Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 8, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Highlights / Catch Notes
Income Tax
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Vires of clause (i) of explanation 1 to Section 115JB(2) in its prospective and retrospective operation - The amending Act cured the statutory provision of the vice from which it suffered and it was given retrospective effect which was quite within the competence of the legislature. - HC
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Stay application - Scope of Office Memorandum F. No. 404/72/93- ITCC issued by CBDT - Assessing Officer is required to take appropriate decision on the stay application, as per the modified instruction - HC
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It is not disputed that the unclaimed dividend which has been transferred to the Reserve Fund, has already borne income tax. Thus, bringing the same to tax, would amount to double taxation. - HC
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Bogus claim of consultancy charges payments - providing accommodation entries - Once the assessee admitted that ₹ 50 lakhs was claimed excessively, the onus of showing that the balance ₹ 50 lakhs was a justified expenditure lay upon it. - Additions confirmed - HC
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Addition on account of long term capital gains taxable in the hands of the assessee - In view of cancellation of JDA no further amount has been received and no action thereon has been taken - No addition - HC
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LTCG - Deduction u/s 54F claimed by the Trust assesseed u/s 161 on behalf of beneficiary - only by virtue of u/s. 161 that the trust has been assessed for the income that is for benefit of sole beneficiary - Exemption u/s 54F allowed to trust - AT
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Non charitable activities - assessee failure to prove the donations received are corpus donations - not having registration u/s 12A - additions and disallowance confirmed - AT
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Deemed dividend u/s 2(22)(e) - The company had advanced money to clear the loan outstanding in the name of the assessee, so as to pledge the properties for loans availed - It is not a gratuitous payment which attracts deeming provision of section 2(22)(e) - AT
Customs
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Levy of CVD on imported CKD E-bike kits - in a CKD condition, what in fact is imported is the entire vehicle - Since virtually what is imported is in fact an entire electrically operated vehicle, in this case is E-bikes, there would be no justification in denying the exemption from excise duty under the Notification in question. - HC
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Valuation - rejection of transaction value - Mere presence of the CHA at the time of examination does not mean that the copy of the third chartered engineer report was provided to the respondent and it is clear that they were not given a chance to rebut the same. - AT
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Refund claim - SAD - N/N. 102/2007-Cus dated 14.9.2007 - appellant claims that even though initially they have availed the CENVAT credit of the duty paid on the said imported goods, but later the credit had been reversed before clearance/sale and also before filing the refund claims - refund allowed - AT
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Conversion of shipping bills after export of goods - rejection on account of time bar - the amendment shall be governed by the circular prescribing conditions thereto which cannot be said to be moored to any provision of the Act - AT
Service Tax
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Renting of immovable property service - the confusion and doubts relating to renting of immovable property service would detract from the allegation that there was misrepresentation or suppression of fact with intent to evade tax - demand of service tax set aside - AT
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VCES declaration - The claim of CENVAT Credit taken and/or utilized crystallizes only when the assessee files return before Revenue - CENVAT Credit can only be availed by filing the return, if no return is filed, it cannot be said that any liability was discharged - VCES was rightly rejected - AT
Central Excise
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Clandestine removal - associated enterprises - There is no evidence of extra usage of electricity or any evidence for transportation of such clandestinely removed goods. There is no evidence for payment/receipt of money for excess inputs, extra labour and also payments made from the buyers end - demand of duty set aside - AT
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Penalty - CENVAT credit - the SCN, as well as the orders of the lower authorities, do not establish that the appellant had demonstrated deliberate intent in availing ineligible CENVAT credit - there was no reason to issue the show cause notice - No penalty - AT
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CENVAT credit - common courier bill of entry for various importers - whether credit available on the basis of photocopy of the courier bill of entry? - Held Yes - AT
VAT
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Classification of goods - “Hydraulic door closers” appears to be a mechanical device and as submitted by the counsel for the petitioner, it stops the speed of the door or retard the speed - cannot be classified as fitting for doors - HC
Case Laws:
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Income Tax
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2017 (5) TMI 263
Diversion of business funds to an associate concern without interest - Tribunal held that the assessee failed to point out any service having been rendered by the associate company to the assessee firm - Held that:- We do not find that the Tribunal arrived at the conclusions on basis of surmises and conjectures, but the Tribunal noticed that an agreement between the assessee and M/s Singhal’s Resourcing and Marketing Pvt. Ltd. was there and further that the profit and loss account of M/s Singhal’s Resourcing and Marketing Pvt. Ltd. discloses that it incurred revenue expenditure for giving the said service, but except that no other material was available and the assessee was not at all in position to express even about the services which were availed. The Tribunal after examining all aspects of the matter held that the assessee failed to establish the factum of having service from M/s Singhal’s Resourcing and Marketing Pvt. Ltd. and while doing so also observed that the agreement may be a device adopted to ignore the tax liability. Pertinent to notice that the assessee and M/s Singhal’s Resourcing and Marketing Pvt. Ltd. though are separately assessed to tax, but are closely knitted concerns and the partners are either close relatives or the same persons. In entirety, we do not find any wrong with the findings arrived by the Income Tax Appellate Tribunal. We find force in the argument advanced by learned counsel that the appeal as a matter of fact is having no substantial question of law. - Decided against assessee.
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2017 (5) TMI 262
Vires of clause (i) of explanation 1 to Section 115JB(2) in its prospective and retrospective operation - Held that:- The provision impugned in the present writ petition was considered in Whirlpool of India Limited & Anr. (2013 (3) TMI 414 - DELHI HIGH COURT) and it has been held that, no new levy has been proposed to be made by the amendment. The nature of the levy has been changed. It merely cures a provision of vice. The amendment made is not ultra vires or unconstitutional.
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2017 (5) TMI 261
Stay of demand - recovery proceedings u/s 226 - petitioner institute has been set up and is maintained by the State Government for advancement of scientific knowledge - Held that:- In the instant case, a bare perusal of the impugned order reveals that no reasons whatsoever have been mentioned while rejecting the case of the petitioner for stay of demand during the pendency of the appeal. It is enjoined upon the Appellate Authority to set out the reasons in support of the order passed. Giving reasons is one of the fundamentals of sound administration of justice. It is necessary to disclose the reasons which would indicate application of mind on the part of the authority and the aggrieved party would know as to why the decision has gone against it. It may not be necessary to set out reasons in detail but reasons at least in brief have to be stated by the Adjudicatory Authority. It is important to note that the petitioner institute has been set up and is maintained by the State Government. The object of the petitioner institute is advancement of scientific knowledge aimed at enhancing the quality of patient care. The case of the petitioner against the assessment for the year 2011-12 has already been decided in its favour and it is stated to be entitled to refund of ₹ 5.87 crores. The setting aside by ITAT’ of withdrawal of the registration of the petitioner institute under Section 12AA will have a bearing on the demand raised against the petitioner as well as the outcome of the appeal before the CIT. It deserves to be noticed that against the total demand of ₹ 171.14 crores raised from the petitioner an amount of ₹ 72.39 crores has already been recovered/received by the respondents. In the impugned order, the demand pertaining to assessment years 2006-07 to 2010-11 has already been stayed as the petitioner has deposited an amount of 15%. It is also not a case where the petitioner institute has been a wilful defaulter and it would be difficult to recover the amount in case, appeal is decided against it. The petitioner has also been able to make out a prima facie case. We are, therefore, of the view that the case of the petitioner falls in exceptional circumstances which would warrant stay of demand without any pre-deposit during pendency of appeal.
