TMI Tax Updates - e-Newsletter
June 15, 2013

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. RELEVANT INTERPRETATION PRINCIPLES (PART- I)

   By: Dr. Sanjiv Agarwal

2. REFUND OF PRE-DEPOSIT

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Extension of Special Package of Industrial Incentive for the State of Jammu & Kashmir

2. Index Numbers of Wholesale Price in India (Base: 2004-05=100) Review for the month of May, 2013

Notifications

DGFT

1. 21 (RE-2013)/2009-2014 - dated 13-6-2013 - FTP

Central Government hereby authorizes the officers to function as Appellate Authority.

2. 20 (RE-2013)/2009-2014 - dated 13-6-2013 - FTP

Central Government hereby authorizes the officers for the purposes of exercising powers under Section 13 read with Section 11 of the FT(DR) Act, 1992.

Circulars / Instructions / Orders

FEMA

1. CLARIFICATION - dated 7-6-2013

CLARIFICATION ON QUERIES OF PROSPECTIVE INVESTORS/ STAKEHOLDERS ON FDI POLICY FOR MULTI-BRAND RETAIL TRADING

2. Press Note No. 2(2013 Series) - dated 4-6-2013

Foreign Direct investment Policy – definition of 'group company'

3. Press Note No. 1 (2013 Series) - dated 3-6-2013

Review of the policy on foreign direct investment in the Multi Brand Retail Trading Sector- amendment of paragraph 6.2.16.5(2) of 'Circular 1 of 2013-Consolidated FDI Policy'

Highlights / Catch Notes

Income Tax

• India-Germany DTAA: Article 7 ensures only profits from permanent establishments in India are taxed, preventing double taxation.

  Case-Laws - AT : Attribution of income - India - German DTTA -as per Article 7 of the India Germany DTAA, the business profits of the permanent establishment in India, only are offered to tax. - AT
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• Income Tax Act: Improper Rejection of Registration u/ss 12A/12AA; Assessee Not Operating Institution or Coaching Classes.

  Case-Laws - AT : Registration u/s 12A / 12AA - section 2(15) - there is neither institution nor any coaching classes conducted by the assessee - rejection is not proper - AT
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Customs

• Settlement Commission Rules Full Payment Required for Customs Settlements, No Partial Proposals Accepted Under Current Law.

  Case-Laws - HC : Meaning of 'Case' - Settlement Commission - merely because the recovery has not been completed, a person would not be entitled to offer a lesser amount than what has been adjudicated to be due from him. - HC
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• High Court Upholds Shrimp Confiscation Amid CESTAT Vacancy, Stresses Food Safety Standards Over Procedural Delays.

  Case-Laws - HC : Confiscation - food safety - shelf life of the shrimp - he reason that the CESTAT is not sitting due to vacancy in its Chennai Bench cannot be a good reason for this Court to interfere with the order - HC
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• Tribunal Exceeded Jurisdiction Dismissing Stay Application; Pre-Deposit Requirement Contested Due to Goods in Department Custody.

  Case-Laws - HC : Requirement of pre-deposit - Tribunal was not well within its jurisdiction while dismissing the stay application in view of the fact that entire goods seized are in the custody of the department. - HC
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Corporate Law

• Court Rules: No Alterations to Originally Sanctioned Scheme in Unworkable Amalgamation Case.

  Case-Laws - HC : Scheme of arrangement / amalgamation - prayer for winding up since the transfree company felt that scheme is unworkable - The Court cannot add terms to the scheme which did not exist in the original sanctioned scheme. - HC
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Service Tax

• Service Provider Wins: No Extended Tax Recovery or Penalties for SEZ Services' Tax Exemption via Refund Mechanism.

