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Income Tax
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2012 (4) TMI 195
Deduction u/s 54EC LTCG - sale of residential property on 22.10.2007 - deduction u/s 54EC allowed in respect of investment of ₹ 50 lacs made in REC bonds on 31.12.2007 - denial of deduction in respect of investment of ₹ 50 lacs in NHAI bonds made on 26.05.2008 on ground of it being made beyond the prescribed time of 6 months assessee contended that subscription to the eligible investment was closed during the period 01-04-2008 to 26-05-2008 - investment of more than ₹ 50 lacs cannot be made in one F.Y. Held that:- Proviso to Section 54EC restricts investment of more than ₹ 50 lacs in a F.Y.. However, if assessee transfers his capital asset after 30th September of the F.Y. he gets an opportunity to make an investment of ₹ 50 lakhs each in two different F.Ys. In present case, assessee could have invested in eligible investment within six months (on or before 21-04-2008) involving two financial years. Therefore, assessee is entitled to get exemption upto ₹ 1 Crore if investment is made upto 21.04.2008. Further investment of ₹ 50 lacs is made by assessee on 26.05.2008. It is undisputed that subscription to the eligible investment was closed during the period 01-04-2008 to 26-05-2008 thus assessee was prevented by sufficient cause which was beyond his control in making investment in these Bonds within the time prescribed. Therefore, investments made by the assessee on 26-05-2008 even though beyond six months is eligible for exemption Decided in favor of assessee.
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2012 (4) TMI 194
Hiring of vehicles to be used for loading & unloading and transportation of products assessee contended it to be composite contract and applicability of Section 194C to it alternative contention of the assessee that section 40(a)(ia) is applicable only in case of non deduction of tax and not for short deduction of tax - Held that:- Agreement clearly shows that the assessee is taking vehicles on hire for use of the same for particular hours in his business activity. The agreement does not require the contractee to do any work at all. Merely because the words "loading & unloading" are used in the contract, no one can presume that the contractee has to do any work on behalf of the assessee. The assessee has to make use of the equipment/vehicle made available on payment of hire for his use. Therefore, it is hire of equipment/vehicle simplicitor and Section 194I would be applicable Decided against the assessee. Applicability of Section 40(a)(ia) on short deduction of tax Held that:- Since this issue was not considered by the lower authorities. Hence, matter is remitted back to the file of the A.O. for the limited pupose of determining whether short deduction of tax would attract the provisions of section 40(a)(ia)
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2012 (4) TMI 193
Taxability in India of income earned in a foreign countries covered under DTAA, by the assessee who is a resident of India - assessee engaged in providing full range of consultancy, design and engineering services in all fields of telecommunication in India as well as abroad Held that:- If, in the DTAA, an item of income is "may be taxed" in state of source and nothing is mentioned about taxing right of state of residence in convention itself, then state of residence is not precluded from taxing such income and can tax such income using inherent right of state of residence to tax such global income of its resident. Only in the case of phrase "shall be taxed only" used, then only the state of residence is precluded from taxing it. In such cases, where the phrase "may be taxed" used, the state of residence has been given its inherent right to tax. Also, in case of CIT vs PVAL Kulandagan Chettiar (2007 - TMI - 40400 - Supreme Court) it was held that state of residence has right to tax global income of its resident. Since, Residence based taxation is followed in India rendering residents to be taxed on their global income, and non-residents to be taxed only on income sourced inside the country. Therefore, assessee is liable to be taxed on its global income Decided against the assessee. Validity of reopening of assessment beyond 4 years from the end of relevant A.Y excessive deduction u/s 80HHC & 80HHB assessee contending change of opinion Held that:- As per Explanation (2)(c)(iv) to section 147, if excessive loss, depreciation allowance or any other allowance under the act has been computed, it shall be deemed to be an escapement of income. In present case, indirect expenses attributable to the exported trading goods were understated. There was no discussion about deduction u/s 80HHC & 80HHB in assessment order and even there was no working of attributable indirect expenses in Form No. 10CCAC which was vital element for computation of deduction available to the assessee which has not been furnished by the assessee. Therefore, there was a reasonable belief that income has escaped assessment. Further, existence of belief can be challenged by assessee but not the sufficiency of the reasons to belief Decided against the assessee. Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under subsection (2) of section 148. Deduction u/s 80HHB - dis-allowance of Rs 8 lacs - Claim of Rs 32.08 crores made and reserves made upto Rs 32 crores only Held that:- Since there is shortfall in reserves , hence conditions laid down in Section 80HHB(3)(ii) are not fulfilled. Thus, dis-allowance is upheld Decided against the assessee. Dis-allowance u/s 80HHC - assessee contending that it is maintaining separate books of account for export business, therefore, indirect expenses relatable to the export goods need not to be worked out as per provisions of section 80HHC(3) Held that:- Administrative expenses will have to be apportioned in the ratio of export turnover to total turnover which have relations with the export business Decided against the assessee.
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2012 (4) TMI 192
Validity of order of Tribunal setting aside the entire dis-allowance of Rs 28.69 lacs in respect of Bad debts to the file of A.O. to decide fresh when assessee had withdrawn its appeal before the Tribunal against the order of CIT upholding disallowance of Rs 14.96 lacs only appeal before Tribunal barred by limitation - assessee withdrew its appeal during the hearing and sought to press in aid the provisions of Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 Held that:- Under Rule 27 the Respondent is permitted to support the order appealed against, though he may not have appealed against the order, on any of the grounds decided against him which renders that Assessee would be entitled to urge that the deletion of the disallowance of Rs.13.73 lacs by the CIT(A) was correct and proper. Assessee, however, would not be entitled to avail of the benefit of the provisions of Rule 27 in regard disallowance of Rs.14.96 lacs confirmed by CIT(A). Therefore, Tribunal erred in setting aside the order of the CIT(A) in its entirety. Order of the Tribunal would have to be confirmed only to the extent to which it restores the proceedings to the Assessing Officer as regards the amount of Rs.13.73 lacs Decided in favor of Revenue.
