Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
April 4, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Cash credit - addition u/s 68 - It is a settled law that the assessee can only be asked to prove source of credits in its books of accounts and not the source of the source of deposit. - AT
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Addition u/s 41(1) - The assessee has not obtained any benefit out of such liability which is not ceased to be a liability and the assessee has not written back such liability unilaterally in its books of account - no addition - AT
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Sharing of expenses - claim of expenditure on the basis of debit note - one cannot imagine that there will be not expenditure of machinery maintenance - claim allowed - AT
Service Tax
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Penalty - ignorance of law - misguidance by the Consultant - ignorance of law is enough to set-aside penalty under Section 76, 77 and 78 of the Finance Act, 1994 - AT
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Cenvat Credit on capital goods received prior to getting registration certificate as service provider allowed - AT
Central Excise
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Transfer of credit - even when there was no stock of input ‘as such’ or ‘in progress’ having put to use, the transfer under the provisions of Rule 10 of Cenvat Credit Rules is permissible - AT
VAT
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Recovery of tax arrears of seller from the purchaser or property - As long as the transaction, between the original assessee and the petitioner company, is not shown to be fraudulent in nature it cannot be said that such transaction is void - HC
Case Laws:
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Income Tax
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2013 (4) TMI 68
Unaccounted Capital - introduction of capital by the partners - Section 68 - onus to discharge - Held that:- In the absence of any material to indicate that there were profits of the firm, the amount credited to the partners' accounts could not be assessed in the hands of the firm. Once the partners have owned that the monies deposited in their accounts are their own, the Income Tax Officer is entitled to and may proceed against the partners and assess the same in their hands, if their explanation is not found satisfactory. The assessee had discharged the primary onus which was on it by offering explanation, which has not been found to be incorrect or false in any manner - The interest of the revenue is also safeguarded as the Income Tax Officer has been given the liberty to consider the said credits in the hands of the partners if he is not satisfied with the sources of investment of cash credits in the accounts of the partners. - Decided against the revenue.
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2013 (4) TMI 67
Rejection of registration u/s. 12AA of the Income Tax Act - As per the reports furnished by AO and Jt.CIT, it is stated that as per the activity report filed by the applicant, the only activity of the society is managing a School affiliated to CBSE. But as per the income side of the Income & Expenditure statement, the society has been receiving entrance coaching fee from Viet and Brilliant during all the previous years. Further, the Society has no property of it own. No building or room is taken on rent/lease for the functioning of the Society. - Held that:- The case of the assessee is that the said reports were not put before it and hence the opportunity was not provided to it to submit its view on the adverse remarks, if any, made by the lower authorities. The said action of Ld CIT violates the principles of natural justice. Under these circumstances, as observed in the decision of the Hon'ble Jurisdictional Kerala High Court in the case of Adarsha Vidyanidhi Trust vs. CIT (2007 (1) TMI 148 - KERALA High Court) the order passed by the Ld. CIT cannot be treated as a valid one and is liable to be quashed.
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2013 (4) TMI 66
Unexplained investment in stock - stock statement submitted to bank - CIT(A) deleted the addition - Held that:- The assessee is required to explain its stock position, however, there may be difference in valuation but here the contention of the assessee is that before bank valuation of stock was based on the weight is incorrect. No material has been brought on record before us to substantiate that the limit granted by bank to assessee were fully exhausted. Further the observation of the CIT (A) that the declaration of higher stock to bank is out of business expediency and not an offence is not supported by any material on record. Matter remanded back for fresh examination to the A.O. and he should bring on record the correct factual position that whether the sales made by assessee is on the basis of weight or numbers, whether the stock submitted to the Bank was in Kgs. or in numbers and whether the assessee has been submitting higher stock figures as compared to its book stock to bank in the past and for earlier months in the year under appeal. Addition on account of interest expenses - CIT (A) deleted the addition - Held that:- CIT (A) gave a finding that Shri Jayantibhai Maniar was the son of another partner and was also an employee of the firm. The A.O. has made an addition as the assessee had advanced interest free loan out of the interest bearing funds. The advance given by the firm was for the business expediency. In favour of assessee.
