TMI Tax Updates - e-Newsletter
August 18, 2014

Case Laws in this Newsletter:

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

Articles

1. Indirect Tax Impact - Tax Audit - AY 14-15

   By: Madhukar N Hiregange

2. DECLARATION AND PAYMENT OF DIVIDEND UNDER COMPANIES ACT, 2013

   By: DR.MARIAPPAN GOVINDARAJAN

Highlights / Catch Notes

Income Tax

• Bus Hiring Not Leased: Correct Tax Deduction u/s 194C Confirmed for Kilometer Basis Contracts.

  Case-Laws - HC : TDS on hiring of Buses on kilometer running basis - the contract of transport was not akin to the taking of any 'plant' or 'machinery' on lease or any other similar arrangement - the assessee had correctly deducted tax at source u/s 194C - HC
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• Bonus Shares' Acquisition Date is Issuance Date: High Court Clarifies Tax Benefits u/s 54E for Capital Gains.

  Case-Laws - HC : Benefit of section 54E - LTCG / STCG – bonus shares issued by a company are acquired by a shareholder when they are issued, and they must be taken to be held by the shareholder from the date of their issue, and not from the date when the original shares - HC
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• Royalties Classified as Revenue Expenditure, Not Capital, Due to Their Nature as License Fees for Manufacturing and Sales.

  Case-Laws - HC : Royalty payment - revenue expenditure or capital expenditure - payment is purely revenue in nature, as they provide for payment of license fee for manufacture and sale of the products which are manufactured - HC
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Customs

• Commissioner Denies Conversion of Shipping Bill from DEEC to Draw-Back Scheme, DEEC Benefits Still Available.

  Case-Laws - AT : Denial of conversion of shipping bill from DEEC Scheme to draw-back scheme - benefit under DEEC Scheme was not denied to the appellant - Commissioner has rightly denied the conversion of shipping bill from DEEC Scheme to draw-back Scheme - AT
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Corporate Law

• Determining Proper Notice u/s 138 of Negotiable Instruments Act Should Occur During Evidence Stage, Not Preemptively.

  Case-Laws - SC : Proof of service of notice under Section 138 of the Negotiable Instruments Act, 1881 - service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C - SC
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Service Tax

• Reversal of Credit Balance Qualifies Respondents for Small Service Exemption under Notification No. 6/2005-S.T.

  Case-Laws - AT : Small service exemption - admittedly the respondents have taken credit on telephone service but have not utilized the credit available for payment of service tax on telephone service and they have reversed the credit balance so they are entitled to claim for the benefit of exemption Notification No. 6/2005-S.T - AT
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Central Excise

• Revenue Must Prove Capital Goods Cleared in Original State for Modvat Credit Reversal in Cenvat Case.

  Case-Laws - AT : Cenvat Credit - Clearance of capital goods as such - It has to be kept in mind that it is the Revenue who is making the allegations and as such, the onus to show that the goods were cleared as such thus requiring reversal of modvat credit, is on the Revenue - AT
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• Duty Demands on Lifts and Elevators Excluding Installation Charges Are Unlawful; Manufacturing and Service Are Separate.

  Case-Laws - AT : Valuation - demands of duty made by including the erection, commissioning and installation charges in the assessable value of the lift/elevators cannot be sustained in law as manufacture and rendering of services are distinct and different activities - AT
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Case Laws:

• Income Tax

• 2014 (8) TMI 463
  Benefit u/s 54 – Second property not purchased within two years of sale of first property – Whether amount paid for cancellation of the earlier agreement for sale of the original property and amount paid as brokerage, could be allowed to set off from the sale consideration received – Held that:- The payments cannot be challenged on the ground that they were not genuine or were not made – the payments were not directly relatable to the transaction for sale which had resulted in income by way of capital gains - the tribunal has rightly held that the expenditure was incurred and was wholly connected with the sale transaction - By cancelling earlier transaction and ensuring that the rights created by the earlier agreement to sell do not obstruct the sale transaction, payments of 5,00,000/- to Ashok Singhal and 2,50,000/- to Rajat Kapur, have been made. Whether the assessee had “purchased” the second property and the payment made was entitled to exemption u/s 54 of the Act – Held that:- The word “purchase” used in Section 54 of the Act should be interpreted pragmatically in a practical manner and legalism shall not be allowed to play and create confusion or linguistic distortion - the assessee to deposit unspent amount not utilized by the assessee for purchase or construction of a new asset before the date of furnishing of return, in a specified account - the amount, if already utilized for purchase or construction of the new asset with the amount so deposited will be deemed to be cost of a new asset subject to the proviso - The word “purchase” is used in sub-section (2) and indicates that the word is not restricted or confined to registered sale deed or even possession but has a wider connotation. The proviso supports the interpretation and stipulates that the amount deposited but not utilized wholly or partly for purchase or construction of new asset within the specified period will be charged to tax u/s 45 in the previous year in which the period of three years from the date of transfer of original asset expired - The period of three years is stipulated as this is the longer period specified in the sub-section (1) to Section 54 - It is only the balance amount which is not utilized which is to be brought and charged to tax - The entire amount of sale consideration or the capital gains is not to be brought to tax, but the unspent amount/figure is taxed - Decided against revenue.

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• 2014 (8) TMI 462
  TDS on hiring of Buses on kilometer running basis - Liability to deduct TDS u/s 194C r.w. Clause (c) of Explanation III – Held that:- The Tribunal has rightly held that the contract would indicate that the assessee has not taken possession of the buses - the Tribunal was correct in coming to the conclusion that the provisions of Section 194-C and not Section 194I of the Act were attracted - the agreement between the assessee and the transporters was not akin to the taking of any 'plant' or 'machinery' on lease or any other similar arrangement - the assessee had correctly deducted tax at source u/s 194C of the Act. The Tribunal has rightly noted that the buses belong to the contractor and were provided on hire to UPSRTC - The payment was to be made on kilometer basis - The contractor was responsible for bearing running cost, maintenance and incidental expenses including the salary of the driver - The contract contained a specific stipulation in respect of the total distance which could be traversed on any given operating day - The contract also provided that the vehicle would run on the route specified by the UPSRTC – Decided against Revenue.

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• 2014 (8) TMI 461
  Benefit of section 54E – Transfer of bonus shares - Whether the sale of the bonus shares ought to be taxed as short term gains or as long term gains - The entire sale proceeds were invested in the eligible assets - President held that the transaction had resulted in the transfer of shares, and transfer of certain interest was only a consequence and incidence of the transfer of the shares - the sale of bonus shares resulted in short term capital gain – Relying upon Manecklal Premchand (Deceased) v/s Commissioner of Income Tax [1989 (9) TMI 15 - BOMBAY High Court] - there was a failure on the part of the Assessee to disclose fully and truly all material facts necessary for the assessment in the original returns filed for the AY 1978-1979, and re-assessment was justified in law - the bonus shares issued by a company are acquired by a shareholder when they are issued, and they must be taken to be held by the shareholder from the date of their issue, and not from the date when the original shares in respect of which they are issued, were acquired by the shareholder – Decided in favour of revenue.

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• 2014 (8) TMI 460
  Replacement of machinery and introduction of compact spinning system - Whether the Tribunal was right in holding that the expenditure incurred by the assessee in replacing machineries and introducing 'compact spinning system' in the place of 'conventional drafting system' is revenue expenditure allowable u/s 37 – Held that:- Following the decision in M/s. Super Spinning Mills Ltd. Versus The Assistant Commissioner of Income-tax [2013 (9) TMI 88 - MADRAS HIGH COURT] - the basic test is to find out whether expenditure is incurred to "preserve and maintain" an already existing asset and the expenditure must not be to bring a new asset into existence or to obtain a new advantage - elaborating on the provisions of Section 31 of the Act and Section 37 of the Act, the Authority has to pass an order on the impact of replaced materials on the business as well as functioning of the machinery after replacement to result in the higher productivity or not – thus, the order of the Tribunal is set aside and the matter is remitted back to the AO for fresh consideration on replacement of machinery – Decided in favour of Revenue.

