Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 8, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Deduction u/s 80IB - textile business for printing work - AO allowed the claim for the earlier AY - there is no change in the facts for the assessment year under consideration - deduction allowed. - AT
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AO was compelled by the audit party to issue notice for reopening, though earlier he held a bona fide belief that the income was as per the correct legal position. - Notice u/s 148 quashed - HC
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Cancellation of Registration U/s 12AA - carrying out the game of cricket as an entertainment industry, generating huge revenue - registration has been rightly cancelled - AT
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TDS U/s 194J or 194C - professional services - modelling activity is professional service or not - Held no. - AT
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Transfer of a case u/s 127(1) - unfortunately CIT apart from stating that case has been transferred for co-ordinating investigation has not given any other reason - matter remanded back - HC
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Computation of Capital Gains - Benefit of indexation - The holding period of the assessee in respect of the said asset, again, to be reckoned with reference to the holding by the previous owner - AT
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Deemed dividend u/s. 2(22)(e) - loan or advance to a non-shareholder cannot be taxed as deemed dividend in the hands of the a non shareholder. - AT
Customs
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Finalization of provisional assessment - principles of unjust enrichment are not applicable to this refund claim. - AT
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Using of IEC of some other person is not an offence under the Customs Act, 1962. Therefore, the appellant has not violated the provisions of Customs Act. - AT
Service Tax
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Denial of Refund claim – Availment of benefit of Notification No.41/07-ST & Notification no.17/09-ST – Computation of period of limitation for different periods and different notifications - AT
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Service tax - rate of tax - rate applicable at the time of rendering the service is rate on which service tax liability is required to be discharged even if the consideration for the said service was received subsequently. - AT
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Condonation of delay - the medical certificate issued by a skin specialist is misconceived. No reason to condone the delay. - COD application dismissed. - AT
Central Excise
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Refund - The excess duty paid was not required to be paid by the appellant. Therefore the same cannot be treated as duty - not filing the refund claim in time cannot be the reason for denying the claim as bar of limitation is not applicable to this case - AT
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Cenvat credit - capital goods used for R&D purpose - In case it is situated within the registered factory premises, the Cenvat Credit will be admissible and if not then will not be admissible. - AT
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Dutiability - no duty is chargeable on the blank CDs created during the course of manufacture of Audio CDs, Video CDs and CD Rom Software - AT
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CENVAT Credit on Sales Commission Services - scope of the term “such as“ - Input services - Rule 2(l) - CENVAT credit would not be admissible - AT
VAT
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Delayed submission of C forms - the Tribunal has no power to grant indefinite time to obtain C-forms for production at any time the dealer wants - HC
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Delayed submission of C forms - rejection of C-forms of the petitioner holding that they were belated was not correct and proper - HC
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KGST assessments & CST assessment - detergents, cleaning agents and laundry brightners. - the product in effect is a cleaning agent cum disinfectant and is squarely covered by Entry 51 - HC
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Interest u/s 27(1) - DVAT - The tax which is said to be due under section 27(1) of the said Act must be the tax which is due “according to a return” - if no return filed no interest u/s 27(1) - HC
Case Laws:
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Income Tax
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2013 (5) TMI 175
Deduction u/s 80IB - as per AO deduction u/s 80IB was allowable, if the assessee sells its own manufactured goods and not the ready goods purchased - CIT(A) allowed the claim - assessee engaged in textile business for printing work - case selected for scrutiny - Held that:- The deduction u/s 80IB is available for ten consecutive assessment years and the assessee claimed the deduction first time for the assessment year 2004-05, therefore, the benefit was available to the assessee for the year under consideration when nothing was brought on record to substantiate that there was change in the activities and nature of the work of the assessee for the year under consideration vis-a-vis the preceding year i.e. 2004-05. See Tahreem Electricals (P) Ltd Vs. ACIT (2007 (6) TMI 253 - ITAT LUCKNOW-B) - appeal of the department dismissed. In the present case also, the Assessing Officer allowed the claim of the assessee for deduction u/s 80IB of the Act for the assessment year 2004-05 and there is no change in the facts for the assessment year under consideration as well as in the activities of the assessee as compared to the said earlier year, therefore, the Assessing Officer was not justified in denying the claim of the assessee
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2013 (5) TMI 174
