Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 29, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Taxability of sale of software as “Royalty” - payment received by the assessee for sums does not amount to “royalty” within the meaning of Article 12(4) of Indo-Netherland DTAA and accordingly, the same is not taxable in India. - AT
Service Tax
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Claim of refund - services used for export of goods - the exemption Notification No. 41/2007-ST is rendered inapplicable in the case of such exports where the appellant claimed drawback under the Drawback Rules - AT
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Refund - period of limitation - retrospective exemption on all taxable services relating to Transmission and Distribution of Electricity - Refund is not hit by infirmities of time bar and cannot also be rejected on the ground that the Notification No. 45/2010-ST is not applicable to the appellant - AT
Central Excise
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Cenvat credit on common services stand reversed with interest, and hence, it is to be presumed as not having been taken up initio. In such a case there will be no justification for any demand under Rule 6 (3) (b) of the Cenvat Credit Rules - AT
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There was no cross appeal filed by the Revenue before the Commissioner (Appeals). In such a scenario, we agree with the ld. Advocate that the impugned order passed by the Commissioner (Appeals) had travelled beyond the scope of the appeal before him and is required to be set aside on the said ground itself. - AT
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Duty liability - whether the respondent is liable to pay duty under section 11 D being a dealer and not being a manufacturer of the goods? - Held No - AT
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CENVAT credit on construction activities denied - denial is only for the road which extends beyond the plant area and upto the main public road - the demand for extended period cannot be sustained. - AT
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Cenvat Credit - As far as training to the employees of the company are concerned this is specifically included in the definition of input service as contained in Rule 2 (l) of CENVAT Credit Rules 2004 - AT
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Even if the processes undertaken by the assessee do not amount to manufacture, credit of duty paid on the inputs would still be admissible on export of the said processed input - AT
VAT
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Reopening of assessment after the 4 years - GVAT - Effect of subsequent amendment - Admitted facts are that no proceedings for assessment of the petitioner were pending on that day. The return filed by the petitioner for the relevant year was long past assessed and closed. - No demand - HC
Case Laws:
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Income Tax
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2016 (7) TMI 1135
Taxability of sale of software as “Royalty” - consideration received on sale of computer software programme i.e. C D Rom as business income OR “Royalty Income” - P.E. in India - Held that:- DIT vs M/s Nokia Networks, reported in (2012 (9) TMI 409 - DELHI HIGH COURT) concluded that, when assessee supplies the software which is incorporated on CD, it has applied only a tangible property and payment made for acquiring such a property cannot be regarded as payment by way of royalty. We uphold the order of the CIT(A) that the payment received by the assessee for sums does not amount to “royalty” within the meaning of Article 12(4) of Indo-Netherland DTAA and accordingly, the same is not taxable in India. Since, admittedly, the assessee has no PE in India; therefore, same cannot be taxed as business income under Article 7. - Decided in favour of assessee
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2016 (7) TMI 1134
Nature of income - interest income treated as business income - Held that:- Considering the submissions of the assessee’s counsel is that the assessee society is maintaining operational funds and to meet any eventuality towards repayment of deposit the cooperative society is maintaining some liquidated funds as short term deposits with banks. Hence adhering to the doctrin stair desises, we hold that the assessee should be granted benefit of deduction under section 80P(2)(a)(i). Accordingly, the interest on deposits would qualify for deduction under the said section. Accordingly, we set aside the orders of authorities below and decide the issue in favour of the assessee
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2016 (7) TMI 1133
Penalty u/s 271(1)(c) - Held that:- As the quantum addition is deleted, there remains no basis at all for levying the penalty for concealment or furnishing inaccurate particulars. The penalty cannot stand on its legs when addition on the basis of which the penalty was imposed remains no more in existence, thus, appeal allowed in favour of assessee.
