Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 22, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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No details of the seminars conducted abroad are brought on record as also spouses of the Doctors also travelled overseas along with Doctors and the expenses of the spouse on air ticket as well stay abroad are charged as an business expenditure u/s 37 of the Act which cannot be called as being incurred wholly and exclusively for the purposes of business of the assessee - AT
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Exemption claim was wrongly denied by invoking section 2(15) proviso of the act, since it neither carries out any activity in the nature of trade, commerce business nor any activities or renders any service in relation to the same whilst collecting the impugned cess @ 12 paisa per liter from milk producers in lieu of making them avail the above stated facilitie - AT
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Whereas the expenditure of a capital nature incurred on the renovation etc. of a building, which is not owned by the assessee but in respect of which the assessee holds mere occupancy rights, cannot be allowed deduction as a revenue expense, but such expenditure of a capital nature is liable to be considered as a building owned by the assessee for the purposes of section 32 - Depreciation to be allowed - AT
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Deduction u/s 10A computation - whether loss from non-eligible unit can be set off against the profit of eligible unit or whether only profit of eligible unit is to be considered for computation of deduction u/s 10B - Held Yes - AT
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Levy of penalty u/s 271(1)(c) - deduction u/s 80IB - One’s own mistake or delay can’t be used to advance one’s cause. In law, nobody can claim the benefit of delays or mistakes on his own part; though it may advance the cause of the other side - AT
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Addition on cessation of liability - Amount of advance received for sale of property - the amount of advance received should be reduced from the cost of acquisition of asset. - AT
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Once the commission is accepted to have been paid, there is no logic in disallowing such expenditure by holding that it was excessive. It is for the assessee to determine the way in which it has to carry on its business. - AT
Customs
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Since assessment has not been modified in accordance with procedure prescribed in statute, therefore, in the garb of refund, officer concerned cannot take a different view so as to refund an amount paid as per assessment order. Hence so long as assessment as such continue, no refund is admissible to petitioner. - HC
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Valuation - royalty/ value of designs, drawings etc. - Only a portion of the lump sum amount attributable to the design cost of product manufactured abroad - only appropriate amount to be included in the value of import - AT
Service Tax
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Period of limitation - filing an appeal before the Commissioner (appeals) - condonation of delay - in the absence of any material considered the date from which the limitation period ought to have been taken, it was a fit case to condone the delay - HC
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VCES - rejection of VCES application - correct rate of service tax - petitioner had calculated and deposited tax @ 10.3% whereas the tax had to be calculated @ 12.36% as per department - There is no provision in the VCES, which permits correction of errors of this nature by the Petitioner. - HC
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Cenvat credit - Service Tax paid on various services viz., Catering service, Commissioning services, House Keeping, Documentation Service and Conducting written test for Non-Mgt allowed as credit - AT
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Whether the excess service tax paid by them in the previous period can be adjusted in the subsequent period, for neutralizing the subsequent tax liabilities - Self adjustment allowed - AT
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VCES declaration - the designated authority has in the group companies’ case on the very same issue accepted the VCES declaration while in the appellants’ case herein, rejected the same - designated authority directed to re-adjudicate the matter - AT
Central Excise
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Service Tax Certificate for Transportation of goods by Rail (STTG Certificate) will be eligible duty paying document for availing cenvat credit - Circular
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Clandestine removal of goods - that there is nothing on record to show that cash seized from the residential premises of the General Manager of the company represent sales proceeds of the clandestinely removed goods from the appellant factory. - AT
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Cenvat credit - Whether, after putting the capital goods into use for a period of around 10 years, the assessee is required to reverse the cenvat credit originally taken at the time of receipt of goods or the fact of payment of duty on the transaction value would satisfy the provisions of law - Demand set aside - AT
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Classification - Operation theater lights - these specialized lamps have shadowless operation, heat defusing capacity and also colour correction capabilities - to be classified under Central Excise Tariff heading 9018.00 as Instruments and Appliances used in medical, surgical, dental or veterinary sciences - AT
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Duty liability - import of cut size aluminium sheets and are subjecting the same to process like slitting, cutting, routing etc. to convert them into alucobond panels (cladding) - the test of marketability fails - demand of duty set aside - AT
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SSI exemption - Refund claim - Central excise duty paid by mistake by including non ISI submersible pumps i.e. non BIS pumps in the overall turnover - refund allowed - AT
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Once it is clear that the supplies made by the appellant are in the nature of deemed exports, they would be entitled to the benefit of entitlement to the cash refund of the cenvat credit amount lying unutilized in their said account. - AT
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Valuation - the addition of collection charges, weighment difference and rate difference are very much in the nature of additional consideration and hence required to be included in the assesable value for the discharge of excise duty. - AT
VAT
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One of the important component on taxation being missing namely taxable turnover in the case of dealers opting for payment of tax on lump sum basis, levy of additional tax under Section 7A of the Haryana VAT Act cannot be sustained. - HC
Case Laws:
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Income Tax
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2016 (9) TMI 865
Additions made on accounts of exemptions under section 10A - confirmation of separate and distinct identity - ITAT confirming the order passed by the CIT(A) in deleting additions - Held that:- We notice that CIT (Appeals) as well as the Tribunal have, while coming to the conclusion as reflected in respective orders, considered several factors and tested the contention of the revenue from all these aspects. The authorities have also considered the business activities of both the units; the business territory of both the units; the product in which both the units are dealing; the terms of the agreement and inasmuch as have also gone into the aspect of recruitment and training expenses as well. While coming to the conclusion, each details submitted to them have been considered minutely, so much so relationship of parties, strength of the employment, infrastructure facilities and capital investment having been brought in the new unit in respect of furniture, fixtures, computer equipments etc and also considered the parameters prescribed under Section 10A of the Act so as to become eligible for deduction. The Tribunal has also considered the relevant circular which has been placed for consideration and various authorities submitted to it and therefore, appears to this Court that the conclusion arrived at by the Tribunal is based upon sound reasoning, the orders impugned are not required to be interfered with. From the aforesaid background of fact since it is clearly emerging that the conditions contained under Section 10A of the Act are established on the case on hand, the record has revealed the independent and distinct identity of Unit-107 and all other relevant factors have rightly been concluded by the Tribunal to hold that Unit-107 is a separate and distinct identity, the conclusion arrived at by the Tribunal is not worth to be dislodged or disturbed. Therefore, we are of the opinion that the decision delivered by the Tribunal does not deserve to be disturbed or set aside and therefore, having not found case in favour of the revenue, we hereby confirm the order of the Tribunal
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2016 (9) TMI 864
Reopening of assessment - technology transfer - whether Sun Pharmaceutical alone had developed the technology and transferred through circuitous route to avoid taxation and Unimed Technologies Ltd. did not have any infrastructure facilities for such purpose? - Held that:- In the present case, as per the reasons recorded, previously Sun Pharma and Sun BVI had a Technology Transfer agreement. However, in the present case, technology was transferred by Unimed to Sun BVI for a declared consideration of 4 lac USD which, Sun BVI a subsidiary of Sun Pharma based in British Virgin Islands sold the same technology to M/s CARACO for 1.17 crores USD. The statement of Sudhir Valia key person in the group of companies and at that time director of Sun BVI and presently the director of Sun Pharma was recorded under Section 131(1A) of the Act in which he accepted that Sun BVI had no facility of R & D and manufacturing. During the inquiry, revenue also found material to suggest that Sun BVI had acquired technology from Unimed. Unimed also did not have elaborate R & D facility or necessary work force for such purpose. Such R & D facility was only available with the assessee and its research centre. The Assessing Officer therefore formed a belief that Sun BVI is shell company used only as a device to deviate the taxable profits of Sun Pharma as Sun BVI had also not developed any technology on its own. It was found that Sun BVI and CARACO both were subsidiaries of assessee. The assessee company had capacity to produce such technology and in fact between 199702, Sun Pharma had supplied such technology developed by it to M/s CARACO. In view of such evidence on record, the Assessing Officer concluded that technology in question transferred was actually done by the assessee to CARACO but was routed through other companies only to avoid payment of tax. In our opinion, these reasons do not lack validity. As noted, elaborate reasons have been recorded by the Assessing Officer which demonstrate how prima facie it can be shown that technology developed by Sun Pharma through use of its research and development facilities was routed to CARACO through Unimed and Sun BVI in British Virgin Islands which ensured that the entire amount escaped assessment in the hands of Sun Pharma. At the stage of considering notice for reopening, one has to see only prima facie whether on the basis of tangible material on record, the Assessing Officer could form a valid belief that income chargeable to tax has escaped assessment. At that stage, it is not necessary to verify whether invariably such income would be brought to tax. The contention that full and true disclosure have been made cannot be accepted. What was disclosed by Sun Pharma was that its subsidiary received consideration of 1.17 crores USD for transfer of penalty to CARACO. It obviously did not reveal whether Unimed or Sun BVI had any R & D development capabilities.
