit of the aforesaid notifications or its liability to pay duty. Despite that in the impugned orders, the appellant's duty liability has also been determined by the authorities - in the adjudication, the authorities have gone beyond the scope of the SCN and therefore the orders cannot be sustained - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 492
Misdeclaration of imported goods - baby diapers - the goods imported were declared as baby diapers but on preliminary examination, it was found that the imported baby diapers were of 'Pamper' brand and not unbranded, as declared in the Bill of Entry - it was found that in the front side of the containers, boxes containing “Pamper” brand diapers were stacked and behind it, there were other boxes that were found to contain cosmetics and toiletry preparations ie., perfumes, deodorants, soaps, shampoos, talcum powder, hair gel and other goods having origin from France, United Kingdom, Thailand, Germany, USA, etc. - appellant Shri Jayesh Shah contends that he did not file Bill of Entry, and therefore, he cannot be said to be Importer, and hence, no penalty upon him - Held that: - the aforesaid contention has no substance. As per Section 112 [a] of the Customs Act, 1962 even if a concerned person has not submitted Bill of Entry, if he is found to be an abettor in illegal import, penalty u/s 112 (a) of the Act is imposable. So far as appeal preferred by Shri Bipin J Shah, appellant of Tax Appeal No. 817 of 2016 is concerned, it is required to be noted that he has been imposed penalty of ₹ 10 lacs. Both the Adjudicating Authority as well as the learned Tribunal have held Shri Jayesh Shah as master mind/kingpin with respect to the impugned illegal import and the said Shri Jayesh Shah has been imposed penalty of ₹ 5 lacs only. In the facts and circumstances of the case, Shri Bipin J Shah also could have been imposed penalty of ₹ 5 lacs at par with Shri Jayesh Sharad Shah. Decided partly in favor of appellant.
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2017 (3) TMI 491
Smuggling - cigarettes - 410 pairs of shoes - 5800 pieces of lady's inner wear - the goods are prohibited goods or not - Held that: - appellants had submitted that their names were being misused as mentioned wrongly in the Airway bill. As the consignors are not traceable and the consignee had not substantiated any evidence in support of his claim of the goods, it may be concluded that the goods are of smuggled nature - regarding the imposition of penalty on the appellants, none of the appellants had refuted the charge of the habitual offence committed by them. Taking into account, the facts and circumstances of the case, the quantum of penalty is reduced - appeal disposed off - decided partly in favor of appellant.
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2017 (3) TMI 490
Valid licence for import - import of ‘rough marble blocks’ - appellant were not in possession of the prescribed licence at the time of placing the order or at the time of import of the goods - Confiscation - redemption fine - penalty - Held that: - The goods were held to be offending for not being in possession of valid licence for import. The imported goods were not ‘marble’ but ‘other calcareous stones’ which the Geological Survey of India reported to be a variety of limestone without metamorphic recrystalisation and such goods being restricted could be imported only against licence - appeal rejected - decided against appellant.
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2017 (3) TMI 489
Levy of ADD - vitrified/Porcelain tiles - Import from China - whether the applicant be treated as New Shipper u/r 22 of the AD Rules and are entitled to individual dumping margin? - Held that: - the appellant No.1 and 2, who are related producers were not new players in the business but were actually in existence, in different names, earlier. On the spot verification conducted by the DA revealed the said fact. In fact appellant No.2, though declared to have been set up in 2009, was in fact, in existence from 2001. This fact was not disclosed in the declaration filed by the appellant. Similarly, it was also recorded that these Producers have a much wider relationship network than what was declared by them. This puts the whole claim and basis of New Shipper Review under jeopardy - it will not be appropriate to clear the subject goods made by the applicants without payment of AD duty. Appeal dismissed - decided against appellant.
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2017 (3) TMI 488
Benefit of N/N. 21/20102- Cus - denial on the ground that the goods which were imported are “Used Rails” in the guise of “Heavy Material Scrap” - Held that: - the respondents themselves accepted that what was in fact imported was used Rails and not Heavy Material Scrap. The respondents even went to the extent of admitting the mis-declaration of the goods as “Heavy Material Scrap” - the findings of the Tribunal in the impugned order treating, the goods as Heavy Material Scrap and not Rails are clearly erroneous - appeal allowed - decided in favor of appellant.
