TMI Tax Updates - e-Newsletter
September 24, 2013

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise Indian Laws

Articles

1. PROVISIONS RELATING TO CENVAT CREDIT ON ‘INPUT SERVICES’

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Corrigendum to Exchange Rate Notification 100/2013 (NT) Dated 19.09.2013

2. Measures to Address Trade Imbalance Between India China Get Fillip

3. RBI Reference Rate for US $ and Euro

4. FAQ on DVAT Amnesty Scheme with Disputes Settlements introduced w.e.f. 20.9.2013

5. Chinese Companies Sign MoUs for Procuring 338 Million USD Products from Indian Companies

Notifications

Customs

1. F.No. 468/03/2013-Cus.V - dated 23-9-2013 - Cus (NT)

CORRIGENDUM - Notification no. 100/2013-Customs (NT), Dated 19th September 2013.

VAT - Delhi

2. F.7(433)/Policy-II/VAT/2012/PF/ 817-828 - dated 23-9-2013 - DVAT

Notify that the Notification No. 7(433)/Policy-II/VAT/2012/PF/472-483 dated 16/08/2012, regarding filing of Stock Statement in Form Stock-1 online for the stock available on 31st March for any year, stands withdrawn with immediate effect.

3. F.3(16)/Fin.(Rev-I)/2013-14/dsVI/787 - dated 20-9-2013 - DVAT

Central Sales Tax [(Delhi) (Second Amendment)] Rules, 2013

Circulars / Instructions / Orders

Income Tax

1. Instruction No. 14/2013 - dated 23-9-2013

Standard Operating Procedure for cases under Non-filers Monitoring System ('NMS')-regarding.

DGFT

2. 27 (RE-2013)/2009-2014 - dated 24-9-2013

Indo–Myanmar Border Trade - Amendment in the Public Notice No. 30(RE-2012)/2009-2014 dated 16.11.2012.

Highlights / Catch Notes

Income Tax

• High Court Rules Additional Quota for Free Sale Sugar as Capital Account, Not Taxable as Revenue Receipt.

  Case-Laws - HC : Whether incentive received by the assessee by way of additional quota for free sale sugar which is directly connected with the business activities of the assessee, was on capital account and hence not taxable as a revenue receipt - Held yes - HC
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• Petitioner Must Disprove Presumption of Notice Service u/s 143(2) of Income Tax Act with Evidence.

  Case-Laws - HC : Service of Notice u/s 143(2) within the time limit – Held that:- The onus to rebut the presumption of service of notice sent by post, lies upon the petitioner. - HC
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• Speculative Loss Benefit u/s 43(5) Introduced by Finance Act 2005, Rules Notified January 2006, Delay Doesn't Invalidate Intent.

  Case-Laws - HC : Benefit under Section 43(5) clause (d) – speculative loss - the said insertion was made by Finance Act, 2005. Rule 6 DDA and Rule DDB notified as on 25.1.2006 - delay, if any, in the issue of Rules and notification, cannot nullify the legislative mandate of the enactment. - HC
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Customs

• Court Highlights Need to Avoid Excessive Fines with Long Prison Terms u/ss 21(c) and 28 with 23(c.

  Case-Laws - HC : Conviction for an Offence Punishable u/s 21(c) and 28 r.w. 23(c) – where substantial term of imprisonment was inflicted excessive fine should not be imposed except in exceptional cases. - HC
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• Sale of Uncleared Imported Revolver Under Customs Act Section 48; Restitution Focused on Arms Act Compliance.

  Case-Laws - HC : Sale of uncleared goods - Restoration and Restitution of Imported Revolver – Section 48 of the Customs Act was clearly applicable as the imported item, i.e. the revolver, was an arm defined under the Arms Act, 1959 - HC
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• Petition on Retained Foreign Exchange: No Duty Evasion Found; Section 129E of Customs Act Not Applicable.

