TMI Tax Updates - e-Newsletter
July 1, 2014

Case Laws in this Newsletter:

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

Articles

1. ADJUDICATION OF PENALTY UNDER COMPANIES ACT AND RULES

   By: DR.MARIAPPAN GOVINDARAJAN

2. Exemption from capital gains tax on SUCCESSION OF SOLE PROPRIETARY BUSINESS BY COMPANY- 3rd article in view of a recent Tribunal judgment- a case for learning.

   By: DEVKUMAR KOTHARI

3. EXEMPTION TO RESTAURANT SERVICES

   By: Dr. Sanjiv Agarwal

News

1. Index of Eight Core Industries (Base: 2004-05=100), May, 2014

2. Governance in the Corporate Sector – Certain Perspectives (Valedictory address by Shri G Padmanabhan at the 15th National Conference of Practising Company Secretaries (PCS) on the theme ‘Practising Company Secretaries: The Facilitator for Corporate Growth’ - June 27-28, Mumbai)

3. RBI Reference Rate for US $ and Euro

Circulars / Instructions / Orders

DGFT

1. 63 (RE: 2014) /2009-2014 - dated 27-6-2014

Notification of SIONs pertaining to product group Chemical & Allied Products.

Companies Law

2. 26/2014 - dated 27-6-2014

Clarification with regard to use of the words “ commodity Exchange” in a company-reg.

Highlights / Catch Notes

Income Tax

• Deduction Claim Denied: Interest Paid on Capital to Partners Violates Section 24(b) for Rental Property Income.

  Case-Laws - AT : Deduction of u/s 24(b) from house property (rental) income – Interest paid on capital to partners – the claim of the assessee is in clear violation of the provisions of section 24(b) and it cannot be allowed - AT
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• Advertisement Costs for Brand Value Deductible as Revenue Expenditure Under Income Tax Act Section 37(1.

  Case-Laws - AT : Expenses on advertisement - creation of brand value - capital or revenue in nature - it has been rightly treated by it as revenue expenditure, admissible u/s.37(1) of the Act - AT
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• Gifts from Son Under Scrutiny for Tax Omission, But Donor's Financial Capacity Not in Question.

  Case-Laws - AT : Confirmation of addition – Receipt of gifts from son – Simply because such a transaction of gift has not been mentioned in the income tax return of income of the donor filed in India, it cannot lead to any inference that he did not had the capacity - AT
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• Penalty u/s 158BFA(2) Confirmed but Not Levied Due to Estimation-Based Additions in Income Tax Case.

  Case-Laws - AT : Confirmation of penalty u/s 158BFA(2) of the Act – Furnishing of inaccurate particulars - U additons have been upheld on estimation basis , thus, no penalty is leviable - AT
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• Assessee Entitled to Interest After Paying Rs. 4.50 Crores Self-Assessment Tax u/s 140A, Section 244A Applies.

  Case-Laws - AT : The tax paid by the assessee for a sum of Rs. 4.50 crores, is nothing but tax paid under self–assessment tax for the purpose of section 140A and once that is so, the assessee is entitled for interest under section 244A - AT
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Customs

• Sony Cassettes Import Exemption Granted for Manufacturing Use Under Specific Clauses and Export-Import Policy Conditions.

  Case-Laws - AT : Import of Sony Video/Audio Cassette - nexus with manufacture - Since the goods imported had been used for the purposes specified in Clause (a) to (d) or for the purposes of specified in the export import policy, exemption to be allowed - AT
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• Iron Ore Export Case: Inflated Freight Charges Affect Valuation; No Waiver for Pre-Deposit Duty Granted.

  Case-Laws - AT : Valuation - export of Iron Ore Fine and Lumps - Addition of inflated freight to the assessable value to export of goods - prima facie the applicant had not made a case for waiver of pre-deposit of duty. - AT
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Service Tax

• Petitioners must quickly address incorrect facts recorded by the tribunal to ensure timely correction.

  Case-Laws - HC : The petitioner, if felt aggrieved by such wrong recording of the facts by the tribunal, has to approach the same Authority promptly before it fades from its memory. - HC
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• Court Rules No Stay on Tax Demand Penalties u/ss 76 & 78 via Article 226 Petition.

  Case-Laws - HC : Penalty u/s 76 & 78 - Failure to remit tax - no direction can be issued to keep in abeyance the demand of tax assessed and penalty levied, on that ground, under Article 226 of the Constitution of India. - HC
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Central Excise

• Court Rules Non-Woven Fabric Not Dutiable Due to Lack of Marketability Evidence Under Central Excise Act.

  Case-Laws - HC : Captive consumption - marketability - non-woven fabric - Department led no evidence whatsoever to establish that the impugned product in the form that it is, is marketable and therefore dutiable under the provisions of the Act - HC
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• High Court Upholds Order to Detain Tea Garden Lessee's Assets for Unpaid Excise Duty.

  Case-Laws - HC : Recovery of duty from lessee of the tea garden - Default to pay excise duty - power to issue the attachment/detention order for realization of dues - order of recovery sustained - HC
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• Applicant's Battery Packing and Branding May Not Constitute Manufacturing Under Central Excise Law, Prima Facie Case Favors Assessee.

  Case-Laws - AT : Rechargeable battery and battery charger - manufacture - marketability - principal activity/processes carried out by the applicant are in the nature of packing and branding - prima facie case is in favor of assessee - AT
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• Typographical error on PAC identified as procedural mistake; ensures substantive rights aren't denied at Makarpura unit.

  Case-Laws - AT : Wrong mentioning of address in the PAC was only due to typographical mistake. A procedural mistake cannot be made the basis for denying substantive right when such a manufacturing facility is not available at their Makarpura unit of the appellant. - AT
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• Pharmaceutical Manufacturer Denied SSI Exemption for Using Non-Owned Brand Name, Failing Central Excise Criteria.

  Case-Laws - AT : SSI exemption - Manufacturing of pharmaceuticals in name of other person - respondent failed to satisfy condition of SSI benefit manufacturing branded goods of others not proving that the brand name was its own - AT
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VAT

• High Court Rules "RA THERMOSEAL" and "THERMOSEAL" Classified as Toothpaste, Affecting VAT and Sales Tax Regulations.

  Case-Laws - HC : Classification of “RA THERMOSEAL” and “THERMOSEAL” - medicine or toothpaste - Even if one were to apply the common parlance test to the said products of the Applicant, they would be “products capable of being used as toothpaste” - HC
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• Legal Error in LPG and Kerosene Pricing: Deductions Disallowed for Credit Notes to Oil Marketing Companies.