Sale of mutual funds and sale of shares - speculative profit v/s capital gains - Held that:- A.O. has followed the orders for A.Y. 2002-03 and 2003-04 wherein the profit was treated as speculative profits. But CIT (A) has not given any finding with respect to the applicability of Explanation to section 73. Further the Assessee has raised an additional ground for the first time that LA erred in not granting deduction being the difference between the cost and market value of the mutual fund units held in the closing stock - the matter be remitted back to the file of CIT (A) for deciding the matter de novo & also decide the issue of profit earned on sale of shares and mutual funds in view of Explanation to Sec. 73 and for passing a speaking order to that effect. Disallowance of claim of Bad Debts as assessee has not demonstrated that the amount was written off in respective parties account- Held that:- As decided in case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] with effect from April 1, 1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable: it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee - remit the issue to the file of A.O. with a direction to him to verify the facts in the light of the decision. Disallowance of interest expenditure under Sec. 36(1)(iii) - Held that:- From the audited Balance Sheet as on 31.3.2004 as compared to immediately preceding financial year interest free funds in the form of share capital, reserves and surplus and unsecured loans as on 31.3.2004 was to the extent of ₹ 22.92 crore as against ₹ 2.79 crore as on 31.3.2003 meaning thereby that there was an increase of ₹ 20.13 crore in interest free funds. Thus it is seen that the interest free funds as on the date of Balance Sheet were far in excess of investments as on 31st Mar, 2004. Thus relying on Reliance Utilities (2009 (1) TMI 4 - HIGH COURT BOMBAY) wherein held that if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments - in favour of assessee. Disallowance of claim of depreciation on electric installation at 25% and in the process CIT(A) agree with the A.O. that it ought to be granted at 15% - Held that:- the assessee has not brought any material on record except making an oral statement statement that the electrical installations were attached to the Plant and Machinery. Further, A.R. could not controvert the finding of the CIT (A) and therefore no reason to interfere with the order of the CIT (A) - against assessee. Provisions made for leave encashment, gratuity and bad and doubtful debts - Whether be treated as unascertained liabilities, including the same in the book profit while calculating profit under sec. 115JB? - Held that:- Assessee did not argue its case before the CIT (A) and the same was dismissed as not pressed. Since the assessee has now raised the issue the matter should be remanded back to the file of CIT (A) so that the issue can be decided on merits. Disallowance towards Directors' Foreign Travel expenses and credit card and membership fees expenses - Held that:- A.O. disallowed the expenses for the reason that the assessee could not discharge the onus of proving the expenditure was for the purpose of business. Further no evidence was placed before the A.O. or before the CIT (A). Even before us Ld. A.R. has not brought any material on record in support of its contention. In view of these facts, we find no reason to interfere with the order of CIT (A). Disallowance u/s 14 A - CIT(A) deleted the addition - Held that:- While deleting the addition CIT (A) has given a finding that the assessee was having sufficient profits and interest free funds in comparison to the investments. He has further given a finding that with respect to the mutual funds transactions, no interest has been charged by the Bank except security transactions tax of ₹ 64,909/-. Before us the Ld. D.R. could not controvert the findings of CIT (A). Disallowance on account of interest expenses - Held that:- CIT (A) while granting relief to the assessee has given a finding that the availability of interest free funds and interest free unsecured loan was in excess of the investments. He has further given a finding that all the mutual funds transactions were carried out through CITI Bank and no interest was charged by the Bank except security transaction tax & deleted the addition. As D.R. could not bring any material on record to controvert the findings of the CIT (A) decided against revenue. Penalty u/s 271(1)(C) - CIT(A) deleted the levy - Held that:- CIT(A) while deleting the penalty has held that the issue on which addition has been made a debatable issue and a contentious matter and therefore, no penalty can be levied. Ld. D.R. could not controvert the findings of the CIT (A) and therefore, we find no reason to interfere with the order of CIT (A)
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2013 (5) TMI 173
Unexplained Share Application Money - addition u/s 68 - Held that:- The said 18 para of CIT (A)'s order is very specific about the addition of Rs. 1 Cr on account of Share Application Money and the same is silent about the other sum of Rs. 25 lacs, the Share Application Money interpreted by the Odyssey Corporation Limited. The said para was drafted in a singular form and it does not indicate both the Share Application Money subscribers. Therefore, this issue involving Odyssey Corporation Limited should be set aside to the files of the CIT (A) for specific adjudication after granting a reasonable opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee in this regard are allowed for statistical purposes.
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2013 (5) TMI 157
Notice U/s 148 escaped assessment - Assessing Officer was compelled by the audit party to re-open the assessment - Held that:- It is well settled that even if an issue is brought to the notice of the Assessing Officer by the audit party, it would not preclude the Assessing Officer from acting on such communication as long as the final opinion to take appropriate action is that of the Assessing Officer and not that of the audit party. Referring to the decision in case of CIT v. P.V.S Beedies (P.) Ltd (1997 (10) TMI 5 - SUPREME Court). it is equally well settled however that if the Assessing Officer has acted only under compulsion of the audit party and not independently, the action of re-opening would be vitiated. It is well settled that it is only the Assessing Officer whose opinion with respect to the income escaping assessment would be relevant for the purpose of reopening of closed assessment. It is, of course true, as held by the decision of the Apex Court in case of PVS Beedies Private Limited [1997 (10) TMI 5 - SUPREME Court] and Indian & Eastern Newspaper Society [1979 (8) TMI 1 - SUPREME Court ], if the audit party brings certain aspects to the notice of the Assessing Officer and thereupon, the Assessing Officer forms his own belief, it may still be a valid basis for reopening assessment. It writs large on the face of the record that the Assessing Officer was compelled to issue notice for reopening, though he held a bona fide belief that the treatment to the income which he had accorded in the original assessment was as per the correct legal position. - Notice u/s 148 quashed - decided in favor of assessee.
