Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 28, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Share of property - inheritance - the assessee's share out of the said consideration became payable to her directly under the will on the death of the father, not to be regarded as income - HC
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Exemption u/s 10(21) - Scientific research association - the fact that the petitioner also received certain payments towards royalty, service charges, etc. would not in itself mean that the petitioner was not a scientific research association. - HC
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Merely because the Tribunal confirmed the findings of the lower appellate authority it does not mean that the Tribunal has acted illegally or irregularly. - HC
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Order u/s 220(2) - Appealable order - Interest u/s. 220(2) - Appeal before the Tribunal was maintainable u/s. 253 of the Act for being an appeal directed against the order of CIT(A). - HC
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Deduction u/s 80 IB - depreciation has to be claimed and the resultant profits arrived at after claiming depreciation will alone qualify for deduction under section 80IA / 80IB - AT
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Charitable purposes U/s 2(15) - to aid spreading of the education and update the syllabus and other related educational aspects, two magazines were started by the assessee or their sister concern - Exemption allowed - HC
Customs
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Recovery of duty drawback after 3 years - though Rule 16 does not provide for any period of limitation, a reasonable period has to be read into the said rule - SCN have to be held to be bad on the ground of being time barred - HC
Corporate Law
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Infringement of trademark - Domain name www.tatainfotech.in - defendant got the impugned domain name registered deliberately in bad faith, in the hope of being able to sell the domain name to the plaintiffs - HC
Indian Laws
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International Arbitral award - The Arbitral Tribunal has only awarded reimbursement of half the price paid by the buyers to the sellers and, therefore, the award cannot be held to be unjust, unreasonable or unconscionable or contrary to the public policy of India. - SC
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Service Tax Return (ST 3) for the period 1st July-30th September, 2012 is now available in a modified format for e-filing in ACES.
Central Excise
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Evasion of Central Excise Duty - Not able to understand as to how the presence of the Investigation Officer in the cross-examination proceedings or re-examinations of witnesses would amount to abdication of authority by the second respondent. - HC
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ROM - a mistake apparent on record must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. - AT
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Cenvat Credit – GTA service for procuring the MS billets which ultimately has been used for manufacture of galvanised parts of transmission tower and lining sold by the appellant is an input service and the appellant is entitled for the Cenvat credit. - AT
VAT
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Inter-State sale or stock transfer - F-Form - when there is a provisional assessment, the person aggrieved by the provisional assessment has every right to make objections and if such objections are made, it is incumbent on the part of the authority concerned to look into the same - HC
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To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. - HC
Case Laws:
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Income Tax
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2013 (3) TMI 492
Exemption under Section 54EC denied - Addition on account of short term capital gains - ITAT deleted the addition - the assessee received 30% of the sale proceeds of the land from her brother in accordance with the direction given by her late father in his will - Held that:- The assessee received the said sum of Rs. 1,05,00,000/- as inheritance from her father who had clearly indicated in his Will that in case the property is sold, 30% of the sale proceeds would be given to the assessee. The fact that the property was agreed to be sold during the lifetime of the father and part consideration had been received during the lifetime would only imply that the condition upon which the assessee was to receive the said 30% of the sale consideration had already been satisfied during his lifetime. Thus the assessee's share out of the said consideration became payable to her directly under the will on the death of the father. Even if the matter is looked in this perspective the receipt in the hands of the assessee cannot be regarded as income. However, the Tribunal has taken a different approach by holding that even if it is regarded as income the assessee would be entitled to the benefit of income under Section 56(2)(v) of the Income Tax Act, 1961. Either way the answer is the same. No interference with the order of the Tribunal is called for. Addition on account of Income from House Property - CIT (A) deleted the addition - Held that:- This issue was decided in favour of the assessee in respect of the assessment year 2005-06 by the CIT (Appeals) and it has not been questioned by the revenue before the Tribunal. Therefore, following the said decision, the Tribunal confirmed the view taken by the CIT (Appeals). Even on that aspect, no interference is called for.
