TMI Tax Updates - e-Newsletter
June 29, 2013

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise

Articles

1. OFFENCES BY DEALERS – WHEHTHER MANUFACTURER IS LIABLE?

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Statistics Day Celebrations

2. RBI releases Draft Guidelines on Wealth Management/Marketing/ Distribution Services offered by Banks

3. RBI’s annual closing of accounts

Notifications

Customs

1. 69/2013 - dated 28-6-2013 - Cus (NT)

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

VAT - Delhi

2. F.3 (352)/Policy/VAT/2013/314-324 - dated 20-6-2013 - DVAT

Policy VAT 2013 -314-324 dated 20-06-2013

3. F. 5(54)/Policy-II /VAT/2012-13/325 -336 - dated 20-6-2013 - DVAT

Policy VAT 2013 -325-336 dated 20-06-2013

4. F. 3 (162)/Policy-II/VAT/Misc/09/286-296 - dated 17-6-2013 - DVAT

Policy VAT 2012 -298-308 dated 18-06-2013

Circulars / Instructions / Orders

Companies Law

1. 12/2013 - dated 28-6-2013

NAME AVAILABILITY GUIDELINES, 2011- Registration of Electoral Trusts as Companies under Section 25 of the Companies Act, 1956.

Central Excise

2. F.No.390/Misc./163/2010-JC - dated 3-6-2013

Reduction of Government litigation - providing monetary limits for filing appeals by the Department before CESTAT/High Courts and Supreme court - Regarding

Highlights / Catch Notes

Income Tax

• Court Rules Long-Term Capital Gains Must Be Shared Among Co-Owners Based on Property Shares in Joint Ownership Case.

  Case-Laws - AT : Addition towards LTCG on sale of house property - co-ownership - he entire capital gains cannot be taxed in the hands of assessee - AT
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• Tax Authorities Can't Dictate Business Expenses u/s 37(1) of Income Tax Act: Emphasizing Taxpayer Autonomy.

  Case-Laws - AT : Claim of expenditure - deductin u/s 37(1) - it is not open to the Department to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure. - AT
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• Machine Depreciation Part of Commissioning Process; Case Remanded for Further Review.

  Case-Laws - AT : Depreciation - as it is perhaps this that has been construed as a trial run, is only a part of its commissioning, as vendors are usually required to demonstrate the working of the machine as a part of its commissioning - matter remanded back - AT
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• Court Upholds Section 263 Revision: Section 145A Must Be Followed for Accurate Income Reporting.

  Case-Laws - AT : Revision u/s 263 - Section 145A is a non-obstante provision, which, therefore, is to be necessarily followed for the purpose of returning the income - revision upheld - AT
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• Section 263 Orders: Importance Lies in Clarity and Substance of AO's Findings, Not Length.

  Case-Laws - AT : Revision u/s 263 - It is not the shortness of the order which makes it tenable or not, rather there are contents of the order about clear findings of the AO on the record which will make the order tenable - AT
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• Printers, routers, and switches to be classified as computers for income tax depreciation rate calculations.

  Case-Laws - AT : Depreciation - Printers and routers - the routers and switches are to be included in back of computers for the purposes of demanding the rate of depreciation. - AT
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• Dispute Over Tax Deduction Eligibility for Profits from Unutilized FSI Sales u/ss 80IB(10) and 80IB(1.

  Case-Laws - AT : Deduction u/s. 80IB(10) r.w.s. 80IB(1) - Profit derived from sale of unutilized FSI - he concept of element of unutilized FSI sold is imaginary and base on surmises and conjunctures - AT
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Customs

• Revenue Authorities Ordered to Lift Bank Account Attachment u/s 110 of the Customs Act, 1962.

  Case-Laws - HC : Attachment - power to attach bank accounts - Section 110 of the Customs Act, 1962 - Revenue directed to raise the attachment of bank account forthwith. - HC
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Service Tax

• Petitioner Exempt from Service Tax on Dam Construction Services in Hydroelectric Project.

