TMI Tax Updates - e-Newsletter
June 28, 2013

Case Laws in this Newsletter:

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

Articles

1. CENVAT CREDIT ON INPUT SERVICES – RECENT JUDICIAL DECISIONS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. RBI announces rate of interest on Floating Rate Bonds, 2017

2. RBI announces rate of interest on Floating Rate Bonds 2015

3. Receipt of applications for new bank licence in the private sector closes on July 1, 2013

4. RBI Reference Rate for US $ and Euro

5. RBI sets up Committee on Financial Benchmarks

6. Approval for continuation of the National Mission on Food Processing

7. Disinvestment of 7.64 percent paid up equity capital of National Fertilizers Limited

8. Proposal of Yes Bank Limited to increase foreign equity participation upto 60 percent through a Qualified Institutional Placement (QIP) of its equity shares to eligible non-residents and/ or issue of Global Depository Receipts (GDRs) to eligible non-resident investors

9. First Quarter Review of Monetary Policy 2013-14 on July 30, 2013

Notifications

Customs

1. 68/2013 - dated 27-6-2013 - Cus (NT)

Amendment Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

Income Tax

2. 47/2013 - dated 26-6-2013 - IT

Income-tax (8th Amendment) Rules, 2013 - Insertion of Rule 21AC AND FORM NO. 10FC

Circulars / Instructions / Orders

Income Tax

1. F. NO. HRD/CM/102/3/2009-10/(PT)/963 - dated 19-6-2013

CADRE RESTRUCTURING OF IT DEPARTMENT - CONSTITUTION OF THE CORE COMMITTEE

FEMA

2. 122 - dated 27-6-2013

Import of Gold by Nominated Banks /Agencies

Highlights / Catch Notes

Income Tax

• Interest on Advance Tax Defaults: Section 234B and Exclusion of Section 234C Interest in Self-Assessment Tax Explained.

  Case-Laws - AT : Interest under section 234B - defaults in payment of advance tax - exclusion of interest u/s 234C included in the self assessment tax - AT
  Visit to Get Source

  ---

• Section 144 Error: Assessment Officer Wrongly Disallows Partner Interest and Salary, Yet Confirms Firm Status in Clause 5.

  Case-Laws - AT : Interest & salary to partners disallowed - A.O. has wrongly made assessment u/s 144 though in clause 5 of the assessment order he has taken the status as a “firm“ not as “AOP“ - AT
  Visit to Get Source

  ---

• Tribunal Lacks Power for Re-hearing u/s 254(2); Review Limited to Non-Substantive Aspects Only.

  Case-Laws - AT : Readjudication of an order u/s 254(2) - There is no express power of review conferred on this Tribunal. Even otherwise, the scope of review does not extent to re-hearing of the case on merit. - AT
  Visit to Get Source

  ---

• Reassessment Invalidated: No Connection Found Between Recorded Reasons and Assessed Income u/s 147.

  Case-Laws - AT : Reopening of assessment - The reasons recorded for reopening the assessment has no nexus with the income ultimately assessed u/s 147. - assessment is not valid - AT
  Visit to Get Source

  ---

• Time Gap in Transactions Doesn't Prove Unexplained Cash Credits: Withdrawal and Deposit Dates Matter.

  Case-Laws - AT : Unexplained cash credit - merely because of the gap of 1 to 3 months between the date of withdrawal and date of deposits, it could not be inferred that the source of deposits in PNB remained unexplained. - AT
  Visit to Get Source

  ---

• Court Rules Interest on Refunded Plot Advances is Deductible as Revenue Expense for Tax Purposes.

  Case-Laws - AT : Compensation charges - revenue v/s capital - Payment of interest on advance received against the booking of plots while refunding the amount - deduction allowed. - AT
  Visit to Get Source

  ---

• Assessment Order Invalidated for Targeting Non-Existent Company After Dissolution or Amalgamation.