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2013 (4) TMI 65
Cash credit - addition u/s 68 - addition on account of loan received - Held that:- Before the CIT (A), in respect of Kokilaben Patel it was submitted that she is a non resident and the amount was given by her from account payee cheque and the copy of account of her bank account was also submitted and thus the assessee had discharged the initial onus cast upon. These facts could not be disputed by Revenue by bringing any contrary material on record. In the case of Alkaben Vasudev, the amount of ₹ 2,50,000/- was received by cheque and the copy of the Bank account of Alkaben along with the confirmation was also filed. As the assessee has discharged the initial onus cast upon it. The Revenue could not controvert the submissions of the assessee. CIT (A) while confirming the addition in the case of Alkaben Vasudev Patel has mainly relied on her bank statement. It is a settled law that the assessee can only be asked to prove source of credits in its books of accounts and not the source of the source of deposit. Further there is nothing on record to prove that summons was issued to Alkaben by the Revenue or explanation was sought from her with respect to the cash deposits. Another reason for confirming the addition of loan from Alkaben was that the signature on the copy of confirmation was not authenticated. Nothing has been brought on record by Revenue the provisions which requires for authentication of the signature and the authority who was required to authenticate the signature of the depositor. Thus the addition made on account of cash credit needs to be deleted. In favour of assessee
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2013 (4) TMI 64
Addition u/s 41(1) - cessation of liabilities - Held that:- The liability pertains to the preceding year where copies of accounts of all sundry creditors are placed on record and were available before both the authorities below. The said balances are outstanding in the following years as well is a matter of record and there is no dispute to the said fact. The assessee has not obtained any benefit out of such liability which is not ceased to be a liability and the assessee has not written back such liability unilaterally in its books of account. Therefore, such liability cannot be a subject matter of section 41(1) of the Act. Even if confirmation copies of accounts and books of account are not produced, the copies of audited accounts for the impugned year and the assessment record of preceding year was available with the A.O. The AO cannot make the assessment on conjectures, surmises or on the basis of suspicion. - Additions made u/s 41(1) directed to be deleted. Addition of family loans - Held that:- The arrangements made by the DR has no substance in the matter in this regard. The assessee having proved the identity, capacity and creditworthiness of said persons and therefore, cannot be subject matter of addition. Thus, additions have wrongly been confirmed by the CIT(A) and the same are directed tobe deleted. Disallowance of car expenditure and car depreciation - Held that:- As the AO has not made any discussion in the body of the order and has simply disallowed expenses without application of mind, which has been confirmed by the CIT(A). No such disallowance can be made without passing areasoned order. Therefore, such addition made, is directed to be deleted.
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2013 (4) TMI 63
Sharing of expenses - claim of expenditure on the basis of debit note - Addition on account of repair and maintenance expenses - Held that:- Accepting arguments of the assessee that premises of both the concerns are common at Jalandhar where machines of both the concerns have been installed. The expenses having been incurred by M/s. Holy Faith International Pvt. Ltd and small items like Nuts, bolts, Gear, Element, Patti, Bearings, Tools, Beeding and Grease etc. as mentioned hereinabove have been purchased by M/s. Holy Faith International Pvt. Ltd for which all the details are available. The expenses pertaining to the assessee out of the total bills which is fraction which pertains to the assessee were debited to the assessee by crediting to the expenses account by M/s. Holy Faith International Pvt. Ltd is not under dispute. The expenses have been claimed only at one place by the assessee is also not under dispute. Both the concerns are being taxed at highest slab is not under dispute & also assessee is having machinery which is part of the asset side of the balance sheet and, therefore, one cannot imagine that there will be not expenditure of machinery maintenance. Thus the debit note issued by M/s. Holy Faith International Pvt. Ltd has rightly been claimed by the assessee as an expenditure. The A.O. is directed to allow the same and accordingly the order of the ld. CIT(A) is reversed on the issue. Claim of TDS rejected - selection of assessment year - Held that:- There is no dispute to the fact that the same pertains to the assessment year 2003-04. The tax has been paid in the treasury of the Govt. and the credit for the same is required to be given to the assessee since the same does not pertain to the impugned assessment year and income has not been credited during the impugned year. Therefore, the CIT(A) has rightly decided that TDS claim cannot be allowed in this year. It is also claimed that TDS is allowed only in the year where the income has been credited. Therefore, the matter is set aside to the file of the AO who will allow the claim of TDS in the year in which the income has been credited and accordingly decide the issue. Thus, grounds No. 1 & 2 of the assessee are allowed and grounds No. 3 & 4 of the assessee are allowed for statistical purposes.
