TMI Tax Updates - e-Newsletter
August 26, 2014

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise

Articles

1. POWERS OF SETTLEMENT COMMISSION UNDER CUSTOMS ACT, 1962

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. RBI Reference Rate for US $ and Euro

2. India’s Corporate Sector can do wonders, says the President

Circulars / Instructions / Orders

VAT - Delhi

1. 09/2014-15 - dated 21-8-2014

Furnishing of advance information in respect of functions organised in Banquet Halls, Farm houses, Marriage/Party Halls, Hotels and Open Ground etc.

Highlights / Catch Notes

Income Tax

• Belated Notice u/s 143(2) Invalid; Assessing Officer's Jurisdiction Challenged Due to Timing Issues.

  Case-Laws - HC : Validity of belated notice u/s 143(2) in pursuance of section 292BB - Failure to issue a notice within the prescribed period would result in the AO assuming jurisdiction contrary to law - HC
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• Penalty Confirmed u/s 271(1)(c) for False Explanation in Gift Transaction from Family Friends.

  Case-Laws - HC : Penalty u/s 271(1)(c) - credit worthiness and genuineness of the transaction - Gifts by family friends – the explanation given by the assessee is totally false - penalty confirmed - HC
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• Club Membership Fee Classified as Revenue Expenditure, Not Capital Asset, for Business Operations Benefits.

  Case-Laws - HC : Capital or revenue expenditure - one time expenditure incurred for the Club Membership Fee – Such expenses are for running the business with a view to produce the benefits to the assessee - it cannot be treated as capital asset - HC
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• Consumer Healthcare Firm Wins Tax Deduction Case: Packaging Horlicks and Boost Qualifies as Manufacturing under Sec 2(29BA.

  Case-Laws - AT : Claim of deduction u/s 80IC - Packaging of Horlics, Boost for Glaxo Smithkline Consumer Healthcare Ltd. amounts to manufacture or not u/s 2(29BA) – deduction allowed - AT
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• Certificate u/s 197: No Default for Assessee if Tax is Paid, But Interest u/s 201(1A) Applies.

  Case-Laws - AT : Low or Non-deduction of Tax at source certificate u/s 197 – when tax was paid by the deductee, the assessee shall not be held to be in default, but the interest u/s 201(1A) of the Act is mandatory - AT
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• Unexplained Cash Deposits Under Income Tax Section 68: Assessee's Share Transactions Deemed Beyond Reasonable Probability.

  Case-Laws - AT : Unexplained cash deposits u/s 68 - explanations offered by the assessee with regard to sale of shares and re-purchase of shares of company which has been delisted is beyond the comprehension of human probabilities - AT
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• Repairs to Rented Premises Not Eligible for Amortization u/s 35D of Income Tax Act.

  Case-Laws - AT : Addition u/s 35D – Expenses on repair of work place - expenses are for the purposes of repairs on rented premises cannot be said to be preliminary expenses, eligible for amortization - AT
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• AO Can Reject Books if Price Paid Exceeds Market Rates u/s 145(3.

  Case-Laws - AT : Once the AO has established that the price paid to a party is higher as compared to similar products supplied by other parties on the same date, the action of rejection of books of account u/s 145(3) correct - AT
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• Section 206C(1A): Assessee Can't Collect TCS from Buyers After Declaration, Not in Default for Non-Collection.

  Case-Laws - AT : Once the declaration referred to in section 206C(1A) was received by the assessee, then thereafter the assessee could not legally collect the TCS from such buyers and consequently the assessee cannot be treated as an assessee in default for not collecting TCS from such buyers - AT
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• CIT's Revisional Power u/s 263: Correcting AO's Errors in Tax Assessment Due to Inadequate Inquiry.

  Case-Laws - AT : Revisional jurisdiction of CIT u/s 263 – assessment order becomes erroneous where it is found that proper and due inquiry has not been made by the AO and due tax has not been collected from the assessee - AT
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Customs

• Customs Commissioner Can Adjudicate All Cases Irrespective of Duty Amount, Clarifies 2011 Circular.

  Case-Laws - HC : Jurisdiction of Commissioner - Provisional release of goods order - The faulty premise is that the Commissioner of Customs cannot adjudicate a matter which involves duty of less than 50 lacs. The extract of the circular dated 31.05.2011 makes it clear that the Commissioner of Customs has authority to adjudicate all cases without limit. - HC
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• Entrepreneurs' financial struggles or failed business plans don't justify duty exemptions under EPCG License export obligations.

  Case-Laws - HC : Violation against EPCG License - Export obligation - The losses or profits made by an entrepreneur or its business plans going awry, cannot possibly be a ground that entitles a businessman to avail duty exemption/concession. - HC
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Service Tax

• Service Tax Implications on R&D Activities Without Separate Technical Testing: Case Law Analysis.

  Case-Laws - AT : Technical testing and analysis service - service under discussion relates to research and development activity and the appellants are not undertaking the testing and analysis activity separately - AT
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• Intention of Parties Key in Valuing Goods Transfer in Turnkey Contracts for Service Tax Application.

  Case-Laws - AT : Works Contract - Split of Turnkey project - intention of parties - it should be possible to determine the value of transfer of property in goods involved in the execution of the said works contract and thereafter value of the service portion. - AT
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• Court Rules Civil Construction by HAFED Under Works Contracts is Commercial, Subject to Service Tax; No Exemption Granted.

  Case-Laws - HC : Business of civil construction of buildings, godowns, roads etc. against works contract - Prima facie, the argument that activities of HAFED or Haryana Seeds Development Corporation are non-commercial is not acceptable - HC
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Case Laws:

• Income Tax

• 2014 (8) TMI 732
  Validity of belated notice u/s 143(2) in pursuance of section 292BB - scrutiny assessment - Assessee had cooperated with the proceedings – - Held that:- The Tribunal had rightly noted that the AO had recorded in the order of assessment that a notice u/s 143 (2) of the Act was issued on 6 October 2009 much beyond the period prescribed u/s 143(2) of the Act which was till 30 September 2009 - no notice u/s 143(2) of the Act was issued within the prescribed period, the Tribunal rightly held that the assessment was not valid - where the AO fails to issue a notice within the period of six months as spelt out in the proviso to clause (ii) of Section 143 (2) of the Act, the assumption of jurisdiction u/s 143 (3) of the Act would be invalid. The defect in regard to the assumption of jurisdiction cannot be cured by taking recourse to the deeming fiction u/s 292BB of the Act - Section 292 BB of the Act cannot come to the aid of the revenue in a situation where the issuance of a notice itself was not within the prescribed period, in which event the question of whether it was served correctly or otherwise, would be of no relevance whatsoever - Failure to issue a notice within the prescribed period would result in the AO assuming jurisdiction contrary to law – thus, the order of the Tribunal is upheld – Decided against Revenue.