  Case-Laws - AT : Validity of assessment on a company which has been dissolved/ amalgamated - assessment order passed on the appellant company was a nullity - AT
  Visit to Get Source

  ---

Customs

• Licensing Authority's DEPB Scrips Valid Despite Exporter's Misrepresentation or Forgery, Conferring Good Title to Respondent.

  Case-Laws - AT : DEPB scrip issued by the Licencing Authority against misrepresenting/forged documents produced by the exporter - respondent would have to be treated as having good title to the DEPB scrip. - AT
  Visit to Get Source

  ---

Service Tax

• Court Rules Maintenance Charges for Rental Properties Not Subject to Service Tax Under Current Regulations.

  Case-Laws - AT : Renting of Immovable Property - taxability of amount received towards maintenance and repair charges to keep the plant and machinery in good condition - prima facie not taxable. - AT
  Visit to Get Source

  ---

• Cenvat Credit Available for Input Services Including GTA Services Up to Port of Export for Service Tax Paid.

  Case-Laws - AT : Cenvat Credit - Input services - place of removal - GTA Service - all the services upto the port of export are input services and service tax paid on such input services is eligible for cenvat credit. - AT
  Visit to Get Source

  ---

• Penalty Waived for Late Nil Return Filing u/r 7C Proviso; Appellant's Late Fees Dismissed.

  Case-Laws - AT : Penalty for late filing of Nil return - it is a fit case to invoke the proviso to Rule 7C and waive the late fees relating to the nil returns filed by the appellant - AT
  Visit to Get Source

  ---

• Appeal Restoration Denied Despite Apex Court Ruling Eliminating COD Clearance Requirement.

  Case-Laws - AT : COD clearance - earlier appeal was dismissed for non clearance - restoration application in view of Apex court decision dropping the requirement of COD clearance - application rejected. - AT
  Visit to Get Source

  ---

Central Excise

• Cenvat Credit Approved for Duty on Welding Electrodes Under Central Excise Rules.

  Case-Laws - AT : Cenvat Credit - welding electrodes - Cenvat credit in the duty paid on the welding electrodes is admissible to the assessee. - AT
  Visit to Get Source

  ---

• Appellant Not Required to File Four Separate Appeals for One Order Following Show Cause Notices.

  Case-Laws - AT : Number of appeals - Four Show Cause Notices - One order in original - there was no need for the appellant to file four separate appeals against one order in original. - AT
  Visit to Get Source

  ---

• Cenvat Credit Not Applicable to High-Speed Diesel; No Modvat Credit for Low Sulphur HSD.

  Case-Laws - AT : Cenvat Credit - Extra low Sulphur oil - Since the HSD is excluded from the purview of modvat credit eligibility, there is no reason to allow the modvat credit on Low Sulphur HSD. - AT
  Visit to Get Source

  ---

VAT

• Assessee Challenges Central Excise Duty as Admitted Tax, Disputes Interest Imposition u/s 8(1).

  Case-Laws - HC : Levy of interest - assessee is bonafidely disputing the liability of tax on the Central Excise Duty - it cannot be treated as admitted tax and the interest u/s 8 (1) cannot be levied and demanded - HC
  Visit to Get Source

  ---

Case Laws:

• Income Tax

• 2013 (6) TMI 630
  Interest under section 234B - defaults in payment of advance tax - AO excluded not only the interest u/s 234C included in the self assessment tax but also the interest chargeable from 1.4.98 to 30.11.98 from the sum of Rs. 81.30 crore - Held that:- Action of the AO was not justified. The interest till the date of self assessment tax payment has to be computed u/s 234B (2) (i) in the prescribed manner and from the said interest, interest u/s 234B included in the self assessment tax is required to be reduced. The interest for the period beyond the date of self assessment tax payment i.e. 30.11.98 is requried to be computed under section 234B (2) (ii) on the amount by which self assessment and advance tax paid falls short of the assessed tax at the specified rates. In this case self assessment tax after excluding the interest u/s 234C was only Rs. 24.50 crore. Therefore, only this sum is required to be reduced from the shortfall of Rs. 81.30 crore for further computation of interest. The sum of Rs. 13,00,00,000/- which is the interest computed for the period from 1.4.98 to 30.11.98 is not required to be excluded from self assessment tax as the same was not payable under section 140 A but became payable on regular assessment. In favour of assessee. Interest u/s 234D - excess refund - Held that:- The provisions of section 234 D apply only in cases where the refund has been granted u/s 143(1) which is later found excessive on regular assessment. Therefore, if there is no refund granted u/s 143(1) the question of levy of interest u/s 234 D does not arise. AO, therefore, is directed to verify the claim of assessee and delete the ineterest if no refund had been granted to assessee under section 143 (1). In favour of assessee.

  ---

• 2013 (6) TMI 629
  Interest & salary to partners disallowed - Held that:- Assessee made compliance and furnished information required by the A.O. & books of the account was also produced before the A.O. but Revenue has failed to point out that the notices issued u/s 142(1) was with some terms of the notices. Thus, merely non compliance of a notice u/s 142(1) having no terms or requirements is not sufficient reason for making assessment under Section 144 particularly in case partnership firm where the A.O. want to invoke Section 184(5) and Section 185 disallowing the interest and remuneration to partners firm, the assessment made by A.O. u/s 144 is not in accordance with the conditions laid down in Section 144. Thus A.O. has wrongly made assessment u/s 144 though in clause 5 of the assessment order he has taken the status as a "firm" not as "AOP". Thus allow the claim of the assessee. Unsecured loan advanced by the partner - Held that:- In the light of the judgments of India Rice Mills [1995 (12) TMI 55 - ALLAHABAD High Court],Surendra Mahan Seth 1996 (2) TMI 84 - ALLAHABAD High Court) and Metachem Industries (1999 (9) TMI 21 - MADHYA PRADESH High Court)the current capital introduced by partner in firm is established and thus the addition cannot be made in the hands of the firm. Following the above judgment the addition of Rs.11,83,637/- is deleted and balance addition of Rs.4,32,200/- (16,15,837-11,83,637/-) sustained by the CIT(A) is also deleted. Adhoc disallowance out of expenses - Held that:- Considering the nature of business of the assessee and fact that the assessee failed to produce complete bills, vouchers, the addition has been sustained by the CIT(A). The CIT(A) has rightly sustained the addition of Rs.2,50,000/-. Since this is a matter of estimation and the assessee and Revenue both have failed to point out any contrary material based on which a different estimation can be made at this stage, in the light of the fact, order of the CIT(A) is confirmed. Appeal of the assessee is partly allowed

  ---

• 2013 (6) TMI 628
  Reopening of assessment - AO noticed that the assessee society's profits were diverted to the account of its General Secretary for construction of a building, wherein the General Secretary's proprietary business was being carried on - Held that:- There is sufficient force in the contention of the assessee that material facts are fully and truly disposed of by the assessee as evidenced by the two letters filed at the time of completion of original assessment. AO has raised certain queries in the original assessment and, in reply, the assessee has given details vide the aforesaid letters. The ratio laid down in the case of CIT Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] is fully applicable to the facts and circumstances and it cannot be said that there was failure on the part of the assessee in disclosing the material facts. As the assessee has disclosed all the material facts relating to giving of advance to Mr. SV Rao and it is also on record that he is a Secretary of the assessee Trust. AO after considering this fact preferred not to take any decision on this issue. Being so, AO precluded from taking any contra decision as there is no failure on the part of the assessee in furnishing the material evidence before the Assessing Officer. Once AO applied his mind and had taken conscious decision on the impugned matter, it is not open to AO to reopen the assessment. In favour of assessee.

