Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 8, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Default made by the revenue in compliance with the procedure in place for service of the assessee ipsofacto, is not a circumstance to let the assessee go scot free from the taxation regime when his liability of payment of capital gain tax is not questioned - HC
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Reopening of assessment Validity of Notice u/s 148 - only a prima facie view of the AO is necessary to issue notices and not a cast iron case of escapement of income - HC
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Constitutional validity of Explanation of section 10(2A) - The explanation would not call for any striking down in the hands of this Court - It cannot be given a literal interpretation, so as to defeat the object of the amendment made to the Act - HC
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AO is not right in holding that the incomes which are excluded from the total income of the firm by operation of various clauses of Section 10 and which form part of the share of profits of the firm would have to be taxed in the hands of the partners - HC
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Contravention of section 269SS Penalty u/s 271DD the contribution made by the respective persons was treated as a loan and the explanation that they were to be made partners later was not accepted - penalty confirmed - HC
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Basis of Best judgement assessment post search - There is also no requirement u/s 153A and other provisions requiring the department to collect information and evidence for each and every year for the six previous years u/s 153A - HC
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Allowability of deduction u/s 80IA(4) - the incentive received as per the scheme of the Central Govt. had no first degree connection with the industrial undertaking of the assessee - AT
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Reassessment - The re-appreciation of seized material in subsequent proceedings by the AO is wholly unjustified particularly when such a seized material was not considered worthy by the CIT(A) in the original appellate proceedings - AT
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Disallowance u/s 14A of the Act r.w Rule 8D - When the interest component is not disputed towards acquisition of business assets, the application of rule 8D(2)(iii) does not arise - AT
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A leasing or finance company, which leased out machinery owned by it, to third parties, who used the machinery for manufacture of articles or things as specified in Section 32A(2)(b)(III) would be entitled to investment allowance u/s 32A - HC
Customs
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Extended period of limitation - Revenue neutral situation - Once appellant has used the entire quantity of imported goods with respect to the manufacture of exported goods, it cannot be said that there could be any intention to evade Customs duty. - AT
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Refund of SAD - Bar of limitation - It can be seen that in any of the Central Act or Regulations, if the word from is used, the day on which that event has taken place has to be excluded. - AT
FEMA
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Forfeiture of property - Joint ownership being wives - If the competent authority has reasons to believe that the properties under dispute were acquired out of illegal sources of income such satisfaction is enough to call upon the concerned person to show cause. - HC
Corporate Law
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Winding up of Company - Inability to pay its debts - An Arbitrator, notwithstanding, any agreement between the parties, would have no jurisdiction to order winding up of a company - HC
Indian Laws
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Validity of guidelines issued for differently abled person - Conduct of Examination by ICAI - ICAI directed to prepare at least in major cities, its own panel of scribes/writers - HC
Service Tax
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Denial of the benefit of small scale exemption under Notification No.6/2005-ST dt. 01.03.2005 - it is not brought out anywhere that appellant has not fulfilled the conditions specified under exemption Notification - AT
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Service of providing meals to school students under the Mid-day Meal Scheme - when the transaction is mainly one of sale, the appellant has made out a prima facie case for grant of stay. - AT
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GTA service or Cargo Handling Service - transportation of iron ore - Rate is including of loading and unloading from wagon - prima facie it is not cargo handling service - AT
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CENVAT Credit - no ST was payable before 18-4-2006 - As such, the payment of Service Tax by the appellant prior that date, taking of credit of the said service tax so paid cannot be held to be against the law so as to deny them the credit - AT
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Value of sale of spare parts should be excluded if sales tax/VAT liability has been discharged on such sales as is evident from the invoices/bills issued in this regard - AT
Central Excise
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Manufacture of goods out of plastic material imported being Cellulose Acetate Non Plasticised Powder Granules (Job Lot - Sweepings) - Notification No.4/2006-CE - stay granted partly. - AT
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Cenvat Credit - Job Work under Rule 4(5)(a) of Cenvat Credit Rules, 2004 - Job worker paid the duty - Appellant took the Cenvat Credit of the duty paid by the job workers - credit allowed - AT
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Shortage in the stock of Cenvat credit availed of raw materials - physical verification of stock - clandestine clearance - Levy of penalty u/s 11AC confirmed - AT
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Confiscation of goods - Incomplete entry in RG-1 register - confiscation of the goods, redemption fine and imposition of penalty on the appellant company u/s 11AC upheld - AT
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Adjudicating authority cant take two stands on a single cost certificate - law does not permit such discrimination i.e. acceptance of a certificate for the purpose of recovery and rejection of the same certificate for the purpose of refund - AT
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Demand of duty on scrap - old waste and scrap generated through breaking of the capital goods or crushing or hammer of the same does not result in emergence of any excisable goods - AT
VAT
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Concessional rate of tax - when the assessee is a dealer in textile machinery and the item in question dealt with by the assessee is an accessory to the textile machinery, one cannot bring the said item under a general Entry - HC
Case Laws:
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Income Tax
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2014 (3) TMI 223
Validity of Notice issued u/s 148 of the Act Opportunity of being heard Held that:- The Assessing Officer would have had ample occasion to consider and detect all the material disclosed by the petitioner during proceedings under Section 143(3) of the Act - Besides, from the reasons recorded for reopening of the assessment, it is very clear that the same has been issued on examination of the computation of the income and details furnished under Section 44AB of the Act - it cannot be said that there was a failure on the part of the petitioner to disclose material facts necessary for assessment proceeding during the original proceedings leading to the Assessment Order dated 21 April 2008 - there has been no failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment during the original assessment proceeding leading to Assessment Order dated 21 April 2008 - Thus, the notice dated 22 March 2013 is unsustainable. There is no occasion to consider the petitioner's other contention that there is no reason to believe that income chargeable to tax has escaped assessment as the present proceeding initiated by the impugned notice dated 22 March 2013 is mere change of opinion thus, the notice dated 22 March 2013 is an order without jurisdiction - the requirement of the first proviso to Section 147 of the Act is not satisfied thus, the notice dated 22 March 2013 issued under Section 148 of the Act is set aside Decided in favour of Assessee.
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2014 (3) TMI 222
Commencement of business - Allowability of Interest u/s 35D of the Act Held that:- ITAT was of the view that the assessee's business commenced from 1994-95 itself which was followed by a lull in the intervening periods - This does not mean cessation of the assessee's business - the assessee's business of consultancy was set up in the year as substantial revenue is earned in next 2 years - the claim of the assessee is allowed by holding that assessee's business was commenced. The findings of fact by the Tribunal that the assessees business of consultancy was set up in 1994-95 and that it earned substantial revenue for the next two years cannot be disputed the finding was arrived at after considering the materials including the additional evidence adduced before it the decision in Commissioner of Income Tax v. M/s. Hughes Escorts Communications Ltd. [2007 (9) TMI 261 - DELHI HIGH COURT] and CIT v. Whirlpool of India Ltd. [2009 (8) TMI 28 - DELHI HIGH COURT] followed - once the Tribunal was of the opinion that business had commenced on account of the substantial income earned by the assessee after two years of its setting up, the view taken by the Tribunal cannot be faulted thus, no substantial question of law arises for consideration Decided against Revenue.
