Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 9, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Transfer of Case - Section 127 - before an order of transfer of case is passed under Section 127(2) an opportunity of personal hearing is mandatory, wherever it is possible to do so. - HC
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Registration u/s 12A(a) rejected - It is nowhere the case or finding of the CCIT that on account of the said defect in the admission procedure, the Trust ceased to exist solely for educational purposes and / or it existed for the purposes of profit. - HC
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Disproportionate profits - a finding that the projects on which claim of deduction uu/s 80-IB(10) was preferred had higher margin of profit, would not be sufficient enough reason to reject the claim - AT
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Nursery expenses - the cost of planting bushes in replacement of bushes that have died or become permanently useless in an area already planted, has to be allowed provided such an area was not previously abandoned. - AT
Customs
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Import of L-Leucine and L.Valine - whether or not Pharma and drug use - a statutory rule cannot override the executive fiat - HC
Service Tax
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Refund of unutilized CENVAT credit - Matter remanded back for quantification of the amount for refund on the basis of Chartered Accountant's certificate to be produced by the party in terms of the Board's Circular - AT
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Export of goods - The rebate claim has been correctly rejected on the ground that the procedure as set out under Notification No.21/2004 has not been followed. - AT
Central Excise
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Cenvat Credit - reasonable step - even the supplier of the goods of M/s. Saraswati Impex have stated that they have received the goods from the Registered Dealer under cover of Modvat Invoice. Any fraud, if any at the end of the first two Registered Dealers, cannot result in denial of credit to the appellant - AT
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Supply of Goods to SEZ - Rebate claim - Rule 18 - The only lapse of non filing of Bill of Export can not be ground to deny the substantial benefit of rebate claim - CGOVT
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Misuse of area based exemption and undue availment of rebate claims - Notfn. No. 56/2002-C.E - the goods cleared on payment of duty from irregular or excess credit, the said goods are to be treated as non-duty paid. - CGOVT
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Cenvat Credit - Shortage of Raw material - method of measurement - appellants are required to reverse the Cenvat credit on those shortages after adjusting the excess quantity during the course of stock taking by way of dip method. - AT
VAT
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Incidence of Tax - purchase tax on chassis - merely because bodies were going to be attached by the ultimate purchasers, it cannot be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption. - HC
Case Laws:
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Income Tax
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2013 (3) TMI 153
Transfer of Petitioner's case from Assistant/Deputy CIT Pune to Assistant/Deputy CIT, Mumbai - search proceedings - Assessee against non providing of intimation of transfer - Revenue relied on Aamby Valley ltd. (2013 (3) TMI 138 - BOMBAY HIGH COURT) as as the Mumbai Commisionerate of Income Tax is seized of the matter the assessment could be completed here before 31/3/2011 - Held that:- It is a settled position in law as held in the matter of Sahara Hospitality Ltd.(2012 (9) TMI 520 - BOMBAY HIGH COURT) that before an order of transfer of case is passed under Section 127(2) an opportunity of personal hearing is mandatory, wherever it is possible to do so. In the present matter the show cause notice proposing the transfer of the Petitioner's case from Pune to Mumbai was issued by the office of the Commissioner of Income Tax (Central) Pune on 8/2/2012. The Petitioner responded to the notice stating its objections to the proposed transfer on 8/2/2012 itself. The impugned order of transfer of the Petitioner case from Pune to Mumbai was passed by the Commissioner of Income Tax(Central) Pune on 2/8/2012. Thus there was sufficient time to grant a personal hearing to the Petitioner after the issue of the show case notice and before the passing of the impugned order 2/8/2012. Neither at the hearing nor in the affidavit in reply the respondent-revenue have contended that it was not possible to grant a personal hearing to the Petitioner. At the hearing the Respondent Revenue did not assert that any personal hearing was granted to the petitioner before the passing of the impugned Order dated 2/8/2012. The facts in the present case particularly the conduct of the Petitioner, is completely distinguishable as in impugned order of transfer passed on 2/8/2012 received by the Petitioner on 30/8/2012. The Petitioner filed the present petition on 11/10/2012 and moved this court for the first time on 23/10/2012. The Respondent thereafter sought time to file their affidavit in reply and the same though dated 14/12/2012 was filed on 13/2/2013. Thereafter this petition was adjourned from time to time and the matter was heard only on 25/2/2013 and 27/2/2013. In these circumstances, no complaint on account of the conduct of the Petitioner can be made as it had moved the