  Case-Laws - HC : Determination of selling price - pricing system of LPG and kerosene assigned to Petroleum Planning and Analysis Cell (PPAC) - The authority committed an error of law in disallowing the deductions from total turnover on the basis of credit notes issued to Oil Marketing Companies - HC
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Case Laws:

• Income Tax

• 2014 (6) TMI 845
  Allowability of deduction of u/s 24(b) from house property (rental) income – Interest paid on capital to partners – Held that:- The assessee claimed deduction on the amount of interest paid to partners on their capital contribution u/s 24(b) of the Act - no material has been placed on record to indicate that any property was acquired, constructed, repaired or renewed, etc., with the borrowed capital on which interest was paid – Relying upon CIT vs. Four Fields Pvt. Ltd. [1997 (5) TMI 23 - PUNJAB AND HARYANA High Court] - deduction for interest u/s 24(b) of the Act can be allowed only where the property has been acquired, constructed, etc., with a borrowed capital and interest is payable in respect of such capital - the claim of the assessee is in clear violation of the provisions of section 24(b) of the Act and it cannot be allowed – Decided in favour of Revenue. Validity of assessment u/s 147 of the Act – Change of opinion – Held that:- There is no fresh basis for which the assessment was sought to be reopened - The AO is harping on the same material to canvass now the amount is not deductible - This amounts to change of opinion - There is no reference to any tangible material coming to the possession of the AO after the completion of the original assessment divulging the escapement of income – Relying upon CIT v. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - there can be no reopening of assessment simply on the basis of change of opinion - there must be some "tangible material" with the AO proposing to issue notice for reassessment leading to the conclusion about the escapement of income - there is no fresh material by which the AO could have entertained reason to believe about the escapement of income - there is no need to deal with the question of disallowance of interest and other expenses - Decided against Revenue.

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• 2014 (6) TMI 844
  Expenses on advertisement - creation of brand value - capital or revenue in nature - Allowability of expenses u/s 37(1) of the Act - Whether the assessee's case can be said to be covered in its favour by the tribunal's order deciding the assessee's appeal against the revision order u/s. 263 for AY 2006-07 – Held that:- What is to be seen is whether any capital asset stands acquired by the assessee through its concerted advertisement campaign - No evidence in this regard has been brought on record. Though ordinarily, the onus to prove its return, and the claims preferred thereby, is only on the assessee Relying upon CIT v. Calcutta Agency Ltd. [1950 (12) TMI 4 - SUPREME Court] - the assessee to have discharged the initial onus on it; the genuineness of the expenditure, or of it having been incurred for the purpose/s of business, as afore-stated, being not in dispute - no holistic view in its respect has been taken or sought to be adopted by it, enquiring into the details of the exercise undertaken by the assessee, but by viewing only one year at a time, even as the same would, as it appears to us, is in the nature or assumes the nature of a project. Apart from the coming into existence of a brand value, there are issues with regard to its valuation and cost - as a relationship between the expenditure and the asset, assuming its existence, has to be direct for it to be considered as forming part of its cost, and which cannot be said to be so in the instant case - Just because an expenditure is debited in books as toward brand building, which it purportedly is, and a statutory recognition has since been accorded to such intangible assets, as a 'brand', would not by itself imply that an advantage in the capital field, or of enduring value to the business, has arisen to the assessee upon incurring the expenditure - there was no basis to hold that the expenditure incurred in the regular course of its business by the assessee, has translated or manifested in, or resulted in the acquisition of, a capital asset or a in a profit making apparatus by the assessee, or of it being in the nature of capital expenditure, i.e., per se - it has been rightly treated by it as revenue expenditure, admissible u/s.37(1) of the Act. We decide accordingly – Decided against Revenue.

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• 2014 (6) TMI 843
  Admission of additional evidence under Rule 46A of the Act – Held that:- Relying upon Prabhavati S. Shah v. CIT [1998 (2) TMI 107 - BOMBAY High Court] - while ordinarily the matter should go back to the file of the CIT(A) to meet the objection/s raised by the AO – it is not necessary or even proper to do so in the facts and circumstances of the present case - the assessee’s counsel had withheld all the papers on account of his differences with the assessee, and who had therefore with great difficulty - through the agency of a common friend, reconstructed the file - there was even a conflict with regard to the receipt of the assessment order by the assessee - being on 28.3.2006 and 29.12.2006 as per the AO and the assessee - it constitute valid grounds for non-furnishing the said details and evidences before the AO in the assessment proceedings, satisfying the condition of r.46A(c) - The CIT(A) was justified in admitting the additional evidences adduced before him by the assessee – Decided against revenue.

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• 2014 (6) TMI 842
  Confirmation of addition – Receipt of gifts from son – Held that:- The documents are prima–facie sufficient to hold the genuineness of the transactions and also the source of the credit entries made in the assessee’s book - The creditworthiness and the capacity of the donor also cannot be doubted also for the reason that he is the managing director of the British company through which he has remitted the sum and has also confirmed the same before the AO in person - his Balance Sheet filed in India shows investment of more than Rs. 10.25 crores as on 31st March 2008 - once all these documents and evidences have been furnished, the primary onus of the assessee stands discharged and the onus shifts upon the AO to prove that the assessee’s explanation as well as the evidences are not tenable on the basis of any material collected by way of enquiry. Simply because such a transaction of gift has not been mentioned in the income tax return of income of the donor filed in India, it cannot lead to any inference that he did not had the capacity - being a resident of U.K., he is required to disclose the source in the return of income filed in the U.K - factum of gift transaction is between son and father, there was no reason to hold that such a gift is not genuine – thus, the order of the CIT(A) is set aside – Decided in favour of Assessee.

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• 2014 (6) TMI 841
  Confirmation of penalty u/s 158BFA(2) of the Act – Furnishing of inaccurate particulars - Unexplained investment in jewellery, undisclosed source of cash and unexplained investment in valuable articles – Held that:- The addition on account of cash and investment in articles were sustained on estimated basis - With respect to the addition on account of investment in jewellery it is seen that Assessee had stated to have received the jewellery from her sister in Nairobi but in the absence of any supporting declaration filed before customs/ immigration, addition to the extent of 190 gms of jewellery was sustained - there is nothing to suggest that the explanation of the Assessee was found to be untrue – Relying upon CIT vs. Becharbhai Parmar [2012 (4) TMI 418 - GUJARAT HIGH COURT] - the penalty u/s 158BFA(2) is not mandatory in nature - Section 273B which provides that penalty shall not be imposed in certain cases on the assessee proving that there was reasonable cause for failure to pay tax refers to several provisions such as sections 271, 271A etc. makes no mention of Section 158BFA(2) - This still does not mean that penalty under section 158BFA(2) is mandatory – the additons have been upheld on estimation basis , thus, no penalty is leviable – Decided in favour of assessee.