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2014 (3) TMI 221
Jurisdiction of the AO for assessment - Whether the ITAT erred in law in quashing the assessment made by the assessing officer at Kapurthala in absence of any direction to assessing officer, Jalandhar to whom according to ITAT the jursidiction lies to frame the assessment Held that:- There is force in contention of the revenue that once service of notice under Section 148, 143(2) and 142(1) of the Act was held to be bad observing that the assessee was no more residing at the last known address and was accessible only through his attorney Jarnail Singh, it was incumbent on the Tribunal not to quash the whole proceedings as it amounted to leaving the assessee go scot-free, though he is liable to pay tax on the capital gains Because of procedural lapses, the assessee should not be a gainer and that too by default to escape his liability. Default made by the revenue in compliance with the procedure in place for service of the assessee ipsofacto, is not a circumstance to let the assessee go scot free from the taxation regime when his liability of payment of capital gain tax is not questioned - Since the land is located at village Mansoorwal Dona, District Kapurthala and the proceedings are not required to be conducted at the place of residence of power of attorney of the assessee Thus, the order is liable to be set aside decided in favour of Revenue.
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2014 (3) TMI 220
Reopening of assessment Validity of Notice u/s 148 of the Act Held that:- There has been a full and true disclosure of all relevant material necessary by the petitioner for the purpose of assessment - as the assessment sought to be reopened i.e assessment year 2008-09 by a notice dated 25 March 2013 is less than 4 years from the end of the assessment year - there was no occasion for the Assessing Officer to apply his mind to the tangible material to form any opinion with regard to it during the original assessment proceeding Relying upon Export Credit Guarantee Corporation India Ltd. vs. Additional CIT [2013 (1) TMI 517 - BOMBAY HIGH COURT] - reopening of an assessment is permissible when the original assessment order passed under Section 143(3) of the Act is silent in respect of the issue/point on which reassessment notice is issued - Non receipt of convertible foreign exchange within a period of 6 months from the end of the assessment year was not the subject matter of consideration nor the fact that the petitioner had declared its book profits after reducing the amount of deductions under Section 10AA of the Act during the original proceedings. It is permissible for the Assessing Officer to have a reasonable belief that income chargeable to tax has escaped assessment and the same does not stem from a change of opinion - only a prima facie view of the AO is necessary to issue notices and not a cast iron case of escapement of income thus, no fault can be found with the notice dated 25 March 2013 issued under Section 148 of the Act thus, there is no reason to interfere in the notice Decided against Assessee.
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2014 (3) TMI 219
Inclusion of exempted income of Firm in the hands of Partners - Constitutional validity of Explanation of section 10(2A) - Entitlement for exemption u/s 10(2A) of the Act - Weather the share of profit as partner of the firm income inclusive of the income, which is exempted from tax u/s 10 (34) and 10(35) of the Act Held that:- The petitioner is entitled to claim exemption under sub-section (2A) of Section 10 of the Act, on the share of profit of the firm, inclusive of the income, which is exempted under sub-sections (34), (35) and (38) of Section 10 of the Act, as the total income referred to in sub-section (2A) of Section 10 of the Act, includes exempted income of the partnership firm Relying upon Malabar Fisheries Co. Versus Commissioner of Income-Tax, Kerala [1979 (9) TMI 1 - SUPREME Court] - Any share of profits derived from a firm by a partner, is not includable in the total income of the partner as it is an exempted income - the partnership firm would have already reckoned that income for computation of tax under the Act thus, the explanation to sub-section (2A) of Section 10 of the Act must be read in consonance with the above interpretation - The expression total income of a firm in the explanation would not mean taxable income of the firm but gross total income of a firm in which certain incomes would not be assessable to tax or exempted income - But it would nevertheless, form part of the profits of the firm - total income of the firm cannot be equated with taxable income of the firm, but, gross total receipts of the firm. Scope of the Term Income u/s 10(2A) of the Act - Whether a declaration is sought to the effect that the total income referred in Section 10(2A) of the Act does not include income of the partnership firm which is exempted from tax - Held that:- The explanation to Section 10(2A) does not require any striking down as sought by the petitioner The section has been interpreted in the order having regard to the object of the amendment and the principles of Partnership Law - The Assessment Order dated 28/03/2013 for the year 2010-11 and the Notice of Demand, issued under Section 156 of the Act are set aside - While dividing the profits of the firm between the partners of the firm, the income which is excluded from total income of the firm for the purpose of taxation of the firm would also have to be divided - the dividends paid by the company, or income derived from mutual funds or from transfer of equity shares are not includable in the income of the firm for the purpose of taxation, but are reflected in the return of income filed by the firm, the firm would not have paid any tax on those amounts but they are nevertheless part of the profits of the firm - While dividing the profits of the firm between the partners, those incomes which are not includable in the income to be considered for the purpose of taxation or exempted incomes, would have to be also divided as profits of the firm - when profits of the firm are divided amongst the partners of the firm, under sub-section (2A) of Section 10 of the Act, such income would not be includable in the total income of the partners of the firm in view of the amendments to the Act and this is with the object of avoiding double taxation. The Assessing Officer is also not right in holding that the incomes which are excluded from the total income of the firm by operation of various clauses of Section 10 and which form part of the share of profits of the firm would have to be taxed in the hands of the partners, as only income which is taxed in the hands of the firm is exempted from tax in the hands of the partner - The Assessing Officer has given a literal interpretation to the explanation to sub-section (2A) of Section 10 of the Act, which is contrary to the object of the amendment made to Section 10 of the Act - a reasonable construction of a taxing statute ought to be preferred over a literal construction, if the latter defeats the manifest purpose and object of the statute - Such a reasonable construction of the explanation to sub-section (2A) of Section 10 with respect to its placement in Chapter III, does not envisage taxation of the shares of profits of the firm at the hands of the partners. The explanation would not call for any striking down in the hands of this Court - It cannot be given a literal interpretation, so as to defeat the object of the amendment made to the Act - the distribution of profits and gains of a firm in the hands of the individual partners shall not be considered to be income of the partners and therefore, not includable while computing the total income of the partner under the Act - The share of a partner in the total income of a firm has to be excluded before arriving at the gross total income of the partner - While computing the profits of a partner of the firm, the share of a partner in the total income has to be excluded from the gross total itself and not in the total income of the partner as understood in sub-section (45) of Section 2 of the Act - Hence, the income eligible under sub-section (2A) of Section 10 would not enter into computation as the same is exempted income just as agricultural income or income received by an individual as a member of Hindu undivided family is exempted from computation of total income under sub section (45) of Section 2 of the Act Decided in favour of Assessee.