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2017 (5) TMI 260
Validity of reopening of assessment - addition on account of long term capital gains taxable in the hands of the assessee - JDA - transfer within the meaning of sub sections (ii) and (vi) of Section 2(47) - Held that:- The matter is no longer res integra. In C.S. Atwal’s case (2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT) held that the issue involved in this appeal stands decided by this Court. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of the Act and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In view of cancellation of JDA no further amount has been received and no action thereon has been taken. It was urged that as and when any amount is received, capital gains tax shall be discharged thereon in accordance with law. In view of the aforesaid stand, while disposing of the appeals, we observe that the assessee appellants shall remain bound by their said stand. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption under Section 54F of the Act would not survive any longer and has been rendered academic. The Tribunal and the authorities below were not right in holding the assessee-appellant to be liable to capital gains tax in respect of remaining land measuring for which no consideration had been received and which stood cancelled and incapable. - Decided in favour of assessee.
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2017 (5) TMI 259
Addition made on account of provisions for losses in stores stock, raw material, finished goods deleted. Guest house expenses are not allowable for claiming depreciation of assets in light of the provisions of Section 37(4) of the Act of 1961. Disallowance on account of change in valuation of closing stock - Held that:- As closing stock becomes the opening stock of the next year and as such the Income Tax Appellate Tribunal was justified to adjust the alleged loss by excluding the interest on government loan and office expenses from the cost of closing stock.See VKJ. BUILDERS AND CONTRACTORS P. LTD. Versus COMMISSIONER OF INCOME-TAX [2009 (8) TMI 101 - SUPREME COURT]. Deletion of levy of interest under Sections 234-B and 234-C when assessment is made on basis of book profit under Section 115-J - Held that:- Hon’ble Supreme Court in Kwality Biscuits Limited case(2006 (4) TMI 121 - SUPREME Court) has already taken the view that in absence of specific provision in the Act for payment of advance tax in cases where income is taxed under Section 115-J or 115-JA, the tax payer is not liable to pay any advance tax.
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2017 (5) TMI 258
Revision u/s 263 - Whether CIT was justified in invoking the jurisdiction under Section 263 to remand the matter to the Assessing Officer in respect of allowance of Corporate Social Responsibility claim of assessee? - Held that:- In the instant case, we find that the Assessing Officer has applied his mind to the claims made by the assessee and wherever the claims were disallowable they have been discussed in that assessment order and there is no discussion or reference in respect of the claims that were allowed. Judgments in the case of Fine Jewellery (India) Ltd. (2015 (2) TMI 732 - BOMBAY HIGH COURT) and Nirav Modi (2016 (6) TMI 1004 - BOMBAY HIGH COURT) it would be necessary to hold that in the circumstances of the case, it cannot be said that merely because the Assessing Officer had not specifically mentioned about the claim in respect of the Corporate Social Responsibility, the Assessing Officer had passed the assessment order without making any enquiry in respect of the allowability of the claim of Corporate Social Responsibility The provisions of Section 263 of the Act could not have been invoked by the Commissioner of Income Tax in the circumstances of this case. The Tribunal was not justified in holding that the query under Section 142 (1) of the Act was very general in nature and the reply of the assessee was also very general in nature. In our considered view, the query pertaining to Corporate Social Responsibility was exhaustively answered and the appellant – assessee had provided the data pertaining to the expenditure under each head of the claim in respect of Corporate Social Responsibility, in detail. The Tribunal was not justified in holding that the reply/explanation of the assessee was not elaborate enough to decide whether the expenditure claim was admissible under the provisions of the Income Tax Act. The Assessing Officer is not expected to raise more queries, if the Assessing Officer is satisfied about the admissibility of claim on the basis of the material and the details supplied. In the facts and circumstances of the case, we answer the question of law in the negative and against the Revenue.
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2017 (5) TMI 257
Penalty levied under section 271(1)(c) - claim of weighted deduction on purchase of the motor vehicles for employees - Held that:- As observed by the Hon'ble Supreme Court as well as this Court in catena of decisions, mere wrong claim cannot be a ground to levy penalty under section 271(1) (c) of the Act. Under the circumstances and considering the decision of the Hon'ble Supreme Court in the case of Tips Industries P. Ltd. (2010 (1) TMI 50 - BOMBAY HIGH COURT ) when the learned tribunal has deleted penalty under section 271(1)(c) of the Act, it cannot be said that the learned tribunal has committed any error. No substantial question of law arise. - Decided in favour of assessee
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2017 (5) TMI 256
Stay application - Scope of Office Memorandum F. No. 404/72/93- ITCC issued by CBDT - Held that:- Between clause 4 [B](a) and clause 4 [B] (b), the word used is “or” and therefore, in both the eventualities ie., in case of Clause 4 [B](a) and in case of Clause 4 [B](b) ie., in case the Assessing Officer is of the opinion that the assessee is required to deposit either above 15% or less than 15% of the disputed demand, in that case, the Assessing Officer is required to refer the matter to the Principal CIT/CIT and thereafter, the Principal CIT/CIT is required to take appropriate decision, after considering all the relevant facts and determine the lump sum payment to be made by the assessee for granting stay of the balance demand. In a case where the Assessing Officer grants stay of demand on payment of 15% of the disputed demand and the assessee is still aggrieved, in that case, a further right is conferred upon the assessee to approach the jurisdictional administrative Principal CIT/CIT for review of the decision of the Assessing Officer. Under the circumstances, for the reasons stated above, the impugned decision of the respondent no.2- Assessing Officer rejecting the stay application cannot be sustained and the same deserves to be quashed and set-aside. Assessing Officer is required to take appropriate decision on the stay application, as per the modified instruction dated 29th February 2016 and unless the case falls within Clause 4 [B](a) & (b), he is required to pass appropriate order on the stay application, granting stay on payment of 15% of the disputed demand. In case, the Assessing Officer is of the opinion that the case falls within Clause 4 [B](a) or (b), in that case, he is required to follow the procedure as observed hereinabove; more particularly, Clause 4 [B] where the Assessing officer is required to refer the matter to the administrative Principal CIT/CIT and thereafter, the Principal CIT/CIT to take appropriate decision.