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• 2014 (6) TMI 840
  Deletion of penalty u/s 271(1)(c) of the Act on account of low GP – Failure to produce books of accounts and other documentary evidence – Unexplained investment u/s 131 of the Act – Held that:- In the absence of books of accounts, the Revenue was fully justified in making additions but the quantum addition is not sufficient for levying of penalty u/s. 271(1)(c) of the Act for the reason that the parameters of judging the justification for addition made in assessment case of Assessee is different from the penalty imposed on account of concealment of income – Relying upon Navjivan Oil Mills. Versus Commissioner of Income Tax [2001 (7) TMI 81 - GUJARAT High Court] - when the addition was made on estimate basis, penalty u/s 271(l)(c) was not leviable – the penalty on the addition is set aside. There is no finding of the AO that the bank account in which the cash sales were deposited were disclosed in the balance sheet - thus, the matter is remitted back to the AO for verification of the submissions and as to whether the bank account in which the cash sales are deposited was disclosed in Balance Sheet and thereafter decide the issue – Decided partly in favour of Revenue.

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• 2014 (6) TMI 839
  Estimation of income - increase in GP rate - addition in trading results – Rejection of books of accounts – Held that:- The assessee had turnover and had transaction with 252 different parties - the AO rejected the books of account and increased GP rate by 4% - the AO gathered no additional material that could help him recompute the income of the only a small fraction of appellant's gross turnover of Rs.50.3 crores, the effect of difference on confirmation of account results in the appellant having booked lesser expenses in respect of these five parties compared to what was shown on confirmation from them - the very basis of rejection of books of accounts is faulty as circumstances did not require such a drastic measure by disregarding audited books and vouchers - The AO has not given details of the manner in which any income was not booked or any expenses were over booked - the action of the AO in making the best judgement assessment, thereby increasing the GP of the assessee by 4% was based on incorrect appreciation of the facts, on insufficient facts to reject the books, suffers from lack of natural justice to the assessee u/s 144 - the expenses were clearly in the nature of prior period expenses and need to be disallowed in making the computation of income for the current year - CIT(A) has dealt with the entire issue and has rightly decided the issue in favour of the assessee and there was no infirmity in the order – Decided against Revenue.

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• 2014 (6) TMI 838
  Cancellation of reassessment of proceedings u/s 147 of the Act – Change of opinion – Arrear wage revision - Held that:- In order to willy nilly bring the amount to tax the AO again issued notice u/s 148 of the Act - assessee is a government loss making company and in the year as it turned into huge profit, it was decided to revise the wages and give the arrears to employees which is being sought to be reassessed – Relying upon Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] - reassessment cannot be made on change of opinion, assessment cannot be reopened merely on the basis of audit objection as it constitutes mere an opinion by some other agency. The issue is about wage revision (arrears) and is duly considered during the course of assessment by way of specific query which was replied by the assessee – AO being satisfied allowed the claim during regular assessment u/s 143(3) - Based on the audit objection AO proposed section 154 and again required the assessee for explanation which was provided – section 154 proceedings were also dropped - the assessment was again reopened u/s 147 – the AO in order to tow the line of audit objection and to avoid any ramification therefrom reopened the assessment u/s 147 without valid reason - Once the issue was examined during the course of assessment which emerges from the record so clearly, it cannot be held to be a proper case of reopening of assessment – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue.

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• 2014 (6) TMI 837
  Deletion of disallowance of USA expenses - non deduction of TDS on remittance to non-resident - reimbursement of expenses - Held that:- Following Himalya International Ltd. Versus DCIT Circle-12(1), New Delhi and ITO, Ward-12(4), New Delhi Versus Himalya International Ltd. [2014 (3) TMI 617 - ITAT DELHI] - all US expenses incurred by the consignment agent on behalf of the assessee were the responsibility of the assessee as per MOU dated 19.9.2002 and subsequent agreement dated 30.3.2004, which were also certified by CPA audit report, when actual export sale was effected at USA through consignment agent on behalf of the assessee, then expenses claimed by the assessee for the purpose of business cannot be treated as post sales expenses and observations and findings of the Assessing Officer are not correct and justified in this regard and we set aside the same to this extent only – relying upon GE India Technology Centre Private Ltd. Versus Commissioner of Income Tax & Anr. [2010 (9) TMI 7 - SUPREME COURT OF INDIA] followed – thus, Circular No. 715 dated 8.8.95 is not applicable. The AO concluded the assessment n contradictory finding because on the one hand, the AO has considered gross sales realized value in USA as sales of the assessee for the financial year under consideration and on the other hand the AO held that the export sale was completed when the consigned goods left the Indian Customs Border and all expenses incurred thereafter were post sale expenses – thus, the first part of findings of the AO are correct that the gross sales realized value in USA is the export sales of the assessee but export sales was not completed when the goods left the Indian Custom Borders because it was consignment which was intended to be sold through consignment agent of the assessee i.e. M/s Global Reliance In. in USA - CIT(A) has very elaborately dealt with the issue and had rightly deleted the addition – Decided against Revenue. Deletion of late deposit of ESIC and PF - Held that:- Following Commissioner of Income Tax Versus AIMIL Limited and others [2009 (12) TMI 38 - DELHI HIGH COURT] - CIT(A) has allowed the claim of the assessee on account of payment of employees contribution / PF and ESIC - the amount of PF/ESIC was deposited before the due date of filing of return u/s 139(1) of the Act – Decided against Revenue.

