TMI Tax Updates - e-Newsletter
August 27, 2013

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise Indian Laws

Articles

1. No penalty on deductor if deductee did not provide TAN

   By: DEVKUMAR KOTHARI

News

1. RBI releases Discussion Paper on ‘Banking Structure in India - The Way Forward’

2. Investment of Banks in Money Laundering

3. Safefuards in New Banking Licence Norms

4. Regulation of Commission Rate to Insurance Sales Agents

5. Faster Insurance Claims for those Affected in Uttarakhand Tragedy

6. Repayment of 7.27% Government Stock, 2013 on September 03, 2013 and Government of India Floating Rate Bond, 2013 on September 10, 2013

7. Auction for Sale (Re-Issue) of Government Stocks

8. Exchange Rate of Foreign Currency (Swedish Kroner) Relating to Imported and Export Goods Notified

9. RBI Reference Rate for US $ and Euro

10. The Institute of Company Secretaries of India Announces the Results of its Professional and Executive Programmes

11. Steps Taken for Tiding Over the Existing Shortage of Manpower in Serious Fraud Investigation Office

12. Lobbying by Companies

Notifications

Customs

1. 89/2013 - dated 26-8-2013 - Cus (NT)

Rate of exchange of conversion of each of the foreign currency with effect from August 27, 2013

2. 88/2013 - dated 26-8-2013 - Cus (NT)

Appoints ICD under Sec 7 (aa) of Customs Act, 1962

3. 85/2013 - dated 21-8-2013 - Cus (NT)

Amendment Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

DGFT

4. 38(RE-2013)/2009-2014 - dated 26-8-2013 - FTP

Import policy of Worked monumental or building stone (except slate) and articles thereof, other than goods of heading 6801; mosaic cubes and the like, of natural stone (including slate), whether or not on a backing; artificially coloured granules, chippings and powder, of natural stone (including slate)

5. 37 (RE-2013)/2009-2014 - dated 26-8-2013 - FTP

Policy for issue of import licenses of Rough Marble and Travertine Blocks for the Financial year 2013-14.

6. 36 (RE-2013)/2009-2014 - dated 26-8-2013 - FTP

Policy for allocation of quota for import of Rough Marble Blocks for Indian companies investing abroad in marble mining, for the year 2013-14

Highlights / Catch Notes

Income Tax

• Interest Disallowance Rejected: AO Fails to Prove Violation of Section 36(1)(iii) Conditions in Sister Concerns Loan Case.

  Case-Laws - AT : Disallowance the interest paid at the rate of difference between two average rates (of borrowing funds and lending funds from and to sister concerns) - AO has not pointed out as to how the conditions of section 36(1)(iii) have been violated in this case - No disallowance - AT
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• Section 148 Notice Quashed: Assessing Officer Lacked Independent Reasons, Relied on Jurisdiction-Lacking AO's Satisfaction.

  Case-Laws - AT : Notice u/s 148 - AO has not recorded any reasons for re-assessment proceedings and merely acted on the borrowed satisfaction recorded by another AO without jurisdiction - Notice quashed - AT
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• Tax Officer's Penalty for Concealed Income u/s 271(1)(c) Canceled Due to Estimated Income Discrepancy.

  Case-Laws - AT : Penalty u/s 271(1)(c) of the Income Tax Act - concealment of income - AO rejected to books of accounts since 90% of expenses paid in cash and not verifiable - AO applied the net profit rate @ 3.1% instead of 2.1% - levy of penalty on estimate of income be cancelled. - AT
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• CIT's powers u/s 263 limited; can't revise A.O.'s decision if based on a reasonable interpretation.

  Case-Laws - AT : Revision - Jurisdiction of CIT u/s 263 - the argument of lack of enquiry or inadequate enquiry cannot be employed where the A.O. has taken one of the possible views, showing his application of mind on the issue - AT
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• Section 54B Deduction: Taxpayer's Claim Must Be Assessed Independently, Not Affected by Relative's Actions in Capital Gains Case.

  Case-Laws - AT : Deduction u/s 54B - capital gain from sale of agriculture land - Merely because the assessee's brother has not made any claim u/s 54B that cannot be a reason for disallowing the claim of the assessee. - AT
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• Authorities Must Correctly Compute Transfer Pricing Adjustments, Not Follow Assessee Errors, Per Legal Obligation.

  Case-Laws - AT : Transfer pricing adjustment - Merely because the assessee had made mistakes in computing the TP adjustment the authorities cannot follow the same blindly as they are duty bound to compute the adjustment correctly as per law. - AT
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• Loss-Making Comparables in Transfer Pricing Adjustments Valid Unless Extraordinary Factors Affect Transaction's Comparability.

  Case-Laws - AT : Transfer pricing adjustments - the comparables could not be rejected only on the ground of loss making unless the losses are because of some extraordinary factors which have affected the comparability of the transaction. - AT
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• Off-Market Share Transactions Deemed Genuine Due to Proper Documentation and Evidence.

  Case-Laws - AT : Income from undisclosed sources - Transaction of sale and purchase of shares - off market transaction - genuine or not - Although, it was an off market transaction but it was properly documented and duly supported by relevant evidences - held as genuine transaction - AT
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• Income Scheme Declaration: Bank Deposit in Fictitious Names Fails as Valid Explanation u/s 68 of Income Tax Act.

  Case-Laws - AT : Addition u/s 68 - A declaration made by a person under the VDIS of certain amount and then made a claim regarding the deposit with the Bank which is not in the name of such person (but in the name of fictitious names) cannot be considered as an explanation u/s 68 - AT
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• Section 80P Deductions Inapplicable to Unexplained Income in Block Assessment u/ss 158BC and 158BD.

  Case-Laws - AT : Block assessment - Section 158BC and 158BD - Deduction u/s 80P - where the addition has been made u/s 68 with respect to the undisclosed deposits, the benefit of Section 80P is not available on such unexplained income. - AT
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• Tax Authorities Question Legitimacy of Gift Funded by Borrowed Money via NRE Account.

  Case-Laws - AT : Gift received through NRE account - gift out of borrowed fund - A gift normally connotes a transaction where a person parts his own property to another without consideration and for love and affection. - additions confirmed - AT
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Customs

• Licenses Unavailable: Waiver of Pre-Deposit Granted, Stay of Proceedings Allowed by Adjudicating Authority.

  Case-Laws - AT : Waiver of pre deposit – findings recorded by the adjudicating authority that the forged/tampered licences were not available even at the time of investigations and hence could not be produced - stay granted - AT
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• Denial of SAD Refund Due to Nil BED and Missing Declaration Disqualifies Appellant from Exemption Benefits.