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2016 (9) TMI 863
Addition on account of disallowance of quality claim expenses - failure to furnish evidence - ITAT allowed the claim - Held that:- Commissioner as well as the Tribunal concurrently held that there was sufficient evidence on record to establish that the assessee had, in fact, suffered a loss of ₹ 2.90 crores on account of quality claim. The assessee pointed out that some of the exports suffered from total rejection or objection of inferior quality. Instead of re-importing such goods and selling in India which would be economically unviable, the assessee sold it to traders in the country of export for which the assessee was forced to give huge discounts. The purchasers had raised debit note, and thus charged such discounts to the assessee. This was thus, neither a case of unascertained nor a case of contingent liability. Merely because the assessee in the accounts, mentioned as a provision would not be conclusive of a nature of claim. This is precisely what the Commissioner held and observed. In fact, the assessee had charged such sum to the profit and loss account thereby deducting the expenditure for all practical purpose. In the present case the liability was not only certain, it was also discharged presently and not differed for a later date. The assessee had received debit notes from the buyers and accepting such liability, had debited a sum of ₹ 2.90 crores in the P & L account. - Decided against revenue
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2016 (9) TMI 862
Terminal date from which interest got charged - Settlement Commission - Held that:- Identical issue was raised before this court in R.Vijayalakshmi vs. Income Tax Settlement Commission Additional Bench and others [2016 (8) TMI 657 - MADRAS HIGH COURT] and ultimately it was held that the Department will be entitled for interest only as ordered by the Commission while passing the order under section 245D (4) of the Income Tax Act. Writ petition is allowed and the order passed by the Income Tax Settlement Commission in the impugned order is set aside insofar as the computation of the terminal date for charging of the interest under Section 234(B) alone and the impugned order passed by the Settlement Commission is set aside to that extent and it is held that the Department will be entitled for interest as ordered by the commission in its order dated 12.09.1998
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2016 (9) TMI 861
Reopening of assessment - whether technology developed by Sun Pharma through use of its research and development facilities was routed to CARACO through Unimed and Sun BVI in British Virgin Islands? - Held that:- Both the notices for reopening cannot coexist. The reasons recorded in the case of Unimed and Sun Pharma pertain to the same transaction. The same income obviously cannot be taxed twice. Apart from this, the reasons recorded in the case of Sun Pharma substantially destroy the reasons recorded in the case of Unimed. We say so for the simple reason that as noted earlier in case of Unimed, the case of revenue was that Unimed had transferred technology to Sun BVI for disclosed consideration of 4 lac USD. Shortly thereafter, the same technology was transferred by Sun BVI to CARACO for 1.17 crores USD. According to the information of the Assessing Officer, Sun BVI did not have sufficient wherewithal to carry out research and technology development which would ensure so much of value addition. In his opinion, therefore, Unimed had actually transferred technology to CARACO for a total sale consideration of 1.17 crores USD. On the other hand, in case of Sun Pharma, the Assessing Officer canvases that even Unimed did not have any such capability. It did not have full-fledged R & D facilities or sufficient man power for such research. It was primarily engaged in manufacturing of injections and eye drops. It was Sun Pharma who had developed the technology which transferred it to Unimed who in turn had transferred it to Sun BVI who sold it to CARACO. Sun BVI being a subsidiary of Sun Pharma and being based in British Virgin Islands, Sun Pharma evaded payment of tax through such process. In any case, therefore if the revenue contends that it is Sun Pharma from where the technology had originated and Unimed did not have the capability to do so in its own, the grounds mentioned in the reasons for reopening assessment of Unimed must immediately fail. Even before us, counsel for the revenue showed preference for the reopening in the case of Sun Pharma on legal contentions. The sum total of this discussion, without any further consideration, notice for reopening in case of Unimed must fail. Coming back to the notice for reopening in the case of Sun Pharma in the present case, as per the reasons recorded, previously Sun Pharma and Sun BVI had a Technology Transfer agreement. However, in the present case, technology was transferred by Unimed to Sun BVI for a declared consideration of 4 lac USD which, Sun BVI a subsidiary of Sun Pharma based in British Virgin Islands sold the same technology to M/s CARACO for 1.17 crores USD. The statement of Sudhir Valia key person in the group of companies and at that time director of Sun BVI and presently the director of Sun Pharma was recorded under Section 131(1A) of the Act in which he accepted that Sun BVI had no facility of R & D and manufacturing. During the inquiry, revenue also found material to suggest that Sun BVI had acquired technology from Unimed. Unimed also did not have elaborate R & D facility or necessary work force for such purpose. Such R & D facility was only available with the assessee and its research centre. The Assessing Officer therefore formed a belief that Sun BVI is shell company used only as a device to deviate the taxable profits of Sun Pharma as Sun BVI had also not developed any technology on its own. It was found that Sun BVI and CARACO both were subsidiaries of assessee. The assessee company had capacity to produce such technology and in fact between 1997-02, Sun Pharma had supplied such technology developed by it to M/s CARACO. In view of such evidence on record, the Assessing Officer concluded that technology in question transferred was actually done by the assessee to CARACO but was routed through other companies only to avoid payment of tax. In our opinion, these reasons do not lack validity. As noted, elaborate reasons have been recorded by the Assessing Officer which demonstrate how prima facie it can be shown that technology developed by Sun Pharma through use of its research and development facilities was routed to CARACO through Unimed and Sun BVI in British Virgin Islands which ensured that the entire amount escaped assessment in the hands of Sun Pharma. At the stage of considering notice for reopening, one has to see only prima facie whether on the basis of tangible material on record, the Assessing Officer could form a valid belief that income chargeable to tax has escaped assessment.
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2016 (9) TMI 860
Reopening of assessment - Held that:- There is no failure on the part of the petitioner, to fully and truly disclose all material aspects, we have no hesitation to hold that the impugned action in the form of notice under section 148 and order of rejection of petition being not sustainable in the eye of law. Therefore, in view of the aforesaid set of circumstances, we are of the opinion that the said action challenged in the petition is required to be set aside. The petition is allowed to the aforesaid extent and notice under section 148 of the Act as well as order dated 01.07.2011 are quashed and set aside - Decided in favour of assessee.
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2016 (9) TMI 859
Penalty u/s 271(1)(c) - addition made to the income during the Assessment proceedings - unrecorded purchase - concealment of income with regard to sales - Held that:- The fact that the Respondent Assessee had itself disclosed additional income during the course of the assessment proceedings, would not by itself lead to the conclusion of concealment of income. An admission made by a party contrary to facts on record would not estop a party, from pointing out/explaining the facts already on record in a correct although a different perspective. This is more particularly so, if the party is to be visited with an imposition of penalty. So far as intent is concerned, the same is of no consequence in interpreting a fiscal statute, while imposing a penalty for a breach of law. Penalty would visit a party, who has breached the law in fact and not on the basis of supposed intent. The last submission on behalf of the Revenue that the concealment is evident from the fact that the month wise statement of purchase and sales submitted by the Respondent Assessee indicated a negative stock. This in the present facts would be of no consequence, as the record indicates and it is not disputed by the Revenue, that there was unrecorded purchase of 4418 metric tones of goods, which would meet the shortage in stock in the month wise statement of purchase and sales of goods submitted by the Respondent Assessee. In the above view, the impugned order of the Tribunal cannot be found fault with. The finding of fact, as recorded by the Assessing Officer and CIT(A), is not disputed by the Tribunal in the impugned order. It is on consideration of these findings recorded by the lower authorities that the impugned order further takes into account only the unrecorded purchases which were ignored by the lower authorities which establishes that there is no concealment of income. - Decided in favour of assessee
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2016 (9) TMI 858
Agricultural land - how, the distance between an agricultural land and the nearest municipality, should be measured? - whether should be measured, by the approach road, or by straight line distance on horizontal plane? - When a person cannot approach the land by the distance in straight line on horizontal plane, should the measurement be taken, by approach road? - Held that:- In a given case, the agricultural land is located in a village X and if there is a lake, measuring 4 Kms x 6 Kms, by length and breadth and if on the banks of the lake, the outer limits of the nearest municipality starts, one has to visualise distance which a person has to travel, through an approach road, permitted to be used by public and in such circumstances, it cannot be contended that the distance between the land and the nearest municipality should be measured in straight line on horizontal plane or crow flight/aerial distance. While carving out Section 11 of the General Clauses Act, 1897, legislature has also made it clear that for the purpose of any Act, that distance, shall unless a different, intention appears, be measured in a straight line on a horizontal plane. The proper interpretation to Section 11 of the General Clauses Act, 1897, depends upon the purposes for which, an Act is enacted. In the case of an explosive unit or stone quarry operations, aerial distance/crow's flight can be taken. In such circumstances, the distance falls within the ambit of prohibited distance. Thus in Section 11 of the General Clauses Act, 1897, the legislature has also foreseen that measurement of distance, should be in the context and the purposes to be achieved, in any enactment and it is not a straight jacket formula, that in all cases and under all circumstances and notwithstanding the purposes, for which, an Act is enacted, measurement of distance should be done only in straight line on horizontal plane. Reverting to the case on hand we are of the view that the decisions of the fact finding authorities that there cannot be any justifiable reason to reject the certificates of the Village Administrative Officer, Deputy Surveyor, Ambattur Taluk, Tahsildar, Ambattur and the General Manager, Metropolitan Transport Corporation (Chennai) Ltd's., are not perverse, warranting intervention. On the facts and circumstances of this case, we also wish to state that in the matter giving weightage to the evidence, report of the departmental inspector vis-a-vis the certificates of the Village Administrative Officer, Deputy Surveyor, Ambattur Taluk, Tahsildar, Ambattur and General Manager, Metropolitan Transport Corporation (Chennai) Ltd's, for the purpose of Section 2(14)(iii)(b) of the Income Tax Act, certificates of the revenue authorities, who are competent to measure the land and distance, and whose reports are accepted by the Government for demarcation of the limits of an area and the certificate of the Public Transport Corporation Ltd., should be given weightage and accepted, unless the contrary is proved. In the case on hand, there are no materials to reject the said certificates, and no reason has been assigned by the assessing officer, for rejection. In the light of what is stated above, it is not open to the revenue to contend that as per Section 11 of the General Clauses Act, 1857, the distance between the agricultural land and the nearest municipality, should be measured, only in a straight line on horizontal plane. In between agricultural land and the nearest municipality, if there is a mountain, or lake or private lands or government properties, and in such other cases, where the public has no access to reach the municipality and if there is an alternative public road route, the distance has to be measured only through the access road and not in a straight line or horizontal plane. - Decided in favour of the assessee.