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2017 (5) TMI 255
Disallowance of on account of amortization in respect of Govt. Securities held in HTM category - Held that:- The issue raised herein stand concluded against Revenue and in favour of the Respondent-Assessee by decision of this Court in CIT v/s. Thane Bharat Sahakari Bank Ltd. [2015 (3) TMI 1026 - BOMBAY HIGH COURT] Tax on unclaimed dividend to Reserve Fund - addition on write back of unclaimed dividend - Held that:- We note that it is an undisputed position before us that in the present facts, the dividend had not been charged to the Profit & Loss Account. It forms part of appropriation of income as it is not debited to its Profit & Loss Account. In the above view, it is not disputed that the unclaimed dividend which has been transferred to the Reserve Fund, has already borne income tax. Thus, bringing the same to tax, would amount to double taxation. Our view is fortified by the observations of this Court in CIT v/s. M/s. Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT ] on an identical fact situation, that the view of the Tribunal that no tax is payable or transfer of unclaimed dividend to Reserve Fund, calls for no interference. The above observations were made even when no specific question with regard to the same, had been specifically raised therein.
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2017 (5) TMI 254
Bogus claim of consultancy charges payments - providing accommodation entries - Held that:- Material found in the course of search or other proceedings in relation to a third party assessee could not be treated as conclusive in relation to the present case; although the assessee was unable to show the precise nature of the services provided (and for which expenses were justifiably claimed) that per se could not lead one to conclude that the expenses were bogus. Counsel thus, underlined the distinction between lack of a full or proper explanation on the one hand, and no explanation on the other. This court is of the opinion that the impugned order is unreasoned and has blindly accepted the CIT (A)’s logic that propriety demands that the assessee’s surrender–restricted to ₹ 50 lakhs should be accepted. The expenses claimed were ₹ 1 crore. Once the assessee admitted that ₹ 50 lakhs was claimed excessively, the onus of showing that the balance ₹ 50 lakhs was a justified expenditure lay upon it. The assessee did not discharge that onus; the AO was therefore justified in bringing in to tax that expenditure. The reasoning adopted by the CIT (A) and the ITAT are therefore, unsustainable.Question of law framed has to be answered in favour of the revenue
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2017 (5) TMI 253
Addition on account of long term capital gains taxable in the hands of the assessee - Joint development agreement - transfer within the meaning of sub sections (ii) and (vi) of Section 2(47) - Held that:- The matter is no longer res integra. In C.S. Atwal’s case (2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT) held that the issue involved in this appeal stands decided by this Court. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of the Act and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In view of cancellation of JDA no further amount has been received and no action thereon has been taken. It was urged that as and when any amount is received, capital gains tax shall be discharged thereon in accordance with law. In view of the aforesaid stand, while disposing of the appeals, we observe that the assessee appellants shall remain bound by their said stand. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption under Section 54F of the Act would not survive any longer and has been rendered academic. The Tribunal and the authorities below were not right in holding the assessee-appellant to be liable to capital gains tax in respect of remaining land measuring for which no consideration had been received and which stood cancelled and incapable. - Decided in favour of assessee.
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2017 (5) TMI 252
Disallowance of land development expenses - expenses originally shown payable but subsequently claimed to have been credited to work-in-progress - CIT-A deleted the addition - Held that:- No specific error in the order of the CIT(A) could be pointed out by ld D.R. in the findings of the CIT(A) that the development expenses debited to profit and loss account was wrongly credited to ‘payable’ account instead of crediting it to the ‘work-in-progress’ account, which was rectified by the assessee in the subsequent accounting year and that it had no effect on the profitability reflected in the profit and loss account. CIT(A) has also given a finding that the assessee during the year has recognized revenue in respect of area of 25,892.22 sq.ft in the year under consideration and the development expenses of ₹ 41,57,264/- claimed in the profit and loss account also pertains to the area sold during the year. This finding of the CIT(A) has also remained uncontroverted by ld D.R. Further, the CIT(A) has relied on the decision in the case of Calcutta Co. Ltd (1959 (5) TMI 3 - SUPREME Court ), wherein, it was held that the assessee claimed estimated expenditure towards development of the plots sold during the year, even though no part of that amount represented any expenditure actually made during the year. It was held that there was a certain and accrued liability and the estimated expenditure required to discharge the liability will have to be deducted. - Decided against revenue
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2017 (5) TMI 251
Addition on account of major repair expense - Held that:- As decided in assessee's own case for previous AY 2006-07 & 2007-08 held there was no enhancement in the capacity of the plant and machinery as well as no increase in the efficiency. There was no purchase of any new equipment under the category of plant and machinery. Thus no enduring benefit was created by the assessee out of the aforesaid expense,thus the entire expenditure was revenue in nature and thereby allowable - Decided in favour of assessee Debts written back - Gain received on account of settlement of the loan - whether the loan amount written off is income as per the provisions to section 28(iv)? - Held that:- The provisions of section 28 of the Act deals with profits and gains of business or profession and clause (iv) thereof says that the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession shall be chargeable as income under the head "Profits and gains of business or profession". In the instant case the fact that the loan was utilized for the capital transactions has not been disputed by the AO. Thus it is clear that the instant loan was not utilized for the trading liability of the assessee and therefore the waiver off the same cannot amount to income which is chargeable to tax. See CIT v. Tosha International Ltd. [2008 (9) TMI 31 - HIGH COURT DELHI ] - Decided against revenue
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2017 (5) TMI 250
LTCG - Deduction u/s 54F claimed by the Trust assesseed u/s 161 on behalf of beneficiary - Appellant is Association of Persons (AOP) - AO denied the deduction on the ground that deduction u/s 54F is applicable only to 'Individual' or 'HUF' - whether the assessee trust, which is for the sole benefit of an individual, will be entitled to deduction u/s. 54F or not, when its status is that of A.O.P.? - Held that:- As per Section 54F the benefits of this section is available to individual or Hindu undivided family (HUF). Hon’ble jurisdictional High Court in the case of Mrs. Amy F. Cama (1998 (6) TMI 60 - BOMBAY High Court ) has elaborately considered the same issue and held that the assessee trust was entitled for the same. The Hon’ble Court had expounded that Section 161 of the I.T Act, 1961, makes a representative assessee subject to the same duties, responsibilities and liabilities as if the income was received by him beneficially. The fiction is created as it was never the object or intention of the Act to charge tax upon persons other than the beneficial owner of the income. Whatever benefits the beneficiary will get in the said assessment must be made available to the trustee while assessing him under section 161. From the above case laws it is amply clear that by virtue of Section 161 of the I.T. Act the representative assessee is subject to the same duties, responsibilities and liabilities as if the income was received by him beneficiary, and whatever benefits the beneficiary will get in the said assessment must be made available to the trustee while assessing him u/s. 161. It is clear that it is only by virtue of u/s. 161 that the trust has been assessed for the income that is for benefit of sole beneficiary. According respectfully following the precedent we hold that the assessee is principally entitled to deduction u/s. 54F and it cannot be said that since it is a AOP and not a individual or HUF the said exemption/deduction should be denied.