  Case-Laws - AT : Refund of SAD - no excise duty was collected in the invoices because BED is nil, hence no declaration was made on the Invoice that no credit of additional duty was taken - Failure to fulfil condition of notification, disentitles the appellant to the benefit of exemption given by the notification - AT
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• Court Rejects Time-Bar Defense; Fraudulent Conduct Not Protected u/s 129D Despite Appeal Filing Delay.

  Case-Laws - AT : The argument of the assesse that the appeal filed was time-barred under provisions of Section 129D failed - Fraud and justice cannot dwell together - The delay was not a matter for which the assesse should get protection for his fraudulent action. - AT
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• DEPB Scrips Expired; TRA Issuance Insignificant Without Revalidation by DGFT Authorities.

  Case-Laws - AT : DEPB Scrips Cancelled on Being Time Expired - telegraphic release advice (TRA) - the validity of DEPB scrips was only one year and the grant of TRA had no significance as of now unless the DEPB scrips were revalidated by the DGFT authorities - AT
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Indian Laws

• Court Agrees to Review Judgment After Finding Error; Aims to Correct Mistake to Serve Justice.

  Case-Laws - HC : Review petition - error on record - power to correct - earlier judgment suffers from error apparent on the face of record and is liable to be recalled/reviewed. The purpose of justice will not be served by rejecting the Review Application and perpetuating the error again - HC
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Service Tax

• High Court Rules Writ Petition Non-Maintainable; Notice Issuance and Reply Not a Cause of Action.

  Case-Laws - HC : Maintainability of Writ Petition - petition against initiation of inquiry - mere issuance of the notice or giving a reply would not constitute a cause of action - Decided against the assessee. - HC
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• Franchisor Demand Dismissed as No Representational Rights Granted to Franchisee for Sales or Services.

  Case-Laws - AT : Franchisee services - The department failed to show that the appellant (the franchisor) granted representational rights to franchisee to sell or manufacture or provided service identified with them - demand set aside - AT
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• CENVAT Credit Denied for Advertisement Services in Mutual Fund Advisory Case; Not Qualified as Input Services.

  Case-Laws - AT : CENVAT credit - Input service of advertisement service - applicants outward service is only investment and advisory services rendered to the mutual funds, for which advertisement cannot be input service - prima facie case is against the assessee - AT
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• Transmission Tower Installation and Testing Services Exempt Under Notification 45/2010 for Transmission and Distribution Providers.

  Case-Laws - AT : Any activity or service like erection, commissioning and installation of transmission towers and meters as also technical testing and analysis would constitute the activity of transmission and distribution by the service provider to the service receiver - and such service would be squarely covered under exemption provided under notification 45/2010 - AT
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• Court Grants Stay in Service Tax Case on Reimbursed Spare Parts Valuation; Revenue's Argument Rejected.

  Case-Laws - AT : Marketing, Selling and After Sales Services - Valuation - assesse was not paying service tax on cost of spare parts reimbursed – The argument of Revenue that spare parts of motor vehicles used in repair was of the same nature as chemicals used in photography cannot be accepted - stay granted - AT
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Central Excise

• 'Liril Active Shower Gel' Classified as Soap Under Heading 34.01, Not Heading 33.04 as Argued by Revenue.

  Case-Laws - SC : Classification of Goods - The product ‘Liril Active Shower Gel’ was covered by Heading 34.01 which covers soap and various other substances and the product was not covered by Heading 33.04 as contended by the Revenue - SC
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• Larger Bench to Resolve Dispute on Turnover Clubbing Under SSI Exemption Notification No.8/2003 for Small-Scale Industries.

  Case-Laws - AT : SSI Exemption Notification No.8/2003 - Clubbing of turnover of goods manufactured by loan licence or job worker - Difference of opinion - Matter referred to larger bench - AT
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• Cenvat credit on outward freight admissible for FOR destination sales per Board's Circular August 23, 2007.

  Case-Laws - AT : Cenvat credit of service tax paid on outward freight up to the buyer’s premises would be admissible when the sales were on FOR destination satisfying the criteria prescribed for the same in the Board’s Circular 23-8-2007 - AT
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• Court Upholds Deemed Modvat Credit for Grey Fabrics, Rejects Revenue's Claim of No Manufacturing Process Occurrence.

  Case-Laws - AT : Rebate claim - The Revenue had sought to deny the deemed modvat credit availed by the appellant in respect of the grey fabrics received by them on the ground that no manufacturing process had taken place at the appellant’s premises - If the said stand of the Revenue was accepted, it will lead to the fact that no duty payment on the final product was required - decided in favor of assessee - AT
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• Merchant Exporter Not Liable for Duty or Interest for Non-Export of Goods Under Central Excise Act, 1944.

  Case-Laws - AT : Merchant exporter - Failure to export the goods - goods procured against CT1 certificate - appellant discharged the duty liability - Interest liability - the appellant was not a person who was chargeable to duty cannot be saddled with the duty liability under any provisions of Central Excise Act, 1944 - No interest liability on merchant exporter - AT
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Case Laws:

• Income Tax

• 2013 (8) TMI 744
  Disallowance the interest paid at the rate of difference between two average rates (of borrowing funds and lending funds from and to sister concerns) without going into details of utilization of funds borrowed and the purpose of giving of loans – Held that:- AO has not mentioned anything in the assessment order as to under which provision, he has made addition of the differential interest rate - AO has not brought out any detailed facts on record proving nexus of funds borrowed with the funds given as loan to establish that the borrowed funds were diverted at lesser rate of interest to sister concern or other than business purposes - On the face of these findings of fact recorded by the ld. CIT(A) even the part addition sustained by the ld. CIT(A) is not justified - CIT(A) even should not have sustained the part addition because the AO has not pointed out as to how the conditions of section 36(1)(iii) have been violated in this case – Decided against the Revenue. In the case under consideration, the case of the A.O. is that there is a loss on account of interest paid and received. The CIT(A) has also wrongly accepted the A.O.'s view without considering the section 36(1)(iii) of the Act. The loss in the interest account was on account of different rates charged from different parties on loans and advances taken and loans and advances given. For allowing deduction under section 36(1)(iii), it is to be seen whether conditions stated in section 36(1)(iii) has been satisfied or not. In the case under consideration, the assessee has satisfied all the conditions that the borrowed fund was used for the purpose of business as prescribed under section 36(1)(iii) of the Act. Also, it was not the case of the A.O. that the borrowed fund was not utilised for the purpose of business of the assessee.