  Case-Laws - HC : Maintainability of Petition - Release of Foreign Exchange Retained - This was not a case of evasion of duty Section 129E of the Customs Act has no manner of application - It was a settled position of law that a party who had acted in terms of an order cannot challenge the same subsequently - HC
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Service Tax

• Assessee Eligible for Tax Refund Under Amended Notification No. 17 of 2008-S.T. Despite Unmet Conditions, No Fraud Intent.

  Case-Laws - HC : Refund of tax - Benefit of notification - Non fulfillment of conditions - Since there was no effort to defraud the respondent and the amount of commission was already deposited, therefore, the assessee will be entitled for refund in terms of amended Notification No. 17 of 2008-S.T - HC
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Central Excise

• Criminal Case Against Petitioner Deemed Unjustified as Appellate Tribunal Sets Aside Basis Order.

  Case-Laws - HC : Criminal proceedings - The order which formed basis of the complaint in question had been set aside by the Appellate Tribunal, therefore, continuation of criminal proceedings against the petitioner would be nothing but an abuse of process of law - HC
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• Court Orders Tribunal to Expedite Decision to Prevent Shop Closures and Financial Loss for Petitioner.

  Case-Laws - HC : Condonation of delay - The apprehension expressed by the petitioner that there will be closure of his shops and that the matter will be precipitated pushing him to serious loss can be addressed by directing the Tribunal to take the same into consideration and pass an expeditious order without loss of much time in the matter. - HC
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• Court Examines Evidence Quality in EOU Goods Removal Case; Focus on Debonding Date Crucial for Assessment.

  Case-Laws - AT : Clandestine removal of goods - 100% EOU - date of Debonding - the case has to be seen not having regard to how many pieces of evidences are there but with reference to quality of the evidence available. - AT
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• Central Excise Act allows multiple show cause notices; extended limitation period applies for clandestine removal cases.

  Case-Laws - AT : Clandestine removal - SCN - Invocation of Extended Period of Limitation - there is no provision under the Central Excise Act, which prohibits issuing more than one show cause notice to an appellant - AT
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Case Laws:

• Income Tax

• 2013 (9) TMI 737
  Whether the expense is a capital expenditure of revenue expense in nature – Held that:- Entire expenditure as disclosed in the annual report was on the construction of the works of capital nature i.e. hatcheries, which were under construction. The assessee could not produce the document to bifurcate expenses, which were expended on the construction of hatcheries and those which were expended in the regular business of the Corporation. The findings that the assessee could not explain the expenses, which were incurred on business of the Corporation is a finding of fact - Expenses claimed under the head of work in progress on the units under construction, were of enduring inseparable advantage from the projects to the assessee-corporation - Any administrative expense, which are made on the construction having enduring advantage to the assessee has to be treated as capital expense. It cannot be treated as revenue expenses of the organization – Decided against the Assessee.

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• 2013 (9) TMI 736
  Whether incentive received by the assessee by way of additional quota for free sale sugar which is directly connected with the business activities of the assessee, was on capital account and hence not taxable as a revenue receipt – Held that:- Following the judgment in the case of CIT Vs. Ponni Sugars & Chemicals Ltd [2008 (9) TMI 14 - SUPREME COURT], in which it was held that main eligibility conditions for the scheme (Sampat Incentive Scheme) was that the incentive had to be utilized for repayment of loans taken by the assessee to set up new units or substantial expansion of an existing unit, and the subsidy received by assessee was not in the course of a trade but was a capital nature – In the present case, the incentive received is considered as Capital in nature – Decided against the Revenue. Whether allowance made u/s 43B in respect of unpaid production incentive bonus covered under section 36 (i) (ii) of the I.T. Act –Held that:- The Company was claiming allowance of Rs.13,98,899/- on the unpaid productivity incentive bonus as on 31.3.1990 - Allowance is permissible on actual payment of production linked incentive bonus to the workmen of the Company, and not on the amount reserved for that purpose, which is kept as unpaid - Allowance under Section 37 of the Act in respective of productivity linked incentive bonus can be claimed as deduction, provided the assessee-company paid the amount in the previous year, relevant to the assessment year in question. The allowance cannot be claimed for unpaid part of production linked incentive bonus – Decided in favor of Revenue.