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2017 (5) TMI 249
Gross profit determination - CIT(A) reducing the gross profit determined by the AO at the rate of 4% to 1.5% of the gross turnover - Held that:- The assessee has offered gross profit on such undisclosed business @ 1% whereas the AO has taken gross profit @ of 4%. However, on perusal of assessment order, we find that the estimated rate @ of 4% towards the gross profit was adopted by the AO without adducing any reason. On the contrary, the ld. CIT(A) has reduced the rate of gross profit from of 4% to 1.5% by having reliance in the assessment order in the case of MDPL, engaged in the similar business, where the gross profit was shown @ less than 1.5% and the same was accepted by the Revenue. At the outset, we find that the AO has adopted the rate of gross profit without any basis. On the contrary, the ld CIT(A) has adopted the scientific approach for determining the gross profit on the undisclosed income. As such, we find no infirmity in the order of ld CIT(A) and we uphold the same. Hence, this ground of appeal of the Revenue is dismissed. Addition on undisclosed investment made in the land - Held that:- We note that CIT-A has confirmed the undisclosed sales of ₹ 1,86,57,135/-, ₹ 7,67,35,863/- and ₹ 8,14,26,433/- in the assessment years 2007-08, 2008-09, and 2009-10 which was worked out by the AO in his assessment orders passed under section 153A of the Act respectively. We also observed that the ld. CIT-A have also upheld the order of the AO in assessing the gross profit on such undisclosed sales as well as addition on account of undisclosed investment. Thus the ld. CIT-A was of the opinion that the cash payments as recorded in the impounded document SPB/19 has to be treated as made out of the receipts recorded in SPB/19 which have already been considered by the AO. In other words, according to the ld. CIT-A the cash payments as recorded in the impounded document SPB/19 has to be treated as explained in view of the receipts recorded in SPB/19 which have already been considered by the AO. The aforesaid factual finding was not controverted by the ld. DR. Therefore we fully agree with the reasons given by the ld. CIT-A - Decided against revenue
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2017 (5) TMI 248
Non charitable activities - assessee failure to prove the donations received are corpus donations - not having registration u/s 12A - Held that:- The assessee is not able to file any books of account to show that the purpose for which donations are received. The ld. CIT(A) has given a categorical finding that assessee could not produce any evidence to show that the donar had sent the donations for specific purpose. The ld. CIT(A) has also considered the form FC-3 filed under the Foreign Contribution Act and gave a finding that there is no information in these reports that the contribution was received for the purposes specified by the donar. Even before us, the assessee is not able to file any evidence to show that the contributions received by the assessee are corpus in nature and also he is not able to file any evidence to show that he has incurred some expenditure for the purpose of running assessee-society. The ld. CIT(A) by considering all the submissions of the assessee, passed a detailed order. - Decided against assessee.
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2017 (5) TMI 247
Deemed dividend u/s 2(22)(e) - The company had advanced money to clear the loan outstanding in the name of the assessee, so as to pledge the properties for loans availed - Held that:- Considering the facts and circumstances of this case and also respectfully following the decision in the case of Pradeep Kumar Malhotra Vs. CIT (2011 (8) TMI 16 - CALCUTTA HIGH COURT) we are of the view that any loan or advance received from the company for the mutual benefit of the company as well as the assessee to get business advantage are not falls within the definition of ‘deemed dividend’ as defined u/s 2(22)(e) of the Act. Therefore, we are of the view that the advance received by the assessee from the company is not a gratuitous payment which attracts deeming provision of section 2(22)(e) of the Act. Hence, we delete additions made by the A.O. towards deemed dividend u/s 2(22)(e) of the Act. In so far as appeal filed by the revenue is concerned, since we hold that the advance received by the assessee from his company are not coming within the meaning of ‘deemed dividend’ as defined u/s 2(22)(e) of the Act. the findings given by the CIT(A) on the alternative plea of the assessee that for the purpose of computation of deemed dividend, the accumulated profit of the company up to the date of advancement of each loan has to be considered, but not current year profit becomes academic in nature. Therefore, the ground raised by the revenue in its appeal is dismissed as infructuous.