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• 2013 (8) TMI 743
  Re-opening of assessment u/s 147 of the Income Tax Act – Late filing of return – Held that:- There is no denial of the fact that assessee has taxable income and even admitted the same under provision of section 115JB. The return of income also was not filed in time and return filed was beyond time limits permitted so an invalid one. - as the assessee has not furnished return of income eventhough has taxable income, we uphold the proceedings under section 147. The grounds are rejected. - Decided against the assessee. Sale of depreciable asset - Benefit of Indexation - assessee claimed that the assessee has not claimed any depreciation from assessment year 2000-01 and so provision of section 50 are not applicable – Held that:- contention of assessee not acceptable - Reliance has been placed upon the Hon'ble Kerala high Court in the case of CIT vs. Sakthi Metal Depot [2010 (1) TMI 659 - Kerala High Court] and Chhabria Trust vs. ACIT [2003 (5) TMI 479 - ITAT MUMBAI] - From the year 2000-01 assessee neither filed returns nor offered income under 'house property', so as to consider that asset was not used for business - , the contention of the assessee that asset was deemed to be 'capital asset' and not 'business asset' cannot be accepted. - Decided against the assessee. Interest u/s. 234B, 234C and 234D - Interest u/s. 234B, 234C and 234D cannot be levied as the assessee is a notified person and the provisions of the Special Court (Trial of offences relating to transactions in Securities) Act 1992 will prevail – Held that:- Reliance has been placed upon the judgment in the case of CIT vs. Divine Holdings Pvt. Ltd. [2012 (4) TMI 100 - BOMBAY HIGH COURT] - levy of interest u/s. 234A, 234B and 234C is mandatory – Decided against the Assessee.

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• 2013 (8) TMI 742
  Notice u/s 148 - Reasons to be recorded – borrowed satisfaction - Held that:- ITO, Agra was not having jurisdiction over the assessee, therefore, should not have recorded the reasons for reopening of assessment and further, he was having no reasons to believe that income chargeable to tax has escaped assessment because the order of ADM, Agra has not reached finality on admission of writ petition by the Hon'ble High Court. The reasons which are not in accordance with law have been recorded at Agra by the ITO, who was not authorized to do so, as was having no jurisdiction over the assessee and the Assessing Officer having jurisdiction over the assessee at Aligarh did not do anything with regard to the initiation of re-assessment proceedings and has not recorded any reasons for re-assessment proceedings and merely acted on the borrowed satisfaction. Reliance has been placed upon the judgments in the case of Signature Hotels P. Ltd. vs. ITO,[ 2011 (7) TMI 361 - Delhi High Court] ; Hon'ble Rajasthan High Court in the case of CIT vs. Shree Rajasthan Syntex Ltd., [2008 (5) TMI 276 - RAJASTHAN HIGH COURT].

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• 2013 (8) TMI 741
  Penalty u/s 271(1)(c) of the Income Tax Act - concealment of income - AO rejected to books of accounts since 90% of expenses paid in cash and not verifiable - AO applied the net profit rate @ 3.1% instead of 2.1% - Held that:- In the penalty order, the AO did not mention whether he has imposed the penalty for concealment of income or for furnishing inaccurate particulars of income. Relying upon the judgment of Hon'ble Gujrat High court in the case of New Sorathia Engineering Co. vs. CIT, [2006 (1) TMI 71 - GUJARAT High Court] , wherein it has been held that it is incumbent upon the Assessing Officer to state whether penalty was being levied for concealment of particulars of income by the assessee or whether any inaccurate particulars of income had been furnished by the assessee, it has been held in the present case that levy of penalty on estimate of income be cancelled. There is no definite finding of fact or any contrary material has been brought on record to prove that the assessee has filed inaccurate particulars of income - Levy of penalty under Section 271(1)(c) of the Act in the facts and circumstances of the case at estimate of income, would not be warranted – Decided in favor of Assessee.

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• 2013 (8) TMI 740
  Unexplained deposit(investment) in the bank - source of cash deposited in bank - sale of property by the assessee for Rs. 56,78,751 - sale deed was executed by the GPA holder for a consideration of Rs. 17,50,000 - Held that:- Since this sale deed was not executed by the assessee she can not be said to have the knowledge that the sale deed was executed only for Rs. 17,50,000/-. No fault can be found with the issue of Power of Attorney which was executed in favour of Shri Ravinder Kumar only after receipt of full consideration. The fact of payment of cash also becomes clear from the copy of affidavit filed before the lower authorities When these facts regarding execution of sale deed at lower amount came to the knowledge of the assessee, assessee's husband filed a complaint on 14.11.2008 with the Tehsildar, Naraingarh. Copy of this complaint was marked to the Chief Ld. Commissioner of Income Tax also. On the basis of this complaint, action was taken by the Registering authority which becomes clear from the order of the Collector (translated copy of the same is available at page 48 to 51 and 52 to 58 of the paper book). The Collector has clearly held that upon Inspector of adjoining area that though registered sale deeds were executed on the collector rate but the same was less than the prevalent market rate. This clearly shows that the assessee was taken for a ride and the cash portion paid to the assessee by the buyer was not declared and whatever steps the assessee could have taken, have been taken by the assessee to report the matter to the authorities. The cash has been received by the assessee on sale of agricultural land and the same has been deposited in the bank. - Source proved - No addition.

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• 2013 (8) TMI 739
  Treatment of short term capital gain as business income - investment in shares – Assessee is an individual and proprietor of M/s. Urmi Plastics which is engaged in the business of manufacturing of PVC, pouches and tubing - Apart from business income, assessee also showed capital gain income both under the head long term and short term for share transactions – Assessee's share transactions are to be considered as trading transactions assessed both short term capital gain and long term capital gain offered by the assessee as business income - Held that:- Assessee was involved in share transactions in earlier years and also in later years. Considering the transactions and submissions of the assessee, the same cannot be treated as business income as assessee had no borrowed funds, no set up to do share transactions as a trading activity - Coupled with the fact that the assessee has neither claimed benefit of opening and closing stock, nor AO disturbed the working of the assessee except treating the gain as business income, income declared by the assessee as short term capital gain can not be treated as business income. Transaction to be treated as short term or long term capital gain - Assessee got the shares transferred to demat account as on 31.03.2005 and sold as on 18.04.2005 - There is no verifiable evidence to establish whether the assessee purchased shares on 02.04.04 as claimed – Held that:- Assessee purchased the shares and transferred them into demat account on 31.03.05 - Gain earned by the assessee can be brought to tax as capital gain but as short term capital gain, as there is evidence of purchase as on 31.03.05 and sale as on 18.04.05 - A.O. is directed to treat gains as short term capital gain and tax accordingly. Commission amount on presumption and notion for computing tax - Commission paid at 5% for arranging long term capital gain – Held that:- The transaction is neither proved as an arranged one and nor there is evidence on record that the assessee arranged transaction by paying any commission. The presumptions cannot be made while bringing an amount to tax and no notional amount can be brought to tax – Deletion of commission amount as there is no evidence of assessee paying any commission so to sustain the addition so made.

