Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 26, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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The entire gamut of action of the assessee in engaging in such big ticket land purchase without employing any fund of his own and almost immediate re-sale thereof clearly demonstrates the implicit intention of the assessee that the transaction entered was nothing but an ‘adventure in the nature of trade’ i.e. a business transaction - AT
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TDS credit - TDS certificate was issued in the name of the previous owner of the bond. - The fact that the TDS certificate refers to assessment year 2005-06 is of no consequence. The fact remains that the assessee has not claimed credit for TDS in any other assessment year. - credit allowed - AT
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Addition u/s 40A(3) - bogus expenditure in cas - assessee has directly deposited the cash in the account of the companies and has produced the sales bills of the company. So in the instant case, there is no evasion of tax by claiming the bogus expenditure in cash - AT
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Understatement of sales consideration - dubious or bogus or collusive transaction - when the prices will go up and down, that may result in gain or loss, it cannot be said that it is colourable device adopted by the assessee - One who deals in shares in the open market, knows the depth of the same and not the AO. - AT
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Since the return of income was filed beyond the period stipulated under section 139(1) of the Act in view of the provisions of section 80AC, is beyond the scope of section 143(1) since there is neither an arithmetical error nor an incorrect claim apparent from the record - AO was not justified in disallowing the assessee’s claim for deduction u/s 80IB(10) - AT
Customs
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The case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained - AT
Service Tax
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Service tax liability - valuation - reimbursable expenses cannot be added in the assessable value of the C&F services, service tax is payable only on the commission and not on the reimbursable expenses - AT
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Service tax liability - appellant are only pleading on the principle of revenue sharing without actually elaborating on the nature of agreement - Admittedly the considerations received by appellants are for services. These are taxable services - AT
Central Excise
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Cenvat credit - the credit involved on the inputs lying in stock and destroyed in the fire before being put to use could not be allowed to the Appellant and the same is required to be paid back/reversed. - AT
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Period of limitation - Refund claim - duty paid on discounts which were passed subsequent to the clearance of the goods from the depots - The provision should be read as it is, no addition or subtraction is permitted in understanding its meaning. - No refund - AT
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The evidences in the form of approximation and averaging production as 77.6% and one statement of a Director of the appellant company cannot be called a prudent conclusion of the production estimate - demand set aside - AT
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Manufacture - PET bottle - if they supply pre-form to the job worker to be converted into PET bottles and for the further use in packing the fruit pulp, the same cannot make the appellant -assessee as a manufacturer - AT
Case Laws:
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Income Tax
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2016 (9) TMI 1007
Reopening of assessment - disallowance of loss - Held that:- Assessing Officer examined the issue at length in the original assessment order and came to the conclusion that the transactions were not off market transactions and that therefore, the loss suffered by the assessee cannot be disallowed. Whatever be the validity of such findings, surely the Assessing Officer himself cannot question the same by issuing the notice for reopening, that too without there being anything additional on record, suggesting that the assessee had not disclosed true and full facts. In the reasons recorded, the Assessing Officer does not even comment on the fact that M/s.Nitin Parikh and Co. were the sister concerns, a ground vaguely sought to be made out by the counsel for the Revenue. Assessing Officer merely hinted at lack of disclosure regarding the so called self inflicted loss. He did not even refer to the assessee's lack of disclosure of M/s.Nitin Parikh and Co. being sister concern. In any case, in the order of assessment itself, the Assessing Officer was actually aware about the fact that M/s.Nitin Parikh and Co. was a part of the group of companies of which the assessee was also one of the members. We have reproduced the relevant portion of para 5 of the order of assessment, in which the Assessing Officer himself refers to M/s.Nitin Parikh and Co. as one of the group concerns. His consideration of the issue of allowability of the loss was therefore not tainted by any misdeclaration by the assessee. Once therefore, when the issue was thoroughly examined in the original order of assessment, it was simply not permissible for the Assessing Officer to reopen the assessment on such basis without there being any suggestion that the Assessing Officer was in possession of some external material which would show that the assessee had not show truly and fully all material facts.
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2016 (9) TMI 1006
Terminal date for the purpose of charging interest under Section 234-B - 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.