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2013 (3) TMI 491
Exemption u/s 10(21) - Whether the petitioner Centre for Development of Telematics – C. DoT is a ‘scientific research association’ for the purposes of clause (ii) of sub-section (1) of section 35? - assessee contested against the denial of claim stating that the Board is required to refer this question to the central government to take the decision which was not followed - central government categorized the petitioner as ‘other institution’ partly engaged in scientific research - Held that:- On going through the file submitted by respondent no clear cut reference from the Board to the central government arises requiring the central government to decide as to whether the petitioner fell within the category of a ‘scientific research association’ or in the second category of ‘other institution’ partly doing scientific research as referred to in section 35(1)(ii) of the said Act. In the note prepared at paragraph 7(b) Page 10 of the file thereof, it appears that the fact that in the process of activities engaged in part by the petitioner, the petitioner also received some payments, reimbursements and royalties based, weighed heavily with the central government in deciding that the petitioner fell into the category of ‘other institutions’. However, this may not be the correct approach inasmuch as section 10(21) and in particular the third proviso thereto recognises a situation where the research association could have profit and gains from business also. In fact, the proviso goes to the extent of saying that the exemption under section 10(21) would apply even to profits and gains of business of a research association provided the business was incidental to the attainment of its object and separate books of accounts were maintained in respect of such business. Therefore, the fact that the petitioner also received certain payments towards royalty, service charges, etc. would not in itself mean that the petitioner was not a scientific research association. Thus the issue should be considered by the central government afresh in the manner indicated above and in accordance with law.
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2013 (3) TMI 490
Delay of 121 days in filing the review petition - no application has been filed for condonation of delay in filing the review petition - Held that:- Two options are there in these circumstances, first to dismiss the review petition as barred by limitation and second one is to return the original review petition to the petitioner to file fresh review petition along with application under Section 5 of the Limitation Act, in accordance with law. Thus opting for second option Registry is directed to return the original review petition to the petitioner, with aforesaid liberty.
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2013 (3) TMI 489
Determination of the arms’ length price - benefit of adjustment of +5% denied - Held that:- In view of the observations of the Supreme Court in the case of K.V. Pilliah and Sons (1966 (10) TMI 35 - SUPREME COURT) it is apparent that merely because the Tribunal confirmed the findings of the lower appellate authority it does not mean that the Tribunal has acted illegally or irregularly. In the present case, the Tribunal had examined the findings of the Commissioner of Income Tax (Appeals) in detail and had given an opportunity to the departmental representative to controvert or rebut the findings and conclusions arrived at by the CIT (Appeals). However, despite that opportunity, it is recorded in the order, that the departmental representative had not been able to controvert those findings and point to any material to enable the Tribunal to take a view other than the view taken by the CIT (Appeals). It is in these circumstances that the Tribunal concurred with the view taken by the CIT (Appeals). It is also not the case of the revenue that the departmental representative had made certain points controverting the findings of the CIT (Appeals), which have not been taken into account by the Tribunal. Had that been done, possibly, the revenue would have filed an application under section 254 of the Income Tax Act, 1961 for rectification but that has also not been done. In these circumstances, no substantial question of law which arises for our consideration in these appeals. The appeals are dismissed.
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2013 (3) TMI 488
Deduction U/s 80IB [4] of the Income Tax Act, 1961 - Commenced business before grant of Factory License - Held that:- In so far as present assessee is concerned, material on record is insufficient to ascertain as to in which category the case would fall. The date of application for grant of Factories license is not available on record. We notice that in our Order dated 17th January 2012, in case of this very assessee in Tax Appeal No. 2016 of 2010, we had placed the proceedings before the Assessing Officer for verifying the facts and deciding the same on the basis of findings given by us in the said judgment. The order of the Tribunal is set-aside; proceedings are placed before the Assessing Officer for ascertaining the facts in light of the observations made above and decide the claim of deduction under Section 80IB of the Act of the assessee afresh.