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• 2013 (8) TMI 738
  Revision - Jurisdiction of CIT u/s 263 - According to CIT, A.O. was duty bound u/s.68 of the Act to do the enquiry of the information received from the FTD before passing it’s orders, and that in fact was also in substance the directions by the FTD vide its order dated 04.02.2011, and which he did not clearly do, passing the order the very next day. His order was, therefore, erroneous and prejudicial to the interest of the Revenue. - Held that:- A.O. was himself of the considered view that further enquiry is required, having sought materials for the same, though was unable to, in the exigencies of the case, verify and examine the same. In fact, the hon'ble court itself clarifies therein that the CIT could establish that the facts on record or the inference drawn from the facts on record per se justify and mandate further enquiry or investigation by the A.O., which had not been conducted by him - Mandate of s. 68 of the Act remaining unsatisfied. As per the decision in CIT vs. Sunbeam Auto Ltd. [2009 (9) TMI 633 - Delhi High Court] wherein it has been clarified that the argument of lack of enquiry or inadequate enquiry cannot be employed where the A.O. has taken one of the possible views, showing his application of mind on the issue - The argument as regards inadequate enquiry predicates on non-application of mind, so that where, therefore, proper application of mind is reflected, the argument of lack of enquiry would not hold. The enquiry, or its absence, even as explained earlier, is purely a matter of fact, so that the decision turns once again on facts - There has been a valid assumption of jurisdiction u/s.263 in the instant case – Appeal allowed – Decided in favor of Assessee.

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• 2013 (8) TMI 737
  Disallowance of exemption u/s 54F - investment in residential house - The dispute is with regard to the area of the land which is required for convenient enjoyment of 254.94 sq.mts of residential house. - Deposit in capital gain deposit scheme - date of completion of the building.- Held that:- the land appurtenant to the residential house has to be determined with regard to the locality where the residential house is situated, the social status of the individual assessee, profession of the individual and other factors for proper and convenient enjoyment of the residential house. - 5 cents of land determined by the CIT(A) is very less in the State of Kerala. - matter remitted back to AO for reconsideration. Computation of Capital Gains - Expenditure incurred towards development of the land which was sold and brokerage paid to the extent of Rs.11 lakhs - Held that:- when the assessee withdrew the claim before the assessing officer by a letter dated 16-12- 2010, the same cannot be reagitated either before the CIT(A) or before this Tribunal. Deduction u/s 54B - No capital asset was subjected to agricultural operation - Held that:- Merely because the assessee's brother has not made any claim u/s 54B that cannot be a reason for disallowing the claim of the assessee. When the assesee has produced certain material before this Tribunal and claimed that the land was subjected to cultivation, this Tribunal is of the considered opinion that the assessing officer has to examine the documents independently and record finding whether the land in question is subjected to cultivation or not? Therefore, the omission of the assessee's brother to claim deduction u/s 54B cannot be a reason to disallow the claim of the assessee. Accordingly, the order of the lower authorities are set aide and the issue is remitted back to the file of the assessing officer. The assessing officer shall reconsider the issue in the light of additional evidence filed by the assessee before this Tribunal and thereafter decide the same in accordance with law after giving reasonable opportunity to the assessee - Decided in favour of assessee.

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• 2013 (8) TMI 736
  Denial of accumulation under section 11(2) of the Act – assessee Society is running educational institute - alleged that assessee did not specify the purpose of accumulation in Form 10B - Held that:- Assessee has accumulated income for the specific purpose and for which the funds have been used accordingly in subsequent years - assessee has applied the accumulation of funds as specified which were in accordance with the object of the trust – disallowance set aside – Following decision of Additional Commissioner of Income-tax, Range - 1, Aligarh Versus Jamia Urdu [2012 (10) TMI 255 - ITAT, AGRA] - Decided against Revenue. Disallowance under section 40A(3) - Held that:- As CIT(A) has deleted the addition holding that the income of the Institution is exempt under section 10(22) the disallowance under section 40A(3) became academic - Following decision of Addl. Commissioner of Income Tax (A. O.) Range-1, Aligarh. Versus Jamia Urdu, [2012 (10) TMI 255 - ITAT, AGRA] - Decided against Revenue.

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• 2013 (8) TMI 735
  Transfer pricing adjustment - Rejection of comparables - loss making companies - Held that:- the comparables could not be rejected only on the ground of loss making. The cases of loss making companies are required to be further examined to find out if the loss had occurred during the normal course of business or because of some extraordinary factors which have affected the comparability of the transaction. Only in the later case the loss cases have to be excluded. No such exercise has been done - both assessee and TPO have applied TNMM method at entity level which is not correct. The adjustment is required to be computed only with respect to international transaction and not in respect of the entire business transactions - Merely because the assessee had made mistakes in computing the TP adjustment the authorities cannot follow the same blindly as they are duty bound to compute the adjustment correctly as per law. Because of the mistakes committed by both the sides TP adjustment has been made at Rs. 65.27 crore when the entire purchases from the AE was only Rs. 56.25 crore. It will not be appropriate to compare the margin of manufacturing companies to those of trading companies. - business profile of the assessee itself was not very clear. - it is appropriate that a fresh transfer pricing study be undertaken for selecting proper comparables after careful study of functional profile of the assessee so as to arrive at proper TP adjustment - Decided in favour of assessee.

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• 2013 (8) TMI 734
  Unexplained investment u/s 69 - Ownership of income - Protective assessment - A.O. has concluded that the transaction in question related to purchase of beetel nut made by DTI [Dinesh Tobacco Industries] and not related to Shri Nand Kishore Malani in any manner - A.O. proposed to assess the income in the hands of DTI on the basis of DRI s finding - Held that:- n there is no scope for making the addition of Rs. 3,75,00,000/- , in the same manner as it was surrendered by Shri Nand Kishore Malani, in the hands of the assessee firm when Shri Nand Kishore Malani has made a surrender of the entire money and he has also paid taxes thereon and has also disclosed this income in his return of income. There is no scope for making any addition either on substantive basis or on protective basis in the hands of the assessee firm or in the hands of M/s Dinesh Pouches Ltd. - Following decision of M/s Dinesh Tobacco Industries Vs. DCIT [2013 (8) TMI 715 - ITAT JODHPUR] - Decided in favour of assessee.

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• 2013 (8) TMI 732
  Block assessment - Section 158BC and 158BD - amount in the Bank Account and fixed deposit as unexplained credit - validity of initiation of proceedings u/s 158BC and applicability of the provisions of section 68 -Held that:- a mere declaration by someone under VDIS is not sufficient being a satisfactory explanation of cash credit appearing in the books of the assessee which is subjected to further verification and examination to find out the true nature and source of such amount. Further, the declaration made by the claimants can be considered only with respect to those cases where the declaration under the VDIS as well as the deposits in the Bank Account are in the same name. A declaration made by a person under the VDIS of certain amount and then made a claim regarding the deposit with the Bank which is not in the name of such person cannot be considered as an explanation u/s 68 of the Income Tax Act. Therefore, the declaration under VDIS can be considered for further examination and verification for the purpose of explanation in respect of deposits in the Bank Account and FDR only with respect to the cases where the declaration and deposit are in the same name and not in the fictitious name. Appraisal report is not a relevant and cogent material to be considered for assessment purposes. What is the material is the evidence and information as well as books of account detected during the course of the search and seizure proceeding and subsequent investigation. Deduction u/s 80P - Held that:- where the addition has been made u/s 68 with respect to the undisclosed deposits, therefore, the benefit of Section 80P is not available on such unexplained income. Matter remanded back with the direction to AO that, if the deposit and the declaration in the VDIS are in the same name and pertains to the same time/year then it can be considered as an explanation subject to verification of the correct name and identity of the depositor. The declaration of income under VDIS post search and seizure action but name of the declarant does not match with the name of the depositors in the account, the same would not be considered as relevant evidence.