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2016 (9) TMI 1005
Addition on account of unsecured loans from sister concerns - genuineness of the transactions - Held that:- The assessee has discharged its liability to establish that the transactions were genuine. In absence of certain records which were destroyed due to floods, the assessee had produced alternative materials and evidences which were found to be satisfactory. - Decided in favour of assessee.
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2016 (9) TMI 1004
Revision u/s 263 - Deprecation claim - whether entire hospital building of the appellant is not eligible to be treated as a plant for the purpose of granting depreciation - Held that:- The question to be examined is whether as held by the Apex Court in Karnataka Power Corporation (2000 (7) TMI 72 - SUPREME Court ) the building has been so planned and constructed as to serve an assessee's special technical requirements. On such consideration, if a factual finding has been arrived at in favour of the assesses, then the building would qualify to be a plant with consequential depreciation at the applicable rate. Insofar as these cases are concerned, from the assessment order itself, we find that it was the case of the assessee that the hospital building is a specifically designed and planned one to meet its requirements as a hospital. However, without any further verification, this contention has been brushed aside and the assessment has been completed merely following the principles laid down in Venkata Rao (supra). In the light of the subsequent judgment in Karnataka Power Corporation (2000 (7) TMI 72 - SUPREME Court ), we are unable to sustain such assessments. Therefore, we set aside the assessment orders and the orders of the first appellate authority and the Tribunal and remit the matters to the Assessing Officer to pass fresh orders in the light of the principles laid down by the Apex Court in Karnataka Power Corporation.
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2016 (9) TMI 1003
Rectification application u/s. 154 - Held that:- There is no dispute that the impugned assessment year is the first year of filing electronic return. The Central Board of Direct Taxes has also issued a circular no. 6/2008 dated 18-07-2008 advising the assessees to retain with themselves all annexures relating to computation of income, TDS/TCS certificates, challans, counterfoils relating to advance and self assessment taxes and audit report to be produced as and when called by the Assessing Officer. We repeat that neither there is any such call or intimation of processing forthcoming from the case file. Both the lower authorities are fair enough in not specifically rejecting assessee’s plea of having incorporated an incorrect figure of ₹ 3,33,426/- as extracted from her rectification petition. We come to pages 10 to 13 of the paper book stating gross total income of ₹ 35,62,254/- along with nil tax payable, purchases of ₹ 3,33,426/-, profits before taxes of ₹ 34,87,179/- and aggregate income of ₹ 1,38,790/-; respectively. Her P & L account at page 33 of the case file reveals purchase figures of ₹ 35,33,426/- resulting in net profits of ₹ 1,64,716.75/-. These figures are based on duly audited books. There is no issue before us on correctness thereof. We observe in totality of all these facts that the only option before this assessee was to file for the impugned rectification u/s. 154 of the act in view of the correct figures given in her P & L account and books which were retained as per the Board’s circular hereinabove (supra).
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2016 (9) TMI 1002
Gain arose on sale of the rural agricultural lands - Held that:- We have no hesitation to hold that the impugned land was purchased with an intention to sell the same to the identified buyers to achieve commercial objectives outright. As noted earlier, section 2(13) of the Act seek to explain the term of ‘business’ by way of inclusive definition. As per section 2(13) expression ‘business’ include not only trade or commerce, etc. but definition further extends to encompass within its ambit an ‘adventure in the nature of trade’. The entire gamut of action of the assessee in engaging in such big ticket land purchase without employing any fund of his own and almost immediate re-sale thereof clearly demonstrates the implicit intention of the assessee that the transaction entered was nothing but an ‘adventure in the nature of trade’ i.e. a business transaction under extended definition of S. 2(13) of the Act. Consequently, profits arising therefrom acquires the character of ‘business income’ chargeable under S. 28 of the Act. We concur with the view of the Assessing Officer and the CIT(A) in bringing the income arising on sale of land under the head ‘business income’. - Decided against assessee.
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2016 (9) TMI 1001
Levy of penalty u/s. 271(1)(c) - eligible for deduction u/s. 80IB(10) - Held that:- It is a well settled law that where the issue is debatable, penalty cannot be levied. In the case of assessee the Tribunal has held the additional income declared by assessee on account of extra sale consideration to be assessed under the head ‘Income from other sources’. Whereas, there are decisions of the Tribunal where on-money declared during search was held to be business income and the assessee was allowed to claim benefit of deduction u/s. 80IB(10) on such income disclosed. In such circumstances no penalty can be levied where two different views have been taken and the issue becomes debatable. - Decided in favour of assessee.