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Service Tax
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2017 (3) TMI 520
Refund claim - Notification No.41/2007-ST - rejection on the ground of some shortcomings/infirmities in the refund claim - Held that: - the issue is no more res integra - C.B.E. & C. of Circular No.120/01/2010-ST dated 19.01.2010 has clarified the issue and held that The declaration should be certified by a person authorized by the Board of Directors (in the case of a limited company) or the proprietor/partner (in case of firms/partnerships) if the amount of refund claimed is less than ₹ 5 lakh in a quarter. In case the refund claim is in excess of ₹ 5 lakh, the declaration should also be certified by the Chartered Accountant who audits the annual accounts of the exporter for the purposes of Companies Act, 1956 - appeal allowed by way of remand for verification.
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2017 (3) TMI 519
CENVAT credit - Job-work - though the job work activity was exempt under N/N. 8/2005-ST dated 01.03.2005, Job workder paid the service tax - principal have availed credit on the strength of such job bills. - Held that: - when the supplier has paid duty and issued valid invoices, the appellant is eligible to take credit, moreover, the issue herein is a revenue neutral situation - similar issue decided in the case of NIKITA TRANSPHASE ADDUCTS PVT. LTD. Versus COMMR. OF C. EX., THANE-II [2006 (10) TMI 358 - CESTAT, MUMBAI] - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 518
Rebate claim - export of services - denial on the ground that the appellant had also availed refund of CENVAT Credit paid under N/N. 5/2006 dated 14.3.2006, both rebate as well as refund of input service credit cannot be availed in respect of same set of inputs invoices - Held that: - the refund of CENVAT Credit is admissible provided the claimant does not claim rebate of duty under Central Excise Rules in respect of such duty or rebate of Service Tax under Export of Service Rules, 2005 in respect of such taxes. It is apparent that the claim of rebate of Service Tax under Export of Service Rules, 2005 and refund of CENVAT Credit u/r 5 of the CCR are mutually exclusive schemes - Appeal dismissed - decided against appellant.
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2017 (3) TMI 517
CENVAT credit - services used for erection, commissioning and installation - denial on the ground that appellant have artificially split a single individual contract into two separate contracts with the intent to wrongly availing CENVAT Credit - Held that: - Commissioning and installation are separate activity and the value of the same cannot be included in the assessable value of the goods. The Deputy Commissioner's report is very clear that the appellants are engaged in providing services of commissioning and installation and they have availed credit only to those services which are used in the said activity - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 516
Rectification of mistake - typographical error - “30 out of 33 blocks showed positive results” when actually only 3 out of 33 had showed positive results and the remaining blocks had infact been surrendered - this needs rectification. Para 12 of the order which the Assessee is relying upon is clear and unambiguous in holding that service tax is not payable in the present case. Our other observations and findings in para 12(a) to 12(c) are observations which we cannot rectify in this proceeding as an appeal against the final order is now pending before the apex court. ROM application disposed off.
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2017 (3) TMI 515
Rejection of refund claim - export of Software services - various input services - Held that: - this Tribunal in the appellant's own case for different period has discussed in detail and analyzed the eligibility of refund in regard to all the services. The Tribunal has allowed the appeal holding that the appellant is eligible for refund. In regard to Security Agency Services it is seen that the services involve escort guard also, such escort guard is for providing escort to women employees who are working the odd hours of the night. In view thereof, the appellant is eligible for refund of security agency services. The banking and Financial services was received by the appellant for the purpose of taking advice on redemption of employees stock option, these services are directly connected with, the business activities of the appellant therein, and therefore eligible for credit. Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 514
After sale service - demand on the ground that appellant having received the consideration in the margin allowed in the dealer agreement - Held that: - the issue stands settled by the case of In ASL Motors Pvt Ltd v. Commissioner of Central Excise & Service Tax, Patna [2007 (11) TMI 73 - CESTAT, KOLKATA], where it was held that When the appellants sold the cars and recovered the amount including the dealers’ margin the intention was to sale the car not to provide free after sales service, Free sale service is only to promote sale – No service tax can be levied on impugned amount, on which sales tax has been already paid - appeal allowed - decided in favor of appellant.