  Case-Laws - AT : Commercial and industrial construction services - construction of a dam which was an integral component of a hydro Electric project - Prima facie, the petitioner is immune to the liability of service tax - AT
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• Court Grants 67% Service Tax Abatement for Construction Services; Temporary Relief Pending Further Review.

  Case-Laws - AT : Commercial or Industrial Construction Services - abatement of 67% - prima facie case is in favor of assessee - stay granted. - AT
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• Reduced Penalty: Appellant Allowed to Pay 25% for Failing to Deposit Collected Service Tax Amount.

  Case-Laws - AT : Penalty - Non deposit of amount of service tax collected from the client - benefit of payment of penalty of 25% extend to the appellant. - AT
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Central Excise

• High Court Allows Modvat/Cenvat Credit Transfer During Amalgamation, Following Delhi Tribunal Precedent.

  Case-Laws - HC : Modvat / Cenvat Credit - Transfer of credit - amalgamation - Even though the Tribunal has not reasoned its order in so many words, yet, it followed the decision of the Delhi Tribunal on a similarly positioned assessee. - credit allowed - HC
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• Court Upholds CESTAT Order Requiring Rs. 60 Lakh Pre-Deposit; Appellants Cannot Reopen or Contest the Issue.

  Case-Laws - HC : Appeal against the stay order of CESTAT directing the appellant to made predeposit of Rs. 60 Lakhs - it is not open to the appellants to reagitate the issue. - HC
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• Amendment to Rule 5 of Cenvat Credit Rules removes 1:1 input-final product correlation for refund claims.

  Case-Laws - HC : Refund of unutilzed cenvat credit - Rule 5 of CCR - Notification no. 5/2006 - amendment appears to have done away with 1:1 correlation between input and final product for refund - HC
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Case Laws:

• Income Tax

• 2013 (6) TMI 667
  Addition towards LTCG on sale of house property - Penalty u/s 271(1)(c) - Held that:- It is an undisputed fact that the assessee had received Rs. 34,11,000/- on the sale of property & assessee out of the total cost of Rs.16.70 lacs incurred for acquiring the property, the assessee had paid only Rs.7,97,500/- and the remaining amount was paid by Shri Jagdish Khurana. In the audited balance sheet of the assessee for F.Y. 2003-04 it is seen that the assessee had shown investments in Sweet Co.Op. Housing Society of Rs. 8,12,500/-. Assessee also has placed on record the copy of computation of income for A.Y. 2006-07 of Shri Jagdish Khurana wherein the long term capital gain on sale of property has been disclosed by him. As the Revenue has not brought on record any material to prove that the assessee was the sole owner of the property it is also a fact that Mr. Khurana, the co-owner of the property, has offered his share of capital gains in the return of income for A.Y. 2006-07. However there is nothing on record to show as to how the profit on sale of aforesaid property has been treated in the hands of Shri Jagdish Khurana while finalizing his assessment. Thus the entire capital gains cannot be taxed in the hands of assessee ,therefore this aspect needs examination at the end of AO. As the addition itself has been deleted the penalty does not survive. In favour of assessee.