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• 2013 (9) TMI 735
  Penalty u/s 271(1)(c) of the Income Tax Act – Held that:- Reliance has been placed upon the judgment in the case of Reliance Petro Products' case [2010 (3) TMI 80 - SUPREME COURT], wherein the Hon’ble Supreme Court has held that mere raising of a claim, even if not sustainable in law, is not by itself, sufficient to hold that it denotes furnishing of inaccurate particulars with an intent as would invite a penalty – In the present case, deductions were claimed in a bona fide exercise of the right of an assessee to claim deduction. The fact that this claim was rejected, does not raise inference of a mala fide attempt to evade tax. A penalty is imposed only if the claim is mala fide or raised with intent to evade tax – Decided against the Revenue.

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• 2013 (9) TMI 734
  Service of Notice u/s 143(2) within the time limit – Held that:- The onus to rebut the presumption of service of notice sent by post, lies upon the petitioner. The petitioner has failed to discharge this onus. The bald denial by the petitioner that notice was never received, in our considered opinion, is insufficient, to record a finding in favour of the petitioner - No reason to accept the petitioner's averments and submissions that notice dated 22.5.1992 was not served upon the petitioner, within the period of 12 months prescribed by the proviso to Section 143 (2) of the Act – Petition dismissed – Decided against the Assessee.

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• 2013 (9) TMI 733
  Benefit under Section 43(5) clause (d) – speculative loss - derivative transactions - the said insertion was made by Finance Act, 2005. Rule 6 DDA and Rule DDB were subsequently enacted to prescribe conditions and procedure for notification of a recognized stock exchange. National Stock Exchange and Bombay Stock Exchange were notified vide notification dated 25th January, 2006. - Held that:- Respondent is entitled to benefit, even in respect of transactions carried out with effect from 1st April, 2006. Tribunal observed that Parliament had enacted the provision with effect from the said date, and delay, if any, in the issue of Rules and notification, cannot nullify the legislative mandate of the enactment. Delay was attributable to the Central Board of Direct Taxes, who had failed to issue necessary notification within time – Decided against the Revenue. However, during the course of hearing before us, learned counsel for the parties have accepted that the tribunal has not decided the other question i.e. applicability of Explanation to Section 73 of the Act. - matter remanded back to tribunal on this issue.

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• Customs

• 2013 (9) TMI 732
  Conviction for an Offence Punishable u/s 21(c) and 28 r.w. 23(c) – Held that:- Taking into consideration Section 30 of Cr.P.C. and judgment of Shahejadkhan Mehbubkhan Pathan Vs. State of Gujarat [2012 (10) TMI 518 - SUPREME COURT] - the default sentence of 1 year each was reduced to 3 months each - It was ordered that the appellant shall pay a fine of Rs.1 lac and in default of payment of fine, she shall undergo SI for a period of 3 months each on both counts. It was the duty of the Court to keep in view the nature of offence, the circumstances in which it was committed, the position of the offender and other relevant considerations such as pecuniary circumstances of the accused person as to character and magnitude of offence before ordering the offender to suffer imprisonment in default of payment of fine - The provisions of Sections 63-70 of IPC make it clear that an amount of fine should not be harsh or excessive - where substantial term of imprisonment was inflicted excessive fine should not be imposed except in exceptional cases.