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• 2014 (8) TMI 731
  TDS payment made after due date – Effect of amendment to section 40(a)(ia) – Held that:- Following the decision in COMMISSIONER OF INCOME TAX II Versus GUJARAT STATE ROAD TRANSPORT CORPORATION [2014 (2) TMI 120 - GUJARAT HIGH COURT] - amendment u/s 40(1)(ia) of the Income Tax Act, 1961 brought out by the Finance Act, 2010 w.e.f. 01.04.2010 is having retrospective effect – Decided against Revenue.

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• 2014 (8) TMI 730
  Notice for re-opening of assessment u/s 148 - Notice issued for payment of Group Gratuity to LIC - Balance of the premium payment paid – payment depicted both on the liability as well as asset side of the balance sheet as contra entry - Neither claimed as expenditure nor allowed by the AO in the scrutiny assessment u/s 143(3) of the Act – Held that:- The AO had rightly issued notice u/s 148 of the Act on the ground that the claim on the part of the assessee had resulted in escapement of income on account of provisions created for retiring benefits and on account of provisions created for Group Gratuity Scheme - the mere production of account books or other evidence from which material evidence with due diligence could have been discovered by the AO, would not amount to disclosure - the AO while recording reasons for issuing notice u/s 148 of the Act had rightly held that there was no true and full disclosure and initiation of proceedings within four years from the end of the AY 2009-10 was valid – Decided against Assessee.

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• 2014 (8) TMI 729
  Penalty u/s 271(1)(c) - credit worthiness and genuineness of the transaction - Gifts by family friends – Identity of donee proved or not – Held that:- The Tribunal rightly upheld the levy of penalty and concluded that the assessee had failed to substantiate that the gift received was genuine - The plea of the assessee that the gift was received due to his financial difficulty was also negated on appreciation of material on record - The gifts were held to be bogus and explanation of the assessee was held to be false - huge bank balance in the Saving Bank Account in the Financial Year 2002- 03 clearly show that the assessee was not in any financial difficulty and therefore, it is clear that these are bogus gifts – the explanation given by the assessee is totally false and accordingly explanation (1) to Section 271(1)(c) would not be attracted – thus, no substantial question of law arise for consideration - Decided against Assessee.

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• 2014 (8) TMI 728
  Capital or revenue expenditure - one time expenditure incurred for the Club Membership Fee – Held that:- The corporate membership which was obtained for running the business with a view to produce profit would amount to revenue expenditure - such an expenditure does not bring into existence an asset or an advantage for the enduring benefit of a trade - by subscribing to the membership of a club, no capital asset is created or comes into existence - Following the decision in Commissioner Of Income-Tax Versus Engineers India Ltd. [1999 (7) TMI 58 - DELHI High Court] - Such expenses are for running the business with a view to produce the benefits to the assessee - it cannot be treated as capital asset – Decided against Revenue. Nature of fee received – Capital or revenue - Expenses incurred on ISO certification – Held that:- Following the decision in Empire Jute Co. Limited vs. CIT [1980 (5) TMI 1 - SUPREME Court] - the expenses incurred on ISO 9002 Certificate is revenue in nature – Decided against Revenue.

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• 2014 (8) TMI 727
  Claim of deduction u/s 80IC - Packaging of Horlics, Boost for Glaxo Smithkline Consumer Healthcare Ltd. amounts to manufacture or not u/s 2(29BA) – Held that:- The AO disallowed the claim of deduction u/s 80IC by observing that assessee was not engaged in manufacturing activity - whether the assessee had to fulfill the conditions contemplated u/s 80IC, it is imperative to take note of the relevant statutory provisions - Sub-section (1) of section 80IC provides a deduction in respect of profit and gains derived by an undertaking or enterprises from any business referred to in sub-section (2), while computing the total income of an assessee - Sub- section (2) has further sub-sections and in the case of the assessee, the clause applicable is 80IC (2) (b) which provides that assessee has begun or begins to manufacture any article or thing, which are not specified in Thirteenth schedule - assessee should not manufacture any article or thing which is specified in thirteenth schedule - the activity of manufacture should commence between the period 7th day of Jan 2003 and ending on Ist April 2012. It should be at the place notified by the Board in accordance with the scheme - the assessee was registered with the excise department - In the audit report of the excise department the assessee has been shown to be engaged in the manufacture of Malt Based Foods, falling within chapter 19 of CETA attracting central excise duty - CIT(A) in coming to the conclusion that assessee was engaged in the activity of manufacturing and production, eligible for deduction u/s 80IC, has drawn support from various judicial pronouncements - assessee has already been allowed deduction u/s 80IC in earlier years from A.Y. 2005-06 to A.Y. 2008-09 - No change in facts for the assessment year in question has been brought on record – thus, the order of the CIT(A) is upheld – Decided against Revenue.