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• 2014 (8) TMI 459
  Royalty payment - revenue expenditure or capital expenditure - Amount Paid to foreign company as per collaboration agreement - Invocation of section 35AB r.w Explanation 2 to section 9(vii) – Held that:- The courts have applied different tests like starting of a new business on the basis of technical know-how received from the foreign firm, the exclusive right of the company to use the patent or trademark which it receives from the foreign firm, the payment made by the company to the foreign firm whether a definite one or dependant upon certain contingencies, the right to use the technical know-how of production or the activity even after the completion of the agreement, obtaining enduring benefit for a considerable part on account of the technical informations received from a foreign firm, payment whether made once for all or in different instalments co-relatable to the percentage of gross turnover of the product to ultimately find out whether the expenditure or payment thus made makes an accretion to the capital asset and after the court comes to the conclusion that it does so, then it has to be held to be a capital expenditure. Relying upon Alembic Chemical Works Company Limited Versus Commissioner of Income-Tax, Gujarat [1989 (3) TMI 5 - SUPREME Court] - no single definitive criterion by itself could be determinative and, therefore, bearing in mind the changing economic realities of business and the varieties of situational diversities the various clauses of the agreement are to be examined - The payment made in terms of the two agreements dated 24.5.1989 and 8.12.1993 is purely revenue in nature, as they provide for payment of license fee for manufacture and sale of the products which are manufactured pursuant to the first agreement dated 7/24.10.1986 – there was no justifiable reason to differ with the finding rendered by the Tribunal - the payment of royalty based on the two agreements dated 24.5.1989 and 8.12.1993 is revenue expenditure – Decided against Revenue. Exclusion of excise duty and sales tax collection for computation of total turnover – Deduction u/s 80HHC – Held that:- Following the decision in Commissioner of Income Tax v. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] - section 80HHC of the Income-tax Act, 1961, is a beneficial section - It was intended to provide incentive to promote exports - The intention was to exempt profits relatable to exports - Just as commission received by the assessee is relatable to exports and yet it cannot form part of turnover for the purposes of section 80HHC, excise duty and sales tax also cannot form part of turnover - excise duty and sales tax did not involve any such turnover such taxes had to be excluded - Commission, interest, rent, etc., do yield profits, but they do not partake of the character of turnover and therefore they are not includible in the total turnover – Decided against Revenue.

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• Customs

• 2014 (8) TMI 465
  Denial of conversion of shipping bill from DEEC Scheme to draw-back scheme - Commissioner has denied the conversion of shipping bill on the ground that as per the CBEC Circular No. 04/2004-Cus dated 16.01.2004, conversion from DEEC Scheme into draw-back scheme can be allowed if benefit under DEEC Scheme is denied by DGFT/Ministry of Commerce or Customs authorities - Benefit not denied to assessee - Held that:- As per the CBEC Circular No.04/2004-Cus dated 16.01.2004 the condition for conversion is that if benefit under DEEC Scheme is denied by DGFT/Ministry of Commerce or Customs authorities, in that case conversion can be allowed. Admittedly, in this case, benefit under DEEC Scheme was not denied to the appellant. Therefore, the learned Commissioner has rightly denied the conversion of shipping bill from DEEC Scheme to draw-back Scheme. In these circumstances, I do not find any infirmity with the impugned order and the same is upheld - Decided against assessee.

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• Corporate Laws

• 2014 (8) TMI 464
  Proof of service of notice under Section 138 of the Negotiable Instruments Act, 1881 - cheque bounced - Whether in absence of any averments in the complaint to the effect that the accused had a role to play in the matter of non-receipt of legal notice; or that the accused deliberately avoided service of notice, the same could have been entertained keeping in view the decision of this Court in Vinod Shivappa [2006 (5) TMI 441 - SUPREME COURT] - Held that:- It is clear that Section 114 of the Evidence Act enables the Court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. Section 27 of the GC Act gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. It is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. High Court clearly erred in quashing the complaint on the ground that there was no recital in the complaint that the notice under Section 138 of the NI Act was served upon the accused. The High Court also erred in quashing the complaint on the ground that there was no proof either that the notice was served or it was returned unserved/unclaimed. That is a matter of evidence - service of notice is a matter of evidence and proof and it would be premature at the stage of issuance of process to move the High Court for quashing of the proceeding under Section 482 of the Cr.P.C - Decided in favour of appellants.