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• 2013 (9) TMI 731
  Sale / disposal of goods for non clearance - Restoration and Restitution of Imported Revolver – Held that:- The writ petition cannot be allowed in view of the extraordinary delay and latches in approaching the Court -The revolver in question was sold under Section 48 of the Customs Act, 1962 and the Custom authorities in their letter dated 4th February, 1994 had rightly drawn attention of the petitioner of the detention receipt to the effect that "if the goods are not cleared within two months of the detention or any period extended by the competent authority, action to dispose of goods under relevant provisions of the Customs Act, 1962 would be initiated". Section 48 of the Customs Act was clearly applicable as the imported item, i.e. the revolver, was an arm defined under the Arms Act, 1959 - Even with the writ petition we note that the petitioner had not filed any document or proof to show that the earlier revolver held/owned by him was of Indian make and origin – Decided against Petitioner.

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• 2013 (9) TMI 730
  Maintainability of Petition - Release of Foreign Exchange Retained - The petitioner was an accused of the offence of illegal export of currencies of various description – Held that:- There was a subtle distinction that payment of a redemption fine and penalty was made to get the Indian equivalent of the foreign currency and not as a predeposit of duty for filing the appeal before the Commissioner - Section 129E of the Customs Act provides that a person desirous of appealing against a decision relating to any duty and interest demanded in respect of goods shall pending the appeal deposit with the proper officer the duty and interest demanded or the penalty levied. This was not a case of evasion of duty Section 129E of the Customs Act has no manner of application - It was a settled position of law that a party who had acted in terms of an order cannot challenge the same subsequently. This writ petition must be held to be barred on the further ground of being hit by the principle analogous to res judicata and constructive res judicata - A full bench of the Supreme Court in the case of The Direct Recruit Class II Engineering Officers Association and Ors. –Vs.- State of Maharashtra and Ors.[1990 (5) TMI 223 - SUPREME COURT] - where the High Court dismissed a writ petition after hearing the matter on the merit a subsequent petition in the Supreme Court under Article 32 on the same facts and for the same reliefs filed by the parties will be barred by the general principle of res judicata - If in such a case a person was allowed to choose and sue upon one cause of action at one time and to reserve other for subsequent litigation that would aggravate the burden of litigation - This was an abuse of the process of the court - The rule had been referred to as a constructive res judicata which in reality was an aspect of the general principle. In the first writ petition the petitioner had prayed for a writ in the nature of Mandamus commanding the respondents to release the foreign exchange seized and the Indian currency and return the redemption fine and penalty respectively deposited by the petitioner etc. - In the present writ petition also the petitioner had made the same prayer seeking a Mandamus commanding the respondents to release the foreign exchange retained by the respondents authorities and for other reliefs – there was sufficient merit in the preliminary objection by the respondents regarding the maintainability of the writ petition - It will not be proper to admit the petition.

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• 2013 (9) TMI 729
  Interim Order – Stay on Refund - Held that:- The order was an interim order and final hearing was yet to be held - The grievance whatever appellant wants to raise, may be raised before the Tribunal - But presently there was no infirmity in the order passed by the Tribunal where refund of the amount had been stayed as per the ratio laid down in the case of Commissioner of Central Excise, Kanpur vs. Ufan Chemicals [2013 (5) TMI 703 - ALLAHABAD HIGH COURT] - There was no reason to interfere with the order passed by the CESTAT – Decided against Assessee.