Court with reasonable expedition unlike in the case of Aamby Valley(supra). Therefore in the present petition it cannot be said that the normal assessment for the assessment year 2010-11 is getting time barred in view of the delay on the part of the Petitioner in moving this Court as in the case of Aamby Valley(supra). Therefore, the decision in the matter of Aamby Valley(supra) would not apply to the facts of the present case. The entire proceeding transferring the case from Pune to Mumbai is in breach of principles of natural justice. The giving of notice containing the reasons for the proposed action is a basic postulate for compliance of the Audi Alteram Partem Rule. It is axiomatic that unless a party is informed of the reasons for the proposed action, it would be impossible for the noticee to put forth its point of view with regard to the reasons for the proposed action - thus quash and set aside the order of transferring the Petitioner's case from Pune to Mumbai - in favour of assessee.
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2013 (3) TMI 152
Interpretation of Section 80 HHC - Held that:- Perusal of the order of ITAT clearly show that the appellant was given liberty to approach the Tribunal by moving an application for recall of the said order. However, instead of filing the application for which permission was granted by the Tribunal, present appeal is filed. No questions of law arise out of impugned order. Thus it would be more appropriate for the appellant to move the Tribunal and make an application for recall of the order in question for which the period of limitation has not yet expired.
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2013 (3) TMI 151
Applicability of provisions of Section 13 - whether CIT(A)& ITAT correctly held that there is no scope of applying these provisions in the instant case? - whether the law thereon was appropriately applied or not? - Held that:- As it was not contended that the income of the property was being used for any private religious purpose or for the benefit of any particular religious community or cast. It was also not contended that any income was used for any purpose other than charitable purposes. It was, at the same time, not contended that any income of the property was being used directly or indirectly for the benefit of any person. It was not contended that the income was invested in any of the funds or shares mentioned in Section 13 of the said Act. Thus the two fact finding authorities correctly held that there is no scope of applying the provisions of Section 13 of the said Act in the instant case. Unable to hold that law was not appropriately applied by the Tribunal.
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2013 (3) TMI 150
Registration u/s 12A(a) rejected - as per revenue Trust was not satisfying the essential conditions for exemption under Section 10(23C) as it had violated the procedure of admission as laid down by the Government / Medical Council - Held that:- A plain reading of provisions of Section 10(23C) (vi) & (via) would reveal that what is required for the purpose of seeking approval thereunder is that the University or other educational institution should exist 'solely for educational purposes and not for purposes of profit'. It is nowhere the case or finding of the CCIT that on account of the said defect in the admission procedure, the Trust ceased to exist solely for educational purposes and / or it existed for the purposes of profit. Further, it is not the case of the appellants that the students who were admitted were not imparted education in the college in which they were admitted and / or the admissions granted were fake or non-existent or that the income generated by admitting the said students was not used for the purpose of the Trust. The emphasis on part of the CCIT that the purpose of education would not be served if the education is for students who have been illegally admitted and the purpose of education as contemplated in the section would be served only if the students have been legally admitted and not otherwise, appears to be going beyond the requirements of the section. Of course, the requirement of an educational institution to provide admissions strictly in accordance with the prescribed rules, regulations and statute cannot be less emphasized, rather the same need to be adhered to in letter and spirit, but then, the said violation cannot lead to its loosing the character as an entity existing solely for the purpose of education. As decided in Rajan Purohit Vs. Rajasthan University of Health Sciences [2013 (3) TMI 137 - SUPREME COURT] that there was no agreement between the College and the State Government to admit students into its MBBS course on the basis of RPMT 2008 and the finding of the High Court in this regard is erroneous and the High Court could not have directed the College to fill up its seats on the basis of merit of students as determined in RPMT 2008. Hence, the direction of the High Court to fill up the seats by students selected or waitlisted in the RPMT 2008 is set aside. As none of the 117 students who were otherwise eligible for admission to the MBBS course will be disturbed from pursuing their MBBS course, subject to the condition that they will each pay a sum of Rs.3 lakhs within a period of three months from today to the State Government. Thus no reason to interfere with the order passed by the Single Judge, who has left it to the CCIT to decide afresh the proceedings for assessment year 2008-09 and onwards till assessment year 2010-11 by passing fresh speaking order after affording opportunity of hearing to the petitioner-Trust.