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2016 (9) TMI 1000
Disallowance u/s 40A(3) - Held that:- In the present case, the following facts are not disputed. 1) The APPELLANT is a resident of CHAKDOLA village and he carries out his business of distribution of Kerosene Oil, from the said village, distributing the same to various M R shops in the region. 2) The said CHAKDOLA vii/age is located in a remote corner s of the District of Burdwan, nearest town being Jamuria s situated about 5 KM away , and the nearest 'bank located at Jamuria Town. 3) In the financial year 2005-06, there was no banking facility at Chakdola Village . Now in the year 2013, also there are no Banks at Chakdola Village. 4) Payments in CASH are made by the appellant for purchase of goods at Govt. fixed rates, at Chakdola village. 5) Kerosene Oil are transported in OIL TANKERS, to Chakdola Village, and stored in OIL DRUMS for further distribution, down the line, and tank are also paid by the appellant. 6) Even though the appellant has a bank Nc at Jamuria town , it is mostly inoperative, because it is practically not possible to pay by A/c payee cheques, because a single cheque will take 15 days time for clearance, and the entire chain of distribution will break down. Assessee would fall within clause (h) of Rule 6DD of the Rules and therefore no disallowance ought to have been made u/s.40A(3) of the Act. Though the Assessee made the above submissions before the CIT(A), the CIT(A) has not given any findings on the applicability of Rule 6DD(h) of the Rules. For the reasons given above, we hold that no disallowance u/s.40A(3) of the Act ought to have been made in the case of the Assessee as the case of the Assessee is covered by exceptions set out in Rule 6DD(h) of the Rules. The disallowance is directed to be deleted. - Decided in favour of assessee.
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2016 (9) TMI 999
MAT applicability u/s 115JA/115JB - Held that:- Provisions of section 115JA/115JB are not applicable against the Assessee- Bank.
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2016 (9) TMI 998
Revision u/s 263 - correctness of building maintenance expenditure, interest and finance charges, pre-paid expenses, sales commission, re-payment of loans, advance against purchase of raw materials and payments made to specified persons u/s 40A(2)(b) - Held that:- Unless the order passed by the A.O.is erroneous and prejudicial to the interest of the revenue, the CIT cannot assume jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interest of the revenue are co-exist. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has conducted detailed enquiry and also examined all the issues pointed out by the CIT in this show cause notice. The assessee has explained each and every issue pointed out by the CIT with necessary evidences. The CIT, cannot assume jurisdiction to revise assessment order, once, assessee explained that it had filed all the details before the A.O. on the issues on which CIT wants further verification. It is the general presumption of law that, the A.O. has considered all the details before completion of assessment and the CIT cannot presume that the enquiries conducted by the A.O. is insufficient and also the A.O. has not applied his mind, unless CIT proves that the assessment order passed by the A.O. is erroneous. Therefore, we are of the view that the assessment order passed by the A.O. u/s 143(3) of the Act dated 29.11.2011 is not erroneous in so far as it is prejudicial to the interest of the revenue. - Decided in favour of assessee
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2016 (9) TMI 997
TDS credit - relevant assessment year - to whom the credit belongs to - whether the TDS certificate filed along with the return of income was not for the relevant A.Y. 2006-07 and also not in the name of the assessee? - Held that:- There is no merit in this appeal by the revenue. The facts with regard to the ownership of the bonds on which the interest accrued as that of the assessee is not in disputed. It is also not in dispute that the assessee was entitled to the interest on the bonds that were acquired by the assessee form M/s. C.K.P. Corporation Bank Ltd. It is only because of the fact that the assessee’s name was not found in the registered bond holders that the TDS was issued in the name of the previous owner of the bond. All the above facts were not only confirmed by M/s. CKP Corporation Bank but also the company which issued the bonds namely M/s. MPVCL. In these circumstances there cannot be any doubt or dispute as to the person who is entitled to the interest income and the refund of TDS thereon in the event of non taxability of interest income in question. The fact remains that the assessee has offered the interest income to tax in the A.Y.2006-07 and in terms of section 199 of the Act the assessee was entitled to credit for tax deducted at source. The fact that the TDS certificate refers to assessment year 2005-06 is of no consequence. The fact remains that the assessee has not claimed credit for TDS in any other assessment year. The tax deducted at source and paid to the Government is tax actually paid. In the present case the assessee satisfies all the conditions for grant of credit of TDS - Decided in favour of assessee.