  Case-Laws - AT : Provision of services to SEZ - exemption by way of refund mechanism - non payment of service tax - the extended period could not have been invoked and penalty could not have been imposed - AT
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Case Laws:

• Income Tax

• 2013 (6) TMI 337
  Interest on borrowed funds - disallowance of claim on the ground that there was additional amount of advances given to directors, without any nexus being established between the borrowed funds and the advances made to Directors - Held that:- Except for stating that the assessee had made borrowal in the immediate preceding accounting year, no materials were placed before this Court or before any other authority to show that the borrowed funds were not diverted for any purpose other than business. The mere contention that the borrowed funds were utilised for the purchase of Masoor Dhall from Sri Saravana Agency, per se, cannot be taken as a good ground to accept the plea of the assessee, considering the fact that consistently the advances given to the Directors had increased from Rs.3.23 crores to Rs.3.91 crores without corresponding return thereof and with no better performance in the business of the assessee. In the circumstances, the arguments placed by assessee rejected. As far as the reliance placed on the decision of CIT V. Kandagiri Spinning Mills Ltd [2007 (4) TMI 182 - MADRAS HIGH COURT] the same is distinguishable for the simple reason that the decision rested on the factual findings therein in that case by the Commissioner of Income Tax (Appeals) as well as by the Tribunal. As rightly pointed out by the Tribunal, when the assessee had not showed any such nexus of the borrowed funds utilised in the business and continued to be used in the business, no hesitation in confirming the order of the Tribunal.

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• 2013 (6) TMI 336
  Jurisdiction power u/s 263 by CIT(A) - the assessment made with reference to the claim under Section 14A was erroneous and prejudicial to the interest of the Revenue - Tribunal set aside the order of the CIT - assessee had borrowed secured loans by issue of redeemable non-convertible debentures to the tune of Rs.60 crores, but utilized the same towards investment in shares - Held that:- It is clearly pointed out that the notice issued u/s 263 made no specific reference to materials showing the assessment as erroneous and prejudicial to the interest of the Revenue warranting revision of the order of assessment. Thus, unless the basis of revision satisfying the twin conditions, namely, erroneous and prejudicial to the interest of the Revenue, are pointed out by the CIT in invoking Section 263 certainly, the asssessee is entitled to raise the question of jurisdiction. As in present case Tribunal, as a matter of fact, found that the redeemable non-convertible debentures were issued between 17.3.2004 and 31.3.2004 and there were no investments made during this period. Being pure and simple factual finding, which has not been denied by the Revenue, there exists no ground to accept the case of the Revenue to dislodge the findings of the Tribunal. No basis for revision and that the factual finding as regards the issuance of redeemable non-convertible debentures is not correlated to any investment made during this period, no hesitation in rejecting appeal of revenue.

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• 2013 (6) TMI 335
  Deduction u/ 80HHC - Export of Marble Blocks, which are cut and polished. - Held that:- present appeal is fully covered by decision of the Division Bench of this Court in Commissioner of Income Tax, Udaipur vs. M/s. Arihant Tiles & Marbles Pvt. Ltd. [2013 (6) TMI 45 - RAJASTHAN HIGH COURT] - ssessee is entitled to deduction under Section 80HHC - Decided in favor of assessee.

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• 2013 (6) TMI 334
  Deduction under Section 80HHC - export of marble blocks which were not polished - Held that:- As decided in Arihant Tiles and Marbles Pvt. Ltd case [2013 (6) TMI 45 - RAJASTHAN HIGH COURT] the assessee-respondents are eligible for deduction under section 80HHC of the Act for export of marble blocks, which were cut and polished. This findings are, indisputably, binding on, this court in view of the law laid down in the case of Sudarshan Silks and Sarees v. CIT [2008 (4) TMI 5 - Supreme Court] - in favour of the assessee.