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• 2014 (6) TMI 836
  Disallowance of interest – Applicability of Rule 8D of the Rules – Investment in shares – Held that:- CIT(A) was of the view that a disallowance has to be made in accordance with the provisions of rule 8D(2)(iii) - nothing is borne out from the record that which are the expenses which do not have any bearing or cannot be said to be attributable for earning of exempt income and which expenses are directly relatable to other business activities - In the absence of details, the formula prescribed under rule 8D(2)(iii), has to be applied - provisions of rule 8D is applicable from the AY 2008–09 – thus, the order of the CIT(A) is upheld – Decided against Assessee. Grant of interest u/s 244 of the Act - Self–assessment tax paid – Held that:- Self–assessment tax is payable on the income shown in any return of income required to be furnished under various provisions of the Act, after taking into account, the amount of tax, if any, paid earlier which can also include advance tax - the self–assessment tax includes any amount of tax which has already been paid under the provisions of the Act - the assessee has paid the tax for the purpose of its taxable income for the AY 2008–09, in the month of July 2008 - due date for filing the return of income was 30th September 2008 - If the tax has been paid prior to the date of filing of return of income, then it has to be construed as amount of "tax already paid" as contemplated in clause (i) of sub–section (1) of section 140A. The tax paid by the assessee for a sum of Rs. 4.50 crores, is nothing but tax paid under self–assessment tax for the purpose of section 140A and once that is so, the assessee is entitled for interest under section 244A – Relying upon Commissioner of Income-tax Versus Vijaya Bank [2011 (7) TMI 582 - KARNATAKA HIGH COURT] – thus, the assessee is entitled to refund of self–assessment tax along with the interest u/s 244A, which is to be calculated from the date of payment of tax till the date of refund – Decided in favour of Assessee.

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• Customs

• 2014 (6) TMI 850
  Modification of stay order - Interference with SCN - learned Single Judge stayed the SCN - suspension of the petitioner's registration under the Courier Imports and Exports (Clearance) Regulations, 1998 - Held that:- Stay can be confined to the actual passing of final orders pursuant to the show cause notices impugned in the Writ Petitions. If so, no serious prejudice would be caused to any of the parties - The interim stay granted by the learned Single Judge is modified and the stay is confined to actual passing of final orders on the basis of the show cause notices. It is made clear that the proceedings pursuant to the show cause notices may go on, but the stay is confined to actual passing of final orders - Decided partly in favour of Revenue.

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• 2014 (6) TMI 849
  Waiver of pre-deposit - import of Sony Video/Audio Cassette - nexus with manufacture of the export goods. - benefit of exemption Notification No.2/95-CE - Whether the Appellant namely M/s. Nisith Impex Pvt. Ltd . is eligible to the benefit of Notification No.133/94-CUS dated 22.06.1994 which exempts the specified goods when imported into India, by a unit in FPZ or FTZ, for the production or manufacture of articles for export out of India - Held that:- It is a case of the Appellant that they had duly carried on the manufacture process on the imported video cassettes/audio cassettes in the manufacture of articles for export and after fulfilling the export obligation disposed the said goods as per permission granted by the Development Commissioner. Since the goods imported had been used for the purposes specified in Clause (a) to (d) or for the purposes of specified in the export import policy in the manner approved by the Development Commissioner as laid down in the said Customs notification they are eligible for full exemption on the impugned goods under Notification No.133/94-CUS. case may be remitted back to the adjudicating Commissioner for fresh decision and therefore after granting waiver of pre-deposits of the amounts adjudged - matter remanded back.

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• 2014 (6) TMI 848
  Waiver of pre deposit - export of Iron Ore Fine and Lumps - Valuation - Addition of freight to the assessable value to export of goods - Held that:- As per the revenue the freight has been inflated to suppress the value of exported goods. This is evident from the evidence on record i.e. the chartered party agreement the actual freight rate is at the US$ 27 PMT. The adjudicating authority in para 18.3 also gave a finding that for the purpose of receiving proceeds for goods the applicant made parallel agreement showing lower freight rate. The applicants received the remittance as per the actual agreement according to which the freight is actually US$ 27 PMT. In these circumstances, prima facie the applicant had not made a case for waiver of pre-deposit of duty. The applicants M/s. Twenty First Century Iron & Steel Ltd. are directed to deposit an amount of Rs.11,18,700/- within a period of eight weeks. On deposit of the above mentioned amount, the pre-deposit of the remaining amount of penalties are waived - stay granted partly.

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• Corporate Laws

• 2014 (6) TMI 847
  Winding up petition - Respondent took premises on leave and license from the petitioning-creditor for lock in period - Respondent vacated the premises before the end of that lock-in period - Appellant claim the license fee for the remainder of that lock-in term - Respondents claims that there is no debt - Held that:- There are, as is well-established, two primary legal components to any such agreement: the permission or license to use and occupy without creating any rights in the licensee in the property in question, and the licensee's obligation to pay the licensor the stipulated license fee. Possession is, therefore, the sine-qua-non of any such agreement. The surrender of possession cannot but be a termination of the agreement, whether these words are used or not. Without possession, there is no question of any leave and license agreement of immovable property. The agreement is undisputed. Its terms are known. The company's premature exit is not denied. There is no material to evidence any oral understanding and, in any case, the contract forbids any such oral understanding.1 What Treasure World therefore asks Indiabulls to prove is the negative - i.e., was there not an oral understanding to abandon the written contract? I do not see how Indiabulls can possibly do this, or even why it should be asked to, especially since Treasure World has been unable to produce anything to indicate that this state of affairs ever existed. It seems to me highly improbable that, had there been any such understanding, it would not have been recorded. Treasure World had multiple opportunities to do this. Received wisdom has it that such a recording of abandonment would and should have been done at the first such opportunity, and that the record must so show. What Treasure World's email of 29th October 2012 is merely interesting; what it does not say is crucial. Indiabulls' claim for 'liquidated damages' is wholly distinct. It arises only under clause 9.9, one that provides for liquidated damages. But it does not operate where there is a termination by the licensee before the end of the lock-in period. It comes into effect only when the licensee has overstayed his welcome: when it has not vacated, though bound to do so, though the licensor is ready to refund the security deposits. Indiabulls' claim for liquidated damages is for a period from 1st November 2012 to 11th December 2012. It stands apart from Indiabulls' claim for arrears (for the period from June 2012 to 31st October 2012) when Treasure World was undeniably in possession, and, too, from Indiabulls' claim for license fees and other charges from 1st November 2012 to the end of the lock-in-period, 14th June 2014. There are, therefore, three distinct claims that Indiabulls makes: Claim 1 is for a total of Rs.61,16,648.25 as arrears for June 2012 to 31st October 2012, the time Treasure World used the premises as a licensee but did not pay the license fees and charges. Claim 2, not pressed, is for Rs.32,75,923.96 as liquidated damages for the period 1st November 2012 to 11th December 2012. Claim 3 is for Rs.2,33,30,970.73 as the license fee and maintenance charges for the unexpired term of the lock-in period from 1st November 2012 to 14th June 2014 - Claim 1 is soon despatched. It was undoubtedly payable by Treasure World. It is, however, in the aggregate amount of Rs.61,16,648.25, lower than the security deposit of Rs.73,12,145/-. Once the latter is adjusted, Claim 1 is fully paid. If the other two claims are also not legally due, then there is no debt at all; indeed, it is Indiabulls that would be indebted to Treasure World, as it would have to refund the balance security deposit after adjusting the security deposit. Claim 2, for liquidated damages, is also not a debt. By its nature, it must be first adjudicated. That, as we shall see, is now well settled. E-City Media P. Ltd. vs Sadhrta Retail Ltd., [2009 (11) TMI 508 - HIGH COURT OF BOMBAY]; Union of India v Raman Iron Foundry, [1974 (3) TMI 105 - SUPREME COURT]. License fees for the remainder of the lock-in period, couched in the manner it is in the contract, cannot be said to be one for damages of any kind. Treasure World's liability arises not from Clause 3.2, which makes no mention of any payment at all, but only says that there is a lock-in period of 36 months during which Treasure World may not terminate. It arises under clause 13.2: should Treasure World, despite the interdiction of clause 3.2, terminate after that lock-in period commences but before it ends, it incurs an immediate liability to pay for the remainder of the 36-month term. This is a debt. No valid defence to Claims 1 and 3 taken together. The amounts of Rs.61,16,648.25 and Rs.2,33,30,970.73, less the amount of the security deposit, Rs.73,12,145.00, i.e., Rs.2,21,35,473.98 is due and payable by Treasure World to Indiabulls. Treasure World has, without valid justification, neglected to pay this amount to Indiabulls. An order of admission and advertisement is justified. However, given the discussion, I am inclined to afford Treasure World a final opportunity to make payment. - Decided in favour of appellant.