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• 2013 (8) TMI 731
  Income from undisclosed sources - Gift received through NRE account - Onus to prove the genuineness of gift - CIT sustained addition - Held that:- A gift normally connotes a transaction where a person parts his own property to another without consideration and for love and affection. It is rare to come across a person who makes a gift of money to another out of the borrowed funds - merely because a gift has come through banking channels and from identifiable sources would not be sufficient to discharge the burden of the assessee in respect of cash credit shown to be a gift, unless inter-alia, the credit-worthiness of the donor was also proven. In the present case, the alleged donor, Smt. Amarjit Kaur, is certainly not shown to be credit worthy since she had no indepdent sources of income and even the allowance received from the UK Govt. was not sufficient to cover the alleged gifts. The claim of taking a loan from Sh. Jatinder Kumar Sidhu is doubtful since the transaction was admittedly in cash and the claim has also been made at a very late stage. The transaction is also not verifiable. Further, as noted earlier, the claim of making gift out of the borrowed money is against normal human probability. The contention that the assessee had no other source of income is not relevant as far as addition u/s 68 of the Act is concernd, since this is a deeming provision which treats unexplained cash credit as the assessee's income - Following decision of Yash Pal Goel v. CIT [2009 (1) TMI 58 - PUNJAB AND HARYANA HIGH COURT] - Decided against assessee.

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• Customs

• 2013 (8) TMI 730
  Reduction of redemption fine and penalty - held that:- It is an established fact on record that the machine imported enjoying customs benefit was utilized for job work which has hampered interest of Revenue - such a use is not possible without human intervention and object or motive is imputed to that. Therefore, the mild fine of Rs.2.00 Lakhs imposed in adjudication does not call for interference. - decided against the assessee.

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• 2013 (8) TMI 729
  Illegal diversion of goods. - Stay application – waiver of pre deposit of penalty u/s 112(b) and 114(i) – Held that:- Assessee in his statement accepted that there was some illegality in clearing the muriate of potash - assesseee had not cooperated with the lower authorities during the adjudication proceedings - cout relied upon Maruti Seeds & Fertilisers (2013 (8) TMI 570 - CESTAT AHMEDABAD) - assessee had not made out the case and all the defences taken by him need to be gone into detail which can be done only at the time final disposal of the appeal – The stay petition was filed for the waiver of pre-deposit of the amount of penalty imposed by the adjudicating authority on the appellant under the provisions of Section 112(b) and Section 114(i) – pre-deposit ordered for an amount of Rs.1,25,000 – stay granted partly.

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• 2013 (8) TMI 728
  Waiver of pre deposit of penalties u/s 112(a) – Stay petition - Held that:- Show cause notice and the earlier round of litigation that the entire case starts on the basis of clearance of consignments based on forged/tampered licence - findings recorded by the adjudicating authority that the forged/tampered licences were not available even at the time of investigations and hence could not be produced before the Bench – waiver of pre deposit allowed to the assessee – decided in favour of assessee.

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• 2013 (8) TMI 727
  Benefit of Notification No.102/2007 - Refund of SAD - no excise duty was collected in the invoices because BED is nil, hence no declaration was made on the Invoice that no credit of additional duty was taken - Held that:- every restriction, stipulation condition as well as limitation prescribed by the Notification was to be scrupulously followed to avail benefit of notification Court followed the judgements of State of Jharkhand & Ors vs. Ambay Cements & Anr (2004 (11) TMI 319 - SUPREME COURT OF INDIA ) and Mihir Textile Ltd. Vs CCE (1997 (4) TMI 75 - SUPREME COURT OF INDIA) - We do appreciate the difficulty of the appellant. But we are helpless to come to rescue of the appellant granting exemption at the cost of the people of India when there was failure to fulfil condition of notification. - Failure to fulfil condition of notification, disentitles the appellant to the benefit of exemption given by the notification. – decided against the assessee.

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• 2013 (8) TMI 726
  Confiscation of Goods u/s 111(d) and 111(m) - Mis-declaration of Goods - Redemption of Goods u/s 125 – Penalty u/s 112(a) - Permissibility of Review - The assesses filed Bill of Entry for import of consignments declared as old woolen and synthetic rags/garments, completely fumigated - Revenue was of the view that the Bill of Entry was assessed by enhancing the value of consignment - Whether the review made by the authority concerned was permissible under the law or not - Held that:- The argument of the assesse that the appeal filed was time-barred under provisions of Section 129D failed - Fraud and justice cannot dwell together - The delay was not a matter for which the assesse should get protection for his fraudulent action. COLLECTOR OF CENTRAL EXCISE Versus M.M. RUBBER CO. [1991 (9) TMI 71 - SUPREME COURT OF INDIA] and COMMISSIONER OF CUSTOMS, KANDLA Versus ESSAR OIL LTD. [2004 (10) TMI 90 - SUPREME COURT OF INDIA] - Assessment of Bill of Entry, without giving any reasons, was an appealable order - But the matter could not have been decided in appeal because the order did not give the reasons for the order - The issue of a reasoned order got delayed because the documents were withdrawn for investigation by DRI - It was the result of the fraudulent action of the appellant in giving fraudulent description of goods on the Bill of Entry. Whether an attempt of revoke would pass a test of legal propriety as mentioned in Section 129D of the Customs Act, 1962 – Held that:- New facts implying fraud were noticed even after order was passed by Commissioner (Appeals) - the new facts should have been taken into account by the Tribunal for condoning the delay in filing appeal - COMMISSIONER OF CUSTOMS Versus CANDID ENTERPRISES [2001 (3) TMI 101 - SUPREME COURT OF INDIA] – the Argument of the assesse was not maintainable under Section 129D - The fact that the goods were not examined properly before passing the order cannot be considered as a new fact - only the facts that came out of fresh examination are new facts – Decided against Assesses.