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• 2013 (6) TMI 333
  Attribution of income - India - German DTTA - Addition being difference of amount remitted by the HO to its Branch in India - amount remitted to the HO for an addition made u/s 40A(2)(b)held to be related party remittance - Held that:- It is an undisputed fact that India Branch Offices are under the Korean Registry wherein the India BO undertakes inspection and validation of ocean fairing vessels by physically examining the vessels. After physical examination, the reports are sent to HO located in Germany, who issues validation certificate, regarding the fitness of the vessel. The business model followed by the assessee and its parent in Germany are, ships and vessels, in order to operate in sea are required to be classified by a classification society approved by an authority. The classification is done at the insistence of the ship owner on behalf of the respective government. In certain instances, classification is done as per report coming directly from the ship owner. In either case, the post examination approval reports are submitted to the respective government, which is then hands it over to the ship, whose flag it is carrying. The Indian Operations were started from 06.11.1989 as a branch of its German parent, who in turn is a member of International Association of Classification Societies, who decides the scope of monitoring activities of its members. The scope of Indian Branch would include Classification and certification of ships, Certification of marine related materials and components & Certification relating to International safety management Co. These activities are carried out with the technical assistance and cooperation of its HO in Germany, who, as submitted are available 24X7. On computation of its classification, invoice is raised by the Indian BO or the German HO, as the case may be, and the receipts are assigned as per the agreed standard module herein followed globally, whereby, the HO retains 30% and the BO retain 70% as per fee splitting arrangement. Thus as per Article 7 of the India Germany DTAA, the business profits of the permanent establishment in India, only are offered to tax. Treading strictly on the DTAA route, the issue becomes clear, that the split of fee which is attributed to its German parent HO, become non taxable under the Indian tax regime. This would become applicable on all the three figures that are impugned before us, because the share of Rs. 22,55,981/- is also of the similar nature & character, as that of fee attributed towards HO by the Indian BO at Rs. 58,13,506/- and the expenses incurred by the HO on behalf of India BO at Rs. 3,00,754/- u/s 40A(2)(b). As in agreement with the decision of Intergrafia Print & Pack GMBH (2007 (10) TMI 415 - ITAT DELHI) following the India German DTAA treaty fee split arrangement has been approved. Also in agreement to the decision of the assessee own case in penalty proceedings, wherein, the CIT(A) came to a factual finding that, "following a well defined system, the revenue earned from the activities of the HO cannot be taxed in India", which ultimately has been attributed to the HO and fully backed by the India German DTAA and Para1(b) of the Protocol, as was recited by the AR and reproduced by us earlier. Thus reversing the decision taken by the DRP and direct the AO to delete the three impugned amounts of Rs. 58,13,506/-, Rs. 22,55,981/- and Rs. 3,00,754/- from the income of the assessee - appeal filed by the assessee allowed.

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• 2013 (6) TMI 332
  Addition in respect of interest payment - disallowance u/s 36(1)(iii) - Held that:- It is an admitted fact that the assessee gave Rs. 9.33 lacs loan / advances to three of his friends namely Sri Kastrichand Pvt. Ltd. (Rs. 3,83,000/-), Mahesh Ahuja (Rs. 4,50,000/-) and Advance Samata Anand (Rs. 1,00,000/-). It is also a fact that out of the interst bearing loans, the assessee received Rs. 11.6 lacs from Tarachand Kashyap, HUF which is used for the purpose of acquiring a business asset. Thus, the interest claim of Rs. 92,912/- directly relates to the said loan of Rs. 11.6 lacs. Thus, the balance of Rs. 38,529/- is an interest paid to the banks which is open to disallowances. The assessee has not demonstrated as to the relatable interest bearing loans and the manner of appropriation of the said loans. In the absence of the same, the only presumption is that the said loans from Kotak Mahendre Bank and DCB are utilized for lending to the said three parties for non business purpose. Ratio of S.A. Builders vs. CIT case (2006 (12) TMI 82 - SUPREME COURT) is relevant here and the advances of Rs. 9.33 lacs were given outside the purview of the established concept of 'commercial expediency'. Thus disapproving the estimation method adopted by the CIT(A) in making disallowance restricting to Rs 93,300/-. Therefore, restricting the disallowance to Rs. 38,529/- should meet both ends of justice - grounds raised by the assessee are partly allowed.

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• 2013 (6) TMI 331
  Income from un-disclosed sources - share transactions - search u/s 132 - Held that:- As during the course of hearing, a specific question was asked to the AR as what treatment was given to the shares in the personal accounts of the assessee in the year of purchase & as he submitted that he was not aware of the said fact. As this fact is vital fact for deciding the issue and it needs further verification. The shares purchased by the assessee are claimed to have been issued by BCL, a company of Mukesh Choksi. As it was held that fact of transfer of shares had to be confirmed with office of Registrar of Companies. Considering the facts of the above case restore back the matter to the file of the AO for fresh adjudication. AO is directed to afford reasonable opportunity of hearing to the assessee - appeal filed by the assessee stands partly allowed.