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2016 (9) TMI 996
Unexplained investment u/s 69 - Assessee failed to produce her documentary evidence in support of investment made in RBI bond amounting to ₹ 8 lakh - Held that:- From the submission of Ld. AR we find that assessee has received a sum of ₹ 8.50 lakh in an account maintained jointly with her husband. The bank statement and salary details of assessee’s husband have been duly furnished. In our considered view the source of investment has been duly explained by submitting the documents in the form of paper book. Considering the details of the facts of the present case, we find that source of investment has been duly explained by assessee at the appellate stage and in rebuttal Ld. DR also failed to bring anything contrary to the argument of Ld. AR. Hence, we are inclined to reverse the order of Authorities Below - Decided in favour of assessee Penalty u/s 271(1)(b) - Held that:- From a plain reading of the above Sec. 273B of the Act, we find that no penalty shall be levied upon assessee if it is proved that there was a reasonable cause for the noncompliance of notice. In the facts of case, as assessee, a female was on the advanced stage of pregnancy and at that time came to Kolkata, in her parental house from Bangalore for the purpose of giving birth to her second issue. Considering the totality of the fact, we find that there was sufficient reasonable cause which prevented assessee to compliance said notice and in this view of the matter, we quash the penalty imposed by AO - Decided in favour of assessee
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2016 (9) TMI 995
Addition u/s 40A(3) - bogus expenditure in cash - Held that:- The primary object of enacting Section 40A(3) were two folds- firstly, putting a check on trading transactions with the object to evade the liability of tax on income earned out of such transaction and, secondly, to inculcate the banking habits amongst the business community. Apparently, this provision was directly related to curb the evasion of tax and inculcating the banking habits. Therefore, the consequence, which were to be fallen on account of non-observation of Section 40A(3) must have nexus to the failure of such object. Therefore, the genuineness of the transactions being free from vice of any device of evasion of tax is relevant consideration. With regard to the purpose of bringing the provisions of section there is no doubt about the identity of the party. The ld. AR has directly deposited the cash in the account of the companies and has produced the sales bills of the company. So in the instant case, there is no evasion of tax by claiming the bogus expenditure in cash. - Decided in favour of assessee
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2016 (9) TMI 994
Claim under section 80IB - non setting off of the losses against the profits of the Aluminium Paste Unit - Held that:- Each unit has to be separately considered for working out deduction under section 80IA or 80IB or 80HHC of the Act once separate accounts were being maintained and there was no interlacing and interdependence. In the instant case, the assessee has been maintaining separate accounts for its different units. Therefore, respectfully following the decision of the Coordinate Bench of the Tribunal in assessee’s own case for earlier assessment years, we dismiss the ground raised by the Revenue.