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2016 (7) TMI 1132
Disallowance u/s 14A - Double deduction - Held that:- As observed that the assessee company has made investments of ₹ 1.47 crores in shares yielding exempt income which is same as in the preceding year as no fresh investment has been made during the year, while net owned funds of the assessee company comprising share capital and reserves are to the tune of ₹ 1.86 crores as on 31-03-2009 and ₹ 1.91 crores as on 31-03-2008 which are far in excess of the investments made by the assessee company of ₹ 1.47 crores in shares yielding exempt income. The assessee company has stated that the borrowed funds are utilized for project and none of the borrowed funds were used for the purposes of making investments in shares yielding exempt income which is also not controverted by the Revenue. In any case since there are net owned funds which are far in excess of investment in shares as set out above, presumption will apply as per decisions of Hon’ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT ) and in the case of HDFC Bank Ltd. v. DCIT (2014 (8) TMI 119 - BOMBAY HIGH COURT ) and decision of HDFC Bank Limited v. DCIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] and hence no disallowance is warranted for interest paid by the assessee company under Section 14A of the Act read with Rule 8D(2)(ii) of Income Tax Rules, 1962 . Also as the assessee company had made disallowance of ₹ 73,740/- voluntarily of its own under Section 14A of the Act read with Rule 8D(2)(iii) of Income Tax Rules, 1962 and the learned CIT(A) confirmed the same amount in his appellate orders dated 27-08-2012 which has led to double disallowance of the same amount which is added twice to the income of the assessee company which is not permitted under the Act. Hence we order deletion of the additions made by the AO as sustained by learned CIT(A) u/s 14 A of the Act read with Rule 8D of Income Tax Rules, 1962. It is also not brought on record that the Revenue is in appeal against the appellate orders of the learned CIT(A) - Decided in favour of assessee
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2016 (7) TMI 1131
Disallowance of the credit cart expenses of two directors of the company - Held that:- The expenses having been incurred through credit card and assessee having failed to establish that these expenses were incurred wholly and exclusively for the purposes of business, we are of the view that the AO was justified in disallowing the same. - Decided against assessee. Un-reconciled purchases - Held that:- It is not the case of the AO and the learned CIT(A) that there is a difference in the quantity or there is a difference in the payments made by the assessee not accounted for by Jindal Poly Films Ltd. These being running account the addition on account of difference in the two parties accounts cannot be made. We are also in agreement with the contention of the learned AR that in the year under consideration the purchases booked by the assessee is of ₹ 236,42,32,571/- as against sales shown by Jindal Poly Films Ltd. of ₹ 236,43,55,556/-. Thus the assessee has claimed expenditure less by ₹ 1,22,985/- on account of the purchases. Having claimed less expenditure the addition cannot be made in the hands of the assessee and accordingly we hold that the learned CIT(A) was not justified in confirming the addition on account of these differences in the reconciliation. Accordingly, AO is directed to delete the entire addition. - Decided in favour of assessee.
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2016 (7) TMI 1130
Undisclosed investment in stock under the head ‘income from other sources - Held that:- Commissioner of Income-tax(Appeals) has accepted the trading result of the assessee without surrendered stock, which is a loss and thus even if the surrendered excess stock as directed by the learned Commissioner of Income-tax (Appeals) is assessed under the head ‘income from other sources’ , the net result will be the same as loss under the head profit and gains of business will be eligible for adjustment against the ‘income from other sources’ as per the provisions of section 71 of the Act. The learned Commissioner of Income-tax (Appeals) has not mentioned as why the excess stock declared by the assessee should be assessed under the head income from other sources. In our opinion the excess stock was as a result of business activity of the assessee and there was nothing wrong in adding the same with the closing stock of the business and therefore the direction of the learned Commissioner of Income-tax (Appeals) in assessing the surrendered stock under the head income from other sources is not justified and accordingly, we direct to assess the same under the head profit and gains of business and give benefit to allow carry forward this stock as opening stock of the succeeding year. Addition under the head other sources - Held that:- We find that without the excessive stock of ₹ 3,81,13,064/-, the trading result of the assessee was a loss of ₹ 64,41,401/- which was rejected by the Assessing Officer and assessed into profit of ₹ 20, 65, 885/-thus making the total addition of ₹ 85,07,286/-. The learned Commissioner of Income-tax (Appeals) in the impugned order has accepted the trading results of the assessee, however, directed to delete the addition of ₹ 20,65,885/-. In our opinion, once the trading results of the assessee have been accepted, the entire addition of ₹ 85,07,286/- was required to be deleted by the learned Commissioner of Incometax (Appeals). Accordingly, we direct to delete the addition of ₹ 64,41,401/- - Decided in favour of assessee. Disallowance under section 14A read with Rule 8D Held that:- We find that there is no dispute on the fact that no exempt income was earned by the assessee during the year. Thus,the disallowance made by the Assessing Officer and sustained by the learned Commissioner of Income-tax(Appeals) is directed to be deleted. - Decided in favour of assessee.