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2013 (4) TMI 62
Jurisdiction power u/s 263 by CIT(A) - AO has not disallowed u/s 43 B a sum pertained to earlier previous year towards loan from GIIC and claimed as deduction u/s 43 B - Held that:- A.O. has issued the show cause notice on this issue and the assessee filed reply & A.O. has not made any addition after considering the reply. Therefore, the CIT order u/s 263 on this issue is tantamount to change of opinion which is not permitted under the law as held by the various high courts on this issue - in favour of assessee. Foreign currency loan, liability and assets (other than fixed assets) were restated at the rate of prevailing at the year end and exchange rate difference was charged to the profit and loss account which was not according to ratio laid down in the case of Indian Overseas Bank Ltd.(1984 (4) TMI 35 - MADRAS HIGH COURT) as notional liability is not permissible - Held that:- As this fluctuation of exchange loss is allowable being a revenue expenditure relied in the case of Woodward Governor Pvt. Ltd. vs. CIT (2009 (4) TMI 4 - SUPREME COURT) and details were also given before the AO, therefore, there is no revenue loss. As that the exchange rate pertained to various purchases as claimed by the appellant are revenue in nature. Thus no reason to uphold the order of CIT - in favour of assessee.
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2013 (4) TMI 61
Addition u/s 68 - unverifiable loan from Shri Satish Chopra and Smt.Chand Rani - Held that:- As fresh evidences before the CIT(A) were produced who forwarded the same to the AO and called for the remand report who furnished the remand report in which his only comment with regard to Smt.Chand Rani was "Reply received from legal heir Sh. Partha Arora, confirming the loans advanced to the assessee. (copy enclosed as annexure 'E')." With regard to Shri Satish Chopra, no comment was given in the remand report. On these facts, CIT(A) deleted the addition mainly pointing out that in the remand report, the AO has not disputed the correctness of the evidences furnished by the assessee before the CIT(A). Against revenue. Cash deposit in the bank account from undisclosed sources - CIT(A) deleted the addition - Held that:- It is evident that in the remand proceedings, the assessee produced the evidences explaining the source of the deposit of Rs.2 lakhs in cash in the bank account which has not been disputed by the Assessing Officer. In view of the above, we do not find any infirmity in the order of learned CIT(A). The same is sustained and ground No.2 of the Revenue's appeal is also rejected - in favour of assessee.
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Customs
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2013 (4) TMI 60
Smuggling goods – Confiscation – Appellant/Accused is found with carrying two tractors loaded with battery scrap. Department seized the battery scrap with a view that they are smuggled goods. Notice also proposed imposition of penalty. Additional Commissioner vide his order confirmed the confiscation also ordered for confiscation of the truck in terms of Section 115(2) of the Customs Act, 1962 with an option to redeem the same on payment of redemption fine. Said order of Additional Commissioner was challenged by the present appellants before Commissioner (Appeals), who upheld the same, hence the present appeal is filed before Tribunal. Held that:- Tribunal finds that there is no direct evidence on record showing smuggling of battery scrap from Nepal. The Revenue is solely relying upon the statement of who is a co-accused tribunal also finds that battery scrap is non-notified item in terms of provisions of Section 123 of the Customs Act. As such, the onus to show that the same was smuggled lies very heavily upon the Revenue and is required to be discharged by production of sufficient and tangible evidence. Inasmuch as the confiscation stand set aside, there is no justification for imposition of penalties on both the appellants.