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2013 (5) TMI 156
Stay - Disallowance of depreciation on intangibles & tangible - Demand U/s 40A(2) - Interest U/s 220(2) of the Income Tax Act, 1961 - Held that:- It is necessary to note that out of the total tax demand of ₹ 15,81,63,498/-, an amount of ₹ 1,62,40,170/- already stands paid as it was adjusted against the refunds due for the assessment year 2008-09. The balance tax payable would then be ₹ 14,19,23,328/-, out of which, pursuant to the order passed by the Tribunal, a sum of ₹ 50 lacs has already been paid by 5th February, 2013, which leaves a balance of ₹ 13,69,23,328/- and as against this, an amount of ₹ 13,36,32,605/- is only on account of enhancement made of ₹ 30.44 crores which, prima facie, does not appear to be backed by law - We feel that the petitioner has an excellent prima facie case and the Tribunal ought to have granted stay of the demand raised by the revenue. We set aside the impugned order passed by the Tribunal to the extent of balance payments other than the payment of ₹ 50 lacs already made by the petitioner - the rest of the demand is stayed till the Tribunal disposes of the appeal - The writ petition stands disposed of - Any observations made in this order are only prima facie observations and will not be taken into account by the Tribunal while considering and deciding the appeal - We expect that the Tribunal shall decide the appeal expeditiously. The parties have assured that they shall not take any adjournments.
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2013 (5) TMI 155
Cancellation of Registration U/s 12AA - Established for the purpose of promoting and developing the game of cricket - Charitable activity u/s 2(15) - held that:- It is not the physical factor as to whether the assessee is conducting cricket matches or not, which is the issue to be looked into. It is the purpose for which those physical activities are carried out. There is no case, as far as physical activities are concerned, that the game conducted by the assessee is not genuine. It becomes not genuine when we look into the objects for which the association is formed and registered under section 12AA of the Act. The object of the assessee was to carry on an activity for advancement of an object of general public utility by promoting the cricket game - But it has deviated from the stated objective by carrying out the game of cricket as an entertainment industry, generating huge revenue - We are of the considered opinion that the case of the assessee is covered by both the limbs stated in section 12AA(3) of the Act - We uphold the order of the Director of Income-tax (Exemptions) passed under section 12AA(3) of the Income-tax Act, 1961 - The registration of the assessee granted under section 12AA has been rightly cancelled - Appeal is dismissed in favour of revenue.
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2013 (5) TMI 154
TDS U/s 194J or 194C - professional services - modelling activity is professional service or not - Matter of dispute is the assessee made TDS at 1.133 per cent as per section 194C, whereas the Assessing Officer applied at 11.33 per cent as per section 194J of the Act - Held that:- It is a settled position vide the decisions in Dy. CIT v. Movies Stunt Artists Association (2005 (11) TMI 366 - ITAT MUMBAI )that the list of film artist cannot be extended to include other category of stunt actors, although they are engaged in the production of cinematographic film - It is also the decision of the Tribunal in EMC v. ITO( 2010 (1) TMI 832 - ITAT, Mumbai) that the photographer-cameraman, who of course figure in the list of film artist, cannot be covered by the list under provisions of Explanation (a) to section 194J of the Act and Notifications issued by the Board - when such cameraman is not engaged in skills, i.e., acting skill in films, modelling skills for display of merchandise, singing skills, etc., and such person can make earning out of such skills - It is not that the total earning of that person in lieu of services rendered which must attract the provisions of section 194J of the Act. The expressions services rendered used in the said Explanation assume significance and therefore, the taxable receipts under section 194J of the Act are services-specific and not person specific. In the instant case, the payments are payable for the services of modelling and it is unconnected with the production of cinematographic film. While modelling is aimed at display of merchandise, the acting is defined as to act in play or film (www.freedictionary.com), i.e., to portray a role authored by a story-writer with different purposes and objects and certainly not to displace merchandise to boost the sales of a manufacturer or a trader of the product or services. Therefore, the impugned payments made by the assessee to Matrix India on behalf of Ms. Katrina Kaif did not attract the provisions of section 194J of the Act - Accordingly, the grounds raised are allowed - We have granted relief to the assessee on the main issue - Adjudication of other ground constitutes an academic exercise. Therefore the said grounds are dismissed as academic - The appeal is allowed in favour of Assessee.
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2013 (5) TMI 153
Transfer of a case - Section 127(1) of the Income Tax Act - reasons for transferring the case - Held that:- What the Apex Court has observed in Ajantha Industries (1975 (12) TMI 1 - SUPREME Court) is that while transferring the case on the ground of co-ordinated investigation, some reason has to be given by the commissioner which reveals why it is necessary to transfer the case for the purpose of co-ordinated investigation. In our view unfortunately Commissioner of Income Tax apart from stating that case has been transferred for co-ordinating investigation has not given any other reason - Impugned order is therefore quashed and set aside - Matter is however remanded back to the Commissioner of Income Tax who shall pass fresh order U/s 127(1) of the Income Tax Act after giving an opportunity to the petitioner and pass an order in accordance with law after recording his reasons - Petition is accordingly partly allowed and disposed of - Contentions of both the parties are kept open.