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2016 (7) TMI 1129
Penalty under section 271(1) (c) - Held that:- CIT (A) has deleted the penalty on the arguments advanced by the assesesse, which were not raised before the assessing officer. Hence, in the interest of Justice we set aside the whole issue of the penalty before the assessing officer with a direction to decide the issue afresh after considering all the arguments raised by the assessee. We also held that that the assessee is further entitled to raise any new/ fresh arguments as the penalty proceedings are separate and independent proceedings then the assessment proceedings and the Ld. AO may decide the issue on merit - Decided in favour of revenue for statistical purposes.
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2016 (7) TMI 1128
Disallowance u/s 14A - Held that:- The assessee has not claimed any expenditure against the investment income. The AO has made the addition on estimate basis which is not prescribed under the law. There is nothing on record to controvert the submissions made on behalf of the assessee. In view of the aforesaid facts, have no reason to disagree with the claim of the assessee that no further expenditure over and above the expenses already disallowed in the return of income is required to be disallowed under section 14A of the IT Act. Accordingly, it is held that the disallowance made by the assessing officer under section 14A of the IT Act by application of Rule 8D of the IT Rules is directed to be deleted. - Decided in favour of assessee.
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Customs
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2016 (7) TMI 1149
Maintainability of Writ Petition - alternate appellate remedy - question of limitation - Lapse on the part of Superintendent of Central Excise and Customs - disciplinary proceedings have been initiated against the petitioner. - a penalty of ₹ 1,74,940/- has been imposed on the petitioner under Section 112A(ii) of the Customs Act and a penalty of ₹ 5,50,10,690/-, under Section 104AA of the Customs Act. - Held that:- The question of limitation is not a pure question of law, but a mixed question of fact and law. Even assuming without admitting that the submissions made by the learned Senior counsel for the petitioner is correct and that Section 155(2) of the Customs Act, would stand attracted still it has to be seen as to what would be the starting point of limitation. This exercise cannot be made in a Writ Petition. This Court could have rendered a finding on the said issue, but refrains from doing so, as it would prejudice the petitioner at the time of filing the appeal, as this Court is fully convinced that the Writ Petition cannot be entertained as serious, disputed and complicated questions of fact are involved and therefore, the petitioner should be necessarily relegated to avail the appellate remedy provided under the Customs Act. Accordingly, the Writ Petition is dismissed as not maintainable, giving liberty to the petitioner to prefer an appeal before the Appellate Authority and while computing limitation, the period between 11.07.2016, till the receipt of the certified copy of this order shall stand excluded - Decided against the appellant.