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2016 (9) TMI 857
Reopening of assessment - Entitlement to claim u/s.54F - Held that:- For initiation of action under section 147(a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction. Merely an audit report, in our opinion, would not authorize the Assessing Officer to reopen the assessment even within the period of 4 years from the end of the relevant assessment year, when the said material was already before him when the original assessment was made. Any such attempt on his part would be based on mere change of opinion. To reiterate when a claim was processed at length and after calling for detailed explanation from the assessee, the same was accepted, merely because a certain element or angle was not in the mind of the Assessing Officer while accepting such a claim, cannot be a ground for issuing notice for reassessment. Therefore, in our view, the Assessing Officer cannot change his opinion, which he has already accepted in his assessment order. We are of the opinion that the Tribunal has committed an error in reversing the finding of CIT (A). Accordingly, we answer the question posed for our consideration in favour of the assessee and against the revenue and the Tribunal has committed an error in holding that the reopening proceedings are valid, legal and within the jurisdiction of the Respondent. Even otherwise, the method of valuation is in order and since the valuations are made under two different Acts, they cannot be made basis for reopening of valuation. - Decided in favour of assessee.
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2016 (9) TMI 856
Expenditure allowable u/s 37 - expenses on Doctor overseas tours - Held that:- Overseas trips for Doctors and their spouses were organized by the assessee whereby no details of the contents of seminar, if any conducted by the assessee overseas has been brought on record and also even the spouses accompanied the Doctors to the overseas trip which included cruise visit to island, gala dinners, cocktail, gala entertainment etc. rather than being directed towards seminar for product information dissemination or directed towards knowledge enhancement or knowledge sharing oriented as no details of seminar and its course content is brought on record rather the trip is directed towards leisure and entertainment of Doctors and their spouses which in our view appears to be clearly a distinguishable feature in this year enabling us to take a divergent view and the expenses incurred by the assessee cannot be allowed as business expenditure u/s 37 of the Act as it is clearly hit by explanation to Section 37 of the Act being against public policy as unethical prohibited by law. Even otherwise, these expenses cannot be considered to be incurred wholly and exclusive for the purpose of the business as the same were incurred to create good relations with the doctors in lieu of expected favours from doctors for recommending to patients the pharmaceutical products dealt within by the company to generate more and more business and profits for the assessee company. For claiming the expenses u/s 37 of the Act which is a residuary section, it is essential that the expenses are not covered under clauses of Section 30 to 36 of the Act of 1961 and are incurred wholly and exclusive for the purposes of business and it is not sufficient that it has some connection with the business of the assessee. No details of the seminars conducted abroad are brought on record as also spouses of the Doctors also travelled overseas along with Doctors and the expenses of the spouse on air ticket as well stay abroad are charged as an business expenditure u/s 37 of the Act which cannot be called as being incurred wholly and exclusively for the purposes of business of the assessee. - Decided against assessee
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2016 (9) TMI 855
Exemption claimed u/s. 11(1)(a) denied - activities of milching animals - Held that:- It is an admitted fact that the assessee is not in any way involved in a trade, commerce or business. Nor does it carry out any activity in relation thereto since providing medical, maternity, nursery, fertility and vaccination facilities to bovine milch animals belonging to milk producers in lieu of collecting cess @ 12 paisa per liter of the milk produced. Both the ld. lower authorities are fair enough in not disputing genuineness of all these research and development activities. Its objects forming part of the lower appellate order pages 7 to 9 along with the receipts in question do not indicate any trading, commercial or business activity element. The assessee is already a registered body within the meaning of a charitable trust u/s. 12A of the act. We are only dealing with impugned exemption proceedings. The Assessing Officer takes note of the fact that the appropriate authority has denied assessee’s status of a research association u/s. 35(1)(2) of the act. We fail to concur with this line of reasoning as section 35 rejection order denying deduction of expenditure on scientific research stands on a totally different footing as against the impugned exemption proceedings. We make it clear that we are dealing with section 2(15) r.w.s. 11 of the Act wherein the only issue is that of the assessee being engaged in charitable activities in furtherance to its charitable objects followed by application of income in furtherance thereto. We accordingly are of the opinion that both the lower authorities have wrongly rejected assessee’s exemption claim by invoking section 2(15) proviso of the act, since it neither carries out any activity in the nature of trade, commerce business nor any activities or renders any service in relation to the same whilst collecting the impugned cess @ 12 paisa per liter from milk producers in lieu of making them avail the above stated facilities. The assessee’s activities hereinabove in making available the facilities in question to milching animals are to ensure that they are free from diseases, their breed improvement and overall well being. We apply all the above stated constitutional provisions and case law to conclude that ‘medical relief’ in section 2(15) of the act very much includes the above referred relief made available by the assessee to the milch animals in lieu of a nominal cess @ 12 paise per litre. We reiterate that we are dealing with a charitable purpose definition clause in a tax statute to be given a broader interpretation in order to give its full effect. We hold that assessee’s activities deserve to be treated under the former specific category of ‘medical relief’ not covered by sec. 2(15) proviso inserted w.e.f. 01-04-2009 in question. It is accordingly held to be not an entity advancing any other object or general public utility without prejudice to our findings hereinabove - Decided in favour of assessee
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2016 (9) TMI 854
Addition being legal and professional expenses incurred in relation to shares buy back - Held that:- The Hon’ble Supreme Court in Punjab State Industrial Development Corporation (1996 (12) TMI 6 - SUPREME Court) has held that the expenses incurred in that connection still retain the character of a capital expenditure since the expenditure is directly related to the expansion of the capital base of the company. Similar view has been reiterated in Brooke Bond India Ltd. (1997 (2) TMI 11 - SUPREME Court ). As the expenditure of ₹ 1,95,320/- relates to buy back of shares, respectfully following the precedents noted by the ld.CIT(A), we uphold the disallowance. Addition in respect of Repair and maintenance expenses - revenue or capital expenditure - depreciation availability - Held that:- The Hon’ble jurisdictional High Court in Bigjo’s India Ltd. vs. CIT (2007 (3) TMI 104 - HIGH COURT, DELHI ) considered almost a similar situation as is obtaining before us in the present appeal. In that case, the assessee, a licensee of the showroom, erected new counters and built a new lift shaft at a new site. It was held that such amount was not in the nature of current repairs but a capital expenditure not deductible in full. We thus reject the viewpoint of the assessee of such an expense being of revenue nature. Explanation 1 to section 32 provides that where the business is carried on in a building not owned by the assessee, but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred ‘on the construction of any structure or doing of any work in or in relation to, and by way of renovation or expansion or, or improvement to, the building, then, the provisions of this clause shall apply as the said expenditure or work is a building owned by the assessee.’ It implies that whereas the expenditure of a capital nature incurred on the renovation etc. of a building, which is not owned by the assessee but in respect of which the assessee holds mere occupancy rights, cannot be allowed deduction as a revenue expense, but such expenditure of a capital nature is liable to be considered as a building owned by the assessee for the purposes of section 32 and hence depreciation is allowable pro tanto. In view of the above discussion, by which we have held that the expenditure incurred by the assessee in respect of the building is a capital and not a revenue expenditure, we hold that the assessee is entitled to depreciation at the stipulated rate. The AO is directed to allow such depreciation as per law after allowing a reasonable opportunity of hearing to the assessee.
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2016 (9) TMI 853
Unexplained investment in agricultural land - Held that:- Non-admissibility of the agreement and the receipt, is not required to be adjudicated as in our view there is no investment in the purchase of the agricultural land and merely the statement of the assessee cannot be considered to be admissible piece of evidence to show that the some crystallized right in the form of investment were made by him in the agricultural land. Since we have held that the agreement in the receipt are nonest in the eyes of law, therefore, it cannot be considered as investment, in consequence thereof or there cannot be any investment. The question of investment will only arise when there is a document to support that. Further we find that the assessee has been able to explain, assuming documents are admissible in law, source of investment, which is reflected from the statement given by the father of the assessee and also by the person from whom as well as also by the other persons. The assessee explained that ₹ 11 lacs were received by him from Sh. Hukum Singh and Satveer Singh. This said persons have duly explained the source of the source. Further ₹ 22 lacs were received by the assessee from his father would also be many plausible explanation of receipt of 22 Lacs as sale consideration for the sale of his land from one Sh Gopi Ram. The assessee himself had produced the receipt of the ₹ 6,00,000/-received on account of sale of his Tractor. Thus the assessee was able to explain the complete source of investment of ₹ 50 lacs. - Decided in favour of assessee.
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2016 (9) TMI 852
Deduction u/s 10A computation - whether loss from non-eligible unit can be set off against the profit of eligible unit or whether only profit of eligible unit is to be considered for computation of deduction u/s 10B - 'total income' computation - Held that:- Deduction u/s 10A/10B, has to be given effect at the stage of computing the profit & gains of the business under the head ‘income from business or profession’ which shall be arrived at after adjusting loss of ineligible unit with the profit of the eligible unit i.e. giving effect to the provisions of Section 70 and 71 of the Act. This view is consistent with the circular no. 7/DV/2013 [FILE NO.279/MISC./M-116/2012] dated 16-07- 2013 as well interpretation accorded to Section 10B of the Act by the Hon'ble jurisdictional High Court decisions in the case of Hindustan Unilevers Limited v. DCIT (2010 (4) TMI 206 - BOMBAY HIGH COURT ) and CIT v. Galaxy Surfactants Limited(2012 (3) TMI 101 - BOMBAY HIGH COURT ) , which proposition of law is laid down by Hon'ble Apex Court in Jeyar Consultant & Investment Pvt. Ltd. vs CIT (2015 (4) TMI 195 - SUPREME COURT ) although given in context of Section 80HHC of the Act. Thus,it is of considered view that consequent to amended provisions section 10B makes it clear that it is a deduction and not exemption , and the computation of income has to be in accordance with the provisions of the Act, therefore, not only profits but also losses from the business have to be taken into consideration while computing deduction u/s 10B of the Act. Thus, it is held that losses incurred in the non-eligible business by the assessee are to be set off against the profit of eligible units of the assessee to arrive at the deduction u/s 10B of the Act.