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Central Excise
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2017 (3) TMI 513
Shortage of inputs - demand - Held that: - The adjudicating authority as well as the Commissioner (Appeals) decided the matter only on the observations of the Settlement Commission. Wherein the Settlement Commission has relied upon the report of the Commissioner (Investigation). However, the adjudicating authority has not taken pain to examine the reconciliation statement and gave independent findings, by not doing so he has not discharged the duty as adjudicating authority - the matter needs to be considered by the adjudicating authority in respect of reconciliation statement submitted by the appellant. Imposition of penalty u/s 11AC - rejected inputs - Held that: - on the issue of admissibility of credit on the rejected inputs the issue is debatable - penalty u/s 11AC is not imposable. Returned goods - Rule 16 - demand on the ground that returned duty paid goods were not re-issued within six months - Held that: - the period of six months was not provided under Rule whereas it is provided by way of trade notice which is procedural one. Under any circumstances duty paid goods cannot be levied duty twice only because it is not cleared within six months from the factory of the appellant - demand set aside. Personal penalty imposed on the employees of the appellant - Held that: - all the issues involved are debatable - it is not a fit case for imposing penalty on the employee of the appellant company - penalty set aside. Appeal disposed off - decided partly in favor of assessee.
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2017 (3) TMI 512
CENVAT credit - credit availed on invoices issued by second stage dealer - penalty - Held that: - the appellants have already paid the amount and not contesting the same. As regards the penalty corresponding to the said amount, we find that the appellant has inadvertently passed on the credit on the invoices of second stage dealer. There is no malafide intention - penalty u/s 11AC should not be imposed. Manufacture - appellants have assembled the kit of bought out items and duly packed and sold to various customers, whether activity amounts to manufacture or not - demand - Held that: - the appellant is not actually assembling the kit whereas they are putting various pars in a packing in loose condition and that parts duly packed in the pouch sold in the market. The activity of repacking from bulk quantity to retail small packing does not amount to manufacture. Therefore, the activity of packing of various parts into small retail packing and sale thereof to various customers does not fall under the purview of manufacture. Accordingly, no demand can be confirmed - Consequently penalty is also set aside. Appeal allowed - decided partly in favor of appellant.
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2017 (3) TMI 511
Benefit of N/N. 3/2001-CE dated 01/03/2001 - denial on the ground that the appellant availed exemption of the entire 3500 MTs of products and did not restrict itself to first clearance of 3500 MT - Held that: - The intention of the Government was clearly to exempt first clearances i.e. the clearances in the chronological order up to the aggregate value of ₹ 75 lacs. The intention is not to grant a total concession of ₹ 75 lacs on the goods cleared at any time during the financial year. The logic is understandable. The exemption was meant to Units whose aggregate clearances in the previous year were below two crores, which shows that the Government wanted the benefit to be taken only by small manufacturers. The exemption was to be given on first clearances i.e. in the serial order of clearances. As soon as the aggregate came to ₹ 75 lacs, the concession would automatically stop. The intention was not to give a concession of ₹ 75 lacs straightaway - appeal dismissed - decided against appellant.
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2017 (3) TMI 510
SSI exemption - job-work - use of brand name of others - ready made garments - goods manufactured and cleared under the brand name of Rusty Soul and Woods & Woods and Jeanagers - whether the main appellant M/s. Parit Enterprises (PE) is liable to pay differential duty for the period in question, on the redeemed garments bearing the brand name and manufactured and cleared by them and consequently interest and penalties on the main appellant as well as other appellant? - Held that: - the benefit of N/N. 12/01-CE would be applicable to the appellant here as it is on record that the brand Rusty Soul and Woods & Woods were not registered with the authorities and application were made - as the benefit of N/N. 12/01-CE is applicable to the readymade garment manufactured by the appellant, no Central Excise duty liability arises on them. Accordingly, the differential demand of duty along with interest is liable to be set aside and we do so. Since the demand of the duty is set aside, we also set aside the penalties imposed on both appellants. There is no dispute as to the fact that these readymade garments were of brand Rusty Soul and Woods & Woods . As already held hereinabove, these branded readymade garments are not liable to duty by virtue of benefit of N/N. 12/01; accordingly the confiscation is set aside, and it is held that these readymade garments are not liable for confiscation. Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 509
Recovery of the dues - attachment - dismissal of appeal on the ground that the appellants have not appealed against notice issued by the Bangalore Commissionerate - Held that: - once the demand of duty is confirmed, there is a statutory provision for recovery of interest on the confirmed demand in terms of Section 11AA/ 11AB then interest is unavoidably payable. Even for recovery of interest, no SCN is required As the statutory provisions mandate for payment of interest. The interest is piggyback of the duty demand, it goes hand in hand. Therefore, for the purpose of demand of interest no separate proceedings are required - appeal dismissed - decided against appellant.