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2016 (7) TMI 1148
Assessment of bill of entry - provisional release of goods - import of wire mesh - against the said B/L, an alert had been issued by the Directorate of Revenue Intelligence (“DRI”) - The first is that a mandamus be issued to the respondents to assess the goods imported by the petitioner against Bill of Entry No. 4767708 dated 31st March, 2016. The alternative prayer is that the respondents should be directed to make a provisional assessment of the goods imported under Section 18 of the Customs Act, 1962. Held that:- The Court considers the request for further time to be unreasonable for the simple reason that the entire purpose of the Petitioner filing the present petition was to get the alert notice issued by the DRI removed and this petition itself has been pending since 25th April 2016. The demurrage charges have been mounting, and for no fault of the Petitioner, it is unable to proceed with the assessment of the goods by the Customs and the ultimate clearance of the goods. The following directions issued:- (a) The Respondents will proceed hereafter on the basis that the alert issued by the DRI in respect of the two containers in question stands removed; - (b) The Customs will write to the CONCOR, i.e., Respondent No. 4, not later than one week from today, giving its no-objection for the physical inspection of the goods; and The Customs authorities will proceed with the assessment and complete it within a period of two weeks thereafter subject to the petitioner complying with all the formalities and requirements of Respondent no.4. - Decided partly in favor of petitioner.
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Service Tax
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2016 (7) TMI 1154
Taxability of services provided by the SEZ unit to the DTA unit of the same assessee - principle of mutuality - Held that:- Identical issues raised by the same assessee for assessment year came up for consideration in [2016 (7) TMI 307 - GUJARAT HIGH COURT] The Tax Appeals of the Government were dismissed. - These Tax Appeals are also dismissed.
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2016 (7) TMI 1153
Waiver of pre-deposit - tribunal directed the appellant to deposit an amount at ₹ 15 lakhs and declining to accept the plea of the Appellant that credit should be given to the sum of ₹ 9.23 lakhs already deposited by Appellant along with the returns in Form ST-3 for the period 2008-10. - Held that:- the impugned order dated 15th March 2016 of the CESTAT is modified and it is directed that in view of the Appellant having already deposited ₹ 9.32 lakhs and having further deposited ₹ 5.77 lakhs on 16th May 2016, there will be no requirement for the Appellant to make any further payment by way of pre-deposit in terms of the impugned order of the CESTAT. The CESTAT will now hear the appeal pending before it on merits.
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2016 (7) TMI 1152
Claim of refund - services used for export of goods - Notification No. 41/2007-ST dated 6.10.2007 - Refund was rejected on the ground that the appellant had availed drawback in respect of goods exported under Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 - Held that:- the analysis and conclusion drawn on this issue in terms of para 2 (reproduced above) of the judgement of CESTAT in the case of Bharat Art and Crafts [2016 (4) TMI 197 - CESTAT NEW DELHI] remain valid and there is nothing in the pleadings/contentions of the appellant which in any way adversely affects the efficacy of the said analysis. Thus the exemption Notification No. 41/2007-ST is rendered inapplicable in the case of such exports where the appellant claimed drawback under the Drawback Rules. - Decided against the assessee.
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2016 (7) TMI 1151
Refund - period of limitation - retrospective exemption on all taxable services relating to Transmission and Distribution of Electricity provided by a service provider to a service receiver during the period 26.02.2010 to 21.06.2010 - refund claim is filed on 11.07.2011 which is after lapse of six months from issue of notification and hence is hit by time bar. Held that:- We find that both the apparently conflicting provisions in section 11(B) vis-a-vis 11 (C) ibid, with regard to time limit prescribed to file refund claim are in fact harmonious with each other. Each has its own place, purpose and intention in the statute. The time limit of six months provided in Section 11 (C) will normally be applicable in respect of refund claims emanating out of notifications issued under that section. However, if the issue involved in such 11 (C) notification is also subjudice in any Court etc., the said provision of Section 11 (C) will stand eclipsed by the general provision of Section 11 (B). The general provision of S 11 B 5 (ec) will then take precedence over the special provision in S 11 C ibid. In such a case, by implication the refund claimant will legally become entitled to file the claim within a time limit of one year from the date of judgment, decree, order or direction of appellate authority, Tribunal or Court in view of clause (ec) of explanation B of S 11 B (5) ibid The limitation can therefore start clicking only from the date of final judgment /decree/decision of Court/Tribunal/Appellate Authority. In this case therefore the limitation period will only start, at the earliest, after 23.05.2016 i.e. date of Final Order No. A/30489/2016 stated above. Refund is not hit by infirmities of time bar and cannot also be rejected on the ground that the Notification No. 45/2010-ST is not applicable to the appellant - Decided in favor of assessee.