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2013 (3) TMI 149
Reassessment - addition of any other income - there is no addition on the very reason for reopening - held that:- Admittedly this reopening was done within 4 years. It is the only prohibition applicable if the action of reopening is admitted u/s 147 after expiry of four years from the end of the relevant assessment year. The AO has found on perusal of the assessment records that there was a case which makes the AO to have a reason to believe that the assessee has inflated the total purchase value of the gold. The reason for reopening the assessment is quite justified as we need not go into the sufficiency of the reasons for reopening. It is only the prima facie reason to believe that income has escaped assessment. If the AO was of the reason that there is a specific disclosure of each material fact and that such disclosure should not be garbled or hidden in the material which has been filed by the assessee to the AO. The assessee must act with candour. The gold was received in the financial year 2003-04 and the relevant purchase has to be entered in the financial year 2003-04 only and not in financial year 2004-0. The profit on sale was shown under the head “other income and adjustment profit on unfixed deal”. The AO treated this as cash credit u/s 68 of the IT Act. Therefore the AO has valid reason to believe that income has escaped assessment because the assessee’s failure to disclose the material facts necessary for assessment for the relevant assessment year. - Decided in favor of revenue.
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2013 (3) TMI 148
Deduction u/s 80IB(10) - housing project - validity of the certificate issued by Corporation of Chennai - whether the Corporation of Chennai can be considered a local authority - held that:- No doubt, “local authority” has not been defined anywhere in Section 80-IB(10) of the Act. However, sub-section (2) of Section 10 exempts income of a local authority which is otherwise chargeable to tax under the head Income from house property, capital gains or income from other sources. Explanation thereunder states that local authority will definitely include a Municipal Committee, Panchayat and Cantonment Board. Therefore, we are of the opinion that ld. CIT(Appeals) was correct in reaching a conclusion that a local authority will include Corporation of Chennai. - Decided in favor of assessee. Deduction u/s 80IB(10) - disproportionate profits when compared to projects on which there was no such claim - held that:- There is no case for the Revenue that any of the expenses was not properly allocated to the projects nor that some of the expenses were exclusively incurred on the projects for which there was a claim of deduction under Section 80-IB(10) of the Act. Therefore, a finding that the projects on which claim of deduction under Section 80-IB(10) of the Act was preferred had higher margin of profit, would not be sufficient enough reason to reject such a claim. Deduction u/s 80IB(10) - works contractor versus developer - held that:- No doubt, Finance (No.2) Act of 2009 with retrospective from 1.4.2001 had added an explanation to Section 80-IB(10) whereby it has been declared that deduction under Section 80-IB(10) could not be given to an undertaking which executes a housing project as works contractor. But, as already held by us, here the assessee could not be considered as a mere works contractor, it having been concerned with acquisition of land, promotion of the project, construction and selling of the flats. Undue reliance was placed by the A.O. on the agreements entered by the assessee with prospective buyers in this regard. - Deduction allowed - Decided in favor of assessee.