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2016 (9) TMI 993
Addition u/s 14A - Held that:- AO has to consider the assessee’s own fund i.e. capital and reserves as available on the date of investment which yields exempted income and thereafter he shall apply the Formula in Rule 8D and also exclude investments in subsidiaries as held by the above order of Co-ordinate Bench. With this observation, we remit the issue to the file of AO for fresh consideration Understatement of sales consideration - dubious or bogus or collusive transaction - whether CIT(A) erred in allowing the assessee’s claim of sale of shares belongs to its sister concern, M/s. TVS Finance and Services Limited at price of 1 paise is acceptable whereas the purchase price per share is ₹ 31.19 per share and it was purchased by the assessee company just 47 days before the date of sale of shares by the assessee company at 1 paise per share? - Held that:- It was the duty of the AO to bring on record sufficient evidences and materials to prove that the documents filed by the assessee were bogus, false or fabricated and the long term capital loss shown by the assessee is there not at all. The only material to support the conclusion of the AO is that either the purchase of shares by the assessee was at ₹ 31.19 per share or the assessee has sold the shares to the sister concern, TVS e-Access Pvt. Ltd. at a cost of Rs. one paise per share, whereas the same shares were sold to one of the Directors, Smt. Mallika Srinivasan at the rate ₹ 25 per share. However, none of the judicial pronouncements support this plea of the AO. While making this kind of addition by the AO, the burden on the AO is very heavy to establish that the assessee has actually received the excess consideration than disclosed by the assessee. We have also considered the entire background of the case and circumstances under which the assessee was forced to sale the shares at very very low price. Actually, when the companies networth is negative, it is endeavour of the every person to get rid of that liability to save from future liabilities. In other words, in this modern economy, the share price is subject to high volatile and value of shares, which may be very high on one day and due to change of circumstances it may collapse in the market on very next day and it may go even nil value, due to circumstances beyond the control of the Directors or management of the company. A person, who is dealing in shares would become a millionaire in a single day. Similarly, a person may become penniless or insolvent on very next day. It is not uncommon in the share market, happening of such events. For these things, we cannot attribute any motives and it is because of market conditions prevailing at the particular point of time or because of government policies and nobody shall be blamed. In our opinion, when the prices will go up and down, that may result in gain or loss, it cannot be said that it is colourable device adopted by the assessee. We have to see the ground realities, one who deals in shares in the open market, knows the depth of the same and not the AO. In our opinion, the reason advanced by the ld. DR to hold that it is not colourable device holds no water. Further, ccomparing Mrs. Mallika Srinivasan's sale of shares of her holding in TVSF&S @ ₹ 25 per share is also illogical and has no substance. This is because she is a shareholder, under the public category, holding a few hundred shares, which was offered by her in the exit route provided to the public under the book building process associated with the delisting of shares. Any public shareholder as a retail investor, who surrender the shares, would have got the same ₹ 25 per share which was the ‘exit price' derided as per the SEBI Regulations under the book building process. Hence, it is not correct to say that they fixed retail investor price @ ₹ 25 per share and other than retail investor price at 1 paisa per share. Further, regulations of SEBI for delisting and price ought to be offered to the public shareholder on the basis of book building process should be recognised and when so done, the sale price adopted for sale of some TVSF&S shares held by TVSM to TVSEA at 1 paisa cannot be compared because one is through delisting process price and another is arrangement of the promoters to recognise the nil value or negative value of the shares held by them in huge quantities as promoters. When they want to exit the company and plan for restructuring of the finance business, to sell the shares to a group company at a value borne in the balance sheet with negative networth and certified by the valuer is to be recognised.
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2016 (9) TMI 992
Allowability of deduction claimed u/s 80IB(10) - contravention of the provisions of section 80AC of the Act in not filing the return of income for A.Y. 2012-13 within the period stipulated under section 139(1) - Held that:- CIT(A) has considered at length the issue of whether the AO’s disallowance of the assessee’s claim for deduction under section 80IB(10) of the Act, for the reason that the return of income for A.Y. 2012-13 was filed beyond the due date stipulated under section 139(1) of the Act (but was filed within the time allowed under section 139(4) of the Act), in view of the provisions of section 80AC of the Act is beyond the scope of the provisions of section 143(1) of the Act. We concur with the view of the learned CIT(A) that as per the ratio of the decisions of the Hon'ble Bombay High Court in Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust ( 1993 (9) TMI 75 - BOMBAY High Court )even in cases where the return of income is filed beyond the due date stipulated under section 139(1) of the Act, the deduction should not be disallowed under section 143(1) of the Act merely in view of the provisions of section 80C of the Act. We also find on a perusal of the provisions of section 143(1) of the Act, that the AO’s action in disallowing the assessee’s claim for deduction under section 80IB(10) of the Act, since the return of income was filed beyond the period stipulated under section 139(1) of the Act in view of the provisions of section 80AC, is beyond the scope of section 143(1) since there is neither an arithmetical error nor an incorrect claim apparent from the record. In this view of the matter, we uphold the finding of the learned CIT(A) that the AO was not justified in disallowing the assessee’s claim for deduction under section 80IB(10) of the Act and his direction to the AO to delete the disallowance thereof, made under section 143(1)(a)/143(1) of the Act. - Decided in favour of assessee.
