TMI Tax Updates - e-Newsletter
August 4, 2014

Case Laws in this Newsletter:

Income Tax Customs Service Tax CST, VAT & Sales Tax

Articles

1. Deputation of employees on cost-sharing basis does not fall under Supply of Manpower Services

   By: Bimal jain

2. BENEFIT OF SECTION 80 OF FINANCE ACT, 1994 IS NOT DENIABLE EVEN IN CASES WHERE EXTENDED PERIOD OF LIMITATION INVOKED FOR DEMAND OF DUTY

   By: DR.MARIAPPAN GOVINDARAJAN

3. CENVAT CREDIT RULES – TRANSFER OF CREDIT

   By: Dr. Sanjiv Agarwal

News

1. RBI cancels the Licence of The Vasavi Co-operative Urban Bank Ltd., Hyderabad (Telangana)

2. Infrastructure Trust Funds to be set up to Spur Investments

3. Small Saving Schemes for the benefit of all including Weaker Sections of Society

4. Sanctioned and Acutal Strength of Employees in Central Government; 30,84,530 Civilian Employees in Position

5. BRICS Development Bank to be set up to Support Infrastructure and Sustainable Development Projects among others

6. Sampoorn Vittiya Samaveshan Mission to be Launched Soon to Provide all Households with Banking Services

Highlights / Catch Notes

Income Tax

• High Court mandates use of local PWD rates for construction cost u/s 69B, rejecting distant city rates.

  Case-Laws - HC : Additions u/s 69B - When the details regarding the cost of construction at PWD rates for Virudhunagar District is applicable, there is no reason for the Valuation Officer to adopt the rate, which is prevalent at distant places and metropolitan cities like Delhi - HC
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• Court Rules in Favor of Revenue on Deductions for Unutilized Floor Space Index u/ss 80IB(10) and 80IB(1.

  Case-Laws - HC : Deduction u/s 80IB(10) r.w. section 80IB(1) – Profits derived from sale of unutilized FSI – none of the assessees have made any special ground for non-utilization of the FSI - decided in favor of revenue - HC
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• ITAT Accepts Assessee's Explanation for Cash Loans; Waives Penalties u/ss 271D and 271E.

  Case-Laws - HC : Penalty u/s 271D and 271E – Cash loan transactions treated as undisclosed income u/s 68 – waiver of penalty u/s 273B - explanation offered by the assessee was found satisfactory by the ITAT - No penalty - HC
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• Advance Tax Payment Doesn't Waive Requirement to File Income Return; Non-Compliance Leads to Undisclosed Income Status.

  Case-Laws - HC : Payment of advance tax does not absolve an assessee from an obligation to file return disclosing total income for the relevant AY - income for that year would be treated as an undisclosed one - HC
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Customs

• License Fees and Royalties Excluded from Import Goods Valuation in Case Involving M/s. SGV Collaboration.

  Case-Laws - AT : Valuation of import goods - Inclusion of License fees and royalty - licence fee and royalty paid by the appellants to their collaborator M/s. SGV, France, would not be added to the value of the imported capital goods - AT
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• Depreciation Allowed for 100% EOU Undergoing Debonding After Partial Fulfillment of Export Obligation; Revenue's Denial Unreasonable.

  Case-Laws - AT : 100% EOU - debonding - Revenue's argument to deny depreciation does not appear to be reasonable for the reason that depreciation is admissible once there was export obligation discharged even partly irrespective of quantum of export made - AT
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• Ships for Breaking and Surplus Fuel Classified Under Import Policy Heading 89.08 as Integral Parts of Vessels.

  Case-Laws - AT : Classification of goods - classification of the ships/vessel, brought in for breaking up along with surplus fuel - classifiable under Heading 89.08 of the Import policy as an integral part of the vessel/ship - AT
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Service Tax

• Service Tax Not Applicable on Appellant's Services to Member Sugar Mills; No Classification as Club or Management Consultancy.