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• Service Tax

• 2014 (8) TMI 482
  Condonation of Delay - Inordinate delay of 541 days - Tribunal declined to condone delay - Held that:- Appellants have produced the affidavit of one Shri Parvez Parwala working with altogether another Chartered Accountant i.e. Shri Ingit Modi, Chartered Accountant as well as the affidavit of one Shri Rakesh Thakor who was a clerk working with the aforesaid Shri Parvez Parwala. On considering the further affidavits/affidavits of the aforesaid two persons, it appears that the appellant has come out with altogether a different story of handing over the papers to Shri Rakesh Thakor, a clerk of Shri Parwala of M/s. Ingit Modi, Chartered Accountant. It is required to be noted that as such the aforesaid can be said to be an afterthought and altogether a new story/grounds. Considering the aforesaid facts and circumstances, we are in complete agreement with the view taken by the learned Tribunal that the affidavits filed by the Shri Rakesh Thakor and Shri Parvez Parwala do not inspire any confidence. The learned Tribunal has rightly observed that the respective appellants have failed to make out a sufficient ground to condone the huge delay of 541 days. It appears that the respective appellants were totally negligent. Under the circumstances, the learned Tribunal has rightly refused to condone the huge delay of 541 days in preferring the appeals - Condonation denied.

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• 2014 (8) TMI 481
  Interest on refund claim - date of service of order of Tribunal to the department - Whether service of a certified copy on the Commissioner of Central Excise, Delhi-I would constitute due service for the purpose of section 35FF of the Central Excise Act, 1944? - Held that:- Normally it is the Assistant Commissioner who grants the refund order. Even otherwise, in the facts of this case, the adjudication order had, in any event, been passed by the Commissioner of Central Excise, Delhi-I. Thus, in whichever manner the case is looked at, the Commissioner of Central Excise, Delhi-I would fall within the expression “adjudicating authority” as appearing in section 35FF of the said Act. Therefore, the relevant question to ask is on which date was the order passed by the Tribunal communicated to the “adjudicating authority”. Clearly, this fact has been recorded in the order dated 14.03.2014 itself that the order passed by the Tribunal on 04.03.2011 was served on the Commissioner of Central Excise, Delhi-I on 16.03.2011. Therefore, the refund ought to have been made on or before 16.06.2011. However, the refund was actually made on 18.10.2011. Therefore, interest was payable under section 35FF of the said Act to the petitioner for the period 16.06.2011 to 18.10.2011. Rate of interest has to be specified by the Central Government by a notification in the official gazette. However, the rate cannot be below five per cent and cannot exceed thirty per cent per annum. As per the notification No.67/2003-CE(N.T.) dated 12.09.2003 which was applicable during the relevant period, the Central Government has fixed the rate of interest at six per cent per annum for the purposes of section 11BB of the said Act. It is that rate of interest which shall be applicable in the present case also - Decided in favour of assessee.

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• 2014 (8) TMI 480
  Bottling the LPG in cylinders - Business Auxiliary Service - Held that:- In the case of Batra Brothers reported in [2006 (9) TMI 93 - COMMISSIONER OF CUSTOMS AND C. EX] and Bharat Petroleum Corporation Ltd. reported in [2008 (8) TMI 776 - COMMISSIONER OF CENTRAL EXCISE (APPEALS), PUNE-II], the Commissioner (Appeals) observed that bottling the LPG in cylinders comes under ‘Packaging Service’ and in this case, the adjudicating authority has brought it under the category of Business Auxiliary Service as the activity undertaken by the applicants is ancillary to the sale and marketing of the product. Prima facie, we do not find the activity undertaken by the applicants falls under Business Auxiliary Service as alleged against the applicants, therefore, applicants had made out a case for 100% waiver of pre-deposit. Accordingly, we waive the entire amount of duty, interest and penalty and stay recovery thereof pending the appeal - Stay granted.

