Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 17, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Articles
News
Notifications
Highlights / Catch Notes
GST
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Reduced Liability of Tax on complex, building, flat etc. under GST - CBEC clarifies that why the prices should not increase post GST
Income Tax
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Addition on account of cash deposit in the bank account - unexplained sources - Anyhow if the claim of assessee may be considered favourably for receipt of marriage gift and birthday gift, assessee would have spent some expenditure on those celebrations but no evidence in this regard has also been filed. - AT
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Reopening of assessment - there was a live link with formation of belief that income in the hands of the assessee had duly escaped assessment by way of alleged trading loss of cotton knitted fabrics - Case was correctly reopened - AT
Customs
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Modification of condition of provisional release of seized goods - That the appellant herein had not gone to the High Court along with the other nine exporters, does not make compelling reasons for denial of revised terms of provisional release of export goods to the appellant.
Indian Laws
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Offence under Section 138 Negotiable Instruments Act - When a blank cheque is signed and handed over, it only implies that the person signing it, and handing it over, has given implied authority to the holder of the cheque to fill up the blank portions, it being a matter of legitimate presumption that he would understand the consequences of doing so. - HC
Wealth-tax
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Royal Buggy - art work - scope of exemption from wealth tax - ITAT committed an error in holding that even if the article was one of “work of art”, since it is possible to be put to personal use, it would get ejected from Clause (xii) and would fall only under Clause (viii) of Sub-section (1) of Section 5 - HC
Service Tax
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BAS - classification of services - the services of billing, collection of freight etc. are stand alone services by themselves and would qualify to be Business Auxiliary Service. - AT
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Rule 6(3)(c) restricting utilization of credit for payment of service tax on output services to 20% of amount is attracted – but such restriction is not applicable on capital goods credit & service tax credit in respect of 17 input services specified in Rule 6(5) - AT
Central Excise
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CENVAT credit - services rendered by the foreign company for due diligence of purchase of mines in Indonesia and Turkey - credit cannot be allowed since it is not an input services having nexus with manufacturing - however demand set aside on the ground of period of limitation - AT
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CENVAT credit - fire extinguishers used in the factory premises - denial on account of nexus - Since the products are classified under Chapter 84 and the CENVAT credit is allowed on capital goods, there is no reason deny the credit - AT
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Reversal of CENVAT credit - confirmation u/s 11D of the CEA, 1944, with respect to amounts reimbursed to the appellant, equivalent to the payments made under Rule 6(3) (b) of the CCR, is not justified - AT
Case Laws:
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Income Tax
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2017 (6) TMI 651
TPA - selection of comparable - Held that:- Accepting the contention of the Ld. DR, we hereby direct the TPO to examine afresh the entire TP issue by applying the correct filters. Quantum of deduction u/s.10B in respect of communication charges and travelling expenses - Held that:- As held by the Hon’ble High Court in Tata Elxsi Ltd (2011 (8) TMI 782 - KARNATAKA HIGH COURT) expenses excluded from export turnover had to be excluded from the total turnover also while working out the eligible deduction. We direct the AO/TPO to follow the judgment of the Hon’ble jurisdictional High Court in Tata Elxsi Ltd (supra) and exclude the expenses incurred in foreign currency both from the total turnover as well as the export turnover while computing the deduction u/s.10B. Short credit of taxes paid as self-assessment tax - Held that:- AO is duty bound to give the adjustment of the credit of the self-assessment tax paid by the assessee. Accordingly, we direct the AO to give credit for the full amount deposited by the assessee under the self-assessment tax. If the AO is not agreeable to grant the credit for an amount of ₹ 45,22,357/-, then the AO is directed to give cogent reason for not giving credit for the same. This ground is allowed.
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2017 (6) TMI 650
Addition on account of cash deposit in the bank account - unexplained sources - Held that:- No supporting documents have been filed. The assessee did not produce any independent evidence in support of cash flow statement. No evidence of any amount is received on occasion of marriage and birthday have been filed. Even during the course of arguments, the assessee was not able to produce any evidence to prove that in fact marriage of the assessee had been performed in February, 2007. Anyhow if the claim of assessee may be considered favourably for receipt of marriage gift and birthday gift, assessee would have spent some expenditure on those celebrations but no evidence in this regard has also been filed. Ld. CIT(A) after examining the bank account noted that withdrawals have been made in small amount very frequently. Therefore it could not be considered as redeposit in the bank account of the assessee. The assessee failed to co-relate the withdrawals from the bank account for the purpose of redeposit in the same account. No evidence in support of cash summary has been filed. Therefore whatever contentions have been raised by the assessee before the authorities below to explain cash deposit in the bank account has not been supported by any evidence. - Decided against assessee.
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2017 (6) TMI 649
Denial of exemption u/s. 54EC - whether 54EC bonds were availed during the month of December, 2006? - Held that:- We are of the opinion if 54EC bonds were not available in the market from 01/12/2006 to 22/01/2007, the assessee should be given a grace period of five days, since the assessee had invested in 54EC bonds on 27/01/2007 (whereas in the case considered by the Hon’ble Bombay High Court (supra), the investment was made only on 31/01/2007). For examination of these aspects, the matter is restored to the Assessing Officer. The Assessing Officer shall verify whether the bonds eligible for exemption u/s. 54EC were not available in the month of December, 2006 upto 21/01/2007. If the Assessing Officer finds that the 54EC bonds were not available for the above mentioned period, the benefit of deduction under section 54Ec should be granted to the assessee since the assessee had invested in 54EC bonds within the reasonable period of its availability in the market. In taking the above view, we rely on the judgment of the Hon’ble Bombay High Court in the case of CIT vs. Cello Plast (2012 (8) TMI 527 - BOMBAY HIGH COURT ) which is identical to facts of this case. Claim of exemption u/s. 54F - CIT-A power to consider claim - Held that:- CIT(A) has power to consider the claim of deduction u/s. 54F of the Act. Since on merits, whether the assessee is entitled to the benefit of the claim u/s. 54F has not been examined by the CIT(A), we deem it appropriate to restore the issue to the file of the Assessing Officer for de novo consideration. It is ordered accordingly. Interest u/s. 234B - whether is to be charged as per section 234B(1) or 234B(3) - whether the assessee is liable for interest only from 17/08/2014 to 14/03/2014 as per section 234B(3) as per CIT-A - Held that:- When proceedings u/s. 143(1) of the Act has been completed and issued to the assessee, interest is to be levied as per section 234B(3) of the Act from the date of proceedings u/s. 143(1) of the Act. Moreover we notice that section 234B(3) was amended by Finance Act, 2015 with effect from 1.6.2015 whereby interest u/s. 234B is to be calculated from first day of April to next following such financial year. Therefore, in view of the the amendment with effect from 1.6.2015, we are of the view that the order of the Commissioner is correct and no interference is called for. - Decided against revenue
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2017 (6) TMI 648
Income from house property - Annual letting value determined by the AO based on previous year income - applicability of municipal rate u/s 23(1)(c) - Held that:- As noticed that the assessee has, for the first time, raised a new legal contention before the Tribunal that the ALV of the impugned property is determinable u/s 23(1)(c) of the Act. The tax authorities did not have occasion to examine the above said claim of the assessee. - matter remanded back - Decided in favour of assessee for statistical purposes.