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2017 (3) TMI 508
Benefit of N/N. 30/2004-CE dated 09.07.2004 - by taking the credit at the time of receipt of the inputs the condition of notification was violated - credit was reversed later - Held that: - the Board has clarified that if the credit of inputs used in the exempted goods under N/N. 30/2004 is reversed before utilisation, it would amount to credit not having been taken. Accordingly, the condition of the notification stands meet out - In the present case, the fact is not under dispute that the appellant availed the credit at the time of receipt of the inputs which was partially used in the exempted goods but at the time of clearance of the exempted goods, they have reversed the credit - the appellants have complied with the condition of N/N. 30/2004-CE - appeal allowed - decided in favor of assessee.
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2017 (3) TMI 507
Shortage of inputs as well as finished good - demand - Held that: - while there is allegation of clandestine clearance on the basis of shortages found, no stock verification has been done nor any evidence of clandestine clearance has been recorded. The entire case of Revenue is based on the mismatch between 3CD returns submitted by the Income Tax authorities and the RG-1 register maintained by the appellant under the Central Excise law - without any evidence of removal of inputs and/or finished goods, merely on the basis of the difference between the excise records and financial records demand cannot be made - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 506
CENVAT credit - input service used for disposal of the press mud, a by-product, which was generated during the course of manufacture of sugar - denial of credit on such inputs service on the ground that it is used for manufacture of exempted goods - Held that: - the issue is no more res integra and the same is squarely covered by the respondent's own case Commissioner of Central Excise, Kolhapur Versus M/s. Shree Chh Shahu Ssk Ltd. [2015 (2) TMI 265 - CESTAT MUMBAI], where it has been held that manpower also consumed for the purpose of handling waste and compost etc. is an essential part of manufacture of the product being excisable goods, etc. and accordingly, the same is fully allowable - credit allowed - appeal dismissed - decided against Revenue.
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2017 (3) TMI 505
CENVAT credit - repair and maintenance undertaken in the residential colony of the employees - Held that: - no evidence has been produced that cost of maintenance of townships is included in the cost of production for arriving at the assessable value - credit rightly denied. Interest - Held that: - the same is compensatory in nature - reliance placed in the case of Pratibha Processors Vs. UOI [1996 (10) TMI 88 - SUPREME COURT OF INDIA], where it was held that The levy of interest is geared to actual amount of tax withheld and the extent of the delay in paying the tax on the due date - demand of interest upheld. Penalty - Held that: - appellants are a public sector undertaking and there are no allegations in the show cause notice that there is any fraud or collusion involved in this case - penalty withheld. Appeal disposed off - decided partly in favor of appellant.
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2017 (3) TMI 504
CENVAT credit - Angles, Channels, Centrally twisted de form bars and other items used for construction of factory shed, building or laying of foundation - denial on the ground that the description of invoices shows these items to be structural items whereas party has claimed that these items are fitting of pipes and tubes - Held that: - As the goods have been cleared already, the only documents indicating their nature are invoices, which not only provide description but also headings and sub-headings of the impugned goods - There is no hint or indication in the invoice or any other document to show that the impugned goods were fittings of tubes and pipes - In the absence of any evidence to prove that the items mentioned in the Annexure A to SCN were fittings of tubes and pipes and in the absence of any details about end use of these materials, the description and tariff headings given in the invoices have rightly been relied upon by lower authorities - these items do not fall in the definition of the Capital Goods nor as inputs for Capital Goods - demand upheld. Extended period and penalty also rightly imposed relying in the decision in the case of CCE, Ghaziabad Vs. Rathi Steel & Power Ltd. [2015 (5) TMI 168 - ALLAHABAD HIGH COURT]. Appeal dismissed - decided against appellant.