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2013 (3) TMI 487
Order u/s 220(2) - Appealable order - Interest u/s. 220(2) - Section 246A of the I.T.Act provides the list of appealable orders before the learned CIT(A) - Held that:- We are of the opinion that the order of Tribunal calls for interference in as much as CIT(Appeals) had entertained the appeal which was not maintainable and yet passed an order in favour of the assessee. Tribunal on the ground mentioned in its order had not entertained the Appeal of the Revenue and consequently therefore it had not gone into the merits of the issue of cancellation of the interest chargeable u/s. 220(2) and thus, the order of CIT(A) of waiving interest continues to favour assessee. Appeal preferred by the Revenue before the Tribunal, in our opinion since was maintainable u/s. 253 of the Act for being an appeal directed against the order of CIT(A). Remanding the matter back to the Tribunal for adjudication upon the issue on merits, after giving due opportunities to both the sides to put forth their respective cases. This Tax Appeal resultantly is allowed.
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2013 (3) TMI 486
Reopening of the assessment under section 147 - Section 80 IB - An order of assessment was passed under section 143(3) - Notice under section 148 - Claimed deduction u/s.801A in respect of the profits of the Goa Unit( Depreciation not claimed resulted in excess deduction ) - Held that:- In the present case there was no tangible material which came into the possession of the AO based on which he can came to the conclusion that there was escapement of income because of the failure on the part of the assessee to claim depreciation while arriving at the profits of the Goa Unit. It has to be, therefore, held that the reassessment proceedings have been initiated purely on a change of opinion. We, therefore, held that the initiation of reassessment proceedings is invalid. Consequently the order of assessment under section 147 is annulled. In the present case the assessee had duly disclosed all facts and the AO while passing an order under section 143(3) of the Act is presumed to have applied his mind to the claim of the assessee for deduction under section 80IA of the Act on profits which was calculated without deduction on account of depreciation. Though on merits of the addition made in the reassessment proceedings which is challenged by the assessee in ground No.2 raised before us, we find that a Full Bench of the Bombay High Court in the case of Plastiblends India Ltd. vs. ACIT [2009 (10) TMI 39 - BOMBAY HIGH COURT] has held that depreciation has to be claimed and the resultant profits arrived at after claiming depreciation will alone qualify for deduction under section 80IA of the Act, in view of the decision on Ground No.1 regarding validity of initiation of reassessment proceedings, we do not consider is necessary to deal with the said issue raised by the assessee in ground No.1 The appeal of the assessee is allowed.
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2013 (3) TMI 485
Disallowance U/s 14A & Sec.40(a)(ia)- Applicability of sec. 115JB - Interest under section 234A to 234D - Held that:- The addition made under section 14A of the Act would be an expenditure relatable to an income to which section 10 applies and, therefore, clause (f) of Explanation 1 to Section 115JB of the Act would be attracted. While deciding disallowance U/s 14A of the assessee we have already set aside this issue for fresh consideration by the AO With this observation Ground under applicability of sec. 115JB is dismissed. Regarding the applicability of Sec.40(a)(ia) - TDS - heritage hotel income - Rent u/s 194I - Held that:- It appears to us that it was a business arrangement between the assessee and MMCPL pursuant to which the sum of Rs.15 lakhs was paid by the Assessee to MMCPL and the said payment cannot be termed as rent. This further strengthened by the accounting treatment given by the assessee. The decision in the case of Kamat Hotels India Ltd. (2000 (3) TMI 1039 - ITAT MUMBAI) also supports the plea of the assessee.
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2013 (3) TMI 484
Charitable purposes U/s 2(15) of the Income-tax Act - Amendment to the clauses of the trust deed - Benefits of U/s 11 - Exemption U/s 10(22) of the Income-tax Act - Violation of the provisions of sec. 11(5) and sec. 13(1)(c) of the Income-tax Act - Held that :- It cannot be said to be commercial ventures as held by the Commissioner of Income-tax. To argue that the trust exists for the benefit of a few members cannot be accepted as there has been an amendment in the memorandum of association as noticed supra. The assessee herein was running educational institutions and to aid spreading of the education and update the syllabus and other related educational aspects, two magazines were started by the assessee or their sister concern. They are incidental and ancillary to the main activities of the trust. Therefore, has to be answered in the negative in favour of the assessee and against the Revenue.