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2012 (4) TMI 191
Exception granted in proviso of Section 220(1) period of less than 30 days granted for deposit of demand of Rs 36.56 crores assessee contended no detriment to the interests of the Revenue since ACIT has already levied a provisional attachment u/s 281B on assesses investment in mutual funds of Rs 36.54 crores Held that:- Proviso to Section 220(1) which empowers the AO to demand payment within a period lesser than 30 days with the prior approval of the JCIT cannot be exercised casually and without due application of mind. In present case, since Revenue is adequately protected by the attachment levied u/s 281B, there would have been no basis for forming a reason to believe that if the period of 30 days was to be observed u/s 220(1), that would be detrimental to the Revenue. The detriment to the Revenue must be akin to a situation where the demand of the Revenue is liable to be defeated by an abuse of process by the Assessee. Therefore, order of A.O. was not justified and was contrary to law. Petition is disposed off by directing continuation of provisional attachment u/s 281 B until disposal of appeal before CIT(Appeals). No coercive steps will be taken for recovery of demand pending the appeal Decided in favor of assessee
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2012 (4) TMI 190
Nature of 'Usance Interest' assessee engaged in business of manufacturing of cables of different types imports raw material from parties who are non-residents finance charges/usance charges paid for availing credit under LC - whether usance interest comes within meaning of Section 2(28) assessee contending it to be partaking character of purchase price - taxability in view of DTAA between India and countries where-from raw material is imported dis-allowance u/s 40(a)(ia) for non-deduction of tax at source AY 02-03 - Held that:- There was no nexus between the interest amount and fixation of the price of the raw materials purchased. Price of the material supplied was reflected in a separate invoice and interest paid for availing credit facility of 180 days from the date of bill of lading was reflected in separate invoice. The nexus of interest was only with the period from which the purchase price of the raw material became due viz., the date of bill of lading. Therefore, usance interest, is interest within the meaning of sec. 2(28A) and same would be deemed to have accrued and arisen in India in view of the provisions of sec. 9(1)(v)(b) of the Act. Taxability in view of DTAA between India and the respective countries Held that:- Neither the AO nor the CIT(A) had discussed the issue in the light of the relevant DTAA. Therefore, we remand the issue to the AO for fresh consideration. Applicability of Section 40(a)(ia) In present case, payment is made to to non-residents and in the event of doubt the Assessee ought to have approached the AO for appropriate certificate u/s.195. He cannot plead bonafide belief to stand out of the said provisions. Addition of unutilized Modvat credit to the value of Closing stock Held that:- Addition made by the AO as modified by the CIT(A) i.e. to allow it under u/s 43B if it is paid before filing of returns, has to be sustained but the AO should be directed to allow corresponding adjustment to the opening stock in respect of unutilized Modvat credit. - Decided partly in favor of assessee. Prior period expenses mercantile system of accounting AY 2001-02 - Held that:- No infirmity is found in the order of CIT(A) allowing the claim of the assessee if these expenses are related to that year after verification. The same is therefore upheld Appeal of Revenue dismissed. Waiver of penalty for concealment dis-allowances in respect of write off of leasehold premium, prior period expenses, payment of gratuity, unexplained expenses AY 99-2000 Held that:- It is seen that few dis-allowances have been deleted by Tribunal and dis-allowance in respect of write off of leasehold premium was then a matter of debate hence in view of Reliance Petroproducts (P) Ltd.(2010 (3) TMI 80 - SUPREME COURT) mere rejection of a claim for deduction made by the assessee will not give rise to imposition of penalty for concealment Decided against the Revenue.
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2012 (4) TMI 189
Method of accounting or royalty and assessment of reimbursement of expenses by the AO - Singapore based company - licensing of software to one of the customers which is its hundred per cent subsidiary - Held that:- even if there is force in the argument that the interpretation may lead to delay in payment of tax, it will be useful only in such cases where the AO makes out a case that the delay was with a view to defer the payment of tax. In absence of such a finding by the AO, it is held that the argument is not applicable to the facts of this case. Accordingly, it is held that royalty and FTS are taxable on payment basis and not on accrual basis. Taxability of reimbursement of expenses - held that:- royalties and FTS are taxable on payment basis, and reimbursement of traveling expenses will have to be included in the gross receipts for the purpose of taxation. Whether, the assessee is liable to pay surcharge?- held that:- circular no. 734 does not mention anything about surcharge for the purpose of deduction of tax at source from payments by way of dividends, interest and royalties. What is good for the TDS is also good for the taxation. Therefore, it is held that the assessee is not liable to pay surcharge.
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2012 (4) TMI 187
Capitalization of regularization fee paid - Construction of hospital building - Held that:- The regularization fee paid by the assessee has a direct nexus to the construction of the hospital building as it is paid only for the purpose of regularizing the violations committed in the course of constructing the building - State Government Ordinance has been held to be unconstitutional but even then, the Hon'ble High Court has not directed to repay the amount to the defaulters - It cannot be held that the payment could not be booked anywhere in the business accounts of the assessee - The assessee has rightly booked the payment under the cost of construction of the hospital building - appeals are to be allowed
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2012 (4) TMI 186
Payments made by the assessee-company for subcontracting its works contract - payment of hire charges/charter fees to EMPL - royalty u/s 9(1) and article 12 of the DTAA between India and Singapore - Held that:- the contract given to EMPL was in the nature of sub-contract to undertake on behalf of the assessee's dredging work with the equipment and manpower of EMPL - It is only hiring of the equipment and the assessee did not use the dredger or any part thereof on its own neither it was given any right to use - in order to assess the payment as business receipt of the EMPL it has to be established that there is a permanent establishment of EMPL in India which is not possible since the dredger Ketam has been operated in India for less than 183 days - the liability u/s 195 to deduct TDS depends upon changeability of tax in the hands of recipient and the assessee did not use the dredger or any part thereof on its own, nor had apparent acquired any right to use it
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2012 (4) TMI 173
Arm's Length Price - found some international transactions exceeding the limit prescribed in the assessee's return and a reference to TPO for determination of arms length price - TPO issued a letter to assessee to furnish required information as per s. 92D and 92E of the Act - assessee filed documents after the statutory time limit of 30 days - A.O. levied a penalty under Section 271G of the Act - as per the assessee, it was the initial year of its operations and it had no experience regarding transfer pricing regulations - A.O. was of the opinion that ignorance of law was not an excuse - argument of the assessee that he had substantially complied with the said letter of TPO since 12 out of 16 items were filed - the allegation of TPO that it had failed to comply with the notice was incorrect Held that:- If the Revenue alleges that there has been failure of the assessee with regard to production of any of the record, it was required to point out which record it had failed to produce and whether such record was one which was prescribed under Section 92D(1) to be maintained by an assessee in respect of the international transactions entered into by it - was not a fit case for levy of penalty under Section 271G of the Act. Ld. CIT(Appeals) was justified in deleting such penalty. No interference is required
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2012 (4) TMI 172
Charitable Trust Hospital approval for continuation of exemption u/s 10(23C)(via) for the period from 2009-10 onwards denied by Chief CIT on ground that nature of chemist shop run in Hospital is akin to trading activity hence trust does not exist solely for the purposes of philanthropy Held that:- Running the chemist shop in the present case is not the dominant object of the trust. Chief CIT has clearly misapplied himself in law by having regard to a clearly ancillary or incidental activity and elevating it to the status of the dominant purpose for which the hospital has been established Order of CIT set aside directed to consider the application filed by petitioner.
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2012 (4) TMI 171
Stay of demand Charitable trust registered u/s 12A and 80G availing exemption u/s 11 upto AY 2008-09 In AY 2009-10 demand imposed on ground that donations received cannot be regarded as voluntary contributions complete stay of demand not granted Held that:- Assessing Officers and Appellate Authorities, should act as quasi judicial authorities while disposing stay applications and not merely as tax gatherers of the Revenue. While they have a duty of protecting the interests of the Revenue, they need to mitigate the hardship to the Assessee and applications for stay must be considered objectively. In present case, assessee continues to have a registration u/s 12A, which has not been revoked. Further, assessee has highlighted the nature of its activities in support of the plea for stay and also explained its financial position. In our view, First Petitioner does have serious issues to be urged before the CIT (Appeals) in appeal. This is a case where complete stay of demand ought to have been granted Therefore, complete stay of demand granted Decided in favor of assessee.