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2017 (5) TMI 246
Depreciation on electrical fittings - Held that:- As decided in assessee’s own case for AY 2006-07 the electrical installations formed an integral part of the assessee's plant, therefore, depreciation was allowable at the rate applicable to plant and machinery. We are also of the considered view that electrical installation is integral to the plant and machinery used for manufacturing steel and as the Assessing Officer has not controverted the contentions of the assessee company hence, Ld. CIT(A) has rightly directed the AO to allow depreciation on electrical installations @ 15% i.e. the rate applicable to 'plant & machinery'. MAT computation - calculation of Book Profit u/s 115JB on account of the additions representing the disallowance on excess depreciation on UPS/electrical installation - Held that:- CIT(A) after considering the submissions of the assessee and the ratio laid down by the Hon’ble Apex Court in the case of M/s Apollo Tyres Ltd. Vs CIT (2002 (5) TMI 5 - SUPREME Court) decided the issue in assessee’s favour. In our opinion, the impugned order does not require any interference on our part when the issue has been decided by the ld. CIT(A) by following the ratio laid down by the Hon’ble Supreme Court
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2017 (5) TMI 245
Disallowance on account of interest expenses under Section 36(1)(iii) - Held that:- It is an admitted fact that the assessee paid interest amounting to ₹ 48,92,072/- which comprises of two parts i.e. ₹ 24,36,353/- on the working capital loan from the bank which had been directly used for the business purpose and ₹ 24,60,749/- paid in respect of unsecured loans of ₹ 5,06,36,314/- received from M/s Sudha Apparels Ltd. which was utilized in the fixed deposits on which the assessee earned interest amounting to ₹ 39,73,387/-. Therefore, the expenditure relating to the interest paid was directly linked with the business of the assessee, so no disallowance could have been made u/s 37 of the Act as interest expenses incurred during the year had direct nexus with the income of the assessee and was fully allowable as per the provisions of Section 36(1)(iii) of the Act. In the present case, the AO disallowed a sum of ₹ 13,89,951/- out of the expenses claimed on account of interest which was paid by the assessee for the business exigency. In my opinion the action of the AO was not justified and the ld. CIT(A) without appreciating the fact in right perspective, sustained the disallowance made by the AO. As regards to the interest free advances given by the assessee to M/s Aggarwal Industries and M/s Discover Industries Pvt. Ltd. is concerned, it is noticed that the assessee was having sufficient own funds available with it during the year under consideration which is evident from page no. 9 of the assessee’s paper book which is the copy of the balance sheet as on 31.03.2012 and reveals that share capital and reserves and surplus were to the extent of ₹ 6,31,74,469/- which were more than the interest free advances of ₹ 1,15,82,925/-. Therefore, the AO was not justified in presuming that the interest @ 12% was to be disallowed of ₹ 1,15,82,925/- when the loans raised by the assessee were utilized for the business purposes and the advances given to m/s Aggarwal industries and M/s Discover Industries Pvt. Ltd. amounting to ₹ 1,82,925/- and ₹ 1,14,00,000/- respectively were out of the own funds available with the assessee. In that view of the matter, the disallowance made by the AO and sustained by the ld. CIT(A) is deleted. - Decided in favour of assessee
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2017 (5) TMI 244
Addition made towards bogus purchases - Held that:- There is no material on record to conclusively prove that the purchases made by the Assessee are bogus purchases and nothing is brought on record to suggest that the information gathered by the Sales Tax department conclusively proves that the dealer is providing only the accommodation entries to the Assessee before us. Thus we hold that addition made towards bogus purchases cannot be sustained. At the same time, keeping in view the nature of business of the Assessee and possibility of the Assessee making local purchases without any transportation bills, delivery challans etc., and the possibility of the Assessee making purchases in grey market on cash cannot be ruled out. Therefore, keeping in view the facts and circumstances of the case, we direct the Assessing Officer to disallow 12.5% of the above purchases to meet the anomalies and to cover up the leakage of revenue and not the entire purchases.
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Customs
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2017 (5) TMI 272
Levy of CVD on imported CKD E-bike kits - N/N. 06/2006 (S.No.35) dated 01.03.2006 - Whether on the basis of the classification under the Customs Tariff Act can a benefit under the Exemption Notification be granted, when the language of the notification is clear and unambiguous? - Held that: - In the context of CVD what has to be seen is whether goods of a like nature if manufactured in India would be exigible to excise duty. Where such goods are not exigible to excise duty, then naturally there would be no corresponding CVD on such goods when imported. In the domestic manufacturing context, the question of goods being in either in CKD condition or a Semi Knocked Down (SKD) does not arise. When goods are imported, as in the present case, in a CKD condition, what in fact is imported is the entire vehicle. All that is required to be done is to assemble the various components to obtain the complete vehicle. That is why it is called a CKD kit. Since virtually what is imported is in fact an entire electrically operated vehicle, in this case is E-bikes, there would be no justification in denying the exemption from excise duty under the Notification in question. Therefore, no CVD would be applicable on such imported CKD E-bike kits - appeal dismissed - decided against Revenue.
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2017 (5) TMI 271
Valuation - rejection of transaction value as fixed by foreign chartered engineering certificate - case of respondent is that the department has arbitrarily gone with the third Chartered Engineer value without giving any reason to the importer for rejecting the value of foreign chartered engineer or of the first two chartered engineers - principles of natural justice - Held that: - no reason was given for rejecting the declared value by assessing officer and no opportunity of personal hearing was given to the assessee before enhancing the value on the basis of third Chartered Engineer certificate. Besides this, no speaking order was issued. Mere presence of the CHA at the time of examination does not mean that the copy of the third chartered engineer report was provided to the respondent and it is clear that they were not given a chance to rebut the same. Appeal of department dismissed - decided in favor of respondent.
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2017 (5) TMI 270
Refund claim - SAD - N/N. 102/2007-Cus dated 14.9.2007 - appellant claims that even though initially they have availed the CENVAT credit of the duty paid on the said imported goods, but later the credit had been reversed before clearance/sale and also before filing the refund claims - Held that: - Similar issue has been dealt by Hon’ble Gujarat High Court in the case of Ashima Dyecot Limited [2008 (9) TMI 87 - HIGH COURT GUJARAT], in the context of eligibility of N/N. 30/2004 CE, where the condition was non-avaiment of Credit on the inputs; the circumstance was similar to the present one, that is, the credit initially taken, but later reversed while claiming the benefit of the exemption notification and it was held that credit availed of and reversal would amount to the effect as if the same was not availed - refund allowed - decided in favor of appellant.
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2017 (5) TMI 269
Misdeclaration of export goods - whether main appellant has mis-declared the goods for export, rendering them liable for confiscation, hence to be penalised and redemption fine to be imposed; another appellant-CHA is to be penalised for violation of Customs Act or otherwise? Held that: - there is no dispute that there was mis match of the description given on the packages and the documents. It is also undisputed that the goods were found of standard quality of drug intermediate and were not prohibited goods. It is also undisputed that on provisional release of the seized goods, the same were exported at the same value - there was negligence and carelessness on the part of main appellant and the CHA which has rendered the goods liable for confiscation. The redemption fine and penalty imposed are excessive on the face of the fact there was exportation of the same goods at the same value at a latter stage and undisputedly not questioned - Accordingly holding that goods are liable for confiscation, the redemption fine imposed is reduced to Rupees one lakh and consequent penalty to ₹ 50,000/- on the main appellant. As regards penalty imposed on the CHA, the same is u/s 114 of Customs Act - there is no act, omission or commission on the part of CHA which would have rendered the goods liable for confiscation as the goods may have been presented as they were received along with ARE-1 from the factory - penalty set aside. Appeal disposed off - decided partly in favor of appellant.
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2017 (5) TMI 268
Conversion of shipping bills after export of goods - rejection on account of time bar - case of appellant is that the conversion had been sought u/s 149 of CA, 1962 which does not spell out any time limit as interpreted in the impugned order. It is their submission that circulars, such as no.36/2010-Cus dated 23rd September 2010 of Central Board of Excise & Customs, cannot impose conditions not contemplated in or override the statute itself - Held that: - benefit of scheme arising from any amendment will not be governed by section 149 of Customs Act, 1962 but shall be governed by the circular prescribing conditions thereto which cannot be said to be moored to any provision of the Act - there is no infirmity in the application of time limit to the application for conversion - appeal dismissed - decided against appellant.