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2017 (6) TMI 647
TDS u/s 195 - Addition towards professional fees - payment to non-resident outside India - Held that:- From the facts of the case it is clear that the assessee had incurred expenditure of ₹ 25,89,854/- related to documentation outside India and the services were rendered by company situated outside India. Therefore, it is crystal clear that for services rendered by M/s. Mayor Brown LLB., outside India, income cannot be said to have accrued or arisen in India. Hence, we do not find it necessary to interfere with the order of the Ld.CIT(A) on this issue. Deletion of the disallowance u/s.14A - Held that:- We find that this issue is covered by our recent decision in the case of M/s. SIDD Life Sciences [2017 (4) TMI 915 - ITAT CHENNAI] we hereby remit the matter back to the file of the Ld.AO with directions to pass appropriate Order in the light of the afforested decision after examining the facts of the case. We also make it clear that if the assessee has admitted any expenses to have been incurred relating to exempt income as pointed out by the Ld.CIT(A) in his order at para No.5.2.1, then to that extent disallowance has to be sustained by virtue of Section 14A of the Act. Interest income earned from intercorporate deposits treated as business expenditure - Held that:- The assessee has parked its surplus funds in other companies and earned interest. Such income has to be necessarily assessed under the head ‘Income from other source’ as per Section 54 of the Act, as held by the Ld.AO. Hence, we hereby direct the Ld.AO to assess the interest earned from the bank and inter-corporate deposits under the head ‘Income from other source’.
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2017 (6) TMI 646
Permissible accumulation under Section 11(2) - accumulation @ 15% of the income would be considered on the gross receipts of the year or net receipts? - Held that:- The accumulation under Section 11(1)(a) of the Act is allowable at 15% of the gross receipts. See Moogambigai Charitable and Educational Trust Vs. ACIT [2016 (7) TMI 1014 - ITAT BANGALORE] - Decided against revenue
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2017 (6) TMI 645
TPA - selection of comparables - Held that:- Assessee rendered back office service to its overseas Siemens thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2017 (6) TMI 644
Remuneration received - amount directly remitted from foreign to the NRE account of assessee by the foreign company - Held that:- In the instant case, the employer has directly credited the salary, for services rendered outside India, into the NRE bank account of the seafarer in India. In our considered opinion, the aforesaid Circular NO. 17/2017 [F.NO.500/07/2017-FT&TR-V], DATED 26-4-2017 is vague in as much as it does not specify as to whether the Circular covers either of the situations or both the situations contemplated above. Hence we deem it fit to give the benefit of doubt to the assessee by holding that the Circular covers both the situations referred to above. The result of such interpretation of the Circular would be that the provisions of Sec.5(2)(a) of the Act is rendered redundant. Be that as it may, it is well settled that the Circulars issued by CBDT are binding on the revenue authorities. This position has been confirmed by the Hon’ble Apex Court in the case of Commissioner of Customs vs Indian Oil Corporation Ltd (2004 (2) TMI 66 - SUPREME COURT OF INDIA ) wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circulars and laid down that when a Circular issued by the Board remains in operation then the revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. Accordingly, the grounds raised by the assessee are allowed.
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2017 (6) TMI 643
Assessment of income in the hand of assessee-individual instead of HUF - Held that:- As in the case on hand when no transfer of license by the holder of the licensee is involved then the decisions of Hon'ble Supreme Court as relied in the case of Biharilal Jaiswal Vs. CIT [1995 (11) TMI 2 - SUPREME Court] and CIT Vs. Rangila Ram & Others [2000 (8) TMI 11 - SUPREME Court] are not applicable in the case of the assessee. In view of the above discussion, the orders of the authorities below qua this issue are set aside and the claim of the assessee is allowed to the extent that the income offered in the hand of the HUF cannot be assessed in the hand of the individual-assessee. Gross Profit (GP) addition - Held that:- For the year under consideration the assessee has offered the income which is equal to GP at 11.43%. Accordingly when the assessee itself has shown GP at 11.43% then making addition by taking an estimate of GP at 14% is not justified as there is no significant difference. Even otherwise, the authorities below have not brought on record any specific reason for not accepting the GP shown by the assessee. The only reason by the Assessing Officer is the direction obtained from ACIT under Section 144A of the Act regarding assessment to be made in the hand of the assessee-individual. These directions are based on the data made available by KSBCL and therefore there is always a scope of tolerance range of fluctuation of GP of individual cases and if the assessee’s GP is falling within the reasonable range of fluctuation of GP then no addition can be made by taking GP on estimate basis. Hence the GP addition made by the authorities below is deleted. Addition made on account of difference between the sales shown in VAT return and regular books of accounts - Held that:- It is noted that the difference of sales as per the VAT Return and books of accounts has not been disputed by the assessee therefore the sales shown in the VAT Return cannot be ignored. However the entire sale cannot be treated as income of the assessee and therefore only GP addition of such excess sale as per the VAT Return has to be added as income of the assessee. The Assessing Officer is directed to make the addition by taking the GP as declared by the assessee.
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2017 (6) TMI 642
Undisclosed jewellery - search and seizure operation u/s 132(1) - Held that:- In the light of the admitted fact that the assessee’s wife owned up the jewellery, the assessment of the same in the hands of the assessee was not permissible. The assessee’s wife is assessed to tax by ACIT, Central Circle-1, Kolkata. There is no reason why the addition should be made in the hands of the assessee. The addition is accordingly directed to be deleted. Not allowing expenses against the suppressed receipts from rendering courier services - Held that:- A perusal of the income and expenditure account for A.Y.2010-11 shows that the suppressed booking receipts has been shown in the credit side in the income and expenditure account. The income as per the income and expenditure account is a sum of ₹ 2,63,358/-. In the computation of total income for A.Y.2010-11, the AO has adopted this income as the starting point of computation of income under the head profits and gains of business. Thus the income of ₹ 2,63,357/- includes all expenses debited in the income and expenditure account. The direction of CIT(A) has to be understood as making a reference to no further expenses are to be allowed over and above what is debited in the income and expenditure account. This direction in our view is proper and appropriate because the assessee has not been able to substantiate any other expenses over and above the expenditure debited in the profit and loss account. - Decided against assessee.