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2013 (4) TMI 59
Directions of Additional Chief Metropolitan Magistrate (A.C.M.M.) to supply copies of documents consisted of more than 300 pages - the amount of customs duty alleged to be evaded was over ₹ 5 crores - whether the Petitioner instead of supplying the copies of the documents to the Respondents ought to have approached this Court invoking its inherent powers under Section 482 of the Code? - Held that:- As per Section 482 of the Code, the High Court in exercise of its inherent powers may make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court, or otherwise to secure the ends of justice. As per Janata Dal v. H.S. Chowdhary ( 1992 (8) TMI 301 - SUPREME COURT ) the High Court, as the highest Court exercising criminal jurisdiction in a State, has inherent powers to make any order for the purposes of securing the ends of justice, it being an extraordinary power, will, however, not be pressed in aid except for remedying a flagrant abuse by a subordinate Court of its powers. The Petitioner has not been able to make out a case or to show that the order passed by the ACMM was abuse of the process of the Court or that the order is required to be set aside to secure the ends of justice. Petitioner (DRI) ought to have supplied the Respondents with the copies of the documents promptly so that the trial could have proceeded. The Petitioner (DRI) is unable to make out a case for invoking the powers under Section 482 of the Code. Rather, the filing of the Petition appears to be mala fide the same is accordingly dismissed.
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Corporate Laws
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2013 (4) TMI 58
Petition for Restoration of the name of the petitioner company - petitioner claims that the application for restoration of the name has been filed within 20 years, the period prescribed in sub section (6) of section 560 of the Companies Act, 1956. – Held that - The company, having volunteered for the removal of its name from the Register, cannot be said to be an aggrieved person for seeking restoration of its name to the Register of Companies. The benefit of sub section (6) of section 560 of the Companies Act, 1956 for getting the name of the company restored to the Register of Companies after having been struck off from the Register of companies as a penal measure, shall not be available to a company, who has volunteered for the removal of its name from the Register of Companies under the Scheme floated in 2000. Hence this court comes to the conclusion that the present company petition under section 560(6) of the Companies Act, 1956 by the petitioner company deserves to be dismissed.
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Service Tax
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2013 (4) TMI 72
Demand of Service tax/Penalty - appellant are not contesting the demand and seeking waiver of penalty imposed u/s 78 – Held that - there was investigation against the assessee in April 2002 and there was confirmation of demand of service tax and imposition of penalties on the identical activities undertaken by the appellant. Under these circumstances, the plea of ignorance has to be dismissed as totally devoid of any merits. Tribunal find from the impugned order of the Commissioner (Appeals), that the basic reason for setting aside the penalty under Section 78 is the Tribunal's decision that when Section 78 penalty is sustained, there is no justification for a separate penalty under Section 76. - Imposition of penalty confirmed - decided against the assessee.
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2013 (4) TMI 71
Penalty - ignorance of law - misguidance by the Consultant - Business Auxiliary Services - demand confirmed invoking the extended period of limitation - Held that:- On being asked about non filing of returns in his statement recorded under Section 14 it can be seen that he was misguided by the Consultant as to that the ICICI Bank is liable to pay the tax. After coming to know about the tax liability, he has paid the entire liability of service tax along with interest. This case is an appropriate case for condoning the lapse of not filing the return and not paying the service tax, but both the lower authorities have imposed penalties on the appellant for violation of rules. Lower authorities should have invoked the provisions of Section 80 of the Finance Act, 1994 and should not have imposed any penalties on the appellant. as decided in Ram Travels [2012 (4) TMI 252 - CESTAT, AHMEDABAD] ignorance of law is enough to set-aside penalty under Section 76, 77 and 78 of the Finance Act, 1994. In favour of assessee.