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• 2014 (6) TMI 846
  Oppression and mismanagement of Company - Held that:- Mehra family is controlling the affairs of Respondent No. 1 company and the bank accounts have been opened in the name of the Respondent company after obtaining necessary approval of the Board of Directors in the interest of the company. It is true that the management of the company is empowered to open as many bank accounts in the name of the company as is considered expedient in the interest of the business of the company. However, it is also relevant to emphasize that the said bank accounts ought not to be used for diversion of funds of the company. On one side, the Petitioners/Applicants Advocate has alleged the diversion of funds of the Respondent company. On the other hand, the Respondent Advocate has controverted that there is no case of siphoning of funds of the company. Under these facts and circumstances, I am of the considered view that the Respondent company be allowed to continue the bank accounts in the interest of the company and the Petitioners be given liberty to look into the receipts and payments of money in the bank accounts so as to ensure that the funds are utilised in the interest of the company. - Decided partly in favour of Petitioners.

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• Service Tax

• 2014 (6) TMI 867
  Waiver of pre-deposit of service tax - commercial and industrial construction services - Residential complex services - it was contended that, petitioner neither charged the service tax from the said Board nor the Board paid the amount on such account and, therefore, any direction to deposit the service tax would cause a serious financial hardship which the Tribunal ought to have considered at the time of disposal of the said application. - Held that:- It appears to the Court that the challenge is basically made on the wrong recording of the submissions made before the Tribunal as the Tribunal recorded that the petitioner admitted liability towards by service tax to the tune of Rs. 40 lacs and odd as per Chart produced before the Tribunal. The petitioner, if felt aggrieved by such wrong recording, has to approach the same Authority promptly before it fades from its memory. From the Chart filed before the Tribunal it appears that the West Bengal Housing Board have communicated the liability on the works contract service and the liability upon service tax at Rs. 40,81,074/-. Though the Tribunal should not have used the expression admitted but meaningful reading of the written submission as well as the Chart annexed thereto does not lead to any confusion that the liability is foisted upon the petitioner towards service tax to the tune of Rs. 40 lacs and odd. The liability which is apparent and prima facie appears to be a liability of the contractor under the work order of the contract, the Tribunal in my considered view has not committed any illegality in directing the petitioner to deposit the amount shown in the said Chart after deducting the amount already paid by the petitioner. - The petitioner has volunteered in depositing Rs. 5 lacs with the department on account of service tax. It is manifest from the materials placed from the record that the petitioner, who is working as a contractor would suffer greater hardship if the entire amount is directed to be deposited with the Service Tax Authority. This Court feels that to bring the equilibrium the petitioner is directed to furnish a Bank Guarantee to the said sum of Rs. 35,81,074/- within a week from date. - tribunal to dispose off the appeal expeditiously - Decided conditionally in favour of assessee.

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• 2014 (6) TMI 866
  Penalty u/s 76 ie., till the date of amendment and the introduction of the proviso which bars imposition of penalty under Section 76 of the Act if penalty under Section 78 of the Act is imposed. In such circumstance, the contentions raised by the petitioner regarding the illegality in the levy of penalty cannot be sustained. - Decided against the assessee. Adjustment of penalty already paid - Held that:- the amounts already paid have also been taken into account. Ext.P5 is an order issued, pursuant to the directions of this Court directing credit to be given to all payments effected by the petitioner. - credit of penalty already deposited to be given - decided in favor of assessee. Adjustment of penalty levied i.e. to be reduced to the extent amount of service tax has been deposited earlier - Held that:- Such amounts cannot be adjusted, since, penalty under Section 78 of the Act has to be on the defaulted amounts subject to a maximum of double the actual amounts due. The petitioner having failed to remit any amounts as tax in the relevant years, no adjustments can be made in the penalty levied, on the basis of amounts paid subsequent to the relevant years. Pray to keep the recovery proceedings in abeyance till the additional 4th respondent pays the amounts to the petitioner - Held that:- no direction can be issued to keep in abeyance the demand of tax assessed and penalty levied, on that ground, under Article 226 of the Constitution of India. However, considering the fervent plea made by the learned counsel for the petitioner, the petitioner shall be permitted to pay the amounts due in instalments. - entire amount allowed to be deposited in five installments - Decided partly in favour of assessee.

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• 2014 (6) TMI 865
  Condonation of delay - Disallowance of CENVAT Credit - Penalty u/s 11AC - Held that:- appellant assumes that there was no delay whatsoever in filing of the appeal, since the copy of the adjudication order was first served on the appellant on 09.11.2010, whereas the order was served on 28.04.2010. There is no explanation offered for the belated filing of the appeal. It is the clear case of Revenue that the order in original was served on the authorised representative of the appellant Shri Kushal Mani, on 28.4.2010. This fact was clearly pleaded by the jurisdiction Commissioner, to which there is no response by the appellant. - there is no justification offered for the clear delay in preferring the appeal - Decided against assessee.