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2016 (9) TMI 991
Penalty u/s 271(1)(c) - LTCG V/S STCG - treatamnet to capital gain - Held that:- We are of the considered view that the learned CIT (A) has confirmed the penalty levied by the AO on the basis that the assessee sought undue advantage by seeking to declare income earned from shares as long term capital gains when in the quantum appeal the Tribunal treated the same as short term capital gains. In our considered view, mere making a claim under wrong head does not automatically constitute that any details supplied by the assessee before the Assessing Officer are not accurate and penalty can be levied. Our this view is fortified by the judgment of the Hon’ble Apex Court rendered in the case of CIT Vs Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT]. Accordingly, we reverse the findings of the learned CIT (A). Consequently, the penalty levied on the assessee is deleted. - Decided in favour of assessee.
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2016 (9) TMI 990
TDS u/s 195 - deduction of TDS on payment of commission - Held that:- But in the present case the applicability of section 195(2) would only arise in case the assessee is doubtful or is not sure as to what should be the portion so taxable or the amount of tax to be deducted and in case where a person responsible for deduction is fairly certain then in that eventuality he can make his own determination as to whether the tax was deductible at source and if so, what should be the amount thereof. Considering the facts of the present case the applicability of section 195(2)of the I.T. Act is not made out. Therefore, there was no requirement for the assessee to make application to the AO for non deduction of TDS. Since all those facts have already been considered by CIT(A) while passing impugned order. No new circumstances have been brought on record before us in order to controvert or rebut the findings recorded by the learned CIT (A). Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the Revenue stands dismissed. Addition u/s 41(1) - Held that:- CIT(A) has taken into consideration that a substantial portion of the outstanding amount was out of provision made for A.Y. 2004-05 under consideration, and therefore the ld. CIT(A) has rightly held that the AO’s contention that the whole commission was outstanding for last so many years was not correct. Ld. CIT(A) has also considered that the said commission payable by assessee was not been waived or unilaterally written off by the receiver of commission and also the payment of said amount was not time barred in relevant assessment year. Considering all the facts and legal propositions, the CIT(A) has rightly come to the conclusion that the non submission of reply to the same cannot be enough to construe that no services might have been rendered by the assessee and hence the treatment of said liability as non-genuine was not fully substantiated in the assessment order and hence the additions of this ground was rightly deleted by CIT(A). No new circumstance has been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the Revenue stands dismissed.
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Customs
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2016 (9) TMI 1012
Condonation of delay - show cause demand notice for duty short paid forwarded to supplier as litigation was carried on by the supplier - impression that appeal would be filed by the supplier - reminder received for recovery of confirmed dues - Held that: - the principles of law as laid down in the case of Office of The Chief Post Master General Vs M/s Living Media India Ltd [2012 (4) TMI 341 - SUPREME COURT OF INDIA] is followed. No action has been initiated by the applicant in ascertaining the fact whether the appeal had been prepared by the said M/s Ganpati Energy Pvt. Ltd. and filed till the reminder for recovery of dues was received from the Department. Needless to mention that the applicant was fully aware of the fact that the reply to the Show Cause Notice and the appeal before the learned Commissioner (Appeals) against the adjudication order had been filed through them only and the same cannot be independently filed by M/s Ganpati Energy Pvt. Ltd. Therefore, it is difficult to accept that the aforesaid non-action by the applicant has been bonafide and devoid of negligence. Delay not condoned - appeal dismissed - decided against appellant.
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2016 (9) TMI 1011
Evasion of customs duty - mis-declaration - natural marble blocks and slabs - artificial marble tiles and vitrified tiles - approach to settlement commission by few co-noticees and importer as per provisions of section 127B of Customs Act, 1962 - penalty proceedings dropped by settlement commission for these co-noticees - whether the immunity from penalty be available to the other co-noticees who did not approach the tribunal i.e., decision of tribunal be applied on other co-noticees? - Held that: - the decision in the case of SK Colombowala v. Commissioner of Customs (Import), Mumbai [2007 (7) TMI 514 - CESTAT, MUMBAI] is relied upon, where it was held that, the case against all co-noticees comes to an end once the order of settlement is passed in respect of the person entitled to file an application before the Settlement Commission and therefore, penalty imposed upon the appellants cannot be sustained and is set aside. Appeal dismissed - decided against Revenue.