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• 2013 (6) TMI 330
  Application for registration u/s 12A / 12AA rejected - whether there is binding legal obligation under the terms of the Trust deed on the trustees to apply the income / Trust funds solely for charitable purposes? - Held that:- It is undisputed fact that the assessee-trust filed an application for registration u/s 12AA on 21.3.2012. The Trust was constituted by indenture of Trust Deed dated 29.12.2011 and it was registered with the Charity Commissioner, Mumbai on 20.3.2012. It is also an undisputed fact that the Trust has not applied or appropriated its funds of its objects till date. Thus, it is premature to decide or conclude on the question of application or appropriation of funds for the trust as the trust has not yet established any such academic or educational institutions or necessary infrastructure. Therefore, the question of exceeding of the aggregate receipts of 25 lakhs in violation of the provisions of the second proviso to section 2(15) does not arise. As such, it is settled law that the denial of registration u/s 12AA is not proper when the trust is yet to start its educational activities. The DIT(E) should cross these legal hurdles before he resorts to the denial. When the assessee-trust has have reported any receipts from the educational activities, i.e. objects of the trust, it is premature to conclude on the commercial nature of the educational activities of the trust. Also perusing the assessee's letter dated 27.9.2012, wherein there is a prayer from the assessee for "an opportunity of personal hearing" for sorting out the issues raised by the DIT (E). Assessee has not got invitation of the DIT(E) in this regard. To conclude in the context of the provisions of section 2(15), the expression 'education' should be understood as formal education by way of formal school or colleges or universities etc. The 'commercial centres' are not be treated on par with such formally established educational methods/systems. Also as to how the amended provisions of the second proviso to section 2(15) were not considered in NATIONAL INSTITUTE OF AERONAUTICAL ENGINEERING EDUCATIONAL SOCIETY case [2009 (7) TMI 94 - UTTARAKHAND HIGH COURT] and how the amended provisions differ substantially. DIT(E) denied registration sole on the ground of extended and inclusive object of "tutorial or coaching classes". Therefore, in principle, the said denial of registration at this phase of the trust activities is not proper. Education has different shades and all kinds of education are not covered by the provisions of section 2(15). As on date, there is neither institution nor any coaching classes conducted by the assessee as stated by the Managing Trustee at Bar. These facts were not properly communicated by the assessee to the DIT (E), probably for this purpose, the assessee wanted an opportunity of being heard by the DIT (E) before decision taken against the assessee by the rejection of registration u/s 12AA. Accordingly, the grounds raised in the appeal are set aside to the DIT (E) for examining the issues afresh - appeal of the assessee is allowed for statistical purposes.

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• 2013 (6) TMI 329
  Unaccounted transactions of receipt of jewellery - addition of labour charges - CIT(A) deleted the addition - search and seizure operation carried out u/s 132 - Held that:- It is a case where the receipt of the said jewellary on approval basis was duly recorded in the books of accounts of both parties, namely M/s. Auro gold Jewellery P. Ltd and the assessee. No incriminating document was found and seized during the course of search and survey operation in the cases of M/s. Auro gold Jewellery P. Ltd. and the assessee to prove that these goods were not sent on approval, but these were the sales and purchases of the two parties. In such circumstances, there is no case for taking any adverse inference. Undisputedly, it is an admitted fact that AO did not make any addition of unaccounted purchase of the impugned jewellary received by the assessee on approval basis. However, AO made only the addition of labour charges at Rs. 60/- per gm on the entire stock of jewellery sent to the assessee on approval basis. There is no evidence whatsoever to suggest that the assessee manufacture the said stock received on approval basis and assessee is due to receive the 'labour charges' from M/s Auro gold Jewellery P. Ltd in lieu of any services rendered by the assessee in this regard. Thus such addition on account of labour charges constitutes a case of addition based on surmises or suspicion. Therefore agreeing with the findings of the CIT(A)- appeal of the Revenue is dismissed.

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• Customs

• 2013 (6) TMI 328
  Meaning of 'Case' - The Settlement Commission refused to entertain the application and it is such order which has been challenged by way of the present petition. - removing 36 MT Mulberry Raw silk or raw silk from the Falta Special Economic Zone without payment of customs duty - held that:- The Settlement Commission found that upon the change in the definition, the operative words were “pending before an adjudicating authority on the date on which an application ... is made” and took the view that since nothing was pending qua the matter as on the date of the settlement application being lodged, the Settlement Commission did not have the authority to receive the same. There is no infirmity in the order of the Settlement Commission that calls for any interference in this jurisdiction. There is a fundamental basis as to why the provision is more restricted in its operation. It would defy logic and reason if persons as the present petitioner take a chance to have their matter or claim adjudicated before an authority under the statute and, upon failing in such misadventure, offer to pay a reduced amount than the amount found due. It is evident that the fundamental basis in restricting the relevant provision is to allow a bona fide person to make a settlement proposal prior to taking a chance to have the claim adjudicated. But upon the claim being adjudicated and merely because the recovery has not been completed, a person would not be entitled to offer a lesser amount than what has been adjudicated to be due from him. - Decided against the assessee.