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2017 (6) TMI 641
Reopening of assessment - Disallowance of loss on account of trading in cotton knitted fabrics - Held that:- TDS wing of the IT department conducted survey and during the course of said proceedings, understood the entire modus operandi of the assessee’s dealings in the trading of cotton knitted fabrics and drew adverse inference about the same by stating that the loss incurred on such transactions is purely fictitious and the documents prepared in that regard in the form of purchase and sale invoices were purely manufactured and the assessee does not even have any premises for storage of the cotton knitted fabrics and the business address shown thereon is a simple space between the stairs of first and second floor, wherein a small table alone could be occupied. In fact the person in charge of the said premises Shri A Pandey, who was seated in the said small office space also stated before the TDS wing that he had been placed there only to attend to phone calls and receive correspondences. Thus the transactions carried out by the assessee, we hold that the information / report furnished by the CIT TDS to the Jurisdictional Administrative CIT of the assessee about the manner in which loss was self created by the assessee in dealing in cotton knitted fabrics, definitely would constitute information, warranting reopening of assessment u/s 147 of the Act. We find from the reasons recorded by the ld AO, there was a live link with formation of belief that income in the hands of the assessee had duly escaped assessment by way of alleged trading loss of cotton knitted fabrics. Hence we are not inclined to accept the arguments of the ld AR on the validity of assumption of jurisdiction u/s 147 of the Act. Hence we hold that the assessment has been validly reopened in the instant case for the Asst Year 2008-09. - Decided against assessee.
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2017 (6) TMI 640
Validity of re-assessment u/s.147 - eligibility of entitlement of claim u/s.10A - Held that:- In the instant case the assessment was reopened within four years from the end of the relevant AY and there was a prima facie case of wrong deduction claimed by the assessee. This fact was not brought to the notice of the AO by the assessee at the time of original assessment proceedings u/s.143(3) and the AO also has not examined the eligibility of entitlement of deduct on u/s.10A. Therefore, we hold that the notice issued u/s.148 is valid and the order of the CIT(A) is upheld. The assessee’s appeal on this ground is dismissed Disallowance of claim made by the assessee u/s.10A - year of commencement reckoned - Held that:- From the plain reading amended section of Sec.10A, it is clear that the assessee is eligible for deduction u/s.10A for the period of 10 years from the date of commencement of production/ manufacture of articles/things for 10 consecutive AYs. It was also made it clear in section that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to deduction referred to in this sub-section only for the unexpired period of the aforesaid ten consecutive assessment years. The assessee is in existence from 1997-98 which had commenced production/manufacture of articles/things during the FY 1997-98 and exemption period of 10 years was ended with the AY 2007-08 and therefore for the AY under consideration, the assessee is not eligible for deduction u/s.10A as held by the Ld.CIT(A) in his order. - Decided against assessee.
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2017 (6) TMI 639
Disallowance of labour charges - payments as made in cash - Held that:- The total payment has been made to 68 persons, the aggregate payment was ₹ 4,90,26,955/- which comprised of cash payment of ₹ 13,03,219/-. It is thus seen that the cash payment constituted around 3% of the total payments, the maximum and minimum cash payment to an individual person was ₹ 1,03,400/- and ₹ 400/- respectively. We find that assessee had furnished the PAN numbers of all these 68 persons to the AO but however AO did not make any inquiry about the receipt of payments by them from assessee. Further Revenue has not placed any material to demonstrate that the payment of expenses as claimed by the assessee is bogus. In such circumstances considering the totality of the aforesaid facts and the nature of business activities of assessee, we are of the view that the disallowance of expenses of ₹ 2,99,682/- (where PAN is not available) and of ₹ 13,03,219/- (where PAN is available) is not called for and therefore we direct its deletion. As far as payment stated to have been made to departmental labour and from the details of various projects, where it has been incurred it is seen that the expenses have been incurred for 15 projects at various sites. The assessee has also placed sample copies of the vouchers in the paper book. We find that Ld. CIT(A) has noted that despite various opportunities granted to assessee, assessee has not placed necessary details to justify the payment. Considering the nature of work and the fact that the increasing of expenditure is not doubted by Revenue ends of justice shall be met if the disallowance is restricted to ₹ 20 lacs as against ₹ 47,22,572/- confirmed by Ld. CIT(A).Grounds of assessee partly allowed.
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Customs
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2017 (6) TMI 663
Validity of summons issued - petitioner’s case is that the act of the respondents in issuing summons to the petitioner is mala fide, the manner of issuing summons and its service being improper and that the action is vitiated and, therefore, the summons deserve to be quashed - Held that: - From the documents filed by the petitioner himself, it appears that he has been evading the summons issued by the investigating agency in the past - Summons under Section 108 of the Customs Act, 1962 cannot be answered in the manner sought to be responded to. It is the bounden duty of the petitioner to respond to the said summons by appearing before the investigating officer and making his statement setting out facts that are within his knowledge. Petition dismissed - decided against petitioner.
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2017 (6) TMI 662
Jurisdiction of Directorate of Revenue Intelligence (DRI) - power to issue SCN - Held that: - sub-section 11 was inserted under section 28 of the Customs (Amendment and Validation) Act, 2011 dated 16.09.2011, assigning the functions of proper officers to various DRI officers with retrospective effect - Later on, i.e. for the period subsequent to the amendment, the matter i.e. the DRI officers having the proper jurisdiction to issue the SCN or not had come up before the Hon’ble Delhi High Court in the case of Mangali Impex vs. Union of India [2016 (5) TMI 225 - DELHI HIGH COURT], and the High Court inter alia, held that even the new inserted section 28(11) does not empower either the officers of DRI or the DGCEI to issue the SCN for the period prior to 8.4.11. Matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon’ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard - appeal allowed by way of remand.