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Corporate Laws
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2017 (5) TMI 266
Conversion of Private company into Public Company - Held that:- Petitioner has complied with provisions of Section 14 to be read with Rule 68 of NCLT Rules, 2016. Therefore, having regard to all the circumstances, the conversion from public to private is in the interest of the Company which is being made with a view to comply efficiently with the provisions of Companies Act, 2013 causing no prejudice either to the members or to the creditors of the Petitioner. Therefore, the conversion is hereby allowed. The Petitioner is hereby directed to give effect of the conversion by requisite alteration in its Articles which is hereby addressed and communicate the altered Articles within a period of 15 days to the Registrar
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Service Tax
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2017 (5) TMI 288
Penalty - adjudicating authority has held that the services rendered by the appellant is covered under Erection, Commissioning and Installation Service and rejected the contention of the appellant that the services are Works Contract Service provided to their clients - whether the penalty imposed u/s 76 and 78 is correct or otherwise? - Held that: - the claim of the appellant that the execution of the various projects by them under works contract is not negated by the lower authority on factual matrix. Since the tax under ‘erection, commissioning and installation’ charges are not payable by the appellant for the period prior to 01/06/2007 as the contract executed by them being ‘works contract’, the question of imposing penalty u/s 76 and 78 of the FA, 1994 does not arise - The law has been settled by the Hon’ble Punjab & Haryana High Court in the case of Ajay Kumar Gupta [2015 (5) TMI 566 - PUNJAB & HARYANA HIGH COURT], wherein their Lordships held that once an assessee was not liable to pay tax under the provisions of Section 68 of the Finance Act, 1994, as he was not providing any taxable service at that point of time, penalty imposable u/s 76 does not arise - penalty set aside - appeal allowed - decided in favor of assessee.
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2017 (5) TMI 287
Jurisdiction - before the adjudicating authority the noticee was Indian Institute of Management Training and not the Mathurabai Rambhau Narkhede Memorial Trust which is prosecuting the appeal before the bench - Held that: - the notice being issued to Indian Institute of Management and Training and adjudication order has been issued in the same name appeal should have been preferred only by the notice and the assessee as per the adjudication order - the matter needs reconsideration by the first appellate authority inasmuch as the first appellate authority should consider the records which are filed before him and arrive at a conclusion whether Indian Institute of Management and Training was an appellant before him and if so, he should pass an order in respect of that appellant - matter remanded to the first appellate authority to reconsider the issue afresh from the records available.
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2017 (5) TMI 286
Mandap keeper service - Club or association service - principles of mutuality - Held that: - the amounts sought to be taxed for rendering of 'mandap keeper services' includes transactions with members as well as transactions with decorators. The transactions with members provides space in the club premises for conducting functions and programmes - the demand for service tax under the head 'mandap keeper service' is not sustainable in law, following the principles of mutuality. Renting of immovable property service - extended period of limitation - Held that: - the confusion and doubts relating to renting of immovable property service would detract from the allegation that there was misrepresentation or suppression of fact with intent to evade tax - invoking of the extended period in relation to renting of immovable property is not justifiable - demand restricted to normal period. Appeal allowed - decided partly in favor of assessee.
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2017 (5) TMI 285
Classification of services - maintenance of software services - classifiable under the head 'information technology service' or not? - Held that: - the definition of maintenance or repair of software relates to properties, whether movable or immovable and it has been held that software is goods. Consequent upon this, the explanation was inserted in section 65(105)(zzg) and as pointed out, this Tribunal has considered in Phoenix IT Solutions [2011 (1) TMI 642 - CESTAT, BANGALORE], whether the insertion of the explanation could further the case of Revenue for demand tax from the date that the service was made taxable. Taking all factors into consideration, the Tribunal has held that there is no retrospective application by insertion of the explanation. The period under dispute in the present case is from 9th July 2004 to 6th October 2005 - the demand of service tax is not sustainable - appeal allowed - decided in favor of appellant.
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2017 (5) TMI 284
VCES declaration - rejection on the ground that appellant failed to file proper and correct VCES declaration - the appellant claims to avail CENVAT credit but the appellant has not filed any ST-3 returns prior to 01.03.2013 nor they had paid any taxes till that date. The appellant, however, claimed to have been registered since long - Held that: - The claim of CENVAT Credit taken and/or utilized crystallizes only when the assessee files return before Revenue - CENVAT Credit can only be availed by filing the return, if no return is filed, it cannot be said that any liability was discharged. In the instant case, it is likely that the appellants may have availed input services on which credit of ₹ 2,94,448/- might have been available to them. However, if the same is not taken by filing the return, it cannot be considered as CENVAT Credit. Furthermore, any duty payment is to be reflected by way of filing the return. In absence of return, it cannot be said that any CENVAT Credit which might have been available to them was actually paid to discharge any duty liability. It is apparent that the appellant's total duty liability was ₹ 14,64,374/- and they have filed VCES declaration declaring the liability of ₹ 11,69,927/- and thus, it is apparent that the appellant has not correctly declared his duty liability as on 01.03.2013 in the VCES declaration form - VCES rightly rejected - appeal dismissed - decided against appellant.
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Central Excise
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2017 (5) TMI 283
Penalty u/r 26 of the CER, 2002 - confiscation - Held that: - the noticee should have the knowledge or reason to believe that the offending goods are liable to confiscation, whereas in this case, there is no proposal to confiscate any goods in the SCN nor there is any order for confiscation of any goods. Therefore, keeping in view the provisions of Rule 26 and the judgments relied upon by the appellant, the impugned order is not sustainable in law - appeal allowed - decided in favor of appellant.
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2017 (5) TMI 282
CENVAT credit - duty paying invoices - forged transport invoices - the vehicle number mentioned in the invoices are not transport vehicle - Held that: - the investigation was conducted in the month of 2/2000 and the goods have been received by the appellant prior to that. No statement of the drivers have been recorded to ascertain the fact that the goods have been transported to the appellant or not. No investigation was conducted at the end of the SDO, Ranjitsagar Dam to ascertain the location of the truck on the said day - the appellants have discharged their burden to prove that they have received the goods in their factory and used in manufacturing of final excisable goods which have been cleared on payment of duty in the absence of any contrary evidence on records, the benefit of doubt goes in favor of the appellant - credit allowed - decided in favor of appellant.