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• 2014 (8) TMI 726
  Low or Non-deduction of Tax at source certificate u/s 197 – Assessee in default u/s 201(1) - advance tax was paid by the deductee – Held that:- There was a short deduction of tax u/s 194C of the Act, but the deductee has also paid advance tax in different quarters – relying upon Jagran Prakashan Ltd. v. Deputy Commissioner of Income-tax (TDS) [2012 (5) TMI 488 - ALLAHABAD HIGH COURT] and Hindustan Coca Cola Beverage P. Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] and also CBDT Circular No.275/201/95-IT(B) dated 29.1.1997 - when tax was paid by the deductee, the assessee shall not be held to be in default, but the interest u/s 201(1A) of the Act is mandatory and is to be calculated from the date tax was deductible at source till payment by the payee by way of advance tax or any other mode - CIT(A) has passed a just and proper order by directing the AO to compute the interest chargeable u/s 201(1A) of the Act – Decided against assessee. Charging of interest on short deduction – Held that:- In Hindustan Coca Cola Beverage P. Ltd. vs. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA] and CBDT Circular no. 275/201/95-IT(B), dated 29th January, 1997 it has been clearly held that "interest u/s 201(1A) of the Act till the payment of taxes" will be applicable - it will be against the very context of levy of interest that the interest is compensatory in nature - as charging of interest u/s 201(1 A) is mandatory and there is short deduction as the certificate for lower deduction of tax has been held to be not applicable to the assessee, the AO is directed to re-compute the short deduction of TDS for various dates of payments by the deductor to the deductee and charge interest u/s 201(1A) from the date the TDS was deductible to the date on which such tax is actually paid by the deductee by way of payment of advance tax to the extent of including this liability for the respective quarter after the assessee furnishes evidence for date wise payment of taxes by the deductee - The AO is directed to re-compute the interest u/s 201(1A) – Decided partly in favour of Assessee.

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• 2014 (8) TMI 725
  Unexplained cash deposits u/s 68 - Assessee engaged in business of DEPB licenses, commission agency and trading – Held that:- The assessee is disputing the addition relating to the deposits made into his bank - The assessee has explained the sources to be the sale proceeds realized on sale of shares - the assessee has sold 76850 shares to 15 persons and received cash - the assessee himself has furnished the sources only to the extent of Rs. 7,76,220/- and he did not explain the sources for the remaining amount of Rs. 20.42 lakhs - the assessee has claimed to have sold the shares off-market by receiving cash - None of the parties could furnish copies of the share certificates and share transfer forms to substantiate their respective claim – the contention of the assessee is accepted that a prudent person will not buy shares which do not have any market value and the person who got rid of such kind of shares will not buy back the same from those sellers - the explanations furnished by the assessee may also be tested by considering human probabilities and human conduct - the explanations offered by the assessee with regard to sale of shares and re-purchase of shares of company which has been delisted is beyond the comprehension of human probabilities – the order of the CIT(A) is upheld – Decided against Assessee.

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• 2014 (8) TMI 724
  Restriction on expenses – Held that:- The assessee has debited Rs. 11,39,93,239/- to its profit and loss account - the assessee has Suo Moto made certain disallowance in respect of inadmissible items which include expenses inadmissible Rs. 10,00,000/- commission Rs..98.41 lakhs provision for doubtful debt Rs..43.09 lakhs, Statutory liability Rs. 53.17 lakhs, freight of Rs..6.90 lakhs, Site installation Rs..4.61 lakhs and Prior period expenses of Rs. 2.04 lakhs - The details of expenditure debited to profit & loss account also includes repairs to machineries, site expense, commission, bad debts and miscellaneous expenses and some other expenses - the AO seems unwarranted as the necessary details were much available before the CIT(A) which has not been considered by the CIT(A) and since the assessee itself has disallowed expenses a further disallowance is uncalled for – Decided in favour of Assessee. Estimation of interest towards work in progress – Held that:- Schedule ‘C’ and schedule ‘D’ of the balance sheet show the amount of secured loans and unsecured loans, secured loans contain term loan from bank, cash credit/working capital from bank and term loan for machinery - Unsecured loans refers to the optionally convertibility debentures and interest free loan under sales tax deferral scheme - on these borrowings, the assessee has paid interest amounting to Rs. 1.99 crores out of which interest on debentures is Rs. 1.44 cores and other interest is Rs. 54.83 lakhs - So far as, interest on debentures is concerned no attribution is required – the matter is remitted back to the AO for examination and fresh adjudication – Decided in favour of Assessee. Claim of deferred sales tax – Held that:- Assessee rightly claimed that a revised computation of income was filed during the course of assessment proceedings in which the deferred sales tax claim which was added back in the original computation of income, has been withdrawn – thus, the matter is remitted back to the Ao for fresh adjudication – Decided in favour of Assessee. Treatment of interest income - Income from other sources’ or profit & loss of business – Held that:- A perusal of schedule ‘G’ of current assets forming part of the balance sheet show that the fixed deposits are lodged with banks as margin for funding working capital facilities, which shows that the fixed deposits have a direct nexus with the working capital facilities availed from the bank - the interest earned from such deposits of the money kept apart for the purpose of business is to be taxed under the head income from the business and could be not taxed under ‘income from other sources’ – relying upon Commissioner of Income-Tax Versus Indo Swiss Jewels Limited And Another [2005 (9) TMI 47 - BOMBAY High Court] – the AO is directed to treat the interest income under the head ‘profit & gains of the business’ as declared by the assessee – Decided in favour of Assessee.

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• 2014 (8) TMI 723
  Addition u/s 35D – Expenses on repair of work place - Whether the provisions of section 35D, at all, could be applicable on the assessee, where the assessee incurs expenses to repair the place of his work – Held that:- The assessee is a wholesaler and retailer of musical goods, which he imports - assessee incurred expenses to repair the property/showroom taken on rent - Neither the assessee has incurred any expenditure in the extension of his undertaking nor has he set up a new unit - as per the submissions of the assessee extracted in the order, that the renovation work undertaken by the assessee at Rs. 11,93,820/- had been capitalized suo moto - the expenses are for the purposes of repairs on rented premises cannot be said to be preliminary expenses, eligible for amortization – Decided in favour of Assessee. Personal expenditure - 1/3 Adhoc expenses disallowed –New shop opened at NOIDA - Held that:- The assessee had opened a shop at Noida, while the assessee resides at Mumbai - involvement of personal nature of expense cannot be there - the expenses are routine business expenses, which has not been denied by either of the revenue authorities – the expenses deserve to be allowed as there was no hint of personal usage in any of the expenses, noted by the revenue authorities – - because of opening a new show room at Noida, the business has increased considerably - Along with the increase in business, the routine business expenses have also increased, as compared to the preceding year - the AO did not at all look into the comparative figures as produced before him - when the business has increased by 60.15%, it is obvious that corresponding expenses shall also increase - no disallowance is called for - the order of the CIT(A) is set aside and the AO is directed to delete the disallowance - Decided in favour of Assessee. Import Promotion Expenses – Claim of depreciation – Held that:- There is no term as import promotion expenses - the assessee has used the wrong term for the expenses which he has incurred - It is seen from the details as filed that the expenses had been incurred by the assessee for travelling abroad for the purpose of business, like buying tickets, foreign currency, stay etc. – it has not been examined by the revenue authorities – the assessee claimed depreciation against which, the AO allowed at Rs. 1,37,616/- and balance, the AO disallowed - as the CIT(A) observed that disallowance was made after the AO examined the bills of the fixed assets were produced before him - thus, the matter is remitted back to the CIT(A) for examination – Decided in favour of Assessee.

