Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
April 20, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
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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Deemed dividend u/s 2(22)(e) - the expression, “accumulated profits“ means profits in the commercial sense and not assessable or taxable profits liable to tax - HC
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Charitable purpose u/s 2(15) - sale of unani medicines - charitable activity through - Hakims and Vaids - application of income and accumulation - order denying the exemption u/s 10(23C)(iv) quashed - HC
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Capital asset or not - agriculture land - distance of 8km has to be measured through approach road and not by straight line method on horizontal plane - AT
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Penalty u/s 271B - non maintenance of books off account by the taxpayer as a civil contractor - no books of accounts prescribed - penalty deleted - AT
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Recruitment fees - Tonnage Tax Scheme u/s 115 VI - assessee has claimed the benefit in respect of recruitment fees which was earlier not available u/s 33AC of the Act, the scope of which was limited only to profits derived from the operations of ships - deduction allowed - AT
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Writ petition - waiver of appellate remedy is available to the petitioner in circumstances where there is an infringement of fundamental right, a violation of principles of natural justice or when there is anything ultra vires the law. - HC
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Levy of surcharge on Income Tax calculated U/s 113 - in case of block assessment, even prior to amendment made in Section 113 of the Act w.e.f. 01.06.2002, surcharge was leviable - HC
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TDS u/s 194C - Assessee in default – even though the appellant herein is held as assessee in default, tax cannot be recovered from them, if the same has been paid by the recipient - HC
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Search U/s 132 - in hearing an appeal against the order of the assessment, the Tribunal cannot go into the question of validity or otherwise of any decisions for conducting search and seizure. - HC
Customs
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Revalidation, renewal and extension of the period of the Duty Free Import Authorization (`DFIA') License - Petitioner was not entitled to the grant of revalidation. - HC
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Stay - it is incumbent upon the authority which adjudicates upon an application for waiver of pre-deposit to objectively consider whether the grounds on which a waiver is sought constitute undue hardship to the assessee. - HC
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Classification dispute - Import of Zircon sand as Zircon Ore - the goods imported by the appellant are eligible for the benefit of Notification. - AT
Service Tax
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Refund application rejected - export of consignments - period of limitation - co-relation should have been properly explained by the appellants to the lower authorities which has not been done so, thus issue needs reconsideration - AT
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Recovery proceedings - rejection of prayer for payment in installments - the order has not passed under Section 73, therefore, the appeal is not maintainable before Tribunal - AT
Central Excise
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Cenvat credit - input services - repair and maintenance of transformers during warranty period is an activity related to the sale of goods and cenvat credit was accordingly held to be admissible. - AT
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Cenvat credit with respect to Tin Ingots was rightly taken by the appellant and cannot be denied on the basis of presumptions and surmises. - AT
Case Laws:
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Income Tax
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2013 (4) TMI 398
Deemed dividend u/s 2(22)(e) - Whether ITAT was justified in holding that the liability of the Sales Tax and Excise Duty in the case of M/s. Kothari Products Ltd. and M/s. Ekta Flavours (P) Ltd. were allowable as deduction from the accumulated profits for the purposes of examining the applicability of Sec. 2(22)(e) - Held that:- In the instant case, it appears that the "deemed dividend" taken together in the hands of all the persons cannot exceed the accumulated profit because the concept is that if there is accumulated profit and if the advances of loan has been made out of that then it is "deemed dividend". In the case of M/s. Ekta Flavours (P) Ltd., it appears from the order of the First appellate Authority that there was a liability of Rs. 3,44,57,866/- on account of excise duty payable, which is not contingent because the said liability cannot be denied. So, loan taken by the assessee from M/s. Ekta Flavours (P) Ltd., cannot be treated as "deemed dividend" within the meaning of Section 22(2)(e). When it is so then the said addition was rightly deleted by the First Appellate Authority as well as the ITAT and the same appears reasonable. Regarding M/s. Kothari Products Ltd., it appears that there was also a sales-tax liability to the tune of Rs. 8,42,26,335/-, as mentioned by the Tribunal in its impugned order. Needless to mention that the Tribunal is the final fact finding authority as per the ratio laid down in the case of Kamla Ganpati vs. Controller of State Duty [2001 (2) TMI 132 - SUPREME COURT]. 2001 (2) TMI 132 - SUPREME COURT In the instant case, it is clear that both the companies in question were having tax or excise liability during the assessment year under consideration.It may also be mentioned that the Hon'ble Supreme Court in the case of CIT vs. P.K. Badiani, [ 1976 (9) TMI 3 - SUPREME Court] observed that the expression, "accumulated profits" occurring in clause (e) of section 2(6A), or for the matter of that in any of other clause, means profits in the commercial sense and not assessable or taxable profits liable to tax as income under the Income Tax Act. Thus no reason to interfere with the impugned order passed by the Tribunal. The same is hereby sustained along with the reasons mentioned therein.
