TMI Tax Updates - e-Newsletter
March 2, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws FEMA Service Tax Central Excise

Articles

1. Taxability of Business Exhibition Services

   By: Dr. Sanjiv Agarwal

2. Awarding heavy costs is the only way to prevent Dept from indulging into un-necessary litigation

   By: DEVKUMAR KOTHARI

News

1. Change in Tariff Value of Brass Scrap (All Grades), Poppy Seeds, Gold and Silver Notified .

2. Import of sensitive items during April-December 2011.

3. Harmonized list of Infrastructure sub-sectors.

4. India’s Foreign Trade: January, 2012.

5. Repayment of 7.47% Oil Marketing Companies' Government of India Special Bonds, 2012 on March 7, 2012 and 7.44% Oil Marketing Companies' Government of India Special Bonds, 2012 on March 23, 2012.

6. India Takes Over Chair of ASOSAI.

7. Anand Sharma Welcomes Pakistan’s Transition from Positive List to Negative List Regime for Trade with India.

Notifications

Customs

1. 14/2012 - dated 29-2-2012 - ADD

Rescinds Notification No. 30/2008-Customs, dated the 3rd March, 2008.

2. F.No. 437/06/2012-Cus. IV - dated 1-3-2012 - Cus (NT)

Appointment of Common Adjudicating Authority.

3. 17/2012 - dated 29-2-2012 - Cus (NT)

Amends Notification No. 63/1994-Customs (N. T.) - Land Customs Stations and Routes for import and export of goods by land or inland water ways.

4. 16/2012 - dated 29-2-2012 - Cus (NT)

Amends Notification No. 63/1994-Customs (N. T.) - ustoms ports — Appointment for specified purposes.

5. 15/2012 - dated 29-2-2012 - Cus (NT)

Amends Notification No. 36/2001-Customs(N.T) - Palm oil, Palmolein, Soyabean Oil (Crude) and Brass Scrap (all grades) - Traiff Values.

6. 14/2012 - dated 27-2-2012 - Cus (NT)

Amends notification no. 09/2012- Custom (NT) - Rate of exchange of conversion of each of the foreign currency with effect from 1st February, 2012.

Income Tax

7. 12/2012 - dated 28-2-2012 - IT

Section 10(46) of the Income-tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified body or authority - Competition Commission of India.

8. 11/2012 - dated 28-2-2012 - IT

Section 10(46) of the Income-tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified body or authority - National Skill Development Corporation.

Circulars / Instructions / Orders

FEMA

1. 88 - dated 1-3-2012

Clarification - Establishment of Branch Offices (BO) / Liaison Offices (LO) in India by Foreign Entities – Delegation of Powers.

2. 84 - dated 29-2-2012

Compilation of R-Returns: Reporting under FETERS.

3. 85 - dated 29-2-2012

External Commercial Borrowings (ECB) for Infrastructure facilities within National Manufacturing Investment Zone (NMIZ).

4. 86 - dated 29-2-2012

KYC Norms/AML Standards/Combating Financing of Terrorism/Obligation of Authorised Persons under (PMLA), 2002 - Assessment and Monitoring of Risk – Money Changing Activities.

5. 87 - dated 29-2-2012

KYC Norms /AML Standards/Combating Financing of Terrorism/Obligation of Authorised Persons under (PMLA, 2002 - Assessment and Monitoring of Risk - Cross Border Inward Remittance under MTSS.

DGFT

6. 55 (RE-2010)/2009-14 - dated 29-2-2012

Conditionality for Import of Erythromycin Thiocyanate under Advance Authorization Scheme: Applicability of Policy Circular No.9 dated 30.6.2003 and PC 15 dated 17.9.2003.

7. 56 (RE-2010)/2009-14 - dated 29-2-2012

‘On-line’ filing of PRC.

8. 101(RE-2010)/2009-14 - dated 29-2-2012

Earlier the expression “Handmade” did not include “Braided” in the ‘Note:’ at Sr. No.11 in Table-2 of Appendix 37D. This has now been included.

Highlights / Catch Notes

Income Tax

• Competition Commission of India granted income tax exemption u/s 10(46) of the Income-tax Act, 1961.

  Notifications : Section 10(46) of the Income-tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified body or authority - Competition Commission of India. - Ntf. No. 12/2012 Dated: February 28, 2012
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• National Skill Development Corporation Gains Tax Exemption u/s 10(46) of Income-tax Act, 1961 for Skill Initiatives.

