Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 7, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Disallowing a loss as a speculative loss - The Tribunal ought not to have remitted the matter to the Assessing Officer for a consideration afresh on the issue of the said loss claim - HC
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CIT has exercised jurisdiction under Section 263 of the Act in utter violation of not only of judicial proprietary also against the provisions of law - HC
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Petitioner having made out a case for consideration over reduction or waiver of interest under Sec. 234B of the act, the Chief Commissioner of Income Tax was not justified in rejecting the claim - HC
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Notification U/s 80IB(4) - the process of bottling the LPG Gas into cylinder makes the same marketable - It therefore follows that a new product comes into existence - deduction allowed - HC
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Deduction U/s 36(1)(viii) - long term finance - penal interest and pre-closure charges - aall these categories of incomes which the assessee is receiving as a direct nexus with the long term finance - HC
Service Tax
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Difference in the taxable value as per Bank Statement & ST-3 Return - due to to receipt of various statutory expenses like, employees contribution of EPF and labour contribution of ESI - No addition - AT
Central Excise
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Cenvat credit denied - GI structures & catenary plate -even if the items falling under Chapter 7308 are used as part of the machinery falling under chapter 84, the same would have to be treated as capital goods. - AT
VAT
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Penalty - Tamil Nadu GST Act, 1959 - Even though Sec. 16(2) had undergone amendment w.e.f. 20.5.93, necessary ingredients of willful non-disclosure including the penalty, remains as it is. - HC
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Input tax credit - Partnership took over the proprietorship firm - Not a registered dealer at the relevant time - irrespective of the mandate under the statute, credit can not be allowed - HC
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Forceful collection of Tax - The Enforcement Wing officials had no jurisdiction to collect tax at the time of the inspection, without verification of the monthly returns, before the completion of the assessment. - HC
Case Laws:
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Income Tax
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2013 (5) TMI 132
Penalty U/s 271(1)(c) of the Income Tax Act, 1961 - Stay of recovery - Held that:- there is nothing to indicate that there was negligence or inaction on the part of the Petitioner in pursuing the appeals. - On these facts, especially having regard to the fact that a stay has been sought in respect of the recovery of penalties under Section 271(1)(c) - We are of the view that an order of dispensation ought to have been granted. Accordingly, we allow the petition by setting aside the impugned order dated 26 February 2013 of the CIT-10, Mumbai, directing the Petitioner to deposit an amount of Rs. 8.85 crores towards the demand on account of penalty. We also direct the CIT(A)-22 before whom the appeals are pending to expeditiously dispose of the appeals preferably within a period of two months from the date on which an authenticated copy of this order is produced on his record - The Petitioner shall appear before the CIT(A) together with an authenticated copy of this order on 1 April 2013 for expeditious disposal of the appeals - Rule is made absolute to the aforesaid extent - We clarify that all the rights and contentions of the parties are kept open.
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2013 (5) TMI 131
Depreciation on leased assets - Regarding Sale lease back - Held that:- We are of the opinion that the assessee is entitled for the claim of depreciation under all the three circumstance, i.e. Sale lease back, genuineness of transaction and asset having being put to use. We, therefore, allow ground no. 1 the assessee's appeal and dismiss both the grounds of the department's appeal. Disallowance on account of capital in nature - Held that:- we are of the view that getting the SPNS facility is of an enduring nature, with which not only the banks are hooked to each other, but, a great amount of facility is provided to the customers, . With acquiring this facility, so far as the assessee is concerned it is definitely of an enduring nature, for which, we are of the opinion, the assessee bank is entitled to get depreciation - The assessee's appeal is thus partly allowed. Regarding disallowance of stamp duty - Held that:- we find that the assessee had added back the expense in its computation. Since the amount has already been added back, the revenue authorities erred in making a further disallowance, which has resulted in the double disallowance - set aside the order of the CIT(A) - This ground is allowed. Regarding disallowance for membership :- The amount paid towards corporate membership is an expenditure incurred wholly and exclusively for the purposes of business and not towards capital account as it only facilitates smooth and efficient running of a business enterprise - - set aside the order of the CIT(A) on this issue and direct the AO to delete the disallowanc - Appeal was allowed. Regarding disallowance of depreciation claimed premises acquired by the assessee - Held that:- It is not disputed that the property was repossessed from tenant after paying it off, and it is for the betterment of title of a capital asset, therefore, the expense has to be held to be of capital in nature we, set aside the order of the CIT(A) on this issue and direct the AO to allow depreciation as per law after verification of the dates of payment for repossession - the tenanted property cannot be held to be used by the assessee for the purposes of its business. Regarding levy of interest u/s 234A - Held that:- Placing reliance on the cited cases and the decision of Collector, Land Acquisition vs Mst. Katiji and others, reported in 167 ITR 471, wherein the Hon'ble Supreme Court observes, "When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred,........", the Hon'ble Court further observes, "There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of malafides - Set aside the order of the CIT(A) on this issue and direct the AO to cancel the interest - Appeal is filed by the assessee is partly allowed - Appeal filed by the department is dismissed.
