Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 21, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
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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Unascertained liability - Assessee has deducted the tax during the previous year relevant to the assessment year in question, the conditionality of Section 40(a)(i) stands satisfied - Royalty as claimed by the Assessee-Respondent was unascertained liability, has been found to be incorrect - HC
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Best judgement assessment - Failure to furnish statement - Applicability of Sub-clause (a) of section 144(1) - No merit in the plea of the assessee that the assessment made under section 143(3) of the Act in the present set of facts is invalid - HC
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Valuation of Closing stock - Obligation to handover the built up area admeasuring 1797.25 sq.mtr. was on the assessee from the very beginning. At the end of the year, the built up area to such an extent could not have been considered as the assessee's stock in trade - AT
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Application of section 50C and 43CA of the Income Tax Act - stamp duty valuation the provisions of section 43CA cannot apply to substitute the actual sale consideration with the stamp value in the previous year relevant to assessment year 2009-2010 under consideration - AT
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Taxable event - Completion of contract - profit on sale of the flats - Advance received from VGP which in fact is the sale proceeds of the flats, on completion of the project has to be treated as sale consideration. The consideration can only be treated as advance till the time the project is in progress. The day the project is completed, the advance has to be treated as sale consideration - AT
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Exemption u/s 10(23C)(iiiad) - substantial govt aid - the percentage of grants in aid with respect to total receipts are more than 34.33% considered by the Hon'ble Karnataka High Court to be substantial [2011 (2) TMI 1235 - Karnataka High Court]. - assessee eligible for exemption u/s 10(23C)(iiiab) - AT
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Set off of business losses - The expression any business clearly includes all businesses, without making any distinction between speculation and non-speculation business, and, therefore, going by the plain language of the statutory provision losses in a business, other than in speculation business, can be set off against profits of speculation business as also non speculation business - AT
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Penalty u/s. 271(1)(c) - assessee did not revise the statement of brought forward (or carry forward) loss/es even after the receipt of the appellate order for A.Y. 1995-96 on 25.01.2002, accepting its claim for the set-off of loss to this extent - penalty confirmed - AT
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Cancellation of registration granted to a Charitable Trust u/s 12A - The CIT by his own motion added one more condition in section 12AA (3) that the object of the assessee, Agra Development Authority is not charitable as per amended provisions of section 2(15) for which the CIT is not empowered to add such own condition in the statute - AT
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Capital receipt or Revenue receipt - Entertainment tax subsidy - there was no obligation on assessee to utilize it for any specific purpose will not be hit by Explanation 10 to Sec. 43(1) - AT
Customs
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Enhancement of Assessable Value Smuggling of Goods u/s 2(39) Since no licence was produced by assesse even in Tribunal, those goods were smuggled goods under section 2(39) of Customs Act, 1962 for which all tyres were liable for confiscation under section 111(d) - AT
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Once the goods are held to be smuggled goods under section 2 (39) of Customs Act, 1962, there was no scope at all to interfere to the adjudication- AT
Corporate Law
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Petition for Winding up Demurrage Charges - Winding up petition was not a legitimate means to seek enforcement of a debt which was genuinely and bona fide disputed by the respondent - HC
Service Tax
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Service Tax on erection, commissioning and installation services -Noticee themselves did not get themselves registered in time, did not get themselves registered for all the taxable services rendered by them and even after getting registered, had not disclosed the actual facts to the department. - stay granted equal to 50%. - AT
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Ad-hoc cargo and Deposit Account - levy of service tax on receipt of advance - service tax already deposited on accrual basis - stay granted. - AT
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Clearing and forwarding services Section 65(105)(j) from the terms and conditions entered into by the appellant, it is clear that the appellant was acting as a commission agent by procuring the orders for the sale of the goods - Not taxable as C&F agent services - AT
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Imposition of penalty Section 76 The claim that they came to know about the service tax liability only after investigation by the department no reason to interfere with the order of the Commissioner (Appeals) - no penalty - AT
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CENVAT credit on telecommunication service - main issue involved is whether the tower on which the antenna is mounted by the applicants would constitute capital goods for the purpose of Rule 3 of the CENVAT Credit Rules, 2004 - stay granted - AT
Central Excise
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Recovery of demand from successor of Unit - Priority of dues - the notice of the Excise Department calling upon the appellant to pay the dues of the erstwhile owner of the unit was stands quashed. - SC
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Rebate claim - by virtue of sub-rule (1) of Rule 6 of Cenvat Credit Rules, 2004 the assesses were not entitled for Cenvat credit on inputs used in manufacture of exempted goods - rebate claim rejcted - CGOVT
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Manufacture u/s 2(f) - manufacturing of stainless steel from metal scrap - Processing of raw material into 'blended metal scrap' - Sorting grade wise - Cutting/Shredding/Crushing and sizing of oversize material - Bundling and briquetting - Blending - proposed activity would amount to manufacture. - AAR
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Classification of goods - disposable aluminum foil casserole tray dish as the decision of Hon'ble South Africa Supreme Court was based upon the opinion of the Committee on Harmonised System which is also the basis of Indian Central Excise Tariff, the same is applicable - AT
VAT
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Classification - ink jet cartridges and toner cartridges were parts and accessories of printer which is a peripheral to a computer system and would be covered under Entry Nos.22 & 24 of serial No.68, Part B of First Schedule to the TNVAT Act - HC
Case Laws:
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Income Tax
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2013 (8) TMI 562
Disallowance of Advertisement expenditure enduring benefit - Held that:- Neither the Assessing Officer nor the CIT(A) has disputed the revenue nature of the advertisement expenses of Rs.77,16,120/-. There is no dispute that such expenses is allowable expenditure. Merely because the assessee has firstly shown the entire amount in the books of accounts as deferred revenue expenditure and thereafter debited Rs.29,51,909/- in the profit and loss account cannot be made a ground to disallow the advertisement expenses of Rs.77,16,120/- when indisputably in the computation of income, the assessee has claimed the entire sum of Rs.77,16,120/- after adding back Rs.29,51,909/- to the profit as per profit and loss account. - Decided in favor of assessee. Reliance is placed upon the Apex court judgment in the case of Empire Jute Co. Ltd. Vs. CIT [1980 (5) TMI 1 - SUPREME Court] - Test of enduring benefit alone is not conclusive for treating any expenditure as capital expenditure and it is relevant to find out or ascertain as to whether such expenditure results into an advantage of enduring nature to the assessee in the capital filed or revenue filed so as to decide the exact nature of the said expenditure and allowability of the same under the Income-tax Act. Disallowance for provision of warranties - One year warranty is offered on each computer manufactured and sold by it to purchasers and in terms thereof