  Notifications : Section 10(46) of the Income-tax Act, 1961 - Exemptions - Statutory Body/Authority/Board/Commission - Notified body or authority - National Skill Development Corporation. - Ntf. No. 11/2012 Dated: February 28, 2012
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• Court Criticizes Tax Department for Denying Tax Holiday, Suggests Costs to Ensure Accountability and Corrective Measures.

  Case-Laws - HC : Stricture against department - In the process, a person who is eligible to a tax holiday has not only been denied the benefit, but made him to contest the proceedings in three forums - The only way to bring reason to the department is by imposing costs, so that appropriate action may be taken against the person who has taken a decision to prefer an appeal and recover the same after inquiry- HC
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• Tax Authority Disallows Deduction of Penal Charges; Not Considered Ordinary Business Expenses Under Income Tax Rules.

  Case-Laws - AT : Penal Charges paid to Sister Concern towards cost of storage - deduction disallowed - AT
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• CIT Justified in Revising AO Order: Deduction Denied Without Audit Report u/s 80IA(7) and Rule 18BBB.

  Case-Laws - AT : Revision u/s 263 - In view of 80IA(7) read with rule 18BBB, unless audit report of p/y is furnished no deduction is available. - CIT was justified in holding the order of the AO as erroneous in so far as it was prejudicial to the interests of Revenue. - AT
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• High Court Allows Deduction for Identity Card Manufacturing u/s 80IA; Not Classified as Photography Goods.

  Case-Laws - HC : The manufacture of identity cards cannot be described as photography apparatus and goods. In fact, the assessee is taking the aid of photographic apparatus and goods for manufacturing or producing identity cards. - Deduction u/s 80IA allowed - HC
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Customs

• Common Adjudicating Authority Appointed to Streamline Customs Adjudication Process Under Notification F.No. 437/06/2012-Cus. IV.

  Notifications : Appointment of Common Adjudicating Authority. - Ntf. No. F.No. 437/06/2012-Cus. IV Dated: March 1, 2012
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• Amendment to Notification No. 63/1994-Customs Updates Land Customs Stations and Routes for Cross-Border Trade.

  Notifications : Amends Notification No. 63/1994-Customs (N. T.) - Land Customs Stations and Routes for import and export of goods by land or inland water ways. - Ntf. No. 17/2012 - Customs (N. T.) Dated: February 29, 2012
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• Amendment to Notification No. 63/1994-Customs (N.T.) Updates Customs Port Regulations for Improved Efficiency and Compliance.

  Notifications : Amends Notification No. 63/1994-Customs (N. T.) - ustoms ports - Appointment for specified purposes. - Ntf. No. 16/2012 - Customs (N. T.) Dated: February 29, 2012
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• Amendment to Notification No. 36/2001-Customs(N.T.) updates tariff values for palm oils, crude soybean oil, and brass scrap.

  Notifications : Amends Notification No. 36/2001-Customs(N.T) - Palm oil, Palmolein, Soyabean Oil (Crude) and Brass Scrap (all grades) - Traiff Values. - Ntf. No. 15/2012 - Customs (N. T.) Dated: February 29, 2012
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• Amendment to Notification No. 09/2012-Custom (NT) Updates Exchange Rates for Customs from February 1, 2012.

  Notifications : Amends notification no. 09/2012- Custom (NT) - Rate of exchange of conversion of each of the foreign currency with effect from 1st February, 2012. - Ntf. No. 14/2012-CUSTOMS (N.T.) Dated: February 27, 2012
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DGFT

• "Handmade" Now Includes "Braided" in Note at Sr. No.11, Table-2, Appendix 37D.

  Circulars : Earlier the expression “Handmade” did not include “Braided” in the ‘Note:’ at Sr. No.11 in Table-2 of Appendix 37D. This has now been included.
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• Guidelines for Importing Erythromycin Thiocyanate under Advance Authorization Scheme Referencing Circular No. 55 (RE-2010)/2009-14.

  Circulars : Conditionality for Import of Erythromycin Thiocyanate under Advance Authorization Scheme: Applicability of Policy Circular No.9 dated 30.6.2003 and PC 15 dated 17.9.2003. - Cir. No. 55 (RE-2010)/2009-14 Dated: February 29, 2012
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• DGFT Launches Online System for Pre-Requisite Certificate to Boost Efficiency in Trade Applications.