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2016 (9) TMI 851
Validity of proceedings u/s 153C/143(3) - absence of satisfaction note - Held that:- As it is undisputed that no satisfaction was recorded by the AO of the searched persons in this case. A communication from the ACIT to the ld. CIT-DR IV, ITAT Delhi also confirms the contention of the assessee. It is also undoubted that the Circulars issued by the CBDT have a binding force at least as far as the assessee’s interest are to be safe guarded. Para 4 of the circular specifically directs that even if the AO of the searched person and the other person is one and the same, then also he is required to record his satisfaction. In the light of the factual matrix of the case duly supported by the circular, we find that the assessee has a strong case on this issue. We, accordingly, hold that proceedings u/s 153C/143(3) for both the assessment years under appeal were void ab initio as the fundamental requirement of recording the satisfaction note was not complied with. Hence, the assessments for both the years are quashed - Decided against revenue
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2016 (9) TMI 850
Penalty levied u/s. 271(1)(c) - voluntary surrender of income by assessee - Held that:- A.O. has failed to make out the case of concealment of particulars of income or furnishing of inaccurate particulars of such income by the assessee, rather, it was a case of voluntary surrender of income for tax purpose in order to buy peace of mind and to avoid vexed litigation and Ld. CIT(A) has legally and rightly passed the impugned order. Finding no illegality or perversity in the impugned order, we hereby dismiss the present appeal filed by the Revenue - Decided in favour of the assessee
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2016 (9) TMI 849
Levy of penalty u/s 271(1)(c) - deduction u/s 80IB - Held that:- The assessee has claimed that revised returns for both asstt. years 2005-06 and 2006-07 were filed, withdrawing claim u/s 80IB of I.T. Act at the time when return for asstt. year 2007-08 was being filed. The assessee claims that the realisation that the assessee was not eligible for deduction u/s 80IB of I.T. Act was arrived at the time of filing return for asstt. year 2007-08 impliedly claiming thereby that the assessee decided to withdraw the claims u/s 80IB of I.T. Act for asstt. year 2005-06 and asstt. year 2006-07 (by filing revised returns of income) not because of the questionnaire dated 4.7.2007 issued by the Ld. AO) but because subsequently at the time of filing return for asstt. year 2007-08 the assessee on its own realised that deduction u/s 80IB was not admissible. This is a self-serving claim without any credible proof. Self-serving claims without credible proof do not merit serious consideration, and in the facts and circumstances of the cases before us, it does not advance the cause of the assessee. Had the revised returns been filed (withdrawing claim made u/s 80IB of I.T. Act for asstt. year 2005-06 and 2006-07) well before the time of filing return for asstt. year 2007-08 i.e. well before 31.10.2007, but after questionnaire dated 4.7.2007 was issued by Ld. AO, would the assessee be justified in claiming a favourable consideration ? No. In view of the reasoning earlier given in this order, the assessee would still be hit by Explanation 1(B) to S. 271(1)(c) of I.T. Act and would be still liable to pay penalty u/s 271(1)(c) of I.T. Act. Merely because the assessee delayed the filing of revised return of income (for asstt. year 2005-06 and 2006-07) till 31.10.2007, i.e. till the time of filing of return for asstt. year 2007- 08 even after receiving questionnaire dated 4.7.2007 ; the assesee cannot claim favourable consideration. One’s own mistake or delay can’t be used to advance one’s cause. In law, nobody can claim the benefit of delays or mistakes on his own part; though it may advance the cause of the other side. Penalties levied u/s 271(1)(c) of I.T. Act by the Ld. AO for both asstt. years 2005-06 and 2006-07 ; and upheld by the Ld. CIT(A) for both these years are hereby confirmed. We uphold the orders of the lower authorities for both asstt. years 2005-06 and 2006-07 and dismiss the appeals filed by the assessee for both asstt. year 2005-06 and 2006-07.- Decided against assessee.
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2016 (9) TMI 848
Addition on cessation of liability - whether the said liability did not exist in the books of accounts of M/s, Dawat-E-Hadiyah Trust as confirmed during the course of enquiry u/s. 133(6) ? - Held that:- Amount of advance received for sale of property shall be treated as income u/s 56 if the same is forfeited and negotiations did not result in transfer of such capital asset. But these provisions have been inserted w.e.f. 01-04-2015. These provisions are not clarificatory in nature. These provisions lay down a substantive law creating additional tax liability upon an assessee and, therefore, this cannot have retrospective effect. Further, with the insertion of these provisions, it becomes clear that earlier the law was not like this. Thus, for the year before us, i.e. A.Y. 2010-11, the then existing provisions of section 51 shall be applicable which clearly provides that the amount of advance received should be reduced from the cost of acquisition of asset. Thus, we reinforce the direction of the Ld. CIT(A) and direct the Assessing Officer to reduce the cost of acquisition of the property by the amount of ₹ 3.74 crores on sale of the said property at the time of computation of capital gains as may be arising on account of sale of the said property. The action of Ld. CIT(A) in directing the Assessing Officer to delete the addition which was made by the Assessing Officer u/s 41(1) of the Act, is hereby upheld. - Decided in favour of assessee
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2016 (9) TMI 847
Disallowance of expenditure - payment of Agency Commission to sister concern - whether excessive or unreasonable - Held that:- As decided in assessee’s own case and in the case of the assessee’s sister concern there is no dispute about the fact that the assessee availed the services of the foreign agent in respect of exports effected by it, as was apparent from the GRs. This fact was also approved by the RBI. Despite the payment of commission at l0% to a person, who is unrelated to the assessee, the gross profit as well as the net profit of the assessee saw substantial increase in terms of amount as well as percentage. The fact that the assessee did pay commission to its foreign agent has been acknowledged by the AO as is apparent from his decision in restricting the deduction to 2.88% of the turnover. Once the commission is accepted to have been paid, there is no logic in disallowing such expenditure by holding that it was excessive. It is for the assessee to determine the way in which it has to carry on its business. The assessee has to decide the percentage of commission which is to be allowed by him considering all the attending circumstances and the business exigencies. In our considered opinion, the ld. CIT(A) was justified in deleting this addition - Decided in favour of assessee
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2016 (9) TMI 846
Grant of registration u/s 12AA refused - determination of object of a trust - Held that:- If the predominant object of a trust or institution is charitable and in the process of achieving that object some activity of commercial nature generating income is carried out, which again is utilised for the advancement of its charitable objects, it cannot be inferred that the trust or institution is not established for charitable purposes. Moreover, the issue of applicability of the proviso to section 2(15) has to be examined at the stage of assessment while adjudicating the assessee’s claim of exemption u/s 11 of the Income Tax Act, 1961 and hence it is not germane at the time of considering the issue of granting registration u/s 12AA. Though the first proviso to sec. 2(15) of the Act excludes any activity of the nature of trade, commerce or business from being considered to be a charitable purpose but, the second proviso to section 2(15) restricts the application of first proviso only to such trusts and institutions having receipts from commercial activity exceeding a prescribed limit in a particular previous year. Therefore, the application of the proviso to section 2(15) has to be looked into in every assessment year. In our considered view, the first proviso to section 2(15) will have no role to play in the matter of granting registration and the role of the Ld. DIT (E) is restricted to him being satisfied that the objects are genuine and charitable. In absence of any such finding by the Ld. DIT (E) in this instant appeal, we hold that the benefit of grant of registration has been denied to the assessee without any cogent reason and hence while allowing the assessee’s appeal we direct the Ld. DIT (E) to grant registration to the assessee u/s 12AA of the Act. - Decided in favour of assessee
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Customs
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2016 (9) TMI 881
Interest on refund under the provisions of Section 27A of the Customs Act, 1962 - import of spares and consumables for carrying out drilling operations - Notification No.21/2002-Cus dated 1st March, 2002 - exemption of goods required in connection with petroleum operations undertaken under petroleum exploration licenses - sub-contractor - Essentiality Certificate - import without claiming benefit and on payment of duty - claim for refund - is applicant entitled to get interest on delayed refund? - Held that: - once an application for refund has been made and the same is granted within a period of three months from the date of receipt of the application, then there would be no liability to pay interest to the applicant. However, if the refund is granted beyond the period of three months from the date of receipt of the application, then, on the amount of refund granted, interest would also be payable from the date immediately after expiry of three months from the date of receipt of such application, till the date of refund. the decision in the case Ranbaxy Laboratories Ltd Vs. Union of India [2011 (10) TMI 16 - Supreme Court of India] would apply. The Petitioner had not complied with the conditions of the Essentiality Certificate. It therefore held that the Essentiality Certificate could not be taken to be the basis of the refund and accordingly rejected the refund application of the Petitioner. This order dated 13th December, 2011 was thereafter subjected to an appeal and as well as further proceedings , which finally culminated in a refund being granted to the Petitioner on 23rd June, 2014 in the sum of ₹ 1,89,15,549/-. As no interest was granted on this refund, the Petitioner challenged the said order - Held that: - the statutory provisions are clear that where there is a delay in the grant of refund, then interest must follow. It is only the calculation thereof which would be determined by the Authority - applicant entitled to interest. Necessary action to be taken against the Secretary, Ministry of Finance (Department of Revenue), Government of India and the Chairman, Central Board of Excise and Customs, New Delhi. It is only they who would possibly realise that the object and purpose is to take expeditious action on refund applications so that revenue loss is avoided in payment of statutory interest. The intent is to discourage the tendency of not taking prompt action on these applications, thereby defeating all policies aimed at creating a business friendly atmosphere. They must also realise that litigation in Court on this score results in precious time and money being wasted. Applicant entitled to interest on delayed refund - matter on remand to Refunding Authority for the limited purpose of calculating and paying interest - petition disposed off - decided in favor of petitioner.