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Customs
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2013 (3) TMI 481
Transit loss - Naphta - According to the Revenue offsetting of gain observed in one product against loss observed in another product is permissible only in cases where unloading of two compatible type/same type of products are effected through one set of pipeline at one location where the possibility of inter mixing of the product exists. In the present case, since the product unloaded at all the three terminals being same, according to the Revenue offsetting the gain occurred at Vasco to the loss occurred at Mangalore could not be acceded to. Held that:- As per Circular No. 55 of 1989, dated 15-12-1989 the storage loss and handling loss should be taken up for condonation on accumulative basis month wise as per the guideline dated 1-6-1956 and 2-3-1959. All the authorities below committed error in holding that if a part of the quantity liable to be discharged at Mangalore is discharged at Vasco then there would be transit loss at Mangalore and transit gain at Vasco. As noted earlier, transit loss can be computed only after the entire quantity is discharged and with reference to the total discharge at each of the destination. In this view of the matter the decision of the authorities below in holding that there is transit loss/transit gain and that the transit loss exceeds 1% and therefore the assessee is liable to pay duty with interest cannot be sustained. - Decided in favor of assessee.
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2013 (3) TMI 480
Recovery of duty drawback - Period of limitation - Petition has been against the order passed by the Government of India allowing the revision preferred by the Revenue and holding that the drawback paid erroneously to the petitioners is liable to be recovered under Rule 16 of the Drawback Rules, made under Section 75 of the Act. Examining the facts of the present cases in the light of the aforesaid legal position, in all these cases, drawback had been paid to the petitioners between December 1995 and August 1996. Thereafter, despite a clarification having been issued as regards the interpretation of condition (c) of the Note under SS No. 5404(1)(i) of the Drawback Schedule, no action was taken by the concerned authorities at the relevant time. It is only after a period of more than three years that show cause notices came to be issued to the petitioners seeking to recover the differential amount of drawback erroneously paid to them. - As held by the Supreme Court in the case of Collector of Central Excise, Jaipur v. M/s. Raghuvar (India) Ltd. (supra) [2000 (5) TMI 40 - SUPREME COURT OF INDIA], where no period of limitation is prescribed, the courts may always hold that any such exercise of powers which has the effect of disturbing the rights of citizen should be exercised within a reasonable period of time. Held that:- In the light of the aforesaid discussion, in the opinion of this court, though Rule 16 of the Drawback Rules does not provide for any period of limitation, a reasonable period has to be read into the said rule. As observed hereinabove, in the facts of the present case, the show cause notices which have been issued after a period of more than three years from the date when the drawback came to be paid to the petitioners, cannot by any stretch of imagination be said to have been issued within a reasonable period of time. Under the circumstances, the show cause notices have to be held to be bad on the ground of being time barred. Once the show cause notices are held to be invalid, the very substratum of all the orders passed pursuant thereto, including the impugned orders would fall, rendering the same unsustainable.For the foregoing reasons, the petitions succeed and are, accordingly, allowed.
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Corporate Laws
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2013 (3) TMI 479
Permanent injunction - Infringement of trademark - as per plaintiffs the defendants are using the trademark/domain name www.tatainfotech.in or any other mark/domain name which is identical with or deceptively similar to the plaintiff's trademarks TATA/TATA INFOTECH - plaintiffs prayed for an order for transfer of the domain name www.tatainfotech.in to the plaintiffs from the register of the Registrar, Key-Systems GmBH, and for delivery-up of all infringing materials along with the rendition of accounts of profit illegally earned as well as damages - Held that:- The WHOIS search conducted on the registry website for the domain name www.tatainfotech.com clearly states that the record of the said domain name was created on January 30, 1998. The plaintiffs have also stated that they have been the prior user with respect to the said domain name ever since the year 1998. In contrast, the WHOIS search conducted on the registry website for the impugned domain name www.tatainfotech.in clearly shows that it was created on CS (OS) No. 563/2005 Page 9 of 11 February 19, 2005 in the name of defendant no. 1 i.e. Arno Palmen, by the sponsoring registrar Key-Systems GmBH, who is defendant no. 2. Further, the email correspondence between the contesting parties also conclusively demonstrates that the defendant no. 1 not only had the knowledge that plaintiff no. 2 was the legitimate owner and user of the trademark TATA INFOTECH, but also got the impugned domain name registered deliberately in bad faith, in the hope of being able to sell the domain name to the plaintiffs, or take unfair advantage of the distinctive character and repute of the plaintiff's trademark. Thus the defendant no.1, its servants, agents and assigns and all others acting on behalf of the defendant are restrained from conducting any business or dealing in any manner including using domain name www.tatainfotech.in or the word TATA or any name comprising of the same or deceptively/confusingly similar to it regarding any goods, services or domain. The defendant no. 2, Key-Systems GmBH is directed to cancel the registration of the impugned domain name in favor of the defendant. With respect to delivery and rendition of accounts, the plaintiff has not placed any evidence on record to show that the defendant no. 1 has any infringing material or made any business out of the impugned trademark/domain name. No costs to follow. The suit is hereby decreed to the extent indicated above.