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• 2013 (6) TMI 666
  Determination of income - addition towards estimated G.P. on unaccounted sale of Gutkha and Pan Masala - Held that:- AO has supported its finding by the statement of the Assessee recorded on 02.04.2009 post survey carried on 05.02.2009. As find from the record that the AO supplied the copy of the said statement to the Assessee but did not supply the other documents/record requisitioned from the Sales Tax Department based on which the unaccounted sale was worked out by AO. Assessee vide its letter demanded the alleged record though AO has referred the notice u/s 142(1) to show that the copies of the documents were shown to Assessee for examination. It is pertinent to note that no documents can be used against the Assessee without giving him proper opportunity to rebute the same or to produce counter evidence. The assess denied that the alleged record belongs to the Assessee and demanded the cross-examination of the panchnama on this point. The whole case of the department is based on the presumption that the Assessee is C & F Agent of Godhwat Industries for sale of Gutkha and Pan Masala. AO made the estimated GP addition by working out the unaccounted sale whereas in case of C & F Agent the income is only the commission as agreed between the parties and not any profit margin from purchase and sale because the purchase is made by the traders and dealers and the sale is made by the manufacturer. There cannot be any purchase and sale by the C & F Agent but it facilitates the purchase and sale between the Trader/Dealer and the manufacturer. AO adopted the GP rate admitted by the Assessee on its business of Trade which is not permitted to be adopted for the income being commission of C & F Agent. AO worked out unaccounted sale for 10 months on the reason that the search was conducted by the Sales Tax Department on 20th January. Therefore the 10 months sale was worked out from the April 2007 to January. 2008. But it is material to note that the search was conducted on 20th January.2009 and not on 20th Janyary.2008, therefore the record found during the search cannot be said to be upto to 20th January.2008 so that the unaccounted sale on the basis of that record can be worked out upto 20th January.2008. Also when the Sales Tax Department who carried out the search and seizure operation and seized the record in question has come to the conclusion that the unaccounted sale is from the purchase from outside state then the view of the AO that the unaccounted sale is from the purchases made within the state is not sustainable. Thus set-aside the orders of the authorities below qua this issue and delete the addition of estimated GP towards unaccounted sales. Addition on account of cash payment - Held that:- Since the addition is made on the basis of the seized material by the Sales Tax Department therefore in view of finding in respect of the issue of addition on account of unaccounted sale as well as the conflicting view taken by the Sales Tax Authority and Income Tax Authorities on the same evidence this addition is deleted.

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• 2013 (6) TMI 665
  Deduction u/s 80IA disallowed - conditions specified at (a), (b) and (c) of the section are not found fulfilled by assessee - Held that:- Respectably following assessee's own case [2010 (9) TMI 938 - ITAT HYDERABAD] claim of the assessee for deduction 80IA allowed. Against revenue. Payment to PSAM towards professional charges disallowed - Held that:- AO and the CIT(A) were not correct in concluding that there was no necessity for services to be rendered over and above those contemplating in the BIMCO agreement. As refering to the decision of CIT Vs. Dhanrajgiri Raja Narsingiriji [1973 (3) TMI 6 - SUPREME Court] wherein held that "it is not open to the Department to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure. Every businessman knows his interest best." In the case of Jaipur Electro (P) Ltd. Vs. CIT 1996 (5) TMI 55 - RAJASTHAN High Court] it was held that "the doctrine that the businessman is the best judge of business expediency does not affect the right, any duty of the assessing authorities to know whether it was incurred for business purposes and not for other extraneous conditions." Thus the expenditure to PSAM has been wholly and exclusively incurred for the purpose of business is to be allowed as a deduction. In favour of assessee.

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• 2013 (6) TMI 664
  Depreciation claim disallowed - additions to the relevant blocks of assets admittedly made at the end of the financial year had not been shown to be put to use - Held that:- The trial production is usually for the entire unit, as it is only when the entire machinery is set up, that the production or trial production could be made. The running of a single machine, as it is perhaps this that has been construed as a trial run, is only a part of its commissioning, as vendors are usually required to demonstrate the working of the machine as a part of its commissioning. Again,from the list of the additions to the fixed assets there are additions dating as far as back to May, 2007. The assessee has also sought to place on record the copy of the invoice dated 28.02.2008, with a request that the same be admitted on record, perhaps to meet the objection by the first appellate authority that the production would only be accompanied by payment of excise duty. Thus restore the matter back to the file of the assessing authority for a de novo examination of the matter - assessee's appeal allowed for statistical purposes.