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2013 (5) TMI 130
Disallowing a loss as a speculative loss - The issue was whether the loss was genuine or not -Held that:- The Tribunal ought not to have remitted the matter to the Assessing Officer for a consideration afresh on the issue of the said loss claim - The only issue that was to be decided by the Tribunal was whether the said loss was speculative or was towards damages for breach of contract in respect of two contracts - The factum of the loss being genuine was not in issue - Therefore, no useful purpose would be served by remitting the matter to the Assessing Officer. The impugned order to the extent that it remits the matter to the Assessing Officer for a consideration afresh needs to be set aside - The matter is restored to the Tribunal for deciding the question as to whether the loss was speculative in nature or whether it was towards damages for breach of contract as claimed by the assessee - With these directions, the appeal stands disposed of.
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2013 (5) TMI 129
Search & Seizure - A search action was initiated on a group of individuals/ concerns who are alleged to be involved in Hawala transactions involving an illegal transfer of cash - Assessment in accordance Section 153-A - Section 153-C - Held that:- It is evident that sufficient opportunities have been granted to the Petitioner to appear before the DDIT. The Petitioner has failed to appear in response to the summons. The proceedings in the present case were adopted against the holder of the locker and the search proceedings have been completed. An assessment would now be carried out in accordance with law by the Assessing Officer by following the provisions of Section 153A or, as the case may be, Section 153C. The Petitioner has consistently chosen to evade the process of law. During the course of assessment proceedings, the Assessing Officer would have regard to all the relevant facts and circumstances - We are not inclined to entertain the petition at this stage - The petition shall accordingly stand dismissed - There shall be no order as to costs.
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2013 (5) TMI 128
Failure to furnish the return - Offence U/s 276-CC of the Income Tax Act, 1961 - The accused/Assessee has not rendered any valid and cogent reasons for filing the Income Tax Return for the Assessment year, 1994-95 after the lapse of 7 months - Held that:- Just because the respondent had applied for the compounding of the offence before the filing of the complaint against her in Court, as is was being claimed by her, and the same according to her had not been decided before the filing of the complaint it could not be said that the complaint was not maintainable, as was also the submission of the learned counsel for the respondent not was the trial Court required to examine at the stage of charge as to why the department was not compounding the offence in the case of the respondent herein. If she was aggrieved by any action or inaction on the part of the authority competent to take the decision on her request for compounding she should have had recourse to legal remedies instead of waiting for the prosecution to be launched by the department. The impugned orders of the trial Court and the revisional Court are set aside and the matter is now remanded back to the Court of the Additional Chief Metropolitan Magistrate with the direction for framing charge under Section 276-CC of the Income Tax Act against the respondent and to try her in accordance with law. It is however, clarified that nothing observed by this Court in this order shall be considered by the trial Court to be any final expression of opinion on the merits of the complainant’s case or the respondent’s explanation which she had tendered in response to show cause notice given to her before the filing of the complaint in Court by the Income Tax Department - The case shall now be taken up by the trial Court on 29th April,2013 at 2 p.m.