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• 2014 (8) TMI 479
  Appeal before Commissioner (Appeal) - Period of limitation - Date of order-in-original - Violation of principle of natural justice - Opportunity of hearing not given to assessee - Appeal dismissed as barred by limitation - Held that:- Counsel had also submitted reply to the RTI filed by them with regard to service of Order-in-Original, wherein, it has been mentioned that the order was not sent by Registered Post as per the provisions of Section 37C of the Central Excise Act, 1944, which has been made applicable to service tax cases also. The order is to be sent through a Registered Post and as the same has not been done, therefore, in the absence of any contrary evidence, we hold that the date of communication of the Order-in-Original is 13-12-2011, and hence appeal is well within the prescribed time-limit. Accordingly, we set aside the impugned order and in the interest of justice remand the case to the Commissioner (Appeals) to pass a fresh order on merits after giving the appellants a reasonable opportunity of being heard in their defence - Decided in favour of assessee.

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• 2014 (8) TMI 477
  Denial of benefit of Cenvat credit - Invoices on the name of CHA or sub-contractor - Held that:- If the bills of other agencies engaged by CHA are directly linked to the imports made by the assessee and CHA was only acting as a intermediary, the benefit of credit of service tax paid by the other agencies should not be denied to the appellant. As such I set aside the confirmation of demand on the said ground and remand the matter to the original adjudicating authority to verify the correctness of the statement made by the appellant and if the bills raised by the other agencies can be linked to the imports made by the appellant, the credit should be allowed. - Decided in favour of assessee.

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• 2014 (8) TMI 476
  Levy of Penalty - Lower Adjudicating Authority set aside partial demand - But commissioner exercised revisional authority and imposed penalty - Held that:- Lower Adjudicating Authority confirmed the demand and imposed penalty of equal amount under Section 78 of the Finance Act, 1994 and gave them option to pay penalty of 25% in the order in Revision. However, he did not impose any penalty under Section 76. Further, ld. Commissioner in his order in Revision has imposed a penalty under Section 76 of Finance Act, 1994. Undisputedly, ld. Commr. (Appeals) vide his order dated 1-6-2012 has set aside the total demand. The Department did not produce any evidence challenging the aforesaid order-in-appeal. Once the demand itself has been set aside, the penalty is not warranted in this case. Decided in favour of assessee.

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• 2014 (8) TMI 475
  Penalty u/s 76 - Demand raised for service tax - However, on intimation assessee paid service tax before issuance of SCN - Commissioner dropped penalty demand - Held that:- Demand is for the period 2004-05 to 2007-08. For the period prior to 18-4-2006 there has been decision of the Bombay High Court in the case of Indian National Shipowner Association v. UOI - [2008 (12) TMI 41 - BOMBAY HIGH COURT] to the effect that service tax need not be paid by recipient of service for services provided by persons located abroad - respondent has voluntarily paid the tax when the omission was pointed out to them without contesting the issue and he has also paid the penalty under Section 78 - Decided against Revenue.

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• 2014 (8) TMI 474
  Waiver of demand of pre-deposit of Service Tax - Failure to maintenance of separate accounts for input services utilized for exempted services - assessee submits that they are selling the products and also paying VAT and the sale is on consideration and that there is no service as such is involved in the said sales activity - Held that:- sales activity of applicant in respect of products manufactured by them on payment of VAT cannot be treated as rendering any exempted services. Further, previous Stay Order has been made on voluntary offer to pre-deposit an amount of 25/- lakhs. - Stay granted partly.