the assessee provide free maintenance including replacement of parts within one year from the date of sale / installation of computers Held that:- Provision for warranty is rightly made by the appellant-enterprise because it has incurred a present obligation as a result of past events. There is also an outflow of resources. A reliable estimate of the obligation was also possible. Therefore, the appellant has incurred a liability, on the facts and circumstances of this case, during the relevant assessment year which was entitled to deduction under Section 37 of the 1961 Act Applying the decisions in the cases Bharat Earth Movers Ltd. Vs. CIT [2000 (8) TMI 4 - SUPREME Court]; Rotork Controls India Private Limited Vs. Commissioner of Income Tax, Chennai [2009 (5) TMI 16 - SUPREME COURT OF INDIA], it was held that provision for warranty is allowed as expenditure Decided against the Revenue. Disallowance of provision of royalty, ignoring the provisions of Section 40(a)(i) of the Income Tax Act, 1961 - Section 40(a)(i) of the Act provides that royalty payable out side India shall not be deducted in computing the income chargeable under the head of "profits and gains of business or profession" on which tax has not been paid or deducted under Chapter XIII B Held that:- Liability to pay royalty had accrued and was not contingent has held by the assessing officer, while making the provision the assessee had also made book entries in respect of tax deductible. Thus, out of two conditions as mentioned in Section 40(a)(i), namely, "tax has not been paid" or "deducted", one condition, namely, "not deducted" do not exist inasmuch as the tax has been deducted and therefore, the provision of Section 40(a)(i) will not be attracted. In the present case the tax has been deducted and thus in that event the provision of Section 40(a)(i) stands satisfied - Provision of Section 40(a)(i) was substituted by Finance Act (No.2), of 2004 which puts the condition that where tax is deductible at source under Chapter XVII B, and such tax has not been deducted or, after deduction, has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-Section (1) of Section 200, then the royalty shall not be deducted in computing the income chargeable under the head "Profits and gains of business of profession". Thus, subsequent amendment making specific provision of deduction and payment thereof in the previous year or in the subsequent year was not available under Section 40(a)(i) as it existed during the relevant assessment year i.e. Assessment Year 1991-92 - Assessee has deducted the tax during the previous year relevant to the assessment year in question i.e. A.Y. 1991-92, the conditionality of Section 40(a)(i) stands satisfied - Royalty as claimed by the Assessee-Respondent was unascertained liability, has been found to be incorrect Expenditure under the head provision for royalty allowed Decided against the Revenue.
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2013 (8) TMI 561
Exemption under Section 10B - Establishment or revival of a new Export Oriented Unit - Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee company had established a new Export Oriented Unit which was not a revival or reconstruction of the old unit disregarding the facts narrated by the Assessing Officer? - Held that:- The orders passed by the Commissioner as well as by the Tribunal were thus based on the order passed by the Tribunal for the assessment year 1994-95 and there are no materials placed before this Court to contend that the assessee had violated the conditions of licence, thereby disentitling the assessee to have the benefit of deduction under Section 10B of the Act - Decided against Revenue.
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2013 (8) TMI 560
Best judgement assessment - Failure to furnish statement - Applicability of Sub-clause (a) of section 144(1) - Survey under section 133A of the Income Tax Act - Assessee has been avoiding the service of notice & non-cooperating in completing the assessment Held that:- Assessee had tried to find one excuse or the other for not complying with the notices/show cause notice/explanation sought by the authorities of Income Tax - This is the case of Survey, where the documents found from the possession of the assessee were only identified by putting marks on the said documents and copies of the same were taken by the survey team and original were available with the assessee. Despite show cause notices issued to him, there was no compliance and originals of the said identified documents/books were not produced before the Assessing Officer in the original and set aside proceedings. The plea of the assessee that the alleged documents were never confronted to him and/or photo copies of the same not provided are baseless, as the identified documents and the alleged parallel books of account found during survey were at variance with the books of account, on the basis of which return of income was filed and which were always available with him - This is case of survey and not search and seizure operation where documents and books of account found are impounded. There is no recourse to impounding of documents/books during the survey. Despite the same, the Assessing Officer gave notice to the assessee time and again to collect the photocopies of the said documents, were not complied with by the assessee, though he claims to have received the said notices belatedly. Such defaulters cannot take shelter under the provisions of non-allowance of opportunity or non-confrontation of the alleged documents Ground was dismissed Decided against the Assessee. Completion of assessment under section 143(3) or section 144 of the Act Held that:- Provisions of section 144(1)(a) of the Act are not applicable to the instant case - Sub-clause (a) of section 144(1) of the Act which are to be applied where the assessee had failed to furnish any return of income. In the facts of the present case the assessee had furnished return of income on 1.3.1993 declaring loss of Rs.15,700/-, which was processed on 29.2.1993. Thereafter survey under section 133 of the Act was conducted at the business premises of the assessee on 3.2.1992 and four documents marked as B-1 to B-4 were found and identified and the copies of the documents were taken by the survey team - Clauses (b) and (c) of section 144(1) of the Act are applicable where the assessee fails to comply with all the terms of notice issued under sections 142(1), 142(2A) or 143(2) of the Act - in the facts of the present case, first after filing the return of income, survey was conducted at the business premises of the assessee and survey investigation was carried out and comparison was made to the regular books of account maintained by the assessee and thereafter original assessment was made - No merit in the plea of the assessee that the assessment made under section 143(3) of the Act in the present set of facts is invalid Decided against the Assessee. Separate addition for each figure of alleged uchanti loose paper and books Held that:- Assessee failed to put forward any contention in support of the merits of the case - Addition of Rs.53,32,425/- has been made in the hands of the assessee on account of various entries in the parallel set of accounts and documents marked as D-1 to D-4 found during the course of survey. The assessee has failed to controvert the findings of the Assessing Officer in this regard and has even failed to bring on record any evidence explaining or justifying its stand as to why the said addition should not be made in the hands of the assessee, except the plea of peak investment in support of which no calculation has been filed - The assessee has failed to discharge the onus cast upon him - No merits in the issue raised by the assessee of calculation of peak investment/credit based on the loose papers/books - In the absence of any explanation by the assessee justifying the nature of entries in the said documents found during the course of survey, no merits in the alternate ground of appeal raised by the assessee.
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2013 (8) TMI 559
Depreciation u/s 32 - Tribunal deleted disallowance - Held that:- Assessee did not claim depreciation in return filed - Following decision of CIT v. Mysore Cements Ltd. [2010 (3) TMI 984 - KARNATAKA HIGH COURT] - Decided against Revenue.
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2013 (8) TMI 558
Expenditure u/s 40(a)(ia) - Tribunal held that the provisions of section 40(a)(ia) applies only to that expenditure which is payable as of 31st March and not to the expenditure which has already been paid during the year itself - decision of the Special Bench in the case of Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) has been carried in appeal before the Andhra Pradesh High Court and the Andhra Pradesh High Court has admitted the Tax Appeal and stayed the decision [2013 (8) TMI 288 - ANDHRA PRADESH HIGH COURT]. - Revenue's appeal admitted.