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• 2013 (6) TMI 327
  Confiscation - food safety - shelf life of the shrimp - import for the purpose of re-export - Bill of Entry, dated 7.7.2011 - it had been shown on the carton boxes, as 'Best Before Use', as 30.4.2011 - the respondent had passed an Order-in-Original No.18294 of 2012, dated 14.2.2012, confiscating the shrimps imported by the petitioner, for the purpose of re-export. By the said order, the petitioner had also been imposed with the penalty. - held that:- it is clear that the principles of natural justice had been followed, by the respondent, while passing the impugned order, dated 14.2.2012. Even though various grounds had been raised on behalf of the petitioner company, this Court is not inclined to go into the merits of the matter, as it is open to the petitioner Company to avail the alternative remedy of appeal available to it. It is not the case of the petitioner Company that the respondent does not have the authority or jurisdiction to pass the Order-in-Original No.18294 of 2012, dated 14.2.2012. The reason that the CESTAT is not sitting due to vacancy in its Chennai Bench cannot be a good reason for this Court to interfere with the order of the respondent, dated 14.2.2012, as prayed for by the petitioner company, in the present writ petition. - Decided against the assessee.

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• 2013 (6) TMI 326
  Requirement of pre-deposit - Confiscation - misdeclaration - import of ball bearing - alleged that petitioner has imported finished goods whereas in the bill of entry, petitioner had declared incomplete goods - Section 129E of the Customs Act - held that:- pre-deposit of the duty and penalty would be required to maintain the appeal when goods in question are not in the custody of the revenue. In the present case, admittedly goods were seized by the department and are in the custody of the department, therefore, pre-deposit of the duty and penalty imposed to maintain the appeal is not at all required. Tribunal was not well within its jurisdiction while dismissing the stay application in view of the fact that entire goods seized are in the custody of the department. Since, petitioner is not in custody of the goods, therefore, asking him to deposit huge duty and penalty to maintain appeal would cause great hardship to the petitioner. Therefore, impugned order cannot be sustained in the eyes of law. - decided in favor of assessee.

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• Corporate Laws

• 2013 (6) TMI 325
  Scheme of arrangement / amalgamation - prayer for winding up since the transfree company felt that scheme is unworkable - failure to discharge the obligation under the scheme - held that:- The specific absence of the distribution network and the decryption code of the STBs answers the argument of the learned senior counsel for the appellant that this distribution network and the decryption code of the STBs did not form a part of the undertaking which was to be transferred by the transferor company to the transferee company. The Court cannot add terms to the scheme which did not exist in the original sanctioned scheme. The powers of the Court are limited to giving directions which it considers necessary for the proper working of the compromise or arrangement and in the course of these directions it may only make such modifications in the said compromise or arrangement which are necessitated for the proper working of the said compromise or arrangement. It is not within the domain of the Court to read terms which were explicitly sought to be excluded under the sanctioned scheme. The Court in the present case has nowhere returned a conclusion that the scheme was unworkable. The terms of the scheme as is evident from para 13 (Company Petition No.20 of 2011) details the benefits which had accused to the transferee company. - These benefits had already accrued to the transferee company. The appellant has also acted upon the scheme. Under section 392(2) of the said Act the Court will not pass an order for winding up on the basis of a mere allegation without any particulars; merely on a bald submission that the scheme as sanctioned has become unworkable would not lead to the passing of a winding up order. - petition dismissed with cost quantified at Rs.25,000/-.