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2017 (6) TMI 661
Natural justice - clandestine removal of instant coffee - Held that: - the department has not been able to bring evidence on record which shows that the appellant or any of his employees is involved in fabrication of documents or have signed any of the forged documents used for import of goods - the proceedings were initiated against the appellant for revocation of CHA license and after detailed enquiry the adjudicating authority has exonerated the appellant by holding that there is no evidence against the appellant for abetting the importer - the denial of cross-examination of the witnesses by the Revenue is also bad in law - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 660
Modification of condition of provisional release of seized goods - appellant submits that the SIIB have initiated investigation into ten exporters, including the appellant herein. This being so, the terms of provisional release for identical export goods in respect of other exporters should also be extended to the appellants - Held that: - That the appellant herein had not gone to the High Court along with the other nine exporters, does not make compelling reasons for denial of revised terms of provisional release of export goods to the appellant. This in our opinion, which is unjust and unfair. The revised terms of provisional release should be allowed to the goods seized from the appellants, on the same terms and conditions as has been extended to the other nine exporters. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 659
Classification of Steam Coal and Bituminous Coal - case of Revenue is that since the Larger Bench has issued specific direction for disposal of the appeals, therefore, the present appeals be decided in the light of the observations recorded by the Larger Bench in the Order dt.16.01.2017 as the said judgment is binding on this Tribunal - Held that: - it is clear that the registry was directed to place the appeals before the respective benches for appropriate order and disposal of the appeals in the light of the direction/observation made in the order of the Larger Bench. The direction/observation of the Larger Bench could be located at Para 6 of the order, wherein liberty is granted to all the assesses to come again before this Tribunal after receiving the final verdict from the Apex Court within prescribed time, if advised so - the present appeals are disposed of with liberty to the appellants to approach this Tribunal after final verdict on the issue of classification of Steam Coal and Bituminous Coal from the Hon'ble Apex Court - appeal allowed by way of remand.
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Corporate Laws
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2017 (6) TMI 656
Winding up application - Held that:- The foundation of the claim of the petitioner to interest is not at all clear at this point of time. In the statutory notice they have mentioned a due date in respect of each invoice and the number of days by which the payment was overdue. The petitioner has calculated interest @ 24% p.a. Whether this rate of interest was agreed upon by the parties or claimed for the first time in the said notice is not disclosed. The petitioner has to produce all this evidence during the final hearing of the winding up petition. At any rate, the rate of interest prima facie appears to be penal. At the moment this court directs that the petitioner shall be entitled to simple interest @7% p.a. under the Sale of Goods Act, 1930 from the respective due dates of the invoices mentioned in the statutory notice dated 12th January, 2016. This winding up application is formally admitted. Direct that the petitioner be advertised once in Times of India, Kolkata Edition and once in Anandabazar Patrika, Kolkata Edition. Publication in the Official Gazette is dispensed with. Direct the advertisement be published by 31st May, 2017. The winding up application be listed as (Company Matter New) on 3rd July, 2017.
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2017 (6) TMI 654
Scheme of Amalgamation - Held that:- Considering the approval accorded by the members and creditors of the Petitioners to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and Official Liquidator whereby no serious objections save the one relating to NBFC which has also been dealt with have been raised to the proposed Scheme, there appears to be no impediment to grant sanction to the Scheme. We also accept that none of the companies fall in the definition of NBFC and do not require to be registered as such with the RBI. However, the Companies shall remain bound by the undertaking filed by all of them. Consequently, sanction is hereby granted to the Scheme under sections 391 and 394 of the Companies Act, 1956. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.
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Insolvency & Bankruptcy
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2017 (6) TMI 655
Applicability of provisions of Section 433 of the Companies Act, 1956 or the provisions of Insolvency and Bankruptcy Code, 2016 - insolvency resolution process triggering - Held that:- The new legislation cannot be presumed to apply retrospectively if it affects the substantive or vested rights of the parties unless it is expressly provided or it becomes evident from necessary intendment. In case the new legislation is procedural then it is presumed to operate retrospectively. In the present case, the petitioner has filed the company petition before the Hon'ble High Court of Delhi on 16.10.2016 and therefore, it is claimed that the petition continued to be one for winding up under Section 433 (e) of the Companies Act, 1956 as all the rights of the petitioner are deemed to have crystalized and vested on the aforesaid date. We are afraid that no such interpretation of general application as sought to be claimed on behalf of the petitioner is acceptable because there is no substantive or vested right with the petitioner to seek winding up of the respondent company till the time the process of winding up has been initiated. The aforesaid aspect has been taken care of by the Transfer Rules which provide that all those cases where notices have been served were to be retained by the Hon'ble High Court and in rest of the cases where notices could not be served were to be transferred to this Tribunal. Moreover, the nature of the remedy in sum and substance continues to be available in the form of Insolvency and Bankruptcy which may eventually results into liquidation of the respondent company. Thus the result is similar to the one which would be achieved in case of winding up. It needs to be further added that right becomes a vested right only when its acquired and is enjoyed by a litigant. Merely by filing a petition no right is acquired leave aside the enjoyment of such a right. Therefore, we are unable to persuade ourselves to accept first contention raised by the petitioner. In the absence of demand notice under Section 8 (1) of the Code, the petitioner could not have approached this Tribunal for initiation of insolvency resolution process against the respondent company. In the present case, there are many other defects pointed out by the learned counsel for the respondent. Therefore, we find that the present application is incomplete as the same is liable to be dismissed.
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Service Tax
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2017 (6) TMI 686
Business Auxiliary Services - classification of services - whether the Terminal Handling Charges (THC) received by the assessees is taxable under the category of Business Auxiliary Service? Held that: - The definition, as it stood prior to 10.9.2004, expressly mentions the words billing, collection or recovery of cheques, accounts and remittances which are the services falling under Sl. No.12 to 14 out of the fourteen services rendered by the assessee. It is not necessary that such services should be incidental or auxiliary to the services mentioned in (i), (ii) and (iii). As rightly argued by the department, the services of billing, collection of freight etc. are stand alone services by themselves and would qualify to be Business Auxiliary Service. The assessee, is preparing the Railway receipt, (billing), collecting the Railway Freight and remitting the same in RBI for Railways. For utilizing the services of Railways within the Port area the customers have to pay charges to Railways. The assessee cannot collect freight from the customers unless authorized by the Railways. For this reason, the issuance of railway receipts and collection of freight is definitely rendered on behalf of Railways and the remittances of the amount in Reserve Bank of India is also rendered on behalf of Railways which would make the services rendered on behalf of client. The Consultant has made a frail effort to establish that being transportation of goods by rail the services if any would fall under Sec 65(105)(zzzp) and such transportation being through government railways, it is not exigible to tax. The activities carried out by the assesse, are not mere transportation of goods by rail, but the billing, collection of freight, remittance etc. Therefore this ground fails. When the assessee is receiving Terminal Handling Charges for the services rendered to Railways and when Sl. Nos. 12, 13 and 14 would qualify for Business Auxiliary Service as taxable services, it is for the assessee to give the charges collected for each of the 14 services and to prove that such THCs do not apply to the services other than Sl. No. 12, 13 and 14. Extended period of limitation - Held that: - appellants had suppressed the fact of subject income in the subsequent periods. In this scenario, appellant cannot then take the plea that the extended period cannot be invoked on the ground that the information was declared in the returns. Being a public sector also cannot be a plea against invocation of extended period - appellants did not seek or obtain additional registration under Business Auxiliary Service even after the issue of the first impugned order of the Commissioner dated 11.5.2006 - invocation of extended period justified. Penalties - Held that: - the appellant had paid up the tax liability along with interest even before issue of the SCN which cooperation has been taken into consideration by the adjudicating authority for non-imposition of penalties as a mitigating factor for non-imposition of penalties - penalties not justified. Appeal allowed - decided partly in favor of assessee.