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2013 (5) TMI 152
Method of computation of deduction U/s 80HHC - Whether the deduction claimed by the assessee U/s 80HHC of the Act should have been given first and then the adjustments of unabsorbed depreciation should have been taken place - Held that:- The decision of the Supreme Court in the case of IPCA Laboratory Ltd. v. Dy.(2004 (3) TMI 9 - SUPREME Court) and this decision had been followed by the Madhya Pradesh High Court in the case of VIPPY Solvex Products Ltd. v. CIT (2004 (11) TMI 31 - MADHYA PRADESH High Court) opined that the unabsorbed depreciation and carried forward losses of the earlier year should be first factored in while arriving at the taxable income and as against balance available, the benefit of deduction under section 80HHC of the Act can be claimed. We having noticed the ratio of the Supreme Court in the Judgments referred to above, that deduction can be claimed only against positive profits and positive profit necessarily implies the adjustments and set off of the depreciation allowance of earlier years and carried forward losses of earlier years and that Judgment having the binding effect on this court, it has to be necessarily ruled that the benefit under section 80HHC of the Act can be claimed only after the unabsorbed depreciation of the earlier years is adjusted against the profits of the current year and then only the benefit extended under section 80HHC of the Act can be given effect to. Tribunal was correct in taking the view that the Appellate Commissioner was not justified in reversing the view taken by the Assessing Officer and the order of the Tribunal is proper, does not suffer from any error of law and therefore we answer the questions posed in the affirmative to hold that the Tribunal was correct in taking the view that the assessee was not entitled to claim the benefit of deduction even before adjusting unabsorbed depreciation of the earlier years - Revenue's appeal is dismissed.
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2013 (5) TMI 151
Renewal of approval u/s. 80G(5)(vi) - Trust was registered as a charitable trust u/s. 12AA of the Act - Held that:- We notice that the Ld. CIT has not brought out any material to show that the assessee-Trust did not comply with any of the conditions specified in sub-section (5) of section 80G of the Act, which would make it ineligible for recognition u/s 80G of the Act - Instead, in our view, the Ld CIT has misdirected himself in discussing about the activities of museum, which are required to be examined at the assessment level - Hence, in our view, the orders passed by the Ld. CIT(A) are not in accordance with the express provisions stated in sec. 80G(5) of the Act, i.e., in our view, the Ld. CIT has not processed the applications filed by the assessee seeking renewal of recognition u/s. 80G of the Act in terms of relevant provisions of the Act. The application filed by the assessee on 17.03.2009 needs to be examined afresh and in that case, the second application filed by the assessee on 29-11-2010 shall become infructuous - We set aside both the impugned orders passed by Ld CIT and direct him to process the application filed by the assessee on 17.3.2009 in terms of the provisions of sec. 80G of the Act and take appropriate decision in accordance with the law - Appeal is allowed for statistical purposes and the other appeal of the assessee is dismissed as infructuous.
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2013 (5) TMI 150
Computation of Capital Gains - Benefit of indexation - Fair market value of the capital asset - Period of Holding - Held that:- Each of the three owners through whom the assessee and her sister have derived their title, i.e., directly or indirectly, acquired the property prior to 01.04.1981. - no infirmity in the treatment of the fair market value of the asset as on 01.04.1981 as the cost of acquisition. The assessee having 50% share therein can, consequently, claim only 50% of the said value in the computation of the long term capital gains in her hands - A better way would be to compute the entire long term capital gains on the sale of house property, and allocate the capital gains so computed to the extent of 50% each in the hands of the assessee and her sister, Ms. Crystal Perry - We direct like-wise, as has in fact, the ld. CIT(A) - We decide accordingly. Regarding Period of Holding - Held that:- The Special Bench of the tribunal in the case of Dy.CIT vs. Manjula J. Shah (2009 (10) TMI 646 - ITAT MUMBAI) has confirmed the indexation benefit since 01.04.1981 onwards - The said decision by the tribunal has been since upheld by the hon'ble jurisdictional high court in the case of CIT vs. Manjula J. Shah (2011 (10) TMI 406 - BOMBAY HIGH COURT) - The holding period of the assessee in respect of the said asset, again, to be reckoned with reference to the holding by the previous owner, the indexation benefit, which is to be applied to a long-term capital asset and, further, is only for providing the benefit of inflation in the working of the capital gains for the period of holding since 01.04.1981, could not be denied to the assessee. We do not find any merit in the Revenue’s case - We decide accordingly - decided in favour of Assessee.