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2013 (4) TMI 70
Availment of credit before getting registration certificate as service provider - Revenue made out that the appellant could not have taken Cenvat credit of countervailing duty paid on machines imported prior to the date on which service tax registration was granted on such reasoning denying Cenvat credit along with interest and penalty. – Held that - There is nothing in the rules prohibiting a person from maintaining proper account. There is no statutory record presently prescribed like "RG-23" as was earlier in force. The business records maintained correctly reflecting the position has to be accepted. - credit allowed - decided in favor of assessee.
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2013 (4) TMI 69
Delay of more than two years in filling appeal - contention of the assessee that Form ST-4 appeal to be filed before the Commissioner of Central Excise (Appeals) was wrongly filed before the Commissioner of Service Tax - allegation against the assessee that he had discharged their service tax liability only on the service charges realised by them but had not paid the service tax on the reimbursement expenses realised by them from their clients - Held that:- The assessee is stated to be a reputed partnership Firm of Chartered Accountants rendering Chartered Accountant Services. Having regard to the high profile of services rendered by the assessee , the submissions of assessee that the number of the Order in Original Number has been mistakenly typed in Form ST-4 cannot be countenanced. The assessee had also filed RTI application before the Commissioner of Service Tax requesting them to provide Inward Correspondence Numbers with date and copies of the respective folios of the IC Register. The information obtained from the Commissioner of Service Tax it is seen that the Commissioner of Service Tax has clearly stated that "Appeal against the Order in Original No.96 of 2009 dated 16.12.2009 (filed on 12.03.2010) was not received in the Service Tax Commissionerate. As per the entry, when the appeal filed by the assessee against the Order in Original No.96 of 2009 dated 16.12.2009 was not received by the office of the Commissioner of Service Tax, the assessee cannot contend that appeal was filed before the wrong Forum and that would save the limitation. In the order passed in Order in Original dated 16.12.2009, appeal was filed before the Commissioner of Central Excise (Appeals) on 26.12.2011, acknowledged on 29.12.2011 beyond the period of three months plus discretionary period of three months. Tribunal rightly referred to the decision of Singh Enterprises v. Commissioner of Central Excise, Jamshedpur [2007 (12) TMI 11 - SUPREME COURT OF INDIA] holding that a statutory authority is not vested with power to exercise any discretion beyond the period stipulated by law and that the appeal filed beyond the prescribed period of limitation is not maintainable as being barred by limitation. It is well settled law that once the period of limitation has run itself out, the Appellate Authority does not have power to condone the delay in filing the appeal beyond the maximum period prescribed under the Act. Tribunal has rightly dismissed the appeal. No substantial questions of law involved in this appeal and the appeal is dismissed. Against assessee.
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Central Excise
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2013 (4) TMI 76
Refund claim pursuant to the circular related to Reduction of Government litigation - providing monetary limits for filing appeals by the Department before CESTAT/High Courts and Supreme Court - Respondent-assessee, an independent processor of textile fabrics and engaged in manufacturing was working under the Compounded Levy Scheme in terms of Section 3A of the Central Excise Act, 1944, applicable to it. Held that - In our opinion, since in the instant appeal the amount involved is Rs. 5,50,000/- only, In view of the circular dated 17.08.2011, the appeal could not have been preferred by the Central Excise and Customs Department before this Court. As on being informed from the side of the Department after circular dated 17.08.2011 no other circular has been issued by the Ministry of Finance, Department of Revenue Central Board of Excise and Customs, Government of India, New Delhi, authorizing the Department to file appeals where the amount is less than Rs. 10 lacs. It cannot be gainsaid that the Department is bound by its own circulars. Though the appeal has been admitted, we did not go into the substantial question of law formulated by this Court. For the aforesaid reasons, this appeal is dismissed keeping the questions open to be decided in an appropriate case.