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• Corporate Laws

• 2013 (9) TMI 728
  Applicability of Section 8(1) of the Arbitration and Conciliation Act - Oppression and Mismanagement u/s 397 and 398 of Companies Act – Held that:- There was absolutely no merit in the appeal - The appellant, as pointed by the CLB, had undertook and agreed before the CLB that it would bear the entire fees payable to JLL who were appointed by the CLB to carry out the work of valuation of the land. There were cross-petitions before the CLB containing mutual allegations of oppression and mismanagement - It was in one of those petitions that the CLB, in an attempt to ascertain the fair price of the shares of the Indian company, appointed JLL as the valuer for valuing the land as part of the process of valuing the shares - Thus the mater which was the subject of an arbitration agreement between the appellant and JLL was not the action which was brought before the CLB - The order passed by the CLB was an order seeking an expert opinion regarding the fair price of the shares of the Indian Company which was to be determined keeping in view of the possibility of resolving the disputes between the parties amicably - Therefore, section 8(1) of the Arbitration and Conciliation Act, 1996 was not attracted to the dispute between the appellant and JLL. Moreover, it was the appellant which approached the CLB with an application seeking refund of the first instalment of the fee of Rs.16 paid to JLL and also seeking directions from the CLB appointing another valuer, other than JLL - After approaching the CLB with the application and having lost it, it now contended that the CLB had no jurisdiction to pass the impugned order - Its stand was contradictory. The appellant had sent a communication to JLL requesting for appointment of an arbitrator and that this amounted to commencement of arbitral proceedings under section 21 of the Arbitration and Conciliation Act and therefore from this date the CLB lost jurisdiction to adjudicate upon the matter - I have already discussed how section 8(1) of the aforesaid Act was not attracted to the dispute between appellant and JLL. Therefore, the CLB was well within its jurisdiction to have decided. The provisions of section 8(1) of the Arbitration and Conciliation Act, 1996 were not attracted to the dispute between the appellant and JLL I do not think it necessary to consider the other subsidiary arguments advanced on behalf of both the sides – Decided against Petitioner.

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• Service Tax

• 2013 (9) TMI 741
  Refund of tax - Benefit of notification - Non fulfillment of conditions - Section 65(105)(zzb) - Held that:- Section 65(105)(zzb) of the Notification No. 17/2008-S.T., dated 1-4-2008 provides that exporters was declaring the amount of commission paid or payable to the commission agent in the shipping bill and admittedly, there was no such declaration made by the exporter in the shipping bill. But the amount of commission paid to the commission agent has already been deposited within time by the exporter and he has prayed that this technical error may be condoned. Since there was no effort to defraud the respondent and the amount of commission was already deposited, therefore, the assessee will be entitled for refund in terms of amended Notification No. 17 of 2008-S.T., dated 1-4-2008 and mere mentioning in the shipping bill by the exporter would not disentitle him to claim refund - Decided against Revenue.

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• 2013 (9) TMI 740
  Appeal against stay order - commercial or industrial construction service or site formation - Held that:- The Tribunal, however, despite holding that there is strong prima facie case in favour of the appellant after finding that some of the activities/ services provided by the appellant fall within site formation taxable services while others within commercial or industrial construction service has not classified or apportioned the extent of such services for the purposes of consideration of waiver of pre-deposit. We find that an amount of Rs. 1,22,18,670/- has already been appropriated towards the total service tax demand of Rs. 2,17,24,330/- and thus in the absence of any quantification of the services, which do not accommodate any abatement under notification dated 10.9.2004, the appellant is entitled to further relief. - appellant to deposit further Rs. 22 lacs - stay order modified partly.

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• 2013 (9) TMI 739
  Waiver of pre deposit - Input credit - Installation of Oxygen plants - Held that:- revenue wants to deny credit on the ground that oxygen plant is an immovable property. However, this issue is not discussed at all in the impugned order of Tribunal - Therefore impugned order is set aside and application for dispensing with pre deposit of service tax and penalty is restored for hearing before the Tribunal - Decided in favour of assessee.

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• 2013 (9) TMI 738
  Demand - Goods Transport Agency Serives - CENVAT credit - Held that:- Service tax on GTA service can be discharged through Cenvat Credit account. Therefore, the initial payment made by the appellant was valid in law. Therefore, the question of paying the same through cash again was not required under law and hence, the question of demand of any interest for late payment of service tax does not arise at all and the demand is unsustainable in law - appellant is at liberty to take re-credit of the service tax paid through Cenvat Credit account. The appellant is also entitled for the refund of interest paid under protest - Following decision of Commissioner of Central Excise, Chandigarh Versus Nahar Industrial Enterprises Ltd. [2007 (3) TMI 201 - CESTAT NEW DELHI] - Decided in favour of assessee.