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2016 (9) TMI 880
Rejection of settlement applications - proper disclosures not made amounting to non-cooperation - duty and interest under clause (c) to the 1st proviso to section 127B(1) - settlement of cases under Chapter XIV-A - Held that: - The settlement machinery was meant for providing a chance to a tax-evader who wants to turn over a new leaf as recommended by the Direct Taxes Inquiry Committee. The majority view of the Settlement Commission was in grave error in coming to the conclusion that the Settlement Applications filed by the Petitioners were liable for rejection on the ground of non co-operation in the proceedings and non payment of any admitted duty and interest as required under Section 127B. The Petitioners had explained that they had not made any additional payment of duty because in the past they had deposited the amount of duty which was far in excess of what was demanded in the SCN. This explanation was accepted by the Settlement Commission, and it was only thereafter that the case was allowed to be proceeded with - It was not correct on the part of the of the Settlement Commission (the majority view) to reject the Settlement Applications of the Petitioners on the ground of non payment of any admitted duty and interest as required under Section 127B. Classification of goods - reclassification of the fitments to the Pontoon, alongwith the Pontoon - grounds of rejection - Held that: - In view of the fact that the Settlement Commission itself had allowed the Settlement Applications of the Petitioners to be proceeded with under section 127C would only mean that at the threshold itself, the Commission was satisfied that the Settlement Applications filed by the Petitioners was not made for the interpretation of the classification of the goods under the Customs Tariff Act, 1975. This apart, it was also the case of the Petitioners that they are not disputing any classification as proposed by the Revenue in the SCN. - the Settlement Applications filed by the Petitioners could not have been rejected on this ground, as well. Matter remanded to the Settlement Commission to decide the Settlement Applications filed by the Petitioners on merits and in accordance with law and uninfluenced by any views of the majority or minority - petition disposed off - decided in favor of petitioner.
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2016 (9) TMI 879
Redemption of gold seized on payment of redemption fine - Section 125 of the Customs Act 1962 - provisional release of goods under Section 111(d) of the Customs Act, 1962 - prohibited goods - discretionery power of competent authority in taking a decision - whether the competent authority correct in denying the release of goods, thereby imposing absolute confiscation in exercise of its discretionery power? Held that: - The power conferred on the authority without any guidelines may likely to be abused or arbitrarily exercised and in such circumstances, the guidance and the control of exercise of such power has to be gathered from the object of conferment of such power. Non-consideration or non-application of mind to the relevant factors, renders exercise of discretion manifestly erroneous and it cause for judicial interference. The case of Global Energy Limited and another v. Central Electricity Regulatory Commission [2009 (5) TMI 904 - SUPREME COURT] referred where it was held that the exercise of discretion has to be in conformity with the purpose for which, it is conferred, object sought to be achieved and reasons to be recorded. When discretion is exercised under Section 125 and if any challenge is made under Article 226 of the Constitution of India, the twin test, to be satisfied is "relevance and reason". In the light of the judgments of the Hon'ble Apex Court and applying the same to the facts of this case and testing the discretion exercised by the authority, on both subjective and objective satisfaction, as to why, the goods seized, cannot be released, when smuggling is alleged and on the materials on record, it is held that the discretion exercised by the competent authority, to deny release, is in accordance with law. Decided in favor of revenue.
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2016 (9) TMI 878
Refund claims under Section 27 of Customs Act, 1962 - petitioner filing return admitting liability at 20 percent, assessment finalized by competent authority - notification no. 103/2004-Customs dated 30.09.2004 of Union of India reduced custom duty to 15 percent w.e.f. 01.10.2004 - whether authority considering refund claim can sit in appeal over an assessment made by a competent officer for the purpose of refund' when such assessment is not modified by an order of competent authority in appropriate proceeding? - Held that: - the decision in the case of Priya Blue Industries Ltd. Vs Commissioner of Customs (Preventive) [2004 (9) TMI 105 - SUPREME COURT OF INDIA] would apply. Since assessment has not been modified in accordance with procedure prescribed in statute, therefore, in the garb of refund, officer concerned cannot take a different view so as to refund an amount paid as per assessment order. Hence so long as assessment as such continue, no refund is admissible to petitioner. The petitioner may utilize alternative legal remedy, if available - petition dismissed - decided against petitioner.
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2016 (9) TMI 877
Constitutional validity of Sections 27A and 28AA of the Customs Act 1962 - notifications no. 75/2003~Cus(NT) dated 12.09.2003, 18/2011-Cus(NT) dated 01.03.2011 (w. e. f. 01.04.2011) and 33/2016-Cus(NT) dated 01.03.2016 (w. e. f. 01.04.2016) - whether the Respondent is justified in adopting a discriminatory approach in the matter of interest, which is compensatory in character by awarding an Assessee in effect interest at only 6% per annum on the delayed refunds while charging an Assessee interest at present at 15% per annum on late payment of duty? - maintainability - SCN dated 16th April 2014 - Held that: - there is no stay of the adjudication of the SCN dated 16th April 2014, which will proceed in accordance with law. The final order passed in the adjudication proceedings, limited to the extent of the issue of interest, will be subject to the outcome of the present petition - application disposed off.
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2016 (9) TMI 876
Prayer for release of vehicle - confiscation of vehicle - option to pay redemption fine - demand of differential customs duty - imposition of penalty - Motor Bike Harley Davidson - illegal import - seizure - Held that: - serious prejudice will be caused to respondent if the disposal of appeal is delayed - the Customs, Central Excise and Service Tax Appellate Tribunal, Bangalore Bench shall dispose of the appeal as expeditiously as possible, and at any rate, within eight weeks. Petition disposed off - decided in favor of respondent.
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2016 (9) TMI 875
Validity of criminal revision - summon of revisionist under section 135 of the Customs Act, 1962 - raid - search of godown - Chinese silk yarn - seizure under Section 11 of Act, 1962 - recording of statement Sections 107 and 108 of Act, 1962 - summon of four persons who were alleged to be partner in smuggling under Section 108 of Act, 1962 - Held that: - Here is a case at a nascent stage when on the basis of complaint made by a Public Servant, i.e., Assistant Commissioner (Customs), Varanasi alleging that accused-revisionists have committed an offence under Section 135 of Act, 1962, Magistrate has summoned revisionists against whom allegations have been made in the compliant that these are the persons who have committed offence under Section 135 of Act, 1962. In order to form opinion, prima facie, at this stage, Magistrate is supposed to look into the allegations contained in the complaint and the material placed along with it which in the present case include seizure memo, confessional statement of Vijay Kumar as well as statements of accused-revisionists which have been looked into by Magistrate and thereafter it has formed an opinion that a prima facie case has been made out, hence summons have been issued. Nothing has been placed to show that material available before Magistrate, even if believed to be true, no person of ordinary prudence can come to a conclusion that even prima face no case of commission of offence by accused-revisionists under Section 135 of Act, 1962 is made out. Looking to the summoning order issued by SCJM, it can be said that whatever material was available before Court below, it has considered the same, and, after applying its mind to the material available before it, has issued process to revisionists and it cannot be said that the same is illegal or contrary to law in any manner, hence, no interference is called for in this criminal revision. Criminal revision valid.
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2016 (9) TMI 874
Valuation - royalty/ value of designs, drawings etc. - assessable value - Rule 9(i)(b)(iv) of the Customs Valuation Rules, 1988 - collaboration agreement - whether royalty/ value of designs, drawings includible in the assessable value? - Held that: - all the specifications of the shoe are supplied by the appellant to the vendor in the shape of catalogue and real shoe approved by the appellant as well as the foreign collaborator. A design need not be two dimensional it can be three dimensional piece of the product which can be copied both in respect of design and material specifications - Rule 9(i)(b)(iv) attracted - royalty/ value of designs, drawings includible. Design of the production is only one of the component of the collaboration agreement. There are many more services which are provided in respect of the goods marketed by the appellant by the foreign collaboration. Only a portion of the lump sum amount attributable to the design cost of product manufactured abroad. Matter remanded back to the original adjudicating authority for determination of appropriate quantum of the value to be added - appeal disposed off - decided against appellant.
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Corporate Laws
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2016 (9) TMI 868
Failure to obtain SEBI Complaints Redress System (SCORES) authentication within the stipulated time - delay in redressal of the investor grievances - Held that:- As per SEBI circular dated June 03. 2011 it was obligatory on the part of the appellant to obtain SCORES authentication, however, the appellant failed to obtain SCORES authentication. Even after issuance of the reminder circular dated August 13, 2012, the appellant failed to obtain the SCORES authentication. It is only when by circular dated April 17, 2013 SEBI threatened with action if SCORES authentication was not obtained within 30 days, appellant by its letter dated May 16, 2013 applied for SCORES authentication which was submitted to SEBI on May 17, 2013. Thus, inspite of the SEBI circular dated April 17, 2013, instead of obtaining SCORES authentication within 30 days, appellant applied for SCORES authentication on the last day of obtaining SCORES authentication set out in the circular dated April 17, 2013. In these circumstances, the decision of AO that the appellant failed to obtain SCORES authentication within the stipulated time cannot be faulted. As regards the delay in redressal of the investor grievances, it is not in dispute that the show cause notice dated March 26, 2014 referred to two investor grievances and the said grievances have been redressed by the appellant belatedly on September 26, 2014. It is also not in dispute that on receiving the SCORES authentication on September 26/29, 2014 it was noticed by the appellant that there were six more investor grievances and the appellant has redressed those grievances on November 20, 2014. From the aforesaid facts, it is evident that there was As regards the delay in redressal of the investor grievances, it is not in dispute that the show cause notice dated March 26, 2014 referred to two investor grievances and the said grievances have been redressed by the appellant belatedly on September 26, 2014. It is also not in dispute that on receiving the SCORES authentication on September 26/29, 2014 it was noticed by the appellant that there were six more investor grievances and the appellant has redressed those grievances on November 20, 2014. From the aforesaid facts, it is evident that there was delay in redressing the investor grievances. Section 15C of the SEBI Act provides that if any listed company fails to comply with the directions issued by the Board within the stipulated time and fails to redress the investor grievances within the time specified by the Board, then such company shall be liable to a penalty which shall not be less than one lakh rupees but which may extend to one lakh rupees for each day during which such failure continues subject to a maximum of one crore rupees. In the present case, investor grievances noticed by the appellant in the show cause notice dated March 26, 2014 were redressed by the appellant belatedly on September 26, 2014. Similarly, six investor grievances noticed by the appellant on obtaining SCORES authentication on September 26/29, 2014 were redressed by the appellant belatedly on November 20, 2014. Penalty calculated at the rate of Rs. 1 lakh per day for the period during which the failure continued, would in the facts of present case exceed Rs. 1 crore. However, after taking into consideration all mitigating factors the AO has imposed penalty of Rs. 4 lakh which cannot be said to be harsh or excessive. If the grievances of the investors were basically relating to non-receipt of dividend, then having responded to the two complainants on September 26, 2014, which were also relating to the dividend, the appellant could very well have given the same reply to the remaining six investors. However, admittedly the appellant responded to the six investors belatedly on November 20, 2014. In these circumstances, no fault can be found with the quantum of penalty imposed against the appellant.