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2013 (5) TMI 127
Revision u/s 263 - Penalty u/s 271(1)(c) - Calling records(file u/s 263) - Penalty u/s 271(1)(c) on claiming sales tax subsidy as Capital receipt - The AO has levied penalty u/s 271(1)(c) on assessee's claim that sales tax subsidy should be treated as capital receipt, After the said order was passed, the Commissioner Income Tax passed an order U/s 263 of the Income Tax Act, 1961 whereby the penalty was quantified -Held that:- The Commissioner of Income Tax passed an order under Section 263 of the Income Tax Act, 1961 whereby the penalty was quantified for the reason that in the original order of the Assessing Officer, the same was omitted - Tribunal holding that once the penalty itself has been set aside by the Commissioner of Income Tax (Appeals), the provisions of Section 263 of the Act could not be invoked by the Revenue. We find that the Commissioner of Income Tax has exercised jurisdiction under Section 263 of the Act in utter violation of not only of judicial proprietary also against the provisions of law - Once the penalty proceedings have been set aside in appeal, the Commissioner of Income Tax could not impose penalty on the basis of an order, which has since been set aside by the Commissioner of Income Tax (Appeals) - In view of the said fact, we do not find that any question of law arises for consideration out of an order passed by the Tribunal - The appeal is dismissed in favour of Assessee.
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2013 (5) TMI 126
Waiver of Interest U/s 234-B - Extended benefit of deduction U/s 80HHC of the Income-tax Act, 1961 - Held that:- A division bench of the High Court of Gujarat in Bhaneben’s case (2004 (3) TMI 35 - GUJARAT High Court) regard being had to the facts obtaining therein over delay in filing the return of income resulting in late payment of taxes, an unavoidable circumstance - Waiver of interest can be considered. As regards extending the benefit of waiver of interest under Section 234B, learned counsel for Revenue submits that in Bhanuben’s case (2004 (3) TMI 35 - GUJARAT High Court), the Division Bench of High Court of Gujarat extended the relief upto 75% and directed the assessee to pay 25% of the interest levied - Petitioner having made out a case for consideration over reduction or waiver of interest under Sec. 234B of the act, the Chief Commissioner of Income Tax was not justified in rejecting the claim by the orders impugned, on the premise that the petitioner an assessee not within the jurisdiction of High Court of Kerala was disentitled to rely upon the decision of that court in A.V. Thomas’ case ( 1997 (1) TMI 60 - KERALA High Court). Petition is allowed in part - The orders Annexures-D and J of the Chief Commissioner of Income Tax, Bangalore are quashed and the petitioner is directed to pay 25% of the interest levied under Section 234B of the Act for the assessment year 2001-02.
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2013 (5) TMI 125
Search U/s 132 (1) - Block assessment U/s 158BC - Regarding understatement of cost of renovation of residence - Held that:- An addition based on pure estimation cannot be made in block assessment proceedings and as such the assessee succeeds on these grounds. Unexplained and unsecured loans - Held that:- These unsecured loans have already been declared in the regular returns We find no error in the order of the Tribunal observing that accretion to the capital accounts stood disclosed and was not unearthed during the course of the search and, therefore, it could be subject matter of regular assessment and not the block assessment. Undisclosed investment - Held that:- The ITAT observed that documentary evidence was to be given more credence as compared to the statement given without having the benefit of relying on the documentary evidence. This is again a matter of appreciation of evidence. Addition under the realm of suspicion - Held that:- Learned counsel for the Revenue argued that the addition was based on the documents found in the residence of the assessee. However, the said document No.90 was examined by the ITAT and found to be ‘dumb document’. The addition was, thus, rightly deleted. No question of law arises. Deleting the addition in the absence of any evidence - Held that:- A finding of fact is recorded to the effect that the assessee had already considered the income earned on this account in the Commission Income Statement. The ITAT has recorded the finding of fact that assessee had earned only commission income on the transaction and, therefore, there could not have been any such addition. Estimating the commission - Held that:- we find that addition was made by the Assessing Officer estimating 4% commission on every deal through the assessee. The ITAT found this to be on very high side and reduced it to 2%. Cogent reasons are given in para 15.4 of the orders passed by the ITAT. Deleting the addition on account of undisclosed income based on documentary evidence - Held that:- A finding of fact is arrived at that there is no undisclosed income. The ITAT has discussed the matter in detail and in right perspective. Deleting the addition on account of acquisition of plot in the name of assessee’s wife - Held that:- we find that plot was purchased by the assessee’s wife. This income was added to the assessee’s account only on the ground that assessee’s wife did not have any source of income. Rs.26,000/- is hardly an amount. This can be the savings of the housewife also. No question of law arises here as well. Deletion of Rs.2,28,000 -Held that:- The Tribunal found that it was based on Document No.10 which was a sale transaction of Rs.2,28,000/-. The ITAT, on the basis of evidence, found that the assessee was only an agent and was only earning commission and he had himself not entered into any sale agreement. The ITAT had, therefore, modified the order by directing that commission of 2% on Rs.2,28,000/- be added. Again, it is not a question of law. - Decided against the revenue.