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2013 (8) TMI 557
Application of section 50C and 43CA of the Income Tax Act - stamp duty valuation Held that:- On a circumspection of sub-section (1) of section 43CA, it becomes manifest that the provisions for substituting stamp value for the actual sale consideration on transfer of the land, building or both, which were earlier restricted to the capital asset' under head "Capital gains" have now been extended to other than a capital assets' under the head "Profits and gains of business or profession" as well. The reference to the words "other than a capital asset" and the placement of section 43CA in Chapter IV-D indicate that the stamp value in respect of building or land or both sold by a person engaged in such business shall be substituted with the actual consideration received as a result of transfer, if the latter is lower than the former. The insertion of this provision by the Finance Act, 2013 with effect from 01.04.2014 makes it abundantly clear that the mandate of section 43CA shall apply only with effect from assessment year 2014-2015 and not before that. As the assessee in the present case is engaged in the business of selling of flats after construction, the income from which is chargeable under the head "Profits and gains of business or profession", the provisions of section 43CA cannot apply to substitute the actual sale consideration with the stamp value in the previous year relevant to assessment year 2009-2010 under consideration - Invoking the provisions of section 50C for sustaining the addition, has no legal legs to stand on Decided in favor of Assessee. Application of section 56(2)(vii)(b)(ii) read with section 50C of the Income Tax Act Commissioner(Appeals) sustained the addition at ₹ 8,53,79,819 by holding that market value of flats ought to have been considered instead of the actual sale consideration Held that:- Both the above provisions are inapplicable on the facts and circumstances prevailing in the present appeal Assessing officer did not bring any material on record to show that the assessee in fact received higher price than declared. Under such circumstances, the action of the authorities of the Income Tax in this regard cannot be justified. Valuation of Closing stock - Addition of ₹ 13,44,81,944 on account of lower valuation of closing stock - Assessing Officer found total area of unsold flats at 31,414 sq.ft., the value of which was shown in the balance sheet at ₹ 2.03 crore. This gave rate of ₹ 647 per sq.ft. On the perusal of the profit and loss account, the Assessing Officer observed that the cost of construction was at ₹ 4928 per sq.ft. - The assessee was required to handover tenements having area of 225 sq.ft. each aggregating to 1797 sq.mtrs in the project - Vide letter dated 24.12.2012, MHADA directed the assessee to surrender the surplus Built up area admeasuring 1797.25 sq.mtr.' either in same building or in any other building in same ward only - Assessee was under obligation to hand over 1797 sq.mtrs. of built up area to MHADA as can be seen from that letter following interference by the Hon'ble Bombay High Court that both the assessee and MHADA agreed that the assessee would "surrender the surplus built up area admeasuring 1797.25m2" Held that:- Obligation to handover the built up area admeasuring 1797.25 sq.mtr. was on the assessee from the very beginning. At the end of the year, the built up area to such an extent could not have been considered as the assessee's stock in trade - Cost of 1797 sq. mtrs. be treated as Super built up area' and in that way, the addition deserves to be deleted Matter restored to the file of A.O. for working out the value of the remaining closing stock Decided in favor of Assessee.
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2013 (8) TMI 556
Addition made on account of bogus purchases to the tune of Rs.17,59,225/- - Assessment order passed under Section 143(3) dated 30th of December, 2008 were that the assessee in individual capacity is a civil contractor. The allegation of the AO was that the assessee had made bogus purchases Held that:- The commodity supplied were not subject to sales tax, therefore, the CST/ST number were not mentioned on the bills. Further, it has also been noted that in respect of some of the parties, the entire amount could not be paid during the year under consideration, therefore, the part of the amount remained outstanding which was paid in the subsequent year through account payee cheques Thus, purchases were not bogus Decided against the Revenue. Bad debts written off Held that:- After considering the totality of the facts and circumstances of the case as also the case law cited of TRF Ltd. Vs. CIT [2010 (2) TMI 211 - SUPREME COURT] we are not inclined to intervene with the factual as well as legal finding of learned CIT(A) on the issue of write off of sundry balance. In the result , no force in this ground of the Revenue. Hence dismiss. Disallowance made u/s 40(a)(ia) of the Act amounting to Rs.1,35,98,554/- without considering the fact that the payment of TDS was made into the government in contravention of the provisions of Section 200(1) of the Act, 1961 Held that:- Relying upon the decision in the case of CIT Vs. Nestle India Ltd. [2005 (2) TMI 41 - DELHI High Court ], wherein it was held that Where assessee had deducted tax at source from royalty payment in the same financial year and deposited the same in the next financial year within limitation prescribed under Chapter XVII-B r.w.s. 200(1), no disallowance of royalty payment could be made by invoking Section 40(a)(i) - As per the amended provisions, if the payments have made before the due date of filing of the return then the same is allowable, ld. CIT(A) has not examined the each and every detail of payment and the corresponding dates of the deposit of T.D.S. - Remanded back to CIT(A) for the limited purpose to examine the dates of the deposits of the T.D.S. and if the same is as per the law as pronounced in the case law cited above then the same should be allowed Decided against the Revenue.
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2013 (8) TMI 555
Taxable event - Completion of contract - profit on sale of the flats - Year of completion of the residential complex built by a developer - CIT(Appeals) has given a categoric finding that the project was completed in the Financial Year relevant to the AY. 1999-2000 - Chartered Accountant of the assessee vide letter dated 14-12-2004 has mentioned in his letter that the housing project was completed in the Financial Year 1998-99 - Assessee had applied for issuance of Completion Certificate in the month of August 1999 and the Completion Certificate was issued to the assessee by CMDA on 29-12-1999 Held that:- Project is completed when it becomes habitable and all activities relating to the construction of the project are completed. It is the choice of the developer when to apply to the concerned, authority for the issuance of completion certificate - Year of completion of project as 1998-99. Amount received by the assessee from underwriter is the purchase cost of the flats or advance against the sale of underwritten flats - Held that:- The term 'underwrite' means to assume financial responsibility to guarantee the purchase of a full issue of stocks or bonds - Perusal of the underwriting agreement makes it clear that VGP (underwriter) has to pay the agreed amount in a phased manner to the assessee by January 1998. In lieu of the consideration received, the assessee has to complete the apartments and hand over the possession to the prospective buyers brought in by VGP. In the book of accounts, the assessee has shown the amount received from VGP in lieu of underwritten apartments as advance. The assessee is appropriating the amount shown as advance to sale in the year of execution of sale deed. The assessee has received the amount much prior to the date of execution of sale deed and delivery of possession of property - The risk, responsibility and liability to sell the flats underwritten is on the underwriter. If VGP brings any buyer of the flat and requests assessee to execute sale deed in his favour, the assessee is duty bound to get sale deed executed in favour of the prospective buyer and handover possession of the flat. In case the assessee refuses to do so, it shall be breach of contract between the assessee and underwriter - From the documents on record and the facts of the case, it is evident that the amount received by assessee from underwriter is the sale price of the flats. Taxable event AY in which the income of the assessee is liable to be taxed Held that:- The assessee is following project completion method. Therefore, the assessee is liable to be taxed in the year of completion of the project - Project of the assessee was completed in the year 1998-99 relevant to the AY. 1999-2000, the income from sale of flats is liable to be taxed in AY. 1999-2000 Advance received from VGP which in fact is the sale proceeds of the flats, on completion of the project has to be treated as sale consideration. The consideration can only be treated as advance till the time the project is in progress. The day the project is completed, the advance has to be treated as sale consideration Decided in favor of Revenue.