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• 2014 (8) TMI 473
  Denial of CENVAT Credit - telecommunication service, security service and maintenance & repair service - Denial on basis of Circular No. 98/1/2008-S.T., dated 4-1-2008 - Held that:- circular denies the Cenvat credit in respect of commercial or industrial construction service or works contract service which are rendered during construction of the immovable property and therefore prima facie the circular is not applicable to the present case. In this case appellants have provided security to the building, telecommunication facility and have also looked after the repairs & maintenance which according to the terms of agreement either the landlord has to undertake or the tenant has to undertake. If as per the terms of the agreement, the landlord undertakes to provide these services, prima facie, they have to be held as input services with regard to renting of immovable property - appellant has a prima facie case in their favour - Stay granted.

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• 2014 (8) TMI 472
  Denial of small service exemption since cenvat credit was availed - Denial of refund claim of service tax paid wrongly while availing SSP exemption - Value of taxable services was below the monetary limit of 4 lakhs - Held that:- Impugned order has been passed by the Commissioner (Appeals) relying upon the decision of the Apex Court in the case of Shri Hari Chemical Exports Ltd. (2005 (12) TMI 95 - SUPREME COURT OF INDIA) wherein the Apex Court has held that “only because in his books of accounts entries are made for taking of the credit in terms of one provision of the Rules, the same if ultimately found to be inapplicable and return of the credit is taken effect, we are of the opinion that there cannot be any legal bar in claiming the exemption under another rule.” In this case, admittedly the respondents have taken credit on telephone service but have not utilized the credit available for payment of service tax on telephone service and they have reversed the credit balance so they are entitled to claim for the benefit of exemption Notification No. 6/2005-S.T., dated 1-3-2005 - decided against Revenue.

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• Central Excise

• 2014 (8) TMI 478
  Cenvat Credit - Clearance of capital goods as such - evidence - reversal of credit - Invocation of extended period of limitation - Held that:- The authorities have not bothered to look into the date of receipt of capital goods and date of sale of the same, which would enlighten as to whether the capital goods were received without being used or not. Merely because the appellants could not produce the evidence (as they did not attend the personal hearing), the Revenue cannot assume that the capital goods were sold as such. It has to be kept in mind that it is the Revenue who is making the allegations and as such, the onus to show that the goods were cleared as such thus requiring reversal of modvat credit, is on the Revenue. - all the figures have been taken from the balance sheet of the applicant, and as such, at this prima facie stage, it cannot be said that there was any suppression on the part of the applicant. Thus, invocation of longer period was not justified - Stay granted.

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• 2014 (8) TMI 470
  Classification of goods - Coconut Oil packed in 200 M.L. of plastic containers - Held that:- Board issued a Circular No. 890/10/2009-CX dated 03/06/2009 laying down that classification of Coconut Oil packed in small containers upto 200 M.L. would be considered as hair oil which would fall under heading 3305 and not under Chapter 15 of the Central Excise Tariff Act, 1985. After issuance of the said circular, the appellant, under the advice of their Jurisdictional Central Excise Authorities, started clearing the said product on payment of duty in terms of Chapter 33 classification, under protest. Attention has also been drawn to the outer label on the container indicating that the Coconut Oil is "Edible" Coconut Oil. Learned DR is disputing the said fact on the ground that he is not sure about the label being a label of 200 M.L. pack - matter remanded back for ascertaining facts of the case.

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• 2014 (8) TMI 469
  Refund claim - Passing of incidence of duty paid to another person - Burden of proof - Held that:- in all cases of refund, the claimant of refund has to prove to the satisfaction of the refund sanctioning authority that the incidence of duty, sought to be refunded by the claimant, has not been passed on to any other person - no documentary evidence of not collecting the refund amount was produced by the Respondent as was the case in Sweat Trade vs CCE Mumbai [2008 (7) TMI 114 - CESTAT MUMBAI]. In the interest of justice, the matter is required to be remanded back to the Adjudicating Authority - Following decision of Union of India Vs. Solar Pesticide Pvt. Ltd. (2000 (2) TMI 237 - SUPREME COURT OF INDIA) - Decided in favour of Revenue.