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• 2013 (6) TMI 663
  Jurisdiction power u/s 263 by CIT(A) - assessee is maintaining its accounts on an exclusive basis, i.e., valuing its inventories as well as purchases and sales, at net of excise duty, which is being accounted for separately, therefore, admittedly there is a technical breach of section 145A - Held that:- Section 145A is a non-obstante provision, which, therefore, is to be necessarily followed for the purpose of returning the income under the Act. The A.O. has, firstly, by not discharging his obligations, being duty bound to verify the assessee's return as being in accordance with the law, and then in acting in disregard of the directions by the ld. CIT, has put the assessee to inconvenience, and which cannot but be depreciated. As regards the invocation of s. 263 case of Malabar Industrial Co. Ltd. v. CIT [2000 (2) TMI 10 - SUPREME Court] laid down four-way test for invocation of a provision i.e. incorrect assumption of facts, incorrect application of law, without applying the principles of natural justice, and without application of mind. It is the last category, if not perhaps the first one as well, which arise in the instant case. Thus confirming the invocation of section 263 in the instant case, direct the assessing authority to observe the directions of the revisionary authority both in letter and in spirit so as to avoid multiplicity of proceedings.

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• 2013 (6) TMI 662
  Expenses made u/s 144 disallowed - CIT(A) allowed part relief - Held that:- As no appearance was made before the AO despite various opportunities it is a settled law that AO has to make a best judgment assessment, the same has to be judicious and on fair basis but in present case fair basis cannot be assessee's own results for earlier years because such assessment were never subjected to scrutiny. The assessee is engaged in the business of manufacture and sale of bottling plants and had turnover of Rs. 87,21,688/-. It is very difficult to believe that assessee has earned only a net profit of Rs. 32,799/- in the current year. In assessment year 2006-07, the assessee has shown only a profit of Rs. 103/-. Persuing the Profit and Loss account for last three years and it was noticed that assessee has not paid any salary or interest to the partners. As that assessee consists of two partners and the partners do not have any other income failure to understand how the assessee was running his household if no salary was drawn from the firm in the absence of any other income. In any case without any charge of interest and salary to partners net profit shown by assessee is unreasonably low. The estimate made by CIT(A) seems to be more than reasonable and therefore, nothing wrong with his order and confirm the same.

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• 2013 (6) TMI 661
  Revision - Jurisdiction power u/s 263 by CIT - credit worthiness of persons introducing new share application money were not ascertained by the then AO - No enquiry in respect to sundry creditors has been made by the A.O.- Details regarding 'other Income' as declared by assessee had not been called for by the then A.O. - No verification with regard to decrease in stock - No verification with regard to sundry debtors - Allegation of the CIT is on the premise that AO did not consider the factual position and there was lack of inquiry or investigation on indicated item - Held that:- What emerges from the order-sheet and record is that AO conducted inquiry on all these aspects by way of questionnaire and notices u/s 142(1). In the assessment order there are clear finding of satisfaction by AO that all the compliance was made and he was satisfied about the information provided by the assessee by way of account books, record and the compliance to the questionnaire. Thus, the allegation of CIT is not sustainable that it is a case of non-inquiry or lack of inquiry. As with the perusal of the order-sheet and voluminous compliance filed by the assessee which is placed on paper book, clearly suggest that proper inquiries were made which are duly complied on the indicated issues. Though DR has referred to the short and cryptic order of AO CIT no where refers to the short order. It is not the shortness of the order which makes it tenable or not, rather there are contents of the order about clear findings of the AO on the record which will make the order tenable. Thus in agreement with assessee that while exercising powers u/s 263 CIT should not frame issues about third parties whose record was not before him as relying upon CIT Vs. Anil Kumar Sharma (2010 (2) TMI 75 - DELHI HIGH COURT), CIT Vs. Sunbeam Auto Ltd. (2009 (9) TMI 633 - Delhi High Court), DLF Ltd. (2012 (9) TMI 626 - DELHI HIGH COURT), Max India Ltd. (2007 (11) TMI 12 - Supreme Court of India), Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME Court), M/s New Cyberabad City (2013 (6) TMI 531 - ITAT HYDERABAD) and The Civil Services Society (2013 (6) TMI 530 - ITAT DELHI). Thus order passed by the CIT u/s 263 is quashed - assessee's appeal allowed.