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Central Excise
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2016 (7) TMI 1146
Cenvat Credit - common input services - failure to maintain separate accounts for the use of inputs for dutiable as well as exempted products as required under Rule 6 (3) (b) of the Cenvat Credit Rules - Held that:- on reversal of the Modvat credit, the Assessee cannot be said to have taken credit of duty on the inputs utilized in the manufacture of final products. When this Apex court judgment is applied to the present case, the Cenvat credit on common services stand reversed with interest, and hence, it is to be presumed as not having been taken up initio. In such a case there will be no justification for any demand under Rule 6 (3) (b) of the Cenvat Credit Rules. - Demand set aside - Decided in favor of assessee.
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2016 (7) TMI 1145
Assessable value - sales made to related and unrelated persons - Held that:- As going through the impugned order of the Commissioner (Appeals), we find that the said order, on the face of it, travels beyond the jurisdiction, inasmuch as it stands challenged before the Appellate Authority by the appellant only in respect of the confirmation of demand of ₹ 96,000 approximately. It is an admitted fact that the part of the impugned order of the Original Adjudicating Authority dropping the demand was not challenged by the Revenue before the Commissioner (Appeals), in which case there was no occasion for the Appellate Authority to deal with or adjudge the correctness of that part of the order dropping the demand. It also stands admitted before us by the Revenue that there was no cross appeal filed by the Revenue before the Commissioner (Appeals). In such a scenario, we agree with the ld. Advocate that the impugned order passed by the Commissioner (Appeals) had travelled beyond the scope of the appeal before him and is required to be set aside on the said ground itself. Thus we set aside the impugned order and remand the matter to the Commissioner (Appeals) for fresh consideration only in respect of the demand involved in the appeal filed by the appellant
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2016 (7) TMI 1144
Duty liability - whether the respondent is liable to pay duty under section 11 D being a dealer and not being a manufacturer of the goods? - Held that:- The said issue came up before the Hon’ble Apex Court in their own case reported (2011 (9) TMI 434 - SUPREME COURT OF INDIA ) wherein held that the respondent is a dealer and duty is payable by the manufacturer of the goods. In that circumstance, the duty is not payable by the respondents. In that circumstance, no demand is sustainable against the respondent under section 11 D of Central Excise Rules, 1944. We also find from the records, no excess duty has been recovered by the respondents. Therefore, we do not find any infirmity in the impugned order and the same is upheld. The appeals filed by the Revenue are dismissed.
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2016 (7) TMI 1143
CENVAT credit on construction activities denied - denial is only for the road which extends beyond the plant area and upto the main public road - Extended period invoked - Held that:- As find that these are inter-connected roads on which the appellants spent money for construction and accordingly, had bonafide belief of eligibility of credit on such activity without the distinction for inside the plant and or outside the factory gate. In such circumstances, the allegation of suppression or willful misstatement etc. cannot survive. Further, it is an admitted fact the credits availed were all entered in their records and were figuring in the statutory returns also. The lower authorities have also allowed substantial portion of credit on the same activity insofar as it relates to the road inside the factory gate. Considering the above factual position and legal interpretation involved in this case, find that the demand for extended period cannot be sustained. Accordingly, the impugned order is set aside on this ground. - Decided in favour of assessee.