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• Central Excise

• 2013 (9) TMI 727
  Rebate Claim under Rule 18 of the CE Rules 2002 - whether process of repacking is a manufacturing activity - Mosquito Repellant Liquid - Whether denial of rebate of duty paid on the goods exported was correct - Held that:- The goods were exported as combi-packs - Section 2(f)(iii) states that manufacture includes any process in relation to the goods specified in third schedule involves packing - There was force in the appellant’s argument that as the said goods were repacked in combi-packs, it amounts to manufacture and they were eligible for rebate - Moreover, in the case of Om Sons Cookware P. Ltd. [2011 (1) TMI 814 - GOVERNMENT OF INDIA ] Rebate/drawback were Export Oriented Schemes and unduly restricted and technical interpretation of procedure to be avoided - Liberal interpretation should be given when substantive fact of export was not doubted - Further, it was policy of the Government that the domestic duty shall not be exported - In short, whatever duty was paid by the exporter had to be paid back so as to encourage them - the appellant was eligible for rebate – order set aside 0 Decided in favour of Assessee.

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• 2013 (9) TMI 726
  Valuation of Penalty and Redemption Fine - Whether there was error in the order of the Tribunal as it does adjudicate and decide the ground of appeal that the penalty and redemption fine have been calculated by including value of accounted for stock mentioned in RG-IV Register – Held that:- Neither the adjudicating authority, first appellate authority nor the tribunal have dealt with and examined the grounds or answered the same - RG-IV registers, entries and whether they were found at the time of the search was neither adverted to nor dealt with. The question of law was answered in favour of the appellants and against the Revenue with an order of remand for fresh decision by the tribunal - The tribunal will examine the entire controversy once again, without being influenced by the earlier order - The tribunal will be at liberty to impose redemption fine in accordance with law without taking into notice the earlier fine - If required and necessary, the respondent will be entitled to meet and answer the contentions after verification as permitted and allowed under the rules.

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• 2013 (9) TMI 725
  CENVAT Credit – production of bagasse during mcrushing of sugarcane - Duty under Protest – Refund of Duty – Held that:- As decided in Balrampur Chini Mills Ltd. vs. Union of India and others [2013 (1) TMI 525 - ALLAHABAD HIGH COURT] - bagasse was a waste product and no more duty will be imposed over it - Bagasse and 'press mud' were not final products of the manufacturer. The law was well settled that 'bagasse' generated from the crushing of the sugarcane was neither manufactured goods nor manufactured final product, but it was a residue/waste - 'bagasse' was nothing but a waste obtained during manufacture of sugar waste cannot be regarded as a final product exempt from duty for invoking provisions of Rule 57 CC of Central Excise Rules, 1944. Bagasse was classified under sub-heading 2303 20 00 of Central Excise Tariff Act - Neither the penalty nor the interest can be charged from the petitioners, in view of the fact that the petitioners were not liable to duty either by payment or by reversal in respect of bagasse sold by the petitioner - As the petitioners have paid the entire duty and interest under protest, the entire deposited amount shall returned to them - waste was never manufactured and it only emerges in the process of manufacture of final product, Rule was not applicable to bagasse which was admittedly a waste, which emerges from the crushing of sugarcane for the manufacture of final product, namely, sugar.

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• 2013 (9) TMI 723
  Criminal proceedings - Complaint u/s 9 and 9A of CE Act - Application for Quashing the Complaint u/s 9 and 9-A of the Central Excise Act, 1944 r.w. Sections 420, 467, 468 and 34 of the Indian Penal Code, 1860 – Held that:- Once, the department accepts that the sales were at the factory gate and the price for sale at the factory gate was available, there would be no justification to reject the same and take recourse to Central Excise Valuation Rules and add the differential between the freight amount charged at equalised rate and actual frieght expenses to the factory gate price would be applicable - The order which formed basis of the complaint in question had been set aside by the Appellate Tribunal, therefore, continuation of criminal proceedings against the petitioner would be nothing but an abuse of process of law – Order set aside - Complaint u/s 9, 9-A of the Central Excise Act, 1944 read with Sections 420, 467, 468 and 34 IPC and all the subsequent proceedings arising therefrom were quashed.