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2013 (4) TMI 397
Exemptions under Section 10(23C)(iv) denied - as per assessee they are dedicated to business of manufacture of sale of unani medicines for the purpose of charity - as per dept petitioner No.1 is not engaged in any charitable activities set out in Section 2(15) but donates a part of its surplus to Hamdard National Foundation ("HNA") which does not meet the requirements of Section 2(15) - Held that:- It is stated in the impugned order that this financial help was being given to selected Hakims and Vaids of repute. However, no details of Hakims and Vaids and their incomes have stated or mentioned in the impugned order. On what basis did the author of the order reach the conclusion that financial aid was being given to already well of Hakims and Vaids is not indicated or averred to. HNF is registered under Section 12A read with Section 12AA of the Act and throughout they have been granted exemption. For assessment year 2007-08, the Assessing Officer had denied exemption to HNF under Section 11 of the Act but the said decision was reversed by the appellate authority vide decision dated 31.1.2012 i.e. before the date of the present order dated 22.2.2012. The impugned order however, does refer to the order of the Assessment Officer but does not notice the appellate order passed on 31.01.2012 reversing the findings of the AO On the question of books of accounts the contention of petitioner No.1 relying upon the decision of Delhi High Court in Mehta Charitable Prajnalay Trust [2012 (12) TMI 211 - DELHI HIGH COURT]. Petitioner No.1 submits that the amount mentioned in last column accumulation is less than 15% of the general reserve and therefore, the petitioner meets the prescribed parameters. This aspect has been ignored in the impugned order by recording that the surplus has been given to HNF or surplus/income has been passed on and given to HNF. The effect thereof and whether objects/use of funds by HNF can be determinative and relevant for deciding the applicable head u/s 2(15) in the case of the petitioner No.1 is an aspect which requires examination/consideration. allow the present writ petition and issue the writ of certiorari quashing the impugned order dated 22.2.2012 passed by the Director General of Income Tax (Exemptions). The Director General of Income Tax (Exemptions) will pass a fresh order dealing with all the contentions and issues raised by the petitioner No.1
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2013 (4) TMI 396
Non consideration of all grounds of appeal - as per assessee Tribunal had only dealt with the first ground relating to the rejection of the claim for a deduction under Sections 80HH, 80I and 80IA on the LPG plants - Petitioner seeks the issuance of a writ of Mandamus to the A.O. to give effect to the order of the Tribunal as if all grounds of appeal have been set aside for fresh adjudication - Held that:- The Petitioner had a remedy under Section 254(2) under which the Appellate Tribunal is empowered at any time, within four years from the date of its order, to amend any order passed by it under sub Section (1) with a view to rectify any mistake apparent on the record, if the mistake is brought to its notice by the assessee or the A.O. The Petitioner admittedly did not file any application under Section 254(2) and the period of four years for filing such an application has now elapsed. The petition has been filed almost five and a half years after the order of the Tribunal with no reasonable or cogent explanation for the delay. As we have noted already, there is no merit in the alternate submission that the order of the Tribunal dated 28 May 2007 left open all the grounds of appeal. Plainly that was not so. No case for interference under Article 226 of the Constitution is made out. The petition is accordingly dismissed.
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2013 (4) TMI 395
Whether agricultural land held by these two assessees are capital asset within the meaning of Section 2(14)(ii)(b) by adopting the ariel distance by straight line method instead of road distance - Held that:- Following the decision of Commissioner of Income Tax Versus Satinder Pal Singh [2010 (1) TMI 752 - Punjab and Haryana High Court] & many other judgments this ground of these two assessees in both the appeals is allowed by holding that the distance of 8km has to be measured through approach road and not by straight line method on horizontal plane and if through approach road the distance is taken, then it is seen that the distance is beyond 8 km from the municipal limit. Accordingly, no capital gain is payable as the agricultural land sold is not a capital asset within the meaning of Section 2(14)(iii)(b) of the Act. Once held this was an agricultural land and, therefore, any consideration out of sale of agricultural land, which is not assessable as the land was situated beyond 8 kms., therefore, the direction of the learned CIT(A) that the surplus may be treated as business income, has become now meaningless.
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2013 (4) TMI 394
Depreciation claim on intangible assets acquired in earlier year - Held that:- Decided against assessee as relying on its own case peroprted in 2013 (4) TMI 380 - ITAT MUMBAI Disallowance under section 14A - Held that:- CIT (A) has directed AO to recomputed the disallowance on a reasonable basis following the decision of in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT). Since the issue was already before AO who has to give effect to the direction of the CIT (A),no reason to interfere. AO is directed to follow the direction of the CIT (A). Disallowance u/s 40(a)(ia) - TDS was not made on these amounts on royalty, courier charges etc at the end of the year pending receipt of bills - Held that:- AO has not examined the issue about year-end payments. There is a difference between the payments that are made during the year and the payments made at the fag-end of the year. In 2nd category of payments tax has been detected in the subsequent year when Bills are booked. In this regard the amendment made to Sec.40(a)(ia) by the finance act,2008, with retrospective effect from 1.4.2005. Also perusuing the case laws relied upon by the AR of GE India Technology Centre Private Ltd. (2010 (9) TMI 7 - SUPREME COURT OF INDIA) and Industrial Development Bank of India (2006 (7) TMI 248 - ITAT BOMBAY-H) in this regard. Thus tax deducted at source were not applicable in case consideration. Addition made on the basis of information received in AIR - Held that:- Restore the issue to the file of AO to make inquiries with the said parties whether the transactions indeed pertain to assessee. In case of mistaken reporting, the same cannot be added in the hands of assessee. Keeping in mind that assessee has discharged its onus of reconciling most of the amounts reported which are duly accounted, direct AO to enquire from the above two parties about the nature of transactions and if they pertain to assessee, enquire from assessee and do the needful after examining the facts. If the transactions does not pertain to assessee, there is no need to make any addition, just because the information came through AIR.