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2013 (8) TMI 554
Proceedings u/s 147 - Assessee claimed deduction u/s 80IB - A.O. disallowed deduction and started proceeding u/s 147 - CIT annulled reassessment - Held that:- reopening of assessment has been done in this case on the basis of retrospective amendment to Section 80IB(10) of the Act. In the reasons recorded for re-opening of the assessment, there was no mention that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment at the time of original assessment. There is also no dispute about the fact that re-opening has been done after four years from the end of the relevant assessment year. As per first proviso to section 147 for the purpose of initiating proceedings u/s 147 after the expiry of four years from the end of relevant assessment year, the income chargeable to tax should have escaped assessment by reason of failure on the part of the assessee either (i) to make a return u/s 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or (ii) to disclose fully and truly all material facts necessary for his assessment - Following decision of Sadbhav Engineering Ltd. Versus Deputy Commissioner of Income-tax [2010 (7) TMI 521 - Gujarat High Court] and Aayojan Developers Versus Income-tax Officer [2011 (2) TMI 738 - Gujarat High Court] - Decided against Revenue.
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2013 (8) TMI 553
Exemption u/s 10(23C)(iiiad) - substantial govt aid - computation of turnover of Rs.1 crore - three educational institution - Held that:- Assessing Officer has considered the total receipts of three educational institution being run by the assessee society whereas the claim of the assessee is that the same should be considered separately and if it is done then, the income of these institutions is fully exempt U/S 10(23C)(iiiad) - the annual gross receipts of three educational institution being run separately by the assessee society cannot be clubbed together for examining the fulfillment of the conditions of receipt being less then the prescribed limit of annual gross receipts. - Following decision of Jat Education Society Versus Dy. CIT [2011 (3) TMI 569 - ITAT DELHI] - Decided in favour of assessee. Deduction u/s 10(23C)(iiiab) - requirement of approval of CCIT - Held that:- As per the provisions of this sub-clause (iiiad) of clause (23C) of section 10 that the term "aggregate annual receipts" of each educational institution is relevant and if any assessee is having more than one educational institution then the aggregate annual receipt of each of such educational institution has to be considered separately - the income of these three institutions are also exempt u/s sub-clause(iiiad) of clause (23C) of section 10 because aggregate income of each of these institutions in each of these two years is below Rs. 1 crore. The requirement of approval of CCIT under sub-clause (vi) of clause (23C) of section 10 is for those who are not covered by sub-clauses (iiiab) or (iiiad) of clause (23C) of section 10. Since, these three institutions are covered by clause (iiiad), clause (vi) is not applicable - Decided in favour of assessee. Substantial Government Aid - Held that:- the percentage of grants in aid with respect to total receipts are more than 34.33% considered by the Hon'ble Karnataka High Court to be substantial [2011 (2) TMI 1235 - Karnataka High Court]. - the assessee/institutions were substantially financed/aided by the Govt. and hence are eligible for exemption u/s 10(23C)(iiiab). - Decided in favor of assessee.
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2013 (8) TMI 552
Set off of business losses - setoff of business losses with speculation gains - Held that:- The restriction set out in section 73 relates only to losses of speculation business being set off against profits of non speculation business, but not vice-versa. Therefore, in the absence of specific restriction on set off of normal business losses against profits of speculation business, the same cannot be inferred or assumed. Similar is the position with regard to set off of speculation losses against non speculation profits. Section 72(1) provides that non speculation business loss can be set off against "profits and gains, if any, of any (emphasis supplied by us) business or profession" carried on by assessee and assessable in that assessment year, and when it cannot be so set off, it shall be carried forward to the following assessment year. The expression "any" business clearly includes all businesses, without making any distinction between speculation and non-speculation business, and, therefore, going by the plain language of the statutory provision losses in a business, other than in speculation business, can be set off against profits of speculation business as also non speculation business - Decided in favour of assessee.
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2013 (8) TMI 551
Penalty u/s. 271(1)(c) - Onus on assessee to furnish a reasonable explanation - CIT upheld penalty - Held that:- assessee did not revise the statement of brought forward (or carry forward) loss/es even after the receipt of the appellate order for A.Y. 1995-96 on 25.01.2002, accepting its claim for the set-off of loss to this extent. The same led to a corresponding difference in the brought forward loss for A.Y. 1996-97. To this extent the assessee has clearly preferred a double claim, i.e., firstly against the income for AY 1995-96 and then again for the current year. Its argument of the A.O. having disallowed the claim subject to verification is to no effect inasmuch as the difference in loss, as claimed and allowed, is finally only for this difference, i.e., which stands wrongly claimed. If the assessee considered that its claim for set off of business loss against LTCG, made for AY 1995-96, may be disallowed in appeal, so that he chose to keep alive its claim for set off of the said loss against income for the current year, the only manner he could do so was by way of a note in the return o income for the current year, and not by actually claiming a set off. The same makes his stand, rather than clarificatory, contradictory, inasmuch as the assessee did not withdraw its claim for the preceding year. In fact, the return for the current year stands filed on 22/4/2004, i.e., after having received the order allowing its claim for set off of business loss against income (LTCG) for AY 1995-96, so that these considerations are only hypothetical and of no relevance. This is as the loss no longer survived for set off, having been already adjusted, rendering the claim for its adjustment (of business loss) to that extent (for this year) as without basis. The assessee thus has no explanation, much less a valid one, for the excess of Rs. 27.01 lakhs, except want of due diligence. In fact, the audit report contains a specific column for furnishing information on brought forward claims for losses and unabsorbed depreciation, and which should have also infused a sense of responsibility in preparing and filing the return, while it is apparent that the figure of loss(es) has been mechanically adopted. Rather, as apparent, the record was not updated for three consecutive years, i.e., A.Y. 2002-03 to 2004-05, and despite the same having a tax impact for the current year. The assessees case is sans any explanation, and levy of penalty on this sum stands rightly confirmed by the ld. CIT(A) - Decided partly in favour of assessee.