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2017 (6) TMI 685
Sub-contract - levy of tax - principal contractor had remitted the service tax on their behalf - Held that: - when service tax has been paid by the main contractor, charging the sub-contractor again will amount to taxing the same service twice - matter requires to be remanded to the adjudicating authority to verify whether the service rendered by the appellant has suffered tax in the hands of the principal contractor - appeal allowed by way of remand.
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2017 (6) TMI 684
Valuation - Surplus & Incidental Income - includibility - Held that: - It is argued that the said issues have been settled in the case of Commissioner of Service Tax Versus M/s. Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT], where it was held that it is difficult to hold that the gross amount of remuneration/commission would nevertheless include expenditure incurred by the assessee providing the services; that all incidental charges for running of the business would also form part of the remuneration or Commission - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 683
Refund claim - N/N. 41/2007 - denial on the ground that the appellant has claimed duty drawback - Held that: - The said issue came up before this Tribunal in the case of Mittal International [2017 (3) TMI 1512 - CESTAT CHANDIGARH] wherein it has been held that the input service used for export of goods are not the part of the drawback claim, therefore, the appellant is entitled for claim refund of services used for export of goods - refund allowed. Refund claim - Terminal Handling Charges - Inland Haulage Service - Held that: - the Terminal Handling Charges and Inland Haulage Charges are covered under port services and the appellant is entitled for refund claim of Terminal Handling Charges as the same has been received for export of goods, therefore, the appellant is entitled for refund claim. Whether the contract is required for commission paid to the commission agent and consequently, refund claim can be denied on this ground? - Held that: - the appellant has paid charges of services provided by the commission agent located outside of India and charges has been shown in the said invoices, the appellant has paid service tax under the reverse charge mechanism, therefore, the appellant is entitled to claim refund of commission paid to the commissioner agent located outside India. Whether the appellant is entitled for refund claim of CHA service provided by the service provider where the CHA service is not authorised by the appellant and invoices are raised by other CHA who has provided services to the appellant? - Held that: - It is not disputed that the appellant has availed the services of CHA and the same has been received in connection with the export of goods by the appellant. In that circumstances, as the invoices shows co-relation with the export of goods, the same is sufficient for entitlement of refund claim under N/N. 41/2007. The matters are remanded back to the adjudicating authority for verification - appeal allowed by way of remand.
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2017 (6) TMI 667
CENVAT credit - tele-communication services - capital goods - input services - The Revenue alleged that the appellant, in addition to the taxable service in relation to telephone connection are also providing the exempted services of the network access to other telephone service provider - invocation of Rule 6 (3) (c), of the CCR, 2004 - Held that: - the identical issue for the previous period in the appellants’ own case has been examined by this Tribunal in the case of Idea Cellular Ltd [2009 (2) TMI 91 - CESTAT NEW DELHI], where it was held that Rule 6(3)(c) restricting utilization of credit for payment of service tax on output services to 20% of amount is attracted – but such restriction is not applicable on capital goods credit & service tax credit in respect of 17 input services specified in Rule 6(5) - the present matter is also remanded back to the adjudicating authority for verification and re-quantification of demand for excess utilized credit - appeal allowed by way of remand.
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Central Excise
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2017 (6) TMI 682
Imposition of penalty - excess credit taken on capital goods - whether the Tribunal could have reversed its view, based on an application for rectification, moved by the Revenue, under Section 35 C (2) of the CE Act? - Held that: - Tribunal will have to rule on and have to come to a definitive conclusion, whether or not, the case falls in the realm of a mistake, as contended by the Assessee or is it a case of deliberate and conscious act of deception and/or wrong doing - appeal allowed by way of remand.
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2017 (6) TMI 681
SSI exemption - use of brand name of others - Department was of the view that the appellants were using the brand name belonging to FCF in the products manufactured and cleared by them - the department has not been able to establish that the alleged brand name belonged to FCF - Held that: - The letter addressed by the Managing Partner of FCF to Trademark registry clearly shows that they have withdrawn their application for registration of trademark. Further, the letter written by the Trademark registry to department evidences that though FCF had applied for registering the trademark in their name, they had not remitted the required fee. When an application has not been presented with the requisite fee, in effect, the application has to be considered as not presented at all - the managing partner of FCF has filed an affidavit stating that the alleged trademark does not belong to them and that the appellants are the absolute owners of the said trademark - department has failed to establish that the alleged trademark belongs to FCF. Extended period of limitation - Held that: - the declaration filed by the appellant gives a detail description of their marketing pattern - suppression cannot be alleged against the appellant and the demand raised invoking the extended period is unsustainable. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 680
Refund of excess amount of interest paid - Held that: - the Commissioner (A) has allowed the appeal of the Department only on the ground that while granting refund claim, the original authority has not properly examined whether the duty was paid by the appellant before the due date as per the Rules - the interest is required to be paid on duty i.e., as arrived at after self-abatement. The original authority has rightly granted the refund after following the Rules prescribed under Rule 9 of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 679
CENVAT credit - extended period of limitation - Held that: - as the Commissioner (A) has observed in para 12.1 to 12.3 that the entire facts were in the knowledge of the department and the audit report also came on 8.1.2007 and the show-cause notice was issued on 3.4.2009 which is beyond the period of limitation and the department has also failed to bring on record any suppression of fact except saying that the same was detected during the audit and had it not been detected during audit, it would have gone unnoticed. This is not sufficient to invoke the extended period of limitation. The assessee has been filing the ER-1 returns regularly, in which the assessee has been disclosing the availment of CENVAT credit and the department did not raise any objection and it is only during audit for the first time the objection was raised and thereafter also the department did not issue the show-cause notice within a period of one year. Appeal dismissed - decided against Revenue.