  Case-Laws - AT : Classification of service - club or association service or Management Consultancy service - no service tax would be chargeable on the amount being received by the appellant from its Member Sugar Mills - AT
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• Penalty Waiver u/s 73(3) Inapplicable for Willful Defaults Like Double Availment of CENVAT Credit.

  Case-Laws - AT : Waiver of penalty u/s 73(3) where service tax with interest deposited beofore issuance of Show Cause Notice - Availment of CENVAT Credit twice - once a person is in willful default, penalty cannot be waived - AT
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• Services to NASSCOM Deemed Taxable as Management Consultancy, University Exam Assistance Involved.

  Case-Laws - AT : Management or Business Consultancy Services - appellant was just assisting the conduct of the examinations of the universities and NASSCOM - services provided to NASSCOM prima facie taxable - AT
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VAT

• Old Newspapers Deemed Taxable Goods by High Court; Assessee Liable Under Karnataka and Central Sales Tax Laws.

  Case-Laws - HC : Levy of tax - Whether the old newspapers dealt with by the assessee are goods and if so, the liability on the part of the assessee is whether under both KST and CST - held Yes - HC
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Case Laws:

• Income Tax

• 2014 (8) TMI 57
  Addition on the basis on CPWD or PWD valuation - Exercise of discretion u/s 69B – Held that:- In the absence of basic records with regard to the extent of materials, the materials purchased and consumed and the accounts thereby incomplete, the AO referred the valuation to the Valuation Officer – the DVO adopted CPWD rates, which were the rates prevalent in Delhi and other cities for working out the cost of construction of the building and the assessee's claim was rejected - when the details regarding the cost of construction at PWD rates for Virudhunagar District is applicable, there is no reason for the Valuation Officer to adopt the rate, which is prevalent at distant places and metropolitan cities like Delhi - the authorities below committed serious error, thus, the matter remitted back to the AO to apply the PWD rates at Virudhunagar District in the year 1998-99 with regard to the cost of construction of the assessee's house, so as to ultimately find out what could be the deemed income u/s 69B for the purpose of assessment –Decided in favour of assessee.

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• 2014 (8) TMI 43
  Block assessment u/s 158BA r.w 113 – Source of investment not properly explained - Addition u/s 69 - once an assessing authority notices an undisclosed income, an obligation arises for the assessee, to explain the source of the investment, which has yielded the income - If he fails to do so, Section 69 of the Act mandates that the entire amount shall be treated as income, itself - Notwithstanding the limitations in the context of hearing an appeal u/s 260A of the Act, it is left open for the assessee to explain the source of investment in respect of the undisclosed figures - Since that is not forthcoming, the only way out is to fall back upon the figures indicated by the revenue, the undisclosed income, as the income irrespective of the investment which is needed to yield that income or the absence of explanation of the source – assessee shall be under obligation to pay the tax on the undisclosed income of Rs. 50,00,000/- in the place of Rs. 32,00,000 – Decided partly in favour of Revenue.

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• 2014 (8) TMI 42
  Deduction u/s 80IB(10) r.w. section 80IB(1) – Profits derived from sale of unutilized FSI – Profits eligible for deduction or not and the profits not derived from the business activity of development and construction of a housing project – Held that:- The profit relatable to the sale of unutilized FSI would not be eligible for deduction under sec. 80IB(10) of the Act - Following the decision in The Commissioner of Income Tax-I Versus Moon Star Developers [2014 (4) TMI 1042 - GUJARAT HIGH COURT] - marginal underutilization of FSI certainly cannot be a ground for rejecting the claim u/s 80IB(10) of the Act - Even if there has been considerable under-utilization, if the assessee can point out any special grounds why the FSI could not be fully utilized, the case may stand on a different footing - in cases where the utilization of FSI is way short of the permissible area of construction, looking to the scheme of section 80IB(10) of the Act and the purpose of granting deduction on the income from development of housing projects envisaged, bifurcation of profits arising out of such activity and that arising out of the net sell of FSI must be resorted to - none of the assessees have made any special ground for non-utilization of the FSI - The finding recorded by the AO is on appreciation of evidence and it has never been disputed by the assessee - when the factual aspect with respect to the total permissible FSI available for construction; the FSI utilized by the assessee and the FSI unutilized by the assessee is available on record, there is no question to remand the matter to the AO – Decided in favour of Revenue.