  ---

• 2013 (6) TMI 627
  Readjudication of an order u/s 254(2) - Rectification of mistake - DR contended that as per the chart prepared by the CIT(A), it is noticed that the total of all the items match with the duplicate items/entries but it is seen that there is difference in the items and contents of jewellery - Held that:- By this Miscellaneous application DR wanted the Tribunal to review its earlier order, which the Tribunal cannot do it in view of the provisions of section 254(2), as per which, the powers of the Tribunal are limited. Further it is well settled that statutory authority cannot exercise power of review unless such power is expressly conferred. There is no express power of review conferred on this Tribunal. Even otherwise, the scope of review does not extent to re-hearing of the case on merit. See CIT vs. Pearl Woollen Mills (2009 (11) TMI 48 - PUNJAB AND HARYANA HIGH COURT).

  ---

• 2013 (6) TMI 626
  Unexplained cash credit - CIT(A) deleted the addition - Held that:- As assessee has furnished the bank statements of the lenders. From these statements it was established that the lenders had adequate bank balance to grant the loan to the assessee. The lenders were also income tax assessee. Thus agreeing with CIT(A) that assessee has been able to establish that the transaction with the creditors are genuine and the identities and credit worthiness have been established. In favour of assessee. CIT(A) annulled the assessment on relying on assessee's version that notice u/s 143(2) was not served - Held that:- As already dealt with the merits in the case by CIT (A) on the issue that the sum of Rs. 28,00,000/- was not liable to be added to the income of the assessee as unexplained credit u/s 68. Hence, this issue of lack of notice u/s 143(2) is now of only academic interest.

  ---

• 2013 (6) TMI 625
  Penalty u/s 271(1)(c) - assessee has debited a provision of Rs. 3.5 crores in profit & loss account as provision for interest of Punjab Government & CONWARE - Held that:- It seems that amounts were not recoverable and in fact the amounts have been written off in the next year. Against the entry of interest, the assessee made a provision of such interest and debited the same amount to the Profit and loss account. There is no finding that details provided by the assessee are incorrect. As observed earlier, the claim of the assessee seems to be bonafide because principal amount itself was written off and therefore, perhaps there was no claim against the interest. The assessee provided the interest on the accrual basis but simultaneously made a debit entry against such interest. This is purely a bonafide claim based on bonafide belief. Thus the penal provision cannot be attracted in such a situation and accordingly delete the penalty. In favour of assessee.

  ---

• 2013 (6) TMI 624
  Reopening of assessment - additions on account of transfer pricing adjustments and determined the total income - Held that:- The assessment was reopened for assessing the escaped income on account of increase in work in progress which according to the AO was due to advances received from the customers. However, reading of the assessment order passed u/s 143(3) r.w.s. 147 reveals the fact that the issue was completely given a go bye in the reassessment order. The Assessing Officer not even has made a whisper about the income which he believed to have escaped assessment as per the reasons recorded by him. In fact, as it appears during the reassessment proceeding the AO had made a reference to the TPO for determining the arm s length price and has made additions as per the order passed by the TPO u/s 92CA(5) making transfer pricing adjustment. Thus, it is very much clear that the reassessment has been made for assessment of income other than the income escaping assessment as per the reasons recorded for formation of belief while initiating proceeding u/s 147 of the Act. The reasons recorded for reopening the assessment has no nexus with the income ultimately assessed u/s 147. In favour of assessee.