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2016 (7) TMI 1142
Cenvat Credit - Input services - whether rent-a-cab services for taking the employees from their residence to the factory and back and also for carrying food for the staff of the company as well as expenses incurred by the company for imparting training to its employees fall in the definition of input services or not? - Held that:- As far as rent-a -cab service is concerned, it has been held by the Hon’ble High Court of Karnataka in the case of Commissioner of Central Excise Bangalore Vs Stanzen Toyotetzu (P) Ltd [2011 (4) TMI 201 - KARNATAKA HIGH COURT] above that rent-a-cab service is an input service and therefore credit is admissible. As far as training to the employees of the company are concerned this is specifically included in the definition of input service as contained in Rule 2 (l) of CENVAT Credit Rules 2004. Therefore in view of the law the impugned order denying benefit of credit on these two services is not sustainable in law and therefore set aside the impugned order by allowing the appeal with consequential relief if any.
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2016 (7) TMI 1141
Manufacturing - denial of Cenvat Credit of duty paid on the inputs as the processes undertaken by the appellant does not amount to manufacture - Held that:- The Tribunal in the case of Rico Auto Industries Ltd. Vs. CCE New Delhi (2003 (2) TMI 512 - CESTAT NEW DELHI) has held that even if the processes undertaken by the assessee do not amount to manufacture, credit of duty paid on the inputs would still be admissible on export of the said processed input in terms of provisions of Rule 57F(2) and Board’s circular 283/117/96-CE. - Decided in favour of aseessee.
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2016 (7) TMI 1140
Determination of roper documents for the purpose of Cenvat credit - duty demand - Held that:- There is no dispute about the duty paid character of the inputs, their receipt by the present respondent and utilization of the inputs. The technical objection raised by the Revenue seems to be only one that Bill of entry was endorsed by the importer in favour of the assessee by the principal manufacturer and such endorsement cannot be accepted. No reference stand made to any of the provisions of law to bar availment of cenvat credit on the basis of endorsed Bill of Entry. It was not the case of the Revenue that part of the goods said deviated to present respondent. The admitted fact is that goods on record are entire imported goods and were in original packing which stand diverted to the respondent along with the signature of Customs officer. It is also seen that the demand was raised against the respondent based upon the objection by the Audit, which objection was very strongly opposed by the Revenue itself. If that be so, we really fail to understand as to how the Revenue would be aggrieved with the present order of the Commissioner dropping the demand.
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2016 (7) TMI 1139
Levy of penalty - CENVAT Credit - allegation that input was not at all received in the factory of the appellant - Held that:- The appellant had issued Central Excise invoices to the customer and had also reversed the credit. This reveal that they had no intention to evade payment of duty, but the same was due to non - adherance of proper procedures. The Commissioner (Appeals) has observed that no case has been made out to prove complicity of Vice President in the offence with 'intent'. That appellants discharged the duty liability on the entire imported goods. - As there is no evidence to establish suppression of facts or willful misstatement with intent to evade payment of duty, I am of the opinion that the penalty under section 11 AC cannot be imposed. - Decided in favor of assessee.
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2016 (7) TMI 1138
Cenvat credit eligibility - whether credit is eligible on inputs, when the process does not amount to manufacture? - manufacturing of High Carbon Ferro Chrome (HCFC) - Held that:- Once assessee considered the activity as amounting to manufacture and discharged duty liability CENVAT Credit cannot be denied holding that there is no manufacture. See AJINKYA ENTERPRISES Versus COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2013 (6) TMI 610 - CESTAT MUMBAI ]. Thus in the present case we have no hesitation to hold that the credit is admissible
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2016 (7) TMI 1137
Eligibility for Modvat credit of duty paid on capital goods under the then Rule 57Q of Central Excise Rules, 1944 - Held that:- An identical matter came up for decision by the Tribunal in respect of the same appellant. The Tribunal in the decision (1998 (3) TMI 311 - CEGAT, CALCUTTA) held that the concept of mobile factory is alien to the Central Excise Act, 1944 and no Modvat credit will be available to these items. Following the same ratio, find that there is no merit in the appeal filed by the appellant and the same is accordingly dismissed.