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2013 (4) TMI 393
Stay of recovery of demand declined - adjustment of refund due and payable to the assessee - Held that:- The demand cannot be adjusted by the department in this manner merely because it is in possession of the funds belonging to the assessee to which the assessee is legitimately entitled to and has been granted a refund for Assessment Years 2008-09 and 2009-10. The making of an adjustment in these facts is totally arbitrary and contrary to law. As a matter of fact, the assessee has contended that it was also governed by the order of the Tribunal on both the issues. Even this aspect has not been considered by the assessing officer. Disallowance of the exemption on dividend income - Held that:- Assessee under cover of its letters dated 15 and 18 March 2013 has produced certificates of confirmation from the mutual funds to the effect that dividend distribution tax has been paid. The assessing officer was apprised of the fact that in a similar situation for Assessment Year 2011-12, the claim of the assessee was allowed upon the production of confirmations from the mutual funds. Prima facie there was sufficient material before the assessing officer to indicate that the mutual funds which are registered with SEBI fall within the purview of Section 10(23D) and the assessee was entitled to an exemption under Section 10(35A). Thus the assessee has made out a strong prima facie case for a stay of the recovery of the demand in respect of the aforesaid three items Disallowance of broken period interest, Disallowance of amortization of premium, and Disallowance of exemption on dividend income from the mutual fund units. The balance due and payable by the assessee would work out to Rs.159.49 crores. The assessee has under cover of its letter dated 28 March 2013 paid an amount of Rs.100 crores under protest. On these facts and for the reasons the action of the department in adjusting the refunds due to the assessee in the amount of Rs.49.56 crores for Assessment Year 2008-09 and Rs.518.30 crores for Assessment Year 2009-10 was contrary to law. To recapitulate, the impugned order accepts the position that the assessee is covered by the decision of the Commissioner of Income-tax (Appeals) and hence directs that the assessee shall not be treated as assessee in default while at the same time making an adjustment of the refund. In the circumstances,the interests of justice would be served if the department is permitted to make an adjustment to an extent of Rs.60 crores. The balance which is refundable, for Assessment Years 2008-09 and 2009-10 shall be refunded together with interest as admissible in accordance with law within a period of three weeks from the date on which an authenticated copy of this order is produced on the record.
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2013 (4) TMI 392
Penalty u/s 271B - non maintenance of books off account by the taxpayer as a civil contractor mainly engaged in government contract - Also penalty u/s 271A levied - Held that:- When the Parliament in its wisdom expects every person carrying on business including civil contract, this Tribunal is of the considered opinion that the excecutive authorities (CBDT) ought to have prescribed minimum required books of account. As decided in Babu Reddy case (2010 (3) TMI 918 - KARNATAKA HIGH COURT) and Aggarwal Construction Co. (2007 (1) TMI 203 - ITAT CHANDIGARH-B ) found that although books of account had to be prescribed, such books had not been prescribed under the Income-tax Rules in respect of business of civil contract. Accordingly deleted the penalty levied u/s 271A for not maintaining the books of account. Therefore, once the penalty for not maintaining the books of account was deleted, it is not known how the very same CIT(A) confirmed the penalty levied u/s 271B of the Act for not getting the books of account audited - thus the penalty levied u/s 271B is deleted.
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2013 (4) TMI 391
Recruitment fees - Whether treated as the income not incidental for computing its shipping income under Tonnage Tax Scheme u/s 115 VI read with Rule 11-R of the Income Tax Rules - assessee in the present case is a company which is engaged in the business of shipping operations - Held that:- Prior to A.Y. 2005-06 the benefits of shipping company were provided in section 33AC of the Act by way of deduction of an amount not exceeding 50% of profits derived from the business of operation of ships. As rightly submitted by the ld. counsel for the assessee, the scope of benefits provided u/s 33AC of the Act thus was limited to the profits derived from the operation of ships in which the recruitment fees arising from incidental activities was not covered. Chapter XII-G, however, has extended this scope from A.Y. 2005-06 which in addition to the profits from core activities from operating qualifying ships also includes profits from incidental activities. Keeping in view this extended scope of benefits available now under Chapter XII-G inserted in the statute w.e.f. 1-4-2005, the assessee has claimed the benefit in respect of recruitment fees which was earlier not available u/s 33AC of the Act, the scope of which was limited only to profits derived from the operations of ships. Therefore, delete the addition made by the A.O. and confirmed by the ld. CIT(A) on account of recruitment fees. In favour of assessee. Disallowance of expenses claimed against miscellaneous income - Held that:- As rightly submitted by the D.R., the details of the expenses claimed by the assessee have not been furnished by the assessee either before the authorities below or even before the Tribunal and in the absence of the same, agreeing with the contention of the D.R. that there is no case made out by the assessee for the assessee to justify any more opportunity to be given to the assessee at this stage to support and substantiate its claim on this issue. Thus uphold the impugned order of the ld. CIT(A) confirming the disallowance made by the A.O. on this issue. Against assessee.