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2014 (3) TMI 218
Contravention of section 269SS of the Act Penalty u/s 271DD of the Act Proper explanation not made - Held that:- There was no material to substantiate the questions raised by the appellant - The main allegation raised by the assessing officer for imposing penalty was that the assessee-firm had received cash in excess of Rs. 20,000/- in violation of Section 269SS The authorities below as well as the Tribunal, on verification of the materials on record, came to a finding that the audit report and balance sheet of the assessee had shown the outstanding amount as loan received from 12 persons thus, the contention that the amounts received by the assessee was from promoters/partners of the firm was not accepted. None of the authorities have found that the reasons stated are genuine and can be accepted to avoid payment of penalty - it is found by the authorities that the contribution made by the respective persons was treated as a loan and the explanation that they were to be made partners later was not accepted thus, the factual issues can be re-opened - The findings of facts by the authorities are neither perverse nor illegal in any form thus, no question of law arises for consideration Decided against Assessee.
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2014 (3) TMI 217
Materials detected during search Basis of Best judgement assessment - Whether the Tribunal gone wrong in not considering the aspect as to whether materials detected in a search conducted u/s 132 of the Act in the business premises of another assessee could be a reason or basis for best judgment assessment against the assessee - It is clear that in the pre-search enquiry and course of search proceedings the information collected was mostly with reference to assessment year 2008-09 - the information gathered during the search proceedings with reference to Commercial Tax department pertains to 2006 - Inspection by Commercial Tax department was on 24.02.2006 - Commercial Tax department also found similar deficits in the maintenance of accounts and the records by the appellant assessee - Commercial Tax Department also opined, sales bills were not issued for the entire sales made by them though estimate slips was prepared for the actual sales. Initiation of proceedings u/s 153A of the Act - Whether the material recovered on 21.08.2007 and also other information during the course of search could be the material for previous six years to initiate proceedings under Section 153A of the Act Held that:- Though the estimate slip reflects the actual purchase and sale of gold made in the business concerns of appellant assessees, the sale bill was always for lesser quantity than the details reflected in the estimate slip - By this process actual sales were not reflected was the information gathered during 2006 by the Commercial Tax Department - Search was in 2007 - There was material in black and white at least for these two years thus, there was enough information and material to presume the nature of accounting and also modus operandi in maintaining the records by the assessee - Relying upon Commissioner of Income-tax Versus Hotel Meriya [2010 (5) TMI 556 - Kerala High Court] none of the provisions under Chapter XIVB mandates, for making block assessment there shall be evidence regarding the concealment of income for every year for the block period. There is no prohibition or embargo on the department to consider this information for assessment or reassessments contemplated under Section 153A - There is also no requirement under Section 153A and other provisions requiring the department to collect information and evidence for each and every year for the six previous years under Section 153A - As there was no explanation called for from the assessees, so far as the materials collected from statement of the employees of the assessee and also the other material, in all fairness - the Tribunal exercised its jurisdiction with all magnanimity in remitting back the matter to the assessing officer giving opportunity to the assesees to explain and substantiate their stand before the assessing authority - This would mean that the assessee has one more opportunity to convince the department regarding their stand by explaining the controversies raised by the department based on the information gathered by them during the search there was no reason to interfere in the decision of Tribunal Decided against Assessee.
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2014 (3) TMI 216
Allowability of deduction u/s 80IA(4) of the Act Sales tax incentive Receipt not in proper form Held that:- The assessee could not bring any distinguishing facts/decision The decision in Liberty India Vs CIT [2009 (8) TMI 63 - SUPREME COURT] followed - sections 80IA and 80IB are a code by themselves and they provide for allowing of deduction in respect of profits and gains derived from the eligible business - the connotation of the words "derived from" is narrower as compared to that of the words "attributable to" and by using the expression "derived from" the Parliament intended to cover the sources not beyond the first degree - the incentive received as per the scheme of the Central Govt. had no first degree connection with the industrial undertaking of the assessee and the immediate source of the same being the relevant scheme of the Central Govt. thus, it could not be considered as profit eligible for deduction u/s. 80IA/80IB Decided in favour of Revenue. Admission of additional ground Held that:- The CIT(A) has not admitted the additional ground on the pretext that the ratio of the decision of the Hon'ble Supreme Court in the case of Goetze (India) Limited Versus Commissioner of Income-Tax [2006 (3) TMI 75 - SUPREME Court] precluded him to do so but the decision of the Hon'ble Supreme Court does not fetter on the powers of the CIT(A) to decide additional plea which was not taken before the AO - to this limited extent, the matter is remitted back to the CIT(A) for deciding the additional ground under Rule 27 of the Appellate Tribunal Rules , 1963 Decided in favour of Assessee.
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2014 (3) TMI 215
Validity of order u/s 263 of the Act Proper verifications not made - Held that:- All the authorities have considered the issues wrongly - AO should have verified various credits and debits both cash and cheque in the course of scrutiny and could have examined whether any unaccounted income was earned by way of credits or investments etc., so as to consider invoking the provisions of section 68, 69, 69A which are applicable - AO examined only the outstanding amounts at the end of the year and made the addition on the reason that assessee could not furnish necessary confirmations - CIT(A) also erred in not accepting the additional evidence when sufficient opportunity was not given by A.O. and assessee was in a position to substantiate his transactions - the order set aside and the entire issue of examination of receipts and payments/ deposits in bank and other accounts are required to be examined afresh thus, the matter remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (3) TMI 214
Disallowance made u/s 68 of the Act - Unexplained income Held that:- Originally the creditors advanced the money to M/s Nalla Malla Reddy Engg. College - the College got sanctioned a loan of Rs. 5.00 crores from SBI - After availing the loan on 08/10/2007, Nalla Malla Reddy Educational Society repaid the loan back to the parties - On receipt of money by the parties, they issued cheques on various dates ranging from 12/10/2007 to 16/10/2007 - the genuineness of the transactions are established as the transactions are routed through banking channels. The loans were received through a/c payee cheques, detail of which had been filed by the assessee by filing the copy of the bank a/c of the loan creditors - Thus where the return of income is filed by the creditors of the assessee and is accepted by the Department, and the payments are through a/c payee cheques the genuineness of the transaction cannot be doubted - the assessee has demonstrated by way of material evidence that the cash credits received by it are genuine and the assessee has fulfilled the conditions laid down u/s 68 of the Act thus, the order of the CIT(A) set aside and the additions made u/s 68 of the Act also set aside on account of cash credits received by the assessee Decided in favour of Assessee. Addition made - expenditure u/s 37(1) Proper vouchers not furnished Held that:- The assessee failed to substantiate the claim by producing documentary evidence to establish that the payment is genuine thus, the order of the CIT(A) on the issue is confirmed Decided against Assessee.
