Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 10, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Rejection of books of accounts - Addition of unaccounted sales - the material found during the survey proceedings showed that the books of accounts were not correctly maintained and that therefore, there was no error in rejection of the assessee's books of accounts - HC
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Grant of approval u/s 10(23C)(vi) - when it is proved on record that the assessee Trust is running an educational institution, the application to grant approval u/s 10(23C)(vi) cannot be denied merely because there are other objects in the original Trust Deed also - AT
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Penalty order u/s 271B r/w Sec.274 - technical snag as occurred in uploading of audit report on web - the audit report was subsequently uploaded electronically and also hard copy was furnished before the AO before the completion of the assessment proceedings - No penalty - AT
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Trust is a revocable trust and the income derived by the assessee required to be taxed in the hands of the beneficiaries in accordance with the provisions of sections 61 and 161(1) - AT
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TDS u/s 195 - payment made to the non-residents - marketing consultancy fees - all the operations and activities of the non-residents were carried on outside India - The payment made to the non-residents is not taxable under section 9(1)(i) - No TDS liability - AT
Service Tax
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Export of services - even if less remittances is sent outside amounts to receiving of remittance in convertible foreign exchange - both the conditions of Export of service under the export of service rules are satisfied that is rendering of service from India and received by receiver abroad - benefit of export allowed - AT
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CENVAT credit - service tax paid on expenses incurred for providing warranty services are entitled for input service credit - AT
Central Excise
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Liability of interest u/s 11 of CEA, 1944 - price variation clause - payment of duty on differential amount - interest demand upheld - AT
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Refund - The appellant has cleared the inputs as such by paying the duty and therefore, the payment of duty at the insistence of the audit second time is wrong and illegal and therefore, the appellant is entitled to refund of the same as per Section 11B of the CEA. - AT
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Valuation - According to the Revenue, while clearing the rejected slag, they were showing less clearance value and paying less duty on that, and the reversal/payment of duty was not equal to the credit availed by them - Once adjudicating authority dropped the demand on the basis of verification report, revenue cannot take the different stand - AT
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Valuation - appellant was allowed to recover the amount of sales tax involved on sales transaction of final product and retain the same - value cannot be enhanced to include sales tax - demand set aside - AT
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Whether I.V. Cannulas fall within the scope of the term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" or otherwise - benefit of exemption allowed - AT
Case Laws:
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Income Tax
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2017 (6) TMI 408
Rejection of books of accounts - Addition of unaccounted sales - Held that:- We notice that neither CIT (A) nor the Tribunal have solely relied on the confessional statement of Mahesh Biyani, brother of the assessee, in sustaining the addition made by the Assessing Officer. In fact, the order of CIT (A) which is elaborate, refers to other materials collected during the course of survey such as gross profit rate in the line of business done by the assessee. It was noticed that the gross profit declared by the assessee was much lesser than the profit in the trade. CIT (A) also noted that during the survey as well as after the survey, assessee failed to submit the stock reconciliation. He had in fact conveyed that no stock was maintained. The assessee had failed to provide stock register despite several opportunities. Inter alia on such grounds, the CIT (A) had confirmed the addition. It is true that the Tribunal has discussed the issue somewhat briefly. Nevertheless, the Tribunal has observed that the information given by Mahesh Biyani cannot be brushed aside nor has the assessee brought on record any material to show that the same was incorrect or unreasonable. More importantly, the Tribunal noted that the material found during the survey proceedings showed that the books of accounts were not correctly maintained and that therefore, there was no error in rejection of the assessee's books of accounts.
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2017 (6) TMI 407
Entitlement for deduction under Section 80IB - whether by grinding the soap stone, assessee is carrying out a manufacturing activity? - Held that:- In view of the decision of Supreme Court in the case of Commissioner of Income Tax vs. Sesa Goa Ltd.(2004 (11) TMI 14 - SUPREME Court) the issues are answered in favour of the assessee and against the department.
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2017 (6) TMI 406
Unaccounted share purchase - Held that:- Revenue has been unable to show that the factual finding of the ITAT that the shareholders register maintained by ICPL as well as the returns filed by it with the Registrar of Companies showed that the shares were in fact transferred to WDPL and not to any of the individual Assessees is perverse. The Court, therefore, declines to frame any substantial question of law on this issue. Unaccounted receipt from contractors - Held that:- In the statement recorded under Section 132(4) Assessee pointed out that this was not an amount paid to him in his individual capacity but the company of which he was Director and which is a separately assessed. The CIT (A) held that was no document had been placed on record by the AO to show that the said sum was in fact received by the Assessee. This factual finding has been affirmed by the ITAT. Since there are concurrent findings of facts against the Revenue and in favour of the Assessee, the Court is not inclined to frame any substantial question of law in this regard. Unexplained payment in cash as a result of the family settlement - Held that:- Here again, the ITAT has deleted the additions on account of the cheques not having been encashed and the shares not being transferred. Therefore, no substantial question of law arises from this issue as well
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2017 (6) TMI 405
Addition u/s 68 - not disclosing the source of the source of the investment - Held that:- Tribunal was not justified in not accepting the explanation regarding the investment made by her in the property inasmuch as the authorities could not have gone into the question of source of the source and that too by converting the proceedings regarding addition under Section 68 of 'the Act' into that under Section 69 of 'the Act' without proper notice to the assessee in that regard. - Decided in favour of assessee.
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2017 (6) TMI 404
Matter remanded back for a fresh consideration - whether the sale of the land was actually of an agricultural one or not? - whether a new ground was taken for the first time by the assessee that the land was an agricultural land? - addition invoking Section 50C - Held that:- All that the Tribunal has done is only to remand the matter back to the Assessing Officer for a fresh consideration on this question of fact. As a matter of fact, the Commissioner (Appeals) also remanded the matter back for re-computation of the capital gains, after deleting the addition. When a question of fact is remanded to be adjudicated, to the Assessing Officer, we do not think that a question of law would arise. Therefore, the appeal is dismissed.
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2017 (6) TMI 403
Unexplained investment - Held that:- Tribunal has analyzed the oral evidence of those seven persons. The Tribunal found it hard to believe that all those seven persons at about the same time received the sale proceeds and invested the same in cash with the appellant. Therefore, it was a question of appreciation of evidence, and no question of law arises for our consideration under Section 260A.