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• 2014 (6) TMI 864
  Waiver of pre-deposit - Service of order - Whether the service of the adjudication order through “Speed Post” is proper or not - Held that:- As held by the Hon'ble High Court of Punjab & Haryana in the case of Best Dyeing (2007 (10) TMI 422 - PUNJAB & HARYANA HIGH COURT), the service through “Speed Post” is not a proper service. The Hon'ble High Court has also observed that in the Finance Act, 2013, an amendment took place in Section 37C of the Central Excise Rules, 1944, wherein the service through “Speed Post” is incorporated as “not a valid service”. Therefore, I hold that the service through “Speed Post” is not a proper service during the impugned period. As the appellant filed an appeal before the Commissioner (Appeals) as soon as he received the adjudication order, therefore, the appeal filed before him is within the prescribed time - Matter remanded back - Decided in favour of assessee.

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• 2014 (6) TMI 863
  Service Tax demand - difference in the figures available in the income tax returns and the value of services declared in the ST-3 returns filed by the appellants - Held that:- It is observed that calculation of Service Tax liability based on the income tax return and ST-3 returns is the basic point of the Revenue. Filing documents and pointing of correct calculation in determining of Service Tax liability can always be agitated by the appellant before the appellate authority. Strictly speaking, the point agitated by the appellant before the first appellate authority cannot be considered as additional grounds on some other legal issues which were not taken up before the adjudicating authority. Out of total duty demand of Rs.3,40,573/- confirmed by the adjudicating authority, an amount of Rs.1.5 lakh was deposited by the appellant at the time of admitting the stay. In the interest of justice and in view of the judicial pronouncements on the issue relied upon by the appellant, the matter is required to be remanded to the adjudicating authority to grant a personal hearing to the appellant to explain their case regarding quantification of duty and re-conciliation of difference between the income tax figures vis-a-vis those given in ST-3 returns. Option of 25% payment of penalty admissible under Section 78 of Finance Act, 1994 has also not been extended to the appellant. Quantum of penalties under Section 76 of the Finance Act, 1994 will also depend upon the short levy, if any, recalculated and determined by the adjudicating authority. - matter remanded back - Decided in favour of assessee.

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• 2014 (6) TMI 862
  Adjustment of shortfall of tax with excess payment of service tax - demand based on difference ST-3 return - Demand of service tax u/s 11D - Enhancement in rate of tax - Held that:- The appellant's plea is that there was excess payment to the extent of about Rs.13 lakhs during October, 2003 and if this excess amount is taken into account, there would not be any demand against them under Section 11D. The appellant's counsel has vehemently pleaded that they have documents to prove that the entire amount collected from the customers as service tax during the period from October, 2002 to September, 2003 was paid to the Government. Since this is a matter of reconciliation, the same can only be done by the original adjudicating authority for which this matter would have to be remanded. - matter remanded back. Difference in ST-3 return - Held that:- The appellant's contention is that the value of taxable service declared in the ST-3 returns also includes the charges received from other telecom service providers for interconnection on which no service tax is payable in terms of the Board's Circular No.91/2/07/ST dated 13.12.2000 - matter remanded back for verification. Demand due to enhancement in tax rates - rate of service tax had been enhanced from the earlier 5% to 8% Adv. w.e.f. 14.05.2003 - Held that:- the service tax has been charged at the enhanced rate on the entire amount received during the month of May, 2003, which may be for the period prior to 14.05.2003. In view of this, this demand is also not sustainable and would have to be remanded to the original adjudicating authority for requantification, keeping in mind the principle that the enhanced rate of 8% Adv. effective from 14.05.2003 would be applicable only to the amount received for the taxable services provided w.e.f. 14.05.2003 and the enhanced rate would not be applicable for the amounts received, even if after 14.05.2003, for the services provided prior to 14.5.2003 - matter remanded back - Decided in favour of assessee.

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• Central Excise

• 2014 (6) TMI 859
  Captive consumption - marketability - non-woven fabric - Excise duty, interest and penalty - Assessee engaged in the manufacture of Jute backed Floor Coverings - Jute backed Floor Coverings are exempted from the payment of duty - Assessee contended that non-woven fabric which is cleared in market is different from the fabric which is captively consumed and the same is not marketable as such, hence it is not excisable – Whether under the facts and circumstances of this case, the impugned order passed by the CESTAT, holding that the loosely assembled fibre web in roll form emerging at a stage before the exempted finished jute carpet, is marketable and therefore liable to duty, without considering the relevant records and material submitted by the Appellants, is correct and sustainable in law. Held that:- CESTAT in the impugned order comes to a finding that there is no dispute about the fact that the impugned product "goes through first pass only whereas goods cleared from the factory go through second pass. Therefore, compactness/tensile strength/dimensional stability of 'non-woven fabrics' cleared from factory is much more than the intermediate product." Having come to the aforesaid conclusion and itself making a distinction between the impugned product and the "non-woven fabrics" that were being cleared by the Appellant on payment of the requisite Excise Duty, we find that the CESTAT misdirected itself by shifting the burden on the Appellant of establishing that the impugned product is not marketable. Department led no evidence whatsoever to establish that the impugned product in the form that it is, is marketable and therefore dutiable under the provisions of the Act. Furthermore, we find that the CESTAT has not taken into consideration several orders passed by it earlier in similar matters such as that of the Appellant and which have been referred to by us, earlier in this judgement - Matter remanded back - Decided in favour of assessee.

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• 2014 (6) TMI 858
  Recovery of duty from lessee of the tea garden - Default to pay excise duty - power to issue the attachment/detention order for realization of dues - Assessee contends that they were placed in possession of the tea garden much after the period for which the impugned demand was issued and hence no recovery could be made of the alleged outstanding central excise dues from them (lessee) and nor the tea manufactured by them from the tea garden/factory could be attached/detained - Held that:- The petitioners then in their written submission contended that on the basis of interim order passed in the case the amount mentioned in the demand has been recovered by the Department and hence it cannot be now recovered from any of the petitioners and specially from the petitioner of WP(C) No.3049/2006 i.e. defaulting assessee. If that is the argument, then it is for the petitioner to satisfy the authorities that how, when and in what manner they or any of the writ petitioners satisfied the impugned demand or/and how, when and in what manner, the authorities recovered the entire dues from any of the writ petitioners. In this bunch of petitions, no documents have been filed to show that impugned demand has already been satisfied and if so, in what manner. Neither the petition filed by the defaulting assessee and nor the ones filed by the alleged lessees of defaulting assessee has any merit. - liberty is granted to writ petitioners to file conclusive proof before the competent recovering authorities to show that the petitioners have satisfied the impugned demand and made payment of Rs. 18,64,243. - Decided against the petitioners.