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• 2014 (8) TMI 41
  Validity of order of AO who passed the order in a remand back proceedings - Tribunal directed that AO will allow the claim to the assessee from the indirect overheads not exceeding 10% of the Duty Draw Back to arrive at the indirect cost attributable to the export - Whether the Tribunal is justified in holding that the AO has not complied with the direction of the ITAT in spite of the fact AO in fact had complied with the direction – Held that:- The CIT(A) by passing the order which has been confirmed by the Tribunal, as such, remitted the matter back to the AO to pass afresh order in light of the directions issued by the learned Tribunal passed in earlier round of litigation - the order could not be said as bad in law and/or any substantial question of law arises - when the Tribunal has confirmed the order passed by the CIT(A) remitting the matter back to the AO to pass afresh order considering the earlier directions issued by the learned Tribunal, there was no reason to interfere – Decided against revenue.

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• 2014 (8) TMI 40
  Penalty u/s 271D and 271E – Cash loan transactions treated as undisclosed income u/s 68 – waiver of penalty u/s 273B - Held that:- The Tribunal have considered the order of the Assessing Authority that it is a case of unexplained cash receipt and treated as own income of the assessee, which is subjected to tax u/s 68 of the Act, the question of treating it as transaction in violation of Sections 269-SS or 269-T does not arise as it stands mutually excluded – Relying upon Diwan Enterprisess V. Commissioner of Income-Tax and others [1998 (11) TMI 27 - DELHI High Court] – the Tribunal accepted the stand of the assessee that there was no justification for imposition of penalty u/s 271-D and 271-E, as it is not a transaction in contravention of Section 269-SS and 269-T – there was no reason to take a different view as the order of the Tribunal is to be upheld which justifies a case of undisclosed income at the hands of the assessee subject to tax u/s 68 of the Act. Loan transactions - Loan transaction relatable to the money received from Meenakshi for a sum of Rs. 25 Lakhs is concerned, the Tribunal was inclined to accept the reasoning of the CIT(A) that it is a case, where the assessee, under compelling circumstances, had accepted cash loan and, therefore no penalty need be levied by invoking the provisions of Section 273-B of the Act - Tribunal have gone into the genuineness of the transaction and the reasons attributed by the assessee for obtaining the loan in view of the compelling circumstances, which is covered by relevant documents to support a transaction and, the authorities have rightly interfered with the penalty imposed by invoking the provisions of Section 273-B of the Act – Decided against Revenue.

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• 2014 (8) TMI 39
  Rejection of application for rectification - Decisions relied upon by the assessee considered by Tribunal or not – Held that:- The facts relating to each of the grounds, raised subsequently in the rectification application, were gone into - it was found that the decisions placed by the assessee were not applicable to the facts – assessee’s grievance seems to be in so far as the Tribunal having not elaborately considered the dictum of the various decisions and negatived the applicability on sufficient reasoning – the Court cannot assume that merely for the reason that the Tribunal found that the decisions are not applicable, the Tribunal would not have gone into the dictum laid down therein – thus, the rectification application filed was, rightly dismissed by the Tribunal – Decided against Assessee.

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• 2014 (8) TMI 38
  Kar Vivad Samadhan Scheme u/s 90 – Addition of interest u/s 220(2) for settlement of dispute – Held that:- The designated authority is within his powers in adding up the interest though not quantified at earlier point of time while processing the application under the Scheme as the levy of interest is terminable to the date of payment, which date in the case of KVSS is 31.03.1998 - the interest has been added only upto 31.03.1998 for the purpose of computation and thereafter by giving necessary deduction as envisaged in the Act, the order has been passed – there was no reason to interfere with the demands which have been issued and interest being the natural corollary in terms of the provisions as existing then, there was no infirmity in the orders of the designated authority in including the interest for the period 1988-89, 1989-90 and 1991- 92 while processing the declaration under the Scheme – Decided against Assesee.