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2017 (6) TMI 402
Power to transfer cases u/s 127 - revenue contends that having regard to the presumptive nature of section 124 Tribunal could not have examined the existence of the said order in view of its limited jurisdiction - Held that:- Revenue's contention that the Income-tax Appellate Tribunal's bye-laws are limited and cannot examine the existence of the order given the nature of section 124 is unpersuasive. As an appellate body, it certainly can call for the records and examine the existence of the order. That is, however, entirely different from the effect of section 124 which may bring forward the effect of such order. In other words, existence of the order which is the basis of an assessment can certainly be looked into by the Income-tax Appellate Tribunal as an appellate body. This may be done even though the effect of such order on account of section 124 and a further enquiry into its legality may or may not be available. With this clarification, the court is of the opinion that no substantial question of law arises.
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2017 (6) TMI 401
Transfer pricing adjustment - order passed by the TPO u/s 92CA(3)making upward adjustment to the international transactions - period of limitation - Held that:- The provisions of section 153(2) of the Act lays down the time limit for re-assessment and it is provided that where the notice under section 148 of the Act is served on or after 1st day of April, 2005 but before the 1st day of April, 2011, then for completing the assessment or re-assessment or re-computation under section 147 of the Act, the period is nine months from the end of financial year in which notice under section 148 of the Act was issued. Where the notice under section 148 of the Act was served upon the assessee on 24.01.2011, therefore, the period of nine months would expire by 31.12.2011. The assessment in the case has been completed on 29.02.2012 vide order passed under section 144 r.w.s. 148 of the Act. The CIT(A) has correctly quashed the re-assessment proceedings and held the assessment order to be invalid. - Decided against revenue
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2017 (6) TMI 400
Non-allowance of depreciation - Held that:- Assessee made an application for admission of additional evidence, under which it has summarized the details of fixed assets purchased during the year and has submitted the invoices traced by the assessee in respect of part of the assets. In respect of assets under the head ‘electric fittings’, the assessee has not placed any invoices. In respect of lorry purchased, copy of agreement is filed and in respect of machinery purchased, the assessee has filed some of the invoices but complete details have not been filed. In respect of moulds purchased, the assessee has attached photocopies of all the invoices. The assessee points out that the said additional evidence may be admitted and the Assessing Officer may verify the same and allow depreciation as per law. We find merit in the plea of assessee. The assessee had purchased the fixed assets during the instant assessment year, against which it could not produce the bills before the CIT(A) since the same were not traceable. The additional evidence filed by the assessee in respect of various fixed assets is admitted. The Assessing Officer is directed to verify the evidences available with the assessee and allow depreciation on such assets, for which the assessee has filed the copy of invoices. Addition made on account of hawala purchases - Held that:- The assessee was asked to establish the delivery of goods and furnish the evidences in this regard in order to prove its case of purchases made. However, the assessee claimed that though the delivery of cement was made, but it had no evidence by way of lorry receipts or delivery challans. We restrict the addition in the hands of assessee and direct the Assessing Officer to apply GP rate of 10% on the goods purchased, over and above the GP rate declared by the assessee
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2017 (6) TMI 399
Addition on account of deposits made in the bank account - assessee to explain the source had filed the confirmation from the family members of the assessee but the AO doubted the confirmation by treating the same as a document of settlement between the family members - Held that:- The reason of doubting the said evidence by the AO is that this document pertains to the transaction of giving advance by the assessee to the family members in the Financial Year 2004-05 and thereafter receiving the same back in the Financial Year 2010-11 has been written on a stamp paper purchased on 28.02.2014. Thus it is clear that the AO has misunderstood the document itself contents of which clearly explains and narrates both incidents of advance given by the assessee in the year 2004-05 and the same was refunded to the assessee by the family members in the Financial Year 2010-11. The purpose of giving this confirmation is only for the satisfaction of the taxing authority and not for a proof of settlement to the family members. Accordingly rejecting the said confirmation at the threshold without further examination and verification of the veracity of the confirmation by conducting a proper enquiry is not justified on the part of the AO. Further it is settled proposition of law that in case of deposits in bank the corresponding withdrawal for subsequent deposits can be considered as a proper source of fund in the hand of the assessee. Therefore in case whether there are multiple transaction of deposit and withdrawal on regular basis then only peak credit can be considered for the purpose of making addition on this account. - Decided in favour of assessee.
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2017 (6) TMI 398
Disallowance of deduction claimed under section 80IC - allocation/apportionment of expenses relating to auditors remuneration and directors remuneration to the eligible unit thereby reducing its eligible profits to that extent - Held that:- We find the contention of the assessee that the manufacturing operation involved in the eligible unit did not require too much time and effort of the directors since the parts sold involved minimal variations and sale was made to a single party, also merits no consideration since the directors are not necessarily required to be involved in the day-to-day operations but have to be involved in strategic decision making, which at no stage, has been denied by the Ld. counsel for the assessee. Therefore we have no hesitation in rejecting the argument of the assessee that no portion of directors remuneration was required to be apportioned to the eligible unit at Pant Nagar. It is undisputed that the remuneration paid in the preceding year amounting to ₹ 20.25 lacs, when the eligible unit of the assessee was not functioning, was to be attributed entirely to the non eligible unit at Ludhiana. It is only increase in the remuneration in the impugned year vis-à-vis that in the preceding year, which can be apportioned between the two units. The same amounting to ₹ 9.75 lacs, apportionment of ₹ 6.94 lacs to the eligible unit in Pant Nagar is unjustified considering the fact that while apportioning the increase in remuneration, efforts of the directors of the company in increasing turn over of the non eligible unit should be taken into consideration and also to the contribution of the new director appointed in the company to the activities of the non eligible unit. Considering the same, we are of the view that apportionment of directors remuneration to the extent of ₹ 3 lacs to the eligible unit is just and reasonable, considering the fact that considerable amount of efforts must have been given by the directors for setting up of the new unit in Pant Nagar. We uphold the apportionment to the eligible unit, of auditors remuneration to the extent of ₹ 59,800/- and the directors remuneration to the extent of ₹ 3 lacs. The disallowance of deduction claimed u/s 80IC by the eligible unit to the said extent of ₹ 3,59,800/- is, as a consequence, also upheld. - Decided partly in favour of assessee.
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2017 (6) TMI 397
Levy of penalty u/s 271(1)(c) - disallowance of foreign travelling expenses - defective notice - Held that:- As perused the copy of notice placed we find that it is a printed Performa wherein the relevant column has not been struck off. Under similar facts the Hon'ble Karnataka High Court in the case of CIT Vs Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT ] has held that the practice of department sending a printed form where all the grounds mentioned u/s 271(1)(c) are outlined would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be strictly construed, notice issued u/s 274 should satisfy the grounds which he has to meet specifically, otherwise the principle of natural justice is offended if the show cause notice is vague and on the basis of such provision, no penalty could be imposed on the assessee - Decided in favour of assessee.