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Customs
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2013 (4) TMI 390
Revalidation, renewal and extension of the period of the Duty Free Import Authorization (`DFIA') License denied - Petitioner seeks to challenge the orders declining to revalidate on the ground that the request could not be considered in terms of paragraph 2.13.1 of the Hand Book of Procedures - Held that :- There is no dispute before this Court, during the course of hearing, that the orders of the Foreign Development Officer were subject to the remedy of an appeal under Section 9(5) read with Section 15, since the effect of those orders is to deny the request for renewal or revalidation. The Petitioner failed to avail of the statutory remedy within the period of forty five days or even within the further period of thirty days prescribed by the proviso to Section 15(1). The petition before this Court was filed only on 11 May 2012. Ordinarily the exercise of jurisdiction under Article 226, in the face of an alternate remedy, can only be by way of an exception where an order has been passed without jurisdiction or in violation of fundamental rights or in breach of the principles of natural justice. In the present case, the Petitioner failed to espouse the alternate remedy which is available and has approached this Court much after the period prescribed by the statute has expired. Thus such a petition cannot be entertained. Article 226 cannot be taken recourse to where within the limitation provided by law, the statutory remedy was not availed of. In terms of paragraph 2.13.1, revalidation of such freely transferable authorization was not permissible unless the validity had expired while in custody of the Customs authority/R.A. In the affidavit-in-reply filed by the Respondents it has been stated that the Petitioner while applying for revalidation did not state that the licenses expired under the custody of the Customs authority/R.A. nor was any certificate produced from the Customs authorities to this effect. The averment in the affidavit-inreply has not been controverted. In these circumstances, plainly even on merits, the Petitioner was not entitled to the grant of revalidation.
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2013 (4) TMI 389
Application for waiver of pre-deposit rejected - Held that:- The order of the Commissioner (Appeals) does not reflect any application of mind whatsoever to the twin requirements of whether a prima facie case had been made out by the appellant as well as on the issue of financial hardship. The consequence of non-compliance with an order of pre-deposit is serious. The appeal would be liable to be dismissed for failure of deposit. Hence, it is incumbent upon the authority which adjudicates upon an application for waiver of pre-deposit to objectively consider whether the grounds on which a waiver is sought constitute undue hardship to the assessee. The authority is entitled to impose conditions to secure the interests of the revenue. In the circumstances, the petition ought to be allowed by setting aside the impugned order of the Commissioner of Customs (Appeals) dated 12 February 2013 and by remitting the proceedings back to the authority for a fresh decision on the application for waiver of pre-deposit.
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2013 (4) TMI 388
Quashing of Show cause notice as barred by limitation -assessee appeal - a notice to show cause was issued to Beacon Maritime Carriers Pvt. Ltd. for a failure to export and to account for 59 cargo containers - Held that:- The present case is not one where no action whatsoever was taken by the Customs authorities. On the other hand, as the record would indicate, a personal hearing was held from time to time during the course of which, the Adjudicating Officer was informed of subsequent changes in the agents appointed by the principal shipping agency in Saudi Arabia. The Department was apprised of that fact that adjudication proceedings in relation to the cargo were pending and a conscious decision was taken to take the adjudication in the present case out of the call book. Ultimately, whether the Court under Article 226 of the Constitution should quash a notice to show cause, purely on the ground of delay, is a matter which has to be decided in each individual case. Thus non satisfying that the interest of justice will require the quashing of the proceedings in the present case. The Petitioners have the full range of defences open in regard to the notice to show cause in the course of adjudication proceedings. No merit in the Petition. The Petition is dismissed.