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• 2014 (8) TMI 468
  Valuation of goods - manufacturing of Lift/Elevator - inclusion of value of erection, commission and installation activities in the assessable value - Held that:- Tribunal has consistently held that erection, commissioning and installation activity undertaken and amount charged separately, cannot form part of the assessable value of the goods supplied. Some of these decisions are De Nora India Ltd. - [2010 (5) TMI 749 - CESTAT MUMBAI], Ashida Electronics Pvt. Ltd. - [2011 (6) TMI 419 - CESTAT, DELHI] and Puissance De DPK - [2013 (7) TMI 564 - CESTAT CHENNAI]. The Hon'ble Apex Court has also considered this matter in the case of Nichrome Metals Works Pvt. Ltd. - [2000 (4) TMI 813 - Supreme Court of India] in the order passed by the Tribunal and reported in [1996 (9) TMI 297 - CEGAT, NEW DELHI], wherein the Tribunal held that erection, commissioning and installation charges should not be included in the assessable value of the goods supplied and dismissed the appeal filed by the Revenue against the Tribunal's order. In view of the above judicial pronouncements with which we respectfully agree, we find that the impugned orders are not sustainable in law and the demands of duty made by including the erection, commissioning and installation charges in the assessable value of the lift/elevators cannot be sustained in law as manufacture and rendering of services are distinct and different activities and have been taken under separate contracts. - Decided in favour of assessee.

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• 2014 (8) TMI 467
  Maintainability of appeal against the letter asking for deposit of penalty - Held that:- Tribunal set aside the impugned order to the extent it denied the input-duty credit to the appellant. On a query from the Bench, learned advocate submitted that quantification of the demand taking into account their eligibility to input duty credit as per Tribunal's order has not yet been ascertained by the department till date. On perusal of the letter dt. 4.10.2013 of the Range Superintendent, I find that it is merely a communication for payment of the penalty and not an order itself against which an appeal could be filed. It is also noted that the Range Superintendent directed the appellants to deposit the penalty otherwise it would attract recovery proceedings by the department - appeal is not maintainable against mere communication for payment of penalty. However, the Range Superintendent should have quantified the demand as per Order of the Tribunal before initiation of recovery proceeding. Accordingly, both the appeals are dismissed as not maintainable - Decided against the assessee.

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• 2014 (8) TMI 466
  Waiver of pre deposit - CENVAT Credit - outwards transportation service - Held that:- in the case of Commissioner of Central Excise, v. ABB Ltd. as reported in [2011 (3) TMI 248 - KARNATAKA HIGH COURT] it was held that assessee is entitled to take input service credit on outward transportation service but there is a contrary decision to this judgement in the case of CCE Kolkata vs. Vesuvious India Ltd. [2013 (12) TMI 1025 - CALCUTTA HIGH COURT]. In view of two contrary decisions, the applicant has made out a case for 100% waiver of pre-deposit of the impugned demands. Hence, I grant waiver of pre-deposit of the entire amount of duty, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.

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• CST, VAT & Sales Tax

• 2014 (8) TMI 471
  Challenge to orders of provisional assessment orders under Section 25(1) of U.P. Value Added Tax Act, 2008 - prayer for quashing of the aforesaid two circulars dated 12th November 2013 and 29th of January 2014 passed by the Commissioner, Commercial Tax. U.P. Lucknow - Held that:- It is admitted by the petitioner that the notices were served, however, the petitioner was prevented to appear in their case as one day time is not an adequate opportunity. However, the petitioner instead of taking recourse of remedy of Section 32 of the Act, has rushed to this Court. - Accordingly, in view of availability of an alternative remedy in the form of Section 32 of U.P. Value Added Tax Act, 2008, we are not inclined to entertain this petition. The liberty is given to the petitioner to invoke his right under Section 32 of the Act. If any such application is made by the petitioner within 30 days from today, the same shall be entertained and decided expeditiously after providing a reasonable and adequate opportunity of hearing and of taking all the grounds, pleas and defence which may be available to the petitioner in law. The application, if so moved under Section 32 of the U.P. Value Added Tax Act, 2008, will not be rejected merely on the ground of delay, if any. - Writ petition disposed of.

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