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2017 (6) TMI 396
Penalty u/s 271(1)(c) - invalid notice - defective show cause notice - Held that:- We find that the penalty notice dt.30-12-2012 u/s 274 r.w.s 271(1)(c) of the Act at page no-1 does not specify the charge of offence committed by the assessee i.e whether the assessee had concealed the particulars of income or it had furnished inaccurate particulars of income. Even the column “have without reasonable cause failed to comply with the notice u/s. 142(1)/143(2) of Income-tax Act, 1961 is also not struck off. Except the address of the assessee, assessment year and signature of the AO, nothing is struck off in the notice. Hence the said notice is to be held as defective. See CIT vs SSA’S Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2017 (6) TMI 395
Penalty u/s.271(1)(d) - non-inclusion of certain expenditure for the purpose of FBT liability - Held that:- The assessee has come out with complete disclosure of disputed items of expenditure not included for the purpose of determination of fringe benefits tax liability in the return of income. Thus, the bonafides of the action of the assessee cannot be tainted with any doubt. We also note the attendant fact that the assessee has ear-marked the quantum of fringe benefit tax in the separate escrow account pending resolution of the controversy. Thus, there are sufficient indicators existing in the case that the assessee has acted on bonafide considerations. Needless to say a finding in the quantum proceedings that a particular expenditure is susceptible to provisions of FBT cannot automatically be adopted for the purposes of s.271(1)(d). The assessee has successfully discharged the initial onus placed on it for rebut5ting presumption against it. Therefore, we are unable to see any error in the action of the CIT(A) in deleting the penalty imposed by the AO under s.271(1)(d) of the Act. - Decided in favour of assessee.
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2017 (6) TMI 394
Unexplained cash credit u/s.68 - disallowance of Interest paid to depositors - Held that:- The onus is cast upon the assessee to produce the persons and the assessee cannot absolve himself from the onus cast upon him. The mere filing of confirmation and copy of return of income of depositors does not served the purpose unless and until the facts is verified from the depositors. Therefore, the assessee has not fulfilled the onus cast upon him. The ample opportunities have been given to the assessee to produce the persons. Because, in the above background and materials available with the department, it is necessary to verify the depositors in respect of accommodation entries have been received or not from the said depositors. However, the assessee fails to produce the depositors. Therefore, it is established beyond doubt that there is no genuine cash credit and thereby the cash credit remains unexplained. Therefore, the amount deposited during the year amounting to ₹ 9,70,923/- is treated as unexplained cash credit and the same is added to the total income of the assessee u/s 68. Further the assessee has also not furnished the age wise analysis of the opening balance of ₹ 24,71,091/- standing in the name of the above depositors. Therefore, the same is treated as received during the year and added to the total income of the assessee as unexplained cash credit. Moreover, since there is no genuine cash credit in the name of the above 7 depositors, the entered interest amounting to ₹ 1,08,818/- is also disallowed. - Decided in favour of revenue .
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2017 (6) TMI 393
Addition u/s 68 - unexplained cash credit made in S.B. Account of the assessee with Corporation Bank - Held that:- each and every detail pertaining to 37.50 lakh have been given by the assessee and in Paper Book Page No.30 to 35 all details have been furnished. In the light of the above submission we do not find any infirmity in the order passed by the CIT(A) in deleting the addition - Decided against revenue
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2017 (6) TMI 392
ALP adjustment - upward adjustment of management fees paid by the assessee, under a cost contribution arrangement, to its associated enterprises Schneider Electric Industries SAS, France (SEI-F) - whether services rendered by the SEI-F being in the nature of stewardship activities - Held that:- TPO has rejected the determination of arm s length price on the basis of TNMM, at entity level, but then he has not adopted any other permissible method for determination of arm s length price. Such a course of action, as noted above, is not permissible in law. Just because these services are worthless in the eyes of the revenue authorities, the arm s length price of these services cannot be held to be NIL. Similarly, the findings that no services were rendered and that the assessee could have performed these services on its own are contradictory. If no services were rendered, which services the authorities below hold that the assessee could have performed on its own. There is also evidence for visits by the representatives of the group entity, i.e SEI-F, for rendition of these services. Consideration is not required to be charged for the shareholder activities, while other stewardship activities can, and must, be compensated. Nothing, therefore, turns in favour of the revenue on account of the services rendered by the SEI-F being in the nature of stewardship activities which is a term of much broader connotation than shareholder activities.Not charging for the rendition of shareholder activities can be justified but not for all the stewardship activities. Coming to the question of business expediency, in our considered view it was also not for the TPO to bother about business expediency of these services; all he was to see was what would be arm s length services of these services in an uncontrolled situation. That has to be done on the basis of a permissible method of ascertaining the arm s length price. It cannot be open to the TPO to reject a method of ascertaining the arm s length price without fining a legally permissible method to substitute for the method of ascertaining ALP as adopted by the assessee. To hold that the arm s length price of these services was NIL under the CUP method, the TPO had to necessarily to demonstrate that the same services, whatever be its intrinsic worth, were available for NIL consideration in an uncontrolled situation; that is not, and that cannot be, the case. It is also not the case of the authorities below that the arm s length price of these services, under any other legally permissible method is, NIL. There is thus no legally sustainable foundation for the impugned ALP adjustment. We have also noted that the managerial services, availed by the assessee under the same cost contribution arrangement, have been allowed all these years and have been accepted to be at an arm s length transaction. While there is indeed no res judicata in tax proceedings, its important to bear in mind the observations of Hon ble Supreme Court in the case of Radhasoami Satsang Vs CIT [1991 (11) TMI 2 - SUPREME Court ], to the effect that where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year . - Decided in favour of assessee.