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2012 (4) TMI 170
TDS on rental -fifteen co-owners made investment in the building sharing the rental - executed a registered lease to the Bank paying monthly rent including all taxes - co-owners furnished indemnity bond indemnifying the Bank for the loss - the Bank stopped deduction of tax at source under Section 194-I of the Act - Bank has been paying rent to all the co-owners as per their respective shares by separate cheques - ITO initiated proceedings under Sections 201(1) and 201(1A) as Bank was not justified in stopping the deduction of TDS - revenue stated that Section 194-I of the Act mentions that the tax has to be deducted at source on rentals paid to any person if it exceeds Rs.1,20,000/- in a year - the Bank contested that it had been paying rent to each co-owner separately by cheque and the individual amount paid to each co-owner being less than Rs.1,20,000/- in a year Held that:- If the rent which being paid to any person is less than Rs.1,20,000/- per annum there is no necessity of deducting tax at source - each of the co-owners has a definite share in the building - Section 26 of the Act provides that where property consisting of buildings or buildings and lands appurtenant thereto is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons Appeal of Revenue failed
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2012 (4) TMI 154
DTAC between India & Mauritius Taxability of gains arising from transfer of shares and CCDs held by Mauritius company in Indian company Z ltd (Mauritius company) along with Vltd (Indian Company) invested in shares and CCDs of S Ltd (Indian company) engaged in development of real estate project in India prior to the mandatory conversion date of CCDs, V was given the call option to purchase particular shares and CCDs from Z, which was exercised by it applicant contending CCDs not to be loan or advances and gains to be capital gains exempt from tax withholding of taxes - Held that:- CCD creates or recognizes the existence of a debt, which remains to be so, till it is repaid or discharged. Further, it is observed that S Ltd being subsidiary of V ltd is though independent juridical person, S exercises no powers in managing its own affairs. It is de facto under the control and management of its parent company, V. It is V who is developing and running the real estate business of S, standing as a guarantor of the investment made by Z. V rather than S, acknowledges the CCDs as debts. The relationship between them as a parent and subsidiary is on paper: they are one and the same entity. Acknowledgment of debt with commitment to pay is factually upon V. Since, V and S are one and the same, hence the amount paid by V is clearly towards the debt that was taken by S from the Applicant. Gains arising on the sale of equity shares and CCDs are not exempt from capital gain tax in India under DTAC with Mauritius. The gains arising on the sale of CCDs being interest within the meaning of Section 2(28A) of the Act and Article 11 of the DTAC and are taxable as such. Tax is to be withhold on such payments Decided against the applicant.
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2012 (4) TMI 153
DTAC between India & Mauritius - Buy back of shares proposed by A Ltd Co major shareholders are 'A'(Mauritius company) - 25.06% shareholding, A(USA) - 48.87% shareholding and A (Singapore) - 27.37% - offer accepted by only 'A'(M) both in year 2008 and 2010 Revenue contended that tax is sought to be evaded in guise of buy back of shares Held that:- It is significant that offer of buy-back was accepted only by A (M) and not by 'A'(USA) or 'A' (Singapore) since only under the India-Mauritius DTAC, capital gains is totally not taxable in India. Had dividend being declared, company would have been obliged to pay tax on distribution of profits to shareholders. Instead, it allowed the reserves to grow and through proposed buy-back, considerable sums would be repatriated to A (M) in Mauritius without the tax on the distributed profits being paid. Hence, we are satisfied that scheme of buy back of shares is a colorable device for avoiding tax on distributed profits as contemplated in Section 115-O. On our finding that the proposed buy-back is colourable, the distribution in question will satisfy the definition of dividend under the Act, Article 10 of the DTAC between India and Mauritius and consequently taxable as such. Also, applicant is required to withhold tax on the proposed remittance of the proceeds to A (M).
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2012 (4) TMI 152
Delay in filing return - Public Charitable trust U/S 12A - also secured recognition under section 80G(5)(vi) - levy of penalty under section 272A(2)(e) for not filing the return of income within the due date as prescribed in section 139 - assessee in reply stated that the appellant was under a bonafide belief that recognition under section 80G would be a pre-requisite for filing the return of income assessee contented that preoccupation on account of the trusties for meeting the obligations to secure recognition and this was the first year of operation of the trust thus the delay in filing the returns was not intentional Held that:- On being appraised the correct provisions of law, return of income was filed immediately without any further delay there was no loss to the revenue as a result of late filing of the return and there was no ulterior motive to defraud the revenue - Penalty may be imposed under section 272A(2)(e) for failure, an attempt of deliberateness or deceptiveness, to furnish the return of income - Penalty cannot be levied under section 272A(2)(e) if there exists sufficient or reasonable cause for the default - "Reasonable cause' as applied to human action is that which would constrain a person of average intelligence and ordinary prudence - appeal filed by the assessee is allowed in favour of assessee.
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2012 (4) TMI 150
Commencement of Business - Revenue is in appeal against the judgment of the Tribunal AO disallowed the entire expenditure incurred by the assessee during the year as the business of the assessee had not yet commenced Assessee contented that the assessee has submitted the return for AY 1998-99 wherein the basic pattern of investments and operations were the same as in AY 2001-02 and the set up of the business has been accepted during the AY 1998-99, the AO thus cannot again go back and say that the business has not been set up during the year - Tribunal, by the impugned order, allowed the appeal Tax case Appeal by the Revenue Held that:- if the assessee does first activity towards the attaining its main object, business shall be deemed to have been set up - the company entered into collaboration with to set up a joint venture company in which the respondent company had 26% equity share depicts that it is attaining its main objective as mentioned in MOA OF Company - AO is directed to treat all the expenses to be the revenue expenditure and allow set off of loss in accordance with law.Tax Case Appeal of revenue rejected.
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2012 (4) TMI 149
Notice under section 153 - There was a search operation conducted at the business premises and there was seizure of some incriminating documents and the cases were notified with the DCIT - Thereafter, notice under section 153A has been issued consequent to the search action - Held that:- no merit in the ground this ground of the assessee is dismissed. - Notice issued u/s 153 upheld. Deduction under section 80IA - the assessee contended that he is not a contractor but a developer of infrastructure facility revenue denied it as the assessee not developed any new infrastructure facility as required under section 80IA(4)(i)(b) had only taken up the renovation and modernization of the existing net work/infrastructure facilities - Held that:- in view of retrospective amendment, the most important question for examination on facts is whether the business agreement in question can be termed a works contract or not. If the answer is in affirmative, nothing else matters because the Explanation takes over. If not, the other nuances such a development/operation etc., and other specified conditions become relevant. - where an assessee incurred expenditure for purchase of materials himself and executes the development work i.e., carries out the civil construction work, he will be eligible for tax benefit under section 80 IA of the Act. In contrast to this, a assessee, who enters into a contract with another person including Government or an undertaking or enterprise referred to in Section 80 IA of the Act, for executing works contract, will not be eligible for the tax benefit under section 80 IA of the Act. Ownership of project - held that:- according to sub-clause (a), clause (i) of sub section (4) of Section 80-IA the word it denotes the enterprise carrying on the business. The word it cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by any one. Even otherwise, the word it is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility. The assessee should not be denied the deduction under section 80IA of the Act if the contracts involves design, development, operating & maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. - Matter remanded back to AO. Sustaining/deleting of the expenses in the absence of bills and vouchers Held that:- disallowance of expenses in these years also at 5% confirmed. Self made vouchers and bills in respect of purchase of sand disallowed expenses by AO - there are chances of inflating the expenditure - Held that: - direct the assessing officer to disallow Rs.50 lakhs of the expenditure incurred by the assessee as it is not substantiated. Ground in assessee appeal partly allowed. Addition is made towards the difference between projected/provisional balance-sheet and the final balance-sheet. - The provisional balancesheet cannot be considered for determining the undisclosed income. However, as per disposition an amount of Rs.80 lakhs was agreed to be admitted as income, the same be considered as income on this count and no set off could be given towards workin- progress in any subsequent assessment year. This ground of assessee partly allowed. Seizure of cash - held that:- Either the assessees explanation is to be accepted as a whole or rejected as a whole. They cannot pick and chose according to their convenience and make addition. In our o opinion, the addition made towards cash found at the premises of Sri K. Venkata Kutumba Rao, cannot be made either in the hands of the assessees company i.e. M/s GVPR Engineers Limited or in the hands of Sri Siva Shanker Reddy. Accordingly, this ground of assessee is allowed.