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2017 (6) TMI 678
Maintainability of appeal - appeal to appellate tribunal - Valuation - job work - manufacture of malt extract and barley malt which has been cleared to M/s.Smithkline Beecham Consumer Healthcare on job work basis - Revenue is of the view that the assessable value is to be determined on the basis of price charged by the appellant to their independent buyers/consumers as per Rule 6 (b) (i) of the Central Excise Valuation Rules, 1975 - Whether the issue of valuation of the goods manufactured on job work basis can be raised in this appeal or not? - Held that: - reliance placed in the case of MIL India Ltd. [2003 (10) TMI 100 - CESTAT, NEW DELHI], where it was held that the appellant is having right to agitate the issue of applicability of Rule 6 (b) (i) in the appeal pending before us. Whether the provision of Rule 6(b) (i) of the Valuation Rules are applicable to the facts of the present case or not? - Held that: - On bare reading of the said provisions of the Rule 6, the said provisions are applicable to the goods which are not sold but are used or consumed by the assessee himself or on his behalf in the production or manufacture of other articles - Admittedly, in this case, the appellant is a job worker and job worked goods have been sent to the principal manufacturer. In that circumstance, although the goods were not sold by the appellant but are not used and consumed by the assessee himself or on his behalf in the production or manufacture of other articles. In that circumstance, the provisions of Rule 6 (b) (i) of the Valuation Rules are not attracted. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 677
100% EOU - deemed export - Goods cleared without Form I - demand of differential duty alongwith interest and penalties - Held that: - the said condition of Form I in clause 4 of the notification cannot then be considered as a substantive law especially when all other requirements and other conditionalities have been satisfied - reliance placed in the case of SAMBHAJI Versus GANGABAI [2008 (11) TMI 393 - SUPREME COURT OF INDIA], where it was held that procedural law is not to be a tyrant but a servant, not an obstruction but an aid of justice - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 676
CENVAT credit - duty paying invoices - denial of credit on the ground that appellant has received credit on the strength of debit not which is not the proper documents for availment of CENVAT credit - Held that: - CENVAT credit cannot be denied to the appellant on the ground that debit note is not an admissible document for availment of CENVAT credit - In fact, the documents contain the details of service providers namely, name, address, registration number, nature of service, amount of service provided and service tax paid. These particulars are not disputed by the Revenue and therefore, CENVAT credit cannot be denied to the appellant - credit allowed - appeal allowed - decided in favor of appellant-assessee.
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2017 (6) TMI 675
CENVAT credit - CVD and additional duty of customs - footwear - packing/repacking and labelling/re-labelling of imported footwear - Whether as per section 5A (1A) of the Act, the appellant is duty bound not to pay duty under N/N. 6/02-CE dated 1.3.2002 and 5/06-CE dated 1.3.2006 and consequently, the appellant is not entitled to avail credit? - Held that: - Bare reading of the said provision indicates that a manufacturer will not have an option to pay duty only where the goods are exempted and the exemption granted is absolute. Admittedly, in this case, the exemption granted N/N. 6/02-CE dated 1.3.2002 and 5/06-CE dated 1.3.2006, is not absolute but conditional - the benefit of notification is optional to the appellant and the appellant is not entitled to avail the benefit of notification, in that circumstance, it cannot be said that the goods are exempted goods. As the goods are not exempted goods, therefore, the appellant has correctly paid duty on the said goods, consequently, the credit cannot be denied to the appellant. Whether in the facts and circumstances of the case, the appellant is liable to pay 10% of the value of exempted goods or not? - Held that: - As there is difference of opinion between the members, therefore, the matter be placed before the Hon’ble President to appoint 3rd Member to resolve the issue.
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2017 (6) TMI 674
Quantum of abatement - eligibility for pro-rata duty - correct date for re-fixation of ACP - Held that: - Compounded levy scheme for Ingots and billets was introduced in 1997 as a beneficiary scheme to simplify manner of discharging duty liability for the manufacturer of such goods and also to monitor central excise levy thereof. Just because the assessee had not intimated the fact of closure to the Commissioner but has only sent the letters to the officers subordinate to him is certainly no reason to reject the same - on both law and equity, it is not just and fair to continue to force the appellant to discharge duty liability in respect of a furnace which was totally non-functional and closed to levy excise duty on production that never came into existence - the denial of re-fixation of ACP w.e.f. 15.08.1998 is unreasonable and unsustainable, for which reason that part of the order is set aside. Pro-rata fixation of duty liability - Held that: - the second furnace [1570] had been out of service and non-functional from 06.03.1998 to 15.07.1998, which has also been acknowledged by the Commissioner - the appellants will be eligible to discharge duty liability for that period, on pro-rata basis, as per the proviso to Rule 96 ZO (3) of the erstwhile Rules read with Rule 4 of the Induction Rules. With regard to interest and penal liabilities, it is seen that the matter is squarely covered by the judgment of the Hon’ble Apex Court in the case of Shree Bhagwati Steel Rolling Mills Vs. Commissioner of Central Excise [2015 (11) TMI 1172 - SUPREME COURT], where the provision for interest and mandatory penalty under these Rules had been held ultra vires by the Hon’ble Apex Court - there cannot be any interest and penalty on the appellants. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 673
Clandestine removal - chewing tobacco - clearance without invoices and without payment of duty - unaccounted procurement of raw tobacco - Held that: - investigation has sufficiently established the various quantities of unaccounted raw tobacco procured by the appellants - With regard to 42,221 kgs of such raw tobacco, the unaccounted procurement, manufacture of chewing tobacco thereof and their clandestine clearance have been admitted by Shri Shri Abdul Salam in his statement, which was not retracted at any time - for the limited purpose of redetermining the value of unaccounted clearances of chewing tobacco for the period from October 2004 to August 2005, the matter is being remanded to the original authority. Equal penalty u/s 11AC - Held that: - contumacious conduct of KPM definitely justify such equal penalty. However, such equal penalty will obviously have to be revised equal to the revised differential duty liability as may be arrived at in the denovo adjudication. Appeal allowed by way of remand.
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2017 (6) TMI 672
Rectification of mistake - relevant date for payment of interest - Section 11BB of the CEA, 1944 - Held that: - It is well settled proposition that the appellant cannot seek the review of the order in the garb of the rectification of the mistake. The mistake sought to be rectified should be apparent on the face of the record - there is no mistake which requires to be rectified - ROM application rejected.
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2017 (6) TMI 671
CENVAT credit - services rendered by the foreign company for due diligence of purchase of mines in Indonesia and Turkey - environmental impact assessment in connection with setting up of Thermal power plant - setting up of plant and clearance from Airports authority - environmental consultancy services for setting up of coal based super critical Thermal Power Plant in Chattisgarh - whether the appellant is eligible for Cenvat credit of the service tax paid on various consultancy services received by them or otherwise? - Held that: - the services for which service tax liability was paid does not seem to be input services which are in line in the manufacturing of final products of the appellant. Extended period of limitation - Held that: - In the absence of any communication from the department to the appellant as to the correctness of the cenvat credit availed, I find that the plea that the show cause notice dated 04.07.2013 seeking the demand of cenvat credit availed during the period Sept. 2011 to August 2012 is blatantly hit by limitation - demand barred by limitation. Appeal allowed - decided in favor of appellant.