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2017 (6) TMI 391
Disallowance u/s 14A - Held that:- So far as interest disallowance under rule 8D(2)(ii) is concerned, it must stand deleted. Coming to the disallowance under 8D(2)(iii), we find that admittedly total expenditure incurred by the assessee is ₹ 30,22,749 but then we are to go by the forumulae under rule 8D(2)(iii), the disallowance comes to ₹ 62,94,250. That will be an absurdity to be permitted, and, in any case, disallowance of administrative expenses for earning tax exempt income cannot be more than actual administrative expenses. What the assessee has offered for suo motu disallowance on the facts of this case is ₹ 10,00,000 which is almost one third of total administrative expenses. When it was pointed out to the learned Departmental Representative and she was asked as to whether given the peculiar facts of this case, how the suo motu disallowance offered by the assessee cannot be considered reasonable, she did not have much to say. We agree with the learned counsel that the disallowance so offered cannot be considered to be unreasonable by any standard nor has that been alleged before us either. Thus we disapprove the additional disallowance by invoking rule 8D, particularly 8D(2)(iii) as well, and delete the impugned additional disallowance so restored to by the Assessing Officer. - Decided in favour of assessee. Disallowance u/s 14A while computing book profit under section 115JB - Held that:- The above issue is now covered, in favour of the assessee, by Hon’ble jurisdictional High Court’s judgment in the case of CIT Vs Alembic Ltd [2017 (1) TMI 513 - GUJARAT HIGH COURT] Set off of speculation loss - CIT-A allowed claim - Held that:- CIT(A) has not erred allowing the set off of speculation loss on the basis of a decision of this Tribunal in the case of Virendra Kumar Jain Vs ACIT [2010 (5) TMI 870 - ITAT MUMBAI] wherein held in sub-section (4) of section 73 or in any other provision, there is no express language or any implication to the effect that the right of the assessee to carry forward the speculation loss for a period of eight subsequent assessment years has been taken away. The amendment made by the Finance Act, 2005 with effect from 01.04.2006 is merely to substitute the words “four assessment years” for the words “eight assessment years”. In our opinion, the assessee’s contention that any speculation loss computed for the assessment year 2006-07 and later assessment years alone would be hit by the amendment and such loss can be carried forward only for four subsequent assessment years is correct. The vested right of the assessee has not been taken away. - Decided in favour of assessee.
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2017 (6) TMI 390
Income from self-owned property - legal owner - “Profits and Gains of Business or Profession” OR “Income Form House Property” - Held that:- Referring to the decision of Hon’ble Supreme Court in the case of Raj Dadarkar & Associates (2017 (5) TMI 586 - SUPREME COURT OF INDIA) we allow the claim of the assessee and direct the AO to assessee the rental income situated at MBC Tower TTK road, Chennai as income from house property, and consequential deductions in respect to interest on borrowed capital, building insurance, Municipal Tax and repair maintenance charges is to be allowed. The AO is directed accordingly.
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2017 (6) TMI 389
Grant of approval u/s 10(23C)(vi) rejected - whether a trust exists solely for educational purposes and not for the purpose of profit? - Held that:- The assessee has been granted exemption u/s 12AA of the Act vide order dated 15.01.2013 and the Trust is also found to be eligible for exemption u/s 11 of the Act for block assessment period 01.04.1989 to 22.12.1998 by the coordinate Bench of the Tribunal in assessee’s own case in order dated 28.07.2015 (supra). Even perusal of the original Trust Deed shows that the predominant object was educational though noneducational objects were also there. So, merely because of the fact that there were other objects of the Trust, the educational institution did not exist solely for educational purpose. But, in the instant case, the assessee Trust has gone one step further by amending the original Trust Deed vide registered amended Trust Deed dated 26.03.2012 deleting all the non-educational objectives. So, the impugned order passed by ld. Pr. CCIT is not sustainable. Thus when it is proved on record that the assessee Trust is running an educational institution, the application to grant approval u/s 10(23C)(vi) cannot be denied merely because there are other objects in the original Trust Deed also. But, in the instant case, assessee has gone one step further even by amending the original Trust Deed which has been declared invalid by the ld. Pr. CCIT and rejected the application by ignoring the settled principle of law laid down by Hon’ble Apex Court in American Hotel and Lodging Association Educational Institute (2008 (5) TMI 17 - SUPREME COURT OF INDIA ) and Queen’s Educational Society (2015 (3) TMI 619 - SUPREME COURT ). So, we are of the considered view that impugned order is not sustainable, hence set aside and Pr.CCIT is directed to decide the application afresh in view of the observations made herein above. - Decided in favour of assessee.
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2017 (6) TMI 388
N.P. determination - best judgment assessment - Held that:- Before us, the ld. counsel had brought on record that in the earlier year, the net profit rate of 2.46% was applied in scrutiny proceedings in section 143(3) in the A.Y. 2009-10 on a turnover of ₹ 2.01 crore. Apart from that, the ld. counsel has also pointed out that some of discounts available from the distributor is passed on to the customers and therefore, the assessee’s profit margin gets further reduced. Looking to the fact that it is a case of best judgment assessment; other attended circumstances; materials available on record; and also assessee’s past history, we are of the opinion that it would be fair to apply a net profit of 3% of the total sales of ₹ 1,20,76,727/-. Such an estimate of an income would be reasonable taking into consideration the past history wherein the net profit rate has been estimated 2.46%. AO is thus directed to assess the income accordingly.
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2017 (6) TMI 387
Rejection of books of accounts - estimation of G.P rate - Held that:- AO has rejected the books of accounts holding that firstly, the books of accounts have continuously been rejected in the earlier years and secondly, the assessee is not maintaining stock register. In the earlier years, the matter had come up before the Coordinate Benches and the books of accounts have been accepted.Given that there are change in the facts and circumstances of the case, respectfully following the orders passed by the Coordinate Benches in earlier years, the books of accounts cannot be rejected. Regarding estimation of G.P rate, the assessee has disclosed a G.P rate of 20.79% as against G.P rate of 19.87% in AY 2010-11 and 21.09% in AY 2009-10. The AO has stated that there is set history in the case of assessee where G.P rate of 31% has been applied and also upheld by the ld CIT(A) and accordingly, he substituted the G.P rate of 20.79% disclosed by the assessee with G.P rate of 31%. In the earlier years, the G.P rate of 31% has not been accepted by the Coordinate Benches and the G.P rate offered by the assessee was accepted. In light of above, following the orders of the Coordinate Benches and the assessee’s past history, we donot see any justification for AO to interfere with the G.P rate of 20.79% offered by the assessee. In the result, addition of ₹ 21,00,160 is hereby deleted Disallowance made towards travelling, postage, telephone, officer repair and maintenance, etc holding that these were not fully supported by proper bills and also due to the personal element in these expenditure. The ld CIT(A) found the disallowance towards travelling expenses at 15% is on the higher side and restricted it to 10% and rest all disallowances were confirmed.