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2013 (3) TMI 147
Revision u/s 263 - assessment order as erroneous and prejudicial to the interest of the Revenue - held that:- In view of the above facts and case laws of Tata Tea Ltd. [2010 (1) TMI 743 - KERALA HIGH COURT] and Girnar Industries (2009 (8) TMI 676 - KERALA HIGH COURT), as referred by the Ld. Counsel the case law of Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000 (2) TMI 10 - SUPREME COURT), is applicable to the facts of this case. Hon’ble Supreme Court has considered the phrase ‘prejudicial to the interest of the revenue’, and interpreted that it has to be read in conjunction with an erroneous order passed by the AO and every loss of revenue as a consequence of an order of AO, it cannot be treated as prejudicial to the interest of revenue. Assessment order passed u/s. 143(3) of the Act after due consideration of facts as well as the revision order of CIT passed u/s. 263 of the Act that there is no dispute regarding the fact that the assessee is exclusively engaged in blending and packaging of tea for export and is not manufacturing or producing any other article or thing but still it is recognised as a 100% EOU unit by a Board appointed by central government in exercise of powers conferred u/s. 40 of the Industries (Development & Regulation) Act, 1951 and the Rules made thereunder. The view taken by the AO is not unsustainable rather it is a view which is sustainable - Decided in favor of assessee.
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2013 (3) TMI 146
Monetary limit for filing an appeal before ITAT - revenue appeal - tax effect - nstruction No. 3/2011 issued on 09.02.2011 - held that:- At the time of hearing, ld. D.R. could not point out any exceptions mentioned in abovenoted circular in which the assessee’s case falls. Therefore, the Departmental appeal cannot be admitted. - Revenue's appeal dismissed. Bad Debts - Money lending business - held that:- the assessee’s contention of money lending has consistently been accepted by the Department and, therefore, in the absence of new facts being brought on record, on principle and consistency assessee’s claim was rightly accepted by ld. CIT(Appeals). Nursery expenses - revenue or capital expenses - held that:- the cost of planting bushes in replacement of bushes that have died or become permanently useless in an area already planted, has to be allowed provided such an area was not previously abandoned. - Decided in favor of assessee. Additional Depreciation - The assessee had advanced its claim on the ground that since assessee’s income was to be computed as per Rule 8 of the Income Tax Rules and 40% of the income was to be treated as income from business or profession, therefore, depreciation only to the extent of 40% was to be treated as actually allowed and to the extent the income was treated as agricultural income by virtue of the same being exempt, depreciation could not be deemed to have been actually allowed to the assessee for earning the agricultural income. - held that:- The Explanation has been inserted by Finance (No.2) Act w.e.f. 2009. It creates a deeming fiction affecting substantive computation provision determining actual tax liability. Therefore, ld. CIT(Appeals) has rightly treated it to be prospective. - Decided in favor of assessee.
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Customs
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2013 (3) TMI 145
Import of L-Leucine and L.Valine - whether or not Pharma and drug use - the petitioners have complied with the requirements as per Rule 43 read with schedule D of the Drugs and Cosmetics Rule, 1945. The respondents have simply relied upon certain admissions stated to have been made by the drug authorities before the learned Single Judge in W.P.No.14248 of 2011 and 14535 of 2011 for the purpose of coming to a conclusion that the materials referred to are to be treated as drugs for human use. Held that:- The law is well settled that a statutory rule cannot override the executive fiat as it has been held in K. Kuppusamy and another Vs. State of T.N. and others [1996 (2) TMI 468 - SUPREME COURT] - the writ appeals are allowed and the impugned orders in writ petitions are set aside with a direction to the first and second respondents to release the said goods to the petitioners on the declared value, on verification of proper compliance of rule 43 read with Schedule D of the Rules and the label, which has been affixed, and such exercise shall be effected within a period of two weeks from the date of receipt of copy of this order - Decided in favor of assessee.