  Circulars : ‘On-line’ filing of PRC. - Cir. No. 56 (RE-2010)/2009-14 Dated: February 29, 2012
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FEMA

• Guidance for Foreign Entities on Setting Up Branch or Liaison Offices in India under FEMA Circular, March 1, 2012.

  Circulars : Clarification - Establishment of Branch Offices (BO) / Liaison Offices (LO) in India by Foreign Entities – Delegation of Powers. - Cir. No. 88 Dated: March 1, 2012
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• Guidelines for Compiling R-Returns under FETERS per Circular No. 84 for Compliance with FEMA Reporting Standards.

  Circulars : Compilation of R-Returns: Reporting under FETERS. - Cir. No. 84 Dated: February 29, 2012
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• External Commercial Borrowings allowed for infrastructure in National Manufacturing Investment Zones under Circular No. 85, boosting economic growth.

  Circulars : External Commercial Borrowings (ECB) for Infrastructure facilities within National Manufacturing Investment Zone (NMIZ). - Cir. No. 85 Dated: February 29, 2012
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• Authorized under PMLA 2002 must follow KYC and AML standards to prevent money laundering and terrorism financing.

  Circulars : KYC Norms/AML Standards/Combating Financing of Terrorism/Obligation of Authorised Persons under (PMLA), 2002 - Assessment and Monitoring of Risk – Money Changing Activities. - Cir. No. 86 Dated: February 29, 2012
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• Authorized Persons Must Follow PMLA 2002: KYC, AML Standards, and Monitor Cross-Border Remittances for Risk Compliance.

  Circulars : KYC Norms /AML Standards/Combating Financing of Terrorism/Obligation of Authorised Persons under (PMLA, 2002 - Assessment and Monitoring of Risk - Cross Border Inward Remittance under MTSS. - Cir. No. 87 Dated: February 29, 2012
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Central Excise

• Mercerized and bleached cotton fabric needs squeezing and stentering to become market-ready.

  Case-Laws - AT : Processing of Wet cotton fabric - mercerizing and bleaching - Processed goods being in wet condition was not marketable. - To make the said fabric marketable further process of squeezing and stentering has to be done invariably. - AT
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Case Laws:

• Income Tax

• 2012 (3) TMI 33
  Unexplained Capital Introduced - partner personal cash book or passbook were not furnished - CIT(A): non-production of the partners could not be taken as ground to treat the capital introduced as unexplained, source of capital were explained no additions made in the hands of the assessee firm - Held That:- Assessee had discharged the primary onus which was on it by offering explanation, which has not been found to be incorrect or false in any manner.Decided in favour of assessee. Unsecured loans - break up of the loans, copies of acknowledgements of returns filed, confirmation letters from some of the creditors/depositors were produced - CIT gave relief of 15,05,000 and withheld additions of 3,00,000 - Revenue and Assessee both are in appeal - Held That:- loan of Rs.1,50,000/- in respect of Shri Mathew is hereby confirmed and addition in respect of Rs.50,000/- from M/s Parth Computerized Weigh Bridge and Rs.1,00,000/- from Shri S. K. Gupta are restored back to the file of AO for verification and fresh adjucation. Assessee’s second ground is partly allowed for statistical purposes. Unexplained Credits - 21 days time given to furnish evidence - CIT(A) deleted additions of Rs.10,41,850 and confirmed Rs.50,91,930 - Held That:- Assessee submitted that complete names and addresses were given during assessment. No enquiry was made by the AO or evidence of remission of liability brought on record by the AO no adequate opportunity was granted to furnish confirmations. We remand the matter to AO for fresh adjudication after verifying the evidences produced by the assessee before the ld. CIT(A) in support of his claim by the assessee. Bank Interest Claimed - No interest charged to advances given to o Gitaben Kalathia of Rs.3,40,303 - Held That:- Assessee has tried to make out a case that assessee had substantial interest-free funds for giving interest free advances in respect of which he has filed the details. But these details require verification at the end of the AO, the matter is, therefore, restored back to the file of AO for fresh decision. This ground is allowed for statistical purposes.