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FEMA
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2013 (3) TMI 483
Section 8(1) of the Foreign Exchange Regulation Act,1973 (FERA) - Section 56(1)(i) - During search foreign currencies were seized - Petitioner in his statement U/s 40 of the Foreign Exchange Regulation Action 1973 (FERA) had admitted that he visited Seethalakshmi Nagaraj and requested for foreign exchange as he wanted to deposit the same into the NRE account of his brother in law as such person was in need of the same. Held that:- Without going into the merits, even if it be accepted that the foreign exchange did belong to Seethalakshmi Nagaraj, the prosecution would still have a case of borrowing prohibited under section 8(1) FERA1973, if it establishes its contention in this regard. It would be for the petitioner to establish in the course of trial that he had received the foreign exchange from Seethalakshmi Nagaraj at her instance. This is more so because section 71 FERA 1973 places the burden of proving lawful possession of foreign exchange in excess of value of upon him. The revision shall stand dismissed.
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Service Tax
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2013 (3) TMI 495
Service Tax - Cenvat Credit - The appellants during the period 9-7-2004 to 30-9-2006 received services of agents located abroad to promote sale of their goods abroad and not paid service tax for the services which according to Rule 2(1)(d)(iv) of Service Tax Rules, 1994 appellant are expected to pay. Revenue verified the records and found that such tax was not being paid. When the issue was pointed out to them they paid the tax involved. They also took credit of the tax paid in their Cenvat account for the reason that the impugned services were input services for them. Revenue issued Show Cause Notice for demanding the service tax which was initially short paid along with interest and penalty and also for denying the Cenvat credit taken on such services for the reason that these services could not be considered as input services. Held that:- Tribunal finds that It is no longer res integra that service tax could not have been demanded from service recipient prior to 18-4-2006. So demand for service tax in this case is not maintainable. Further the argument adopted for denying Cenvat credit also is not correct for the reason that the relevant provision in Cenvat Credit Rules, 2004 as provided in Rule 9(1). Tribunal do not see any merits of the argument of Revenue and hence the appeal is allowed by setting aside the impugned orders of the lower authorities.
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2013 (3) TMI 494
Import of Services from Dubai – Not Taxable before 18/4/2006 - None present for the respondent. - The respondent has received services from Dubai during the period from 09.7.2004 to 31.1.2006 for which he asked to pay tax. The original authority confirmed demand of service tax along with interest and imposed penalty on respondent. Commissioner (Appeals) , set aside the order passed. Aggrieved by this order revenue file an appeal to Tribunal. Held that:- Tribunal in the light of judgement passed by the tribunal in earlier case of Hindustan Zinc Ltd. vs. CCE, Jaipur, [2008 (6) TMI 6 - CESTAT NEW DELHI (LB)] held that there is no liability to service tax on the recipient would be arise only with effect from 18.4.2006. Appeal is, therefore, rejected.