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2013 (3) TMI 144
Importer - Bill of Entry for vessel filed by GAPL, but claiming that it was filed on behalf of its charterer, VMML, who did not have IE code - Held that:- As no evidence produced to accept that GAPL had filed Bill of Entry on behalf of its charterer, VMML as shipping agent and sub-agents appointed by VMML to complete import formalities could not be said to be responsible for filing Bill of Entry for stores. In that view, as GAPL had accepted liability for vessels on ground that IE code was not available, on the same logic, they should have filed Bill of Entry in respect of stores since both stores and vessels were imported simultaneously. Having held themselves as an importer in respect of the vessel, GAPL had to be considered as importer of stores therein, and their failure to file Bill of Entry for same, was suppression of facts and mis-declaration. Liability of GAPL to penalty - Held that:- the declaration made by the master to preventive officers cannot be considered as having been made on behalf of GAPL - penalty under Section 114A has rightly been imposed on GAPL in respect of stores/diesel etc. found in barge/tugs at the time of their importation. Quantity of diesel of 1660 MT, received in barge DLB 600 and transfer to tugs and marine spreads - Held that:- As per the records diesel was received in presence of representatives of importer, and as per agreement, they were liable for all duties, levies, etc. - Importer of vessel was responsible for bringing diesel into India, its transfer into vessel and utilization thereafter, and having rendered it liable to confiscation, they were liable to pay duty and penalty - According to the decision of Akash Fashion Prints Pvt. Limited (2009 (1) TMI 113 - GUJARAT HIGH COURT) option extended to GAPL to calculate the duty payable on bunkers/diesel imported with interest and 25% of the duty towards penalty and discharge the same within 30 days from the date of communication of this order. Liability of barge/tugs imported for project work and the tug which supplied the diesel to DLB 600 subsequently for confiscation - Vessel used in smuggling - Held that:- Owner of vessel has to be given opportunity to show that it was so used without his or his agent’s knowledge. Section 124 does not speak of importer but owner. Under these circumstances, since no notice has been given to the owners of the vessels and VMML is only a charterer of the vessel and GAPL is only an importer, the confiscation of the vessels has to be set aside on the technical ground of failure to issue Show Cause Notice to the owners of the vessels - Also, under Section 124 ibid is the owner of goods, and not the importer, who has to be given a notice in writing for confiscation - Thus as notice had been given only to charterer and importer of vessel, and not to its owner, confiscation of vessel set aside. Penalty imposed on agents & sub-agents of charterer of vessels responsible for fulfilling of all obligations relating to barge/tugs - vessels caught transferring diesel even before Bill of Entry was filed and cleared - Held that:- Sub-agent did not fulfil their statutory obligations as agents of charterer - They were party and active agent in diversion of diesel to fishing boat engaged in shipping within Indian territorial water without payment of duty as they had obligation to ensure that Bills of Entry were filed in respect of bunkers of the vessel before it was put to use - In that view, imposition of penalty upheld - However, in view of volume of transactions and consideration that he could have received, penalty of Rs 10 lakhs reduced to Rs. 2 lakhs only. Penalty on charterer of vessel who had transferred diesel to a fishing boat, without payment of duty and filing of Bill of Entry - Held that:- Charterer was liable to penalty as GAPL was informed to file Bill of Entry and was required to file Bill of Entry, does not help the charterer since the diesel should have been unloaded only after the Bill of Entry was filed and duty was paid. The fact that diesel was transferred to barge DLB 600 and the vessels were allowed to utilize with bunkers/diesel, and no Bill of Entry has been filed and no duty has been paid on bunkers would go against the appellant. According to Section 87 of Customs Act, 1962, the imported stores can be consumed without payment of duty as stores only during the period when such vessel is a foreign going vessel - penalty on charterer upheld. Penalties imposed on employees, masters, seamen of all the parties - Held that:- Unless employees, masters, or seamen were partners in crime and benefited from it, and they were shown not to be following direction of their employer or in league with them in doing the mischief, it is not appropriate to impose penalty on them - It was more so on facts as penalties had been imposed on companies/firms involved wherever applicable, and there was no detailed discussion of role of employee - set aside the penalties imposed on the employees, who are in appeal. Penalty on CHA on import of vessel filed Bills of Entry following instructions given to them in respect of bunkers/diesel - Held that:- As there is nothing on record to show that CHA have deliberately abetted import of bunkers/diesel without payment of duty and its utilization, benefit of doubt given to CHA - penalty deleted.