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• 2012 (3) TMI 32
  Survey - Difference on valuation of Inventory - Unrecorded Sales - Books of Account Rejected - CIT(A) scaling down the addition from Rs.937123/- to Rs.298812, Held That:- CIT(A) has given the above findings after properly analyzing the facts of this case and has passed a well reasoned speaking order. Nothing substantial was argued by either party to deviate us from the view taken by the learned CIT(A). Allegation of bogus purchase - non production of documents - held that:- it is an undisputed fact that the lift was installed and put to use with the approval of Chief Inspector of Lifts and Elevators through license dated 15.2.2006. For allowability of any expenditure in a particular year of assessment bill of purchase is an important piece of evidence which could not be produced by the assessee. - since the assessee’s income has been arrived at by applying the net profit rate on sales, no separate addition was called for.

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• 2012 (3) TMI 31
  Weighted Deduction - Automobile Industry notified 21.09.04 - Held That:- In view of CIT v. Claris Life Science (2008 - TMI - 201802 - Gujarat High Court), dis allowance confirmed. Subscription Charge not treated as Business Expenditure - Held That:- In view of Sundaram Industries(1999 -TMI - 15776 - MADRAS High Court), disallowance deleted. TDS - Machining Charges - Re-imbursement of actual expense - Payment for job work and no fee for technical service - Held That:- Expenditure is nothing but repairs and rework of the defective brake linings exported by the assessee. Payment does not fall within the category of ‘fee for technical services’ nor does it fall with the term ‘royalty. In view of Transmission Corporation (1999 - TMI - 5757 - SUPREME Court), no liability to deduct TDS. Additional depreciation - machinery installed in immediately p/y used more than 180 days - only 50% additional depreciation claimed - Held That:- The provisions of section 32 of the Act do not provide for carry forward of the residual additional depreciation, if any. order of CIT(A) confirmed. UPS depreciation under "Plant & Machinery OR Computer" - Held That:- Surface Finishing and Equipment (2003 - TMI - 68566 - ITAT JODHPUR), classified as Computer, eligible for higher rate of depreciation.

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• 2012 (3) TMI 30
  Depreciation on UPS under Computer@60 percent or plant & Machinery @25 per cent - Held That:- In view of CIT vs BSES Rajdhani Powers Limited (2010 - TMI - 78240 - DELHI HIGH COURT), UPS classified as Computer eligible for depreciation under 60%. Depreciation on Work Station and Server Back - Held That:- Definition of these items may be available in public domain but same were not provided to the CIT (A) nor such claim was made before her. Case referred back to decide afresh.

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• 2012 (3) TMI 29
  Expenditure in respect of Exempt Income - AO made additions upto Rs 43,93,130 on account of administrative expense - Held That:- Tribunal in assessee own case in preceding years has restricted the disallowances to Rs 1,00,000 therefore on identical footing we restrict the disallowance under section 14A of the Act to Rs 1,00,000. Book Profit under 115JB - Adjustments of provision un-ascertained leave encashments - Held That:-Leave encashment does not fall in the category of an unascertained liability and, therefore, the Commissioner of Income-tax (Appeals) made no mistake in deciding the issue in favour of the assessee

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• 2012 (3) TMI 28
  Validity of reference to Valuation Officer under section 142A - No incriminating material found in Search - No material on record that value of the property was under-stated OR investment exceeded the amount recorded in the registered sale deed - Held That:- Assessing Officer cannot make a reference u/s 142A for making roving and fishing enquires. Reference to DVO can only be made after rejecting books of account when books are not rejected Assessing Officer has no power to straightaway jump to the next step of making an estimate. Relaince placed on CIT vs Mahesh Kumar (2010 - TMI - 78245 - DELHI HIGH COURT), CIT vs Ramesh Kakkar (2010 - TMI - 79050 - DELHI HIGH COURT), CIT vs Manoj Jain (2005 - TMI - 9979 - DELHI High Court).