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• 2014 (8) TMI 722
  Disallowance u/s 14A r.w. Rule 8D – Held that:- In the case of GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] it has been held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable and also not retrospective and applies from A.Y. 2008-09 – u/s 14A of the Income Tax Act, resort can be made to Rule 8D of the Income Tax Rules for determining the amount of expenditure in relation to exempt income, if, the AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure – CIT(A) without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act - CIT(A) also ignored the mandate of the provisions of section 14 A, while confirming the disallowance – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee.

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• 2014 (8) TMI 721
  Various additions made - Appeals consolidated by CESTAT – Held that:- The assessee rightly submitted that all the additions made by the AO and confirmed in appeal by the CIT(A) are based on the basis of investigation and additions made by the Central Excise Department - the assessee has filed appeal before CESTAT - The appeal has been heard in July’ 2013 - There are a batch of appeals and they are being heard turn by turn and the CESTAT Members have stated that they will pass a consolidated order in all the appeals together - assessee rightly contended that the matter requires to be restored back to the file of the CIT(A) for adjudication afresh in the light of the order of CESTAT – revenue also agreed to the above submissions of the assessee - thus, the matter is to be remitted back to the CIT(A) for fresh adjudication – Decided in favour of Assessee.

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• 2014 (8) TMI 720
  Rejection of books of accounts u/s 145(3) – Estimation of GP @ 8% - Held that:- Despite given an opportunity by the AO, the assessee failed to substantiate as to why the same gross profit ratio should not be adopted in its case - CIT(A) was not justified in reducing the gross profit to 8% as against 9% held by the AO - since the purchases from Bharat Steel Company were held to be non-genuine and it was brought to the notice of the assessee by the AO that the price paid to Bharat Steel Company is higher than price charged by other traders for the same product on the same date - the AO has discharged his onus and onus was on the assessee to prove the genuineness of purchases - The assessee has failed to do so – relying upon M/s. Fortune Steel Industries Vs. ACIT [2010 (12) TMI 1108 - ITAT MUMBAI] - in a case where the purchase prices are not verifiable as the parties were not found and in such cases the books should be rejected and the gross profit rate could be estimated - the CIT(A) was justified in upholding the action of the AO in rejecting the book results – Decided against Assessee. Once the AO has established that the price paid to a party is higher as compared to similar products supplied by other parties on the same date and the party to whom higher price has been paid is not traceable and the assessee has not made any efforts to produce the party or give his present address, therefore, the socalled purchases from the said party become suspicious, the AO is fully justified in rejecting the book results and going for estimation. The assessee has categorically explained before the lower authorities that M/s. Asvee Trading Company is not a comparable case since the assessee is a wholesaler whereas the said party is a retailer - No other comparable case was given by the AO - the results of the preceding and succeeding years results were not considered by the AO so as to come to a definite conclusion as to the rate of gross profit in the case of the assessee, vis-a-vis other concerns – thus, the matter is to be remitted back to the AO for decision of the rate of GP.

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• 2014 (8) TMI 719
  Computation of LTCG on sale of two plots of land – Valuation of stamp duty – Held that:- Following the decision in Asst. Commissioner of IT. 12(1), Mumbai Versus M/s Manubhai A Sheth Larger HUF [2012 (9) TMI 682 - ITAT MUMBAI] - The property had already conveyed to the buyer prior to 2001-02 and it was only the final part payment which was made during the year along with the formal documentation - the property was agreed to be sold - The only skin of the nail, which the AO is using is the final payment and documentation and on that basis, the application of section 50 – AO is using is the final payment and documentation and on that basis, the application of Sec. 50C. It is clear from the fact that except for the last installment everything was completed prior to 2001-02 - thus, the order of the CIT(A) is upheld – Decided against Revenue. Treatment of interest income under income from other sources – Disallowance of business loss – Held that:- Assessee had rightly contended that the business loss in earlier years was allowed by the AO - the interest income was taxed as business income in earlier years, therefore, there is no reason in changing the head of income for the year - Following the decision in Asst. Commissioner of IT. 12(1), Mumbai Versus M/s Manubhai A Sheth Larger HUF [2012 (9) TMI 682 - ITAT MUMBAI] – the matter is remitted back to the AO for verification of the contentions of the assessee – Decided in favour of Assessee.

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• 2014 (8) TMI 718
  Addition of cash settlement of bills – Mercantile system followed - Held that:- as the system of accounting followed by the assessee is mercantile, in our considered view the lower authorities were justified in taxing the balance amount of Rs. 35 lakhs as income of the assessee for the year under consideration. We are in agreement with the contention of the assessee that if Rs. 35 lakhs is taxed during the year consideration, then it would amount to double taxation as the assessee has shown the very same income in subsequent Assessment Year 2010-11, which has been accordingly taxed. We hold that the assessee shall be at liberty to approach the appropriate authority in this regard for doing the needful in the matter. – Decided against Assessee.

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• 2014 (8) TMI 717
  Remuneration paid to trustee u/s 13(1)(c) and 13(3)(cc) disallowed – Adequate remuneration paid against the services provided – Held that:- The revenue could not bring any material to controvert the contentions of the assessee - the total receipts of the assessee trust were to the tune of Rs. 443.24 lakhs during the year and the activity undertaken by the assessee trust was to the tune of Rs. 469.87 lakhs - the remuneration of Rs. 4,80,000/- which is about 1% of the total value of activities of the trust for looking after which the same was paid, cannot be said to be excessive or unreasonable – revenue could not controvert that the remuneration of Rs. 4,80,000/- per year was paid to the trustee by the trust in earlier years also for rendering similar services which were allowed by the Department since AY 2003-04 - in absence of any material brought to show that the remuneration paid to Shri Anantbhai K. Shah for actually rendering services as full time secretary of the trust was in excess of the amount which can be reasonably paid for services – Decided in favour of Assessee.