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• 2013 (9) TMI 722
  Condonation of delay - Petitioner challenged the ex-parte interim order of stay granted – Held that:- There was no doubt that the appeal had been filed after a lapse of nearly two years - In the normal circumstances, before entertaining such an appeal and granting stay, the other party would be heard - However, as per Regulation 9(f), the Tribunal had power to admit an appeal, keeping open the point of limitation, if it was prima facie satisfied that there was sufficient cause for the delay - The Tribunal had not admitted the appeal - The Tribunal was well advised to hear the other side in a matter like this before granting an ex-parte interim order. The controversy can be resolved by directing the Tribunal to consider the application filed for grant of stay after affording an opportunity to the petitioner and after hearing both parties - It was made clear that the Tribunal shall pass order after hearing both parties and considering the facts and circumstances of the case - The apprehension expressed by the petitioner that there will be closure of his shops and that the matter will be precipitated pushing him to serious loss can be addressed by directing the Tribunal to take the same into consideration and pass an expeditious order without loss of much time in the matter. The writ petition is disposed of and a direction was issued to the Tribunal to consider and dispose of the application as far as possible on the next date and that the Tribunal shall desist from continuing the ex-parte interim order without considering the contentions raised by both the parties - Both parties shall not precipitate the matter till an order was passed by the Tribunal.

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• 2013 (9) TMI 721
  Clandestine removal of goods - 100% EOU - date of Debonding - Penalty u/s 11AC - Short payment of duty - Higher quantity of goods cleared - Held that:- date 14.8.2007 is not an arbitrary date and the applicant has to account goods for the prior period and it cannot be accounted by showing clearance after the said date. Further, I also agree with his argument that the case has to be seen not having regard to how many pieces of evidences are there but with reference to quality of the evidence available. Though in this case only one piece of evidence is produced but that has very strong force - prima facie case is against the assessee - stay granted partly.

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• 2013 (9) TMI 720
  Valuation - inclusion of incidental charges - Place of removal - Held that:- appellant had discharged the duty liability on the clearances made during this period at a price considered as factory gate sale price - price for such clearances was the right basis for determining the value for assessment of the impugned clearances prior to 1.7.2000. Unless duty was paid on lower value compared to contemporaneous price for sale of such goods to unrelated buyers at the factory gate, in respect of these clearances, there is no case or any demand’ - during this material period there was no definition in the provisions of the Central Excise Act for the ‘place of removal’ - there cannot be any demand on the appellant, there being absence of definition of ‘place of removal’ in the Central Excise Act, 1944. Regarding demand of duty for the period from 1.7.2000 to 13.5.2003 - Demand of duty liability on the ‘incidental charges’ charged by the appellant for transfer of goods from Hyderabad to various depots needs to be included in the assessable value for this period and duty has to be demanded from them. The exact quantification of duty needs to be done by the adjudicating authority, as the show-cause notices issued are overlapping; we would leave the quantification issue to the adjudicating authority to come to a conclusion. Since the demand requires re-quantification, the penalty amount and the interest on the demand of the duty liability also needs to be worked out proportionate to the demand. To that extent only for the quantification of the demand for the period from 14.5.2003 to 30.6.2004, the matter is remitted to the adjudicating authority - Decided against assessee.