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2013 (5) TMI 148
Deemed dividend u/s. 2(22)(e) - assessee-company is engaged in the Processing and Trading of Iron Ore taken loans from M/s. Alfa Distilleries P. Ltd. & M/s. Vulcan Distilleries P. Ltd. - Held that:- As decided in case of Bhaumik Colours P. Ltd [2008 (11) TMI 273 - ITAT BOMBAY-E] in the light of the intention behind the provisions of section 2(22)(e) to extend the legal fiction to a case of loan or advance to a non-shareholder also, loan or advance to a non-shareholder cannot be taxed as deemed dividend in the hands of the a non shareholder. As in the present case nowhere it is a case of the A.O. that the assessee-company is a shareholder of M/s. Alfa Distilleries P. Ltd. or M/s. Vulcan Distilleries P. Ltd. and as the assessee is not the shareholder of those companies, no addition can be made in the hands of the assessee treating the advances / loans borrowed by the assessee company from those two companies. The CIT (A) tried to distinguish the case of the assessee with that of Bhaumik Colours P. Ltd. (supra) but judicial discipline require that all authorities below should follow the ratio and principles laid down by the higher courts and Tribunal in judicial spirit - assessee’s appeal is allowed.
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Customs
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2013 (5) TMI 172
Unjust enrichment on refund arising due to finalization of provisional assessment - Apellant and the foreign company is having a technical assistance agreement - Bills of entry in question were assessed provisionally by taking extra duty deposit of 1% of the duty payable - Appellant submitted the relevant documents to SVB who accepted the invoice values in respect of goods imported. Therefore, appellant claimed refund of extra duty deposit made earlier. Held that:- In the present case while the 1% extra duty had been paid during 2001-2002 to 2003-2004, the refund claim of this extra duty deposit had arisen on 20.01.2004 when the Assistant Commissioner passed the order accepting the declared transaction value and the refund claim had been filed within one year. Therefore, following the judgment of Commissioner of Customs, Kandla Vs. Hindustan Zinc Ltd.[2009 (2) TMI 100] principles of unjust enrichment are not applicable to this refund claim. Since this is the only ground on which the rejection of the refund claim has been upheld. Thus, the impugned order is not sustainable and set aside. Appeal is allowed.
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2013 (5) TMI 170
Using IEC of some other person for importing the goods - stay application seeking waiver of pre-deposit of penalty u/s 112 and 114AA - Held that:- As decided in Hamid Fahim Ansari vs Commissioner of Customs (Import) Nhava Sheva [2009 (5) TMI 84 - BOMBAY HIGH COURT] that imports done in the name of petitioner but for some other person, if the petitioner has obtained IEC by misrepresenting the Ministry of Commerce and Industry and Director General of Foreign Trade, it is for that body to take action. In the result, the Hon’ble High Court held that using of IEC of some other person is not an offence under the Customs Act, 1962. Therefore, the appellant has not violated the provisions of Customs Act. Penalty deleted - in favour of assessee.
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Corporate Laws
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2013 (5) TMI 169
Complaint made 19(1)(a) of the Competition Act, 2002 against Board for Control of Cricket in India (hereinafter "BCCI") - (i) Irregularities in the grant of franchise rights for team ownership. (ii) Irregularities in the grant of media rights for coverage of the league. (iii) Irregularities in the award of sponsorship rights and other local contracts related to organization of IPL. In addition to the issues as pointed out above, the Commission examined the dual role of BCCI for anti-competitive practices. Held that - In line with the provisions of the Act, international jurisprudence, it is concluded that BCCI is an enterprise for the purpose of the Act, and therefore, within the jurisdiction of the Commission. The Commission finds BCCI guilty of contravention of Section 4(2)(c) of the Act. In view of the above and in exercise of powers under Section 27 of the Act, the Commission directs BCCI (i) to cease and desist from any practice in future denying market access to potential competitors, including inclusion of similar clauses in any agreement in future. (ii) to cease and desist from using its regulatory powers in any way in the process of considering and deciding on any matters relating to its commercial activities. To ensure this, BCCI will set up an effective internal control system to its own satisfaction, in good faith and after due diligence. (iii) To delete the violative clause 9.1(c)(i) in the Media Rights Agreement. The Commission considers that the abuse by BCCI was of a grave nature and the quantum of penalty that needs to be levied should be commensurate with the gravity of the violation. The Commission has to keep in mind the nature of barriers created and whether such barriers can be surmounted by the competitors and the type of hindrances by the dominant enterprise against entry of competitors into the market. The Commission has also to keep in mind the economic power of enterprise, which is normally leveraged to create such barriers and the impact of these barriers on the consumers and on the other persons affected by such barriers. The Commission decides accordingly. The directions of the Commission must be complied within 90 days of receipt of this Order. The amount of penalty determined of Rs. 52.24 crore must also be deposited within a period of 90 days from the date of receipt of this Order.