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2013 (8) TMI 549
Cancellation of registration granted to a Charitable Trust under section 12A of the IT Act Held that:- Section 12AA(3) of the Act empowers the CIT to cancel such registration if he satisfy that activities of the trust or institutions are not genuine or are not being carried out in accordance with objects of the trust or institution as the case may be - The power of cancellation of registration under section 12A of the Act came to be incorporated by way of amendment introduced by Finance Act 2010 w.e.f. 01.06.2010 - The C.B.D.T. Circular No.1/2011 dated 06.04.2011 explains that this amendment will apply for A.Y. 2011-12 and subsequent years. Whereas, in the case under consideration, the CIT cancelled registration under section 12A of the Act for A.Y. 2009-10 which is not in accordance with the law - This view is fortified by the judgment of Hon'ble Delhi High Court in the case of DIT(E) v. Mool Chand Khairati Ram Trust [2011 (4) TMI 563 - DELHI HIGH COURT] Even otherwise also, as we notice that registration under section 12A/12AA can be cancelled in the circumstances provided in section 12AA(3) of the Act of which detail has been discussed above in Para no 19 of this order. If we apply the said condition stipulated in section 12AA(3), we find that there is no finding of the CIT that activities of the assessee, Agra Development Authority are non-genuine or not being carried out in accordance with the object of the assessee, Agra Development Authority - In the case under consideration, the condition stipulated in section 12AA(3), that activities of the assessee, Agra Development Authority are non-genuine or not being carried out in accordance with the object of the assessee, Agra Development Author is not satisfied - The CIT by his own motion added one more condition in section 12AA (3) that the object of the assessee, Agra Development Authority is not charitable as per amended provisions of section 2(15) of the Act for which the CIT is not empowered to add such own condition in the statute. - Appeal allowed Decided in favor of Assessee.
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2013 (8) TMI 548
Capital receipt or Revenue receipt - Entertainment tax subsidy - CIT held it as capital receipt - Held that:- Ld. CIT (A) in the year before us, has deleted the disallowance by observing that similar additions for Assessment Year 2006-07 and 2007-08 were deleted by the CIT (A) by referring to, inter alia, 'Ponni Sugar' (2008 (9) TMI 14 - SUPREME COURT) and that the facts and circumstances in the years under consideration were similar to those in the earlier years. This has not been disputed - Decided against Revenue. Applicability of Explanation 10 to sec. 43(1) - Held that:- Central Government granted subsidy to assessee as incentive for setting up industry in backward areas - subsidies granted to industries on a percentage of the capital cost are not deductible from the "actual cost" under section 43(1) of the Act for the purpose of calculation of depreciation, etc. - there was no obligation on assessee to utilize it for any specific purpose will not be hit by Explanation 10 to Sec. 43(1) - entertainment subsidy being for the promotion of cinema/ multiplex industry; only because the methodology adopted is to cap it to capital cost of assets will not mean to reduce the cost of asset directly or indirectly in terms of Explanation 10 to Sec. 43(1) - Decided in favour of assessee.
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Customs
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2013 (8) TMI 570
Abetting diversion of Goods - Assesses were engaged in abetting diversion of Muriate of Potash which were imported at concessional rate of duty for use as fertilizer or in the manufacture of composite fertilizer the allegations against assessee prima facie, seems to be incorrect as they had produced records of proper accounting of imported fertilizers and sale thereof to the persons who were authorized to deal in such kind of goods. Penalty u/s 112(b) and 114(i) - Waiver of pre deposit stay application -- none of the assessees had imported the goods The assessees were charged for export of fertilizers in the guise of Industrial Salt Held that:- The penalties imposed u/s 112(b) by any stretch of imagination cannot be fastened on all the assesses - assessee had made out a prima facie case for waiver of pre-deposit of the amounts involved waiver of pre deposit allowed decided in favour of assessee.
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2013 (8) TMI 546
Enhancement of Assessable Value Smuggling of Goods u/s 2(39) Confiscation of Goods u/s 111(d) - Redemption Fine and Penalty - Held that:- There was no dispute about import of old and used tyres which were found by Adjudicating Authority not hazardous but restricted items which could be imported only against a valid licence - Since no licence was produced by assesse even in Tribunal, those goods were smuggled goods under section 2(39) of Customs Act, 1962 for which all tyres were liable for confiscation under section 111(d) - Valuation as suggested by Chartered Engineer was also rightly adopted to levy duty - Redemption fine and penalty had also rightly been imposed which does not call for interference. The value declared by the importer was in lower side as compared to the value suggested by independent Chartered Engineer and other contemporaneous import - the goods imported were not covered by the scope of the hazardous waste (Management, handling and trans boundary Movement) Rules, 2008 - the goods were undervalued and were imported in contravention of the provisions of import policy being restricted goods for which those were liable for confiscation u/s 111(m) and 111(d) of the Customs Act, 1962 respectively and while doing so, penalty was imposed u/s 112 of the said Act, value of import was re-determined Decided against assesse.
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2013 (8) TMI 545
Valuation - Nature of goods - Whether the goods were of inferior quality - Revenue was of the view that Synthetic Industrial Diamond Powder imported by the appellant was not proved to be of inferior quality Held that:- Materials on record do no suggest to entertain plea of respondent as to inferior quantity when burden of proof was not discharged by it - no evidence was adduced by the assessee to support its claim of proper declaration of description and value of export - there was a clear admission of under valuation as recorded by Adjudicating Authority at the time of recording of statement u/s 108 It was elementary principle of law that who had made averment had to prove its veracity decided in favour of revenue.
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2013 (8) TMI 544
Quantum of fine and penalty whether the amount of fine and penalty could be reduced - Held that:- Court did not order any reduction in fine as a result of which fine of Rs. 2 lakhs is confirmed - So far as penalty is concerned the value of goods reduced by six times of the declared value and the reduction was nearly Rs. 29 lakhs Making overall assessment of facts and circumstances depicted above, penalty is reduced to Rs. 4 lakhs - Penalty was imposed u/s 114(iii) - this section prescribes penalty not to exceed the value of goods as declared by the exporter or the value as determined under Customs Act, 1962, whichever is greater Appeal allowed partly.
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2013 (8) TMI 543
Misdeclaration or mistake assessee contended that there was no misdeclaration but only for the mistake the spare parts were considered to be mis declared goods by Customs - Held that:- Court approve the adjudication as to the redemption fine and penalty was confirmed - Mis-declaration is patent from record for which so far as the consequence of bill of entry was concerned penalty was reduced to some extent appeal allowed partially.
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2013 (8) TMI 542
Under valuation of goods - smuggled goods - appellant failed to explain the reason of under valuation department re-determined the value and upon confiscation thereof imposed the duty with option to redeem the goods on payment of fine and Penalty Held that:- There was no exorbitant redemption fine and penalty imposed - the valuation adopted in adjudication does not appear to be baseless - the appellant did not come out with cogent evidence to support to its claim of declaration of proper value - appellant agreed to the enhancement during adjudication - it was difficult to disturb the adjudication at that stage since import was not made in terms of prescribed procedure of law rendering such goods to be smuggled goods Once the goods are held to be smuggled goods under section 2 (39) of Customs Act, 1962, there was no scope at all to interfere to the adjudication decided against the assessee.