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• 2013 (6) TMI 660
  Non existent/bogus liability - CIT(A) confirmed additions - Held that:- As appellant had not proved this liability with any evidence for genuineness the order of the CIT(A) confirmed - against assessee. Non existent/bogus liability - CIT(A) confirmed additions - notice on the party was returned unserved by the postal authority with a remark 'not known' - Held that:- As assessee has purchased computer cartage for the business purposes vide bill no.20, dated 23.08.2004 and bill no.28, dated 09.10.2004 and payments were made through bank account of the assessee company, therefore, genuineness of the transaction had been proved by the appellant. In favour of assessee. Unexplained difference in accounts - Held that:- Considering evidences furnished by the appellant which shows that as per assessee's books account, the liability as on 31.03.2005 has been shown at Rs.6,93,220/- and in the books of M/s. Bhavin Industries at Rs.7,54,800/-. Similarly creditor in the name of M/s. Colourtex P. Ltd. in the assessee's book has been shown at Rs.13,04,340/- whereas in the books of account of in case of M/s. Colourtex P. Ltd. the creditors of the assessee has been shown at Rs.14,23,994/-. The appellant had not filed any re-conciliation before the lower authorities as well as before us. Therefore order of the CIT(A) confirmed - assessee's appeal is dismissed. Disallowance @ 10% by CIT(A) out of 25% on account of telephone, conveyance and miscellaneous expenses - Held that:- As CIT(A) restricted this addition @ 10% the decision of CIT(A) is confirmed - assessee's appeal is dismissed.

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• 2013 (6) TMI 659
  Unaccounted cash credit - CIT(A) deleted addition - Held that:- As decided in assessee's own case in AY 2002-03 & 2003-04 stating that assessee has submitted proper documents & credentials before the authorities below. The assessee has taken the loans from banking channel in the normal business transactions. The assessee company has paid interest on these loans during the year and also deducted TDS on the interest at stipulated rates as prescribed under the Income Tax Act. As CIT (A) has given a finding that the loans were totally repaid in subsequent years no infirmity in the order of CIT(A). In favour of assessee.

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• 2013 (6) TMI 658
  Software expenses - CIT(A) deleted the addition - Held that:- As decided in CIT Vs. O.K. Play India Ltd [2011 (2) TMI 454 - PUNJAB AND HARYANA HIGH COURT] as relying on CIT v. Varinder Agro chemicals Ltd. [2008 (10) TMI 100 - PUNJAB AND HARYANA HIGH COURT] Since technology is fast changing and day-by-day systems are being developed in a new way, software may be needed like raw material - view taken by the Tribunal that computer software expenses were revenue in nature, is correct. Also see Alembic Chemical Works Co. Ltd. V. CIT [1989 (3) TMI 5 - SUPREME Court]. In favour of assessee. Categorization of items purchased - Printers and routers - electrical equipments or energy savings devices - CIT(A) deleted the addition - Held that:- As decided in DCIT Vs. Datacraft India Ltd. (2010 (7) TMI 642 - ITAT, MUMBAI) it was held that the "router" and "switches" can be classified as computer hardware when they are used along with computer and when there functions are integrated with a computer. It was concluded that in such a situation the routers and switches are to be included in back of computers for the purposes of demanding the rate of depreciation. Also see ITO Vs. Samiran Majumdar (2005 (8) TMI 293 - ITAT CALCUTTA-B) wherein the issue was whether printers and scanners being integral part of computer system can be treated as computer for the purpose of allowing higher rate of appreciation as answered in affirmative. In favour of assessee. Business development expenses - CIT(A) deleted the disallowness - Held that:- Undoubtedly, the assessee co-operative bank has distributed gifts, mementos, school bags, etc to the children of its members such distribution of gifts was allowable as business expenditure was an identical issue decided in ACIT Vs. The Gujarat State Co-operative Bank Ltd. [2013 (6) TMI 438 - ITAT AHMEDABAD] wherein the order of Karajan Co-operative Cotton Sales (1992 (1) TMI 39 - GUJARAT High Court) followed and expenditure was allowed. In favour of assessee.