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2013 (4) TMI 75
Refund - unjust enrichment - duty paid under protest - Demand due to non-inclusion of advertisement expense incurred in the assessable value - Held that:- From the annexure in the balance sheet when read together it becomes quite clear that the amounts paid by the respondent in 1993 and 1994 were included in the balance sheets for the corresponding years and subsequently without refund was received it was deducted. Interest received also has been shown as an income during the year. This shows very clearly that the respondent had treated the amount as a disputed one. The amount was not collected as part of the duty by showing in the invoice but was paid under protest during the course of investigation and after the investigation would show that the appellants could not have collected this amount from the customers. This aspect along with the review of the balance sheet and the chartered accountant’s certificate taken together would show that that respondent has discharged the obligation cast on him to shows that there was no unjust enrichment in this case. Therefore it becomes a rebuttable evidence and once this much evidence has been produced it was for the Revenue to come out with any evidence to show this claim to be false - refund allowed - decided against the revenue.
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2013 (4) TMI 57
SSI Exemption - dummy units - clubbing of clearance - allegation that two units are controlled by members of the same family. - The allegation against the entity and its M.D. is that a dummy company DSW has been floated for the purpose of tax evasion by showing part of the production in the name of DSW while both are controlled by one person. If the clearances of both entities are clubbed together during each year from 2005-2006 to 2009-2010 during each year DSD would not be eligible for SSI exemption. It is also alleged that in terms of appraisal report of income tax department in respect of these two entities on the basis of income disclosed during survey operation, during each of these years they had huge volume of unaccounted sales of excisable goods which had been cleared without payment of duty. Held that – the evidence and report submitted by income tax department shows that both the units were being controlled by single person, therefore, have to be treated as the factories owned by the same person for the purpose of determining their eligibility for SSI exemption. Therefore this is not the case for total waiver and it is directed to the entity to deposit an amount within a period of eight weeks from the date of this order. - stay granted partly.
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2013 (4) TMI 56
Penalty – u/s 11AC & Rule 25 of Central Excise Rules, 2001. - Respondents are manufacturers of FRP sleepers respondents supplied two consignments of FRP sleepers to RDSO without payment of duty by availing full duty exemption under Notification No. 10/97-C.E. The clearances were made against certificates given by the RDSO certifying that the items are required for R&D purposes. The department was of the view that the items supplied are not covered by the Notification and issued notice to recover unpaid duty along with interest and also for imposition of penalty. Held that:- Tribunal held that the duty demand in this case is, time-barred because longer limitation period under proviso to Section 11A(1) is not invocable. The respondent had furnished the necessary information to the department intimating him that they would be clearing goods at nil rate of duty under Notification No. 10/87-C.E. to RDSO against the certificates issued by RDSO. Moreover, supplies of the goods had been made to a Government Institution without payment of duty against a written communication from the Institute. The Revenue’s appeal is dismissed.
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2013 (4) TMI 55
Law of retraction - whether retraction after a period of 9 months can be considered to be valid? - allegation that respondent has manufactured goods from clandestine raw-material and removed the goods and evaded the payment of duty. Held that:- The Tribunal has recorded clear finding that when the premises of the respondent were visited, the stock of raw-material and finished goods were tallying with the recorded goods. Further, nothing on record was found by the authority, which showed that unrecorded raw-materials were purchased or consumed by the respondent or that the respondent had clandestinely manufactured or removed the goods. The findings of the Tribunal can be interfered only if some material evidence is ignored. In such circumstances, only the Court may exercise jurisdiction on issue which may give rise to any substantial question of law. In this appeal, no substantial question of law arises for consideration of this Court. - Decided in favor of assessee.