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2017 (6) TMI 386
Penalty order u/s 271B r/w Sec.274 - technical snag as occurred in uploading of audit report on web - non furnishing of the return electronically - Held that:- As decided in case of M/s Vijay Food Products Vs. ITO [2017 (4) TMI 172 - ITAT JAIPUR] under similar circumstances the intention behind carrying out the audit u/s 44AB and furnishing a copy of the audit report to the AO is to aid and assist the latter in completing the assessment proceedings. It is not the case of the Revenue that any prejudice or hindrance is caused to the Revenue or the audit report has been filed after the close of the assessment proceedings. Taking into the fact that the audit report has subsequently been uploaded electronically and also hard copy has been furnished before the AO before the completion of the assessment proceedings, non furnishing of the return electronically on 18.09.2013 is merely a technical breach of the provisions of the Act - Decided in favour of assessee.
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2017 (6) TMI 385
Eligibility to deduction u/s. 80IA - AO considering the status of assessee as a ‘works contractor’ disallowed the deduction - whether the assessee is a developer or a works contractor - Held that:- We find that the assessee stood successful in getting the bid for detailed survey, drawing, design and execution of sewerage project on turn-key basis for Zones-II,III,IV and V project at Jabalpur. The assessee JV was awarded the said project work by the Municipal Commissioner, Jabalpur. Thereby the assessee is a developer for the reason that the assessee involved in preparation survey, drawing, design and execution of sewerage project work. We find that the assessee made investments and development of infrastructure to support the various contract works. The assessee is also responsible in all respects for the procurement of labours, machinery, equipments, goods, materials for the said project work. The assessee is also responsible for the payment and supply of labour, water and electric charges usage for the project. The assessee is responsible for making the payments of labours and for supply of various items related to the said project. See CIT Vs. ABG Heavy Industries Limited [2010 (2) TMI 108 - BOMBAY HIGH COURT ] On perusal of the terms and conditions in the agreement, it is clear that the assessee was not a works contractor and was a developer and hence Explanation to section 80IA(13) does not apply. - Decided in favour of assessee.
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2017 (6) TMI 384
Exemption of income under sections 61 and 161 - revocable trust - assessee is a trust set up by the Government of Tamilnadu - Held that:- Reference to extractions from the trust deed and the contributor's agreement, it is evident that the assessee is not carrying on any business with commercial motive. The beneficiaries of the trust are identifiable and the shares are determined by contributor's agreement and the contributors are free to call upon the trust to cancel any units held by them and return the value. Therefore, the trust is revocable trust and squarely covered by section 61 of Income-tax Act. Accordingly, we hold that trust is a revocable trust and the income derived by the assessee required to be taxed in the hands of the beneficiaries in accordance with the provisions of sections 61 and 161(1) of Income-tax Act. This view is supported by the decision of the co-ordinate Bench in the case of Deputy CIT v. India Advantage Fund-VII [2014 (10) TMI 614 - ITAT BANGALORE] relied upon by the assessee. The assessee also filed evidence regarding the admission of income by the beneficiaries in page Nos. 81 to 83 from the contributors ICICI Bank, IL&FS and the HDFC. - Decided in favour of assessee.
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2017 (6) TMI 383
TDS u/s 195 - payment made to the non-residents - marketing consultancy fees - all the operations and activities of the non-residents were carried on outside India - disallowance made u/s 40(a)(i) - P.E. in India - DTAA - Held that:- Payment made to the non-residents is not taxable under section 9(1)(i) of the Act as such assessee is under no obligation to make any deduction at source on such payments. See Union of India v. Azadi Bachao Andolan [2003 (10) TMI 5 - SUPREME Court ]. The payment made to the non-residents is not taxable under section 9(1)(i) of the Act as such assessee is under no obligation to make any deduction at source on such payments. There is no attempt before us to demonstrate as to how the learned Commissioner of Income-tax (Appeals) is wrong in holding that the provisions of section 40(a)(i) have no applications to the payment made to the non-residents in view of the non-discrimination provisions contained in article 26 of Indo French Treaty. - Decided in favour of assessee.
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Customs
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2017 (6) TMI 413
Classification of imported goods - Liquid Crystal Devices (LCDs) - classified under CTH 9013 80 10 or under CTH 8529 9090 - Held that: - the issue herein is squarely covered by the precedent order of this Tribunal in the case of M/s Samsung India Electronics Pvt Ltd, M/s Moser Baer India Ltd Versus Commissioner of Customs, Noida [2015 (10) TMI 2258 - CESTAT NEW DELHI], where it was held that decision given in case of M/s Secure Meters Ltd. Vs. CC, New Delhi [2015 (5) TMI 241 - SUPREME COURT] followed wherein "parts suitable for use solely or principally with LCD TV" were stated not to cover LCDs for LCD TVs as specifically as description of CTH 9013 covers LCDs by name and devotes a sub heading (90138010) exclusively for it - the issue is squarely settled in favor of the appellant-assessee and LCD imported by them are classifiable under CTH 9013 80 10 - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2017 (6) TMI 409
Directions to convene and hold meeting of equity shareholders of the applicant company for the purpose of considering and if thought fit, approving, with or without modification, a Scheme of Arrangement in the nature of Demerger need to be adhered to. Scheme of demerger accepted.
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Insolvency & Bankruptcy
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2017 (6) TMI 410
Initiation of corporate insolvency resolution process under Sections 10,13 and 14 of the Insolvency and Bankruptcy Code, 2016 - Held that:- The instant petition deserves to be admitted. It is, however, observed that the Applicant Company' save some sketchy particulars has not given any road map as to how it is going to keep itself afloat as a going concern. However, keeping in perspective the objects for which the Code' has been brought into force and to balance the interest of all stakeholders, I am satisfied that the instant application warrants to be admitted to prevent further erosion of capital and to safeguard the assets of the 'Applicant/Corporate Debtor'. (i) Appoint Mr. Krishan Vrind Jain, Mobile No-9417009490 SCO 345-346, 2nd Floor, Sector 35-B, Chandigarh, 160035, e-mail-jainkv@gmailcom, Registration No.IBBI/IPA-001/IP-00619/2016-2017/1396, a Registered Insolvency Professional (IRP) as the Interim Resolution Professional as contemplated under Section 16 of 'the Code' and his term of appointment shall be for a period of thirty days from the date of this order or as may be determined by the Committee of Creditors whichever is earlier; (ii) In terms of Section 17 of the 'Code', from the date of his appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the Interim Resolution Professional and the officers and the managers of the 'Corporate Debtor' shall report to the Interim Resolution Professional. (iii) The Interim Resolution Professional shall strictly act in accordance with the 'Code', all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing his profession and as an Insolvency Professional with high standard of ethics and moral. (iv) The Interim Resolution Professional shall endeavour to constitute the Committee of Creditors at the earliest but not laterthan three weeks from the date of this Order. (v) It is hereby directed that the 'Corporate Debtor', its properties, personnel and persons associated with the management shall extend all cooperation to the Interim Resolution Professional in managing the affairs of the 'Corporate Debtor' as a going concern and extend all cooperation in accessing books and records as well as assets of the 'Corporate Debtor'.