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• 2014 (8) TMI 37
  Admission of appeal – Undisclosed income on sale of house – Held that:- Tribunal tightly recorded that being one of the seven legal heirs the share of the Assessee in the property was to the extent of 1/7th share, the Tribunal has rightly restricted the addition – there was no reason to interfere with the finding recorded by the Tribunal and consequently restricting the addition – Decided against Revenue. Unexplained investment in house – Held that:- The Tribunal was rightly of the view that the Assessee has filed an explanation but it could not be substantiated by the Assessee or controverted by the Revenue with evidence - The Tribunal has rightly restricted the addition in the facts and circumstances of the case, no error has been committed by the Tribunal restricting the addition – rest of the grounds urged by the revenue are admitted for adjudication - Decided against Revenue.

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• 2014 (8) TMI 36
  Interest income allotted to be taxed on proportionate basis - Whether the Tribunal is right in holding that the interest income in the hands of the assessee allotted in the three years IDBI capital bonds is required to be taxed only on proportionate basis and that the CIT(A) was not justified in sustaining the addition made in the year in which it was received – Held that:- The entire interest received on Bonds is required to be included in the income for the Assessment Year in which the entire amount of interest was received - the upfront onetime payment of interest immediately on allotment is deferred revenue expenditure and the assessee creating asset on basis of interest for five years being paid in advance in first year and, the assets written off over period of debentures for five years continuing benefit to business of the assessee over the entire period, the liability is to be spread over period of debentures and, the entire amount of interest received as upfront one-time payment of interest immediately on allotment is included in the income for the first year in which the amount of interest is received - Following the decision in Rakesh Shantilal Mardia, Ahmedabad Versus Deputy Commissioner of Income Tax [2012 (9) TMI 521 - SUPREME COURT] - Decided against Revenue.

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• 2014 (8) TMI 35
  Advance tax paid but return not filed – Undisclosed income or not – Held that:- The payment of advance tax by itself does not absolve the obligation of an assessee to file returns - It is only when a return is filed, that an assessing officer would be in a position to examine the details of income, expenditure and deductible incomes etc. - Following the decision in Commissioner of Income Tax v. B.R.Shah and others [2013 (1) TMI 345 - SUPREME COURT] - payment of advance tax does not absolve an assessee from an obligation to file return disclosing total income for the relevant AY - income for that year would be treated as an undisclosed one - the contention of the revenue is upheld as regards the manner in which the income for a year for which no declaration was filed even after paying the advance tax – the matter is remitted back ot the Tribunal for fresh consideration – Decided in favour of Revenue.

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• 2014 (8) TMI 34
  Penalty u/s 271 – Benefit of deduction – Debts owed by various persons or agencies - Applicability of section 41(1) - It is only when an amount, which is already allowed or deducted, that can constitute the subject matter of Section 41 (1) of the Act, cannot be rejected as irrelevant - It is a different matter that the amount was brought under the assessment - as long as there is possibility to understand the provision in different ways and the Assessee has chosen one, the occasion to invoke Section 271 of the Act does not arise – Relying upon Commissioner of Income Tax Vs. Delhi Automobiles [2004 (5) TMI 16 - DELHI High Court] - If the debts were written off by the assessee itself, the situation is substantially different - It is only when those circumstances exist, that the occasion to take the amount from the purview of Section 41 of the Act, may arise - The issue is as to whether the assessee was under obligation to reflect the amount written off as an item of income - a unilateral act on its part did not have the effect of writing off, of the amount, it ought to have been reflected in the tax – the order of the Tribunal is upheld – Decided against Revenue.

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• 2014 (8) TMI 33
  Penalty u/s 271(1)(c) – Disallowance of deduction u/s 80HHC – Held that:- CIT(A) set aside the penalty and it has been confirmed by the Tribunal - assessee has disclosed all the material facts while filing the return of income - disallowance of the Assessee’s claim of issues cannot amount to concealment of income or furnishing of inaccurate particulars of income - Tribunal rightly observed that when the issue like unit wise deduction, exclusion of excise duty and sales tax from total turnover etc. had been a matter of dispute between the Department and the Assessee and thus the issue of deduction is a debatable one on which two opinions are possible, penalty under Section 271(1)(c) of the Act is not required to be imposed / levied – order of the Tribunal is upheld – Decided against Revenue.