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2017 (6) TMI 670
SSI exemption - use of Brand name of others - N/N. 8/2001-CE - case of assessee is that they have not used the brand name/logo of VCNPL on the Ozone Water Purifier, as the packing is done by VCNPL in their premises after quality control checks and the logo/brand name is affixed/embossed on the packing before they are cleared to the customer - Held that: - N/N. 8/2001-CE, as existed during the relevant period, provided exemption from duties of excise for SSI units, subject to certain eligibility requirements and other conditionalities. Para-4 of the said Notification categorically denies the exemption contained in the Notification to goods bearing the brand name or trade name, whether registered or not, of another person, except in certain situations, which the appellants certainly does not qualify - the appellants have cleared the impugned Ozone Water Purifiers bearing the brand name/trade name of VCNPL. In consequence, they cannot then be a beneficiary of SSI exemption N/N. 8/2001-CE. In respect of the Ozone Water Purifier as also the magnetic kits, since manufactured bearing the trade name of others, will fall foul of para-4 of the SSI exemption N/N. 8/2001-CE, consequently they cannot avail of the duty exemptions extended in the said Notification. Classification of Magnetic kits - classified under 90.19 or otherwise? - Held that: - these Magnetic kits having been cleared with the brand name/trade name of others, will find themselves bereft of SSI duty exemption under Notification No. 8/2001-CE, they will nonetheless to be eligible for clearances under the effective rates thereof, which, is Nil and 4% for the period under dispute - differential duty liability on the impugned goods namely Magnetic kits will have to be calculated on the basis of effective duty rates as applicable to the goods under chapter heading 90.19 of CETA, viz., Nil upto 01.03.2002 and 4% after 01.03.2002 - matter remanded for denovo adjudication to the adjudicating authority to recalculate duty liability only in respect of this item. Penalty u/s 11AC - Held that: - penalty under Section 11 AC ibid will also be imposable in respect of Magnetic kits clearances. However, the quantum of penalty will be only be equal to the revised duty liability thereon re-determined by the adjudicating authority in denovo proceedings. Personal penalty imposed on Shri R. Radhakrishnan - Held that: - there is a plethora of decisions that once a firm is penalized, separate penalty is not imposable upon the partner of the firm, because partner is not a separate legal entity and cannot be equated with the employee of the firm - penalty imposed on Shri R. Radhakrishnan is set aside. Manufacture - Companion Kit - demand - Held that: - It is definitely a new product that evolved after assembling of various components purchased from the market. Before such assembly the product is not marketable and cannot be called a Companion Kit. Discernably the appellants are engaged in the manufacture of new product - duty demand upheld. Appeal allowed - decided partly in favor of appellant and part matter on remand.
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2017 (6) TMI 669
CENVAT credit - fire extinguishers used in the factory premises - denial on account of nexus - Held that: - Section 38 of the Factories Act, 1948 mandates that manufacturing unit has to install adequate number of fire extinguishers in order to control the situation that may arise due to fire accident. It is also to be noted that the manufacturing unit has to adhere to this particular section of the Factories Act before granting a licence by the authorities. If a person is mandated to follow the law and if the Central Excise duty is paid on such fire extinguishers, same cannot be denied on the ground that the said fire extinguishers are not covered under capital good and there is no direct or indirect connection - Since the products are classified under Chapter 84 and the CENVAT credit is allowed on capital goods, there is no reason to uphold the impugned order - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 668
Classification of goods - Switch Mode Power Supply, D.C. Power Supplies and Transformers etc - whether classified under CTH 8504 or under CTH 8471 - Held that: - it is an admitted position that except classification list dated 05.11.1990, all other classifications filed by the appellant were approved and not challenged before any higher judicial forum - The classification list dated 05.11.1990 was also approved by the ld. Commissioner (Appeals) but the same was challenged by the department before this Tribunal and this Tribunal hold that the correct classification is under heading 8471. The demand arising out of classification dated 05.11.1990 is sustainable and rest of the demand is not sustainable - appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 666
Clandestine manufacture and removal - diesel engine sets - SSI Exemption - Held that: - the dealers have stated that either they have issued only invoices to the farmers to clearing loan from the banks or in most of the cases they have purchased loose kits from the respondent and, thereafter, assembled the same sold to the farmers where the dealers have assembled the diesel engine sets, in that case, dealers became the manufacturer, admittedly no demand notice has been issued to the dealers to pay duty being manufacturer, the proceedings against the respondent is not sustainable - the respondent is entitled for SSI Exemption limit - appeal dismissed - decided against Revenue.
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2017 (6) TMI 665
Remission of duty - in absence of any evidence on record regarding the quantity stored in the godown, the figures arrived by the surveyor on finished goods do not appear to be acceptable - Held that: - the fire accident was reported to the concerned statutory agencies, such as, Fire Brigade, Police Station and the Central Excise Division Office. It has been alleged in the Show-Cause Notice dated 11.05.2009, that the respondent failed to establish that the accident was unavoidable - there is no dispute that the fire occurred and the goods were destroyed. It is well settled by various decisions that remission of duty cannot be denied on the presumption that fire accident was avoidable - appeal dismissed - decided against Revenue.
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2017 (6) TMI 664
Reversal of CENVAT credit - the appellant used common inputs in the manufacture of both exempted and dutiable final products - According to the Revenue, the appellant collected the said amount as duty of excise from their customers, which is liable to be recovered under Section 11D of the CEA, 1944 - Held that: - on an identical issue the Tribunal in the case of M/s. Texmaco Ltd. vs. Commr. Of Central Excise, Kolkata-III [2016 (5) TMI 896 - CESTAT KOLKATA], where it was held that as per CBEC Circular No. 870/8/2008-CX dated 16/05/2008, under Section 11D of the Central Excise Act, 1944 with respect to amounts reimbursed to the appellant, equivalent to the payments made under Rule 6 (3) (b) of the CCR, is not justified - confirmation u/s 11D of the CEA, 1944, with respect to amounts reimbursed to the appellant, equivalent to the payments made under Rule 6(3) (b) of the CCR, is not justified - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (6) TMI 658
Cancellation of Registration Certificate - failure to furnish the return for three consecutive period from 1.10.2011 to 30.06.2013 - Section 27(5) of the Gujarat VAT Act - Held that: - The ground which was given by the appellant dealer for not filing returns for the aforesaid period was due to his father ill health he was required to go to Mumbai and he was required to shift to Mumbai and therefore, he closed the office at the premises, for which, intimation was given. However, it appears that same seems to be an afterthought. The dealer did not intimate the department with respect to change of address. Even notice which was sent through RPAD, was returned. There are number of transactions during the period for which, the dealer did not file the returns and more particularly, to the extent of ₹ 1,54,48,577/. Therefore, the dealer suppressed the aforesaid transactions, more particularly, by not filing the returns. Merely because, subsequently the dealer submitted the returns which were accepted with penalty, it will not affect the powers of the authority to cancel the registration certificate under Section 27 of the Act, more particularly, Section 27(5) of the Act. Appeal dismissed - decided against appellant.