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• 2013 (6) TMI 657
  Deduction u/s. 80IB(10) r.w.s. 80IB(1) - CIT(A) directed the AO to allow the claim - Held that:- As decided in assessee/s own case in AY 2007-08 the dominent control over the project belonged to the assessee and the project was developed at the risk and the cost of the assessee. It has also been noted by the respected co-ordinate Bench that there was no contrary material placed on record from the side of the Revenue, therefore, there was no reason to take any other different view. Thus no grievance against directions given to the AO by CIT. Against revenue. Profit derived from sale of unutilized FSI - deduction u/s. 80IB(10) r.w.s. 80IB(1)allowed by CIT(A) - Held that:- As relying on cases of Radhey Developers [2007 (6) TMI 316 - ITAT AHMEDABAD] & Paritosh Infrastructure [2013 (6) TMI 437 - ITAT AHMEDABAD] the concept of element of unutilized FSI sold is imaginary and base on surmises and conjunctures. Against revenue.

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• Customs

• 2013 (6) TMI 656
  Benefit of Notification No. 174-Cus - Held that:- Appellate Authority has held the returned goods to be a private personal property of the respondent by following the decision of ECHJAY INDUSTRIES PVT. LTD. case [1994 (3) TMI 115 - HIGH COURT OF JUDICATURE AT BOMBAY]. As DR has not been able to show us any other decision contrary to the one relied upon by Commissioner (Appeals). Admittedly, company is a legal person in the eyes of law and the goods belonging to the company would be the private personal property of the company. no infirmity in the impugned order of Commissioner (Appeals). Revenue’s appeal is rejected.

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• 2013 (6) TMI 655
  Attachment - power to attach bank accounts - Section 110 of the Customs Act, 1962 - held that:- the statutory provision does not expressly enable an Investigating Officer to attach a bank account. - While it is true that the enabling power for seizure of any documents or things which, in our opinion, will be useful for, or relevant to, any proceeding under this Act is available under sub-section (3) of Section 110 of the Act prima facie it should be shown to be so. In the judgment of Delhi Court VIKAS GUMBER Versus UNION OF INDIA [2008 (7) TMI 414 - HIGH COURT OF DELHI] the proceedings initiated was after lapse of 4 years and therefore the Delhi High Court characterised it as not bona fide attachment and therefore directed lifting of attachment of all bank accounts. Only difference in the present case is that the bank accounts are under attachment for about two years, but without issue of a show cause notice under Section 124 of the Act. Even the condition imposed on the appellant by the learned Single Judge to furnish bank guarantee or security is not sustainable and the fact that even after passing of the order by the learned Single Judge on 15-9-2010 the respondents have not issued any show cause notice till now is a circumstance which clearly goes against the respondents. Revenue directed to raise the attachment of bank account forthwith.

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• Service Tax

• 2013 (6) TMI 649
  Application for out of trun hearing - appellant has deposited the entire amount of service tax liability, interest thereof and part of the amount of penalty imposed under Section 78 - Held that:- Since we have already granted stay for the waiver of pre-deposit of balance amounts, we call for the early hearing application filed by the assessee and take up for disposal. We find that the total amount involved in this appeal along with interest and penalty is approximately Rs.6.40 Crores. Since the amount in this case is substantial, we allow the application for out of turn hearing of appeals and direct the registry to list the appeals for disposal on 10.7.2013.