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• 2014 (8) TMI 716
  Assessee in default u/s 201(1) – Short collection of TCS amount - Submission of Form No. 27C mandatory requirement or not – Applicability of section 206C – Consignment dispatches results in stock transfer or not – Held that:- The assessee is not legally obliged to collect the TCS from a buyer who furnishes a declaration to the assessee to the effect that the purchases made by such buyer are to be utilized for the purposes of manufacturing, processing or producing articles or things or for purposes or generation of power and not for trading purposes - in a case where such a declaration is furnished by the buyer to the seller, the seller is not obliged to collect TCS from such buyer and consequently the seller assessee cannot be treated as an assessee in default in respect of not collecting TCS from such buyer – CIT(A) upheld the treatment of assessee as assessee in default in respect of those parties from whom the assessee already received declaration in Form 27C on the ground that such declaration was not furnished by the assessee to the Chief Commissioner or Commissioner as required by the provisions of section 206C(1B) of the Act. Once the declaration referred to in section 206C(1A) was received by the assessee, then thereafter the assessee could not legally collect the TCS from such buyers and consequently the assessee cannot be treated as an assessee in default for not collecting TCS from such buyers –Relying upon CIT Vs. Valibhai Khanbhai Mankad [2012 (12) TMI 413 - GUJARAT HIGH COURT] - the assessee cannot be treated as assessee in default for not collecting TCS from such buyers from whom the assessee received declaration as per provisions of section 206C(1A) of the Act - The assessee has not filed copy of declaration received by it u/s. 206C (1A) of the Act before the AO for his verification – thus, the matter is to be remitted back to the AO for proper verification - the auditor’s certificate which has been furnished was not furnished before the lower authorities and it could not be verified by them – Decided in favour of Assessee.

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• 2014 (8) TMI 715
  Penalty u/s 271(1)(c) – Proper explanation to furnish the bona fide the claim made or not - Claim of carry forward of unabsorbed depreciation – Held that:- The contention of the assessee is accepted because though it is true that assessee could not commence the business but at the same time it cannot be ignored that from incorporation the intention of the assessee was for obtaining NSE membership and various formalities had to be fulfilled before application for registration could be made – Relying upon Whirlpool Of India Limited. Versus Joint Commissioner Of Income-tax [2007 (11) TMI 331 - ITAT DELHI-B] - the nature of business proposed to be undertaken was such that without complying with various requirements, the assessee could not make application for registration - The application could be made to SEBI only when the assessee had fulfilled/ complied with basic conditions necessary for grant of registration. There can be one point of view that the business had been set up after all the necessary formalities had been fulfilled for making the assessee eligible for filing the application with SEBI - Only the permission for commencement of business was awaited - The business was ready for commencement subject to grant of registration - it cannot be said that assessee’s explanation of claiming expenses for the period 25-4-2005 to 15-1-2006 could be branded as mala fide - The assessee having complied with all the requirements was sanguine of getting registration and therefore treated its business as being set up from the date of making application - the assessee’s intention since beginning was to act as member of NSE also has to be given due weightage - penalty is not leviable - the assessee having filed all the relevant information along with the return, it cannot be said that assessee had concealed particulars of its income to attract penalty u/s 271(1)(c) – Relying upon Reliance Petro Products Ltd. v. CIT [2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of Assessee.

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• 2014 (8) TMI 714
  Revisional jurisdiction of CIT u/s 263 – Order passed after proper examination of record or not – Held that:- While invoking revisional jurisdiction u/s 263 of the Act, the Commissioner found that the net profit shown by the assessee is quite low and also there is a decline in net profit in comparison to last year - the net profit shown by the assessee is very low, the assessment order is not only erroneous but certainly prejudicial to the interest of Revenue - the AO has not considered the true facts and even has not compared the like business of other assessee and merely accepted the version of the assessee – Relying upon Malabar Industrial Co. Ltd. Versus Commissioner of Income-Tax [2000 (2) TMI 10 - SUPREME Court] - The assessment order becomes erroneous where it is found that proper and due inquiry has not been made by the AO and due tax has not been collected from the assessee - the books of the assessee were held to be not complete and the actual profit could not be ascertained - the principle of consistency must be followed before invoking revisional jurisdiction but at the same time it is equally important that mistake cannot be perpetuated - the order passed by the I.T.O would obviously be prejudicial to the Revenue and would give jurisdiction to the Commissioner u/s 263 as held in CIT Vs Pushpa Devi [1986 (6) TMI 20 - PATNA High Court] - the unsecured loan also remained to be examined by the AO – Decided against Assessee.

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• Customs

• 2014 (8) TMI 736
  Waiver of pre deposit - Misdeclaration of goods - export of Muriate of Potash (MOP) of fertilizer grade as Oil Well Chemical (drilling chemical additive) - Smuggling of goods in violation of the relevant notification of the DGFT - appellant failed to establish that it had procured the goods from a seller - Held that:- Tribunal has noted prima facie that the goods which were attempted to be exported were MOP as demonstrated by the report of two laboratories and other material facts and evidence on record - The order of the Ahmedabad Bench of the Tribunal virtually contains no reason at all. On the contrary, in the impugned order, the Tribunal has furnished cogent reasons and also dealt with the issue of financial hardship. On the balance, the Tribunal has directed a deposit of Rs. 20.00 lacs. The impugned order of the Tribunal does not suffer from any perversity nor does the appeal raise any substantial question of law. However, the time for depositing Rs. 20.00 lacs granted by the Tribunal is extended by a further period of four weeks.