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Service Tax
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2013 (3) TMI 157
Refund of unutilized CENVAT credit taken on certain input services which were claimed to have been used for export of their output service - appellate authority wanted the lower authority to reexamine the nexus between the exported service and the input services on the basis of Chartered Accountant's certificate to be produced by the party in terms of Board's Circular No.120/1/2010 dt. 19.1.2010. Held that:- though a connection was found by the appellate authority between the exported output service and the input services in question for the purpose of refund under Rule 5 of the CENVAT Credit Rules, a final decision was, nevertheless, left to the lower authority on the nexus issue. Obviously, the learned Commissioner (Appeals) erred in assuming that the nexus issue required to be examined on the basis of Chartered Accountant's certificate to be produced by the party in terms of the Board's Circular ibid. He overlooked the fact that the certificate of Chartered Accountant was intended to enable the original authority to quantify the amount for refund. Matter remanded back for quantification of the amount for refund on the basis of Chartered Accountant's certificate to be produced by the party in terms of the Board's Circular, the nexus issue having been settled by the Commissioner (Appeals)
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2013 (3) TMI 156
Export of goods - Rebate / Refund claim on account of input services used in export goods - GTA service tax - input service - Rule 18 of Central Excise Rules, 2002 r/w Notification No. 19/2004-CE (NT) dated 06.09.2004 - held that:- whatever was submitted to the department was rebate claim under Notification No.21/2004 after the refund claim was rejected. The rebate claim has been correctly rejected on the ground that the procedure as set out under Notification No.21/2004 has not been followed. In any case, he submits that according to Section 35B of Central Excise Act 1944 in respect of rebate claims, the Tribunal has no jurisdiction and the appeal has to be filed before Government of India. - Appeal rejected - Decided against the assessee.
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2013 (3) TMI 155
Constitutional validity of Entertainment tax on MSO at the rate of 20 per cent of the turnover - Their main contention is that imposition of entertainment tax on them is beyond the legislative competence of the State Government as they are already subjected to service tax for their services under section 65(105)(zs) of the Finance Act, 1994. - According to them, entertainment tax is also contrary to the settled law and violative of Articles 14, 19(1)(g), 246 and 265 of the Constitution of India. - held that:- In State of West Bengal v. Purvi Communication Pvt. Ltd. (2005 (3) TMI 438 - SUPREME COURT OF INDIA) the Supreme Court has held that the State Government has legislative competence to levy entertainment tax through cable television network on MSOs as they have direct and close nexus with entertainment provided to viewers and they are the providers of entertainment. The Supreme Court has also held that levy of such entertainment tax on MSOs is neither discriminatory nor violative of Article 19(1)(g) of the Constitution. This decision was later followed by the Supreme Court in Indusind Media & Commun. Ltd. v. Mamlatdar (Supra) which was a matter from the State of Gujarat and an entertainment tax was levied on the MSOs. In this case, the Supreme Court has held that since such MSOs are connected to an organization of entertainment, they fall within the meaning of “proprietor” and the issue that MSOs are liable to pay entertainment tax is not longer res integra.
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2013 (3) TMI 154
Commercial Training or Coaching Services- Explanation inserted in Section 65(105)(zzc) of Finance Act, 1994 by Finance Act, 2010 w.e.f. 01.07.2003 having its retrospective effect thus Tribunal directed to examine de novo in the light of explanation inserted. Decision in COMMR. OF S. T., CHENNAI Versus GREAT LAKES INSTITUTE OF MANAGEMENT LTD. [2010 (5) TMI 186 - SUPREME COURT] followed.