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Corporate Laws
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2013 (8) TMI 541
Petition for Winding up Demurrage Charges - Petitioner contended that the company was indebted to the petitioner-company in a sum towards demurrage charges - Held that:- The grounds of dispute raised by the respondent was a bona fide dispute and it was not either illusory or misconceived -there were no good ground to admit the petition There was no privity of contract between petitioner and respondent Merely because respondent-company entered into back to back contracts for Merchandising Trade for facilitating purchase or sale of metal scrap by establishing a Letter of Credit in favour of sellers of metal scrap and pursuant to the same respondent had paid the amounts to its sellers by entering into such tripartite agreement itself would be a pointer to the fact that there was no privity of contract between petitioner and respondent. While examining the prayer for winding up of a company, a duty was cast on the company court to examine as to whether the defence put up by the respondent resisting such claim was a bona fide dispute or a spurious defence the dispute should be of substantial and genuine and not an ingenious method invented by it to deprive the creditor of its just an honest entitlement - Winding up petition was not a legitimate means to seek enforcement of a debt which was genuinely and bona fide disputed by the respondent Costs were ordered to be paid to the Defendant Decided against petitioner.
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Service Tax
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2013 (8) TMI 568
Service Tax on erection, commissioning and installation services - Held that:- Noticee is working under Self-Assessment Scheme and in the said scheme, it is the responsibility of the Noticee to determine whether they are providing any taxable service or not, and if so, to make application for registration for rendering such taxable services, to determine the proper value of their taxable services and to discharge their service tax liability. In the instant case, the Noticee themselves did not get themselves registered in time, did not get themselves registered for all the taxable services rendered by them and even after getting registered, had not disclosed the actual facts to the department. Thus, it is clear to me that the Noticee clearly violated the provisions of Section 66, 67 and Section 68 of the Finance Act, 1994 read with Rules 4, 6 & 7 of the Service Tax Rules, 1994. Waiver of pre-deposit - Held that:- Prima facie applicant had not discharged the correct Service Tax on gross taxable value received by them during the relevant period - applicant directed to deposit 50% of the Service Tax involved in the present case within six weeks from the date of communication of this order and report compliance on 03.09.2013. On deposit of the said amount, the balance dues adjudged would stand waived and recovery thereof stayed during pendency of the Appeal - Stay granted.
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2013 (8) TMI 567
Ad-hoc cargo and Deposit Account - levy of service tax on receipt of advance - stay - Held that:- show-cause notice has been issued to the applicant alleging that they have received certain amounts under head Ad-hoc cargo and Deposit Account (Sundry Depositors) etc. for the period from 2008-09 to 2009-10. However, the data adopted in computing the demand was relating to the summary journal for the month of April, 2010. The finding of the ld. Commissioner is that it is a clerical mistake. Prima-facie, we cannot accept such explanation that it is clerical mistake - only the credit side of the journal ledger has been considered and debit side has not been considered. The practice of discharging service tax against the advances had been dis-continued w.e.f. 01.04.2012 and the service tax has been paid by the applicant from that date against the deposit received from the port users. - taking into consideration that there would not be any liability of the applicant as on date as the entire amount of advances collected from the port users had been subjected to service tax and have been paid by them, thus, the applicant could able to make out a prima-facie case for total waiver of predeposit of dues adjudged. - Stay granted
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2013 (8) TMI 566
Clearing and forwarding services Section 65(105)(j) appellant was rendering assistance in the marketing of goods produced and also ensuring that the goods are sold at the terms and discounts as specified by the manufacturer company Held that:- The appellant does not fall within the taxable service category of Clearing & Forwarding Agency Services - he did not deal with the goods at all as is expected in the case of Clearing & Forwarding Agent - he has to procure the orders from the stockists and forward the same - For the services rendered appellant charged commission - Thus, from the terms and conditions entered into by the appellant, it is clear that the appellant was acting as a commission agent by procuring the orders for the sale of the goods as decided in M/s Prabhat Zarda Factory (India) Ltd. Vs. CCE (2002 (2) TMI 4 - CEGAT, KOLKATA) order to be set aside - appeal decided in the favour of the assessee.
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2013 (8) TMI 565
Imposition of penalty Section 76 revenue file appeal for imposition of penalty Held that:- There was no intention to evade payment of service tax as he already deposited tax with interest assessee is an individual engaged as a land broker in the unorganized sector and as such not well versed with the nuances of taxation - assessee had neither collected any service tax from their clients as provision of service nor have charged or claimed the service tax from their clients - The claim that they came to know about the service tax liability only after investigation by the department no reason to interfere with the order of the Commissioner (Appeals) - appeal decided against the Revenue.
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2013 (8) TMI 564
CENVAT credit on telecommunication service - main issue involved is whether the tower on which the antenna is mounted by the applicants would constitute capital goods for the purpose of Rule 3 of the CENVAT Credit Rules, 2004 department contended that the applicants availed irregular CENVAT Held that:- Revenue is not able to produce any order with respect to duty demand - by order dated 14th March 2012 and 28th March 2012 directed that the duty demand confirmed by the CESTAT shall not be enforced till further orders. Waiver on Pre deposit - Stay application appellant contended that they have already reversed the credit availed by twice Held that:- Court granted waiver of pre deposit and stay of recovery of dues application decided in the favour of the assessee.
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2013 (8) TMI 550
Condonation of delay - Document misplaced - Held that:- The C.A. is the agent of the appellant and the appellant is accountable for the agents lack of diligence. There is no satisfactory cause shown for the near one year delay in preferring the appeal, beyond the three months provided for preferring an appeal - Decided against Assessee.
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Central Excise
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2013 (8) TMI 540
Recovery of demand from successor of Unit - Priority of dues - Liability under the provisions of Excise Act and State Financial Corporation Act - Whether liability arises in law (de-hors the stipulation in Sale Deed /Agreement of Sale) having regard to the legal provisions contained in the Excise Act and State Financial Corporation Act - Held that:- UPFC being a secured creditor had priority over the excise dues - the appellant had not purchased the entire unit as a business, as per the statutory framework he was not liable for discharging the dues of the Excise Department - the subsequent purchaser cannot be fastened with the liability relating to the dues of the Government unless there was a specific provision in the Statute, claiming first charge for the purchaser - As far as Central Excise Act was concerned, there was no such specific provision as noticed in SICOM as well - Proviso to Section 11 was now added by way of amendment in the Act only w.e.f. 10.9.2004. Dues payable Interpretation of Stipulation - Whether the appellant had agreed to discharge the dues payable to the excise department by the borrower on the interpretation of stipulation contained in the Sale Deed of the land and building and Agreement of Sale of plant and machinery - Held that:- Statutory liability arising out of the plant and machinery could be the sales tax etc. payable on the said machinery - dues of the Central Excise were not related to the plant and machinery or the land and building and thus did not arise out of those properties - Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner. The statutory dues were in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture - The expressions in the Sale Deed as well as in the Agreement for purchase of plant and machinery talks of statutory liabilities arising out of the land or statutory liabilities arising out of the said properties (i.e. the machinery) - it was only that statutory liability which arises out of the land and building or out of plant and machinery which is to be discharged by the purchaser - Excise dues were not the statutory liabilities which arised out of the land and building or the plant and machinery - Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property - The appeal was allowed and the judgment of the High Court was set aside - the notice of the Excise Department calling upon the appellant to pay the dues of the erstwhile owner of the unit was also stands quashed.