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Service Tax
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2017 (6) TMI 431
Penalty u/s 76, 77 and 78 of FA - GTA service - abatement on the gross freight - case of Revenue is that the Commissioner does not have the power to waive penalties since the instruction of the Board in Circular dated 17.12.2004 excluded cases involving fraud, collusion, suppression of facts or willful mis-statement or contravention of the provisions of service tax with intend to evade payment of service tax - Held that: - the Commissioner in the facts and circumstances of the case has rightly given the benefit of Section 80 and has not imposed penalties un/s 76, 77 & 78 because the respondent had paid the service tax along with interest before issue of SCN - also, the levy was newly introduced during the relevant period involved in the present case and even the department was not aware of the statutory provisions and hence, the department has demanded the entire amount in the SCN without giving the benefit of abatement as provided under Notification. The benefit under Section 80 extended as the service tax along with interest is paid before issue of SCN - penalty rightly set aside - appeal dismissed - decided against Revenue.
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2017 (6) TMI 430
Refund claim of service tax paid on erection, commissioning and installation service - rejection on the ground of time limitation - Section 11B of the Central Excise Act - Held that: - reliance placed in the case of Sarita Handa Exports (P) Ltd. vs. UOI [2010 (9) TMI 254 - PUNJAB AND HARYANA HIGH COURT], where it was held that refund application beyond period specified under Section 11B of the Central Excise could not be entertained - the refund claim is barred by limitation - appeal dismissed - decided against appellant.
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2017 (6) TMI 429
Waiver of pre-deposit - Erection, Commissioning and Installation Services - the applicant entered into agreement with Haryana Urban Development Authority for execution of certain works wherein the material has been supplied by the appellant-applicant along with service - Held that: - prima-facie the activity undertaken by the applicants does not fall under the category of ‘Erection, Commissioning and Installation Services’ as they are providing the services along with the goods. In that circumstances, the proper classification of the said activities would be ‘Works Contract’ service - the service tax demand has been confirmed under ‘Erection, Commissioning and Installation Services’ which is not a proper classification - the applicant has made out a case for complete waiver of the pre-deposit - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 428
Export of services - service receiver situated outside india - Whether the amount payable to the appellant by the service receiver situated outside India, but paid by the ONGC (ONGC awards contracts for Oil & Gas exploration to the principal of the Appellant), whether amounts to receipt of consideration in convertible foreign exchange, so as to qualify as export of service? - Held that: - in the terms of J.B. Boda [1996 (10) TMI 70 - SUPREME Court], the facts are squarely covered, where it was held that even if less remittances is sent outside amounts to receiving of remittance in convertible foreign exchange - both the conditions of Export of service under the export of service rules are satisfied that is rendering of service from India and received by receiver abroad and further receipt of consideration in convertible foreign exchange. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 427
Repair and Maintenance service - export of service - whether Service Tax of ₹ 1,33,21,724/- is demandable rejecting the claim of the appellant that it is export of service as the service of Repair and Maintenance have been provided by the assessee located in India to the service receiver, which is located outside India? - extended period of limitation - Held that: - similar issue decided in the case of M/s. Samsung India Electronics P. Ltd Versus CCE. Noida [2015 (1) TMI 1098 - CESTAT NEW DELHI], where it was held that assessee had provided services of business support and maintenance and repairs to their clients located outside India and performed in India on behalf of client located outside India. Therefore, it is the case of export of services. Accordingly, it was held that no Service Tax is leviable. CENVAT credit - whether the appellant have rightly taken CENVAT Credit for ₹ 1,49,11,944/- being the Service Tax charged by their Authorized Service Centres, which have provided service to the appellant under the warranty period on sale of their products during the period April, 2006 to June 2007? - Held that: - service tax paid on expenses incurred for providing warranty services are entitled for input service credit - no extended period of limitation is invokable. Appeal allowed - decided in favor of appellant.
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Central Excise
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2017 (6) TMI 426
Liability of interest u/s 11 of CEA, 1944 - price variation clause - payment of duty on differential amount - Held that: - the issue involved in the present case is no more res integra and has been settled by the Hon’ble Supreme Court in the case of CCE, Pune vs. SKF India Ltd. [2009 (7) TMI 6 - SUPREME COURT], wherein the Supreme Court has categorically held interest is to be paid on the differential duty arising on account of the price variation - interest demand upheld - appeal dismissed - decided in favor of Revenue.
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2017 (6) TMI 425
Refund of CENVAT credit - credit availed on the basis of duty paying documents - denial of refund on the ground that the same is not within the stipulated period as prescribed in Section 11B of the CEA, 1944 - But while passing the impugned order, the refund claim has been denied on the ground which has not been taken in the show-cause notice and the same is not sustainable in law - scope of SCN - Held that: - as per the Rule 3(4) read with Rule 9(1)(a)(i) of the CENVAT Credit Rules, CENVAT credit availed may be utilized for payment of an amount equivalent to CENVAT Credit availed on inputs if such inputs are removed as such and in this case also, the duty was paid when the invoice was issued to the buyer JSW Steels Ltd. The appellant has cleared the inputs as such by paying the duty and therefore, the payment of duty at the insistence of the audit second time is wrong and illegal and therefore, the appellant is entitled to refund of the same as per Section 11B of the CEA. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 424
Whether appellants are liable to pay duty on the processed loss occurred during job work? Held that: - Section 3 of the CEA, 1944 stipulates that duty is to be levied on the goods manufactured and that there is no provision for charging duty on invisible losses - the issue whether appellant is liable to pay duty on the burning loss occurred in the job worker unit has been well settled in favor of the assessee in their own case - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 423
Sale of rejected slag - According to the Revenue, while clearing the rejected slag, they were showing less clearance value and paying less duty on that, and the reversal/payment of duty was not equal to the credit availed by them - Held that: - it is clear that the oversized screened slag is a waste material during the manufacturing process of Portland Slag Cement - the Hon’ble Supreme Court in the case of Collector of Central Excise v. Rajasthan State Chemical Works [1991 (9) TMI 73 - SUPREME COURT OF INDIA] held that process in manufacture or in relation to manufacture implies not only the production but also the various stages on which the raw material is subjected to change by different operations. Therefore, each step towards such production would be a process in relation to the manufacture. The Adjudicating Authority dropped the proceedings on the basis of the verification report of the Range Superintendent by letter dated 11.03.2010 - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 422
Benefit of N/N. 3/2001-CE dated 1.3.2001 and N/N. 6/2002-CE dated 1.3.2002 - manufacture of motor vehicle bodies for chassis - denial of exemption on the ground that respondent has availed the credit on other inputs - Held that: - the exemption is available to the respondent if the vehicles are manufactured out of chassiss falling under chapter heading 87.06 on which the duty of excise has been paid and no the credit of duty paid on other inputs for fabrication of bodies of that chassis has been taken - Admittedly in this case the respondent has taken the credit on other inputs, therefore, the respondent is not entitled for exemption. The respondent has not paid the amount of 8% of the value of chassis at the time of clearance of motor vehicle, therefore, the respondent has not paid the correct amount under Rule 6 (3) (b) of CCR, 2001 - demand of duty alongwith interest upheld. Penalty - As there is a difference opinion on the issue of imposing penalty on the respondent, therefore the matter be placed before the Hon’ble President to appoint third Member to resolve - Whether in the facts and circumstances of the case, the penalty on the respondent can be imposed or not ?