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Central Excise
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2013 (3) TMI 143
Cenvat Credit on brass scrap supplied by Registered Dealer under the cover of Cenvatable invoices denied - Held that:- The appellant has admittedly purchased the goods from M/s. Saraswati Impex, Jagadhari. Statement of Sh. Vikrant Gupta of M/s. Saraswati Impex was recorded on 25-1-2005 wherein he confirmed having purchased the goods against the regular Cenvatable Invoices issued by M/s. Sulabh Impex & Ganpati Trader and having further sold goods to the appellants by issuing his own invoices with all these transactions fully reflected in his regular books of accounts and the payment received from the buyers. Further during the course of the adjudication statement of Sh. Surinder Vasudeva, Partner of the appellants, was recorded on 29-8-2007 wherein he confirmed having received the brass scrap from M/s. Saraswati Impex against the regular Cenvatable Invoices. The said scrap was entered in the RG-I Register along with credit entered in RG-II Register and stands utilized in the final product which was cleared on payment of duty. As per the Cenvat Credit Rules, a manufacturer is required to take reasonable steps about the supplier of the goods. In the present case, there is no dispute about the supply of goods by M/s. Saraswati Impex, under cover the Cenvatable goods. The manufacturer cannot go beyond that to verify and find out as to whether the Registered Dealer, who has supplied the goods to him, has procured the same legally or not. Thus even the supplier of the goods of M/s. Saraswati Impex have stated that they have received the goods from the Registered Dealer under cover of Modvat Invoice. Any fraud, if any at the end of the first two Registered Dealers, cannot result in denial of credit to the appellant, who procured the goods directly from the Registered Dealer who has also accepted having received the goods from the first two Registered Dealers - Thus no justifiable reason to deny the credit to the appellant. Also Show Cause Notice dated 23-11-2007 for the period 2004 to 2005 is also barred by limitations - in favour of assessee.
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2013 (3) TMI 142
Supply of Goods to SEZ - Rebate claim - Rule 18 of the Central Excise Rules, 2002. - the ‘Bill of Export’ in respect of ARE-1s prepared were not filed - mandatory condition or not - held that:- Bill of Export is required to be filed in terms of sub-rule (5) of Rule 30 for making clearances to the SEZ. In this case the clearance of duty paid goods to SEZ Units and receipt of same in SEZ Units is not disputed by department. The only lapse of non filing of Bill of Export can not be ground to deny the substantial benefit of rebate claim, under Rule 18 of Central Excise Rules, 2008. - Decided in favor of assessee.
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2013 (3) TMI 141
Misuse of area based exemption and undue availment of rebate claims - held that:- Government therefore is of the opinion that on having been availed the said Notification No. 56/2002-C.E., and/or No. 57/2002-C.E., dated 14-11-2002 (as amended), the legal and statutory bindings of all the provisions/changes of the same would, continue to remain as enforced for the purpose of all the consequential claims. In view of provisions contained in clause ‘g’ of para 2(A) of Notfn. No. 56/2002-C.E., dated 14-11-2002, the goods cleared on payment of duty from irregular or excess credit, the said goods are to be treated as non-duty paid. Therefore, the fundamental requirement of “export of duty paid goods”, for grant of rebate in terms of Rule 18 of Central Excise Rules read with Ntfn. No. 19/2004-C.E. (N.T.), dated 6-9-2004 remains unfulfilled and the said rebate claims are not admissible to the respondents under Rule 18 of Central Excise Rules, 2002. - Decided in favor of revenue.