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Corporate Laws
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2013 (4) TMI 387
Arbitration and Conciliation - the petitioner and the respondent entered into a contract agreement dated 5th January, 2004 for the widening/ four laning and strengthening of the existing 2 lane carriageway of NH-47, including the bridges from Vytilla to Aroor Junction, totaling a distance of 348.382 kms to 358.750 kms of Nh-47 in the state of Kerala - The project could not be completed timely and both the parties claimed that there are breach of obligations on either side - Whether the respondents/petitioner herein are entitled to seek settlement of disputes under clause 24.2 before this Arbitral Tribunal in so far as the recommendations of DRB in respect of such disputes have become final and binding under clause 24.1 of the contract data? - Whether the counter claim by the respondent/ petitioner herein raised for the first time before the tribunal is barred in view of the clause 24.1 of the contract data? - whether the appeal under Section 37 (2) of the Act is maintainable in the case of present nature? Held that:- A perusal of the amended Section 28 of the Contract Act, 1957 would show that both kinds of agreements i.e. agreements which restrict the period of limitation within which claims could be referred, as also agreements which extinguish the right of a party to prefer a claim or discharges any party from any liability under a contract on expiry of a specified period, are void to that extent. Before the amendment of Section 28 in 1997, the agreements reducing the period of limitation were distinguished from those which did not limit the time within which a party might enforce his rights, but which provided for a release or forfeiture of rights, if no suit was brought within the period stipulated in the agreement and the latter class of agreements, being outside the scope of the section, were held to be binding between the parties. Thus, in National Insurance Co. Ltd. v. Sujir Ganesh Nayak & Co. (1997 (3) TMI 568 - SUPREME COURT), the Supreme Court drew a clear distinction between an agreement which curtails the period of limitation and an agreement which provides for forfeiture or waiver of the right itself, if no action is commenced within the period stipulated by the agreement. The first was held to be void as offending Section 28 but, the later was held not falling within the mischief of Section 28. Thus, it was held that curtailment of the period of limitation was not permissible in view of Section 28 but extinction of the right itself, unless exercised within the specified time, was permissible and can be enforced. After the 1997 amendment to Section 28 of the Indian Contract Act, 1872, not only the curtailment of the period of limitation is void, but also the extinction of right, if sought to be brought by the agreement within a specific period, which period is less than the period of limitation prescribed for the suit under the Contract in question, is also rendered void. In other words, after the amendment to Section 28 of the Indian Contract Act, 1872 by Act 1 of 1997, the distinction between curtailing of the period of limitation and extinction of the right itself, after the specified period, no longer exists. Therefore, no merit in the submission of Mr. Sethi learned Senior counsel appearing on behalf of the respondents that there lies a difference in the curtailment of the period of limitation and the extinction of the right itself. The judgment relied by the Mr. Sethi in the case of H.P. State Forest Company (2008 (12) TMI 664 - SUPREME COURT) was rendered in the context of the Section 28 of the Contract Act as it stood prior to the amendment. The effect of legislative amendment was never considered in the said judgment. It is, therefore, clear that the main object of the 1952 Act was only to strike out the unnecessary Acts and excise dead matter from the statute book in order to lighten the burden of ever increasing spate of legislation and to remove confusion from the public mind. The object of the Repealing and Amending Act of 1952 was only to expurgate the Amending Act of 1949, along with similar Acts, which had served its purpose. Clause 24.1 of the Act so far as it puts the restriction on the party either by extinction of right to arbitrate or for its enforcement of the right to arbitrate unless the notice is given within 14 days of the receipt of the recommendations of DRB lies in the teeth of Section 28 of the Contract Act (as amended in the year 1997) and thus the same has to be read down and the effect of such restriction is in consequential. The resultant effect of the aforementioned discussion is that as a matter of law, the restriction prescribed under clause 24.1 of the Contract putting fetters upon the party to arbitrate their claim is inconsequential. Accordingly, the impugned order deciding preliminary issue cannot sustain and the same is set aside. Appeal is allowed. Learned Arbitral Tribunal is requested to entertain the claims of the petitioner and decide the same on merits in accordance with law.
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2013 (4) TMI 386
Permissibility of sale of the assets of the sick industrial company till it is wound up - orders of sale of the assets/properties of the appellant-Company by public auction questioned - Held that:- The Company Judge by order dated 23.1.2004 appointed the Provisional Official Liquidator & eventually by order dated 11.5.2007 was vested with the power under Section 457(1) of the 1956 Act and accorded permission to complete the sale made subject to the final decision in the Company Petition No.29/2003. Thereafter, by order dated 20.7.2007, the sale was confirmed in favour of M/s.Chaudhary & Sons (Forgings) Pvt.Ltd., Ghaziabad (UP) and the official liquidator was directed to take follow up steps. It is thus more than apparent that the exercise for sale of the assets/properties of the appellant-Company was undertaken and completed before final orders being passed in Company Petition No.29/2003 registered on the recommendation dated 11.6.2003 of the Board forwarded under Section 20(1) of SICA. It would be patent from sub-section (2) of Section 20 that whereas the High Court, on the basis of the opinion of the Board is to order the winding up of sick industrial company or cause it to be so done in accordance with the provisions of 1956 Act, the Board as envisaged in sub-section (4) may cause to be sold the assets/properties of the Company in such manner as it may deem fit and forward the sale proceeds to the High Court for orders for distribution thereof in accordance with the provisions of Section 529A and other provisions of the said enactment. The Hon'ble Apex Court in NGEF Ltd.(2005 (9) TMI 306 - SUPREME COURT OF INDIA) stated that on a comparative analysis of the provisions of the 1956 Act, the rules thereunder as well as Sections 20 and 22A of SICA, their Lordships held in authoritative terms that a Company declared to be sick in terms of the provision of SICA, continued to be sick unless it was directed to be wound up and having regard to Section 20(4) of the enactment, the Board alone had the jurisdiction as regards sale of its assets, till the order of winding up of a Company is passed. Having regard to the scope and ambit of the power of the Company Court to order or cause to effect sale of the assets of a sick industrial company pending its decision to wind up the same on the receipt of the recommendation of the Board as contemplated in Section 20(1) of SICA, as conditioned by Section 20(4) thereof and as held in NGEF Ltd.(supra) the impugned orders dated 11.5.2007 and 20.7.2007 pertaining to sale of the assets/properties of the appellant-Company by public auction cannot be sustained in law and on facts.The appeals are allowed.