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• 2014 (8) TMI 32
  Constitutional validity of section 28 and 80HHC – Retrospective amendments – Held that:- The amendment is violative for its retrospective operation in order to overcome the decision of the Tribunal, and at the same time, for depriving the benefit earlier granted to a class of the assessees whose assessments were still pending although such benefit will be available to the assessees whose assessments have already been concluded - in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee but not in a case where it affects even a fewer section of the assesses - Following the decision in Avani Exports & Ors. v. CIT [2012 (7) TMI 190 - GUJARAT HIGH COURT] – the amendment is set aside only to the extent that the operation of the section could be given effect from the date of amendment and not in respect of earlier AYs of the assessees whose export turnover is above Rs. 10 crore - the retrospective amendment should not be detrimental to any of the assessees - the amendment brought about by introducing the 2nd, 3rd and 4th proviso to Section 80 HHC (3) (c) is to operate only prospectively and not retrospectively - Decided in favour of Assessee.

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• 2014 (8) TMI 31
  Applicability of section 44B – operation of ships - reimbursement of demurrage charges paid - Held that:- The amount referred to in sub-section (1) of Section 44B and which are deemed to be profits and gains of the business of operation of ships chargeable to tax under the head "Profits and gains of business or profession" shall be the amount firstly, paid or payable, whether in or out of India, to the Assessee or to any person on his behalf on account of the carriage of passengers, livestock, mail or goods shipped at any port in India and secondly, received or deemed to be received in India by or on behalf of the Assessee on account of the carriage of passengers, livestock, mail or goods shipped at any port outside India - Both conditions envisaged by sub-section (1) of Section 44B are not fulfilled - The provision has been invoked in case of reimbursement of demurrage charges paid or reimbursed by the present Assessee for import of crude oil - It cannot be termed, by any stretch of imagination, as perverse or vitiated by error of law apparent on the face of the record – Decided against Revenue.

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• Customs

• 2014 (8) TMI 47
  Valuation of goods - Inclusion of License fees and royalty - Held that:- It is clearly evident from the agreement that Article 3 provides transfer of technology relating to Float Process. It has no relation to import of capital goods. In fact, the agreement relates to process, know-how, techniques of manufacturing of Float Glass. In terms of Rule 9(1)(C) of the CVR, 1988, the royalty fee and licence fee must be related to the sale of capital goods as a condition of importation of goods, which the appellant is required to pay directly or indirectly as addition of importation of goods. Decision in the case of Matsushita Television & Audio (I) Ltd. [2007 (4) TMI 5 - SUPREME COURT OF INDIA] distinguished wherein it was held that, Royalty is includible in the assessable value of the imported capital goods, as the said agreement clearly includes the cost of imported goods. In the present case, there is no such clause mentioned in the agreement. Further, there is no indication in the agreement that SGV, France, will assist the appellant in respect of the imported capital goods or otherwise in any manner. In other words, SGV, France would assist the appellant in respect of manufacturing process of Float Glass - licence fee and royalty paid by the appellants to their collaborator M/s. SGV, France, would not be added to the value of the imported capital goods - Following decision of Toyota Kirloskar Motor Pvt. Ltd. [2007 (5) TMI 20 - SUPREME COURT OF INDIA] - Decided in favour assessee.

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• 2014 (8) TMI 46
  Validity of order passed - commissioner (Appeals) failed to list the issues or determine the points in dispute - Order neither self-speaking nor reasoned to meet judicial scrutiny - Held that:- On an overall examination of the appellate order, it appears that the respondent was altogether deprived from the process of justice and in absence of recording the arguments and evidence of the respondent, the order cannot be said to be the order passed by application of mind - which is touching the root of the matter and violation of natural justice being patent is incurable at the appellate stage. Therefore, the appeal is remanded to the ld. commissioner (Appeals) to grant fair opportunity of hearing to respondent and upon recording the submissions as well as evidence, the appeal shall be disposed within three months of receipt of this order - Decided in favour of assessee.