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2013 (5) TMI 124
Notification U/s 80IB(4) - Manufacturing activity - Held that:- the process of bottling the LPG Gas into cylinder makes the same marketable on execution of the process. It therefore follows that a new product comes into existence - Deduction allowed - Decided in favor of assessee.
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2013 (5) TMI 123
Deduction U/s 36(1)(viii) - long term finance - penal interest and pre-closure charges - amount transferred to special reserve - Income U/s 115JA of the Act - Held that:- All these amounts, which are paid by the debtor to the assessee, have a direct nexus with the business, which he is carrying on. All these incomes are derived from the business, which he is carrying on. It is also on record except this long term finance business, the assessee is not carrying on any other business much less any short term finance business - Therefore, all these categories of incomes which the assessee is receiving as a direct nexus with the long term finance and therefore Section 36(1)(viii) of the Act is attracted - Decided in favor of assessee. Addition of Provision for doubtful debts/advance to the book profit U/s 115JA of the Act - Held that:- By Finance Act No.2 of 2009 w.e.f. 1.4.1998, the present Clause (g) has been substituted by including the amount or amounts set aside as provision for diminution in the value of any asset - In the instant case, Rs.12,30,220/- has been set apart to meet the contingencies. The said amount has not been included in the book profit - It was unascertained liability. Even this amount is earmarked as provision for diminution in the value of any asset for the purpose of arriving at the book profit for the purpose of Section 115JA which ought to have been included - The Assessing Authority was justified in adding the said amount to the book profit. Both the Appellate Authorities committed a serious error in deleting the said amount - Decided against the assessee.
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2013 (5) TMI 122
Finalization of Assessment U/s 153 A read with Section 143 of the Income Tax Act - The proceedings could not be finalised within the time stipulated, time was sought to be extended by filing separate applications and the extension of time sought for was granted by this Court - Held that :- There was no need, necessity or occasion for the petitioners to have submitted any written submissions either on 10.1.203 or on any other date before 17.1.203, so long as the petitioners desired the matter to be presented through the authorised representative. This Court finds that the proceeding finalised by the second respondent by passing Ext.P3 order is not liable to be sustained any more, for having virtually denied an effective opportunity of hearing. Accordingly, the impugned orders - Ext.P3 in both the writ petitions, are set aside - The second respondent is directed to reconsider the matter and pass appropriate orders in accordance with law, after giving an effective opportunity of hearing to the petitioners - The proceedings as above shall be finalised at the earliest, at any rate within 'three months' from the date of receipt of a copy of this judgment - It is made clear that the petitioners shall make appropriate arrangements to appear in the hearing to be fixed by the second respondent, either in person or through an authorised representative, without seeking for any adjournment, unless for compelling reasons to the satisfaction of the second respondent. The interim order passed by this Court vide Exts.P2/P2A will continue till such time - Both the writ petitions are allowed to the above extent.
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Customs
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2013 (5) TMI 142
Illegal importation of goods into India - 150 pcs. of NIKE brand shoes of third country origin were loaded at Ramgarhwa, in the Scorpio vehicle bearing a fake Registration Number & were intercepted by the Customs on 17.03.2007. On interrogation of the occupants of the said vehicle, it was revealed that the vehicle belonged to the Appellant No.(1) Shri Ravishankar Kumar and the goods were smuggled - Held that:- The fact remains that the statements furnished by the occupants of the vehicle had not been contradicted. In these circumstances, the involvement of these three Appellants in bringing of the goods of third country origin to India cannot be absolutely ruled out, as held by both the lower authorities. No merit in the Appeals to record a finding contrary to the ones recorded concurrently by the authorities below, thus the penalties imposed on these Appellants appear to be excessive hence, to meet the ends of justice penalty imposed on the Appellant No.(1), Shri Ravishankar Kumar be reduced to Rs.30,000.00 and on the other two Appellants, namely, Shri Pawan Kumar Singh and Md. Shamim be reduced to Rs.10,000.00 on each of them. The Appeals are thus partly allowed to the extent of reduction of penalties, as above.