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• 2014 (8) TMI 735
  Jurisdiction of Commissioner - Provisional release of goods order - Whether the said Tribunal had not erred in law in directing remand of the matter to the Commissioner of Customs (Appeals) even though the said Tribunal had categorically held that the Commissioner of Customs (Appeals) did not have the jurisdiction to hear the appeal - Held that:- The appellant then filed an appeal before the Commissioner of Customs (Appeals) in respect of both the orders dated 03.05.2013 as well as the order dated 17.05.2013 which had been communicated by virtue of the letter dated 21.05.2013. The Commissioner of Customs (Appeals) disposed of the same by an Order-in-Appeal No. CC (A) CUS/352/2013 dated 10.06.2013 by relaxing some of the conditions. In other words, the order passed by the Commissioner of Customs (Appeals) was an order passed in favour of the appellant. While doing so, the Commissioner of Customs (Appeals) noted that it had jurisdiction to hear the appeal and to pass an order therein. Commissioner of Customs (Appeals) was not at all correct in observing that the Additional Commissioner of Customs was the adjudicating authority in the present case. We have already pointed out above that the provisional release orders dated 03.05.2013 and 17.05.2013 were both passed by the Commissioner of Customs (Preventive). Therefore, the Commissioner of Customs (Appeals) was wrong in concluding that the appeal fell within the jurisdiction of the office of the Commissioner of Customs (Appeals). The faulty premise is that the Commissioner of Customs cannot adjudicate a matter which involves duty of less than 50 lacs. The extract of the circular dated 31.05.2011 makes it clear that the Commissioner of Customs has authority to adjudicate all cases without limit. Therefore, the Commissioner of Customs (Preventive) acted within his jurisdiction when the orders dated 03.05.2013 and 17.05.2013 were issued by him. The learned counsel for the appellant is factually wrong because the order was passed by the Commissioner of Customs (Preventive) and not by an Additional Commissioner of Customs or by a Joint Commissioner of Customs. Therefore, the submission made by the learned counsel for the appellant that the order-in-appeal dated 10.06.2013 did not suffer from lack of jurisdiction, cannot be accepted - impugned order dated 21.03.2014 passed by the Tribunal to the extent that the matter has been remanded to the Commissioner of Customs (Appeals) is set aside - Decided in favour of assessee.

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• 2014 (8) TMI 734
  Benefit of exemption under nine Bills of Entry under Sl.No.227 of Notification No.23 of 1998-Cus. dated 02.06.1998 - Misdeclaration of goods - Held that:- Revenue having noticed that the issue involves rate of duty on the imported equipments by interpreting Notification No.23 of 1998-Cus. and has taken the matter to the Supreme Court as against the order of the Tribunal, ought not to have filed an appeal before this Court. Hence the proper course for the Revenue would be to file an appeal before the Supreme Court as against the order of the Tribunal, as the question involves rate of duty for the goods imported and whether it should be on the merit or on the benefit of notification as claimed - appeals filed by the Revenue as against the order of the Tribunal are pending before the Supreme Court, we are unable to proceed further in this matter except directing the Revenue to pursue the matter before the Apex Court, if they are so advised - Decided against Revenue.

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• 2014 (8) TMI 733
  Violation against EPCG License - Export obligation - The petitioner had imported cameras and other equipment under the EPCG licence and was obliged to export “Video Software” equal to the CIF value of the capital goods imported by the petitioner - Recovery of customs duty with interest - forfeiture of Bank Guarantee and action under the Foreign Trade (Development and Regulation) Act, 1992 - Held that:- The export obligations were not conditional upon any project or any venture that was planned by the petitioner at the material time. - failure of the venture, that the petitioner intended to pursue in conjunction with Doordarshan would not in any manner absolve the petitioner from complying with its export obligation. According to the petitioner, it invested in equipment and infrastructure in anticipation of producing content for a business channel – DD3 proposed to be aired by Doordarshan at the material time. And, Doordarshan abandoning the said channel severely affected the financial health of the petitioner and resulted in the large investments made by the petitioner remaining non-productive. Apparently, abandoning the DD3 channel by Doordarshan, put paid to the plans of the petitioner to export programme capsules that were to be produced for airing on the said channel. Consequently, the petitioner suffered business losses and could not discharge it is export obligations. The losses or profits made by an entrepreneur or its business plans going awry, cannot possibly be a ground that entitles a businessman to avail duty exemption/concession. In the normal course, the petitioner would be required to pay full duty on the equipment imported by it. Under the EPCG scheme the petitioner was exempt from paying full duty only on the condition that it would employ its assets to earn foreign exchange and export video software to the extent of the CIF value of its imports. This condition, admittedly, not having been met, the petitioner would be liable to pay the requisite duty and other levies. - Decided against assessee.

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• Service Tax

• 2014 (8) TMI 744
  General and Life Insurance Service - Credit utilized for service provided by Insurance agent - Revenue contends that appellants are not provider of the output service of Insurance Auxiliary Service undertaken by the Insurance Agent and the present appellants are paying service tax as recipient of such service, hence cannot avail and utilize the credit of service tax paid on taxable service to be used in or in relation to providing Insurance Auxiliary Service - Held that:- appellants in present appeals were entitled to utilize CENVAT Credit of the Service Tax paid on various input services for discharge of the Service Tax liability on the output service of “Insurance Auxiliary Service - there is no one to one correlation required between the input service and the output service under the CENVAT Credit Scheme and, therefore, the demands confirmed against the appellants for recovery of CENVAT Credit availed by them for discharging Service Tax liability on Insurance Auxiliary Service is clearly unsustainable and accordingly, we set aside the same - Following decision of M/s TATA AIG LIFE INSURANCE CO LTD and others Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI & THANE-II [2014 (4) TMI 637 - CESTAT MUMBAI] - Decided against Revenue.

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• 2014 (8) TMI 743
  Technical testing and analysis service - Agreement with Ranbaxy for development of product - Held that:- From the reading of the definitions provided under the Finance Act, the definition of ‘taxable service' is to any person, by a technical testing and analysis agency, in relation to technical testing and analysis. As the appellants are manufacturing the medicines as per the formulae developed by them or provided by the principal and during the manufacture, the appellants are undertaking certain test to find out whether the products are as per the formulae hence it cannot be said that the appellants are technical testing and analysis agency. - From the impugned order passed by the Commissioner (Appeals), we find that verification was conducted through jurisdictional Superintendent and the jurisdictional Superintendent of the Range reported that the service under discussion relates to research and development activity and the appellants are not undertaking the testing and analysis activity separately. - Decided in favour of assessee.