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• 2014 (8) TMI 45
  100% EOU - debonding - levy of duty on depreciated value - Whether depreciation is admissible on the value of capital goods imported but not used fully for the purpose of manufacture so as to discharge export obligation - Notification No.95/93-Cus dated 2.3.1993 - Held that:- Revenue's argument to deny depreciation does not appear to be reasonable for the reason that depreciation is admissible once there was export obligation discharged even partly irrespective of quantum of export made in absence of any clause in the notification for disallowance against partly discharge of export obligation. Therefore there shall be allowance of depreciation on the capital goods imported to calculate the value thereof for the purpose of recovery of duty foregone. Respondent shall be entitled to depreciation. Qauntum of depreciation - Held that:- Circular No.14/2004-Cus dated 13.2.2004 says that in respect of clearance of capital goods by EOU/EHTP/STP units, depreciation at the rate of 20% per annum of the original value of computer and computer peripherals items and 10% depreciation per annum in case of other capital goods shall be admissible. Such mandate of circular provides basis to hold that rate of depreciation to be allowed shall be at prescribed percentage per annum of original value of the respective and type of capital goods imported duty free. This calls for set aside of the impugned order and matter remanded to the adjudicating authority to calculate the quantum of depreciation admissible keeping in view the mandate of circular issued by Board - Decided partly in favour of Revenue.

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• 2014 (8) TMI 44
  Classification of goods - classification of the ships/vessel, brought in for breaking up along with surplus fuel - clarification by Joint DGFT versus clarification by CBEC - Held that:- An opinion/clarification issued by Joint DGFT has to be considered as a clarification issued by DGFT & will be binding on the customs so far as ITC restrictions are concerned under Foreign Trade Policy. However, the same clarification issued by DGFT may not be binding on the Customs for the classification of the same goods under the Customs Tariff Act which is the sole domain of the Customs Authorities. However, so far as classification of the ships/vessel, brought in for breaking up along with surplus fuel, will have to be considered classifiable under Heading 89.08 of the Import policy as an integral part of the vessel/ship, as per opinion given by DGFT under F.No.IPC/4/5(684)/97/82/PC-2(A), dt.26.06.2013. As the imports under ITC(HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in the vessels brought in for breaking up, cannot be held as liable for confiscation under Section 111(d) of the Customs Act, 1962 and no penalties upon the appellants are imposable in the present appeals under Section 112(a) of the Customs Act, 1962 - Decided in favour of assessee.

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• Service Tax

• 2014 (8) TMI 56
  Classification of service - club or association service or Management Consultancy service - revenue contends that assessee provides Management Consultancy service to cooperative sugar mills constituting the federation - penalties were imposed under Section 75A, 76 and 77 - Held that:- Appellant is a Federation of the Cooperative Sugar Mills of Punjab and in terms of the charter of its functions, it is required to monitor the functioning of its Member Sugar Mills and provide guidance to them from time to time for improving their efficiency. In view of this, the activity of the appellant have to be treated as club or association service as defined under Section 65 (25a) of the Finance Act, 1994 and hence in view of the judgment of the Tribunal in the case of Federation of Indian Chambers of Commerce and Industry vs. CST, Delhi and M/s Electronic and Computer Software Export Promotion Council vs. CST, Delhi reported in [2014 (5) TMI 183 - CESTAT NEW DELHI], which is based on the judgment of Hon'ble Jharkhand High Court in the case of Ranchi Club Limited vs. CCE & ST reported in [2012 (6) TMI 636 - Jharkhand High Court], and of Hon'ble Gujarat High Court in case of Sports Club of Gujarat Ltd. vs. Union of India Ltd. reported in [2013 (7) TMI 510 - GUJARAT HIGH COURT], no service tax would be chargeable on the amount being received by the appellant from its Member Sugar Mills - Decided in favour of assessee.