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• 2014 (6) TMI 857
  Denial of rebate claim - recovery of erroneously sanctioned rebate - contradictory statement of transporters - Cross examination opportunity not given - Held that:- Government of India has issued Notification No. 21/ 2004-C.E. (N.T.) dated 06.09.2004 for grant of rebate of central excise duty paid on materials used in the manufacture of export goods. The essential requirements of the notification for claiming rebate are that the duty paid materials, purchased directly from the material manufacturers or from registered dealers, are actually received by the manufacturer of export goods; that the same are actually used in the manufacture of export goods; and that the export goods so manufactured are actually exported. After the Revenue started its investigations regarding alleged fraudulent rebate claims by the main appellant, the Maharashtra Value Added Tax authorities obtained copies of various documents from the Central Excise Department on the issue and commenced independent investigations from VAT angle. During this investigation the statements of the transporters were recorded by Maharashtra Sales Tax Authorities in their own language ‘Hindi’, which indicate that the inputs in fact have been transported and delivered to the factory of main appellant or to its two job workers at Vasai, which contradict the statements recorded by DGCEI in English. The two set of statements of the same persons on the same issue of transportation of inputs by two investigating authorities are contradictory to each other. The report of MVAT authorities also revealed that the two job workers of the main appellant have very large manufacturing capacity & have huge machinery for manufacture, and had incurred huge electricity expenditure. We note that the copy of the said MVAT Report was not properly appreciated by the adjudicating authority. We also find that the adjudicating authority has nowhere tried to verify from the records of the Deputy/ Assistant Commissioner having jurisdiction over the factory of the main appellant to know whether any additional intimations have been filed mentioning the names and addresses of more job workers. Order passed by the adjudicating authority is set-aside and matter is remanded back to the adjudicating authority for deciding the same afresh after affording the appellants an opportunity to explain their case and after allowing the appellants cross-examination of those persons whose statements are relied upon - Decided in favour of assessee.

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• 2014 (6) TMI 856
  Waiver of pre deposit of duty - manufacture - marketability - whether various processes/activities involved in placing the rechargeable battery and battery charger in blister pack by the Applicant would result into manufacture of an excisable goods within the meaning of Section 2(f) of CEA, 1944. - Penalty u/s 11AC - clandestine manufacture and removal of excisable goods - Held that:- Prima facie analysis of the facts disclose that the principal activity/processes carried out by the applicant are in the nature of packing and branding and at this stage it is difficult to say that such processes would fall under the scope of the definition of manufacture in absence of a Chapter Note or Section Note. The judgments cited by the Ld. Special Counsel on the relevance of marketability in ascertaining whether the present resultant product after packing becomes an excisable product or otherwise, in our opinion, are out of place. In the said judgments the issue involved was whether an intermediate product emerges during the course of manufacture of final products be dutiable, thus necessitating the test of the product's marketability. The judgment of Flex Engg's case [2012 (1) TMI 17 - Supreme Court of India] is also not relevant to the facts in hand as in the said case the issue was whether CENVAT Credit would be admissible in the premises of the assessee on the machines, as the process of testing carried out in the said premises be called as a process of manufacture. Besides, applicant had discharged the service tax on the said process with effect from July, 2010, and they exercised their option under Voluntary Compliance Encouragement Scheme, 2013 (VCES) for the period from October, 2007 to June, 2010. In these premises, we are of the view that the Applicant could able to make out a prima facie case for total waiver of pre deposit of dues adjudged, accordingly, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Stay granted.

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• 2014 (6) TMI 855
  Interest demand - Valuation of goods - cost of the free issue materials were not included in the value of finished goods - Demand of differential duty - whether interest under Section 11AB of CEA, 1944 is attracted on account of the major portion of differential duty paid in July, 2001 and balance in March, 2003 for the clearances effected during July, 1996 to March, 2001 - Held that:- Under sub-section (1) of Sec. 11AA of the Act, as this provision stood at the material time, an assesse who fails to pay the duty determined under sub-section (2) of Section 11AA of the Act, within 3 months from the date of determined of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11/5/2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assesse for the period upto 10th of May, 2001. In respect of the amount of duty paid for the period from 11/5/2001, interest on duty is leviable under Section 11AB of the Act in as much as sub-section (1) of Section 11AA opens with the clause subject to the provision of Section 11AB . In the result, interest can be levied on that part of the amount of duty which pertains to the period from 11/5/2001 to 30/6//2001. This liability, obviously, is unaffected by the fact that such duty was paid within the period of 3 months prescribed under Section 11AA (1). It is, therefore, held that the appellant is liable to pay interest under Section 11AB of the Act on that part of the amount of duty which pertains to the period from 11/5/01 to 30/6/01 and such interest shall be paid for the period from the due date to the date of payment - Decided against assessee. Penalty u/s 11AC - Held that:- Issue of inclusion of value of Moulds supplied free of cost in the value of the finished goods, during the relevant period was unsettled due to conflicting views/decisions on the subject. The said issue got settled only after the Larger Bench decision in the case of Mutual Industries Ltd. (2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI). In view of the judgment in Anil Polymers case (2008 (12) TMI 138 - CESTAT MUMBAI), I find merit in the submission of the Ld. Advocate for the applicant on the issue of allegation suppression and consequent imposition of penalty. Thus, the penalty imposed on the appellant is not sustainable and accordingly, the same is set aside. - Matter remanded back - Decided partly in favour of assessee.

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• 2014 (6) TMI 854
  Valuation of goods - inclusion of inspection charges - Held that:- inspection is being carried out only in respect of sale to M/s. U.P. Jal Nigam. There is no inspection being carried out in respect of sales made to other persons. As such, it can be concluded that such inspection, which was got done from a third party, was on insistence of U.P. Jal Nigam and has got nothing to do with the marketability in the ordinary course. If the same was necessary for marketability of the goods, the same would have been carried out in 100% of the goods manufactured by the assessee. Inasmuch the said inspection is only in respect of sale to one party and inspection charges collected by the appellant from the said party are being paid to the inspecting authorities, we find no justifiable reason to hold that same would be part of the assessable value of the goods - Decided in favour of asessee.