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Service Tax
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2013 (4) TMI 403
Rejection of appeal as time-barred by Commissioner (A) - Held that:- There is no dispute that there is a delay of 355 days in preferring the appeal before Commissioner (Appeals). It is well settled that Commissioner (Appeals) has no power to condone the delay beyond the statutory period. Thus no reason to interfere with the order of Commissioner (Appeals) and the same is upheld.
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2013 (4) TMI 402
Appeal dismissed on the grounds of limitation - It was argued by the assessee that the order in original dated 30.12.2010 was not served upon as per the procedure prescribed under Section 37C of the Central Excise Act, 1944 - Held that:- The whole idea of serving the decision/ order under Section 37C is that the person to whom it is addressed duly receives such communication. This Section does not indicate that the required documents should be sent only through RPAD. Moreover, the wording of appellants letter dated 05.9.2011 clearly indicate that the order dated 30.12.2010 was received by them and the same was misplaced during shifting of their office to a new location. So the main point of receipt of order in original before 06.9.2011 stands settled when the appellant himself accepts the receipt of the order. Further, it is rightly pointed out by the by A.R. for the department that none of the judgments case of R.K. Agarwal vs. CESTAT, New Delhi [2007 (11) TMI 62 - HIGH COURT ALLAHABAD] relied upon by the appellant is applicable to the facts of this case as in all those cases, the fact of receipt of order by the assessee was never established. Against assessee.
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2013 (4) TMI 401
Refund application rejected - service tax charged by the service provider for the export of consignments - as per dept. claim is beyond the period of limitation, and Non co-relation of the consignments with the GTA services - Held that:- On a random sample picked up it is found that the transport company’s Lorry Receipt mentions the container number and the said container number finds mention in the transporters invoice number, and both the documents also indicate the export invoice number of the appellant. If these are co-related with ERE-1, it is found that the ERE-1 also indicate the container number on the reverse wherein the Revenue officers have cleared the consignment for export purposes. Thus, this co-relation should have been properly explained by the appellants to the lower authorities which has not been done so, thus issue needs reconsideration The appellants were registered with Export Promotion Council subsequent to the exports affected by them, thus there cannot be any dispute on the ground that the goods were exported by the appellant company, though the subsequent registration does not turn the exports made by the appellant into non exports. In the absence of any other evidence against the appellant, subsequent registration by the appellant with the Export Promotion Council should not be a reason for rejecting the refund claims of the appellant - direct the adjudicating authority to reconsider the refund claims.
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2013 (4) TMI 400
Non depositing of service tax to the Government though collected - chargeable to an offence liable for prosecution under section 89 of the Finance Act, 1994 - whether this appeal is maintainable or not before this Tribunal? - whether the impugned order is passed under Section 73 of the Finance Act, 1994 or not? - Held that:- In the impugned order there is no dispute about the confirmation of service tax demand. The only dispute is regarding the recovery proceedings of the amount demanded by the Commissioner and the grievance of the appellant only is that he has not considered their applications for payment in installments due to financial hardships. The appellant's prayer to recover the proceedings in installments has been turned down by the adjudicating authority. Thus the impugned order has not passed under Section 73 ibid. Therefore, the appeal is not maintainable before this Tribunal. The appellant is at liberty to recourse their action before the learned Commissioner for appropriate action.
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Central Excise
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2013 (4) TMI 385
Belated return - Held that:- The appellant herein had received the Order-in-Original on 16.01.2011 and he should have filed the appeals by 16.03.2011 and along with applications for condonation of delay by 16.04.2011. It transpires from the records that these appeals are filed on 28.05.2011 before the first appellate authority. The first appellate authority has correctly dismissed the appeals as barred by limitation as per the provisions of Section 35 of the Central Excise Act, 1944. No interfere in such an order required.
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2013 (4) TMI 384
Cenvat credit on GTA services - Whether the supply made by the appellants is on FOR destination basis and whether the freight element and insurance has been included in the overall price - Held that:- Since all the purchase orders of the appellants are not available, the same are required to be verified with the conditions of the purchase order and those prescribed by CBEC under circular No.97/8/2007-ST dated 23.08.07. The case is therefore remanded back to Commissioner (Appeals) for necessary verification for deciding the admissibility of cenvat credit in remand proceedings. Service tax credit admissibility relating to maintenance of garden - Held that:- Appellant has made out a strong case because as per the Gujarat Pollution Control Board permission dated 16.03.06 the appellant was required to maintain a garden which is therefore an obligation under the relevant pollution control law and cenvat credit with respect to the services used for maintaining the garden will be admissible and is accordingly allowed.