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2012 (4) TMI 148
Order of Dispute Resolution Panel (DRP) u/s 144C - distinction between a 'null and void' order and an 'illegal or irregular' order - the order was christened as final order though the assessing authority was supposed to issue a draft order first inviting objections of the assessee against the adjustments proposed by the TPO - The assessee treated the said order as the final and filed appeal before the CIT(A) - on the mistake becoming apparent the AO issued a corrigendum stating that the first order to be treated as draft order - the corrigendum issued no legal force - Held that:- The argument that there is no provision in the Act to issue a corrigendum is not proper, as that power is always inherent with any statutory authority. In fact, a corrigendum is even appealable if it is prejudicial to an assessee. In the present case, the corrigendum issued by the assessing authority is not prejudicial. The Assessing Officer was only clarifying the situation. - Decided in favor of revenue. Higher Depreciation - Comparable companies - In Schedule 16 to its final accounts, which provides notes on accounts, the assessee has clarified the significant accounting policies followed by it in the matter of fixed assets and depreciation. It is stated therein that the assessee has provided depreciation on straight-line method. The rates have been adopted on the basis of technical estimates made of useful life of the assets. Accordingly, the assessee has provided depreciation at 33.33% in the case of plant and machinery including computer hardware and software. Furniture and fixtures were depreciated at the rate of 14.29% and motor vehicles at the rate of 20%. Depreciation was provided on office equipment at 20% and air-conditioners at 12.5%. Held that:- The assessee is in fact not providing technical depreciation influenced by Income-tax Rules No force in the arguments advanced by the assessee company on the question of adjustment of the depreciation factor. - Decided in favor of revenue.
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2012 (4) TMI 147
windmill installed by assessee - claiming depreciation on written down value (WDV) basis at 15% - the quantum deduction claimed was half of the amount, as the asset was put to use for a period of less than 180 days - the assessee found claimed 15% to be incorrect and filed a letter before the AO to rectify the rate to prescribed rate of 80% - The AO rejected the claim as the assessee had not in fact, exercised its option to claim depreciation either on WDV method or on SLM and so also has not applied the correct rate of depreciation provided in the rules assessee filed merely a letter rectifying the said mistake and not the revised return - as the assessee had claimed depreciation for the earlier assessment year on straight-line method, the same method and rate were followed for the subsequent impugned assessment year - assessee contested the point as the assessment year 2006-07 was the first year in which the assessee had claimed depreciation on windmill, thus the quantum of depreciation, whether under SLM or under WDV method, will be the same Held that:- depreciation was for the first year, the depreciation was claimed on the original cost even though at a wrong rate and in the impugned assessment year, the depreciation was claimed again at wrong rate but on WDV method. Therefore, it is very clear that the assessee has exercised its option for choosing the method of providing for depreciation as prescribed in the statute - the assessee asked for adopting the correct rate which is in fact, was only a prayer to rectify a mistake apparent on record and not making any fresh claim no revised return need to filed appeal of revenue rejected
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2012 (4) TMI 146
Validity of search and seizure - Whether the Tribunal was justified in holding that the assessments were invalid for the reason that search warrant issued in Form 45 was invalid - It is also pertinent to note from the search records produced by the department that food bills raised against the customers by Khyber Hayath (sadhya) restaurant and Bimbis Fast Food show the same telephone number 382357, which intrinsically prove that all the concerns are owned and managed by same party, though under separate group names and concerns for the purpose of income tax benefits - During search it was also noticed that all the group concerns had common store in the same building. It is seen that simultaneously on 10.3.1999 itself the Managing Partner's house as well as another premises of the Bimbis functioning in another place at Ernakulam was also searched based on separate warrants - Held that: the search is carried out strictly by following the procedure contained under Rule 112 and by issuing warrant by giving the names of each and every assessee separately after describing all of them as "Bimbis Group of Concerns" - Decided against the assessee by way of direction to Tribunal to decide this case on merit
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Customs
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2012 (4) TMI 185
Jurisdiction of High Court to entertain appeal against order of Appellate Tribunal gist of the decision pronounced without detailed order by CESTAT in open court direction issued to Member(Technical) to draft detailed order who posted the matter for re-hearing on writ petition filed by assessee, Court directed Tribunal to pass detailed order in line with pronouncement made in the open Court and gist of the decision recorded and signed on 04.6.2009 - Held that:- High Court has no power to entertain an appeal filed against the order of the Tribunal and if the parties are aggrieved, they should have approached the Supreme Court by way of appeal u/s 130-E of the Customs Act instead of resorting to invoke Article 226 of the Constitution of India when the jurisdiction of this Court has been ousted by Act 49 of 2005 from 28.12.2005. Therefore, earlier writ petition allowed is dismissed as not maintainable and the Writ Appeal stands allowed.
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2012 (4) TMI 184
Writ Petition - the Deputy Joint Director of Foreign Trade ,the respondent no. 4, after issuing show-cause notice to which the petitioner had replied and was not found to be satisfactory, and after giving an opportunity of personal hearing, to which the petitioner did not respond, had passed an order under section 9 (4) and section 11 (2) of the Act and under Rule 10(b) of the FTRR, cancelling the license of the petitioner and directing payment of customs duty and interest and imposing fiscal penalty - the respondent no.4, passed the order directing imposition of penalty and the Joint Director of Foreign Trade, the respondent no.3, under section 11(4) had passed the order of suspension of Code of the petitioner for non-payment of penalty - Held that:- Respondent No. 3 not being the Adjudication Authority had no power and authority or jurisdiction to pass the impugned suspending the Code - as before passing the order of suspension of Code the petitioners were not given an opportunity of hearing - as before the suspension of Code the consent of the Board was not obtained - the said order is without jurisdiction and illegal and cannot be sustained Writ Petition allowed
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2012 (4) TMI 169
Search by the Revenue - certain quantity of needle and certain quantity of cannulae was found in the factory stating needle was manufactured and the cannulae was smuggled - demand in respect of needle and ordered confiscation of cannulae and imposed a penalty on the employee of company u/s 112 of the Customs read with Rule 209 of Central Excise Rules, 1944 appeal in respect of penalty - Held that:- penalty imposed under Rule 209 of the Central Excise Rules is applicable in respect of manufacturer, producer or registered dealers in case there is contravention of any provisions of Rules. The appellant is an employee of company - penalty imposed is also not sustainable and is set aside.