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2013 (5) TMI 168
Anti-Competitive Agreement - The informant had produced a feature film by the title 'Vishwaroopam'. The informant as an innovative and pioneering step and to take advantage of exhibition of film via (DTH) platform, wanted to premiere the movie through DTH service providers. It is stated in the information that out of total number of theatres (1134) in Tamil Nadu, 698 theatres were members of the opposite party association. Resolution was passed by the opposite party not to lend co-operation for screening of any film that is released even before it comes to the theatre, through DTH or any other technology.' Held that - The impugned resolution was an anti-competitive agreement amongst the theatre owners in Tamil Nadu since the resolution limited and controlled the market of exhibition of films and use of technical development in exhibition of feature films and in contravention of the provisions of section 3(1) read with section 3(3)(b) of the Act. The Commission, therefore, directs the DG under section 26(1) of the Act to cause an investigation to be made into the matter and submit the report to the Commission within 60 days.
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Service Tax
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2013 (5) TMI 181
Denial of Refund claim – Availment of benefit of Notification No.41/07-ST & Notification no.17/09-ST – Denial of refund of service tax as per revenue necessary certificate has not been produced. Assessee only contested the denial of refund of service tax in respect of business auxiliary services received from overseas commission agents for procuring exports order. Held that - Service tax on commission to overseas commission agent had been paid in March, 2009 and refund claim has been filed on 31.08.2009. Since on 7.7.2009 new notification no.17/2009-ST had been issued, in supersession of the earlier notification no.41/07-ST and in the new notification, the limitation period was one year from the date of let export order and since in terms of the Board’s circular no.354/256/2009-TRU dated 1.1.10, the new notification dated 7.7.2009 is applicable to the exports which had taken place prior to its issuance, the limitation period application in respect of this refund claim would be one year. Thus, refund claim had been filed within time. The impugned order is set aside. Denial of refund of service tax for the period of August, 2008 to October, 2008. – Held that: - In respect of refund claim of ₹ 66,499/- in respect of the service tax on the commission paid to the overseas commission agents, the period of export is from August, 2008 to October, 2008. In this case even if the limitation period of one year under the new notification no.17/09-ST dated 7.07.2009 is applied, the claim is time barred as the refund claim has been filed on 11.12.2009. Denial of refund of service tax for the period of from April, 2008 to June, 2008 – Held that:- In respect of refund of service tax of ₹ 85,225/- which is the service tax paid in respect of the payment to the commission agents abroad, while the refund claim could have been filed upto December, 2008, the refund claim, in this case, is time barred.
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2013 (5) TMI 180
Service tax/penalty/interest - u/s 77 & 78 - Held that:- Only issue to be decided in this case is regarding the quantum of service tax liability on all the three appellants which needs to be gone into detail. Thus, this exercise would be better if it is left to the adjudicating authority. Therefore we set aside the impugned orders and remit the matters back to the adjudicating authority to reconsider the issue afresh after following the principles of natural justice.
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2013 (5) TMI 179
Service tax - rate of tax - As per revenue rate of tax leviable on the service provided by the appellant would be the rate which was in existence at the time of receipt of the bill or at the time of receipt of consideration. – Held that:– Following the decision of tribunal in Reliance Industries Ltd. vs. CCE Rajkot [2008 (1) TMI 86] rate applicable at the time of rendering the service is rate on which service tax liability is required to be discharged even if the consideration for the said service was received subsequently. Thus, the impugned order set aside and appeal is allowed.
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2013 (5) TMI 178
Non-compliance of the pre-deposits - non-discharge of Service Tax on the services rendered for transportation - Held that - we direct the appellant to deposit an amount within a period of eight weeks from today and report compliance before Commissioner (Appeals). The appeal is disposed of by way of remand.
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2013 (5) TMI 176
Change of cause title - it is requested that in appeal filed by appellant against Order passed by the CCE, Chennai IV Commissionerate, the respondent name may please be changed as Commissioner of Service Tax, Chennai instead of Commissioner of Central Excise, Chennai IV Commissionerate. Held that - we allow the application and the Registry is directed to correct the cause title Condonation of delay - As submitted by appellant that he could not prepare and finalise the appeal within the stipulated period on account of his emergency travel due to personal family exigencies and produce medical certificates - held that - Tribunal may admit an appeal after the expiry of the stipulated period, if it is satisfied that there was sufficient cause for non-presenting it. We considered the submission of the appellant that the medical certificate issued by a skin specialist is misconceived. No reason to condone the delay.COD application is dismissed.
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Central Excise
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2013 (5) TMI 171
Refund of excise duty paid denied - claim filed beyond the period of limitation - Held that:- It is an admitted fact that the duty payable by the appellant has been paid. The excess duty paid was not required to be paid by the appellant. Therefore the same cannot be treated as duty. As held in Shankar Ramchandra Auctioneers (2010 (4) TMI 391 - CESTAT, MUMBAI) excess amount paid erroneously as duty which was not required to pay, there is no bar to return of such amounts. Therefore, the provisions of Section 11B of Central Excise Act, 1944 are not applicable. Relying on the said decision, it can be concluded that the provisions of Section 11B ibid are not applicable to the facts of this case therefore not filing the refund claim in time cannot be the reason for denying the claim as bar of limitation is not applicable to this case - in favour of assessee.