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2017 (6) TMI 657
Interpretation of statute - entry 28A, particularly after its amendment with effect from 01.08.2009 - classification of goods - Whether on the facts and in the circumstances of the case, the Tribunal has rightly held that, products sold by the opponent company are drugs and medicines and are not cosmetics and toilet preparations including tooth paste, tooth powder, hair oil, face and body lotion, cream and soaps are therefore, exclusion clause (b) of entry no. 28(A)(i) of the Gujarat Value Added Tax Act, 2003 will not apply and on the same basis, the products sold by the opponent fall under the entry no. 28(A)(i) of the Gujarat Value Added Tax Act, 2003? Held that: - prior to its amendment, entry 28A(i) referred only to drugs, medicines and vaccines including bulk drugs. This entry does not have any further elaboration nor it has any exclusion clause. With effect from 01.08.2009, while maintaining the original main description of the items covered under the entry, the legislature introduced an exclusion clause which had two subclauses. We are concerned with subclause (b) which pertains to cosmetics and toilet preparations including tooth paste, tooth powder, hair oil, face and body lotions, creams and soaps. When a product is manufactured from medicinal drugs, be it Ayurvedic or homeopathic, is used under medical advice for specific disease, merely because it may have an element of improving appearance of the human beings, would not mean that the same is not a drug or a medicine, but a cosmetic. The Tribunal therefore correctly held that the products in question were drugs and medicines and not cosmetics or toilet preparations. If that be so, the consequential effect of the items being included in entry 28A(i) becomes simple. The exclusion clause cannot be applied by simply holding that the product in question is a toothpaste or a tooth powder whether it is a cosmetic or toilet preparation or not. Appeal allowed - decided in favor of assessee.
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Wealth tax
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2017 (6) TMI 687
Royal Buggy - art work - whether the Royal Buggy in question was not exempted under section 5 (1) (xii) of the Wealth Tax Act, 1957, because, it was covered under the first proviso to clause (viii) of sub-section (1) of Section 5 of the said Act? - Held that:- Since incidental overlapping is unavoidable, the attempt on the part of the Court in such case would be to ascertain in which clause the article would more appropriately be covered. Clause (xii), as noted, provides for exemption in case of works of art of archeology, scientific or art collection, books or manuscripts, not intended for sale. If any “work of art” can be incidentally also be put to personal use, it would not destroy its very essence or basic character of being an art work. By very nature of things its use may be rare or on special occasions. The element of such an article being one of personal use would be wholly incidental. In the present case itself, the assessee has been pointing out that the Baggi was not meant for ordinary or daily use. Though functional, it would be used on rare ceremonial occasions. That fact that it can be put to such a use was wholly incidental to the article being a “work of art”. The Tribunal, in our opinion, therefore committed an error in holding that even if the article was one of “work of art”, since it is possible to be put to personal use, it would get ejected from Clause (xii) and would fall only under Clause (viii) of Sub-section (1) of Section 5 of the Act. The question framed is answered in favour of the assessee. Tax Appeals are allowed. Judgment of the Tribunal is set aside and that of Commissioner (Appeals) is restored.
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Indian Laws
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2017 (6) TMI 653
Offence under Section 138 Negotiable Instruments Act - signing of blank cheque - Held that:- Once the signatures on the cheque are admitted, the liability arising therefrom cannot be evaded on the specious plea that the contents were not filled up by the drawer of the cheque. When a blank cheque is signed and handed over, it only implies that the person signing it, and handing it over, has given implied authority to the holder of the cheque to fill up the blank portions, it being a matter of legitimate presumption that he would understand the consequences of doing so. It is the claim of the accused that he had handed over the cheque in question as one of the two cheques to the brother of the complainant against the liability he owed to him. Apart from his own oral word in this regard, he made no effort to substantiate such plea. He did not adduce any evidence confirming that the amount of ₹ 4,52,000/- which he owed to the brother of the complainant had been duly accounted for substantially, the balance amount being only to the tune approximately of ₹ 2,04,000/-. If the liability of the accused to the brother of the complainant was for a specific amount, there is no reason why he should have handed over a blank cheque as is claimed. The guilt of the respondent (accused) for offence under Section 138 of Negotiable Instruments Act stands brought home by the evidence adduced by the trial court before the court of the Metropolitan Magistrate. Appeal allowed. The second respondent (Ram Prakash Yadav) is held guilty and convicted for offence under Section 138 Negotiable Instruments Act, 1881.
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2017 (6) TMI 652
Offence under Section 138 of Negotiable Instruments Act, 1881 - Dishonour of cheque for insufficiency, etc., of funds in the account - existence of the consideration - Evidence on record - Held that:- The respondent as the accused did not dispute that the cheque in question bears her signatures and that she had handed it over to the complainant. She claimed she had taken only ₹ 30,000/- as loan by cheque drawn on Punjab National Bank and that the cheque in question when given, was signed by her, but was otherwise blank, even the cheque amount having not been filled up. She did not lead any evidence nor confronted CW-1 with any such theory or facts by any documentary proof. There is nothing on record to show that the complainant had extended loan only of ₹ 30,000/- to the respondent by cheque or that the cheque in question was issued against such transaction or that it was blank when handed over. She has not been able to discredit the evidence of CW-1 with regard to the loan of ₹ 5 lakhs initially taken in the sum of ₹ 2 lakhs followed by additional ₹ 3 lakhs. She could not refute the evidence of CW-1 about the acknowledgement of the liability to that extent by document Ex.CW-1/4 or the promissory note (Ex.CW-1/5) contemporaneously prepared and executed. Thus the defence pleaded by the respondent in answer to the notice under Section 251 Cr.P.C. has remained unsubstantiated. Mere admission of the complainant that he was earning only ₹ 12,000 per month from small business or his failure to file income tax returns, or his omission to produce the bank passbook or to examine Chhotu as a witness in corroboration, are inconsequential. The respondent is held guilty and convicted for offence under Section 138 Negotiable Instruments Act, 1881.
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