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• 2012 (3) TMI 27
  Depended agent or independent agent - Money Transfer Business - Stand alone Machines - liaison office versus Permanent Establishment - held that:- Non-banking financial companies deal with money belonging to others and the activity of paying out monies on behalf of the Western Union Financial Services Inc., must be viewed as part of their business activity. In the case of tour operators, acting as agents of an established firm engaged in the international money transfer business may be conducive to their business. A broad view of the matter has to be taken in these matters. - held as independent agent. Whether the activities of the agent are wholly or almost wholly devoted to the assessee. - held that:- just because they are not acting as agents for any other company carrying on money transfer business it cannot be said that their activities are wholly or almost wholly devoted to the assessee. Whether the transactions between the agents and the assessee are under arm's length. - Held that:- There is no material to show that the rates of compensation are higher in other cases so as to indicate that the agents were discriminated against. The higher rate of compensation in the case of the Department of Posts is probably because its reach is much wider compared to the commercial banks, NBFCs or tour operators. The terms of appointment of sub-agents are uniform in all cases. Thus there seems to be no basis for the charge that the compensation paid is not adequate for the services rendered by the agents. - there is no merit in the claim that the transactions between the assessee and the agents are not under arm's length. Existence of PE in India - held that:- the fact that the agents in India payout the money to the beneficiaries or claimants, which they are bound to under the agreement with the assessee for which they are remunerated does not appear to us to be a case of exercise of any authority. Thus, the agents do not habitually exercise the authority to conclude the contracts on behalf of the assessee. - there is no agency PE of the assessee in India. In the absence of any PE in India, it follows that the profits, if any, attributable to the Indian operations cannot be assessed as business profits under article 7 of the treaty.

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• 2012 (3) TMI 26
  Condonation - Delay of 788 days - Sufficient and reasonable cause - hearing held just once - Held That:- In view of Collector, Land Acquisition vs. Mst. Katiji & Ors.(Supreme Court), pragmatic and liberal approach while considering the petition for condonation of delay. Closing Stock in books at Rs 1,44,77,950 carried forward at Rs 1,15,20,868 - Assessment under 143 - CIT invoked 263 - Held That:- C.I.T. assumed that the opening stock of the subsequent assessment year was correct, which led him to assume that closing stock of the assessment year under consideration was shown at lesser value, which was based on unfounded premises without considering the audited books of accounts of the assessee. 263 of the Act is not one which depends on contingency or guess work, but it should be actually an error either of fact or of law.CIT vs. Trustees of Anupam Charitable Trust (1986 - TMI - 25628 - RAJASTHAN High Court), Jai Kumar Kankaria vs. CIT (2000 -TMI - 14058 - CALCUTTA High Court)

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• 2012 (2) TMI 407
  Validity of Assessment under 147 after Intimation under 143(1) But no notice under 143(2) - Held That:- It is open to Revenue to issue notice u/s 147/148 even if notice u/s 143(2) was never issued or for that matter even if assessment u/s 143(3) had taken place. Income Escaping assessment 147 - Change of opinion - two business - Seprate books of account maintained - common expense pertaining to all unit claimed for deduction under 80IA - Held That:- whether appellant was entitled to deductions or not, already stood examined, considered and adjudicated by the Assessing officer in the previous years.Its not the case that assessee suppressed information or relevant facts were not disclosed neither it was based on report of audit party. Re-asseement is invalid

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• 2012 (2) TMI 406
  TDS - Assessee develops and markets 3D Solutions - sale of shrink wrap software - Royalty - NO Permanent Establishment(PE) - Held That:- In view of DIT Vs. Ericsson AB, (2011 - TMI - 207919 - Delhi High Court) consideration received by the Assessee for software was not royalty. The receipts would constitute business receipts in the hands of the Assessee. Admittedly the Assessee who is a non resident does not have a permanent establishment and therefore business income of the Assessee cannot be taxed in India in the absence of a permanent establishment. Decided in favour of revenue.

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• 2012 (2) TMI 405
  Deduction under 35(2AA) - Approval pending - Donation claimed in return at 100% and will increase to 125% after approval - Additional ground regarding deduction u/s 35(1)(ii) - Held That:- 35(1)(i) and section 35(2AA) operate entirely in different fields and are mutually exclusive. For claiming deduction under 35(2AA) amount should be paid to National Laboratory, University, and under a programme approved in this behalf by the prescribed authority. In the instant case the amount simply was lying with the IIT but it could not be used for scientific research. However for deduction under 35(1)(i) its not necessary that research to be carried in house. For additional ground we remand case back to CIT if CIT(A) allows claim under 35(1)(ii), AO to give effect and if does not allow the assessee’s claim entire deduction of 143 Laks to be withdrawn.

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• 2012 (2) TMI 404
  Penal Charges paid to Sister Concern towards cost of storage - AO: penal charges not a liability related to business of assessee - Held That:- If expenditure relates to commercial expediency its allowable. As far as penal rent is concerned it should be governed by the agreement entered between two parties. In the instant case, it was not shown by the assessee that the impugned liability was fastened upon it. Decided against assessee.