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2012 (4) TMI 168
Appeal filed against the impugned order passed by Commissioner (Appeals) on the ground of rejection of transaction value of imported goods is not sustainable and unjust enrichment as appellant had not produced any evidence on record to show that the burden of duty has not been passed on to the buyer - AO did not agree with the value declared by the appellant and enhanced duty to be paid - appellant paid duty on the enhanced value Held that:- As per the provision of Section 28 D of the Customs Act, presumption is that incidence of duty has been passed on to the buyer by the appellant. This presumption is rebuttable. In the present case, we find that there is no opportunity granted to the appellant to rebut the presumption that the burden of duty has been passed on to the buyer - the impugned order is subject to the principle of unjust enrichment and the matter is remanded to the adjudicating authority in respect of consequential relief in pursuance of the order passed by the Commissioner (Appeals) and adjudicating authority will decide after affording opportunity of hearing to appellant.
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2012 (4) TMI 145
Application for waiver of pre-deposit of penalty - applicants financed the project of client who failed to repay the amount in loan thus took over the project and thereafter sold it - contention of the applicants is that they are not concerned with the evasion of customs duty and penalty is not sustainable - Held that:- as the applicants only financed the project and thereafter sold on default of payment had not violated the provisions of Customs Act -Pre-deposit penalty is waived and is stayed during pendency of the appeal.
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2012 (4) TMI 144
Re-export - import of capital goods by availing Notification No.158/95-Cus dated 14.11.1995 - goods so imported are to be re-exported within a period of six months Revenue stated that the applicants have not exported the goods within six months - applicants contented that as per Notification No.158/95-Cus, the Commissioner of Customs can extend time for further period of six months - Commissioner (Appeals) who directed the jurisdictional officer to dispose of the application for extension of time under Notification No.158/95-Cus within three weeks of the receipt of the order by issuing a speaking order - applicants was informed by letterthat the request of the applicant has been rejected by Commissioner (Appeals) applicant contented that the request was rejected without affording an opportunity of hearing to the applicants and no speaking order was passed Held that:- Commissioner of Customs directed the jurisdictional officer to pass a speaking order, however, no speaking order is passed rejecting the application of assessee without giving opportunity to be heard -impugned order is set aside after waiving the pre-deposit of dues and the matter is remanded to the jurisdictional Commissioner of Customs to decide the issue afresh after affording an opportunity of hearing to the applicants
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2012 (4) TMI 143
Application for extension of pre-deposit - directed for the pre-deposit within six weeks from the date of Stay Order and report compliance on decided date - appellant made an application for extension of time of two weeks for making the pre-deposit which was granted - no representation for the appellant nor any evidence brought on record showing pre-deposit of the aforesaid amount on decided date - Held that:-appeal is dismissed for want of compliance under Section 129E of the Customs Act.
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Corporate Laws
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2012 (4) TMI 183
Winding up application - failure to make payment of dues - held that:- From the facts of this case it can safely by concluded that there is no bona fide dispute about the amount receivable by the petitioning creditor. That the purported defense as taken in the Affidavit in Opposition is totally misconceived, sham and illusory and also not bona fide. It prima face appears that a sum of Rs. 3,57,73,135/- remained due and payable by the Company to the petitioner as on 15th March, 2010. The Company is indebted to pay the sum claimed by the petitioner and, therefore, I prima face hold that the petitioner is entitled to get a sum of Rs. 3,57,73,135/- as detailed hereinbefore and interest at the rate of 15 per cent plus 2 per cent penal interest from the date of default until payment as well as overdue service charges at the rate of 1 per cent per month. The interest which is charged by the banker that is 15 per cent plus 2 per cent penal interest is fixed by this Court. Therefore, this winding up application is admitted. However, the Company is granted an opportunity to pay the dues as aforesaid by five monthly equal installments.
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2012 (4) TMI 167
Application filed by the purchaser of property seeking release of the property from the Official Liquidator- It has also been pointed out that an industrial plot of the company has been sold shortly before the filing of the present winding up petition in the year 2006 which plot was owned by the company Held that:- documents obtained from Sub-Registrar office stated that the above said property sold much before the company in liquidation comes into existence. Then after the death of original buyer relinquish their rights in the above said property though Relinquishment Deed in favour their brother through two different Sale Deeds the said property is not the company's property and the Court has no jurisdiction to deal with the said property or to impose any restrictions on its transfer- application by purchaser allowed is allowed. Application filed by the workmen of the respondent company for release amount deposited with the Official Liquidator by the purchaser as well as former Directors of the company - workmen states that by virtue of a Compromise Deed, two Directors of the respondent company had agreed to pay a sum of Rs. 60 lacs to the workmen from the sale proceeds of the aforesaid property - official liquidator has pointed out that the ex-directors of the company are yet to appear and facilitate the enquiry being undertaken which would include all matters relating to the subject property Held that:- as for workmen's application Court is of the view that it has no jurisdiction to enforce an alleged personal agreement between the former Directors and the workmen insofar as it pertains to personal property of the Directors - workmen are granted liberty to file appropriate proceeding - directs the Official Liquidator to release the amount of Rs. 60 lacs with accrued interest to the entity/individual who has deposited the amount.
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2012 (4) TMI 142
Writ petition - challenging the notice dated 29.06.2011 issued to the petitioner by the first respondent/Bank for sale of the movables listed therein, by invoking the powers under the Securitisation and Reconstruction of financial Assets and Enforcement of Security Interest Act, 2002 - The first respondent/Bank in the counter affidavit has specifically admitted that they are not proceeding to sell the movable properties under the provisions of the SARFAESI Act and they are prepared to withdraw the notification unconditionally - Even though the contention of the learned counsel for the first respondent/Bank is attractive and she has taken strenuous steps to pursue this court to accept her plea, we are unable to accept the same for the simple reason that the goods which are taken by the first respondent/Bank are not the subject matter of the security - It is not the case of the petitioner that the petitioner voluntarily given possession of these goods to the bank so as to enable the bank to keep it and the bank has taken steps without even giving notice to the petitioner, who is not liable to pay any amount in respect of the borrowal - Decided in favor of the petitioner
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Service Tax
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2012 (4) TMI 199
Refund of service tax on taxable services used for export of goods assessee claimed refund of service tax on taxable services used for export of MT of Chrome Concentrate as per Notification 17/2009-ST dated 7.7.2009 export made through MMTC - claim denied on ground that the appellant are not the exporter of the goods but the exporter of the said goods was M/s MMTC Ltd., BBSR Held that:- In EXIM Policy, 2004-2009, it has been clearly laid down that the appellants cannot export the said Chrome Concentrate directly, but required to export through M/s MMTC Ltd., the canalizing agency. However, agreement between appellant & MMTC, Arbitration Clause and other facts indicate that there is a link between the goods exported and the appellant through M/s MMTC and sellers are under obligation to accept the full liability , if any, without dispute. Therefore, in view of decision in case of State of Karnataka Vs. Azad Coach Builders Pvt. Ltd (2010 - TMI - 211475 - Supreme Court Of India), we remand the matter to the Commissioner (Appeals) for fresh decision.