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• 2013 (8) TMI 725
  Mis-declaration of Goods - Rejection of drawback claims – Held that:- The Rejection of Drawback claims was upheld due to the conduct of the assesses and in view of the investigation which was in progress - The delay was relevant only when the drawbacks were held admissible and the consequence was that the exporters were eligible for interest - The drawback claims on goods exported during the period were held up as export attempted to be made was found to be misdeclared and investigations were commenced - The Customs Act envisages payment of interest in terms of Section 75A of the Customs Act in the event of delay in disbursement of drawback claims. DEPB Scrips Cancelled on Being Time Expired - Held that:- The question of denying TRA without getting DEPB scrips cancelled was not proper and legal - However, as DEPB scrips were time expired even at the time of passing of the order no order was required to be passed - the investigation revealed that the export made were not in accordance with shipping bills, it would have been appropriate that references should have been made for cancellation of that DEPB scrips – The assesse-company have asked for telegraphic release advice (TRA) only in respect of two DEPB scrips though they were issued totally five DEPB scsrips - The Commissioner had denied the request for TRA - The action to deny TRA without taking action to get the DEPB scrips cancelled had no meaning - There was no order on other DEPB scrips - it was clear that the validity of DEPB scrips was only one year and the grant of TRA had no significance as of now unless the DEPB scrips were revalidated by the DGFT authorities - In the event of any request for revalidation of DEPB scrips it would be necessary for the customs authorities to take it up for with the DGFT authorities against any such renewal if so advised. Redemption Fine u/s 125 - Penalty u/s 114 – Held that:- Redemption fine imposed on goods which were already exported and not available for confiscation were set aside - Penalty was reduced - this was a case of export of sub-standard items and overvaluation of exports - the charge of mis-declaration and overvaluation, the Commissioner had chosen to impose excessive amounts as redemption fine, obviously in excess of market price - redemption fine imposed were to be set aside.

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• Corporate Laws

• 2013 (8) TMI 724
  Winding up Petition u/s 433(e) and (f) r.w.434 and 439 of the Companies Act - Held that:-The order and directions will not be given effect to for a period of nine weeks to enable them to make payment of the outstanding amount by that time – if no payment was made and/or neither party applies to the Court for any directions, the order for appointing the OL will become operational - the OL will file a status report by the next date. The OL was appointed and was directed to take over all the assets, books of accounts and records - The OL shall also prepare a complete inventory of all the assets before sealing the premises in which they were kept - He may also seek the assistance of a valuer to value the assets - He was permitted to take the assistance of the local police authorities, if required - Publication of the citation of the petition be effected in the Official Gazette, 'The Statesman' (English) and 'Veer Arjun' (Hindi) in terms of Rule 24 of the Companies (Court) Rules, 1959 ('Rules'). Directors were directed to strictly comply with the requirements of Section 454 of the Act and Rule 130 of the Rules and furnish to the OL a statement of affairs in the prescribed form verified by an affidavit within a period of 21 days from when the order becomes operational - They will also file affidavits in the Court, with advance copies to the OL, within four weeks setting out the details of all the assets, both movable and immovable and enclose therewith the balance sheets, profit and loss accounts and copies of the statements of all the bank accounts for the last three years.

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• Service Tax

• 2013 (8) TMI 749
  Maintainability of Writ Petition - petition against initiation of inquiry - petition to declare the inquiry initiated was illegal, bad in law and outcome of the arbitrary exercise of the power and without jurisdiction - Territorial jurisdiction - Cause of action - According to the petitioner, since the summons/notices have been issued at the registered office of the petitioner and the replies are made therefrom, it would constitute a part of the cause of action. The petitioner have the several branches across the country for providing services coming under the category of banking and other Financial Services, Business Auxiliary Services and Business Support Services attracting the service tax. The respondent no.3, the Commissioner of Service Tax at Kolkata issued several summons and notices to the petitioner Company for verification of the documents relating to the service tax on the finance lease under the category of Banking and other Financial Services and Business Auxiliary Services Held that:- mere issuance of the notice or giving a reply would not constitute a cause of action - Decided against the assessee. Decision in National Textile Corporation Ltd. vs Haribox Swalram [2004 (4) TMI 527 - SUPREME COURT] followed. Regarding the contention that the purported action of the respondent no.1 gives rise to an evil consequence at the place of the business of the petitioner at Kolkata, and thus the writ petition is maintainable. Held that:- The evil consequence as tried to be contended by the petitioner must relate to the infringement of the rights as guaranteed under Constitution of India. No case of an infringement is made out in the writ petition. Rather it would appear from the pleadings made in the various paragraphs that compliance to the summons and/or notices is made and the entire facts as pleaded in the writ petition would reflect that the sheet anchor of the case founded on the action of the respondent no.1 to reopen the investigation which has already been concluded and dropped by the respondent no.3 - Decision in the case of Kusum Ingots and Alloys Limited [2004 (4) TMI 342 - SUPREME COURT OF INDIA ] followed. The writ petition was dismissed for want of territorial jurisdiction.

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• 2013 (8) TMI 748
  Franchisee services - The appellant entered into sub-licensing agreement with various seed procuring companies to transfer the technology obtained from BTC for a consideration in the form of sub-license fee and the Revenue seeks to levy service tax on this fee under ‘Franchisee services' - Held that:- The packages contain mark “Fusion BT” which only denotes that the seeds being sold contain Fusion BT genes, and it does not denote that the said mark is either a logo or a trademark or hallmark of the appellant - The department could not show that any logo or hallmark belonging to the appellant has been put on the packages manufactured/marketed by the sub-licensees. A laptop containing a label of ‘windows', only denotes that the processor or the operating system/software, as the case may be in the said laptop and by putting such label, the laptop manufacturing company does not represent ‘Microsoft' or become the franchisee of ‘Microsoft'. - in a franchisee transaction the franchisee loses his individual identity and represent the identity of franchisor to the outside world, as in the case of ‘McDonald' the customers are not concerned with who owns the ‘McDonald's restaurant (franchisee) - The customers identify it with ‘McDonald (the franchisor). The appellants had imported the Technology which is owned by BTC and patented in China - The said technology was imported in the form of the mother seeds and the same were multiplied in the laboratory by or on behalf of the appellants and given to the sub-licensee to further multiply for onward sale by them to the farmers for the purpose of growing commercial crop - The appellants were not granted any ‘representational right' from BTC to represent them in India, nor entitled to grant or they have actually granted any representational right to the sub-licensees. The department failed to show that the appellant (the franchisor) granted representational rights to franchisee to sell or manufacture or provided service identified with them - order set aside – Decided in favor of assesse.

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• 2013 (8) TMI 747
  CENVAT credit - Input service of advertisement service - Held that:- The main condition of the input service is that it has to be used for providing an output service - the output service of the applicant is to provide financial advice to mutual fund to invest the funds. The obligation of the Asset Management Company is to take all reasonable steps and exercise due diligence to ensure the investment of funds is not contrary to SEBI Regulation and the trust deeds. According to the Revenue, in terms of Rule 5 of Service Tax Rules, 2006, the applicant acted as a pure agent of the mutual fund and they incurred the advertisement expenses for the benefit of the mutual funds. It is also contended that the applicants outward service is only investment and advisory services rendered to the mutual funds, for which advertisement cannot be input service.- prima facie case is against the assessee - pre-deposit of Rs. 25 Lacs ordered - stay granted partly.