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2013 (3) TMI 140
Cenvat Credit - Shortage of Raw material - method of measurement - dip method - inputs, like, Imported Feed Stock, Carbon Black Stock, CBFS-HPL, LDO, Tar Oil and Coal Tar. - held that:- As per the Cenvat Credit Rules, 2004, an assessee is entitled to take credit on inputs which has gone in the manufacturing of final product. Admittedly, when these inputs have been found short and the said shortage has not gone in the manufacturing of final product, therefore, the appellants are required to reverse the Cenvat credit on those shortages after adjusting the excess quantity during the course of stock taking by way of dip method. As held by the Hon’ble High Court of Bombay in the case of Greaves Cotton Ltd. (2007 (8) TMI 254 - HIGH COURT BOMBAY), the Hon’ble High Court held that, neither extended period is invocable nor penalties are imposable in these circumstances. Therefore, we also hold that the demand within a period of limitation is sustainable and no penalty is leviable in this case. Matter remanded back for limited purpose of quantification of duty on the net quantity and net amount written off of within normal period of limitation.
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CST, VAT & Sales Tax
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2013 (3) TMI 159
Incidence of Tax - assessee claimed exemption on chassis - chassis purchased by assessee No.1 in the State of Madhya Pradesh at Raipur and the same was brought in the State of Maharashtra effecting its entry, the bus body was mounted on the said chassis which was entered into the State of Maharashtra and the vehicle was registered with the registration authorities of State of Maharashtra bearing registration No. MH31M5270 - Held that:- The chassis was bought at Raipur and effected its entry in the State of Maharashtra for causing it to be driven on public road and as such the Assessment Officer has rightly levied the tax on the purchase value of the chassis. There is also considerable merit in her submission that the Tribunal has totally lost sight of the fact that the term “motor vehicle” refers to and defines in the Act namely the Maharashtra Tax on Entry of Motor Vehicles into Local Areas Act, 1987 as well as the Motor Vehicles Act, 1988 defines “motor vehicle” inclusive of the term “chassis”. Unable to accept the submission of the respondent No.1 that as the chassis was consumed by mounting a bus body on it and resulting “bus” being a different product, respondent No.1 was not entitled to pay any taxes. As decided in Automotive Manufacturers (P) Ltd. etc. .v. Government of Andhra Pradesh and others etc. (1971 (11) TMI 145 - SUPREME COURT) merely because bodies were going to be attached by the ultimate purchasers, it cannot be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption. The Apex Court also turned down the submission of seeking exemption on the ground that the chassis would be meaningless unless body is attached to it. Taking into consideration the observations of the Hon'ble Apex Court, dealing with the word “use” as referred to its meaning in Oxford Dictionary as well as in Webster's Comprehensive Dictionary, the argument advanced by respondent No.1 in support of his submission that as the chassis was consumed in mounting of the bus body on it and as such this different product is not entitled for any tax, is unacceptable. Conjoint reading of section 2(1)(i) and section 3(1) of the Act makes it abundantly clear that the “purchase value of motor vehicle” means not of the value of only the chassis but of the entire composite vehicle (chassis having a body built thereon) entering the State of Maharashtra - the Circular dated 05.10.2001 refers to the motor vehicle and the definition refers to it in the Circular is inclusive of chassis of motor vehicle. No hesitation to say that the Tribunal failed to appreciate the facts of the matter in proper perspective - the order passed by the first appellate authority are confirmed - against assessee.
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2013 (3) TMI 158
Seizure order upheld upto the tribunal as Crane transported from Ghaziabad to West Bengal - Held that:- Considering the invoice no. 429 dated 26.11.2012, the freight agreement no. 302 dated 26.11.2012 submitted by assessee clearly establishes that the Crane was not being transported from Ghaziabad to West Bengal but was actually in transit from Bhiwadi, district Alwar, Rajasthan to Murshidabad in West Bengal via Ghaziabad, Aligarh U.P. The aforesaid documents are relevant and material piece of evidence which have completely been ignored by the tribunal. The non consideration of the said documents vitiates the order of the tribunal, thus need to be set aside and the matter is remanded for its reconsideration.
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