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• 2013 (6) TMI 648
  Commercial and industrial construction services - non-remittance of service tax - stay - Held that:- On a prima facie, creative but unsustainable interpretation, the adjudicating authority found that the service provided by the petitioner pertained to construction of a dam which was an integral component of a hydro Electric project and is therefore outside the purview of the exclusion clause of Section 65(25)(b) which, excludes services provided in respect of roads, airports, railways, transport, terminals, bridges, tunnels and dams from the charge of service tax. Prima facie, we are of the view that the petitioner is immune to the liability of service tax in respect of provision of services in relation to construction of a dam, which is admittedly the service provided by the petitioner. - stay granted. In respect of other transactions on which service tax has been levied viz. renting of immovable property service and supply of tangible goods service, we are not inclined prima facie, to grant any relief at this stage. - stay grated partly.

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• 2013 (6) TMI 647
  Rectification of mistake - Held that:- the finding of Tribunal that - "the original adjudicating authority in the course of denovo adjudication should also go into the question of unjust enrichment which has not been examined" is a mistake and needs to be rectified inasmuch as the Commissioner (Appeals) has admittedly considered the question of unjust enrichment and this was the only issue before him. In the light of observation that the Revenue has not challenged the finding of unjust enrichment arrived at by Commissioner (Appeals), we are of the view the Revenue's Appeal No. ST/181/2010 is required to be dismissed. We accordingly, rectify the said mistake and hold that whereas the Revenue's appeal No. ST/119/06 is allowed by way of remand for reconsideration of merits, Appeal No. 181/2010 is dismissed. However, we would like to make it clear that question of unjust enrichment would be relevant only if the Assistant Commissioner in denovo proceedings holds in favour of the assessee. - ROM application allowed.

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• 2013 (6) TMI 646
  Commercial or Industrial Construction Services - abatement of 67% - Held that:- it can be seen that completion and finishing services necessarily relate to an incomplete or unfinished building or civil structure and necessarily it has to be in relation to new building or a civil structure. A building which has already been completed and put to use does not need any completion or finishing services. Therefore, the activities of repair, alteration, renovation or restoration undertaken by the appellant prima facie comes under clause (d) and not under clause (c ) and, therefore, the appellant is prima facie eligible for the benefit of Notification No.1/2006-ST. Tribunal inn the case of Agrim Associates Pvt. Ltd (2011 (4) TMI 845 - CESTAT, NEW DELHI) also held a similar view. - prima facie case is in favor of assessee - stay granted.

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• 2013 (6) TMI 645
  Penalty - Non deposit of amount of service tax collected from the client - Held that:- since there is no dispute that the appellant had already collected the amount of service tax liability which has been confirmed and upheld by the first appellate authority, the appellant is liable to penal provisions under Section 76. Penalty u/s 78 - Held that:- penalty is liable to be imposed on the appellant under Section 78, as they have collected the amount of service tax from their clients and not reflected but said collected service tax liability in half yearly return filed with the revenue authorities, appellant was correctly visited with penalty. - the first appellate authority having reduced the service tax liability on the appellant to Rs.2,47,032/- has not given an option to the appellant for discharge of the penalty under the provisions of Section 78 which needs to be extended to the appellant. - Following the decision in the case of Akash Fashions [2009 (1) TMI 113 - GUJARAT HIGH COURT] benefit of payment of penalty of 25% extend to the appellant.

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• Central Excise

• 2013 (6) TMI 654
  Modvat / Cenvat Credit - Transfer of credit - amalgamation - Whether the Appellate Tribunal is right in allowing the accumulated Modvat Credit on Molasses, after amalgamation, for the payment of duty on Sugar without transferring the corresponding input as required under erstwhile Rule 57F(12) of CER'44? - Held that:- Proviso to Rule 57F of the Central Excise Rules provides that the credit of duty allowed in respect of any input be utilised towards the payment of duty on any other final product, irrespective of whether such inputs have been used actually in the manufacture of such final product. The only condition is that the inputs should have been received and used in the factory of production on or after 1st March, 1997. Hence, we have no hesitation in accepting the case of the assessee that there is no transfer of units as understood in the legal parlance and the 'transfer' itself being after 1999, they are entitled to have the advantage of the proviso to the said Rule. In the circumstances, we agree with the assessee's contention and we have no hesitation in affirming the order of the Tribunal. Even though the Tribunal has not reasoned its order in so many words, yet, it followed the decision of the Delhi Tribunal on a similarly positioned assessee. We agree with the decision of the Tribunal. Consequently, we reject the appeal preferred by the Revenue. - Decided against the revenue.