  ---

• 2013 (6) TMI 623
  Unexplained cash credit - cash deposits could not be considered out of the sale proceeds of agricultural land because of time gap between the withdrawals from the bank account with Gurgaon Gramin Bank and deposits in the bank account with Punjab National Bank - CIT(A) deleted the addition - Held that:- It is not disputed that the sale proceeds of the agricultural land were deposited in Gurgaon, Gramin Bank, Account No. 3136 and this amount was withdrawn from the account from 11/12/2008 to 20/12/2008. In the cash flow statement reproduced these entries have been shown as cash received from bank account no. 3136 between 11/12/2008 to 20/12/2008. The amount was deposited in PNB account no. 3415 from 22/01/2009 to 18/03/2009. These amounts are also reflected in the cash flow statements which are in conformity with the information obtained from PNB by issuing notice u/s 133(6) by AO. Therefore, the cash flow statement submitted by assessee was rightly not treated as additional evidence by CIT(A) because the primary evidence in the form of bank statement had already been submitted by assessee before the AO. Therefore, do not find any merit in the submission of ld. DR regarding no opportunity being provided to AO by ld. CIT(A). Admittedly, the AO had not pointed out any other investment being made by assessee out of the withdrawals made form Gurgaon, Gramin Bank. Therefore, merely because of the gap of 1 to 3 months between the date of withdrawal and date of deposits, it could not be inferred that the source of deposits in PNB remained unexplained. In favour of assessee.

  ---

• 2013 (6) TMI 622
  Compensation charges - revenue v/s capital - CIT(A) held the charges as revenue expenditure - Held that:- The transaction entered into by the assessee, shown as payment of compensation and claimed as a revenue expenditure, cannot be said to be a mere camouflage or subterfuge designed by the assessee. The assessee had received advance amounts against the booking of plots. These amounts kept lying with the assessee for over a decade. However, the deals could not finalise and the plots remained under the ownership and possession of the assessee company only. The payment was only a part payment, which was returned by the assessee along with the proportionate interest thereon. This payment of interest is not only payment due to the depositor, but it is also payment made as a sound business policy, lest other prospective buyers be shooed away by the factum of non-payment of interest to the earlier customers, even though the advance amounts kept lying with the assessee for years together. Since the payment was in the course of business of the assessee company, it was rightly claimed as a business expenditure. The nomenclature of the payment being not determinative of the nature thereof, it matters little that it was termed as 'compensation' which, otherwise too, it indeed is, as discussed. The payment, however, has never been shown to be sale consideration for re-purchasing the plots, as tried to be made out by the Assessing Officer. Once the plots never left the ownership and possession of the assessee, there is no question of their being re-purchased by the assessee company. CIT (A) also found the amount paid by the assessee to have been allowed to the assessee as revenue expenditure pertaining to the issue of consistency. In favour of assessee.

  ---

• 2013 (6) TMI 621
  Bad debts written off disallowed - Held that:- As relying on judgment of C.I.T. vs. New Delhi Hotels Ltd. [2012 (3) TMI 325 - DELHI HIGH COURT] a sum of advance of Rs. 10 lacs which was paid by Shri Jagdish Nain was on behalf of the assessee and the payment was related and incidental to the assessee's business. The loss of the amount paid and the consequential reimbursement to Sh. Jagdish Nain was also incidental to the business of the assessee. Thus set aside the orders of the authorities below and decide the issue in favour of the assessee.

  ---

• 2013 (6) TMI 620
  Labour expenses/wages disallowed in the absence of proper evidence - CIT(A) deleted the addition in part - Held that:- AO had not recorded any specific finding to reach the figure of disallowance of Rs. 3 lac, which was an ad hoc addition made, ignoring the fact that the percentage of labour wages to gross turnover had come down to 13.73% for that year (Assessment Year 2008-09) as against that of 16.99% in the earlier year. CIT (A) has restricted the addition to Rs. 1 lac which, in our considered opinion is well justified. Against revenue. Unverifiable purchases - CIT(A) deleted the addition - Held that:- As the assessee has shown better results during the year, over those for the earlier assessment year. The gross profit has gone up to 13.10% against 12.90% in the earlier year. In view thereof, the CIT (A) cannot be said to have erred in holding the addition made on estimate basis to be unjustified. In favour of assessee.

  ---

• 2013 (6) TMI 619
  Validity of assessment on a company which has been dissolved/ amalgamated - Held that:- As AO in his assessment order has noted that company had merged with M/s BS Infratech Pvt. Ltd., w.e.f. 1.4.2008. Therefore, it was very much in the knowledge of AO that the assessee was non existent. Therefore, he should have initiated the proceedings against the amalgamated company only. Moreover, the assessee has also indicated on the acknowledgements of returns that returns are being filed under protest. The CIT (A) after relying upon a number of case laws has rightly held that the assessment order passed on the appellant company was a nullity. - Against revenue.