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• Service Tax

• 2013 (6) TMI 341
  Appeal dismissed as time bared - Held that:- When the case came up for hearing last time, the department was directed to produce evidence towards service of the order dated 29/03/2010 to the appellant. Now, the Commissionerate has reported that they had sent the order by speed post however, the postal authorities has informed that the record of the speed post article is not available since the preservation period of old records are over. Thus benefit of doubt is to be given to the appellant and hold that service of the order was not completed earlier and the same was completed only on 11/02/2011 when the order was handed over to the appellant in person. Thus as the appeal has been filed within three months from the date of receipt of the order dismissal of appeal on account of time-bar is not sustainable in law - appeal is allowed by way of remand.

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• 2013 (6) TMI 340
  Levy of ST on sale of SIM Cards of BSNL - extended period of limitation - held that:- activity of purchase and sale of SIM card belonging to BSNL where BSNL has discharged the service tax on the full value of the SIM cards, does not amount to providing business auxiliary services and confirmation of demand on the distributors for the second time is not called for. - Demand set aside - Decided in favor of assessee.

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• 2013 (6) TMI 339
  Levy of ST on sale of SIM Cards of BSNL - extended period of limitation - Held that:- Interestingly the services of selling agent or a distributor of SIM cards or recharge coupon vouchers have been exempted from service tax vide entry No. 29 in Notification 25/2012-ST dated 20-06-12. So the special nature of services in such cases is recognized though only recently. Though the correct procedure for discharge of the service “tax liability by the two parties is that the distributors raise bills for commissions that is due to them along with service tax and BSNL takes Cenvat credit of tax paid by distributors for discharging liability on the telecommunication service provided by BSNL, such procedure dos not result in extra realization of Revenue. Considering the special nature of the impugned activities and the fact that it can be easily verified that full taxable value of the service provided by BSNL to customers is subjected to tax, we are of the view that there is no case to undo decisions already taken by the Tribunal in this regard This issue has lost relevance for the future because of exemption under Notification 25/2012-ST-S. No. 29 for this type of service. - Demand set aside - Decided in favor of assessee.

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• 2013 (6) TMI 338
  Provision of services to SEZ - exemption by way of refund mechanism - non payment of service tax - Notification no. 9/2009-ST dated 3-3-2009 - Held that:- when only during the gap of 2 months the appellant did not pay the Service Tax and it was available as refund to the recipient, the question of having any intention to evade duty does not arise and therefore the Show Cause Notice issued on 19-10-2010 to recover the Service Tax from 3-3-2009 to 20-5-2009 was time-barred. Under these circumstances, the extended period could not have been invoked and penalty could not have been imposed and further legally also, it can be argued that the intention of the Government was to provide exemption and tax could not have been demanded during the relevant period. - Decided in favor of assessee.

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• Central Excise

• 2013 (6) TMI 324
  Admissibility of CENVAT credit on group insurance - period from December 2007 to February 2008 - Held that:- This issue is no longer res integra as decided in Commissioner vs. Stanzen Toyotetsu India (P) Ltd.(2011 (4) TMI 201 - KARNATAKA HIGH COURT) wherein held that as the assessee was statutorily required to obtain insurance police covering risk of their employees under the Workmen’s Compensation Act and the Employees State Insurance Act, the insurance service received by them from the insurers constituted an input service defined under Rule 2(l) of the CENVAT Credit Rules, 2004. Against revenue.

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• 2013 (6) TMI 323
  Supplies to SEZ from DTA - Clearance to be treated as “dutiable goods” or “exempted goods” - as per revenue appellants are liable to pay 10% of the price of the goods cleared at nil rate of duty as per the provisions of Rule 6 of Cenvat Credit Rules - Held that:- As decided in Sujana Metal Products Ltd. v. CCE, Hyderabad (2011 (9) TMI 724 - CESTAT, BANGALORE) supplies from DTA unit to developer in SEZ are covered under the provisions of Rule 6 of Cenvat Credit Rules 2004 in view of the amendment to Rule 6(6) of Cenvat Credit Rules with effect from 31.12.2008 as the same has retrospective effect. Thus appeal is allowed & appellants are entitled to consequential relief.