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2012 (4) TMI 198
Intellectual Property Services - Trade marks and brand name - held that:- If the argument of the learned Advocate that 'Hero Honda' should be considered as trade mark of the oil companies is accepted, we really fail to understand as to whether there was any need for oil companies to enter into agreement with the appellant seeking their permission to allow use of their trade name. Admittedly, the goods manufactured by the oil companies are to be used in the vehicles manufactured by the appellant companies and have a strong connection with the same. The appearance of the trade mark "Hero Honda" and "Hero Honda 4T plus" on the oil company's products definitely indicates a connection between the said companies and the appellants product. If the oil companies would have used the said trade mark without entering into an agreement with the appellant, the same would have amounted to infringement of their right in terms of the sub-clause (4) of the Trade Mark Act. This explains the need to enter into an agreement with the appellant and for payment of royalty to them. As such, we do not agree with the learned advocate that their permission to use the said trade mark to the oil companies is not covered by the definition of Intellectual Property right and intellectual property services as appearing in the Finance Act. While deciding against the assessee, demand beyond normal period of limitation set aside.
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2012 (4) TMI 197
Cenvat credit while availing benefit of abatement - Commercial and Industrial Construction - held that:- , in respect of a contract where the assessee has not taken input credit prior to 01.03.2006 and input/input service tax credit on or after 01.03.2006, the assessee would be rightly entitled for the benefit under the notification no. 15/2004-ST as replaced by notification no. 1/2006 dated 01.03.2006. In a case where the assessee avails CENVAT credit, then in such cases the assessee is not entitled for abatement and the service tax liability will have to be discharged on the full value of the contract. There is nothing in these notifications which prevents an assessee from not availing CENVAT credit and paying service tax on 100% of the contract value in respect of one particular contract and availing abatement and not availing CENVAT credit in respect of another contract. In other words, there is no stipulation in the notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract. Whether for the purpose of discharge of service tax liability, accumulated CENVAT credit arising from some other case/contract can be utilized or not. - held that:- there is no such bar or restriction/prescribed in the notification. The notification only stipulates that in respect of a case/contract, where abatement is availed, no CENVAT credit on inputs, capital goods or input services shall be taken. So long as this condition is satisfied, abatement is permissible.
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2012 (4) TMI 196
Stay of Demand - Department is of the view that the service provided by the applicant to M/s. Tata Johnson Controls Automotive Ltd. are not received in convertible foreign exchange and therefore, are liable to service tax - It is contended on behalf of the applicant that the applicant are entitled for the benefit of circular no. 56/5/2003-ST dated 25.4.2003 - As per the said circular, service provided by the applicant to M/s. Tata Johnson Controls Automotive Ltd. get merged in the service provided by M/s. Tata Johnson Controls Automotive Ltd. in their service exported outside India - Pre-deposit waived.
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2012 (4) TMI 177
Assessee providing services under the Head, Consulting Engineering Service - SCN issued for default of payment service tax Assessee has submitted that the Department has determined the Service Tax liability on the gross receipt as shown in their Balance Sheet for the relevant period though they had filed the detailed break-up of the receipts shown in the Balance Sheet - Revenue submitted that the invoices and other documents/evidences against which the amount had been received, by the Appellant were not placed before the learned Commissioner in support of the claim that the services rendered during the relevant period were not consulting engineer services but comprises of various other services and non-taxable services - Held that:- the entire demand has been raised on the basis of the gross receipt shown in the Balance Sheet considering the same as the gross taxable services attributable towards Consulting Engineering Services - we find that besides Consulting Engineering Services , the Appellant are registered with the Department for various other services, which have not been considered by the learned Commissioner in the impugned Order but they have not substantiated by way of adducing relevant documents/evidences before the Commissioner - the matter be remitted back to the Commissioner for re-consideration of all the issues raised earlier and raised for the first time before this Tribunal and also all the evidences/documents relevant to the case
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2012 (4) TMI 176
Condonation of delay of 37 days in filing Appeal before the Tribunal - Department itself is questioning the legality and propriety of the impugned Order and the Assessee are also in appeal - Held that:- Appeal is dismissed remanding the matter back to Adjudicating Authority for deciding the matter afresh - giving opportunity of hearing to the Appellants.
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2012 (4) TMI 156
Application for waiver of pre-deposit of service tax interest and penalty - demand is confirmed the insurance of factory building is nothing to do with the manufacture of goods - Held that:- credit in respect of service tax paid on the insurance of building is already settled in favour of the assessee by the Tribunal in Utopia India Pvt. Ltd - 2011 - TMI - 206893 - CESTAT, BANGALORE - appeal of assessee allowed.
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2012 (4) TMI 134
Denial of CENVAT credit on outdoor catering service - Held that:- the appellant cannot claim CENVAT credit on outdoor catering service -Commissioner vs. Ultratech Cement Ltd 2010 (9) TMI 19 - High Court of Bombay in favour of Revenue. Air travel service, rent-a-cab service, cleaning/house-keeping service - Held that:- a reasonable opportunity should be given to the appellant to establish, before the original authority, the requisite nexus between the business of manufacture of goods and the services which are claimed to be input services for the purpose of CENVAT credit. CHA Service Held that: - the port of export was held to be the place of removal of the goods exported. It is not deniable that CHA s service was availed by the appellant for export of their goods, which was a part of their business. The requisite nexus between the service and the business of the company stands established. Hence CENVAT credit is admissible on the CHA service to the appellant. Penalty-related issue Held that:- degree of offence of irregular availment of CENVAT credit will be ascertained only by the original authority pursuant to this order appellant after giving them an opportunity of being heard.
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Central Excise
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2012 (4) TMI 182
Waiver of penalty imposed under Rule 173Q of the Central Excise Rules, 1944 assessee opted not to avail the benefit of the notification No.9/99/C.Ex. Dated 29.09.99 in the middle of the year Revenue contended violating conditions of said notification Held that:- Tribunal was justified in deleting the penalty firstly, since assessee opted not to avail the benefit of the notification after obtaining permission from the excise authorities hence no violation of conditions. Secondly, there was no intention of evading tax, in fact assessee cleared the goods on full payment of duty. Thirdly, during the period from 3.3.2000 to 24.2.2001, though the assessee has cleared the goods by availing concessional duty under said notification, differential duty has not been demanded from the assessee Decided against the Revenue.
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2012 (4) TMI 181
COD clearance pending Held that:- Both sides being Govt. Departments can take a cue from the order passed by CCE in case of two govt departments viz. CBEC, Railway Board and M/s. DLW highlighting efforts made to resolve the dispute by both govt departments by having a high level meeting of top officials. With those observations, after waiving the requirement of pre deposit, we remand the matter to CCE to decide the case afresh.
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2012 (4) TMI 180
Dismissal of appeal by Commissioner(Appeals) on ground of non-compliance of direction of pre-deposit - Section 35F of the Central Excise Act, 1944 Held that:- Since, Commissioner (Appeals) has not decided the issue on merit. Therefore, the case is remanded to Commissioner (Appeals) for deciding afresh without insisting for any further pre-deposit.