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• 2013 (8) TMI 746
  Erection, Commissioning & Installation Service u/s 65(39) r.w 65(105)(zzb) - retrospective exemption regarding transmission and distribution of electricity - assesse claimed immunity to tax on the basis of Notification No. 45/2010 - Held that:- All taxable services provided in relation to distribution of electrical energy were exempt from the liability to service tax - The expression in relation to was of wide import and indicated all activities having a direct and proximal nexus with distribution of electrical energy - Distribution of electricity energy cannot be effectively accomplished without installation of sub-stations, transmission towers and installation of meters to record electricity consumption for periodic billing and recovery of charges. M. P. Power Transmission Co. Ltd. vs. CCE Bhopal [2011 (2) TMI 982 - CESTAT, NEW DELHI ] - Revenue demand of service tax on transmission and distribution of electricity was declared unsustainable in view of Notification No. 45/2010 – the purpose of billing the consumer for electricity consumed it ws essential to install the electricity meter having capacity to withstand the load provided to the customer - any activity or service like erection, commissioning and installation of transmission towers and meters as also technical testing and analysis would constitute the activity of transmission and distribution by the service provider to the service receiver - and such service would be squarely covered under exemption provided under this notification – order was unsustainable and was accordingly quashed – Decided in favor of assesse.

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• 2013 (8) TMI 745
  Marketing, Selling and After Sales Services - Valuation - assesse was not paying service tax on cost of spare parts reimbursed – Revenue was of the view that the assesse should had paid service tax on the value of service inclusive of the material used - Held that- There cannot be levy of service tax on value of spare parts used in repair service of motor vehicles - In such activity the cost of materials and the service itself can be clearly vivisected and was perceived as separate components by customers –relying upon BSNL Vs. UOI [ 2006 (3) TMI 1 - Supreme court] - there was no proof regarding value of goods involved – the reimbursement claims for value of goods show the items used and price of each item. The argument of Revenue that spare parts of motor vehicles used in repair was of the same nature as chemicals used in photography because the former are in the nature of spare parts where a sale prior to replacement is acceptable as a concept and the latter has the nature of consumables cannot be accepted – Rule 6 (1) (vi) of Service tax (Determination of Value) Rules 2006 does not specifically state that the rule was about cost of spare parts. Prima facie case is in favor of assessee - stay granted.

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• Central Excise

• 2013 (8) TMI 723
  Finalised Seniority List - Instructions of Deputy Secretary Department of Revenue that the revised seniority list of Assistant Commissioners of Customs and Central Excise circulated in terms of Circular dated 27.02.2013 was the "finalised seniority" list of Assistant Commissioner appointed up to 1996-1997 - Held that:- The facts and circumstances of the case shall not prevent the Government from giving to the officers seniority from the year the vacancies became available - The direction was issued at the request made by the Government of India and on the concession of Mr. Sharan, learned senior counsel for the respondent which shall not operate as a precedent in future.

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• 2013 (8) TMI 722
  Classification of Goods - Held that:- The product ‘Liril Active Shower Gel’ was covered by Heading 34.01 which covers soap and various other substances and the product was not covered by Heading 33.04 as contended by the Revenue - Assenting the view given by CESTAT - Decided against Revenue.

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• 2013 (8) TMI 721
  SSI Exemption Notification No.8/2003 - Determination of Turnover – Clubbing of turnover of goods manufactured by loan licence or job worker - Waiver of Pre-deposit - manufacture of Ophthalmic and liquid orals (medicaments) - Difference of opinion. Matter referred to larger bench with the issue, Whether in the facts and circumstances of the case, the appellant have prima facie case in their favour warranting waiver of pre-deposit under Section 35F?

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• 2013 (8) TMI 720
  Application for restoration of Appeal – Held that:- No new facts has emerged after passing of the order dated 3.10.2012 by this Tribunal - Application for restoration of appeal is dismissed – Decided against the Assessee.

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• 2013 (8) TMI 719
  CENVAT credit – GTA Service on Outward Transportation - upto the place of removal - Definition of Input Service - The appellant availed the Cenvat credit of Central Excise Duty paid on inputs and capital goods and service tax paid on inputs services used in or in relation to the manufacture of their final products - Whether the appellant were eligible for Cenvat credit of service tax paid on GTA Service availed for outward transportation of finished goods from the factory gate to the customer’s premises – Held that:- Cenvat credit of service tax paid on outward freight up to the buyer’s premises would be admissible when the sales were on FOR destination satisfying the criteria prescribed for the same in the Board’s Circular 23-8-2007 - their sales were on FOR destination basis and it was the customer’s premises which would be the place of removal and since during the period of dispute, transportation up to the place of removal was covered by the definition of ‘inputs service’. Ambuja Cement Limited v. Union of India [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT] - They would be entitled for the Cenvat credit of service tax paid on the GTA service availed for outward transportation of the finished goods up to the customer’s premises - the duty on the finished goods was at an ad valorem rate, the definition of ‘place of removal’ as given in Section 4 of the Central Excise Act, 1944, would be applicable and accordingly if the sales, of the goods take place at the customer’s premises i.e. the sales are on FOR destination basis, the customer’s premises would be the “place of removal” - the transportation of the finished goods upto customer’s premises would be covered by the definition of ‘input service’. In the orders neither any findings had been given on the appellant’s plea that their sales were on FOR destination basis nor the Board’s Circular No. 97/6/2007-S.T., dated 23-8-2007 and the judgments of Hon’ble Punjab & Haryana High Court in case of Ambuja Cement Ltd. which was the jurisdictional High Court had been discussed - Order set aside - Matter Remanded back to CCE (Appeals) for de novo decision – Decided in favor of assesse.

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• 2013 (8) TMI 718
  Rebate amount was availed fraudulently (as alleged) without any actual exports - MODVAT credit - Held that:- The Revenue had sought to deny the deemed modvat credit availed by the appellant in respect of the grey fabrics received by them on the ground that no manufacturing process had taken place at the appellant’s premises - If the said stand of the Revenue was accepted, it will lead to the fact that no duty payment on the final product was required - However it is seen that apart from using the said modvat credit for payment of duty, the appellants have also paid an amount from the PLA account - According to the appellant no prudent man will pay duty to the government without actually receiving the grey fabrics - The fact tilted the weight of the evidence in favour of the appellant - In any case by paying duty on the final product, the deemed credit so availed stands reversed by the appellant, in addition to payment of duty out of PLA. SHREE SHIV VIJAY PROCESSORS PVT. LTD. Versus COMMR. OF C. EX., SURAT [2010 (11) TMI 280 - CESTAT, AHMEDABAD] - Factually there was no direct evidence that the fraud was committed by the appellant herein - The case of the Revenue was that there was a complicity of the appellant in his failure to bring any material on record to establish genuineness of transactions - It was nowhere mentioned that the appellant had failed to file monthly returns to the authorities - The appellant herein must have filed the monthly returns as there was a payment of duty by cash through PLA which was evidenced from the findings of facts - If the appellant had filed the regular returns before the authorities - there was nothing on record to show that the appellant was directed to justify their claim of availment of deemed cenvat credit on the grey fabrics - order set aside – Decided in favor of Assesse.