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2013 (8) TMI 539
Un-accounted Fabrics - Confiscation of Goods - Interest and Penalty u/s 11AC r.w. Rule 173 of the Central Excise Rules 1944 - Revenue found un-accounted fabrics and incriminating documents during the visit and of the view that clearance of goods without due payment of duty under the law Held that:- The matter was remanded to the adjudicating authority with a direction to frame an order denovo after giving the assessee an option to pay duty amount within 30 days by making it explicitly clear in the order itself that if the assessee wanted to avail such option, he was permitted to do so - Commissioner of C. Ex & Cus. Surat-I vs. Harish Silk Mills [2010 (2) TMI 494 - GUJARAT HIGH COURT] - the appeal filed by the assessee was allowed for statistical purpose and remand the matter to the Additional Commissioner to pass a fresh order in light of the observations made. It was also directed to consider the provision of section 11AC and the Tribunal had had specifically noted that none of the two authorities below had availed any option to the assessee to pay duty demand with interest and penalty of 25% of the duty within 30 days from the date of adjudication, and therefore, the Tribunal in its order impugned maintained that the case of the assessee is squarely covered by the explanation to Section 11AC - The Tribunal also noted that the duty determined u/s 11AC(2) was subsequent to the year 2000 and, therefore, the case would be covered by the explanation to Section 11AC of the Central Excise Act.
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2013 (8) TMI 538
Rebate claim - Revenue was of the view that the exported goods were fully exempted from duty, the assesse can neither pay any duty on the same nor avail Cenvat credit on inputs used in the manufacture of exempted products - Held that:- Assesse was not eligible for grant of input rebate claim - Assesse had not followed the prescribed procedure at all and also availed the Cenvat credit on inputs - The original adjudicating authority had rejected the claim of the assesse on the ground that the goods were fully exempted from duty vide Notification No. 4/2006- C.E. (N.T.) and therefore by virtue of sub-rule (1) of Rule 6 of Cenvat Credit Rules, 2004 the assesses were not entitled for Cenvat credit on inputs used in manufacture of exempted goods - for availing rebate of duty paid on material used in exported goods, assesse had follow the procedure laid down in the Notification No. 21/2004-C.E. - the input rebate was admissible if the Cenvat credit was not availed on the inputs revision application Rejected. - Decided against the assessee.
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2013 (8) TMI 537
Manufacture u/s 2(f) - manufacturing of stainless steel from metal scrap - Processing of raw material into 'blended metal scrap' - Sorting grade wise - Cutting/Shredding/Crushing and sizing of oversize material - Bundling and briquetting - Blending - Whether the activity proposed to be carried out by the assesse can qualify as/can be treated to be 'manufacture' under the act - Held that:- It can be termed as 'manufacture' - any material difference was found in the relevant facts when the actual determination was made it will be open to the concerned authority to act in accordance with law as delineated above - In the aforesaid legal and factual background, it was ruled that the proposed activity would amount to manufacture. Opinion of Director, National Institute of Secondary Steel Technology - Held that:- The opinion was inconclusive and itself admitted that there was no existing production unit using the proposed methodology and therefore conclusions given are on the basis of documents only - It also goes on to add that in the absence of such process being applied in India it was very difficult to establish commercial viability of the process - the opinion seems to centre around techno-commercial viability and does not give any conclusive findings on the question of manufacture - it cannot be taken as an authority for the proposition that the said process cannot amount to manufacture. It has not been denied that scrap of specific grades alone can be used in the manufacture of stainless steel and that the processes to be adopted by the applicant would result in the transformation of their raw materials, namely, metal scrap of assorted sizes, grades, composition etc. into metal scrap of specific grades which is directly usable for manufacture of stainless steel. Therefore what emerges from the processes would be a product having distinct identity and use, different from the raw material from which it is made. - proposed activity would amount to manufacture.
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2013 (8) TMI 536
Stay Application Waiver of Pre-deposit Appellant is purchaser in auction of items wherein winding up of a company is ordered by the Hon'ble High Court of Gujarat - Cenvat credit of the excise duty paid on capital goods was allowed to an assessee from the year 1994 and hence there is an element of doubt as to whether they were eligible for cenvat credit of the capital goods purchased by them Held that:- This issue needs to be gone into detail as Department is unable to produce any documents in support of his claim that these were no duty paid inputs lying in factory - Issue needs deeper consideration - Appellant's bank guarantee of Rs.5 lakhs were encashed in some other proceedings by the Revenue Authorities - Revenue Authorities encashed the bank gaurantee amount of Rs.5 lakhs, then the said amount if not returned to the appellant; keeping the same in mind, Appellant directed to deposit further an amount of Rs.5 lakhs - Subject to such compliance being reported to the Deputy Registrar, applications for the waiver of pre-deposit of the balance amounts involved are allowed and recovery thereof stayed till the disposal of appeals.
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2013 (8) TMI 535
Shortage in Stock on inquiry Failure to explain the shortages Held that:- Shortage of 32.174 M.T. of final product Partys repeated failure to explain the reasons for the said shortage which is substantial in nature - It is clear that the party has surreptitiously cleared the said final products without payment of appropriate duty and without observing the mandatory formalities - Supressed the facts of such removal, with intention to evade the payment of duty - Thereby attracting the proviso to Section 11 A (1) of the Central Excise Act, 1944 Also, in the case of Nabha Steels Limited versus Commissioner Central Excise, Chandigarh [ 2004 (169) E.L.T. 345 (Tri.-Del.) shortage of Ingots was found on physical verification and admitted by the Director and the duty involved was debited. Penalty was imposed - Facts are almost similar in this case. Decided in favor of Revenue. 25% of Penalty paid Held that:- Correct as per legal provisions and Boards circular No.831/08/2006 Dt. 26.07.2006 - 100% penalty should be levied - Once respondent have exercised the option to pay 25% penalty within specified time it is correct in view of facts and legal provisions. Decided against the Revenue.
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2013 (8) TMI 534
Classification of goods - disposable aluminum foil casserole tray dish Applicability of decision of South Africa Supreme Court - Whether the disposable aluminum foil casserole falls under heading 76.15 or under heading 76.12 of the Central Excise tariff Relying upon the decision in the case of Hindalco Industries Ltd. vs. CCE, Vapi [2008 (10) TMI 179 - CESTAT, AHMEDABAD], it was held that goods in question are properly classifiable under heading 76.15. The contention of the learned Jt.CDR that decision of foreign countries are not their own law and cannot be made applicable to Indian context, is not being acceptable by us inasmuch as the decision of Hon'ble South Africa Supreme Court was based upon the opinion of the Committee on Harmonised System which is also the basis of Indian Central Excise Tariff. For the same reasons, we find no merits in the contention of the learned Jt. CDR that the classification opinion given by Harmonized System Committee is not binding unless the same is made applicable by the Board's order /circular / notification or clarification. Goods in question are properly classifiable under heading 76.15 by following the earlier decision of the Tribunal in the case of Hindalco Industries [2008 (10) TMI 179 - CESTAT, AHMEDABAD]. - Decided in favor of assessee.