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• 2013 (6) TMI 322
  Recovery of cenvat credit of service tax paid on rent charged for facilitating display of the appellants' goods in New Delhi and various places - as per dept. such services did not qualify as input services defined in Rule 2(1) of Cenvat Rules, 2004 - extended period of limitation invoked - Held that:- As can be seen from the reproduced certificate where the chartered accountant has clearly and categorically stated that the expenses are considered under the selling and distribution overhead which, understandably, goes into the costing of the final product. As relying on case of Bharat Fritz Werner Ltd. [2011 (2) TMI 1276 - CESTAT, BANGALORE] the services were utilized by the appellant for the purpose of enhancement of his business. As decided in M/s. Coca Cola India Pvt. Ltd. Versus The Commissioner of Central Excise, Pune-III [2009 (8) TMI 50 - BOMBAY HIGH COURT] each limb of the definition can be considered as independent eligible for exemption. If that be so, in the factual matrix of this case as the said services were, directly or indirectly, used for the purpose of their business, credit cannot be denied. Accordingly, impugned order is set aside and appeal is allowed with consequential relief. The appellant has made out the case in his favour.

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• 2013 (6) TMI 321
  Waiver of pre-deposit of duty, interest and penalty - applicants are availing credit in respect of furnace oil which is used in the manufacture of job work goods which were cleared under Notification NO. 214/86-CE dated 25.02.2986 and the goods which were cleared on payment of duty - Held that:- In view of the certificate produced that the principal is clearing the goods on payment of duty applicant has made out a case for total waiver of pre-deposit of the dues.

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• 2013 (6) TMI 320
  Benefit of Notification No. 1/95-CX denied - demand confirmed in respect of Furnace Oil which is consumed in the generation of electricity which is sold for State Electricity Board - as per assessee in his process no furnace oil is used in the generation of steam which is used in the TG-3 hence the demand in sustainable - Held that:- It is an admitted facts that 3 rd Turbo generating sets is used for generation of electricity which is sold outside the 100% EOU and not for the manufacture of goods exported. The applicants are clearing steam on payment of appropriate duty to that outside unit. Therefore, prima facie no merit in the contention of applicant that steam is not excisable. Thus the applicants are directed to deposit an amount of Rs.36,07,253/- within a period of eight weeks. On deposit of the above mentioned amount, the pre-deposit of the dues are waived and recovery of the same is stayed during the pendency of the appeals.

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• CST, VAT & Sales Tax

• 2013 (6) TMI 343
  Entry tax imposed under Section 9(4) of the Entry of Goods Act, 2000 - addition made under Rule 41(8) (State) - assessee has sold the molasses against the Form-3B - Held that:- Undoubtedly, the dealer is having the turnover of more than Rs.25 crores, so the Form-3B used for more than Rs.5.00 lakhs is applicable in the present case. This aspect was not examined by the lower authorities. Similarly, from the balance-sheet, it appears that the assessee has purchased the goods from unregistered dealer for meager amount except a few. The Department has not examined the genuineness of the transaction. By adopting short cut method, additions were made merely by looking the balance-sheet. No other verification was sought by the lower authorities before making the addition. No opportunity was given to the assessee to justify the genuineness of the transactions by the lower authorities - matter is remanded back to the Tribunal to examine the same denovo.

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• 2013 (6) TMI 342
  Disallowance of exemption on sales return and exempted sales - details regarding the same were not given in the prescribed format - assessee contested against it as when there is no format prescribed under the TNVAT Act for the same - petitioner submitted that the impugned notices of revision of assessment are contrary to the established law and not sustainable, because the Enforcement Wing Officer cannot frame the assessment and the D-3 proposals cannot be simply adopted by the respondent without application of mind - Held that:- The impugned proposal of the respondent for revision of assessment, is subject to the consideration of the objections to be filed by the petitioner, and only after receipt of the objections, the respondent could form any opinion in accordance with law. The claim of the petitioner that the Enforcement Wing Officers' report cannot form the basis for the impugned revision of assessment and he has no role to act as Assessing Officer and the respondent cannot simply adopt the D-3 proposal, are all matters for concern before the respondent on filing the objections by the petitioner. At this stage, the petitioner stated that the petitioner has already filed objections dated 26.2.2013 before the respondent with regard to the impugned notices these Writ Petitions are disposed of, with a direction to the respondent to consider the said objections, dated 26.2.2013 filed by the petitioner, afford an opportunity of hearing to the petitioner to take a decision uninfluenced by the report of the Enforcement Wing Officers and pass appropriate orders, on merits within a period of four weeks from the date of receipt of a copy of this order.

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