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Service Tax
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2016 (9) TMI 900
Period of limitation - filing an appeal before the Commissioner (appeals) - condonation of delay - 78 days beyond 3 months - appeal could not be filed within prescribed period due to non-receipt of the order in original - Held that:- it is true that the outer limit is six months for entertaining of the appeal including condonation of delay. However, in order to find out that the limitation would begin from which date, it was obligatory on the part of the respondent No.2 to verify the record of the acknowledgement received, if any, or any other material for ascertaining the date on which the order was received by the appellant. When the appellant made statement on oath that it received the order only on 11.09.2012 to dislodge or for non-accepting the statement made, there should have been material on record for receipt of the order by the appellant on a particular date. If the material was not there, the second respondent could not proceed on the basis that the order despatched on 16.03.2012 ought to have been received within reasonable time. It is hardly required to be stated that when the statute provides express beginning of the limitation from the date of receipt of the order, unless the receipt is so verified and considered, the limitation cannot be said to have begun. In any case, even if the date of despatch is considered on 16.03.2012 then also within the outer limit of six months, the appeal was already presented on 13.09.2012. It is hardly required to be stated that when the statute provides express beginning of the limitation from the date of receipt of the order, unless the receipt is so veri fied and considered, the limitation cannot be said to have begun. In any case, even if the date of despatch is considered on 16.03.2012 then also within the outer limit of six months, the appeal was already presented on 13.09.2012.Therefore, in the absence of any material considered the date from which the limitation period ought to have been taken, it was a fit case to condone the delay. - Decided in favour of appellant
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2016 (9) TMI 899
VCES - rejection of VCES application - correct rate of service tax - petitioner had calculated and deposited tax @ 10.3% whereas the tax had to be calculated @ 12.36% as per department - on the date of raising the invoice for rendering services, the rate of tax stood revised to 12.36% - Held that:- it was not obligatory for the Respondent to inform the Petitioner what the correct rate of service tax was. It was for the Petitioner to have ascertained the correct rate of tax and calculated the service tax liability accordingly. There is no provision in the VCES, which permits correction of errors of this nature by the Petitioner. In this writ petition, the Court is called upon to examine if the Respondent has committed any legal error in rejecting the application of the Petitioner under the VCES. The Court is unable to find any such error either in fact or in law. Consequently the relief prayed for by the Petitioner cannot be granted. - Decided against the petitioner
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2016 (9) TMI 898
Validity of impugned order - violation of principles of natural justice - petitioner has not been given adequate opportunity to put forth their case by way of personal hearing - Held that:- it is not in dispute that the respondent did not give any reply to the said request made by the petitioner. Nevertheless, the petitioner submitted a representation on 01.03.2016, furnishing certain details said to be the break-up details and a specific request was made to the respondent that an opportunity of personal hearing may be granted to explain the facts and the basis for their calculation. It is also not in dispute that the said representation dated 01.03.2016, was received by the respondent, nevertheless, neither they rejected the request nor considered the same and afforded an opportunity of personal hearing, but, proceed to pass the impugned order on 23.03.2016. In Taxation Statute, though certain Statutes do not specifically provide for an opportunity of personal hearing, Courts have rendered decisions and stated that when complicated questions of facts are involved, it would be in fitness of things for the Authority to afford an opportunity of personal hearing. The said decision has been rendered with a view to clarify the facts and also in a way to help the Adjudicating Officer to give a proper and just conclusion at the earliest. Therefore, had the respondent afforded an opportunity to the petitioner as sought for in their representation dated 01.03.2016, the petitioner would not have approached this Court. Therefore, this Court is inclined to interfere with the impugned order, on the ground that it is in violation of principles of natural justice. - Petition allowed by way of remand
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2016 (9) TMI 897
SEZ unit - Refund claim - Notification No. 40/2012-ST dated 20/6/2012 - period involved is October 2011 to December 2012 - service tax paid on the services provided to them for authorized operations as per various notifications issued from time to time - provisional services rendered by Chartered Accountant as well as those of training of employees - Held that:- I have perused invoices issued in respect of the CA services. There are three invoices issued to M/s Cummins India Ltd., I find that all the three invoices are issued to M/s Cummins India Ltd. However, it is clearly mentioned that it is to the account of M/s Cummins Technologies India Pvt. Ltd., the appellant in the present case. In as much as these services have been rendered to the appellant s SEZ unit as well as are covered in the approved list of services, I find no justification for denial of the refund. Refund claim - invoices issued by CHA do not show the service tax paid by the service providers engaged by them - Held that:- I find that the claim of refund of service tax made under such invoices by the CHA has been denied by the authorities below for the reason that the invoices issued by the service provider, i.e. CHA, do not indicate the full amount of service tax. However, it is evident that all the service providers engaged by the CHA have all render service on account of the appellant SEZ unit. The issue is no more res-integra and have come up before the Tribunal in the past and in such cases the refund stands allowed. Refund claim - training of employees - Held that:- I have seen the three invoices. All three invoices are in favour of appellant and indicate clearly the service tax amounts. Since Commercial & Training and Coaching Services approved for authorized operations, I find no justifiable reason to reject the refund. - Decided in favour of appellant
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2016 (9) TMI 896
Cenvat credit - Service Tax paid on various services viz., Catering service, Commissioning services, House Keeping, Documentation Service and Conducting written test for Non-Mgt. - utilization of Cenvat credit for discharging the excise duty liability on finished petroleum products cleared from the refinery - period involved is April 2013 to December 2013 - Held that:- it is found that disputed input services are not barred or excluded by Rule 2(l) ibid. The catering service availed by the appellant is not in the nature of outdoor catering service used primarily for personal use or consumption of any employee, but related to food served in training activities like seminars, workshops etc., hence their input services will not fall in the audit of the Exclusion clause (C) of Rule 2(I). With reference to credit on commissioning service appellant has clarified that this relates to project monitoring consultancy charges for FGD and PTU units; hence I hold that this service has indeed been utilised in relation to refining activities and hence not excluded by Rule 2(I). With reference to credit on house Keeping Services, it is not the case that these are used for the personal use or consumption of any employee. The appellant is a manufacturer, a refinery, and if they utilise the services of a service provider to perform housekeeping functions like cleaning etc., such services are very much required for the proper upkeep of premises which in term necessary for the manufacturing activities, hence they should be accepted as an input service for the purposes of Rule 2(L) of the Rules. There is also no explicit bar in Rule 2(l) against house keeping services. With reference to credit on Documentation Service, it is clear that these relate to certification services rendered in connection with Disaster Management Plan and for Mechanical Engineering services section covering process drawings. There are very much services in relation to the refinery activities and hence do not fall foul of Rule 2(1). With reference to credit on conducting written test for non-management, this relates to services of Indian Institute of Psychometry for selection of employees for the refinery; the said input services are for the purpose of "recruitment" which is specifically included in the sample list of services in Rule 2(l). As trend, hereinatore, the impugned services are very much input services for the purposes of Rule 2(I). This being so, the denial of input credit by the adjudicating authority on these impugned services is not supported by law and hence is set aside. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 895
Security Agency services - period involved is 2001-2002 to 9/2005 - Demand alongwith interest and penalties - Held that:- from the submissions made before us and the documents adverted to by the appellant it is plain that the appellant did indeed provide services other than security services. It also emerges that the other services provided by the appellant were definitely not subject to service tax for major portion of the period under dispute. This is evidenced by the clarifications given by the CBEC in the FAQs issued by them in 2003. It is further seen that out of the other services provided by appellant, manpower supply services was made taxable from 16.06.2005. Hence at the most only for the period from 16.06.2005 on ward, till September 2005 could there arise service tax liability on the said services and also for any other services provided by them which were not taxable earlier but were later brought into the net with effect from 16.06.2005. Regarding the inclusion of salaries paid by the appellant in taxable value it is seen that a number of Tribunal decisions have clearly held that staff salary and infrastructure expenses are required to be abated. Therefore, the value of services other than Security Agency Services cannot be included under the taxable value of the latter. Staff salary and infrastructure expenses cannot be included in the taxable value for determination of service tax liability and the services other than security services, provided by appellant during the period covered by SCN viz; 2001-2002 to 2005-2006 (upto 9/2005), eg; Manpower supply service will be subject to service tax liability only w.e.f. 16.05.2005. To enable reworking/ recomputation of the service tax liability that has to be discharged by the appellant, the matter requires to be remanded to the adjudicating authority for denovo adjudication - Appeal allowed by way of remand
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2016 (9) TMI 894
Whether the excess service tax paid by them in the previous period can be adjusted in the subsequent period, for neutralizing the subsequent tax liabilities - Held that:- the issue is no more res-integra and stands settled in their own earlier case BSNL Vs. CCE, Chandigarh [2011 (7) TMI 946 - CESTAT, NEW DELHI]. Therefore, as the issue is settled, we find no justifiable reasons to take a different view. As such by following the precedent the impugned orders are set aside. - Decided in favour of appellant
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2016 (9) TMI 893
Imposition of penalty - Section 77 and 78 of the Finance Act, 1994 - service tax liability with interest discharged before issuance of show-cause notice - whether appellant is required to discharge the service tax for the period beyond five years from the date of show-cause notice - Held that:- it is found that the show cause notice was issued on 23.04.2013. Provisions of Section 73(4A) were inserted by Finance Act, 2011 w.e.f. 8.4.2011. The point raised by the appellant is a question of law as if the provisions of Section 73(4A) are applied in this case, the conclusion may have been different; as also the point of demand is for the period beyond five years. Since both these points were not raised before adjudicating authority we deem it fit to remand the matter back to adjudicating authority to reconsider the issue afresh. - Appeal disposed of by way of remand
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2016 (9) TMI 892
VCES declaration - rejection of declaration filed under the Voluntary Compliance Encouragement Scheme, 2013 - whether an appeal would lie to Tribunal against the rejection of VCES declaration filed by the appellant - Held that:- by following the judgment of Hon’ble High Court of Madras in the case of Narasimha Mills Pvt. Ltd. vs. CCE, Coimbatore [2015 (6) TMI 787 - MADRAS HIGH COURT], we hold that all these appeals are maintainable before the Bench. It is found that whether the appellants herein are eligible for the VCES benefit or otherwise has to be decided by the designated authority. In these cases in hand, the designated authority has in the group companies’ case on the very same issue accepted the VCES declaration while in the appellants’ case herein, rejected the same. Therefore, without going into the merits of the case and keeping all the issues open, we record that the designated authority should be given an opportunity to reconsider the issue afresh. Accordingly, we set aside the impugned order and restore the VCES declarations to their original numbers before the designated authority with a direction that he should decide the VCES declarations on merits after following the principles of natural justice. - Appeals allowed by way of remand