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• 2013 (9) TMI 719
  Clandestine removal - Issue of more than one show cause notice - Invocation of Extended Period of Limitation - manufacturing of off-set printing machines – A case of fraud with willful intention to evade duty - Held that:- there is no provision under the Central Excise Act, which prohibits issuing more than one show cause notice to an appellant. Section 11A also does not stipulate any such things. In our view any number of show cause notice can be issued under the said Section to an assessee. There is no doubt or it is not even disputed that the appellants were maintaining parallel set of invoices and undervaluing the goods. These acts are undoubtedly fraudulent act with intent to evade payment of duty. Thus the condition of proviso to Section 11A are undoubtedly satisfied. - The facts and circumstances of the present case cannot be compared with the facts of the cases quoted by the appellants - Under the circumstances we reject the contention of the appellant and held that both the show cause notice have been correctly issued and the invocation of extended period was correct in the second show cause notice. Having come to this conclusion the second contention was automatically dismissed - There was no dispute that the appellants were maintaining parallel set of invoices and also misdeclaring value of the goods involved - It was only based upon the intelligence and subsequent investigation extending over a period of three years covering more than 60-70 customers and analysis of various incriminating records seized during the search operation that the show cause could be issued. Duty, Penalty and Interest on first appellant was correctly imposed - As far as penalty on the second appellant was concerned, we find that all the evasion was being done under his active directions and was therefore liable to penalty – Decided against Assessees.

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• 2013 (9) TMI 718
  CENVAT credit in respect of exemptd goods - Reversal of credit - Retrospective amendment of Finance Act - Held that:- that as per the provisions of Finance Act, 2010 vide which the Rules were amended retrospectively provides that the manufacturer has to reverse the amount along with interest and has to file an application within a period of six months from the date on which the Finance bill receives the assent of the President of India - the appellants filed necessary application after six months and the Commissioner has no power to condone the delay in filing the application - Decided against assessee.

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• 2013 (9) TMI 717
  Restoration of appeals - Notice for hearing not received - Held that:- As per the appeal memorandum, column No. 6 provides for address for communication of order/notice of the appellants at the given address, wherein the appellants have given two addresses for service of notice. If notice could not be served at one address, then the notice may be served on the second address. On perusal of record, it reveals that there was no service of notice on the second address. Therefore, I find that in these cases applicants have not been served any notice of hearing - Decided in favor of assessee.

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• Indian Laws

• 2013 (9) TMI 724
  Cancellation of license for retail sale of country liquor - Inability to pay debts - Surrender of license - Demand of balance fees and dues - Held that:- It is not in dispute that the petitioner did make an application for being considered for grant of licence for retail sale of country liquor - After draw of lottery he was selected for grant of such licence by the excise authority at Meerut. However, because of the interim order dated 18.04.2002 passed by the High Court in Writ Petition No. 505 of 2002 and connected matters the excise authorities were restrained from settling the licence regularly and were permitted to run the shop only on daily wages basis either with the old licensee or with the newly selected candidates - notice was issued to the petitioner to deposit the licence fee, earnest money and the security money by the Excise Officer, Meerut and it was specifically stated in the notice that in case the petitioner does not deposit the said amount, his selection shall be cancelled - The petitioner admittedly did not deposit the licence fee, earnest money and the security money and as a matter of fact vide his application dated 15.07.2002 requested that the term of his daily basis licence be not extended beyond 22nd July, 2002 - It is, therefore, clear that the petitioner, who was the selected candidate, did not comply with the requirement of Rule 12 of Rules, 2002 in the matter of deposit of the money as required. State Government while passing the order impugned has completely loss sight of the statutory rules while holding that non-deposit of the security money, earnest money and the licence fee by the selected candidate would amount to surrender of the licence covered by Section 36 of the U.P. Excise Act - since the selection of a candidate stands cancelled under Rule 10(c) read with Rule 12 for non-deposit of the licence fee and the security money, the question of grant of licence and surrender thereof does not arise. Surrender/cancellation of licence is a stage subsequent to the deposit of money as per Rule 12 - order passed by the State Government dated 19.07.2007 cannot be legally sustained and is hereby set aside.

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