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2013 (5) TMI 167
Admissibility of cenvat credit - capital goods used for R&D purpose - To avail the Cenvat Credit in terms of the definition under rule 2(a)(A) of the Cenvat Credit Rules, 2004, the only requirement is that such specified capital goods should be used in the factory of the manufacturer in the production of the final products - Held that:- The R & D building is whether within the factory premises or not, and the same can be confirmed by the original adjudicating authority. There is no law point involved. The matter is remanded to the Original Adjudicating Authority to verify whether the R & D building is situated within the registered factory premises or not. In case it is situated within the registered factory premises, the Cenvat Credit will be admissible and if not then will not be admissible.
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2013 (5) TMI 166
Waiver of pre-deposits - As per revenue demand was confirmed on the ground that the appellant could not produce the Project Implementing Authoritys Certificates as to the consumption of the goods cleared without payment of duty for a particular project. - Held that:- since the issue needs to be appreciated based on the factual matrix, without expressing any opinion on the merits of the case, matter is remanded back to the adjudicating authority.
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2013 (5) TMI 165
Valuation dispute - appellant was clearing the final products on the basis of 110% of the cost of production. According to the Revenue, the said cost of production dos not stand correctly calculated & arrived at by them in terms of CAS- 4. Accordingly, proceedings were initiated. Held that:- On going through the detailed reply filed by the appellant and the impugned order passed by the Commissioner, there are various discrepancies pointed out by the appellant in determining the cost of production in terms of CAS -4 stand referred to but not decided by the Commissioner. Thus, matter is remanded back. We make it clear that we have not gone through the submissions as regards the limitation etc. and the appellants are at liberty to raise the same before the adjudicating authority.
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2013 (5) TMI 164
Denial of credit - Port services - Held that:- In respect of credit of port services, the issue is covered by the decision in the case of CCE, Jaipur vs. Hindustan Zinc Ltd. [2012 (12) TMI 105 - CESTAT NEW DELHI] whereby the Tribunal after relying upon the earlier decision held against the Revenue. In favour of assessee. Denial of credit - Imposition of penalty - Catering services - Held that:- There is no finding in the adjudication order as well as order of Commissioner (Appeals) while denying the credit in this regard. In the case of CCE, Nagpur vs. Ultratech Cement Ltd. reported in [2010 (10) TMI 13 - BOMBAY HIGH COURT] Tribunal allowed the credit on catering service. Thus, applicant is not liable for any penalty in this regard.
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2013 (5) TMI 163
Dutiability of the blank CD created during the process of replication of Audio/Video CDs and CD Rom Software - Held that:- Following the case of M/s.Pearl Engineering Co. relying on Siddharth Opticals Disc Pvt. Ltd. Vs. Union of India [2013 (1) TMI 331 - DELHI HIGH COURT] no duty is chargeable on the blank CDs created during the course of manufacture of Audio CDs, Video CDs and CD Rom Software. In favour of assessee.
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2013 (5) TMI 162
CENVAT Credit on Sales Commission Services - scope of the term "such as" - Input services - Rule 2(l) - denial of claim by dept. as sales commission services are not eligible for CENVAT credit as per definition of input service defined under Rule 2(l) of the CENVAT Credit Rules, 2004 - Held that:- As decided in CCE, Ahmedabad -II vs. M/ s.Cadila Healthcare Ltd. [2013 (1) TMI 304 - GUJARAT HIGH COURT] the words "activities relating to business" are followed by the words "such as". Therefore, the words "such as" must be given some meaning. In Royal Hatcheries (P) Ltd. v. State of A.P. (1993 (10) TMI 85 - SUPREME COURT) it is held that the words "such as" indicate that what are mentioned thereafter are only illustrative and not exhaustive. For an activity related to the business, it has to be an activity which is analogous to the activities mentioned after the words "such as". What follows the words "such as" is "accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security". Thus none of the illustrative activities, viz., "accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security" is in any manner similar to the services rendered by commission agents nor are the same in any manner related to such services. Under the circumstances, though the business activities mentioned in the definition are not exhaustive, the service rendered by the commission agents not being analogous to the activities mentioned in the definition, would not fall within the ambit of the expression "activities relating to business". Consequently, CENVAT credit would not be admissible - No distinction can be made between the commission paid to the foreign agent and the agents operating within the territory of India because nature of services provided by both the categories of the agents are same - against assessee.
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CST, VAT & Sales Tax
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2013 (5) TMI 161
Delayed submission of C forms - Power of AO to condone the dealy - Inter state sale - Proviso' to Section 8(4) of the CST Act and so also Rule 12(7) of the CST Rules - 'Second proviso' to Rule 12(1) of the CST (R and T) Rules 1957 - Held that:- the Tribunal has no power to grant indefinite time to obtain C-forms for production at any time the dealer wants and that the C-forms should have been produced at the assessment stage itself. Even for accepting belated C-forms, the assessee has to furnish explanation. Since the Assessing Officer has not considered the matter with specific reference to the power to condone the delay and since the explanation offered by the petitioner herein has not been considered at all, the matter requires reconsideration. In view of the power conferred upon the assessing authority to condone the delay by virtue of the 'proviso' of the Rule 12(7), rejection of C-forms of the petitioner holding that they were belated was not correct and proper - Matter remanded back.