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• 2013 (6) TMI 653
  Recovery - circular dated 1.1.2013 - Held that:- this case to be fit one to direct the Appellate Authority to decide the stay petition as early as possible and till then, no recovery will be made by the department.

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• 2013 (6) TMI 652
  Appeal against the stay order of CESTAT directing the appellant to made predeposit of Rs. 60 Lakhs - Held that:- Having carefully gone through the judgment of the Division Bench in M.I.Metal Sections Pvt. Ltd's case [1994 (10) TMI 67 - HIGH COURT OF KARNATAKA AT BANGALORE], we respectfully disagree with the opinion expressed by the Division Bench of the Kerala High Court. According to us, the condition prescribed under Section 35F of the Act that the person desirous of appealing against the order shall deposit the duty demanded or the penalty levied is mandatory. However, the power to dispense with such condition has been conferred on the CESTAT only where it is satisfied that the deposit of the duty demanded or penalty levied would cause undue hardship to such person. Such discretion has already been exercised by the CESTAT and an order came to be passed on 13.04.2011. The said order has also been upheld by this Court in W.P.Nos.14260 of 2011 and 14329 of 2011. Therefore, according to us, it is not open to the appellants to reagitate the issue. It is also relevant to note that when the appeals were taken up by the CESTAT on 04.02.2013, the appellants did not say that they were under financial crisis nor there was any plea about the hardship being faced by them to comply with the condition under Section 35F of the Act. - Decided against the assessee.

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• 2013 (6) TMI 651
  Refund of unutilzed cenvat credit - Rule 5 of CCR - Notification no. 5/2006 - Held that:- the Commissioner of Central Excise (Appeals) completely overlooked the Notification No.7/2010C. E.(N.T.) dated 27.02.2010 and the filing of the refund claim in the revised proforma consequent to Notification No.7/2010C. E.(N.T.) dated 27.02.2010. The Tribunal also while passing the order dated 13.03.2012 has not considered the effect of amendment to Notification No.5/2006 C.E. (N.T.) dated 14.03.2006 by Notification No. 7/2010C.E.(N.T.) dated 27.03.2010. This retrospective effect is given by Section 74 of the Finance Act, 2010. This amendment appears to have done away with 1:1 correlation between input and final product for refund under Rule 5 of Cenvat Rules. Tribunal directed to decide the appeals after considering the effect of the amended Notification No.5/2006 C.E.(N.T.) dated 14.03.2006 on the refund application filed by the appellants. - matter restored before CESTAT.

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• 2013 (6) TMI 650
  Whether the Tribunal was justified in taking into consideration the Line Rejection Register when it was not a declared document under Rule 173 G (5) of the erstwhile Central Excise Rules, 1944? - manufacture of Colour Television Sets. - register of the rejected colour picture tubes - Held that:- he department did not rely upon any order of the Commissioner, under sub Rules (4) and (5) of Rule 173 G prescribing the registers to be maintained by the manufacturers of rejected items in the process of manufacturing. It is also not stated that the Line Rejection Register was not a reliable document, or that rejection were to be maintained in any other form by the assessee. The Tribunal found that the number of rejections were insignificant as compared to total procurement of CPTs. The Appellate Tribunal allowed the appeal of the respondent on the ground that the appellant was maintaining the register of the rejected colour picture tubes. The revenue did not produce any evidence, to show that these rejected colour picture tubes were used in the manufacture of televisions, as a colour television set requires many other parts, such as cabinet, PCB etc. The assessee was maintaining separate records regarding rejection. - Order of tribunal confirmed.

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