  ---

• Customs

• 2013 (6) TMI 637
  DEPB scrip issued by the Licencing Authority against misrepresenting/forged documents produced by the exporter - before cancellation of the DEPB scrip, the respondent had made duty free import against the same - Held that:- DEPB scrip/license had been actually issued by DGFT, though against mis-representation and forged papers produced by the exporter & there is neither allegation nor evidence that the respondent was aware of the fraud committed by the exporter M/s Amber Exports at the time of making imports and at the time of import, in March 2000, the DEPB scrip was valid as the same was cancelled only on 7/12/04 In this case, when the respondent had obtained the DEPB scrip from M/s Amber Exports on transfer and at the time of its use for duty free imports, he was not aware of the fraud committed by the seller/transferor M/s Amber Exports, it is the provisions of Section 29 of the Sales of Goods Act read with Section 19 and 19A of the Contract Act which would be applicable and the respondent would have to be treated as having good title to the DEPB scrip. See Aafloat Textiles reported (2009 (2) TMI 75 - SUPREME COURT), Collector vs. Sneha Sales Corporation reported [1998 (9) TMI 99 - SUPREME COURT OF INDIA] and Leader Valves Ltd. (2007 (3) TMI 166 - HIGH COURT, PUNJAB AND HARYANA).

  ---

• 2013 (6) TMI 636
  Re-import of carpets - provisional release - perishable goods - It is submitted that the petitioner had initially exported the carpets put on account of recession has re-imported them and the respondent-authorities have stored and placed the carpets in the godown in Mandideep. - held that:- the authorities have not properly applied their mind to the amount required to be deposited by the petitioner as there is no order of assessment, penalty or provisional assessment quantifying their liability and admittedly no proceedings for confiscation have been initiated under Section 110 or 110A of the Customs Act against the petitioner. The amount of duty required to be paid by them is much less than the amount for which they have been asked to furnish bank guarantee for release of the goods, therefore, in the circumstances we are of the considered opinion that the authorities should reconsider the matter and pass orders after duly hearing the petitioner and therefore, we are of the considered opinion that the impugned orders dated 12-10-2011 and 16-12-2011 deserve to be and are hereby quashed.

  ---

• Service Tax

• 2013 (6) TMI 644
  Recovery - stay application is pending before CESTAT - petitioner filed an affidavit stating that she is willing to permit the respondent to retain 50% of Rs.29 ,53,000 /- as a per-condition for filing the appeal before CESTAT provided the respondent effects refund of balance of 50% i.e. Rs.14,76,500 /-. That affidavit is taken on record. - Held that:- Recording the submission of the learned counsel and taking on record the affidavit, this petition is disposed of with a direction to the CESTAT to consider the stay application forthwith and pass orders as regards the balance of 50% of the tax demand and respondent is directed to refund Rs.14 ,76,500 /- within a week.

  ---

• 2013 (6) TMI 643
  Renting of Immovable Property - taxability of lease of factory premises with plant and machinery - taxability of amount received towards maintenance and repair charges to keep the plant and machinery in good condition - Held that:- There is no dispute in the instant case that the property rented out is an immovable property and the renting has been for use for the furtherance of business or commerce. The transaction undertaken by the appellant fails within the definition of ‘renting of immovable property' as defined in Section 65(105)(zzzz) above and, therefore, the appellant is prima facie, liable to pay service tax on the rent amounts received by them. As regards the maintenance and repair costs incurred by the lessee, we are of the prima facie view that the appellant is not the service provider and there is no liability on the appellant in respect of those transactions. Since the appellant has already paid the service tax amount on the lease amount received, though under protest, the same is sufficient for hearing of the appeals. - stay granted.