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2013 (5) TMI 121
Pre-deposit of duty - CESTAT directed to deposit Rs. 5 crores against stay order - extended period of limitation - Availing Concessional rate of duty as per Notification No. 23/2003 - Failure on the part of the assessee to disclose use of the imported raw materials in the manufacture of the final product constituted suppression of facts - Held that:- The Apex Court in the case of Vanasthali Textiles Industries Ltd. v. Commissioner of Central Excise, Jaipur, Rajasthan - [2007 (10) TMI 303 - SUPREME COURT OF INDIA] has held that consumables are the inputs which are used in the manufacturing process but are not identifiable in the final product by reason of the fact that it gets consumed in the manufacturing process. In the present case, since the approximate consumption of imported ‘Selbana’ is only 0.02%, it may be that the assessee formed a belief that the same was consumable and not a raw material in the manufacture of the final product. Moreover, it is not in dispute that in the present case, the plant, machinery and building belonging to the assessee have already been taken over by the Asset Reconstruction Company (India) Ltd. in the year 2007. Apart from the above, the assessee has also been declared as a sick unit under the Sick Industrial Companies Act, 1985. - Stay granted in full - order of CESTAT modified.
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Corporate Laws
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2013 (5) TMI 141
Infringement of the patent - suit for injunction - whether it would be appropriate for the Division Bench to require a revocation proceeding initiated by a third party before the IPAB pertaining to grant of patent vide Patent No.196774 in favour of ‘Roche’ to be deferred till the cross-appeals are decided - Held that:- As per Section 8 with respect to non-disclosure of information in the context of the word ‘may’ used in Section 64 of the Patents Act, 1970, in the inter-se disputes between ‘Roche’ and ‘Cipla’ notwithstanding ‘Cipla’ having made good the point with respect to the patent in question of ‘Roche’ having filed various applications in various jurisdictions abroad including India which were not disclosed to the Controller of Patents, the learned Single Judge declined to revoke the patent in favour of ‘Roche’ granted by the Controller of Patents. With respect to the claim of injunction by ‘Roche’ the LD. Single Judge has held that the drug manufactured by 'Cipla’ does not violate the Patent No.196774 and since the claim for grant of patent in the second polymer ‘B’ stood rejected by the Controller of Patents, the Single Judge has held that the question of patent violation with respect to said polymer would not arise. The normal rule of law is that unless a power is specifically vested in a Court to restrain a party from prosecuting remedy before any Judicial Fora, only in exceptional circumstances should such an order; akin to an ante-suit injunction, be passed. But no such power under the Patents Act, 1970 exists. That apart, it may happen that seeking revocation of a patent before a Court, the defending party may allege non-disclosures contemplated by Section 8, which may fall short of the discretion to be exercised by the Judge. But, a third party litigating on the same issue may plead non-disclosures having a span much more than the non-disclosure alleged by some other party. Meaning thereby, the span of non-disclosure may vary between the litigating parties. Under these circumstances the unreasoned one line interim order dated April 01, 2013, requiring proceedings before IPAB between ‘Roche’ and the applicant to be deferred beyond May 15, 2013 needs to be recalled.
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2013 (5) TMI 140
Leave to defend application by the defendant - plaintiff under Order XXXVII of the Code of Civil Procedure claimed for recovery - Held that:- Defendant no.2 had clearly submitted to the rules as provided under UCP 500. Letter sent by the defendant no.2 to defendant no.1, dated 02.07.1999, did not mention about refusal or acceptance of the documents but had merely intimated the defendant no.1 of certain discrepancies and also stated that it would be sending the submitted documents to the defendant no.3 for acceptance. Further as examined the defendant no.2 was in clear violation of Articles 13 and 14 of the UCP 500 with regard to intimating the plaintiff about discrepancies within the prescribed time of seven banking days Thus it is found that the defendant no.2 has not set up any triable issue and thus its application under Order XXXVII Rules 3(5) and 7 is liable to be are hereby dismissed. Consequentially, the application of leave to defend is dismissed and suit is decreed in favour of the plaintiff. Accordingly, a decree for a sum of Rs. 20, 92, 802. 40p id passed in favour of the plaintiff and the defendant no.2. The plaintiff shall also be entitled to pendente lite and future interest at the rate of 12% per annum. Decree be drawn accordingly.