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2012 (4) TMI 179
Delay of one day in filing the appeal before Commissioner(Appeals) delay on medical grounds - Held that:- It is found that Commissioner (Appeals) has dismissed the appeal u/s 35 of Central Excise Act, 1944, for delay of one day in filing the appeal, without granting hearing to the applicant. Thus, after waiving the requirement of pre - deposit, delay of one day is condoned and matter is remanded back to Commissioner (Appeals) to decide the Stay Petition as well as Appeal on merit.
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2012 (4) TMI 178
Pre-deposit - assessee availed cenvat credit on duty paid sponge iron lumps and sponge iron fines credit denied on ground that said goods are not their inputs and they did not have any Registration for trading such goods appeal against the same denied by Commissioner (Appeals) for non-compliance of direction for pre-deposit Held that:- Commissioner (Appeals) while dismissing appeal has not recorded any finding on merit of the case. Therefore, we remand the matter to Commissioner (Appeals) for passing an order afresh on merit without insisting any pre-deposit.
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2012 (4) TMI 166
Waiver of pre-deposit - principles of natural justice - the hearing was fixed for 17.11.2009 and the appellant vide their letter requested for adjournment. Ld.Commissioner has recorded this fact in the impugned order at page 3 and decided the matter ex parte - Decided in favor of the assessee by way of remand
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2012 (4) TMI 165
Application for rectification of mistakes - Ld.A.R. brought to our notice that in the Finance Act, 2010 opportunity was given to the appellant to show to the Department that they had filed an application to Commr. alongwith C.A. certificate for proportionate credit in terms of amendment carried out in Rule 6 and earlier corresponding Rule of Cenvat Credit Rules - the contention of the respondent is that they have not availed any cenvat credit in respect of two appeals - Decided in favor of the assessee by way of remand to Commissioner
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2012 (4) TMI 164
Demand - Classification - Time limitation - Notification No.117/89 dated 27.4.89 - The contention is that for the period of 10 months ranging between December 1989 to September 1990, the demand cum Show Cause Notice was issued on 30.9.92 which is beyond the period of six months prescribed under section 11A of Central Excise Act, 1944 as it stood at the material time - Held that: period involved in this case is from December 1989 to September 1990 and the Show Cause Notice cum demand notice was issued on 30.9.92 which is beyond the period of six months prescribed under section 11A of Central Excise Act, 1944 which stood at the material time - Appeal is allowed
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2012 (4) TMI 163
Appellant engaged in the manufacture of Low Viscosity Furnace Oil (LVFO) kept in their Bonded Warehouse from there, it was transferred to the other Bonded Warehouse without payment of duty - Appellant claimed the benefit of Notification No.29/02-CE which exempts 50% of the duty in case of the goods manufactured at 4 refineries situated in the North-Eastern Part of the country revenue denied the grant of benefit in lieu of notification as they were not directly paying duty at the time of initial clearances from their Bonded Warehouse - Held that:- notification as amended is to the effect that petroleum products cleared under bond from any of the specified refineries and received under bond in a warehouse can be cleared on payment of duty at the concessional rate specified in the notification - nothing in the Notification to deny the exemption if the goods are received under bond in one or more warehouse before they were received in Budge Warehouse. Accordingly we set aside the impugned order and allow the Appeal with consequential relief to the Appellants
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2012 (4) TMI 162
Principle of natural justice - waiver of predeposit of duty and penalty of an equal amount under 173Q - applicant contented that the Commissioner (Appeals) directed to make predeposit at 5% of entire amount of duty confirmed and penalty imposed in this case without affording them any personal hearing - Held that:- this Bench in the case of Packwell Plastic Pvt. Ltd. Vs. Commissioner of Central Excise - 2010 - TMI - 78564 - CESTAT KOLKATA held that impugned order was passed in violation of principles of natural justice and liable to be set aside - The matters are remanded to the Commissioner (Appeals) to decide afresh affording an opportunity of hearing to the appellants .
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2012 (4) TMI 161
Penalty Held that:- the adjudicating authority has imposed a penalty of Rs.18,21,106/-under Section 11AC of the Central Excise Act, 1944 even though he has confirmed Central Excise duty of Rs.21,08,849/ - ld.Commissioner (Appeals) has imposed a penalty of Rs.2,87,743/- under Section 11AC which was conspicuously dropped by the adjudicating authority and no appeal was filed against the said adjudication order. In the circumstances, imposition of penalty of Rs.2,87,743/- under Section 11AC of the Central Excise Act, 1944 by the ld. Commissioner (Appeals) is incorrect - Decided in favor of assessee.
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2012 (4) TMI 160
Appellant is manufacturer of copper wires falling under chapter heading No. 7408 of Central Excise Tariff Act, 1985 - procured allegedly copper ingot converted by into copper wires through certain job workers claiming cenvat credit on the basis of invoices issued by supplier - Revenue rejected the claim of CENVAT stating that assessee was not supplied copper ingots and cenvat credit has been obtained by the appellant on the basis of fake invoices - the adjudicating authority placing reliance on the statement of an employee of supplier of ignot came to the conclusion that no copper ingots corresponding to the invoices were manufactured or transported to the appellant from factory appellant contented that the appellant was not allowed to cross - examine the statement of employee of supplier - Held that:- This case critically depends on proving that manufacturer of copper ingot did not have the facility to manufacture it in his factory - only evidence appearing against the appellant is the statement of authorized Signatory of manufacturer of copper ingot - if the SCN is to be adjudicated on the bare evidence relied upon in the SCN, cross-examination of authorized Signatory of manufacturer of copper ingot is necessary - - matter is remitted back to the adjudicating authority to proceed
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2012 (4) TMI 159
Clearance of capital goods on which Cenvat credit was taken after using the same for about seven years - Revenue contented that as per Rule 3(5) of Cenvat Credit Rules the assessee should have reversed the entire credit taken when the capital goods were initially received in the factory - whereas the contention of the appellant is that when capital goods are removed after use it is not clearance of the goods as such - Held that:- the said rule cannot be interpreted to cover clearance of capital goods after its use and reversal of Cenvat credit based on transaction value of the capital good is good enough as decided in CCE Vs. Raghav Alloys Ltd - 2010 - TMI - 77070 - PUNJAB & HARYANA HIGH COURT - in favour of assessee.
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2012 (4) TMI 158
Both Revenue as well as Assessee are in appeals against the same OIO - Department itself is questioning the legality and propriety of the impugned order - Held that:- Since the legality and propriety of the impugned order in is question, the order is liable to be set aside - remanded the case to the lower adjudicating authority for deciding afresh
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2012 (4) TMI 157
Appeal by Department that the paper used for packing material was sent to job workers for the purpose cutting and printing of labels with the aid of machines, used to wrap the Biris - proposing classification of the biris manufactured by them under Chapter Sub-heading 2404.39 which attracted higher rate of duty - The respondents are manufacturers of Hand-made Labeled Biris falling under Chapter 24 of the CESTA, 1985 under Chapter Sub-heading 2404.31 - Held that:- the paper used for wrapper and label the aid of machines by the job worker did not make the biris as manufactured with the aid of machines Mangalore Ganesh Bidi Works vs. CCE, Mangalore 2007 - TMI - 2202 - CESTAT, BANGALORE and clarified by Board in their Circular No. 840/17/2006-Cx dated 6.12.2002 appeal of revenue rejected.