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• 2014 (8) TMI 55
  Waiver of penalty u/s 73(3) where service tax with interest deposited beofore issuance of Show Cause Notice - Availment of CENVAT Credit twice - Penalty u/s 78 - Held that:- once a person is in default and if he makes the payment of service tax and interest and subsequently the department finds that such payment had arisen because of miss-declaration or suppression, no action can be taken even if there is a deliberate intention to evade tax. The provisions of sub-section 4 is to ensure that just because someone pays the tax and interest, he does not escape from other liabilities which arise in the case of evasion of tax who have not followed the law. - once the amount is paid with interest, show-cause notice could not have been issued for imposition of penalty. In any case for imposition of penalty there is no specific time limit laid down in the law. Another fact that has to be taken into account is the provision in the law that when there is suppression of facts or misdeclaration etc. where extended period can be invoked, an assessee could pay service tax plus interest and 25% of the service tax towards penalty before issue of show-cause notice. This is an alternative which is provided in the law itself to allow assessees to correct the mistakes/omissions and escape penalty of 100% under Section 78 by making payment with interest and 25% of the service tax with interest before the issue of show-cause notice. That being the position if the issue like the one before us is allowed and if the submission is accepted, we would be rendering this provision which provides for payment of 25% of service tax towards penalty otiose. - Decided against assessee.

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• 2014 (8) TMI 54
  Condonation of delay - Held that:- appellant by the belated appeal has caused prejudice to the interest of Revenue. In the case of Bhilware Zila Ex-Service Welfare Sahakari Samit v. Dy. Commissioner of Central Excise, Bhilwara, reported in [2010 (12) TMI 1039 - RAJASTHAN HIGH COURT]. Hon’ble High Court of Rajasthan had occasion to observe how assessees make false plea of service of orders on different persons other than the assessees and burden courts with application for condonation of delay. When there was considerable delay, cause of delay does not appear to be reasonable to condone the delay in this case being guided by the Apex Court decision in the case of N. Balakrishnan v. M. Krishnamurthy - [1998 (9) TMI 602 - SUPREME COURT OF INDIA]. We have seen anxiety of Apex Court in the case of Commissioner of Income Tax, Kolkata-II - [2010 (12) TMI 675 - Supreme Court of India] to protect interest of Revenue - Condonation denied.

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• 2014 (8) TMI 53
  Management or Business Consultancy Services - appellant was just assisting the conduct of the examinations of the universities and NASSCOM, thereby giving technical assistance to the universities and NASSCOM - Scope of Section 65(65) of the Finance Act, 1994 - Held that:- prima facie, no element of consultancy or technical assistance was involved. As it is not in dispute that the service recipient viz. universities are educational institutions offering various academic courses with specific curricula and specific syllabi and conducting examinations for the students on completion of such courses and issuing certificates or degrees to the successful students, the activities undertaken by the appellant were prima facie activities undertaken in aid of education institutions. For these reasons, prima facie, we have found a strong case for the appellant against the demand raised to the extent of Rs. 1.94 crores + Rs. 82 lakhs. - full stay granted. However, appellant has not made out such a case against the demand of Rs. 20 lakhs which was quantified on the gross amount received by the appellant from the NASSCOM. There is no evidence on record to indicate that NASSCOM is an educational institution - Pattern of question papers was given by the NASSCOM but the questions were prepared by the appellant. In this process, there appears to be an element of technical assistance of the appellant to NASSCOM - stay granted partly.

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• 2014 (8) TMI 52
  Waiver of pre-deposit - Soil exploration services - Classification as Scientific and Technical Consultancy Service or Technical Testing and Analysis Services - Held that:- Commissioner in its Revision Notice had not spelt out anything as to how the finding of the Adjudicating Authority that the services rendered by the Applicant were not under the category of ‘Scientific and Technical Consultancy Service’, but under the category of ‘Technical Testing and Analysis Service’ was incorrect in law and fact and also did not enumerate the evidences contrary to the findings of the Adjudicating Authority. We do not find, prima facie, any evidence recorded by the learned Commissioner in the Revision Order to show that the Applicant had rendered scientific and technical consultancy services and not soil testing and soil exploration services. On going through the sample invoices relating to soil exploration services annexed to the paper-book, we prima facie found that the said soil exploration services could not come either under the category of ‘Technical Testing and Analysis Service’ or under ‘Scientific and Technical Consultancy Service’. In these circumstances, we find that the Applicant could able to make out a prima facie case for total waiver of the pre-deposit of duty and penalties. Accordingly, we waive the pre-deposit of duty and penalties and stay its recovery during pendency of the Appeal - Stay granted.