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Service Tax
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2013 (5) TMI 147
Difference in the taxable value as per Bank Statement & ST-3 Return - services of cleaning & manpower recruitment and supply agency - penalty u/s 77 and equal amount of penalty u/s 78 - Held that:- Discrepancy was noticed by the audit during the course of audit of their record & accepting the said mistake, the appellants had deposited the amount of service tax and later paid the interest also. Agreeing with contention of the C.A. that discrepancy between the taxable value shown in the ST-3 Returns and the Bank statement was due to receipt of various statutory expenses like, employees contribution of EPF and labour contribution of ESI, which were duly reflected in the respective invoices, but not included in the gross taxable value in the services which indicate that the approach of the appellant have been bonafide - However, penalty under Section 77 has been rightly invoked and imposed. Consequently, the order of the Commissioner (Appeals) confirming imposition of penalty under Section 78 is hereby set aside. Partly in favour of assessee.
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2013 (5) TMI 146
Condonation of delay of more than 440 days - Held that:- It is an admitted position that the order was served to the appellant as confirmed from the speed post acknowledgement that daughter-in-law, of the appellant has received the order by speed post delivery. The dispute of the mode of communication as raised by assessee has no relevancy in the present case. cod application dismissed.
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2013 (5) TMI 145
Liability to pay service tax under the category of "maintenance services" - Held that:- As no tax is payable on the ground that the maintenance was being done on behalf of the appellants themselves and that it was not a service rendered to the individual shop keepers is not tenable. If they were doing maintenance for themselves, there would not have been any reason for collecting the exact amount of service charges along with tax from the shop keepers. For the period from June'07 to March'08, the appellants have already paid an amount of Rs.13 lakhs claiming CENVAT credit of Rs.18 lakhs. As such, for the balance period, the tax demand is little over Rs.49 lakhs towards which no payment has been made. There are also no details available regarding the amount collected towards electricity and water charges along with service charges. Further, there are no details available to determine how much credit would be available to the appellants especially when they are challenging the taxability itself. Thus the appellants directed to predeposit 50% of the balance amount of Rs.49 lakhs in cash within a period of 4 weeks from today and report compliance on 23.7.2012. This deposit will be in addition to Rs.13 lakhs stated to have been paid earlier.
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2013 (5) TMI 144
Site Formation and Clearance Service' & 'Mining Service' - demand confirmed towards service tax and education cesses - period up to 31.05.2007 & from 01.06.2007 to 31.12.2008 respectively - Held that:- As for the period prior to 01.06.2007, the activity in question cannot be considered as ‘Site Formation and Clearance'. Similar activity is admittedly classifiable under the head ‘Mining Services' for the period from 01.06.2007 (the date on which this service became taxable). As the appellant has paid a major part of the demand for this period waiver of pre-deposit and stay of recovery in respect of the balance amount of service tax and education cesses, interest thereon and penalties awarded.
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2013 (5) TMI 143
Entitlement to Cenvat credit of Service Tax paid on commission paid to overseas agents under the category of Business auxiliary services denied - Held that:- The issue is no more res integra as settled in the case of Cadila Healthcare Ltd. v. CCE [2009 (8) TMI 172 - CESTAT, AHMEDABAD] wherein held that foreign commission agent services are admissible cenvatable services inasmuch as the same are for sale promotion. Also see CCE v. Ambika Forgings (2010 (9) TMI 240 - CESTAT, NEW DELHI) laying down that overseas commission agent services promotes the assessee's business activities and adds to Revenue earning by manufacture and sale of incremental quantity, activity may have nexus to such sales and Service Tax paid on such services has to be held as includable in the definition of inputs services - in favour of assessee.