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2013 (5) TMI 160
Assessment order has been passed, without serving the preassessment notice - As the petitioner's industry had already been closed down as early as on 15-10-2002 - The closure of the business was communicated to the concerned authorities - Held that:- Even though the petitioner has stated that such industry was closed down as early as in the year 2002, this Court finds that the petitioner herself has given her address as "Neetha Sebastian, Propreitor, Sevana Industries, Vaduthala" in Ext.P7 request dated 16-5-2006 for adjournment. This being the position, the contention raised by the petitioner does not hold any water at all, with reference to the actual address in which the notice might have been issued. The petitioner having admitted the receipt of the notices issued by the first respondent earlier, particularly as in the petition to produce the books of accounts and the petitioner having submitted Ext.P7 notice for adjournment, ought to have been vigilant enough to ascertain the actual particulars especially with regard to the next date of hearing scheduled by the first respondent - Cannot now take a 'U-turn' and say that there was failure on the part of the first respondent in finalising the proceedings as per Ext.P1 - Interference is declined and writ petition is dismissed.
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2013 (5) TMI 159
KGST assessments & CST assessment - detergents, cleaning agents and laundry brightners. - Whether the item falls under entry 51 and if not necessarily it has to be consigned to the residuary entry under entry 177 which provides for rate of tax at 8% - held that:- Assessee's product claimed in the product description produced in Court is very much a cleaning agent because on washing with it toilet commodes and wash basins look absolutely clean, sparkling & shining. - the additional feature or advantage of the product to act as a disinfectant along with the main use as a cleaning agent does not affect the product identity as a cleaning material. - the product in effect is a cleaning agent cum disinfectant and is squarely covered by Entry 51. - Decided against the assessee. Stock transfer - F form - held that:- the assessee has proved exemption to the tune of Rs.30 lakhs and balance stock transfer value of Rs.20 lakhs is disallowed for want of conclusive evidence. Here again, having regard to the documents produced, which includes even F-forms issued by the consignees, we feel assessee is entitled to partial relief. - Decided partly in favor of assessee.
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2013 (5) TMI 158
Exemption as per Entry 55 (2) of the 1st schedule to the KVAT Act - manufacturing and sale of 'hand made soaps' - mechanised unit - Held that:- the petitioner got the unit mechanised in September 2005, coming out of the purview of exemption under Entry 55 (2) of the 1st schedule, and has been paying the necessary tax to the department. Since the petitioner did not choose to produce the 'books of accounts' and did not turn up for the personal hearing, there was no opportunity for the first respondent to have the accounts verified and to ascertain the contents of Ext.P1 reply. It is no more open for the petitioner to contend that the first respondent ought to have accepted the returns and should not have proceeded with the Section 6(1A)(b) assessment proceedings. There is absolutely no merit or bona fides in the said submission. More so, when the provision of law is not to be interpreted in favour of the wrong-doer. - Decided against the assessee.
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2013 (5) TMI 149
Chargeability of interest u/s 27(1) - As per petitioner provision of interest u/s 27(1) would only apply where the petitioner/ dealer failed to pay the “tax due” as required by section 21(3) of the said Act. Thus, according to the petitioner, prior to an assessment, unless and until the dealer filed a return, there could not be any “tax due” because that would have relation to the amount of tax due “according to the return” - Held that:- From an examination of the decisions of Rajasthan v. Ghasilal [1965 (1) TMI 41 - SUPREME COURT OF INDIA and Maruti Wire Industries Pvt. Ltd. v. STO & ORS [2001 (3) TMI 856 - SUPREME COURT OF INDIA] it is apparent that the expression “tax due” as appearing in section 27(1) of the said Act would have to be read in relation to the provisions of section 21(3) thereof. Section 21(3) of the said Act has clear reference to the furnishing of a return. Moreover, it has reference to the full amount of tax due from a dealer under the Act “according to such return”. The tax which is said to be due under section 27(1) of the said Act must be the tax which is due “according to a return”. It is obvious that if no return is filed then there could be no tax due within the meaning of section 27(1) of the said Act read with section 21(3) thereof. The tax which is ultimately assessed is the tax which becomes due on assessment and if this tax so assessed is not paid even after the demand is raised then the dealer would be deemed to be in default and would be liable to pay interest under section 27(2) of the said Act. But till such tax is assessed no interest can be levied on such a dealer, who has not filed a return under section 27(1) of the said Act. Thus, it is evident that the impugned order is not in accord with the Constitution Bench decisions of the Supreme Court in Rajasthan v. Ghasilal [1965 (1) TMI 41 - SUPREME COURT OF INDIA]. Thus, writ petition is allowed to the aforesaid extent.
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