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2014 (3) TMI 213
Reassessment - Validity of order of the CIT(A) quashing the re-assessment Mere change of opinion Held that:- The decision in Commissioner of Income Tax Versus Kelvinator Of India Limited [2002 (4) TMI 37 - DELHI High Court] and circular no.549 of CBDT followed - on mere change of opinion of AO cannot be a ground for re-assessment and that amendment of sec. 147 w.e.f. 01.04.89 has not altered the position - In Garden Silks Mills Pvt. Ltd. Versus Deputy Commissioner Of Income-Tax [1998 (11) TMI 108 - GUJARAT High Court] it has been held that however wide the scope of taking action u/s 148 of IT Act, it does not confirm jurisdiction on change of the interpretation of a particular provision earlier adopted by the assessing authority - For coming to the conclusion that there has been excessive loss or depreciation allowance or that there has been under assessment or assessment at a lower rate or for applying other provisions of explanation 2 to sec. 147, it must be on material and it should have nexus for holding such opinion contrary to what has been expressed earlier - Even after the amendment of sec. 147, mere change of opinion does not confirm jurisdiction on the ITO to initiate proceeding for reassessment merely by resorting to explanation 1 to sec. 147. The AO is not justified in reopening the assessment on mere change of opinion - The assessee filed explanation and evidences before the AO at original assessment stage explaining the investment in the properties thus, the seized material which is basis of reopening of assessment was considered at the original assessment stage in the light of the explanation of the assessee supported by evidences. The propriety demands that the AO should not have resorted to proceedings to reopen assessment on identical facts - All facts were all along were within the knowledge of the AO at original assessment stage, therefore, re-appreciation of evidence at subsequent re-assessment proceedings is not permitted on mere change of opinion by subsequent AO - The re-assessment proceedings have been initiated again on similar issue and totally on identical facts regarding investment in property which have already been considered in the original assessment proceedings - It is a case of change of opinion and such a change of opinion for reopening of section 147 is not permitted under law - The AO in the re-assessment order himself has mentioned that addition is made on account of unexplained expenditure/investment in the properties in the original assessment order - Such facts recorded by the AO in the reassessment order clearly strengthen the stand of the assessee for quashing of reassessment proceedings - No new material or fresh information have been received at the re-assessment stage. The re-appreciation of seized material in subsequent proceedings by the AO is wholly unjustified particularly when such a seized material was not considered worthy by the CIT(A) in the original appellate proceedings deleting the addition on the seized material thus, there is no question of re-appreciating the same facts which have been duly considered by the first appellate authority prior to reopening of assessment - The CIT(A) on proper appreciation of facts and material on record, rightly quashed the reassessment proceedings thus, there was no infirmity in the order of the CIT(A) Decided against Revenue.
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2014 (3) TMI 212
Rate of Depreciation @ 60% OR 15% - Printers, UPS, Scanner Held that:- The decision in CIT Vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] followed - depreciation on computer accessories and peripherals allowed at the higher rate of 60% - Decided against Revenue. Disallowance u/s 14A of the Act r.w Rule 8D Held that:- The assessee has given a complete breakup of the loans taken by it and interest paid and has demonstrated that the entire loan was utilized for acquiring business assets and working capital - Neither the AO nor the CIT(A) has disputed or controverted the facts which emanate from the record - In the absence of any dispute about the utilization of borrowed fund for acquisition of business asset and there being no finding of fact that any borrowed fund was used for acquisition of mutual fund, the only germane logical conclusion is that mutual funds have no attribution of any interest income - thus, the contention of the assessee's is upheld that interest bearing funds were not utilized for acquiring of mutual funds on which assessee has earned exempt dividend income. None of the lower authorities have objectively pointed out any fault in this working - They have addressed the issue only on the basis of interest which is not attributable or apportionable in view of above findings thus, the suo motu working of assessee is reasonable in disallowance qua sec. 14A - CIT(A) should not have sustained the disallowance by recoursing to rule 8D(2)(iii) - When the interest component is not disputed towards acquisition of business assets, the application of rule 8D(2)(iii) does not arise - CIT(A) was not justified in upholding the disallowance and sending it to AO for verifications Decided in favour of Assessee.
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2014 (3) TMI 211
Claim of investment allowance u/s 32A of the Act - Whether the assessee is entitled to claim investment allowance u/s 32A of the Act on the value of bottle washer machine leased out by the assessee as part of its business Held that:- The decision in Commissioner of Income Tax Vs. Shaan Finance (P) Ltd. [1998 (3) TMI 8 - SUPREME Court] where the business of the assessee consisted of hiring out machinery and/or where the income derived by the assessee from the hiring of such machinery, was business income, the assessee must be considered as having used the machinery for the purpose of its business thus, a leasing or finance company, which leased out machinery owned by it, to third parties, who used the machinery for manufacture of articles or things as specified in Section 32A(2)(b)(III) would be entitled to investment allowance in respect of such machinery under Section 32A of the Income Tax Act. Validity of Recall of order Held that:- The issue of whether the Tribunal could have rectified its mistake is settled in Assistant Commissioner of Income-Tax Vs. Saurashtra Kutch Stock Exchange Ltd. [2008 (9) TMI 11 - SUPREME COURT] - The Admissibility of the claim of the assessee to investment allowance under Section 32A of the Income Tax Act, in a case like this, has been decided in favour of the assessee and against the revenue - An order which is contrary to a judgment of the Supreme Court is patently erroneous - When the Supreme Court renders a decision enunciating a principle of law, it is assumed that, what was enunciated by the Supreme Court, was in fact, the law from the inception thus, the Tribunal was justified in recalling the earlier order Decided against Revenue.
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Customs
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2014 (3) TMI 209
Classification of Magensia Spinel Bricks - Import of goods - exemption notification No.90/2004-Cus - classification under CTH 69021090 , as other bricks or under CTH 69021010 - Held that:- The mother of all Harmonised tariffs in international trade is the Harmonized Description and Coding System commonly known as HSN Explanatory Notes. - As per the international standards refractory bricks containing by weight, singly or together, more than 50% of Magnesium has to be considered as Magnesite Refractory Bricks. - In the case of appellants, the content of MgO is more than 50% and will thus be a category of Magnesite Refractory Bricks. These categories of bricks have been allowed to be imported only for those who are using this quality of bricks as per SION A-1050. In the case of the appellant also the entire quantity imported has been used in the manufacture of goods for which export obligation has already been fulfilled. There is no evidence or argument on behalf of the Revenue that the Refractory bricks imported by the appellant have been diverted or sold to others. The interpretation to be made under SION is not subordinate to the sub-headings made under CTH 69.02 of the Customs Tariff Act 1989. Both Customs Tariff interpretation and SION interpretation cater to different situations, especially when the Tariff sub-headings are different under CTH 69.02 and HSN Explanatory Notes/SION norms. It has thus been correctly argued by the appellant that action if any under SION and DIFA/DFRC violations has to be taken by the appropriate authorities under DGFT and Customs can only bring to the notice of DGFT authorities of any ambiguity in the imports made by the appellant vis-`-vis authorizations issued by DGFT. Otherwise also, appellant would have been entitled to drawback on the export product if duty was paid on the refractory bricks at the time of imports. It is thus a case of revenue neutrality as it is a well established policy of the Central Government to have zero-rated exports. Accordingly, on merits it is held that benefit of exemption under Notification No.90/2004-Cus, dt.10.09.2004 and Notification No.40/2006-Cus, dt.02.05.2006 has been correctly availed by the appellant. Extended period of limitation - Revenue neutral situation - Held that:- Once appellant has used the entire quantity of imported goods with respect to the manufacture of exported goods, it cannot be said that there could be any intention to evade Customs duty. Alternately, appellant could have also availed incentives like Drawback, rebate, CENVAT Credit etc. at the time of export and accordingly, there cannot be any intention to evade duty attracting extended period in this case, as it is a case of revenue neutrality. Demand set aside on merit as well as on the issue of period of limitation - Decided in favor of assessee.