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Central Excise
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2013 (3) TMI 498
Evasion of Central Excise Duty - search operations conducted - petitioner vehemently contended that neither the Investigation Officer nor any of the members of the Investigating team shall be present during cross-examination proceedings and they shall not do re-examination, since the same would influence the entire proceedings in favour of the Department & the Investigation Officer and the Adjudication Officer shall not be one and the same - Held that:- Not able to understand as to how the presence of the Investigation Officer in the cross-examination proceedings or re-examinations of witnesses would amount to abdication of authority by the second respondent. In fact, if the second respondent refused to permit the presence of Investigation Officer during cross-examination of the witnesses and refused permission to Investigation Officer for re-examination of witnesses, the same would amount to abdication of its authority, particularly in view of judgements relied on by the Department of Sanghi Textiles Processors Pvt. Ltd. vs. C.C. Excise (1990 (8) TMI 160 - HIGH COURT OF ANDHRA PRADESH AT HYDERABAD) wherein a similar objection made by the petitioner was rejected stating that the Excise Department which had initiated the proceedings before the Collector against the petitioner has aright to have the assistance of the Investigating Officers who gathered the material on the basis of which the proceedings had been initiated. Also see Lakhanpal National Ltd. Vs. U.O.I. [1992 (9) TMI 94 - HIGH COURT OF JUDICATURE AT BOMBAY]. Failure to understand as to how the presence of Investigation Officer in the cross-examination proceedings and re-examination of witnesses by the Investigation Officer would be described as bias causing prejudice to the petitioner as the Investigation Officer collected statements from a witness commencing from 07.00 p.m. on 05.06.2006 and ended at 02.30 hours on the next day. The next witness was examined for half an hour from 2.30 a.m. on 06.12.2006. Hence, such an Investigation Officer shall not be allowed to be present before the adjudication authority for conducting re-examination of witnesses is unable to be appreciated the submissions made by the petitioner. If the petitioner has any grievance about the alleged irregular investigation, the same could be advanced before the second respondent and he could not ask on that pretext the exclusion of Investigation Officer in the adjudication proceedings. The Investigation Officer and the Adjudication Officer shall not be one and the same has no basis as here the Adjudication Authority is totally different from the Investigation Officer. In fact, if the Investigation Officer did not participate in the proceedings, then the petitioner could make such an allegation that the Adjudicating Authority acted as prosecutor and judge to himself. In the judgements relied on by the petitioners the investigation Authority also acted as Adjudicating Authority. Therefore, the same was disapproved by the Court. Hence those decisions have no application to the facts of the present case - writ petition dismissed.
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2013 (3) TMI 482
Non payment of excise duty - periods in question May 2010 to December 2010 and January 2011 to October 2011 - SCN demanding duty amounts with interest and also imposed penalty - second respondent ordered pre-deposit of 50% of the duty confirmed and also waived the interest and penalty -the petitioner filed these Writ Petitions on the ground that the financial burden and undue hardship shown by the petitioner have not been considered by the second respondent - Held that:- The second respondent-appellate authority has viewed the matter sympathetically and shown lenient approach while reducing the pre-deposit amount to the extent of 50%, apart from waiving the interest and penalty. If such a course is adopted by the second respondent taking note of the principles by waiving 50% of the pre-deposit amount, it is not for this Court to interfere with the same. Therefore, this Court is of the considered opinion that the second respondent-appellate authority has given due consideration of the financial burden and undue hardship pleaded by the petitioner, and hence, the amount of pre-deposit ordered by the second respondent is no way legally infirmed, which is accordingly confirmed, as there is no scope of interference in the same in the light of the settled legal principles. The petitioner is directed to pay the pre-deposit amounts as ordered by the second respondent-appellate authority in the impugned common order, dated 22.2.2013, within a period of three weeks from the date of receipt of a copy of this order to take up the appeals.