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• 2013 (8) TMI 717
  100% EOU - Diversion of goods - Non- Utilization of Inputs - Violation of Various Notifications - Duty Liability - Revenue was of the view that the main appellant had not consumed/used the input imported by them as an EOU and had diverted the same and thereby has violated the condition of various notifications - Whether the Appellant was liable to discharge the duty liability foregone by the Department either in the form of Customs duty and Central Excise duty - Held that:- It had to be noted that the Revenue has conducted detailed investigations and the Director of the appellant, had clearly admitted that the vehicle numbers shown on the body of the invoices under which the clearances were shown just to fill the appropriate column and, in fact, no goods were physically sent - as many as 14 invoices were found to be having wrong vehicle numbers - what was required to be considered was the case against the appellant and each case had to stand on its own merit or fail. Commissioner of Customs (Sea) Custom House, Chennai Versus CESTAT, South Zonal Bench, & M/s Gaur Impex [2009 (4) TMI 83 - MADRAS HIGH COURT] - All the appellants had to do was to get a certificate from the Development Commissioner that the appellants had fulfilled the export obligation and if they had fulfilled the export obligation, the Development Commissioner would ha issued such a certificate - It was surprising that the appellants were choosing not to get a certificate from the Development Commissioner which was, indeed, required also for their own purpose and instead they required that the Commissioner should make a reference to Development Commissioner and go on, waiting for a reply. Waiver of pre-deposit - The appellant had not been able to make out a prima facie case in their favor - Taking note of the fact that the period of dispute was 2001 to 2003 and nine years had already elapsed and the duty involved was more than Rs.2.5 Crores with equal amount of penalty - the appellant was required to make an additional small amount of pre-deposit - 35Lakhs were ordered to submitted – upon such submission rest of the duty to be waived till the disposal of appeal.

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• 2013 (8) TMI 716
  Merchant exporter - Failure to export the goods - goods procured against CT1 certificate - appellant discharged the duty liability - Interest liability on Duty Liability - Whether the appellant was eligible for refund of amount paid by him as an interest on the duty liability on the goods which were cleared for export but could not be exported by merchant exporters - Held that:- Both the lower authorities had mis-interpreted the provisions of Section 11AB of Central Excise Act, 1944, in a narrow sense inasmuch as they had held that the appellant herein had paid the duty under Section 11A(2B) of Central Excise Act, 1944, was liable to pay the interest also - the appellant was not a person who was chargeable to duty cannot be saddled with the duty liability under any provisions of Central Excise Act, 1944 - Accordingly, the question of payment of interest by the appellant may not arise. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, VADODARA-II Versus M/s GUJARAT NARMADA FERTILIZERS CO LTD [2012 (4) TMI 309 - GUJARAT HIGH COURT] - The section would be applicable to the person who was chargeable with the duty - as had already been recorded that the appellant was not chargeable to duty’ as the goods were cleared for export under CT-3 for which B-1 bond had been executed by merchant exporters - Both the lower authorities had held against the appellant only on the ground that the appellant’s action of discharge of duty liability on the goods cleared for export but could not be exported, was covered under the provisions of Section 11A(2B) of Central Excise Act, 1944 - Order set aside - Decided in favor of Assesse.

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• Indian Laws

• 2013 (8) TMI 750
  Review petition - error on record - power to correct - writ jurisdiction of High Court - grant of promotional pay scale to the petitioners - Held that:- the Court while deciding the writ petition has not gone to the controversy involved in the writ petition and was misguided by the Supplementary Counter Affidavit of Sri Ashfaq Ahmad, who ignoring the earlier order of the Department as well as order of State Government has given an impression that claim of the petitioners being genuine would be given although after decision of the State of U.P. in similar matters, he was not competent do allow the claim of the petitioners. The conduct of Sri Ashfaq Ahmad, who was posted on such a high post was not proper. However earlier judgment dated 23.02.2012 suffers from error apparent on the face of record and is liable to be recalled/reviewed. The purpose of justice will not be served by rejecting the Review Application and perpetuating the error again. The writ petition is liable to be decided on merits. - Decision in Commissioner of Customs v. Hongo India Private Limited [ 2009 (3) TMI 31 - SUPREME COURT] followed. Grant of Promotional Pay Scale – Whether the assesses who were sent on deputation from the Revenue departments, entitled to the same pay scale and other benefits as being provided to the Collections Amins of the Revenue department - Held that:- Thus the pay scale had already been provided, no relief can be granted in the Special Appeal - Relief to the petitioners cannot be denied due to pendency of the Special Appeal, which has no legs to stand - order set aside -The petitioners were also entitled to parity in pay scale and promotional pay scale was concerned - The petitioners have fundamental right under Article 14 of the Constitution for equal treatment - the counsel for the petitioners relying upon Article 14 and 39 (d) of the Constitution - the eligibility, mode of selection/ recruitment, nature and quality of work and duties and effort, reliability, confidentiality, dexterity, functional need and responsibilities and status of both the posts were identical - The petitioners had made statement in this respect which has not been specifically denied – the claim of the petitioners has been denied on an irrelevant considerations - The respondents were directed to grant the same benefits of pay scale and promotional pay scale etc. as given to the Collection Amins of the Revenue department of State of U.P. Whether minimum qualification, mode of recruitment, nature of work and duties and degree of responsibility of the Collection Amins, in Revenue department and Collection Amins, in Trade Tax department are same and employer was the same as such the assesses were also entitled to parity in pay scale and promotional pay scale - Held that:- The petitioners had been illegally discriminated without any basis - at the time of sending the petitioners on deputations, they were given same salary, which they were drawing in Collectorate - The anomaly in salary had occurred for the first time due reasons that on the basis of report of Pay Rationalization Committee, by Government Order the pay scale of Collection Amins in Revenue department was refixed and promotional pay scale but same benefits had not been given to the Collection Amins in Trade Tax department - From the chart supplied by the Standing Counsel, it was proved that the petitioners were given Selection Grade, Promotional Grade and Next Higher Grade - Thus there was totally non application of mind at the time of passing the order and order was based upon false reasons.

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