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2013 (4) TMI 54
Transfer of Cenvat / MODVAT credit - Rule 10 - the appellant denied of Cenvat credit on the ground that as the raw material does not get transferred, the appellant is not entitled to the transfer of Modvat credit - Held that:- it is not the Revenue’s case that the raw material belonging to the earlier manufacturing unit M/s. Auto Tube has been cleared by them to some outside person. Presuming that there was no stock of raw material lying with M/s. Auto Tube even then the benefit of transfer of Cenvat credit would be available to the appellant. The Hon’ble High Court in the case of Commissioner of Central Excise, Pondicherry v. CESTAT [2009 (240) E.L.T. 367] has held that even when there was no stock of input ‘as such’ or ‘in progress’ having put to use, the transfer under the provisions of Rule 10 of Cenvat Credit Rules is permissible. - Credit allowed - Decided in favor of assessee.
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2013 (4) TMI 53
Goods fabricated at site - benefit of Notification No. 41/94-C.E - construction such as small door, big shutter and entrance gate etc. - Held that - Commissioner held that goods are fabricated at site of work for use in construction of the factory. - In views of the evidence on record that goods in question are used in construction of the factory building, no infirmity in the impugned order whereby the benefit of Notification No. 41/94-C.E. is allowed. - Decided in favor of assessee.
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2013 (4) TMI 52
Penalty u/s 11AC read with Rule 25 of the Central Excise Rules, 2002 - utilizing Cenvat credit for payment of duty on certain clearances made even after committing continuance default of payment of duty. - Penalty for contravening the provisions of Rule 8(1), Rule 8(3A) and Rule 11(4) of the Central Excise Rules, 2002. - Held that:- Provisions of Rule 25 are not applicable to the present case for want of intent to evade payment of duty. It is also pertinent to note that the lower appellate authority vacated Section 11AC penalty after holding that the case was only of interpretation of law and the same involved only a delay in payment of duty. Nowhere in the impugned order is there any finding of the assessee having had any intent to evade payment of duty. - Penalty dropped - decided in favor of assessee.
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CST, VAT & Sales Tax
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2013 (4) TMI 74
Recovery of tax - purchase of property - recovery of tax arrears of seller from the purchaser - Tamilnadu General Sales Tax Act, 1959 - Held that:- From the available records it is seen that the petitioner had made the necessary enquiries from the Special Tahsildar, Land Acquisition, as to whether there were any land acquisition proceedings, in respect of the land in question. The petitioner had also paid the Employees Provident Fund arrears of the vendor of the property in question, at the time of the execution of the sale deed. Further, nothing has been shown on behalf of the respondents to substantiate the claim that the purchase of the property by the petitioner company was not bona fide in nature. The respondents have not been in a position to show that the petitioner company had knowledge of the arrears of sales tax, liable to be paid by the original assessee, who is the vendor of the property in question. In such circumstances, the proviso to Section 24-A of the Tamilnadu General Sales Tax Act, 1959, would come to the rescue of the petitioner company. As long as the transaction, between the original assessee and the petitioner company, is not shown to be fraudulent in nature it cannot be said that such transaction is void, as per Section 24-A of the Tamilnadu General Sales Tax Act, 1959. - Decided against the revenue.
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2013 (4) TMI 73
Stay - Coercive proceeding for recovery - Directing to deposit a portion of the disputed liability - Held that:- It is very much evident that the only basis for fixing the liability is with reference to the figures referred to by the Intelligence Wing. True, the penalty proceedings and the assessment proceedings are two different lines/streams. But since no other ground is discernible from Ext.P2 for fixing the liability, than the alleged suppression discovered by the Intelligence Wing, this Court finds considerable force in the submission made by petitioner and holds it appropriate to have the appeals preferred by the petitioner considered and disposed of within a reasonable time. The second respondent is directed to consider and pass final orders on Exts.P3 to P5 appeals, on merits, in accordance with law, at the earliest at any rate within two months from the date of receipt of a copy of this judgment. Coercive proceedings pursuant to Exts.P6 and P7 series shall be kept in abeyance till such time, subject to the condition that the petitioner executes and furnishes a security bond before the first respondent with regard to the liability sought to disputed.
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