  ---

• 2013 (6) TMI 642
  Cenvat Credit - Input services - place of removal - GTA Service - Outward transportation - activity relating to manufacturing - Held that:- first appellate authority was following the law as has been decided by the various decisions of this bench and more specifically Rolex Mills Pvt. Ltd. [2008 (2) TMI 770 - CESTAT, AHMEDABAD] and Adani Pharmachem Pvt. Ltd. [2008 (7) TMI 102 - CESTAT AHMEDABAD] - in respect of export goods, the 'place of removal' is the port of loading. Therefore, all the services upto the port of export are input services and service tax paid on such input services is eligible for cenvat credit. - Decided in favor of assessee.

  ---

• 2013 (6) TMI 641
  Penalty for late filing of Nil return - Held that:- in view of the Board's Circular No.97/8/07-ST dated 23.08.2007, in the event, no service is rendered by the service provider, there is no requirement to file ST-3 Returns. - there is nothing contrary to that circular - as per Rule 7C of the Service Tax Rules, in the event, 'nil' returns are filed, the assessing officer had the discretion to waive the late fees for filing the ST-3 Returns. In my view, it is a fit case to invoke the proviso to Rule 7C and waive the late fees relating to the nil returns filed by the appellant during the period April, 2005 to March, 2008. - Penalty dropped.

  ---

• 2013 (6) TMI 640
  COD clearance - earlier appeal was dismissed for non clearance - Now the appellant has filed this restoration application relying on the decision of the Apex Court in the case of Electronics Corporation of India Vs. Union of India - 2011 (2) TMI 3 - Supreme Court - The issue whether appeals which were already considered by the Committee on Disputes and a decision taken not to allow either side to pursue further appellate remedies, the matter can be reopened in the light of the decision in the case of Electronics Corporation of India (supra), was decided by the Larger Bench of the Tribunal in Burn Standard Co. Ltd. Vs. CCE - [2013 (1) TMI 441 - CESTAT, KOLKATA] - Since the matter is no longer res integra - Application dismissed.

  ---

• Central Excise

• 2013 (6) TMI 635
  Extended period of limitation - period subsequent to date of knowledge of the fact of suppression and evasion of duty to the department - Held that:- Tribunal committed a substantial error in interpreting the provisions of section 11A of the Central Excise Act, 1944. As noted above, the assessee had on its own brought to the knowledge of the Department the fact about clearances of the goods to its sister unit without duty before the date of visit of the officers who noticed such clandestine clearances. The assessee's conduct was candid and therefore bona fide. There was no element of intentional evasion. - Decided against the assessee.

  ---

• 2013 (6) TMI 634
  Cenvat Credit - welding electrodes - Held that:- issue regarding availment of Cenvat credit in respect of duty paid on welding electrodes is settled by this Tribunal [2013 (6) TMI 615 - CESTAT NEW DELHI] in appellants own case. Tribunal relying on the decision of Chhattisgarh High Court in case of Ambuja Cement Eastern Ltd. Vs. CCE [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT], judgement of Hon’ble Rajasthan High Court in case of Hindustan Zinc Ltd. Vs. Union of India - [2008 (7) TMI 55 - HIGH COURT RAJASTHAN] and the judgement of Hon’ble High Court of Karnataka High Court in case of Alfred Herbert (India) Ltd. [2010 (4) TMI 424 - KARNATAKA HIGH COURT] has held that the Cenvat credit in the duty paid on the welding electrodes is admissible to the assessee. - Decided in favor of assessee.