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• 2014 (8) TMI 742
  Computer Reservation System (CRS / GDS) - services relating to the reservation of ticket availability position through on line computer system - whether "Online Database Access or retrieval Service" was received by the appellant from foreign based CRS service provider and liable to service tax in terms of section 66A of the Finance Act, 1994 on reverse charge mechanism basis - Difference of opinion - Majority order - Held that:- The said services were being received in respect of various computer reservation system from various CRS companies like M/s. Galilio International Partnership, USA; M/s. Abacus Distribution System Pvt. Ltd. Singapore, M/s. Amadeus Marketing SA Spain, and M/s. Sabre Travel Information Network etc. Said services were being provided by M/s. CRS or GDS Company to the head office of the air lines in terms of agreement entered between them and their head office. The above matters were heard by the undersigned as Third Member along with difference of opinion in the matter of British Airways [2014 (6) TMI 626 - CESTAT NEW DELHI (LB)] - the matter on merits as also on limitation was in favor of assessee - By adopting the final decision of British Airways vide my Order [2014 (6) TMI 626 - CESTAT NEW DELHI (LB)] demand set aside - Decided in favor of assessee.

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• 2014 (8) TMI 741
  Works Contract - Split of Turnkey project - intention of parties - appellant splitting contract into two, one with the main party, namely, China National Automotive Industry International Corporation for supply of equipment and another with the authorized person in India for erection and commissioning - Held that:- a number of meetings and discussions were held between the appellants and SOKEO who were representing CNAICO and after these meetings and negotiations about prices Letter of intent was issued by the appellant to CANICO. It is important to note that even the said Letter of intent was issued through SOKEO. The Letter of intent very clearly speaks about the design, engineering, manufacture, testing, supply, transportation, storage at site, erection, testing and commissioning of plant and equipment. The two turbines were not manufactured by CNAICO but got manufactured from Nanjing Turbine & Electric Machinery (Group) Co Ltd. It was also observed from the said Letter of intent that CNAICO was to depute NTC for the supervision of erection job to be undertaken by SOKEO at the project site on free of charge basis. The Letter of intent makes it clear that designs system, engineering, procurement, manufacture, quality control, testing, packing and forwarding, deputation of supervisory engineer shall be the responsibility of CNAICO. Further the said Letter of intent states that certain equipments were to be procured locally and finally the equipment are to be installed at the site. It would thus be seen from the said Rule that clause (i) of sub-rule (1) provides that value of works contract service determined shall be equivalent to the gross amount charged for the works contract less the value of transfer of property in goods involved in the execution of the said works contract. We also note that the goods supplied by CNAICO have been cleared on payment of Customs duty after determining the value of such goods and therefore it should be possible to determine the value of transfer of property in goods involved in the execution of the said works contract and thereafter value of the service portion. The normal rate of service tax would be applicable on the value of service so determined. Penalty under Sections 77 and 78 of the Finance Act, 1994 is not imposable. Due to the fact that the appellants cannot be compelled to opt for the Composition Scheme and the value has to be determined as per Rule 2A of the Service Tax (Determination of Value) Rules, 2006, the matter will require re-examination by the original authority and the question of penalty under Sections 77 and 78 can be re-determined thereafter only. In our view, if appellants' contention that they have paid to CNAICO only for the supply of goods is true then the value for service portion will become nil and therefore it would have implication on penalty imposable - Matter remanded back - Decided in favour of assessee.

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• 2014 (8) TMI 740
  Waiver of pre deposit - business of civil construction of buildings, godowns, roads etc. against works contract - Held that:- Prima facie, the argument that activities of HAFED or Haryana Seeds Development Corporation are non-commercial is not acceptable. Further there is neither any pleading or material on record nor any submission by the petitioner before us to identify any error in the adjudication order in so far the valuation or classification recorded by the adjudicating authority in respect of site formation - Consequently, the petitioner shall deposit the assessed quantum of service tax and the interest thereon within six weeks. We grant waiver of pre-deposit to the extent of the assessed penalty. On compliance of pre deposit as ordered there shall be stay of the further proceedings for recovery of the penalty, pending disposal of the appeal. In default of deposit or in reporting compliance as directed, the appeal shall stand dismissed for failure of pre-deposit - no substantial question of law arises in this appeal - Decided against assessee.

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• 2014 (8) TMI 739
  Waiver of pre-deposit - mining services, cargo handling services and supply of tangible goods services - Held that:- it transpires that major part of demand of Service Tax liability on the appellant is under the category of mining services. In our view, the stand taken by the appellant as to that they had a bonafide belief for non-discharge of Service Tax liability on the activity of mining services, is a mixed question of facts and law, which needs to be addressed in depth by appreciating the findings recorded by the adjudicating authority and the rebuttal given in the grounds of appeal. On a holistic view of the issue, we find that, prima facie, the bonafide belief of the appellant needs to be held as inappropriate in as much as when the Service Tax liability was on the mining services was introduced, they could have got clarification from the authorities. - Partial stay granted.

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• 2014 (8) TMI 738
  Waiver of pre-deposit of service tax, interest and penalties - Insurance Auxiliary Service - whether the appellant can utilize CENVAT Credit available with them for payment of service tax - Held that:- Demand is prior to July 2012. The ratio of the above decision is fully applicable to the facts of the present case. Therefore, the applicant has made out a strong case in their favour. Pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - Following decision of M/s TATA AIG LIFE INSURANCE CO LTD and others Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI & THANE-II [2014 (4) TMI 637 - CESTAT MUMBAI] - Stay granted.

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• Central Excise

• 2014 (8) TMI 749
  Waiver of pre deposit - Valuation of goods - related person - mutuality of interest - determination of assessable value of the goods cleared to other units - Held that:- Applicant during the relevant period, manufactured and cleared sponge iron to independent buyers as well as to other two units, namely, M/s Jai Balaji Sponge Ltd., Ranigunj and Sri Ramrupai Balaji Steel Ltd., Durgapur. Basis of allegation of mutuality of interest rests on the facts that the Applicant and the other two Units have common Directors and common Head Office and the other two Units were shown as "related person" in the Balance Sheet of the Applicant. At this stage, it is difficult to accept that merely on these facts, it could be said that there have been mutuality of interests so as to bring them within the fold of Clause (iv) of Sub-section (3)(b) of Section 4, occurring in the definition of "related persons". Prima-facie, we are of the view that once the ingredients viz. Clause (ii) (ii) & (iv) of Sub-section (3) of Section 4, are not satisfied, the assessment of goods sold to these Units, would be in accordance with Rule 10 (b)(ii) of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. In other words, the "transaction value" at which, the Applicants sold/cleared the goods to these Units, namely, M/s Jai Balaji Sponge Ltd., Ranigunj and Sri Ramrupai Balaji Steel Ltd., Durgapur at the relevant time, be the assessable value for payment of duty. In the result, we find that the Applicants are able to make out a prima-facie case for total waiver of predeposit of dues adjudged. - Stay granted.