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• CST, VAT & Sales Tax

• 2014 (8) TMI 51
  Levy of tax - Non production of required documents - Held that:- A cursory reading of the impugned orders will denote that the respondents have straightaway passed a non-speaking orders,without taking into consideration the relevant documents, especially the documents produced by the petitioner on 02.5.2014 claiming exemption for the sale of Copra cake. Admittedly, the petitioner has produced the acknowledgement, which clearly shows that the respondent has received the alleged documents dated 02.5.2014 - Orders are in violation of principle of natural justice - Matter remanded back - Decided in favour of assessee.

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• 2014 (8) TMI 50
  Penalty u/s 76(6) - Whether ex parte decision of the appeal in the facts and circumstances of the case could not be countenanced for want of service of summons on assessee and appeal needs to be restored to the file of the Tax Board for decision afresh affording opportunity of hearing to the appellant to secure the ends of justice - Held that:- Even though the Deputy Commissioner (Appeals), Commercial Tax Department, Bharatpur vide order dated January 23, 2007 had set aside the imposition of penalty on the petitioner firm under section 76(6) of the Rajasthan Value Added Tax Act, 2003, the learned Tax Board vide its order dated August 24, 2009 has upset ex parte the said finding and revived the order of penalty visited upon the petitioner-firm by the assessing authority under the order - view of the respondent-Department is wholly without foundation inasmuch as other than sugar manufactured by the vacuum process other kind of sugar otherwise partakes the character of khandsari sugar and consequently, there was no declaration in the documents accompanying the goods in transit as alleged by the Department. In the event the petitioner-firm had the opportunity of appearing before the Tax Board in the Revenue's appeal against the appellate order dated January 23, 2007 exculpatory of any wrong doing or illegality by the assessee, the correct legal and factual position would have been brought to the notice of the Tax Board - Matter remanded back - Decided in favour of assessee.

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• 2014 (8) TMI 49
  Denial of concessional rate of tax - inputs / goods required for manufacture of notified goods - Whether the Commercial Tax Tribunal and the Joint Commissioner, Commercial Tax, erred in law in accepting the sale transaction mentioned in single declaration form IIIB for concessional rate of tax which pertains to a period of more than a quarter - Held that:- The Tribunal as well as the first appellate authority has taken note of the fact that even if declaration form IIIB contained sale transactions of two quarters in a single form that by itself is not sufficient to deny the conces sional rate of tax to the dealer - since for a complete assessment year normally rate of tax remains the same for a commodity, as such merely for the reason that single declaration contained entries of more than a quarter is not sufficient ground to deny the dealer the concessional rate of tax in respect of an item which is sold as a raw material to the purchaser. No illegality in order passed - Decided against Revenue.

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• 2014 (8) TMI 48
  Levy of tax - Whether the old newspapers dealt with by the assessee are goods and if so, the liability on the part of the assessee is whether under both KST and CST - Held that:- when an earlier Division Bench has already examined this question and has taken a view, unless this view is disagreed by another Division Bench by taking a contrary view and the matter is required to go before the Larger Bench, the earlier view of the Bench has to be followed. In view of the matter having already been seized before the Supreme Court in the other case and if the assessee cannot pursue the matter, we follow the earlier view taken by the Division Bench in the case of United Agencies v. Assistant Commissioner of Commercial Taxes, Bangalore [2010 (12) TMI 1105 - KARNATAKA HIGH COURT] - The substantial question of law relating to the issue of "goods" is answered in favour of the Revenue in the sense-old news paper is termed as "goods" - decided in favour of revenue.

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