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2014 (3) TMI 208
Restoration of application for early hearing - non appearance of counsel - Held that:- When the case was called for hearing today, a request for adjournment of the restoration of early hearing application has been made on the ground that the counsel for the applicant respondent is at Tirupati Balaji. It appears that the applicant-respondent is not serious in pursuing the matter - application rejected.
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2014 (3) TMI 207
Refund of SAD - Bar of limitation - Commissioner granted refund claim relying on the Sec. 9 of the General Clauses Act, 1897 - Notification No. 102/2007 - Held that:- according to the Notification No. 102/2007, the importer is required to file the claim for refund before expiry of one year from the date of payment of additional duty of customs. The Notification does not explain the exact meaning of the word from - In such a situation, the provisions of Sec. 9 of General Clauses Act, 1897 has been correctly applied in view of the manner in which Sec. 9 has been enacted - It can be seen that in any of the Central Act or Regulations, if the word from is used, the day on which that event has taken place has to be excluded. Because of this reason, nowhere in Central Acts or Notifications, when the words from and to are used, the meaning thereof is explained. In the circumstances, the impugned order is in accordance with the law - Decided against Revenue.
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Corporate Laws
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2014 (3) TMI 206
Winding up of Company - Inability to pay its debts - Whether the debt is bona fide disputed - Held that:- The first part of the Clause 5.2 of the purchase order does make reference to payment within 3 to 5 working days from the company receiving payment from HAL on back to back basis. However, the second part provides that the Respondent company would do the best possible to release the payment within 45 days from the date of receipt of certified bills from the Appellant. The use of the word "however" makes it clear that though the Respondent company was bound to effect the payments within 3 to 5 working days upon receipt of payments from HAL, nevertheless if such payments were not forthcoming from HAL, the Respondent company would do the best possible to release payments within 45 days from the date of receipt of certified bills from the Appellant. The payments of amounts to the Appellant was therefore not dependant upon the Respondent company receiving payments from HAL. In fact, there was no privity of contract between the Appellant and HAL. Such defence was never raised by the Respondent company either at the stage of executing the undertaking dated 29 July 2009 or at the stage of acknowledging the amount due in pursuance of the balance confirmation letters dated 25 March 2010 and 7 March 2011 - a claim in a petition for winding up is not for money. The petition filed under the Companies Act in a matter like this, is to the effect, that the company has become commercially insolvent and, therefore, should be wound up. The power to order winding up of a company is contained under the Companies Act and is conferred on the Court. An Arbitrator, notwithstanding, any agreement between the parties, would have no jurisdiction to order winding up of a company - Decided in favour of applicant.
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FEMA
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2014 (3) TMI 210
Forfeiture of property - Joint ownership being wives - scope of the term relative and the illegally acquired property - validity notice issued u/s 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property ) Act 1976 (SAFEMA) - principles of natural justice - validity of composite orders - Proceeding under COFEPOSA - Held that:- or issuing notice under Section 6(1), the competent authority need not come to a conclusion that the properties under the said notice are illegally acquired properties. Such conclusion is warranted only after hearing the person to whom Section 6(1) notice is issued. But what is necessary is that the competent authority must have reason to believe that all or any of such properties are illegally acquired properties, for the purpose of issuing notice under Section 6(1). If the competent authority has reasons to believe that the properties under dispute were acquired out of illegal sources of income such satisfaction is enough to call upon the concerned person to show cause. Insufficiency of the reasons recorded is different from no reasons recorded. Whether reasons stated in the notice would satisfy the requirement is the question not for this Court to go into it, as the same is the subjective satisfaction of the competent authority. The notice issued under Section 6(1) is in accordance with law and does not vitiate the proceedings. - Decided against the petitioners. Principle of natural justice - Held that:- Apex Court has found that non-supply of documents relied on by the respondent therein will not amount to violation of principles of natural justice, where there is substantial compliance of natural justice and no prejudice is caused on account of non-supply. It is found by the competent authority that wives have no independent sources of income and they have acquired the properties only through the illegal income derived by the husband/detenu. By perusing the passports filed by the husband, the competent authority has come to the conclusion that during the relevant period the detenu was not employed in Dubai but he was available only in India and that the remittances during that period have been made not from his own earnings made at Dubai. Thus, in the absence of any other materials placed before the competent authority, he has rightly come to the conclusion that those remittances were made not through the legal source of income derived by the detenu. The petitioners have miserably failed to discharge their burden to disprove the said contention as required under Section 8 of the said Act. - Decided against the petitioners - all petitions dismissed.
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Service Tax
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2014 (3) TMI 231
Demand of service tax - Receipt of Commission - Denial of the benefit of small scale exemption under Notification No.6/2005-ST dt. 01.03.2005 - Non fulfillment of the conditions contained in para 2 of the exemption notification - Held that:- appellant has admitted that the service tax was leviable during the relevant period. However, it was argued that the benefit of value based exemption Notification No.6/2005-ST dt. 03.01.2005 was admissible to the appellant during the year 2006-07 and the differential service tax for the services provided in excess of ₹ 4 lakhs, provided during the financial year 2006-07 has already been paid by the appellant. The exemption limit of ₹ 4 lakh was enhanced to ₹ 8 lakhs w.e.f. 01.04.2007 vide Notification No. 4/2007 dt. 01.03.2007. It is observed that the total amount received towards services provided was only ₹ 6,58,100/- during 2007-08 which was less than the exemption limit of ₹ 8 lakhs. Prima-facie from the above facts it is evident that appellant was eligible to the exemption during the financial year. Show cause notice dt. 09.06.2010 issued to the appellant that it is not brought out anywhere that appellant has not fulfilled the conditions specified under exemption Notification No.6/2005-ST. It is also observed that appellant in their defense reply before the adjudicating authority claimed the benefit of exemption under Notification No.6/2005-ST dt. 01.03.2005. In view of the above appellant was not put to notice during the adjudicating proceeding to explain as to how the conditions specified in exemption Notification No.6/2005-ST were not fulfilled. Regarding duty liability for the period 2006-07 demand of duty over and above the exempted limit of ₹ 4 lakhs for the financial year 2006-07, is required to be discharged by the appellant alongwith the interest applicable - Penalty is also set aside - Decided partly in favour of assessee.