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2013 (3) TMI 478
Rectification of mistake (ROM) u/s 35C(2) of the Central Excise Act, 1944. - Appellant submitted that the ground of erroneous calculation of duty by the department has also not been considered by the Tribunal and the Tribunal erroneously confirmed the demand as per the Order-in-Original, which is incorrectly calculated. He also submitted that without considering the ground of revenue neutrality, the penalty under Section 11AC cannot be imposed on them. Reliance has been made on the case of Commissioner of Income Tax v. Ramesh Chandra Modi – [2000 (7) TMI 8 - RAJASTHAN High Court]. Held that:- Tribunal find that in the present case the points raised in the ROM application were not urged by the applicant at the time of hearing of the application and in their written submissions submitted on the date of hearing. The issue relating to the Rectification of Mistake under Section 35C(2) of the Central Excise Act, 1944 was examined by the Hon’ble Supreme Court in the case of Commissioner of Central Excise, Belapur, Mumbai v. RDC Concrete (India) Pvt. Ltd. reported in [2011 (8) TMI 25 - SUPREME COURT OF INDIA] and observed that a mistake apparent on record must be an obvious and patent mistake and the mistake should not be such which can be established by a long drawn process of reasoning. In view of the observation of the Hon’ble Supreme Court, Tribunal find that the application for ROM filed by the applicant is not sustainable.
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2013 (3) TMI 477
Cenvat Credit – Service Tax- Revenue filed an appeal against the order passed by the Commissioner (Appeals).The dispute in the present appeal relates to the Cenvat credit of Service tax paid by the respondents on the GTA service so received by him for transportation of billets which ultimately has been used for manufacture of galvanised parts of transmission tower and lining. The Revenue case is that inasmuch as the said billets are not brought into the respondents factory and are directly sent to the job workers factory, the Service tax paid by the appellant for transportation of said billets is not available to them as credit. Held that: - Tribunal following the decisions of Hon’ble High Court of Bombay in M/s. Coca Cola India Versus COMMISSIONER OF C. EX., PUNE-III [2009 (8) TMI 50 - BOMBAY HIGH COURT] held that GTA service for procuring the MS billets which ultimately has been used for manufacture of galvanised parts of transmission tower and lining sold by the appellant is an input service and the appellant is entitled for the Cenvat credit. Revenue’s appeal is accordingly rejected.
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2013 (3) TMI 476
Cenvat/Modvat - Inputs - Availment of credit - CENVAT credit of the duty paid on their input was denied - No such duty ought to have been paid by the job worker who supplied the goods - Held that:- Duty actually paid on input which has been received in the factory of the manufacturer of final product and used in or in relation to manufacture of the final product must be allowed as MODVAT/CENVAT credit to be utilized for payment of duty on the final product As per the Tribunal’s decision in Kwality Biscuits Limited v. Commissioner - (2005 (12) TMI 467 - CESTAT, BANGALORE) it was held that MODVAT credit of duty paid on input packing charges was not liable to be denied to the assessee on the ground that such charges were not includable in the assessable value of the goods, it was found that the input supplier chose to pay duty on the packing charges also and that input was used by the assessee in or in relation to manufacture of their final product. Appellant has placed on record a few other decisions also So it can be concluded that benefit cannot be denied to the appellant and the impugned order is set aside and these appeals are allowed.
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2013 (3) TMI 475
Availing Cenvat Credit of on input service - Post manufacturing activity - Definition of Input service - Held that:- There is a clear nexus between these expenses with the goods manufactured by the appellant. Therefore, the said Insurance Services are used by the appellant only in relation to activities relating to their business of manufacture of final products. So the service tax paid on such “input service” is eligible for taking cenvat credit. The present case is covered under the Tribunal’s decision in the case of M/s. Reliance Industries Ltd. v. C.C.E., Rajkot reported in 2009 (14) S.T.R. 287 (Tri. - Ahmd.)