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2016 (7) TMI 1136
Recovery of duty on Printed PVC Films - period of limitation - Held that:- Commissioner (Appeals) has allowed the appeal filed by the Respondent only on the ground of limitation, without recording any findings on the merit of the case. The reasoning recorded by the Ld Commissioner (Appeals) in the impugned order while holding the demand notice barred by limitation, is contrary to the principles laid down by the Hon’ble Gujarat High Court in Neminath Fabrics Pvt Ltd s case (2010 (4) TMI 631 - GUJARAT HIGH COURT ). Therefore, the said finding of the Ld Commissioner (Appeals) cannot be sustained. In the result, the impugned order is set aside and the matter is remanded to the Ld Commissioner (Appeals) for deciding the issue afresh on merit. Needless to mention, a reasonable opportunity of hearing be granted to the Respondent. The appeal is allowed by way of remand.
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CST, VAT & Sales Tax
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2016 (7) TMI 1150
Reopening of assessment after the 4 years - GVAT - Rate of VAT - 4% or 12.5% - bicycles, tricycles, cycle rickshaws, pedal rickshaws, and cycles combination and accessories and parts thereof. - Held that:- When the petitioner's assessment thus became final and by efflux of time, even exercise of powers by the Commissioner under section 35(1) became barred by limitation, subsection (8A) was not even yet introduced in the statute book. We have serious doubt whether this provision could be applied to the periods prior to the date when the provision was enacted. However, at any rate, to apply to such a situation where the original assessment and any scope by the Commissioner to revise the tax in terms of subsection (1) of section 35 has long pass, been barred by limitation, would expose the provision to vulnerability on the ground of virus. There is yet another strong reason why we cannot upheld the action of the respondent authorities. Clause( a) of subsection (8A) which empowers the prescribed authority to collect tax when it is found that tax has been evaded or sought to be evaded or tax liability has not been disclosed correctly or excess tax has been claimed, the same can be done during the course of any proceedings if the prescribed authority is so satisfied. The pendency of proceedings therefore, would be sinequanon for exercise of such powers. Admitted facts are that no proceedings for assessment of the petitioner were pending on that day. The return filed by the petitioner for the relevant year was long past assessed and closed. Demand set aside - Decided in favor of assessee.
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Indian Laws
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2016 (7) TMI 1147
Appointment of arbitrator - Held that:- Had the learned Single Judge stated that the period consumed for pursuing the remedy under Section 11 of the 1996 Act, would be excluded for filing objection, possibly the matter would have been different. In any case, we do not intend to dilate further on that aspect. It is quite clear that the quoted portion herein-above does not so indicate. It only grants liberty to the respondent to file an objection in accordance with law. Section14(1) of the Act which we have reproduced, lays down that the proceedings must relate to the same matter in issue. It emphasises on due diligence and good faith. Filing of an application under Section 11of the 1996 Act for an appointment of arbitrator is totally different than an objection to award filed under Section 34 of the 1996 Act. To put it differently, one is at the stage of initiation, and the other at the stage of culmination. By no stretch of imagination, it can be said that the proceedings relate to “same matter in issue”. Additionally, the respondent had participated in the arbitral proceeding and was aware of passing of the award. He, may be, by design, invoked the jurisdiction of the High Court for appointment of an arbitrator. We are absolutely conscious that liberal interpretation should be placed on Section 14 of the Act, but if the fact situation exposits absence of good faith of great magnitude, law should not come to the rescue of such a litigant. We say so because the respondent instead of participating in the arbitration proceedings, could have immediately taken steps for Appointment of arbitrator as he thought appropriate or he could have filed his objections under Section 34(2) of the Act within permissible parameters but he chose a way, which we are disposed to think, an innovative path, possibly harbouring the thought that he could contrive the way where he could alone rule. Frankly speaking, this is neither diligence nor good faith. On the contrary, it is absence of both. In view of the aforesaid analysis, we find that the High Court has fallen into grave error by concurring with the opinion expressed by the learned Additional District Judge and, therefore, both the orders deserve to be lancinated and, accordingly, we so direct.
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