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2014 (3) TMI 230
Waiver of pre deposit - Demand of service tax - Penalty u/s 78 - Service of providing meals to school students under the Mid-day Meal Scheme - Whether service amounts to Outdoor Catering Services - Held that:- Considering a small amount of consideration received by the appellant towards the labour involved in supplying the mid-day meal, especially, when the transaction is mainly one of sale, the appellant has made out a prima facie case for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of the dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.
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2014 (3) TMI 229
Waiver of pre-deposit - GTA service or Cargo Handling Service - Penalty u/s 77 & 78 - Held that:- as per work order dated 06.06.2005 and 26.07.2005 issued by M/s. Tayo Rolls Ltd.(purchase section)in favour of the Applicant namely M/s. Radha Transport Company, gives the discretion of job as transportation of iron ore from Tatanagar Goods Shed to M/s. Tayo Rolls Ltd.. Rate is including of loading and unloading from wagon. Note- The above rates include demurrage and warfrage charges. It is thus evident from impugned work order that transportation of iron ore is the principal activity of the Applicant and for the purpose of said transportation they are also doing the job of loading and unloading from the wagon - prima facie Applicant was providing transportation services, which is not covered within the purview of Cargo Handling Services. Hence, the Applicant has made out a prima facie case for waiver of pre-deposit of entire amount of Tax and penalty. Accordingly, pre-deposit of Tax and penalties is waived till the disposal of the Appeal - Stay granted.
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2014 (3) TMI 228
Denial of refund claim - Business Auxiliary Services - Eligible for the benefit of Notification No. 13/2003-S.T. - Held that:- The lower appellate authority has come to the conclusion that the appellant is eligible for benefit of Notification No. 13/2003-S.T. as mutual funds are goods as defined in Section 65(50) of the Finance Act. However, the said order does not take into account the amendment made to the said notification vide Notification No. 8/2004, dated 9-7-2004. Vide Notification No. 8/2004, the scope of exemption has been restricted to the services rendered by a Commission Agent in relation to the sale or purchase of agricultural produce. In other words, in respect of Commission Agent dealing with mutual funds, the benefit of Notification No. 13/2003 would apply only for the period prior to 9-7-2004. Since in the present case, the refund pertains to the period July, 2003 to September, 2004 as mentioned in the show-cause notice, it has to be held that for the period from 9-7-2004 to September, 2004, the benefit of Notification No. 13/2003 would not be available to the appellant and therefore, if any service tax has been paid on services rendered during the said period, the appellant will not be eligible for the benefit of refund. Appellant is eligible for refund of Service Tax period prior to 9-7-2004 in accordance with law. However, for the period subsequent to 9-7-2004, the appellant would not be eligible for any refund. Therefore, we remand the matter back to the original adjudicating authority to consider afresh the appellants claim for eligibility to refund in respect of the Service Tax paid for the period 9-7-2004 to September, 2004 after giving a reasonable opportunity to the appellant of being heard - Decided in favour of Revenue.
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2014 (3) TMI 227
Denial of CENVAT Credit - Tax paid on reverse charge mechanism - Consulting engineer services - Waiver of pre deposit - Held that:- during the relevant period, the Revenue itself was insisting on payment of service tax on reverse charge basis in terms of the provisions of Rule 2(1)(d)(iv) - no Service Tax was payable before the introduction of Section 66A w.e.f. 18-4-2006. As such, the payment of Service Tax by the appellant prior to the said declaration of law and taking of credit of the said service tax so paid cannot be held to be against the law so as to deny them the credit - said proposal of denial of credit in the show cause notice was on altogether different ground, which, in any case stand accepted by the Adjudicating Authority. He cannot move from the allegation made in the notice and cannot adopt a different ground for denial of the credit, according to the well settled law - Decided in favor of assessee.
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2014 (3) TMI 226
Penalties under Sections 76, 77 and 78 - Value of spare parts were not included in the consideration received for repair services and service tax liability had not been discharged on the value of such spare parts - Circular No. B.11/1/2001-TRU, dated 9-7-2001 - Held that:- From the reading of the above circular, it would appear that even in a case of composite transaction involving sale of goods and rendering of service, if the bill/invoices issued clearly shows payment of sales tax/VAT on the spare parts, then the value of such spare parts would not be includible in the gross consideration received for rendering of service. The Commissioner has not considered these submissions made by the appellant and also the clarifications issued on the matter. Therefore, we are of the considered view that the matter has to go back to the adjudicating authority for fresh consideration. First of all, all the transactions involving only sale of spare parts should be excluded for the purpose of computation of service tax demand. Secondly, even in a case where the transaction involves both sale of spare parts and also rendering of service, the value of sale of spare parts should be excluded if sales tax/VAT liability has been discharged on such sales as is evident from the invoices/bills issued in this regard - Decided in favour of assessee.
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Central Excise
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2014 (3) TMI 205
Classification - manufactured of goods out of plastic material imported being Cellulose Acetate Non Plasticised Powder Granules (Job Lot - Sweepings) - Benefit of Notification No.4/2006-CE - CETH 3901 to 3914 or CETH 3915 - Held that:- A plain reading of the above Chapter Note simply seem to convey that CTH 3915 does not apply to waste, parings and scrap of a single thermoplastic material when transformed into primary forms. In the present case, there is no evidence on record that plastic granules imported are made out of waste, parings and scrap of plastics. The sample invoices and bills of entry copies provided by the appellant convey that granules are of mixed colours. A certificate of origin available in the appeal filed by the appellant describe the imported goods as Cellulose Acetate Non Plasticised Powder Granules (Job Lot - Sweepings). In view of the above facts available on records prima facie appellant has not made out a case of complete waiver as the scheme of classification of waste and scrap under Chapter 39 of Customs Tariff Act 1975 does not suggest that waste and scrap of plastic materials can be classified under headings other than CTH 3915 - Conditional stay granted.
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2014 (3) TMI 204
Availment of CENVAT Credit - Waiver of pre deposit - Duty demand - Held that:- Appellant No.1 availed Cenvat credit on the basis of dealers invoices under the description of HR Sheets and Coils, CR Sheets and Coils, MS Wire/Coils, Plates etc., issued by the Appellant No.4 & 5. Appellant No.1 had not received the said goods. On investigation, it was found that the dealers supplied the MS Scraps instead of the goods as described in the dealers invoices. Thus, the Appellant No.1 is not eligible to avail credit on the basis of the said invoices - dealers in their statement accepted that they have supplied MS Scrap and raised invoices on MS Coils, Rounds etc., to Appellant No.1, the manufacturer for claiming the benefit of Cenvat credit in violation of the Cenvat Credit Rules. It is also noted that the manufacture knowing fully well that they have not received the goods as per description of the invoices they have availed the credit, which is totally irregular. Hence, the demand of duty along with penalties on the manufacture and the dealers are justified - demand of duty, penalty along with interest on Appellant No.1 is upheld - Decided against assessee.