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Central Excise
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2013 (5) TMI 139
Remission of the licence fee and grant of compensation - decline of claim as remission of the licence fee and for grant of compensation - assessee submitted a loss of sale of 50 working days suffered due to closure of shop attributed to the orders passed by the administrative authorities - Held that:- The District Magistrate, has failed to take into consideration Rule 15 of the Rules which permits the licensee to lift 20% extra quantity of country liquor over and above monthly minimum guarantee quota. The District Magistrate had also failed to take into consideration the fact that in case the petitioner was permitted to run the shop during the said period, he might have sold more quantity of liquor so as to exhaust the upper limit which is 20% more than the minimum guarantee quota. Further failure to take into consideration, Rule 17 of the Rules which gives clear indication that the licenced premises will remain closed only on 14th April (Ambedkar Jayanti), 15th August (Independence Day), 2nd October (Gandhi Jayanti), 26th January (Republic Day) and up to 3 more days as notified for closure by the Licensing Authority or on the basis of order of the Licensing Authority on account of law and order or General Election related activity. No finding has been recorded in the impugned order that the closure of the shop beyond the prescribed period under Rule 17, was on account of the order of the Licensing Authority, keeping in view the law and order situation or General Election related activity. In this view of the matter the impugned order passed by the District Magistrate cannot be sustained & directed to pass fresh orders keeping in view the observations made hereinabove.
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2013 (5) TMI 138
Condonation of delay - delay by 624 days and 593 days for both the appeals - Held that:- Reasons stated in the affidavit do not constitute sufficient cause for condonation of the heavy delay of the appeals. The affidavit filed by the CMD of the company does not disclose any specific health problem. It generally makes references to ailments and health-related issues. No authenticated medical certificate in proof of any ailment serious enough to incapacitate the appellant is found amongst the medical records filed with the COD applications. Thus the appeals should not have been delayed because of the CMD’s preoccupation with other works. COD application dismissed.
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2013 (5) TMI 137
Cenvat credit denied - GI structures & catenary plate - Held that:- There is no dispute that although the boiler as well as turbine fall under chapter heading 84 and are covered by the definition of capital goods, and that the definition of capital goods in addition to the goods falling under Chapter 82, 84, 85, 90 etc., also covers as the component, spares and accessories of these goods. It is settled law that components and accessories of the capital goods can be of any heading not necessary of the tariff headings specified in the definition of capital goods. Therefore, even if the items falling under Chapter 7308 are used as part of the machinery falling under chapter 84, the same would have to be treated as capital goods. Since in this case, the GI structure is used as part of the turbine, the denial of credit in respect of this item on the ground that the same is not covered by the definition of capital goods is not correct. Also denial of cenvat credit in respect of catenary plate which, admittedly, has been used as part of the boiler is also not correct.In favour of assessee. Structural part of the boiler - Held that:- Same have been used as supporting structure for Boiler. The structural part to be used as support for Boiler had been fabricated in some other factory and had been brought to this factory where the same has been erected. Since in the facts of this case, the structural part, though supporting structure, is more like a component of the boiler, the denial of cenvat credit in respect of the same would not be correct. In favour of assessee.
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2013 (5) TMI 136
Cenvat credit on channels, Angles, Plates, H.R. Sheet etc. disallowed - Held that:- When the fact that the items, in question, have been used for repair and maintenance of the plant and machinery that is, for fabrication of the parts of machinery which had got worn out and have to be replaced, is not disputed, in view of the judgments of Ambuja Cement Eastern Ltd. vs. CCE, Raipur (2010 (4) TMI 429 - CHHAITISGARH HIGH COURT), Alfred Herbert (India) Ltd. (2010 (4) TMI 424 - KARNATAKA HIGH COURT) and Hindustan Zinc Ltd. vs. Union of India(2008 (7) TMI 55 - HIGH COURT RAJASTHAN) the inputs used for repair and maintenance of machinery would be eligible for cenvat credit. Since repair and maintenance is an activity which is essential for smooth manufacturing operations and without regular repair and maintenance, manufacturing activity is not commercially feasible, the inputs used for repair and maintenance of the plant would be eligible for cenvat credit. The appeal is allowed.