  ---

• 2013 (6) TMI 633
  Cenvat Credit - Extended period of limitation - difference of opinion - recovery of wrongly availed credit - Rebate erroneously granted on the duty on exported goods by utilizing irregular availed credit - Difference of Opinion: Whether the Member (Judicial) is correct is holding that prima facie demand for extended period of limitation cannot be demanded at this stage and deposit of only Rs. 1 Crore out of Rs. 3,39,70,960/- would be sufficient. OR Whether the Member (Technical) is correct in holding that department has strong case, applicant cannot get refund of duty twice, when it is specifically prohibited and stuffing in presence of inspector cannot imply that extended period cannot be invoked and since balance of convenience lies in the money be with the Government and therefore ordering deposit in cash of Rs. 13,22,30,368/- (Rupees Thirteen Crore Twenty Two Lakhs Thirty Thousand Three Hundred Sixty Six Only) and freezing of credit of Rupees Nine Crore Eighty Lakhs Twenty Three Thousand Three Hundred Eighty Four Only or balance of credit available, whichever is lower. Matter referred to 3rd member.

  ---

• 2013 (6) TMI 632
  Duty on physician samples of P&P medicines - MRP Based or transaction value - Number of appeals - Four Show Cause Notices - One order in original - Held that:- We note that original authority had dispatched only one order in original and not the four orders in original to the appellants. We, therefore, are of the view that one appeal filed by the appellant before Commissioner (Appeals) is maintainable and there was no need for the appellant to file four separate appeals against one order in original. As regards the stay petitions filed by the appellant, appellant directed to deposit the entire amount of duty involved in respect of all the four show cause notices

  ---

• 2013 (6) TMI 631
  Cenvat Credit - Extra low Sulphur oil - whether ELS is different from the HSD - Held that:- Commissioner (Appeals) came to the conclusion that ELS-HSD is substitute for the HSD and not altogether a different commodity as it has the same use as of the HSD. He rejected the contentions of the appellant that ELS is totally different from HSD holding that ELS is not eligible for purpose of modvat credit. We find that there is no doubt about the fact that low sulphur diesel is environmentally cleaner than the HSD but there is no reason to say that it is totally different from the HSD. Since the HSD is excluded from the purview of modvat credit eligibility, there is no reason to allow the modvat credit on Low Sulphur HSD. - Decided against the assessee.

  ---

• CST, VAT & Sales Tax

• 2013 (6) TMI 639
  Levy of interest - valuation dispute - admitted tax - held that:- The applicant is contesting the liability of tax on the amount of Central Excise Duty since very beginning. At no stage the liability has been admitted. In the present revision also, the liability is being disputed. There is no earlier decision of this Court or Apex Court in the case of assessee or in any other case on the similar facts and circumstances, at the relevant time wherein it has been held that the Central Excise Duty is part of the turnover and liable to tax. Therefore, it is a case where the assessee is bonafidely disputing the liability of tax on the Central Excise Duty. Thus, it cannot be treated as admitted tax and the interest under Section 8 (1) of the Act cannot be levied and demanded. The authority below is only entitled for the interest under Section 8 (1-B) of the Act and not under Section 8 (1) of the Act. - Decided partly in favor of assessee.

  ---

• Indian Laws

• 2013 (6) TMI 638
  Non release of pensionary benefits - leave without notice / sanction - petitioner was posted as Inspector in Indian Oil Corporation, Range Barauli Oil Refinery, he went on leave w.e.f. 23.7.1990. It is the case of the petitioner that the petitioner was suffering from arthritis and was unable to perform his duties. - Held that:- The petitioner in the alternative could show exceptional circumstances for sanction of leave. No such circumstances were shown to the concerned authorities, as has been observed in the orders passed by the authorities. Rather the authorities asked the petitioner to present himself for medical examination before Civil Surgeon, Farrukhabad in the year 1994. Admittedly, the petitioner did not get himself examined medically for reasons best known to the petitioner. A suspicion in regard to bona fides of the petitioner is raised in the mind of this Court as to why the petitioner did not want to get himself medically examined to support his plea for leave on medical grounds. No plausible, justifiable or accepted reason is coming forth for not getting himself medically examined. The petitioner in above noted circumstances wants benefit of continuous service, without having worked. Thus, equity also does not favour the case of the petitioner. - Decided against the petitioner employee.

  ---