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2014 (3) TMI 203
Cenvat Credit - Job Work under Rule 4(5)(a) of Cenvat Credit Rules, 2004 - Job worker paid the duty - Appellant took the Cenvat Credit of the duty paid by the job workers. The Department was of the view that by this modus operendi, the Appellant availed Cenvat Credit in respect of the same inputs twice - first at the time of receiving the inputs in their factory before sending the same to job workers and thereafter second time at the time of receiving intermediate products from the job workers on which the job workers had paid duty on the value which included the value of the free supply inputs. Held that:- Logically, the ground on which the Cenvat Credit is sought to be denied is totally incorrect. There is no condition in Rule 4(5)(a) of the Cenvat Credit Rules, 2004 that job worker should necessarily avail of full duty Exemption under Notification No.214/86-CE. This exemption being a conditional exemption, is not required to be compulsorily availed by job-workers. When the inputs, in question, have suffered twice, first in the hand of input manufacturers from whom the Appellant had procured the inputs and second time in the hand of job workers who at the time of clearance of intermediate products made out of the inputs paid duty on value which included the cost of the inputs, the credit of the duty paid on the intermediate product cannot be denied when such intermediate were made out of those inputs, even if the Appellant had earlier taken the Cenvat Credit in respect of inputs while receiving the same. The intermediate products made out of inputs are different from inputs and just because the Appellant have availed Cenvat Credit in respect of the inputs, the Cenvat Credit of duty, if any paid on the intermediate products by the job-workers, cannot be denied to the principal manufactures. - Decided in favor of assessee.
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2014 (3) TMI 202
Shortage in the stock of Cenvat credit availed of raw materials - physical verification of stock - clandestine clearance - Held that:- In case of Cenvat credit availed inputs, if there is huge unexplained shortage, vis-`-vis the balance recorded in RG-23A register, the same can be either due to clandestine removal of cenvated inputs without payment of duty or due to fraudulent availment of Cenvat credit on the basis of bogus invoices without actual receipt of the goods covered under those invoices. In both the case the burden of proving that such shortage of finished goods or of cenvated inputs is due to bonafide reasons would shift to the assessee. The respondent while accepting the fact of these shortage have not given any explanation for the same other than stating that the same may be due to improper stock keeping. In my view, the explanation given by the respondent for these shortages is not satisfactory and therefore the same are to be treated as due to clandestine removal of cenvated inputs and accordingly penalty under Rule 15 (2) of Cenvat Credit Rules, 2004, readwith Section 11AC of the Act would be attracted. Levy of penalty u/s 11AC confirmed - penalty under Section 11AC would be 25% of the duty demand if the same is deposited by them within a period of 30 days from the date of receipt of this order. - Decided in favor of revenue.
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2014 (3) TMI 201
Clandestine removal - manufacture of Vimal brand gutka and zarda - statements of various authorized representatives of the transporters were recorded - Revenues case is mainly based upon the evidences collected at the transporters end - Held that:- The presence of 120 machines against the declared number of 65 machines can be the supporting evidence if there is other cogent evidence of unaccounted manufacture and clearance of gutka by VCPL. It may not be out of place to mention here that the period involved in the present appeals is prior to compounded levy based on the number of machines installed and as such, the number of machines installed in the factory is not a relevant factor. In respect of appeals filed by VCPL and its Director, Shri H. Sunder, only duty demand of ₹ 6,93,285/- along with interest under Section 11 AB and penalty of equal amount under Section 11 AC is upheld. The remaining duty demand against VCPL including the duty demand on 9 bags of gutka seized from office of M/s. Harsh Transport Co. at Bhopal and 30518 pouches of Vimal gutka seized from Shri Lakshmi Prakash Gupta, Seoni, interst thereon and penalty under Section 11 AC is set aside. The penalty under Rule 26 of Central Excise Rules on Shri H. Sunder is reduced to ₹ 5,00,000/- (Rupees Five Lakh only). Penalty under Rule 26 of Central Excise Rules on M/s.GG Carriers, M/s. Delhi Indore Transport Company, M/s. Singhal Transport Company, Shri Paramjit Singh Kakkar, Prop., M/s. Singhal Transport Company, M/s. Harsh Transport Co. and M/s. Gopi Road Lines is set aside and the appeals filed by them and Shri Paramjit Singh, Prop., M/s. Singhal Transport Company are allowed. - Decided partly in favor of assessee.
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2014 (3) TMI 200
Confiscation of goods and penalty under Rule 25(1)(a) - Incomplete entry in RG-1 register - Held that:- It is not denied that at the time of officers visit to the factory on 03/6/06, the RG-1 register was found written only upto 30th April, 2006 and the same was showing nil balance. It is also not denied that on the visit of the Central Excise officers they found that there was stock of 3961 kgs. of copper ingots representing 3 to 4 days production and the same had not been entered in the RG-1 register. There is thus contravention of the provisions of Rule 10 of the Central Excise Rules according to which every manufacturer has to maintain stock account of finished goods manufactured by him on daily basis in the RG-1 register. In view of this, the stock of copper ingots not accounted for in the RG-1 register has been correctly confiscated under Rule 25 (1) (a) of the Central Excise Rules and penalty has been correctly imposed on them under this Rule - Penalty reduced - Decided partly in favour of assessee.
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2014 (3) TMI 199
Waiver of pre deposit - Confiscation of the excess stock of finished goods as well as raw-material - Discrepancy in RG-1 Register - Held that:- The existence of excess un-accounted stock of finished goods valued at 11,45,000/- is not denied. Though the appellants plea is that the goods were not fully finished condition, this fact was not mentioned at the time of stock taking and this plea has taken for the first time at this stage. Therefore, prima facie this plea cannot be accepted. Moreover recovery of kachha slips showing clearances of the goods is also an indication that non-accountal may be with intention to clear the goods without payment of duty - In view of this, this is not the case of total waiver - Conditional stay granted.
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2014 (3) TMI 198
Confiscation of goods - Incomplete entry in RG-1 register - Penalty u/s 11AC - Held that:- while the invoice accompanying the goods was for 15.065 M.T. of bars, the weight of the goods actually loaded in the truck was 20.5 M.T. and, as such, 5.455 M.T. of the bars had been cleared without payment of duty. It is also seen that though subsequently the appellant paid duty on the excess quantity, on the date of interception of the truck, there is no entry in the RG-1 register regarding clearance of the goods covered under the invoice - confiscation of the goods, redemption fine and imposition of penalty on the appellant company under Section 11AC is upheld - Decided in favour of Revenue.