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2013 (5) TMI 120
Wrong Availment credit on input service - Demand along with interest U/s 11AB - Penalty U/s 11AC of Central Excise Act, 1944 - Held that:- The Handling Agency Services are provided by port authority through Customs House Agent for transportation of their clearance of final excisable goods to factory and port. It is nothing but the services in connection with business activities of production and sale of finished goods. - In the similar issue, the department's Appeal has been rejected by the Hon'ble CESTAT, Ahmedabad in the case of CCE, Rajkot V/s. Rolex Rings P.Ltd( 2008 (2) TMI 295 - CESTAT, AHMEDABAD). The first appellate authority has followed the law as has been laid down by the various judicial fora and also this bench has in the final orders of Inox India Ltd. (2011 (10) TMI 63 - CESTAT, AHMEDABAD ) and Heubach Colour Pvt.( 2012 (6) TMI 221 - CESTAT, AHMEDABAD) held the same view. The Tribunal is taking a consistent view on this issue - the impugned order is correct, legal and does not suffer from any infirmity - Decided against the revenue.
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CST, VAT & Sales Tax
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2013 (5) TMI 135
Penalty U/s 16(2) of the Tamil Nadu GST Act, 1959 - Wrongful claim U/s 3-A(2)(b) was an intentional one so as to result in wilful non-disclosure of Turnover U/s 16(2) of the Tamil Nadu GST Act, 1959 - Held that:- In the decision reported in STATE OF TAMIL NADU v. S.M. BABA SAHIB(1977 (10) TMI 93 - MADRAS HIGH COURT ), this Court pointed out to the earlier decision of this Court reported in STATE OF TAMIL NADU v. SRI SWAMY & CO.(1976 (2) TMI 147 - MADRAS HIGH COURT ), and held that wilful non-disclosure of assessment turnover is a necessary ingredient to make out that part of the section, namely, a deliberate intention to suppress an assessable turnover to attract levy of penalty under Section 16(1) of the Act. A mere reassessment of escaped turnover, per se, would not lead to a finding that non-disclosure of assessable turnover was a wilful one. Learned Special Government Pleader could not point out any finding in the order of the Assessing Authority as regards this necessary ingredient on wilful non-disclosure so as to attract the levy of penalty under Section 16(2) of the Act. Even though Section 16(2) of the Act had undergone amendment with effect from 20th May 1993, necessary ingredients of wilful non-disclosure including the penalty, remains as it is. In the circumstances, we have no hesitation in setting aside the order of the Tribunal, thereby allowing the above appeals by holding that in the absence of any finding as regards wilful non-disclosure, the levy of penalty could not be sustained.
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2013 (5) TMI 134
Availing input tax credit - Not a registered dealer at the relevant time - The business was being run earlier, as a 'proprietorship concern' , which expired , than a partnership deed was executed and the business was taken over accordingly. It was much later, the new partnership firm who has approached this Court - Held that:- Section 11 (12) and 11 (13) make it explicitly clear that the benefit contemplated there in can be claimed only by a 'registered dealer' and never by anybody else. Since the present partnership took its breath for the first time only much later, the petitioner was never an entity before the concerned respondents/authorities anytime before and it cannot be said that the petitioner firm is entitled to have the input tax credit as a matter of right, irrespective of the mandate under the statute, by entertaining the application preferred in January 2006 for retrospective registration under the KGST Act - This Court finds that the writ petition is ill-conceived - None of the grounds raised in support the same is tenable - Assessee Appeal is Dismissed .
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2013 (5) TMI 133
Forceful collection of Tax - Officials had conducted a spot inspection at the petitioners business premises - Conducted an audit, presumably, in terms of Section 64(4) of the Tamilnadu Value Added Tax Act, 2006 - officials from the office had forcibly collected two cheques (Tax Due) - Held that:- The powers conferred, U/s 64(4) of the Tamilnadu Value Added Tax Act, 2006, does not provide the power or the authority to the respondents to collect the tax, said to be payable by the petitioner - The Enforcement Wing officials had no jurisdiction to collect tax at the time of the inspection, without verification of the monthly returns, before the completion of the assessment. In view of the above, the first respondent is directed to return the cheques, bearing Nos.539659 and 539660, dated 16.3.2012, to the petitioner, within a period of ten days from the date of receipt of a copy of this order, as the respondents and their officials do not have any power or authority to collect the cheques at the time of the inspection of the premises of an assessee - The writ petition is ordered accordingly
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