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2017 (6) TMI 421
Penalty u/r 26 of CER, 2002 - clandestine removal - Held that: - the appellant, M/s Kailash Traders willingly connived and colluded with the manufacturer M/s GIPPL in dealing with clandestinely removed goods namely sponge iron/MS ingots etc which the appellant knew were liable for confiscation under the CEA, 1944 and the rules made thereunder. There is no enough defence has been given by the appellant in this regard - penalty sustained - appeal dismissed - decided against appellant.
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2017 (6) TMI 420
Interest on refund of pre-deposit - Held that: - The application filed by the appellant cannot be taken a tool to deprive of the appellant from the legitimate claim of interest - the filing of a formal refund application that too when the adjudicating authority has not acted on the order of the Tribunal, cannot be reason for denying the interest to the appellant - the appellants are clearly entitled for the interest from 20.8.2005 to 17.10.2010 as per the rate prescribed under the law - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 419
Valuation - appellant was allowed to recover the amount of sales tax involved on sales transaction of final product and retain the same - According to the department such an amount which has been retained by appellant is additional consideration flowing from buyer to appellant and as per the provisions of Rule 6 of the Central Excise Valuation Rules, read with Section 4 of the CEA and Board’s Circular dt 30th June 2000, central excise duty needs to be discharged - Held that: - reliance placed in the case of Commissioner of Central Excise, Mumbai-I Versus M/s Welspun Corporation Ltd. [2017 (5) TMI 177 - CESTAT MUMBAI], where the issue is identical to the issue in the case before us, where, the assessee had paid the excise duty ‘under proteston’ the amounts of the sales tax incentives remitted and filed a refund claim while in the case in hand there is a demand for the duty on the amount retained by appellant as sales tax incentives and subsequently remitted by the assessing officer under GVAT Act - we have no hesitation to hold that the impugned order is unsustainable and liable to be set aside - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 418
Clandestine manufacture and removal - copper wire and ingots - Held that: - the seizure of Indian currency for ₹ 23.15 lakhs from the premises of the main appellant was one of the main evidence for the revenue, to conclude that the appellants indulged in unaccounted clearance - It was recorded that the said amount cannot be attributed to sale proceeds of excisable goods, illegally manufactured and cleared by the appellant. As such, one of the main basis on which the present demand was sustained has been held to be unsustainable. Another important aspect relied upon by the Revenue is the production of excisable goods, refined copper wire bars on 20th and 21st September, 2005. Admittedly, the appellants had capacity of making around 4 metric tonnes of the finished goods per heat - the impugned order did not discuss at tall, about the physical possibility of the main appellant manufacturing 13 metric tonnes of refined copper wire bar per day for two consecutive days. Revenue failed to establish the unaccounted manufacture and clearance of excisable goods with any creditable evidences and as such the impugned order is liable to be set aside - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 417
Recovery of excess paid rebate - Department was of the view that excess rebate was paid to the Appellants since the quantity of sugar exported without payment of duty was not deducted from the quantum of excess production based on which the rebate was paid - time limitation - Held that: - the rebates were granted on 15.09.1977 as well as on 17.10.1978, whereas the relevant show cause notices were issued on 13.07.1982, 27.08.1982 and 13.07.1982 - On a perusal of case records, we find that the refunds involved in the present case were sanctioned by the Departmental authorities after scrutiny of records and details submitted by the Appellants. The details regarding the production as well as exports made by the Appellants were already reflected in records and returns submitted to the Department. Accordingly, we are of the view that the charge of wilful suppression is unsustainable. The Department cannot recover excess production rebate on the ground of time bar u/s 11-A - appeal allowed - decided in favor of assessee.
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2017 (6) TMI 416
SSI exemption - use of brand name of others - it has been presumed by the Revenue that the “Emmbros” brand name belongs to the distributors which is factually incorrect as during the course of investigation, the distributor itself has stated that the brand name Emmbros does not belong to them - Held that: - the allegation of the Revenue is only on assumptions and presumptions without any documentary evidence. In that circumstances, there is no infirmity in the impugned order - appeal dismissed - decided against Revenue.
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2017 (6) TMI 415
Natural justice - Classification of goods - Katha-II - classified under CTH 14049050 or 13021919 of CETA - Held that: - initially the test report was given in favor of the appellants. Subsequently, the test report was amended. In that circumstances, in the interest of justice, the cross-examination of Chemical examiner was required to be done - it is gross violation of principle natural justice by not providing cross-examination of the Chemical examination - the matter is remanded back to the Adjudicating Authority to decide the issue on merits - appeal allowed by way of remand.