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2016 (9) TMI 1010
Valuation - imported Mercedes Benz Car - enhancement of the value of the car due to accessories - purchase price - list price - car cover - optional item - Held that: - the manufacturer of car issued an invoice and a certificate indicating that the price at which the car was sold to the appellant was inclusive of cost of all accessories. The vehicle was purchased by the appellant in Dubai by paying an amount of Dirhams 83,100/- all inclusive. Since the certificate and the invoice issued by the appellant does not indicate any different amount charged for accessories, an error occured on adding value of accessories for determining the value for discharge of the Customs duty - appeal allowed - decided in favor of appellant.
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Service Tax
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2016 (9) TMI 1028
Auction of aircraft to recover service tax dues - rights of bidder - non-deposit of amount since the sale was not confirmed - Seeking recall of its earlier order and permission to Applicant/Respondent No. 1 to conduct fresh auction of the concerned aircraft. - in earlier order this court passed an order allowing confirmation of the sale of concerned aircraft upon acceptance of the highest bid of one M/s. SGI Commex Limited - limit has been already sets out in Draft Disposal Manual that any bid up to 20% lower can be accepted, but beyond the same, no concession and ordinarily can be given - till date a written confirmation of the sale or acceptance of the highest bid has not been communicated. Held that:- a curious and interesting picture emerges. Firstly, the Service Tax Commissioner, knowing fully well that the offer of the highest bidder is much below the reserved price, persuaded this court to pass an order and record a statement therein that the commissionerate be allowed to accept this bid. Secondly, statements were made by the Service Tax Commissioner seeking to confirm the sale without informing the court that a written communication communicating acceptance of the offer has to be released and issued to the bidder. Finally and more importantly that the sale must be concluded within 21 days from the date of such communication was also not a statement and factually made before this court. Pertinently, there is a limit prescribed and that there is a Draft Manual has also not been stated ever before this court. Since everything is now emerging during the course of hearing and the auction purchaser/highest bidder desiring time in addition to what was understood and stipulated by it and seeking leave to file an affidavit to that effect, we place this matter on 19th September, 2016. If any affidavit is filed, copies thereof shall be duly served by this auction purchaser/highest bidder to all concerned parties. Eeven if we proceed to reject the request of the Service Tax Commissioner to recall our order dated 22nd August, 2016, given the facts and circumstances, which we have noted today, we would be issuing such further orders and directions and at the entire risk, cost and consequences of those moving the motion and participating in the sale.
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2016 (9) TMI 1027
Maintainability - other remedies available to the petitioner - petitioner seeking permission to bypass the appellate remedy available to the petitioner under the provisions of the Act by approaching the CESTAT - petitioner submitted that the impugned order is a result of grave inconsistencies - disregard of voluminous evidence furnished by the petitioner - Held that:- it is beyond dispute that to test the correctness of the impugned order, a thorough probe into the factual matrix is required and the question would be can such an exercise be done in a Writ Petition especially when the provisions of the Act provide for a hierarchy of remedies. Thus, considering the complicated nature of the facts involved in the instant case and to adjudicate the correctness of the impugned order, it would be necessary to re-examine the factual position, this Court is of the view that the petitioner should not be permitted to bypass the statutory appellate authority which is not only an effective remedy, but is the efficacious remedy. Hence, without going into the merits of the matter regarding the validity of the impugned order, the Writ Petition stands rejected as not maintainable. - Decided against the petitioner
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2016 (9) TMI 1026
Validity of attachment orders - recovery of service tax dues - dispute is whether the petitioners have cleared the entire sum of ₹ 3,41,82,926/or anything is balance. - Held that:- we do not approve of the conduct of the respondents in the peculiar facts of continuing with the attachment, though the petitioners have paid substantial sums by a voluntary disclosure of the dues and secondly, under protest. The Judgments of this Court, time and again, lay down the principle that if dues are disputed and the claims of the Revenue are not admitted, its remedy lies elsewhere. It cannot by a coercive process or coercive means force the assessees to part with monies which the assessees state are not due and payable. Here the assessees have stated on oath before this Court that no amount as is now sought to be claimed is due and payable. It is not as if the Revenue is remediless in as much as it can take the route of adjudication by issuing a show cause notice, giving a party like the petitioners opportunity to place its version and thereafter pass an order assigning reasons. That order, for its legality and validity, can always be tested by a higher forum. Therefore, the impugned attachment is quashed and set aside. - Writ petition allowed