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Central Excise
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2016 (9) TMI 891
Cenvat Credit - Inputs/Services used in the manufacture of exempted goods - Rule 6 of the Cenvat Credit Rules, 2004 - respondent is clearing one of their products i.e. 100% cotton item under 'nil' rate of duty - export of goods manufactured - Held that:- once the issue involved in the present appeal has already been gone into by Hon'ble Supreme Court and judgments of Bombay High Court in the case of Union of India Vs. Sharp Menthol India Ltd. [2011 (4) TMI 27 - BOMBAY HIGH COURT] and Himachal Pradesh High Court in the case of Commissioner of Central Excise Vs. Drish Shoes Ltd. [2010 (5) TMI 334 - HIMACHAL PRADESH HIGH COURT], have been upheld granting relief to the assessee, we do not find that any substantial question of law arises in the present appeal. - Decided against the Revenue
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2016 (9) TMI 890
Confiscation and imposition of penalty - excess found goods as also the Indian currency recovered from the residential premises of the General Manager - Held that:- it is found that the law as regards confiscation of excess stock of goods almost stands settled. The same cannot be confiscated on the mere conclusion of non-entry of goods in the statutory documents, unless there is evidence that such stock was not entered in RG-1 register either deliberately or on the mala fide intention to remove the same clandestinely. Admittedly, in the present case, it is not the Revenue s case that the goods were in process of being removed. Apart from the fact that such stock taking process stands challenged, by adopting the fact that there is no evidence on record to show that such excess found stock was meant for clandestinely removal, in which case, action against the assessee was not appropriate. As regards the confiscation of the seized Indian currency , I find that the same was seized from the residential premises of the son of General Manager. In spite of the fact that no notice was issued to the person from whose possession the currency was seized, to confiscate the currency on the assumption that the same represents the sale proceeds of the goods cleared and sold by the manufacturing unit without there being any evidence to that effect and without there being any duty demand in respect of such clandestinely removed goods is neither proper nor justifiable. It is well settled law that onus to prove that currency in question represents sale proceeds of clandestinely removed goods lies heavily on the Revenue and is required to be discharged with sufficient evidence . In the instant case, I find that there is nothing on record to show that cash seized from the residential premises of the General Manager of the company represent sales proceeds of the clandestinely removed goods from the appellant factory. Therefore, the confiscation of goods as also cash seized or imposition of penalty upon the appellant by the authorities below, are set aside. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 889
Cenvat credit - Whether, after putting the capital goods into use for a period of around 10 years, the assessee is required to reverse the cenvat credit originally taken at the time of receipt of goods or the fact of payment of duty on the transaction value would satisfy the provisions of law - Held that:- Rule 3(5) of Cenvat Credit Rules, 2004, provides for reversal of cenvat credit when the capital goods are removed as such. The expression as such appearing in the said Rule was the subject matter of various decisions and stand interpreted by various Courts to the effect that the said provisions would apply when the capital goods are cleared without putting them to use. The issue stands decided by a Larger Bench decision in the case of Modernova Plastyles Pvt. Ltd. vs. Commissioner [2008 (10) TMI 51 - CESTAT, MUMBAI]. In view of the same, the impugned orders are set aside. - Decided in favour of appellant
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2016 (9) TMI 888
Classification - Operation theater lights - Whetehr they are to be classified under Central Excise Tariff heading 9018.00 as Instruments and Appliances used in medical, surgical, dental or veterinary sciences as per assessee or under CETH 9405 which deals with lamps and lighting fittings, including search lights and spot lights not elsewhere specified as per Department - Held that:- these specialized lamps have shadowless operation, heat defusing capacity and also colour correction capabilities. Therefore, we are in agreement with the lower authority that these lamps are specially designed and made to be used only in operation theatres. We also found that the reliance placed by the Commissioner (Appeals) on the observation of Hon’ble Supreme Court in the case of M/s Metagraph (P) Ltd. vs. CCE [1996 (11) TMI 68 - SUPREME COURT OF INDIA] is appropriate. Therefore, they are appropriately classified under CETH 9018.00. - Decided against the Revenue
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2016 (9) TMI 887
Refund claim - Entitlement - Assistant Commissioner, after allowing the refund claim had adjusted the same against the outstanding dues - appellants accepted the said order of the Asstt. Commissioner and did not challenge it before any higher appellate forum - Held that:- when the matter was remanded by the Tribunal in the earlier proceedings and reached the Commissioner (Appeals) in denovo proceedings, he again passed the order in favour of the assessee. That order had become final inasmuch as the same was not challenged by the Revenue before the Tribunal. As such, the appellants are admittedly entitled to the refund of duty paid but the same refund having been sanctioned and adjusted, second time refund claim by the assessee is not appropriate. The effect of the same would be that deposits made in the shortages case and refunded to the assessee in principle, would be treated as deposit towards earlier demand. As and when the earlier demand is decided, based upon the outcome of the same, the appellants entitlement to refund would be decided accordingly. - Decided against the appellant
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2016 (9) TMI 886
Duty liability - import of cut size aluminium sheets and are subjecting the same to process like slitting, cutting, routing etc. to convert them into alucobond panels (cladding) - whether the above process amounts to manufacture of panels or not - Held that:- it is found that the ld. Commissioner (Appeals) examined the excisability of the process undertaken by the respondent, elaborately. The respondent were making aluminium composite panels fixed to the exterior of the wall of the building. The impugned order categorically recorded, after apprising the facts of the case, that no excisable goods emerges due to the activity of the respondent. Moreover, the aluminium composite panel prepared at site were fixed to the building and becomes part of immovable property. No evidence has been brought forth by the Department that the imported panels after being subjected to drilling, bending etc., but before fixing in the wall were marketable as a new and distinct product. Even in the present appeal the grounds of appeal did not bring out the evidence in support of Revenue’s claim regarding marketability of the product. It is an admitted fact that the composite aluminium panels are specially customised for use in the specific building and are made at site and as such there is no marketable commodity emerging. This fact has been categorically recorded in the impugned order. As we find no material evidence on the basic issue of emergence of new marketable product at site due to process undertaken by the respondent, we have no tenable reason to interfere with the impugned order. - Decided against the Revenue
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2016 (9) TMI 885
SSI exemption - Notification No. 8/2003-CE dated 01.03.2003 - Refund claim - Central excise duty paid by mistake by including non ISI submersible pumps i.e. non BIS pumps in the overall turnover - Held that:- it is found that the notification is available to all goods of Chapter 84 except power driven pumps not conforming to BIS standards. We note that for the purpose of determining the first clearances upto an aggregate value not existing ₹ 150 lakhs the goods covered by the said notification only can be considered. Since non BIS pumps are not covered by the notification and the appellants submitted that they are clearing the same on payment of duty, the turnover of the same is not to be considered for arriving at the threshold exemption limit. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 884
Clandestine removal of dutiable goods - Imposition of penalty - show cause notice was based on the presumption about the figures mentioned on the loose sheets - neither admission from any customer received nor any evidence do have with the department about the details on the loose slips being that related to proceeds of goods cleared clandestinely without payment of duty - Held that:- it is found that in none of the statements there was any admission that the data recorded on the loose sheets, was related to the value of the goods cleared clandestinely. There is force in the argument of the appellants that department did not compare the data with the data related to clearances of goods on which duty was paid and the goods manufactured by them which did not attract duty. We, therefore, find that the show cause notice is based on presumption. Hence, the subject of cause notice is not sustainable. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 883
Refund claim - exports made were not under Bond or letter of undertaking as required under Notification No. 5/2006-CE(NT) dated 14.03.2006 issued under Rules of Cenvat Credit Rules, 2004 - clearance of goods under Notification No. 108/95-CE dated 28.08.2005 and 06/2006-CE dated 01.03.2006 as deemed export - Held that:- in view of various case laws of Hon'ble Supreme Court, High Court and Tribunal, the appellant is entitled to the benefit of refund of unutilized cenvat credit as the supplies made by them to a Project financed by World Bank under International Competitive Bidding is ‘deemed export’ under the provisions of para 8.3 of the Import-Export Policy 2004-09. The condition in the Notification No. 5/2006-CE(NT) dated 14.3.2006 that the goods have to be cleared under bond or under letter of undertaking will not make difference in the case of deemed exports made by the appellant. Once it is clear that the supplies made by the appellant are in the nature of deemed exports, they would be entitled to the benefit of entitlement to the cash refund of the cenvat credit amount lying unutilized in their said account. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 882
Valuation - includability of amount collected towards collection charges in the assessable value - duty paid under protest as the same was done without issuance of any Show Cause Notice - Held that:- the addition of collection charges, weighment difference and rate difference are very much in the nature of additional consideration and hence required to be included in the assesable value for the discharge of excise duty. Period of limitation - Demand alongwith interest and penalty - additional consideration received towards collection charges - audit of appellant was conducted in 9/2003 and audit note also is issued on 31.01.2005 - Held that:- the quantifying the collection charges collected in 2003-04 and having directed JRO to verify the issue in detail and take necessary action to safeguard the revenue, department cannot then take its own sweet time to issue notice on 29.09.2007 i.e., after a lapse of more than four years of the audit. Therefore, the appellant does have a case on the issue of limitation, and that SCN and hence the demand revised in the impugned order is time barred except for the normal period of demand immediately preceding the date of service of Show Cause Notice. The penalty imposed under Rule 25 is also set aside. the demand raised beyond the normal period, is hit by limitation and unsustainable. The impugned demand for the normal period along with interest thereof is sustained and the jurisdictional, Range Superintendent is directed to re-quantify the amount of duty and interest thereof for the normal period. - Decided partly in favour of appellant
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CST, VAT & Sales Tax
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2016 (9) TMI 873
Releasing the refund - Delhi Value Added Tax Act, 2004 - petitioner association, association of Tax Legal Practitioners - non-compliance with statutory provisions - individual claim - public interest litigation - Right to Information Act, 2005 - Held that: - the cause, which apparently involves public interest, is sought to be espoused by a registered association of legal practitioners dealing with the issue in controversy on behalf of the dealers, it is believed that the interest of justice would be met if the Commissioner of VAT, New Delhi is directed to look into the issue and take the necessary steps for rectification of the lapses, if any, in implementation of the statutory provisions. Direction to the Commissioner of VAT, New Delhi to consider the issues raised in this writ petition by treating the same as a representation. The Petitioner association is at liberty to make a representation before the Commissioner of VAT, New Delhi within two weeks furnishing a list of specific instances where the refund is withheld - petition disposed off - decided in favor of petitioner.