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2017 (6) TMI 414
Whether I.V. Cannulas fall within the scope of the term "Disposable and non-disposable cannula for aorta, vena cavae and similar veins and blood vessels and cannula for intra-corporal spaces" or otherwise - N/N. 6/2002 dated 01/03/2002, after amendment vide N/N. 6/2003-CE dated 01/03/2003, read with N/N. 21/2002-CU dated 01/03/2002 and continued to be exempted under such similar N/N. 6/2006-CE. Held that: - the issue herein is squarely covered by the precedent orders of this Tribunal in M/s Becton Dickinson India Pvt. Ltd. Versus CCE, Delhi –III [2015 (6) TMI 335 - CESTAT NEW DELHI], where it was held that On the basis of the certificates of various experts certifying that the scalp vein infusion sets, in question, are Cannula which can be used for blood vessels, the Tribunal held that the same would be eligible for exemption - the appellants are eligible for exemption for i. v. cannula manufactured by them - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (6) TMI 432
Legality of assessment order - release of seized goods on deposit of security - Revisionist is not a dealer registered under U.P. Value Added Tax Act, 2008 - A show cause notice was issued on 24.11.2016, fixing 29.11.2016 as the date. Notice also indicated that physical verification of goods is required. The notice was allegedly pasted on the vehicle. None appeared on 29.11.2016. Applicant denies receiving of this notice - case of appellant is that since a valid TDF form was shown alongwith relevant documents, required to be possessed with the transport vehicle, the ex-parte proceedings of seizure and direction to deposit 40% of value of such goods towards security is wholly unjustified. Held that: - State legislature enacted Uttar Pradesh Value Added Tax Act, 2008, introducing value added system of taxation to levy tax on sale and purchase of goods in the State of U.P. Liability to pay tax under the Act arise only upon sale or purchase of goods within the State. No tax is leviable when goods enter the State from any place outside the State and is bound to any other place outside the State of U.P. - The transport vehicle crossing the State has to possess a transit declaration form as well as other documents required to be possessed as per the circular issued by the Commissioner in terms of Section 50 of the Act. The authorities are entitled to verify whether such declaration/documents are available with the vehicle and disclosure made is true, and if it be so, no further scrutiny is warranted. The authorities would be entitled to verify correctness of declarations/documents. For such purposes, the authorities can verify as to whether the goods actually transported are as disclosed in the TDF, and physical verification can be made to ascertain that declaration made is true. The object of enquiry is merely to satisfy that goods declared to be transported are coming from outside the State, and is actually bound to a place beyond the State. If for part of the goods no reference is made in TDF or relevant supporting documents are missing, a rebuttable presumption might arise that such goods are not intended to cross the State, and are likely to be offloaded within the State. After considering the relevant circulars, this Court while answering question no.2 rejected the contention that Delhi-U.P. Border Area of District Ghaziabad is a 'no man's land' - seizure of goods were held valid. The details of consignor and consignee need not be investigated, at the first instance, if the description of goods mentioned in TDF as well as other details are found correct, nor the authorities would not be justified in detaining or seizing goods merely for the reason that consignor and consignee details are allegedly incorrect. However, where declaration/documents supporting transport of goods are found bogus/fraudulant etc., the authorities may examine details of consignor and consignee with an intent to ascertain whether goods are intended to pass through State or not. - Coming to the facts of the present case, it is to be found that the description of goods mentioned in TDF was found to be at variance with the goods actually transported. Under the circular, authorities have jurisdiction to make physical verification. The authorities have detained only such goods, which are found to be in excess of what was disclosed in the TDF. The valuation of goods transported was also found wrong. To that extent, goods transported are found to be at variance with the declaration made in TDF and the authorities would clearly be justified in detaining goods so as to proceed lawfully against it. Although, it is settled that service of notice has to be in accordance with the Rules of 1972, but on facts, it is found that notices were served upon transporter by the registered post as well. In view of the finding that letters have been sent by registered post on 30th November, 2016, and 10th December, 2016, the argument that proceedings drawn were violative of principles of natural justice cannot be sustained. The order of seizure of goods, therefore, in so far as it is not backed by disclosure made in TDF is upheld. In the facts and circumstances of the present case, it would be appropriate to modify the order of Tribunal, dated 3.3.2017, and to permit release of goods upon depositing 15% of the value of goods, and furnishing of indemnity bond for the balance 85% amount - revision allowed.
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2017 (6) TMI 412
Reversal of Income Tax Credit under Section 19 (2) (v) of the TNVAT Act - Rejection of application filed u/s 84 of the TNVAT Act - whether the petitioner's case will fall under the scope and ambit of the decision of this Court in the case of Everest Industries Limited -v- State of Tamil Nadu & another [2017 (3) TMI 279 - MADRAS HIGH COURT] - Held that: - The respondent should have only seen as to whether the case of the petitioner would fall within the scope and ambit of the decision made by this Court in the said case in order to grant the very same benefit to the petitioner also - the other reasoning given by the respondent that the said provisions had not been quashed by this Court also cannot be sustained, in view of the fact that in the above said decision, this Court has categorically found as to who are the persons entitled to the benefit under the said provision. The respondent has to re-consider the whole issue by applying the said decision to the facts and circumstances of the present case - appeal allowed by way of remand.
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2017 (6) TMI 411
Exemption in terms of Notification issued under Section 17 of the Act - The claim for exemption was rejected by the Assessing Officer on the ground that the society was not authorized to effect sales of E.B. line materials and RTS grills to the Tamil Nadu Electricity Board - levy of penalty u/s 12(3)(b) of the Act - whether the appellant, a cooperative society engaged in industrial activity, is entitled to claim exemption on the product sold by it to the Tamil Nadu Electricity Board? - Held that: - the appellant industry is registered under the Tamil Nadu Khadi and Village Industries Board and to the said effect, a certificate has been issued by the Assistant Director on 09.12.1996 - it is not in dispute that the appellant is one of the institutions certified by the Khadi and Village Industries Board and this stand has been reiterated by the Assistant Director to the Joint Commissioner vide letter dated 06.12.2004. It is important to note that in the said letter, the Khadi and Village Industries Board specifically certified that the society, which is a unit of the Board, is authorized to purchase finished goods from the members of the society and sell the same for the benefit of its members. This aspect of the matter was not considered by the Joint Commissioner while passing the impugned order. Merely because the product supplied by the society, which is being utilized by the Electricity Board for the purpose of supporting high voltage electrical cables, cannot make the product to fall outside the classification of blacksmithy product. The own use of the product is of no consequence to consider a claim for exemption of product, which was sold by the appellant society. Rejection also on the ground that the process involves painting and welding - Held that: - ainting and welding would be necessary to make the finished product. But, the essential character of the product does not change from that of a blacksmithy product. The products, which were sold by the appellant society to the Tamil Nadu Electricity Board, are essentially blacksmithy products and are entitled for exemption in terms of the Notification issued under Section 17 of the Act - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 382
Deposit of 10% of the estimated value of goods seized for release of goods - case of assessee is that assessee is a registered dealer and in case any liability is fixed, the same can be realized and there was no justification for the authorities to require the revisionist to deposit cash security - Held that: - It is not in dispute that revisionist is a registered dealer under U.P. VAT Act in the State, and in case any ultimate liability towards tax or penalty is imposed upon it, the same can always be realized - seized goods shall be released by the authorities, in case the revisionist submits an indemnity bond for the disputed amount in question - revision allowed - decided in favor of revisionist.
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