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2013 (4) TMI 383
Cenvat credit on Outward Freight Services denied - non admissibility under Rule 2(l) of Cenvat Credit Rules, 2004 as the same are beyond the place of removal - demand for the period November 2005 to March 2008 as evident from SCN - Held that:- As decided in Commissioner of Central Excise & Service Tax, LTU, Bangalore vs. ABB Limited [2011 (3) TMI 248 - KARNATAKA HIGH COURT] and Commissioner of Central Excise & Customs vs. Parth Poly Wooven Pvt. Limited [2012 (25) STR 4 (Guj.)2011 (4) TMI 975 - GUJARAT HIGH COURT], wherein it has been held that up to 01.4.2008, due to the prevailing definition, cenvat credit on outward freight service was admissible. In favour of assessee.
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2013 (4) TMI 382
Non discharge of the duty liability for the month of December 2007 to February 2008 - default as per Rule 8(3A) of the Central Excise Rules, 2002 - contested by appellant No.1 that penalty under Rule 25 of the Central Excise Rules not to be imposed - Held that:- The appellant has paid the entire defaulted amount in cash along with interest. Therefore no penalty can be imposed upon the appellant No.1 under Rule 25 of the Central Excise Rules, 2002. The only penalty which could have been invoked is under Rule 27 of the Central Excise Rules because appellant No.1 has contravened the provisions of Central Excise Rules for making the payments from cenvat credit when they were required to make the payments in cash for each consignment. It is seen from the show cause notice dated 25.11.10 that no penalty under Rule 27 of the Central Excise Rules has been proposed against appellant No.1. Accordingly, the penalties that Rs.9,96,740/- imposed against appellant No.1 is required to be set aside. So far as imposition of penalties upon appellant No.2 and 3 are concerned, it is seen that the goods were cleared on payment of duty but instead of making the payment in cash the payments were made from cenvat credit. Therefore the goods were cleared on payment of duty and the same was duly reflected in the returns filed by the appellant No.1. Thus it cannot be held that there was any malafide intention on the part of appellant No.2 and 3 to evade payment of duty. The only default in this case was utilising cenvat credit and there is an interest loss to the Revenue from the date of utilisation of cenvat credit till the demand of duty in cash which has been made good by making the payments in cash - all the three appeals filed by the appellants are allowed.
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2013 (4) TMI 381
Admissibility of cenvat credit on the services related to the inputs not used in the manufacture of goods which are exported - Held that:- A.R. has rightly relied upon the judgment of Ford India Pvt. Ltd. Vs. CCE Chennai (2007 (3) TMI 86 - CESTAT,CHENNAI ) where the clarification dated 13.12.96 relied upon by the appellant was also considered. After considering all the aspects of the case it was held by Chennai CESTAT bench that credit, with respect services utilized only in the activity of trading of components, no cenvat credit is available on such components. On the same analogy the services used with respect to traded items will not be admissible when the services are utilized only for export of such traded items which are net used in the stream of manufacture - appeal filed by the appellant is dismissed.
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CST, VAT & Sales Tax
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2013 (4) TMI 405
Eligibility Certificate cancelled in view of the effect of the notification Nos. 1340 and 1341 by which cold drinks had been placed in negative list - Held that:- Inspite of the fact that the Assessing Authority/Deputy Commissioner (Assessment) Trade Tax, Nazibababd was/is not the competent authority to issue the eligibility certificate under the provisions of 4-A of the U.P. Trade Tax Act, 1948 and further the said authority has no power to amend the eligibility certificate but even then, the Divisional Level Committee had issued the eligibility certificate to the petitioner's unit on 22.1.2001 under Section 4-a of the U.P. Trade Tax Act in utter violation of the Notification No. 2008/2009 dated 29.9.1999. There is no dispute in the fact that on the date of grant of eligibility certificate by the Divisional Level Committee, the Cold Drinks were already placed in the negative list and this very vital fact was not taken into consideration. On coming to the notice of the said facts, the Joint Commissioner (Executive), Commercial Taxes, Nazibabad issued a notice dated 3.5.2008 to the petitioner under Section 10-B of the Act and revised the order dated 30.6.2004 passed by the Deputy Commissioner (Assessment) Trade Tax, to which the petitioner has submitted his reply. Thereafter, an order dated 29.5.2008 was passed by the Joint Commissioner (Executive), Commercial Taxes, excluding the amount of additional fixed capital investment as included by the Deputy Commissioner (Assessment), Trade Tax vide order dated 30.6.2004 to the eligibility certificate. Being aggrieved by the order dated 29.5.2008, the petitioner approached this Court at Allahabad by filing Civil Misc. Writ Petition No. 1265 of 2008, in which, a Division Bench of this Court at Allahabad, vide ad interim order dated 4.7.2008, stayed the order dated 29.5.2008. Counter affidavit was filed on behalf of the State in the above writ petition and the petitioner withdrew the writ petition on 13.11.2009. The petitioner, thereafter, preferred an Appeal, bearing No. 002/2009 before the Trade Tax Tribunal, Moradabad against the order dated 29.5.2008, without disclosing about filing and the pendency of writ petition No. 1265 