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• 2012 (2) TMI 403
  Revision under 263 - lack of enquiry - Held That:- There is nothing on record which could show that Assessing Officer had inquired into financial charges paid on the borrowed fund for purchase of property which is forming part of closing stock. Assessing Officer has also not inquired into the method of valuation of stock. Assessing Officer has passed a summary order without looking into the issue of genuineness of transactions relating to sale and purchase of shares of G.R. Industries. - Revision justified.

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• 2012 (2) TMI 402
  Penalty Proceedings - Survey - Incriminating documents found - Surrender of 22,32,000 in statement u/s 132(4) - Tax and Interest not paid while filing return but paid before completion of assessment - Held That:- Penalty cannot be imposed u/s 271(1)(c) of the Act as the assessee has paid tax alongwith interest before imposition of penalty. Reliance placed on CIT Vs. Mahendra C Shah and CIT (2008 - TMI - 3705 - GUJARAT HIGH COURT) Vs. Radha Kishan Goel (2005 - TMI - 10686 - ALLAHABAD High Court)

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• 2012 (2) TMI 401
  Revision u/s 263 by commissioner - Deduction under 80IB - Failure to file audit report - Held That:- In view of 80IA(7) read with rule 18BBB, unless audit report of p/y is furnished no deduction is available. Therefore We have no hesitation in holding that the learned CIT was justified in holding the order of the AO as erroneous in so far as it was prejudicial to the interests of Revenue. Decide against assesee.

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• Customs

• 2012 (2) TMI 399
  Petition filed for assessment of Bill of Entry by allowing exemption from Additional Duty of Customs (CVD), under Notification No.30/2004-CE, dated 09.07.2004, and to allow the clearance of the goods – Held that:- Prayer for assessing the Bill of Entry by allowing the exemption from Additional Duty of Customs (CVD), under Notification No.30/2004-CE, dated 9.7.2004, cannot be granted. However, respondents are directed to release the goods concerned, in respect of the above said Bill of Entry, subject to the condition that the petitioner furnishes a bank guarantee for the entire value of CVD. Release of the goods in question shall be subject to the orders to be passed by the Division Bench of this Court.

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• Corporate Laws

• 2012 (2) TMI 398
  Companies Act 1956 - Petition filed u/s 433(e) & (f), 434 & 439 of Companies Act, 1956 seeking to wind up the Respondent-Company – non-payment of debt – Held that:- Petitioner has entered into transactions with the respondent Company and the respondent Company has been unable to pay its dues to the petitioner and therefore the respondent Company has made itself liable to be wound up – Decided in favor of petitioner.

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• FEMA

• 2012 (2) TMI 400
  FERA Act, 1973 – violation of the provisions of Sections 8(3) and 8(4) of the Act by four companies - whether banks and their respective employees can be held guilty of abetting Companies for such violation – fresh LC opened even on failure to file BE for prior import - remittance of substantial amounts of foreign exchange against large number of confirmed L/Cs – failure to scrutinse defective import documents – Third bench of Tribunal held in negative – Held that:- The order passed by the Third Member, besides being cryptic, does not take note of all the materials which were on the record of the adjudication proceedings. Therefore, impugned order of the Tribunal based on the decision rendered by the third Member on the points of difference, should be set aside and the appeals be remanded back for hearing afresh – Decided in favor of assessee.

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• Service Tax

• 2012 (3) TMI 36
  Stay petition – dispute regarding quantum of commission income - non co-operation at the adjudication stage – Held that:- Dispensing with the requirement of pre-deposit, we remand the matter back to the Commissioner to consider the details appearing in the balance sheet since figures therefrom were adopted and agreement order.

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• 2012 (3) TMI 35
  Cenvat credit on service tax paid on outward transportation of the goods from the place of removal – Held that:- In view of the decision in case of CST, Bangalore Vs. ABB Ltd. (2011 - TMI - 203985 - Karnataka High Court) this issue stands decided in favour of the assessee. Whether credit can be taken on basis of TR-6 challan - period prior to 16.6.2005 - document under Rule 9(1)(e) of Cenvat Credit Rules – Held that:- In view of the decision in case of Gaurav Krishna Ispat (I) Pvt. Ltd. Vs. CCE (2008 - TMI - 31348 - CESTAT New Delhi) this issue stands decided in favour of the assessee.