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• 2014 (8) TMI 748
  Clandestine removal of goods - Suppression of production - process loss of about 21% not been satisfactorily explained by the appellant - Held that:- Appellant has led a number of evidences by way of SION, expert's opinion etc. to show that process loss to the extent of 14 to 15% is normal in the case of Phenolic Resin manufactured from Gum Rosins. They have also cited the case laws of Oudh Sugar Mills [1962 (3) TMI 75 - SUPREME COURT OF INDIA], Phosphate Company Ltd. [1994 (10) TMI 189 - CEGAT, CALCUTTA] and Padmanabh Dyeing, etc [1996 (8) TMI 298 - CEGAT, MUMBAI], wherein also similar issue had come up for consideration and the Apex Court and this Tribunal took a view that the production cannot be worked out on the basis of formula and in the absence of tangible evidence showing clandestine removal, duty demand cannot be confirmed. Following the ratio of these decisions, which are applicable to the facts of the present case, the appellant has made out a strong case for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.

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• 2014 (8) TMI 747
  CENVAT Credit - whether the goods used in setting up the refinery qualify as inputs or capital goods eligible for availment of Cenvat Credit thereon and whether in respect of goods found to be so eligible, the Cenvat Credit was taken on the strength of valid documents - Held that:- Several contentions of the Appellants have not been considered analyzed in the Adjudication Order nor any findings given thereon. The discussion regarding the invoices claimed to have been submitted by the Appellants in three files to substantiate proper availment of the Cenvat Credit based thereon is also conspicuous by its absence in the adjudication order. Thus the Order-in-Original fails to fulfill the basic requirement of being a speaking order - Matter remanded back - Decided in favour of assessee.

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• 2014 (8) TMI 746
  DTA Entitlement - When the entitlement accrues on the first day of a financial year based on the export performance and NFEP during the preceding financial year, can it be said that merely because the entitlement was formalized by a letter of the Development Commissioner later, the benefit should be denied during the period of interregnum between the first day of financial year and the date of issue of permission by the Development Commissioner - Held that:- The right to sell in the DTA accrues to the appellant on the first day of a financial year. That accrued/vested right cannot be taken away merely because there was a delay in issuing the letter of permission by the Development Commissioner. Such an interpretation would make a mockery of the provisions of EXIM policy and the benefits granted to the exporter under the said policy - during the interregnum, there was a permission available which was valid, based on the preceding year's export performance and the clearance made by the appellant was within this limits specified. Therefore, it cannot be said that the appellant did not have the requisite permission for sale in to DTA - Following decision of Global Wool Alliance Pvt. Ltd. [2011 (2) TMI 637 - CESTAT, MUMBAI] - Decided in favour of assessee.

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• 2014 (8) TMI 745
  Denial of CENVAT Credit - Non compliance of pre deposit order - Held that:- The appeals filed by the appellant before the first appellate authority, were dismissed for non-compliance. As the issue revolves around a narrow compass, therefore, after allowing the stay applications, the appeals themselves are taken up for disposal. From the facts & circumstances of these appeals, it is observed that the issue involved in these proceedings on taking of CENVAT Credit when borne by the appellant is arguable one but the premises hired is used by another job worker. In the dispute of this nature, asking of pre-deposit of nearly 50% of the amount confirmed seems to be excessive. Without expressing any opinion on the merits of the case, appellant is directed to pre-deposit an amount of Rs. 2 lakhs (Rupees Two lakhs only) in both these appeals within a period of four weeks and report compliance to the first appellate authority to decide the matter on merit. In view of the above observations, the OIA dt.24.03.2014 passed by the first appellate authority is set aside and the appeals are remanded back to first appellate authority for de-novo consideration - Decided in favour of assessee.

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• 2014 (8) TMI 737
  Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that:-in case and having satisfied that delay in not disposing of the appeal within 365 days (total) from the date of grant of initial stay is not attributable to the appellant / assessee in whose favour stay has been granted and that the Appellate Tribunal is satisfied that such appellant / assessee has fully cooperated in early disposal of the appeal and/or has not indulged into any delay tactics and/or has not taken any undue advantage, the learned Appellate Tribunal may, by passing a speaking order as observed hereinabove, extend stay even beyond the total period of 365 days from the date of grant of initial stay. However, as observed by the Hon’ble Supreme Court in the case of Kumar Cotton Mills Pvt. Ltd (2005 (1) TMI 114 - SUPREME COURT OF INDIA), it should not be construed that any latitude is given to the Appellate Tribunal to extend the period of stay except on good cause and if the Appellate Tribunal is satisfied that the matter could not be heard and disposed of by reason of the fault of the Appellate Tribunal for the reasons not attributable to the assessee. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. It also may not be construed that the Appellate Tribunal can extend stay indefinitely. On expiry of every 180 days the concerned assessee / appellant is required to submit an appropriate application before the learned Appellate Tribunal to extend the stay granted earlier and the Appellate Tribunal may extend the stay for a further period but not beyond 180 days at a stretch and on arriving at the subjective satisfaction, as stated hereinabove, the Appellate Tribunal may extend the stay even beyond 365 days from the date of grant of initial stay and even thereafter. - Thus, on expiry of maximum period of 180 days the assessee / appellant is required to submit application for extension of stay each time and the Appellate Tribunal is required to consider the individual case and pass a speaking order, as stated hereinabove. - Following decision of Commissioner Versus Small Industries Development Bank of India [2014 (7) TMI 738 - GUJARAT HIGH COURT] - Matter remanded back - Decided partly in favor of revenue.

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