of 2008. Thereafter, the petitioner has preferred the instant writ petition, challenging the power of Commissioner to cancel the Eligibility Certificate, while in paragraph 25 of the writ petition No. 1265 of 2008 filed by the petitioner before this Court at Allahabad, the petitioner itself had acknowledged the power of Commissioner to cancel/amend/modify the Eligibility Certificate under Section 4 A(3) of the U.P. Trade Tax Act. After hearing the parties' counsel, judgment was reserved. Prior to pronouncement of the order/opinion, the petitioner has preferred an application for stay (C.M.Application No. 107227 of 2012), inter alia on the grounds that the question involved in the instant writ petition is also related to the proceedings to the subsequent Assessment Year and the matter is pending before the Full Bench of Commercial Tax Tribunal, U.P. Accordingly, in order to meet the ends of justice and equity, this Court had stayed further proceedings in Second Appeal Nos. 11 of 2011 and 3 of 2010, till delivery of the judgment. Thus, from the facts averred above, it is crystal clear that the petitioner has not disclosed the above material and full facts while filing the instant writ petition, though the same was already in the knowledge of the petitioner and has approached this Court with unclean hands. Therefore, no hesitation to mention that the instant writ petition has been filed by the petitioner by suppressing and concealing the above vital facts, which go to the core of the matter involve. In view of the foregoing discussion, without delving into other grounds of challenge, no interference with the show cause notice or grant indulgence to the petitioner in exercise of discretionary writ jurisdiction under Article 226 of the Constitution of India. Thus leave it open to the petitioner to file its reply before the concerned authority raising all such points as may be available under law and if the petitioner approaches the concerned authority, it shall take appropriate decision in accordance with law.
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2013 (4) TMI 404
Purchase tax on the purchase of paddy relying on Supreme Court decision - U.P. Trade Tax Act - Held that:- The Tribunal vide its impugned orders have deleted the addition in each case by observing that the obiter of the Hon'ble Apex Court is not pertaining to the State Trade Tax Act as it is related to the Central Sales Tax. Notification No. 2947 dated 11.12.1995 issued by the Government of U.P. has specifically granted the exemption from the tax on the purchase of paddy. So, each addition was deleted.
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Indian Laws
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2013 (4) TMI 399
RTI Application - seeking the copies of all note sheets and correspondence pages of file relating to one Ms. Jyoti Balasundram, Member/CESTAT - whether Single Judge was correct to held that the information sought by the appellant herein is the third party information wherein third party may plead a privacy defence and the proper question would be as to whether divulging of such an information is in the public interest or not also affirmed by Division Bench - Held that:- As decided in Girish Ramchandra Deshpande v. Central Information Commissioner [2012 (10) TMI 218 - SUPREME COURT] where Central Information Commissioner denied the information pertaining to the service career of the third party to the said case and also denied the details relating to assets, liabilities, moveable and immovable properties of the third party on the ground that the information sought for was qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. In that case this Court also considered the question whether the orders of censure/punishment, etc. are personal information and the performance of an employee/officer in an organization, commonly known as Annual Confidential Report can be disclosed or not. Thus in agreement with the CIC and the courts below that the details called for by the petitioner i.e. copies of all memos issued to the third respondent, show-cause notices and orders of censure/punishment, etc. are qualified to be personal information as defined in clause (j) of Section 8(1) of the RTI Act. The performance of an employee/officer in an organization is primarily a matter between the employee and the employer and normally those aspects are governed by the service rules which fall under the expression “personal information”, the disclosure of which has no relationship to any public activity or public interest. On the other hand, the disclosure of which would cause unwarranted invasion of privacy of that individual. Of course, in a given case, if the Central Public Information Officer or the State Public Information Officer or the appellate authority is satisfied that the larger public interest justifies the disclosure of such information, appropriate orders could be passed but the petitioner cannot claim those details as a matter of right. The petitioner in the instant case has not made a bona fide public interest in seeking information, the disclosure of such information would cause unwarranted invasion of privacy of the individual under Section 8(1)(j) of the RTI Act. In view of the discussion made above and the decision in this Court in Girish Ramchandra Deshpande(supra), as the appellant sought for inspection of documents relating to the ACR of the Member, CESTAT, inter alia, relating to adverse entries in the ACR and the ‘follow up action’ taken therein on the question of integrity, no reason to interfere with the impugned judgment passed by the Division Bench whereby the order passed by the learned Single Judge was affirmed. In absence of any merit, the appeal is dismissed.
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