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CST, VAT & Sales Tax
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2013 (8) TMI 569
Maintainability of Writ Petitions - Classification of f Ink Jet Cartridges and toner cartridges used in ink jet printers and laser printers. - Circular issued by the Commissioner - accessories or not - Held that:- The Order passed by the revisional authority was an illustration to demonstrate that the authorities under the Act will not and cannot bypass the circular/clarification issued by the Commissioner of the Commercial Taxes department, who was the highest authority of the department - Filterco & another vs. Commissioner of Sales Tax [1986 (2) TMI 58 - SUPREME COURT OF INDIA ]. Once a clarification was given by the Commissioner of Commercial Taxes, that will bind the subordinate assessing authorities and one cannot expect a different order from the assessing officers - no fruitful purpose would be served by directing the assesse to go for an assessment and for that reason, not to entertain the writ petition - when there was a Division Bench judgment of another High Court on a similar provision, it had to be treated with due respect. Following the Judgement of State of U.P. vs. Indian Hume Pipe Co. Ltd. [1977 (3) TMI 116 - SUPREME COURT OF INDIA] - The circular issued by the Commissioner though stated to be without jurisdiction, the circular having been issued by the highest officer in the department, the assessing officers, who were subordinate officers cannot be expected to take a different view and therefore, no useful or fruitful purpose would be served in directing the petitioners to avail the remedy under the Act and therefore, these writ petitions questioning the classification of the goods are held to be maintainable before this Court on account of the reasons recorded. Classification of Entries - Whether the Court should dwell into the question as to whether ink jet cartridges and toner cartridges are accessories to printer and whether they would fall within Entry 22 & 24 of serial No.68 in Part B of First Schedule of the Act attracting 4% VAT, as such question, essentially being a issue relating to classification of goods - Held that:- The term accessories was used in the schedule to describe goods which may have been manufactured for use as an aid or addition - ink jet cartridges and toner cartridges were parts and accessories of printer which is a peripheral to a computer system and would be covered under Entry Nos.22 & 24 of serial No.68, Part B of First Schedule to the TNVAT Act - Filterco & another vs. Commissioner of Sales Tax [1986 (2) TMI 58 - SUPREME COURT OF INDIA. The items in question were integral part of printer which undisputedly is covered by entry 3 a fiscal entry was to be given a common sense meaning as understood by persons dealing with such goods and not any technical meaning Decided in favor of assesse.
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Indian Laws
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2013 (8) TMI 563
Who may Initiate a proceeding - Locus standi - A stranger cannot be permitted to meddle in any proceeding, unless he satisfies the Authority/Court, that he falls within the category of aggrieved persons - only a person who had suffered, or suffers from legal injury can challenge the act/action/order etc. in a court of law - the law on the said point can be summarized to the effect that a person who raises a grievance, must show how he had suffered legal injury - Generally, a stranger having no right whatsoever to any post or property, cannot be permitted to intervene in the affairs of others. Locus standi of respondent - As respondent does not belong to the Scheduled Tribes category, the garb adopted by him, of serving the cause of Scheduled Tribes candidates who might have been deprived of their legitimate right to be considered for the post, must be considered by this Court in order to determine whether respondent was in fact, in a legitimate position to lay any claim before any forum, whatsoever - a third person, having no concern with the case at hand, cannot claim to have any locus-standi to raise any grievance whatsoever - However, in the exceptional circumstances if the actual persons aggrieved, because of ignorance, illiteracy, inarticulation or poverty, are unable to approach the court, and a person, who has no personal agenda, or object, in relation to which, he can grind his own axe, approaches the court, then the court may examine the issue and in exceptional circumstances, even if his bonafides are doubted, but the issue raised by him, in the opinion of the court, requires consideration, the court may proceed suo-moto, in such respect -Cross-examination was one part of the principles of natural justice. Affidavit - Whether evidence within the meaning of Section 3 of the Evidence Act, 1872 Held that:- It was a settled legal proposition that an affidavit was not evidence within the meaning of Section 3 - the filing of an affidavit of ones own statement, in ones own favour, cannot be regarded as sufficient evidence for any Court or Tribunal, on the basis of which it can come to a conclusion as regards a particular fact-situation. Respondent had not been pursuing the matter in a bonafide manner, and had not raised any public interest, rather he abused the process of the court only to harass the appellant, the respondent was restrained from intervening in the matter any further, and also from remaining a party to it, and he was also liable to pay costs - the Scrutiny Committee had already conducted an inquiry in relation to this matter, and the only grievance of the appellant was that there had been non-compliance with the principles of natural justice, and the fact that the applications filed by him, were not decided upon - before the submission of any report by the Scrutiny Committee, his application for calling the witnesses for cross-examination must be disposed of, and appellant must be given a fair opportunity to cross-examine the witnesses, who have been examined before the Committee - the Scrutiny Committee had already taken a decision, the same being violative of the principles of natural justice, would stand vitiated.
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2013 (8) TMI 547
Benefit of Rehabilitation Scheme - Writ of Mandamus - granting assistance and lending to micro, small and medium enterprises - Held that:- There was serious dispute with regard to fulfillment of the condition for seeking benefit of the circular in question it was not appropriate for the Court to issue any mandamus - For issuing the mandamus and commanding the respondents to give effect to the rehabilitation scheme - the Court had to be satisfied that the pre-conditions stipulated for applicability of the circular or scheme were fulfilled. Conditions for Sick unit - When can a unit be considered as sick unit - a unit was considered as sick when any of the borrowal account of the unit remains substandard for more than 6 months or there was erosion in the net worth due to accumulated cash losses to the extent of 50% of its net worth from the documents and material available on record it was clear that the condition was fulfilled - The unit had been in commercial production for at least two years Central Bank of India Vs. Ravindra and others [2001 (10) TMI 1065 - SUPREME COURT OF INDIA]. Matter Sub-judice - Disputed question of facts The Debt Recovery Tribunal is a forum where a detailed enquiry and trial can be held and after recording of evidence and cross examination the tribunal would in a better position to decide the questions of fact which are in dispute by recording a finding with regard to the unit being in commercial production for two years or not - The matter was already sub-judice before the Debt Recovery Tribunal where the dispute in question can be more appropriately dealt with it was not appropriate for the Court to interfere in the matter the Debt Recovery Tribunal comes to the conclusion that the requirements of the Master Circular were fulfilled, the Debt Recovery Tribunal can issue direction for grating benefit to the petitioner as per the scheme or circular of the Reserve Bank of India Decided against petitioner.
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