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• 2014 (6) TMI 853
  GAS project - goods cleared from one unit whereas the PAC issued was in the name of appellant’s other unit. - facilities to maintain Butt Weld Fittings - Clearance of certain pipe fittings for the project ‘Neelam Heera Reconstruction Project’ and ‘North Tapti Project’ under Project Authority Certificate (PAC) without payment of duty as per the provisions of Notification No. 6/2006-C.E., dated 1-3-2006 - non-admissibility of exemption under Notification No. 6/2006-C.E. - Held that:- wrong mentioning of address in the PAC was only due to typographical mistake. A procedural mistake cannot be made the basis for denying substantive right when such a manufacturing facility is not available at their Makarpura unit of the appellant. As the details of the same are required to be gone into at the time of final hearing, prima facie appellant has made out a case for complete waiver of the stay. Accordingly, there shall be stay from recovery of confirmed dues and penalties till the disposal of the appeal - Stay granted.

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• 2014 (6) TMI 852
  Appeal before Commission (appeal) - Bar of limitation - Delay in delivery of order - Held that:- Since the delivery of Order-in-Original was made by dispatch through speed post which has already been held to be improper delivery. The date of receipt of the order by the appellant subsequently, as submitted by the learned counsel has to be treated as date of receipt. Since both sides agree that if that is taken into account appeal filed by the appellant before the Commissioner (Appeals) was within time, we consider it appropriate that at this stage itself the impugned order should be set aside and matter remanded to the Commissioner (Appeals) for decision on the stay application as well as appeal in accordance with law - Matter remanded back - Decided in favour of assessee.

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• 2014 (6) TMI 851
  Denial of SSI exemption - Manufacturing in name of other person - Held that:- Investigation result revealed discovery of the fact that the business activities of M/s, Soft Pharmaceuticals was carried out from the premises of the respondent situated at 47-48, Industrial Area, Phase-II, Chandigarh, where Administrative Office of the said office was functioning. Shri M.D. Sharma, Representative of M/s. Soft Pharmaceuticals sits in the administrative office of the respondent. The respondent categorically stated in the statement recorded under Section 14 of the Central Excise Act, 1944 that it had manufactured and sold goods under the brand name 'SOFT Pharmaceuticals' w.e.f. April, 2003. The investigating officers when examined invoices no. 1 dated 1.4.2003 to Invoice no.1524 dated 30.08.2003 along with pamphlets found that product carried out the brand name 'SOFT Pharmaceuticals' and that also carried the logo 'SOFT Pharmaceuticals'. Although a statement was given that "Soft Pharmaceuticals" was promoter of the product manufactured by the respondent that could not be established by the respondent. The respondent also discharged duty liability upon investigation results and discovery of the materials in the course of investigation - When record reveals aforesaid factual matrix based on evidenced and unlawful benefit was enjoyed by respondent, in absence of rebuttal leading cogent evidence by respondent for 'SOFT Pharmaceuticals' brand belonged to it. Revenue should succeed in its appeal - respondent failed to satisfy condition of SSI benefit manufacturing branded goods of others not proving that the brand name was its own - Decided in favour of Revenue.

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• CST, VAT & Sales Tax

• 2014 (6) TMI 861
  Classification of “RA THERMOSEAL” and “THERMOSEAL” - medicine or toothpaste - Interpretation of Schedule Entry C-I-24 of the BST Act - whether the products of assessee are excluded from Schedule Entry C-I-24 by virtue of the fact that they are products capable of being used as a toothpaste - Held that:- On a comparison of Schedule Entry C-I-24 (before amendment) and C-II-37 (after amendment), it is clear that with effect from 01-10-1995, the exclusions appearing in the “medicines” Entry C-I-24 at (a), (b) & (c) were deleted from the new “medicines” Entry C-II-37, thereby expanding the scope of the Entry relating to “medicines” - products used by people as a toothpaste with a view to clean the teeth as part of one's daily exercise, is commonly understood as a toothpaste. Similarly, if such products besides cleaning the teeth also serve as a preventive measure by virtue of some medicinal contents therein, then it can be called as a “medicated toothpaste”. From the advertising material, it is clear that the Applicant itself claims that the said products have been specifically formulated with a pleasant fresh taste and low abrasive formula for cleaning the teeth and leaving the mouth tingling fresh. Even the said products are marketed as “No.1 toothpaste for sensitive teeth”. To our mind therefore, it is clear that though the said products of the Applicant are “medicines”, that would fall under Schedule Entry C-I-24, the same would be excluded from the said Entry by virtue of the exclusion clause therein viz. “Products capable of being used as toothpaste, tooth powders, cosmetics, toilet articles and soaps”. Even applying the common parlance test, we have no hesitation in holding that though the said products of the Applicant fall within the “medicines” Schedule Entry C-I-24, they are products capable of being used as a toothpaste and would therefore be excluded from the said Entry. Even if one were to apply the common parlance test to the said products of the Applicant, they would be “products capable of being used as toothpaste” and therefore, excluded from Schedule Entry CI- 24. In this regard, the reliance placed by Mr Sonpal, on the judgment of the Supreme Court in the case of Commissioner of Central Excise, New Delhi v/s M/s Connaught Plaza Restaurant (P) Ltd., New Delhi,[2012 (12) TMI 149 - SUPREME COURT] is well founded. This being the position, the MSTT was fully justified in coming to the conclusion in its order dated 12th January 2001 that the said products of the Applicant were capable of being used as a toothpaste which was specifically excluded from the “medicines” Schedule Entry C-I-24. The said products of the Applicant, despite having the basic character of “medicines”, did not fall in the “medicines” Entry C-I-24 because of the exclusion contained therein - Decided against assessee.

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• 2014 (6) TMI 860
  Determination of selling price - pricing system of LPG and kerosene assigned to Petroleum Planning and Analysis Cell (PPAC) - petitioner revised its liability of tax reducing the turn over as per the final price. After fixing the price in accordance with credit or debit note, the petitioner used to fix its tax liability calculating the operative price in respect of VAT Tax as well as Central Sales Tax. - what is the sale price in accordance with the provisions of Central Sales Tax Act and M.P.VAT Act, 2002. Held that:- provisional invoice price and final price both are controlled by PPAC. The petitioner has no liberty to fix price. The change in sell price is due to the directions and fixation of price by PPAC because the domestic LPG is being sold to a consumer on a subsidized price and shortfall has been made good by the manufacturing companies and Oil Marketing Companies on sharing basis as directed by MOP and NG and also partly from the contribution of Central Government through issue of Oil Bonds. Hence in our opinion, the sale price of LPG in the case of the petitioner would be the price fixed by the petitioner after deduction in primary invoice on the basis of credit notes issued subsequently because that was the price, which was released by the petitioner effectively and fixed under the price fixation mechanism. The authority committed an error of law in disallowing the deductions from total turnover on the basis of credit notes issued to Oil Marketing Companies which had resulted reduction in the turn over and liability of tax of the petitioner. - Decided in favour of assessee.

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