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2017 (5) TMI 281
Penalty - interest - CENVAT credit - countervailing duty paid on the raw materials imported - the said imported raw material could not have been consumed due to quality problems and they discharged appropriate customs duty, countervailing duty on the raw material imported by the appellant and availed CENVAT credit of the duty paid, which was reversed on being pointed out - Held that: - Imposition of penalty under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 is incorrect, inasmuch as the said Rule starts that penalty can be imposed by invoking the extended period only if ineligible CENVAT credit is availed with an intent to evade duty - the imported goods has not been utilised by the appellant with intent to evade payment of duty, the provisions of Section 11AC read with Rule 15 of the CCR, 2004 does not apply in this case - penalty set aside. As regards the interest, the appellant requires to discharge interest - The Hon'ble apex Court in the case of Union of India v. Ind-Swift Laboratories Ltd [2011 (2) TMI 6 - Supreme Court] has held that interest liability arises even if the CENVAT credit is not utilised - interest demand upheld. Appeal allowed - decided partly in favor of assessee.
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2017 (5) TMI 280
SSI exemption - appellant have been erroneously availing the benefit of Notification No.8/2003 to calculate the duty liability; but discharged the same with interest on 12/06/2006 and informed the department on 21/06/2006 - demand of interest - penalty u/s 11AC - Held that: - charge to evade Central Excise duty, was based only on an allegation that appellant being in the organized sector should have known the law and should have read the notification correctly before availing the benefit and it cannot be said that they were unaware of the law. Only on this allegation it has been stated that appellant has suppressed the fact from the department with intention to evade Central Excise duty, which is not correct. Provisions of Section 11A(2B), as it stood during the relevant period, specifically states for non-issuance of show cause notice on discharging duty liability and the interest thereof, on ascertainment of duty liability by an assessee on their own or on being pointed out by the Central Excise officer. As already recorded herein above, it is the claim of appellant that due to mis-interpretation of the clause of the notification the duty was short paid during the relevant period, which made good by the appellant before issuance of show cause notice. If this be so, it cannot be said that the appellant had intention to evade payment of Central Excise duty on the branded goods manufactured and cleared by them. The decision of the apex Court in the case of Chamundi Die Cast (P) Ltd [2007 (5) TMI 55 - SUPREME COURT OF INDIA] specifically holds that if an assessee acted on genuine belief that they were covered by the exemption notification, it cannot be held against them and hold that there was intention to evade duty. Penalty set aside - duty with interest upheld - appeal allowed - decided partly in favor of appellant.
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2017 (5) TMI 279
CENVAT credit - GTA service (inward freight) - whether the appellants are eligible to avail CENVAT credit of the service tax paid on GTA service (inward freight) against GAR-7 challan? - Held that: - appellant had availed credit on documents prescribed u/r 9(1)(e) of CCR, 2004 under which service tax was paid on GTA service albeit for the past period against GAR-7 Challan - issue is no more res integra being covered by the decision in the case of JSW Steel Ltd. vs. C.C.E., Salem [2008 (9) TMI 74 - CESTAT, CHENNAI], where it was held that Documents for availment of credit of service tax paid on input services were those referred to under clauses (e), (f) and (g) of sub-rule (1) of Rule 9 - appeal allowed - decided in favor of appellant.
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2017 (5) TMI 278
Clandestine removal - associated enterprises - goods cleared without accounting in RG-I register and without raising invoices and making payment of duty - Held that: - From the explanation of each record/private entries made by the appellant comparing the entries with the CENVAT invoices leads to a probable conclusion that the private records do not reflect dispatch or clearance of goods per se - there is no evidence of receipt of any excess quantity of raw materials for the alleged excess production which the department alleges to have been clandestinely removed by the appellant. Being bulk drugs/intermediaries the department has to establish the receipt of raw materials for the production of the goods. The raw materials of such specialized products cannot be considered to be easily available in local market. The sellers who supplied the excess raw materials are not in picture. There is no evidence of extra usage of electricity or any evidence for transportation of such clandestinely removed goods. There is no evidence for payment/receipt of money for excess inputs, extra labour and also payments made from the buyers end. In Dekon India Vs CCE, Kolkata-II [2004 (2) TMI 181 - CESTAT, KOLKATA] the Bench held that entries made in the plan diary cannot be basis to conclude that goods have been clandestinely removed. When the department is relying on private entries in some loose sheets/note books, the department has to complete the chain of purchase of inputs to production and removal in respect of the figures found in such private records. It is settled law that allegation of clandestine production and clearance is to be made only when the department has concrete evidence of un-accounted receipt of raw materials, its consumption and un-accounted production. The clandestine clearance has to be supported by evidence of transportation of material and also flow back of cash - there is no evidence to establish clandestine clearance of goods - demand is unsustainable - appeal allowed - decided in favor of appellant.
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2017 (5) TMI 277
SSI exemption - dummy units - mutuality of interest - it appeared that M/s NVIS is a dummy unit and part of the goods manufactured by M/s STPL were being shown as manufacture of M/s NVIS so that both the units can avail SSI exemption - Held that: - While M/s STPL is a Private Limited Company with Shri Amrish Kela as its Director M/s NVIS is a proprietary concern of Sh. Amrish Kela as its proprietor. While M/s STPL is manufacturing Oscilloscopes and Mirco wave components, while M/s NVIS claims to have been manufacturing Micro wave components - however, the impugned order is silent regarding the mutuality of interest or flow back of funds. When it is so, then the impugned order is set aside and matter remanded to the adjudicating authority to decide the issue denovo - appeal allowed by way of remand.
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2017 (5) TMI 276
Area based exemption - N/N. 49/2003-CE & 50/2003-CE dated 10.06.2003 - Department opined that the assessee-Appellants were liable to reverse the Cenvat Credit on inputs and capital goods lying in stock - Held that: - Cenvat Credit which was validly availed at the time of receipt of the inputs for the manufacture of the final products, on which excise duty was payable, but subsequently utilized for the manufacture of the same final product which became exempted from payment of excise duty pursuant to a subsequent notification, was not liable to be reversed under Rule 6(1) of the CCR, 2002 - when the SCN was dropped vide order dated 17.10.2005 and the CESTAT upheld the same vide order dated 08.03.2017. When it is so, then the subsequent proceedings by issuing fresh notice on 01.02.2007 are not in good taste especially when the refund of ₹ 82,698/- + ₹ 1291/- (interest) was denied which is allowable even on merits - appeal allowed - decided in favor of appellant-assessee.
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2017 (5) TMI 275
Penalty - CENVAT credit - duty paying invoices - appellant claims that there has been no deliberate attempt to claim ineligible credit and that the promptitude with which the said credits are reversed should have enabled the jurisdictional authorities to take recourse to section 11A(2B) of CEA, 1944 - Held that: - it cannot but be emphasised that the statute itself provides halting further proceedings when duty and interest has been paid forthwith and there is no sustainable evidence to invoke the ingredients necessary for imposition of penalty - the SCN, as well as the orders of the lower authorities, do not establish that the appellant had demonstrated deliberate intent in availing ineligible CENVAT credit - there was no reason to issue the show cause notice and, consequently, to impose penalty - appeal allowed - decided in favor of appellant.