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2016 (9) TMI 872
Release of detained consignments - movements of the goods from Pulichappallam to Puducherry - inter-state transaction or not - production of documents for movement of the goods from one State to another - Held that: - On verification of records, available with the driver of the Vehicle, it was found that the Sattva Hi Tech & Conware Private Limited, Panchavadi Complex Pullichapalayam, Gate pass was present. M/s.Sattva Hi-Tech and Conware Pvt. Ltd., is a custom free station/Container Freight Station, located at Puducherry. There can be no doubt to this issue, since this stand is taken by the Government of India. Similarly, in the Official Website of Trichy Customs, M/s.Sattva Hi-Tech and Conware Pvt. Ltd., situated at Pulichappallam, is shown to be within the Union Territory of Pondicherry. If that be the case, then the only thing, that has to be seen is as to where the goods were transferred. Admittedly, the goods have been taken to the petitioner's warehouse at Thondamanathm, which is within the limit of Villianur Taluk in Union Territory of Puducherry. Reason for detention not tenable - consignment to be released - writ petition allowed - decided in favor of petitioner.
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2016 (9) TMI 871
Bail application under Section 439 of the Code of Criminal Procedure - regular bail - offences punishable under Sections 406, 409, 420, 469, 468, 471, 474, 120-B of the IPC and Section 85(1)(b)(c)(f)(g), 85(2)(g), 85(4) and 85(6) of the Gujarat Value Added Tax Act - voluntary will to deposit an amount of ₹ 1 Crore within period of six and half months from the date of release. Held that: - since the applicant is ready and willing to deposit an amount of ₹ 1 Crore within period of six and half months from the date of his release, before the concerned trial court without prejudice to his rights and contentions, in the facts and circumstances of the case and considering the nature and gravity of accusation made against the applicant in the First Information Report and other investigation papers, discretion exercised in favor of the applicant for grant of bail as there is no possibility of tampering with the evidence as the investigation is over and charge-sheet is filed - the present application is allowed and the applicant is ordered to be released on regular bail on his executing a personal bond of ₹ 10,000/- - decided in favor of applicant.
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2016 (9) TMI 870
Rejection of order of settlement commission - Tamil Nadu Sales Tax [Settlement of Arrears] Act [29 of 2011] - procedure to be followed before passing any decision by settlement commission - proper verification of the application as per provision Section 6 of the Act - is the order passed by settlement authority valid which has been passed without following the procedure contemplated under the Act and has lost sight of the object with which the Settlement Act was enacted? - Held that: - the decision in the case Cheran Cements Limited Vs Joint Commissioner [CT], Trichy Division, Trichy and Another [2014 (11) TMI 878 - MADRAS HIGH COURT] is relied upon. No procedures have been followed and the impugned order suffers from very serious procedural defects and this is a good ground to interfere with the impugned order. Matter remanded to the respondent for fresh consideration in terms of the provisions of the Settlement Act, after affording an opportunity of personal hearing to the petitioner to produce Books of Accounts and relevant records for the purpose of verifying the correctness of the particulars furnished by the petitioner in the application made under Section 5 of the Settlement Act and the computation made by the petitioner under Section 7 of the Act. The respondent shall pass final orders, on merits and in accordance with law, within a period of three months - petition allowed - decided in favor of petitioner.
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2016 (9) TMI 869
Levy of surcharge on amount of tax paid - works contract - Haryana Value Added Tax Act, 2003 - Whether on the facts and in the circumstances of the case, the Ld. Tribunal was justified in upholding the levy of additional tax as surcharge leviable on the taxable turnover even in the case of works contractor who has opted for lump sum tax? - Held that: - the decision in the case Govind Saran Ganga Saran v. Commissioner of Sales Tax and others [1985 (4) TMI 65 - SUPREME Court] is relied upon. It was opined that four components are: (i) taxable event; (ii) taxable person; (iii) rate of tax and (iv) measure or value for which rate of tax is to be applied. In the absence of any of the components, the levy may be struck down. Taxable event for levy of additional tax under Section 7A of the VAT Act is on taxable turnover, is also evident from the fact that the retailers opting for payment of lump sum tax have been excluded from the levy. As provided for in Rule 52 of the Rules, in the case of retailers, taxable turnover is determined only then the amount of tax is calculated. Whereas in none of the other categories of the dealers opting for payment of tax on lumpsum basis, the taxable turnover is calculated. One of the important component on taxation being missing namely taxable turnover in the case of dealers opting for payment of tax on lump sum basis, levy of additional tax under Section 7A of the VAT Act cannot be sustained. Levy of additional tax and interest withheld - petition disposed off - decided in favor of petitioner.
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Indian Laws
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2016 (9) TMI 867
Dishonour of a post-dated cheque given for repayment of loan - Negotiable Instruments Act - Held that:- Reference to the facts of the present case clearly shows that though the word “security” is used in clause 3.1(iii) of the agreement, the said expression refers to the cheques being towards repayment of installments. The repayment becomes due under the agreement, the moment the loan is advanced and the installment falls due. It is undisputed that the loan was duly disbursed on 28th February, 2002 which was prior to the date of the cheques. Once the loan was disbursed and installments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability. In the present case, reference to the complaint (a copy of which is Annexures P-7) shows that as per the case of the complainant, the cheques which were subject matter of the said complaint were towards the partial repayment of the dues under the loan agreement (para 5 of the complaint). The question has to be answered in favour of the respondent and against the appellant. Dishonour of cheque in the present case being for discharge of existing liability is covered by Section 138 of the Act, as rightly held by the High Court.
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2016 (9) TMI 866
Dishonor of cheques - complaints under Section 138 of the Negotiable Instruments Act - Held that:- Admission made by the accused, there was no question of there being merely a presumption in favour of the complainant about the existence of debt or other liability in respect whereof the said 61 cheques had been issued. There was no question of the said presumption being discharged by the accused. There was absolutely no basis to conclude that the said 61 cheques had been given towards security. These findings returned by the learned Magistrate are completely contrary to the stand taken by the accused in the response to the statutory notice under Section 138 of the NI Act and, therefore, contrary to the evidence brought on record. The complainant had specifically disclosed in the complaints itself that as desired by the accused, the security deposit of ₹ 1.35 lacs against 12 specific cheques, details whereof are also set out in the complaint itself. This being the position, there was no question of there being any doubt arising in the mind of the court with regard to the outstanding debt and liability of the accused qua the 61 cheques in question. For all the aforesaid reasons the impugned judgment borders on perversity and they are, accordingly, set aside. The complainant had been able to establish that the cheques in question had been issued against specific debts incurred by the accused against supplies of tyres, tubes and flaps, and that the said cheques were dishonoured upon presentation and despite issuance of statutory notice, the amount covered by the said 61 cheques had not been paid. It is established beyond all reasonable doubt that the accused are guilty of commission of the offences under Section 138 of NI Act in each of these cases. They are, accordingly, stand convicted of the said offence in each of these cases.
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