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2012 (4) TMI 141
waiver of pre-deposit of duty and equal amount of penalty - Commissioner (Appeals) has rejected the appellants appeal on the ground that it was filed 2 days after the due date - the assesee contented that order was received on 28.08.2007 and they were required to file appeal on 27.10.2007 but being the day was Saturday they filed appeal on 29.10.2007(i.e. Monday) and thus there is no delay - Held that?:- there is no delay of filing the appeal - the case is remanded to ld.commissioner(Appeals) to decide the stay petition and appeal afresh.
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2012 (4) TMI 140
Disallowing the CENVAT Credit along with interest, and imposed penalty under Rule 13 - Appellant are engaged in the manufacture of Wire Rope from duty-paid wire and accordingly availed the CENVAT Credit- Department denied the Credit as drawing of wire from wire rods does not amount to manufacture - appellant relied on CBEC Circular No.831/8/2006-CX dated 26.07.06 for claiming credit - Held that:- retrospective amendment in Rule 16 vide CBEC Circular No.831/8/2006-CX is aimed at facilitating wire-drawing units , which had paid a sum equal to the duty leviable on drawn wire after availing the credit of duty paid on inputs for the said period - Appeal in favour of assesee.
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2012 (4) TMI 139
Classification of products arising out of conversion of sugar assessee engaged in the business of conversion of duty paid sugar into mishri, batasha, makhana and similar items - Revenue contending classification of bura under heading 1701.99 and other products Mishri and Makhana to be classified under heading 1704.90 assessee contending such conversion not amounting to manufacture Held that:- Since similar appeals of some other parties have already been remanded by the Tribunal for denovo decision considering all the relevant aspects. Therefore, impugned orders are set aside and matter is remanded to the adjudicating authority for denovo decision
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2012 (4) TMI 138
Classification of Retail visual identity (RVI) Revenue contended classification under chapter heading 9405 6090 assessee contended that erection of RVI at site does not amount to manufacture and the RVI installation cannot be termed as goods as the RVI items come into existence as fixtures on the site and these fixtures cannot be removed without damage and cannot be used at alternative site Held that:- Matter is remanded back to the original adjudicating authority for fresh adjudication subject to further deposit of Rs 50 lacs and in the light of following directions - classification of the goods being cleared should be decided first - Excise duty should be demanded only on the goods manufactured and cleared and not on construction activity appellant to submit details of goods manufactured, classification, value and the exemptions claimed
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2012 (4) TMI 137
Penalty imposed under Rule 25 of the Central Excise Rules, 2002 interest on differential duty arising on supplementary invoices not paid by assessee until SCN issued Held that:- Assessee chose to pay the amount only after receipt of the show-cause notice. In the absence of satisfactory explanation of the default, it is held that appellant wanted to evade payment of interest which invite the penal provisions of Rule 25 Decided against the assessee.
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2012 (4) TMI 136
Packing of assorted medicament from retail packs taken from different cartons into a single carton Revenue contending it to be manufacture Held that:- In the present case, the duty paid goods received by the respondent from the another unit of the same company (Nagarjunasagar unit) were already marketable and nothing further was done by the respondent. Packing of assorted medicament into a single carton by taking small quantities of retail packs of various medicines from different cartons and writing the names and quantities of such medicament over the carton were done as per the requirements of the customer. Aforesaid does not amount to manufacture, as well as question of repacking from bulk pack to retail packs also does not arise Decided in favor of assessee.
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2012 (4) TMI 135
Extended Period of Limitation demand, penalty and interest imposed on ground of alleged wrong availment of Cenvat Credit on inputs imported under DEPB scheme and wrong availment of Cenvat Credit on Capital Goods on which depreciation was claimed u/s 32 of the Income Tax Act - F.Y. 2003-04 SCN issued on 25.11.2005 Held that:- Relevant show-cause notices were issued far beyond the normal period of limitation prescribed u/s 11A(i) of the Central Excise Act, without invoking the extended period of limitation. For invoking the extended period of limitation prescribed under the proviso to Section 11A(1), the department has to allege and establish fraud, collusion, willful suppression or misstatement of facts or contravention of any provision of law with intent to evade payment of duty, against the defaulter. This did not happen in the present case. Therefore the entire demand has to be held to be time-barred Decided in favor of assessee.
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CST, VAT & Sales Tax
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2012 (4) TMI 200
Petition filed to defer liability of assessee to pay taxes in compliance with terms & conditions of Purchase Agreement - assessee registered under MP VAT Act and CST Act, 1956 purchased tendu leaves in bid organized by MP State MFP Co-operative Federation Ltd - assessee contending it to be inter-state sale and not exigible for the levy of tax under the relevant VAT Act - Held that:- Applicants are expected to comply with the terms and conditions of the Purchaser's Agreement and accordingly deposit taxes to the Federation. We permit assessee to file appropriate appeals before the First Appellate Authority/revisions before the revisional authorities within a month's time from today and direct such authorities to dispose of the appeals/revisions on merits, without reference to the period of limitation, within four months from the filing of the appeals/revisions. Also, we direct the assessing authorities under the VAT Act to complete the assessments, within two months' from today.
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Wealth tax
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2012 (4) TMI 151
Wealth-tax appeals - assessee company engaged in the business of manufacturing and sale of glass products due to adverse conditions faced by assessee granted plant and machinery and land and buildings on lease - offered the lease rent and processing charges earned for taxation under the head 'Business income' AO held assessee was earning rental income assets leased out are liable for wealth-tax Held that:- the nature and character of the properties given on lease remained the same even after the properties were let out - whether the business of manufacturing glass products is carried on by the assessee company itself or by the lessor, the assets including land, buildings, plant and machineries always remained as properties in the nature of commercial establishments occupied for the purpose of carrying on business any property in the nature of commercial establishments or complexes is excluded from the definition of assets liable for wealth tax - in favour of assesee.
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Indian Laws
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2012 (4) TMI 174
Disciplinary enquiry by ICAI - statutory auditors of Satyam Computers Services Limited - Principles of natural justice - Cross examination of witness - held that:- Considering the fact that the petitioner is entitled to be granted the opportunity to cross examine Sh. A.Y.V. Krishna, - permission granted to grant to the petitioner one, and only one, opportunity to cross examine the other witnesses as well, subject to the conditions. - the report prepared by the Disciplinary Committee dated 03.01.2012 set aside.
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2012 (4) TMI 155
Authority of President of the ITAT to record the Annual Confidential Reports of the Members High Court held that President had no power to write the ACRs of the Members and directed Selection Committee to reconsider the claim of the Petitioner on merits de hors the ACRs - aforesaid verdict challenged by Vice President of the Tribunal before the Supreme Court Held that at interim stage:- To be put up for final disposal on October 03, 2012. During the pendency of the special leave petition, the direction of the High Court in impugned judgment shall remain stayed. See Uttam Bir Singh Bedi vs UOI (2011 - TMI - 207466 - Madras High Court).
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