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2014 (3) TMI 197
Denial of refund claim - Unjust enrichment - Infirmity in the Cost Certificate - Held that:- appellant have arrived at the cost of production of said goods at Rs. 17,101.17 PMT in the said CAS-4 certificate and arrived at the assessable value amounting to Rs. 18,811.29 PMT for the purpose of payment of duty. It is available on the record that in an another matter the appellant have paid an additional amount of duty Rs. 11,58,160.00 alongwith interest amounting to Rs. 2,91,000.00 on the basis of same CAS-4 Cost Certificate in respect of those invoices in which duty was paid at prices below 18,811.29. The payment of this additional amount of duty on the basis of the same CAS-4 Cost Certificate has been accepted by the department as no contrary fact is available on the record. In this regard, I feel that adjudicating authority cant take two stands on a single cost certificate because the law does not permit such discrimination i.e. acceptance of a certificate for the purpose of recovery and rejection of the same certificate for the purpose of refund - said structural items have been used within the factory for erection of sheds etc. i.e. like capital goods - Following decision of Grasim Industries Vs. CCE [2003 (6) TMI 92 - CESTAT, CHENNAI] - Decided against Revenue.
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2014 (3) TMI 196
Demand of duty on scrap - scrap arising in the course of cutting the new plates, pipes etc. for being replaced in the place of corroded portion of the plant, pipe, vessel - Held that:- old waste and scrap generated through breaking of the capital goods or crushing or hammer of the same does not result in emergence of any excisable goods. In the case of Tudor India Ltd. referred [2011 (7) TMI 546 - CESTAT, AHEMDABAD], the dispute was in respect of plastic scrap generated during the course of separation of rejected old batteries and as such covers the disputed issue completely - Following decision of Commissioner of Central Excise, Pondicherry Vs. Tanfac Industries Ltd. [2012 (6) TMI 640 - CESTAT, CHENNAI] - old waste and scrap generated through breaking of the capital goods or crushing or hammer of the same does not result in emergence of any excisable goods - Decided against Revenue.
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CST, VAT & Sales Tax
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2014 (3) TMI 233
Exemption in tax - Classification of beltings as spares of textile machinery - specific entry versus general entry - Concessional rate of tax at 4% as per G.O.P.87 CT & RE dated 17.03.1993 - TNGST Act, 1959 - Held that:- when there is a specific Entry to deal with an item in question, one cannot bring the said item under a general Entry. It is admitted by the Revenue that the assessee is a dealer in textile machinery, parts and accessories and the assessee is not dealing in a general goods, namely, conveyor transmission or elevator belts or dealing in rubber, whether combined with any textile material or otherwise. On the above-said fact, when the assessee is a dealer in textile machinery and the item in question dealt with by the assessee is an accessory to the textile machinery, we have no hesitation in confirming the order of the Tribunal - Decided against Revenue.
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2014 (3) TMI 232
Exemption from the sales turnover - additional sales tax - whether the petitioner is entitled for exemption from the sales turnover for the period from 17.7.1996 to 31.8.1996 - Held that:- Held that:- Tribunal has not dealt with the matter in detail and it has failed to discuss the issue as to whether the assessee would be liable to pay additional Sales Tax in the light of amended sections 2(1)(a) and 2(1)(aa). All along, the contention of the assessee is that it is liable for exemption from 01.8.1996 in view of the amended sections and before the end of the year, the taxable turnover has not exceeded Rs. One Hundred Crores. Though the said contention was accepted by the appellate authority, the Tribunal has reversed the said decision without assigning any reason - payment of additional Sales Tax would arise only if the taxable turnover for the whole of the financial year exceeded Rs. One Hundred Crores. Moreover, for the period up to July 31, 1996, the liability has to be worked out as per the provision prevailing on that date, i.e., under unamended Section 2(1)(a) and for the consequent period as per the amended position - Following decision of State of Tamil Nadu v. National Time Co. [2010 (7) TMI 842 - MADRAS HIGH COURT] - Decided in favour of assessee.
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Indian Laws
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2014 (3) TMI 225
Jurisdiction of arbitrator - respondent has submitted that the appellant having participated in the proceedings before the learned arbitrator without any demur or objection cannot now be permitted to raise the objection with regard to the jurisdiction of the arbitrator at this belated stage - appellant terminated the contract on the ground of delay on commencement of the work and subsequently executed the work which was of inferior quality - Held that:- Pursuant to section 4 of the Arbitration and Conciliation Act, 1996, a party which knows that a requirement under the arbitration agreement has not been complied with and still proceeds with the arbitration without raising an objection, as soon as possible, waives their right to object. High Court had appointed an arbitrator - If further objections were to be made after this order, they should have been made prior to the first arbitration hearing. But the appellants had not raised any such objections. The appellants therefore had clearly failed to meet the stated requirement to object to arbitration without delay. As such their right to object is deemed to be waived. - appeal dismissed.
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2014 (3) TMI 224
Validity of guidelines issued for differently abled person - Conduct of Examination by ICAI - Restriction in usgae of number of scribes - The reason given by the respondent no.1 for not maintaining panel of scribes is that it does not have its own campus and has to conduct examination at as many as in 377 centres spread over 96 cities throughout the country as well as in 4 cities outside the country and, therefore, it is not possible for it to find out suitable persons to be appointed as scribes for differently abled persons at such places. Held that:- A perusal of the Academic Rules and Regulations of Jawaharlal Nehru University shows that it is the university who pays the charges of a writer providing assistance to the visually impaired students. Considering the guidelines issued by the Government of India, and the guidelines issued by University of Delhi and a reasonable probability of the differently abled persons not being able to find appropriate persons to act as scribes/writers for them during examination, it would only be appropriate for the respondent no.1 to prepare a panel of such scribes/writers at least in the major cities where examinations are held by it. Wherever it is so possible, the ICAI, instead of engaging its own scribes/writers, may engage scribes/writers on the panel of other universities/ institutions at the places where such universities/institutions and/or their affiliated colleges provide such scribes/writers. If a panel of scribes/writers is prepared by ICAI, there would be no need for the candidates to hunt for such scribes and the Superintendent/In-charge of the examination centres also will not have to take the trouble of checking the qualifications and antecedents of the scribes/writers arranged by the candidates themselves. At the places where respondent no.1-ICAI is not able to prepare a panel of scribes/ writers, the candidates will have no option but to arrange their own scribes/writers, but in that case, there should be no restriction on the number of changes allowed to candidate, as far as engagement of scribes/writers is concerned. As regards the apprehension that a candidate may try to avail the services of persons having special knowledge in the subject in which the candidate has to appear and write paper with the help of a scribe/writer, the apprehension has already taken care of by stipulating in the guidelines by respondent no.1 by prescribing qualification of the writer/scribe which is 10th/Matriculation for CPT Examination, for final/intermediate (IPCE) and graduate for post qualification course. The registered students of CA/CWA/CS course and those who have passed final examination or are member of ICAI, ICWAI and ICSI are not eligible to be a scribe/writer for the final and intermediate examinations. As regards qualification of scribes/writers prescribed in the guidelines framed by respondent no.1-ICAI, I find no reason to direct any modification in the said guidelines which are aimed at curbing any possible use of unfair means/malpractice during the course of examination by engaging scribes/ writers who are either equally or more qualified than the candidates. ICAI directed to prepare at least in major cities, its own panel of scribes/writers - Decided partly in favour of Petitioner.
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