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2017 (3) TMI 503
CENVAT credit - whether the appellants are eligible to avail credit at their factory, when the entire input services have been received and utilized for their business activity at their head office which was not registered as ISD? - Held that: - The issue is no more res integra and settled by the Hon’ble High Court at Gujarat in Dashion Limited case [2016 (2) TMI 183 - GUJARAT HIGH COURT], laying down the principle that non-registration of the head office as an input service distributor cannot be a factor for denying the credit at the factory - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 502
Refund claim - unjust enrichment - differential duty paid in excess - refund claim filed on the ground that the CVD was payable at the rate of 30 Rs. Per square meter on goods namely Marble blocks instead of 16% advolram - Held that: - the issue has already been settled in the Order-in-Original No. 33/JTC/CEX/2004 dated 16-8-2004 which was upheld by the Commissioner(Appeals) vide Order-in-Appeal No. P-II BKS/344/2005 dated 30-9-2005. Therefore the said order was binding on the adjudicating authority hence original order on merit does not suffer from any infirmity - appeal dismissed - decided against Revenue.
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2017 (3) TMI 501
CENVAT credit - outdoor catering services - appellant is recovering 50% of the element of the basic value from the worker only and not the service tax - Held that: - the issue involved the present case has already been decided in appellant’s own case Pudumjee Pulp & Paper Mills Ltd Versus Commissioner of Central Excise, Pune-IV [2016 (12) TMI 1046 - CESTAT MUMBAI], where it was held that amount calculated equal to 50% amount calculated towards catering charges by the appellant represents 50% of the basic cost of the catering charges which does not include VAT and Service Tax. As per the Hon’ble Bombay High Court decision in case of Ultratech Cement Ltd.[2010 (10) TMI 13 - BOMBAY HIGH COURT] it was held that if the service tax /Cenvat amount is not recovered from the employee the credit is admissible in respect of outdoor catering services - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 500
CENVAT credit - manufacture of plain laminated particle board falling under Chapter 44.06 of Central Excise Tariff - denial of credit on the ground that the finished goods were cleared under Nil rate of duty in terms of Rule 6(1) of CCR, 2002, credit of duty paid on input which is used in the exempted goods is not admissible - interest - penalty - Held that: - whatever stock of input as such lying in stock as on 4-2-2004, appellant is not entitle for the Cenvat credit. Accordingly credit is admissible for ₹ 14,91,737/- in respect of input contained in WIP and for ₹ 7,19,986 contained in finished goods - As per closing stock on 3-2-2004 the credit in respect of input of ₹ 5,33,499/- lying in stock as such is not admissible - since majority of amount of Cenvat credit is admissible, I do not find it proper to uphold the penalty of ₹ 1 lakh imposed by the Commissioner(Appeals), therefore penalty is set aside - on the inadmissible Cenvat credit in respect of input lying in stock, appellant is liable to pay the interest - appeal disposed off - decided partly in favor of appellant.
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2017 (3) TMI 499
CENVAT credit - inputs - denial on the premise that the invoices against which the appellant has taken the credit were not pre-authenticated by the dealer and the dealer has not maintain records for goods supplied to the appellant - Held that: - As this Tribunal in the case of Steel Authority of India ltd. [2008 (9) TMI 330 - CESTAT, KOLKATA] has held that pre authentication of invoices is a procedural lapse and cenvat credit cannot be denied on the basis of such lapse. Therefore, the cenvat credit cannot be denied to the appellant. Non maintenance of records by the dealer, cannot be the ground for denial of cenvat credit, therefore, on these grounds, the appellant is entitled to avail cenvat credit as there is one to one correlation with invoice issued by manufacture and the dealer - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 498
Rectification of mistake - appellant claims that even though they had argued that duty which was paid by them being disputed, therefore be considered as pre-deposit, but considering the same as duty, this Tribunal has recorded a finding that refund cannot be made unless it is established that the burden of duty has not been passed on to others - Held that: - this is not an apparent mistake, but would result in review of the order passed by the Tribunal - The power to review its order is not vested with the Tribunal - ROM application rejected.