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2017 (5) TMI 274
CENVAT credit - common courier bill of entry for various importers - whether credit available on the basis of photocopy of the courier bill of entry? - doors and panels used in office as capital goods - penalty u/s 11AC - Held that: - in case of courier bill of entry, it is practically impossible to have an original copy of the bill of entry for the reason that a common bill of entry is prepared in respect of various importers therefore the courier bill of entry cannot be available with each and every importer - credit allowed. Credit on doors and panels - Held that: - credit of ₹ 28,963/- which is in excess of 50% availed on capital goods and credit of ₹ 13,922/- availed in excess, it has been admitted by the appellant that the same is not admissible, accordingly the demand of ₹ 31,174 + ₹ 28,963 + ₹ 13,922/- are upheld. Penalty u/s 11AC - Held that: - Since the appellant have admittedly reversed the inadmissible credit even before issuance of SCN along with interest, and taking into consideration the facts and circumstances of the case, there is no suppression of fact on the part of the appellant - penalty not imposable. Appeal allowed - decided partly in favor of appellant.
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2017 (5) TMI 273
CENVAT credit - canteen service - Held that: - it appears that the entire demand relates to the portion which is recovered from the workers and it is deducted from their salary slips on a regular basis - Hence, this vital fact needs to be duly verified as to how much of the impugned demand pertains to the Cenvat Cenvat credit availed on the portion recovered from the employees during the period in the show cause notice - the matter requires to be remanded back to the adjudicating authority - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2017 (5) TMI 267
Classification of goods - Hydraulic door closers - whether classified under Schedule under entry 92 “fitting for doors” or under VAT Schedule (v)? - levy of VAT at 4% or 12.5%? - Held that: - similar issue decided in the case of State of Karnataka Vs. Sanjiv Mehra and Another [1989 (11) TMI 289 - KARNATAKA HIGH COURT], wherein door closer has been held to be machinery and also taking into consideration the other material, the Assessing Officer was of the view that the “hydraulic door closers” would fall under VAT Schedule (v) where a rate of 12.5% is applicable - also, specific entry 92 of the Schedule (iv) shows various parts of door fittings namely'; Stoppers, Suspender, Springs, Magic Eye, Trolley Wheels, Pulleys & Holdfasts etc but “hydraulic door closers” does not find place in it. “Hydraulic door closers” appears to be a mechanical device and as submitted by the counsel for the petitioner, it stops the speed of the door or retard the speed - Even if, one takes into consideration the common parlance test which even the Apex Court time and again in the case of classification has taken into consideration it prima-facie appears that if a person asks from the dealer about part of fitting of doors, it would certainly mean to be Stoppers, Suspender, Springs, Magic Eye, Trolley Wheels, Pulleys & Holdfasts & Channels etc. but none would give “hydraulic door closers” as fitting for doors. Petition dismissed - decided against petitioner.
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Indian Laws
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2017 (5) TMI 265
Copyright violation - Held that:- The question of whether or not there is a violation of copyright is one that must be addressed in the first instance by the producer of the film, viz., the 1st Defendant, not by Zee. At the same time Zee’s interests, particularly in regard to the amount it paid to the 1st Defendant, must be suitably ring-fenced, pending the determination of whether or not there is a case made out of copyright violation. Thus will, therefore, and even in the absence of a formal application for this purpose, direct that Zee be joined as Defendant No. 9 to the present Suit. That amendment is to be carried out by 28th April 2017 without need of reverification. Copies of the Plaint, Notice of Motion and of all Affidavits are to be served on the Advocates for Zee. The question of whether or not Zee is permitted to telecast the offending film will necessarily turn on what the 1st Defendant has to say on this subject. As only noted that there is a very large volume of material already annexed to the Plaint that prima facie indicates that the 1st Defendant has not denied that the Kannada film is a remake of the Korean original. This material will have to be assessed.
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2017 (5) TMI 264
Captive consumption of electricity - Exemption of payment of electricity duty both under Section 3(2)(vii)(a)(i) as well as under notification dated 27.02.1992 - Held that:- The High Court although has noted the fact that in the present case there is no such Memorandum of Understanding between EPL and ECL but the judgment of the High Court is not based only on the above premise rather High Court has clearly found that conditions stipulating under Section 3(2)(vii)(a)(i) of 1958 Act are not satisfied, hence, appellant no.1 is not entitled for exemption. High Court has elaborately considered all the submission raised by the appellant and rightly came to the conclusion that conditions as enumerated in Section 3(2)(vii) (a) are not fulfilled. We do not find any error in the aforesaid finding of the High Court. The notification dated 27.02.1992 was issued in exercise of power conferred by Section 3(3) of Bombay Electricity Act, 1958.The claim raised by the appellant under the above said notification was specifically dealt by the High Court and the Government. The condition which was found lacking for applicability of the notification was that generating sets were not purchased or installed or commissioned during the period from 01.01.1991 to 31.12.1992. The High Court has recorded categorical finding that the generating sets have been commissioned in the month of August 1995. Another reason given by the High Court was that no application was made within 180 days of application of the notification dated 27.02.1992 or even from the date of installation of generating sets i.e. August 1995. Even if the second reason given by the High Court is ignored, nonfulfillment of condition no.(a) of notification dated 27.02.1992 clearly entailed rejection of claim under notification dated 27.02.1992. There is no foundation or basis laid down even in this appeal to assail the finding recorded by the High Court that generating set was not purchased from 01.01.1991 to 31.12.1992. We thus do not find any error in rejection of claim of appellant under the notification dated 27.02.1992.
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2017 (5) TMI 243
Bail application - offence under NDPS Act - Held that:- From a plain examination of the record, it is indeed found that apart from the qualitative test which is again inconclusive as to the entire samples being of narcotic drugs or psychotropic substances and it is found to be adulterated with Paracetamol, the question arises as to what is the quantity of the drug that was allegedly seized and when there is no quantitative report on record, it would be a lacuna that would go to the root of the matter. This aspect of the matter is to be kept in view by the courts below trying cases under the NDPS Act, which shall ensure that the Standing Instructions as regards the procedure to be followed in expeditious test being conducted, maintenance of test reports and filing of such reports along with the charge sheet, are complied with, in order to carry the case forward without the same being an empty exercise of ultimate acquittal of the accused. Therefore, in the present case on hand, the petitioner has made out a case for enlargement of bail in the face of the lacuna that is pointed out. The petitioner shall be enlarged on bail on his executing a self bond in a sum of ₹ 1, 00,000/- with a surety for a likesum.
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