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CST, VAT & Sales Tax
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2013 (3) TMI 497
Inter-State sale or stock transfer - F-Form - Deemed interstate sale u/s 6A - provisional assessment - assessee is dealer in Lifts and Lift components - as per the dept. the parts and accessories are moved directly to the customers' places and thereafter, the Lifts are erected at the site of the customers leading to Inter-State sale - Held that:- Law is well settled that when there is a provisional assessment, the person aggrieved by the provisional assessment has every right to make objections and if such objections are made, it is incumbent on the part of the authority concerned to look into the same, after giving an opportunity of hearing to the person and pass appropriate orders, on merits and in accordance with law, based on material facts and the objections made thereon. Such a course is not adopted in this case and the petitioner submitted that in view of the said clarification letter, dated 21.8.2002, the petitioner-Company is claiming that they are manufacturing goods and carry on only stock transfer from one branch to the other branch of another State, which cannot be termed as Inter-State sale and the tax could not be levied and they claim exemption, and therefore, the petitioner is prepared to make their objections before the competent authority in respect of the notice issued to the petitioner-Company by the respondents for disallowing the claim of exemption, and if such objections are filed, the competent authority may take decision by following due process of law, after giving an opportunity of hearing to the petitioner. Writ Petition disposed of with a direction to the petitioner-Company to make their objections before the first respondent-competent authority, in respect of the notice issued to them for disallowing the claim of exemption within a period of two weeks from the date of receipt of a copy of this order - in favour of assessee by way of remand.
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2013 (3) TMI 496
Notice U/s 25(1) of the KVAT Act - Delivery / issue of order - Sought time for filing objections - By the time Ext.P3 was received, the order was already passed - Held that :- In Govt. Wood Workshop v. State of Kerala, another Division Bench had occasion to consider a similar question and following the view taken by a Bench of this Court in T.R.C.S Nos. 15 and 16 of 1981, it was held that the order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. - It is not enough if the order is made, signed and kept in the file, because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. Therefore, the case of the petitioner is fully covered by the principles laid down by the Division Bench. Thus, it is obvious that the respondent has acted illegally in not considering the objections filed by the petitioner and for that reason Ext.P4 is unsustainable. - respondent directed to pass fresh orders on Ext.P1 notice, considering Ext.P3 objection and after affording the petitioner an opportunity of being heard.
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Indian Laws
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2013 (3) TMI 493
Arbitration and Conciliation - Whether enforcement of the award given by the International Court of Commercial Arbitration at the Chamber of Commerce and Industry of Russian Federation, Moscow in favour of the respondent is contrary to public policy of India ? - Held that:- The transactions covered by Section 23 are the transactions where the consideration or object of such transaction is forbidden by law or the transaction is of such a nature that if permitted would defeat the provisions of any law or the transaction is fraudulent or the transaction involves or implies injury to the person or property of another or where the court regards it immoral or opposed to public policy. Whether particular transaction is contrary to a public policy would ordinarily depend upon the nature of transaction. Where experienced businessmen are involved in a commercial contract and the parties are not of unequal bargaining power, the agreed terms must ordinarily be respected as the parties may be taken to have had regard to the matters known to them. In C.I.F. and F.O.B. Contracts essential feature of a C.I.F. contract is that delivery is satisfied by delivery of documents and not by actual physical delivery of the goods. Shipping documents required under a C.I.F. contract are bill of lading, policy of insurance and an invoice. No merit in the case set up by the sellers that their liability ceased to exist on shipment of the goods on January 29, 1998 or in any case when the shipping documents were handed over through the banking channels on negotiations of Letter of Credit. As in the present case, the sellers were in breach at the threshold, it is immaterial whether or not the buyers had a right of action against the insurers or carrier. The sellers and the buyers in the present case are business persons having no unequal bargaining powers. They agreed on all terms of the contract being in conformity with the international trade and commerce. Having regard to the subject matter of the contract, the clause for reimbursement or repayment in the circumstances provided therein is neither unreasonable nor unjust; far from being extravagant or unconscionable. It is the precise sum which the sellers are required to reimburse to the buyers, which they had received for the goods, in case of the non-arrival of the goods within the prescribed time. More so, the fact of the matter is that goods never arrived at the port of discharge. The Arbitral Tribunal has only awarded reimbursement of half the price paid by the buyers to the sellers and, therefore, the award cannot be held to be unjust, unreasonable or unconscionable or contrary to the public policy of India. The goods were insured and the buyers were made beneficiaries in the insurance policy and, therefore, they have right to claim loss for goods from the insurance company and not the sellers. Moreover, the right to claim under insurance policy is not subrogated in favour of the buyers. The argument is noted to be rejected having no merit at all for the reasons already indicated above. No merit in the appeal and it is dismissed accordingly.
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