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CST, VAT & Sales Tax
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2017 (3) TMI 487
Recovery of tax dues under MVAT - priority of banks over statutory dues - The petitioner bank extended the financial assistance to the respondent No.2 - Company and in order to secure the finances the Company mortgaged its immovable property as well as hypothecated its assets in favour of petitioner-bank - default in repayment of loan - auction sale - The petitioner contends that the petitioner bank being a secured creditor has preferential claim over the secured assets and is entitled to take appropriate steps for realization of the amount due and recoverable from Respondent No.2 Company - Held that: - in view of provisions of Section 529A of the Companies Act, priority is given to the dues of the secured creditor and the workers over the statutory charge claimed by the State - the secured creditors fall under two categories; those who desire to go before the Company Court and those who like to stand outside the winding up. It is open for the petitioner to stand outside the winding up proceedings and claim enforcement of its Security Interest. If the petitioner instead of deciding to stand outside preferred to go before the Company Court for decision, it would become necessary to relinquish its security in accordance with Insolvency Rules mentioned in Section 529. The petitioner is a Secured Creditor in accordance with IInd clause u/s 529-A(i) (b) read with proviso (c) to Section 529 (I) having overriding preferential claim and opts to stand outside winding up to realize its security. In view of clause (c) to the proviso to Section 529 (I) the priority of the Secured Creditor who stand outside the winding up is confined to workmens portion as defined in Section 529 (iii) (c). The petitioner who stands outside the winding up proceedings in view of provisions of Section 529-A can surely have priority over the claim of the State in respect of statutory dues. The petitioner bank has a priority claim over the statutory dues claimed by respondent no.1. - petition allowed - decided in favor of petitioner.
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2017 (3) TMI 486
Liability of interest - Section 8 (1) of the Act - there was a bonafide dispute with regard to liability to pay tax, and the assessment order was passed after nearly 3 ½ years - Held that: - there was no dispute relating to classification of goods or the rate of tax payable. The turnover and the rate of tax were clearly mentioned in the books of account and therefore, the present case was fully covered by the explanation to Section 8(1) of the Act - The intent of Section 8(1) read with explanation is clear, that once the assessee is found to have admitted its turnover, in the books of account, and rate of tax is not in issue, the total tax payable becomes the admitted tax. Any set off claimed by the assessee, if is disallowed and is accepted by the assessee, would not form a valid basis for assessee to contend that the amount of tax payable was not admitted - the Tribunal was justified in holding that the assessee is liable to pay interest under Section 8(1) of the Act, upon the shortfall in payment of tax - revision fails - decided against applicant.
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2017 (3) TMI 485
Refund claim - Section 38(7)(d) - Section 38(3) - processing of VAT refund claims - furnishing of particulars and details relating to refund - the decision in the case of Vizien Organics, M/s Munshi Ram Ram Parkash, Mangla Enterprises, Dhanjal Engg. Works, M/s Goel Oil Company, M/s Arun Electronics, Power Industries Proprieto Sh. Tarun Bansal, M/s. Ludhiana Auto Supply CO., Versus Commissioner, Trade & Taxes & Anr. [2017 (1) TMI 1168 - DELHI HIGH COURT], contested - Held that: - the operation is stayed in the meantime the notice is issued - petition disposed off.
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Indian Laws
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2017 (3) TMI 484
Liquor shop - auction - requirement of liquor shop to remain closed on days as specified - petitioner contends that in spite of the fact that the shop was closed, State/respondent have not appropriated the Basic Licence Fee and Annual Licence Fee and have issued a SCN directing the petitioner to pay dues - Held that: - the respondents are certainly entitled to recover the amount from the petitioner, in case the petitioner has not cleared the dues. However, the dues in respect of Simhastha festival which has already been waived will be deducted from the total outstanding dues - In case the petitioner deposited total outstanding dues within one week, the respondents will not take any coercive action against the petitioner, failing which the respondents shall be free to take action against the petitioner keeping in view the notification dated 05/02/2016 and u/s 31 of M. P. Excise Act. As the respondents have only issued show cause notices, the present petition is certainly a premature petition - petition disposed off - decided in favor of petitioner.
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