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• 2012 (3) TMI 34
  Refund of credit of service tax paid on various input services - Rule 5 of the Cenvat Credit Rules 2004 – 100% EOU - services - transportation of goods from the factory to the port, services of the CHA and terminal handling charges and similar other charges incurred within the port area – Held that:- Issue is already settled in the case of services of outward transportation and custom house agent in favor of assessee. See CST Vs. ABB Limited (2011 - TMI - 203985 - Karnataka High Court), CCE Vs. Rolex Rings P. Ltd. (2008 - TMI - 30898 - CESTAT, Ahmedabad ). The other services are essentially of the same nature as that of custom house agent in the matter of eligibility for taking Cenvat credit – Decided in favor of assessee.

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• 2012 (2) TMI 408
  Stay petition - Since both sides agree for co-operation for verification of the document and resolving dispute of Cenvat credit, matter is remanded back to adjudicating authority and the matter shall be resolved by a reasoned and speaking order.

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• Central Excise

• 2012 (3) TMI 15
  Denial of Modvat Credit of duty paid on the angles, channels etc. on the ground of it being used as supporting structures – assessee contended that small portion of steel items were used as structures and the majority of the same were used for fabrication of capital goods - Chartered Engineer's certificate placed indicating quantum of steel items used for fabrication of capital goods - Held that:- We find that the observations made by the adjudicating authority are factually incorrect, and since issue revolves around the quantum of steel items used as either structural or capital goods, we find that the said certificate is required to be re-examined by the Commissioner. Hence, we remand the matter to Commissioner for de-novo adjudication. Further, we direct the Commissioner to re-decide the other issues relatable to availability of credit in respect of welding electrodes used for repair & maintenance of P&M or the availability of capital consumption notification to the angles, channels etc. being manufactured by the appellants.

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• 2012 (3) TMI 14
  Classification of the parts and accessories of optical fibre cables under heading 9033 – Revenue claiming it to be under heading 8544 – Held that:- In as much as the optical fibre cables fall under Chapter 90 as held in case of Optel Telecommunication Ltd (2005 - TMI - 53974 - CESTAT, Northern Bench, New Delhi), the parts would fall under Chapter 90.33 – Decided in favor of assessee.

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• 2012 (3) TMI 13
  Classification of add-on cards and motherboards and relevant rate of duty leviable – under heading 8473.00 or 8471.00 – Held that:- This Court, on number of occasions, has observed that Tribunal is the last fact finding authority on facts. See Standard Radiators Pvt. Ltd. v. CCE, (2002 - TMI - 46236 - Supreme Court Of India). In present acse, Tribunal merely proceeds to decide the issue on the ground that the assessee had earlier classified the goods in question under Sub-Heading No. 8473.00, and therefore, it was not open to him to claim classification under Sub-Heading No.8471.00. In a commodity classification, it is essential that the character and uses of the commodity and its parts are considered in detail and examined thoroughly. Therefore, we remand the matter to the Tribunal to decide the issue after considering the nature and the functions of add-on cards and motherboards in the functioning of Automatic Data Processing Machines.

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• 2012 (2) TMI 397
  Maintainability of appeal - Revenue is in appeal against order of rejection of appeal by Tribunal – Tribunal confirmed the order of first appellate authority regarding classification of `Bitulux Insulation Board' under Chapter Sub-heading 4407.10 at nil rate of duty - Held that:- Since the revenue has not questioned the correctness or otherwise of the order passed by the first appellate authority dated 16.5.1997, setting aside the order of Asst Commissioner (Adjudicating Authority) it may not be open for the revenue to contend that the adjudicating authority was justified in issuing the impugned show cause notices and also the further confirmation of said notices vide orders passed by the adjudicating authority, the appellate authority and the Tribunal. Therefore, revenue would not be entitled for any relief – Appeal dismissed.

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• 2012 (2) TMI 396
  Waiver of penalty – prompt reversal of Modvat Credit of duty paid on angles and bars, used in the construction activities on intimation by department – assessee contending it to be wrong Book Entry, corrected without utilizing the Cenvat credit - Held that:- We find no malafide reasons on the part of respondents to avail the Modvat credit with a fraudulent intention. We accordingly agree with the appellate authority that penalty imposed upon respondents is required to be set aside – Decided against the revenue.

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