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2016 (9) TMI 1025
Service tax liability - valuation - inclusion of reimbursement of expenses - clearing and forwarding services - gross amount received by the respondent while providing the C&F service - Held that:- by following the decisions of the Hon'ble High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd, Vs. UOI [2012 (12) TMI 150 - DELHI HIGH COURT] and also the decision of Hon'ble Madras High Court in the case of Commissioner of ST, Chennai Vs. Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT] wherein it was held that held that reimbursable expenses cannot be added in the assessable value of the C&F services, service tax is payable only on the commission and not on the reimbursable expenses. - Decided against the Revenue
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2016 (9) TMI 1024
Service tax liability - revenue sharing arrangements - Whether or not the appellants rendered any taxable services under the category of BAS and if so whether the demand has been made within the permissible time limit in terms of Section 73 - full value of consideration for taxable service as received by RSIC from various ICD users has suffered service tax and RSIC remitted the same to the Government - Held that:- it is clear that the appellants were to market the ICD services, ensure the realization of amount from the users and provide various services to importers and exporters which are to be provided by RSIC as a holder of ICD custom operation licence. In other words appellants were providing services in terms of agreement with RSIC w.r.t. import export cargo of various parties. Reading together the terms of agreement and the scope of BAS, as mentioned above, it is clear that the appellants are rendering taxable services under the category of BAS. The argument of the appellants that there is no service tax liability in cost/revenue sharing arrangement is not tenable in terms of clear wordings of the agreement and intention of the contracting parties as clearly manifested therein. The revenue sharing model which was discussed in Board's circular dated 23/2/2009 was w.r.t. movie distribution. In any case the said circular was further clarified vide Circular dated 13/12/2011 wherein it was mentioned that revenue sharing arrangement by itself does not preclude service tax liability. We find that the appellant are only pleading on the principle of revenue sharing without actually elaborating on the nature of agreement as already indicated hereinabove. The agreement in the present case gives no room for doubt regarding the obligation of the appellants to render various services in terms of ICD operations owned and controlled by RSIC. The nature of financial dealings or payment of consideration for services rendered by itself will not decide the tax liability of the service. In the present case there is a taxable service rendered by the appellant. Admittedly the considerations received by appellants are for services. These are taxable services. RSIC paid service tax on the gross income and out of that income they have paid some amount to the appellant and, hence, the plea that the appellants are not liable to service tax is not supported by any legal principle. The fact is that the appellants provided input services (BAS) which enable RSIC to provide overall services w.r.t. ICDs operated under licence by them. Apparently in such arrangement the tax paid by RSIC will be on the total gross value. To render such total service by RSIC to various clients the appellants did provide various taxable services in terms of the agreement. While it is an admitted fact that the appellant service forms part of the overall service rendered by RSIC to various ICD users, payment of service tax by RSIC by itself will not exclude the tax liability of appellants, Apparently the tax liability on the appellant confirmed in the present proceedings is only w.r.t. the consideration received by them and not on the gross value received by RSIC. There is no double taxation in the present case. It is found that the appellant is having a strong ground regarding the question of time bar. It is to be noted that all invoices, for full consideration, have been raised by RSIC and the amount collected from the clients [importers and exports] were subjected to service tax which was deposited to the Government. RSIC in turn are paying certain amount to the appellants to get the services in these ICDs. In such situation there is a clear possibility for a bonafide belief that as the whole amount has been subjected to service tax the amount received by the appellant may not be liable to service tax in connection with the services rendered by them. The issue involved has been a subject matter of interpretation by the Tribunal and High Courts. In fact the earlier Circular issued by the Board, covering the period prior to the introduction of Cenvat Credit Rules gave an impression that when the main service provider discharged the service tax on gross value there may not be tax liability on the sub-contractor rendering similar service to the main contractor. The Tribunal in various cases held in such a case involving interpretation of law and also a bonafide belief regarding service tax liability, will not attract the demand for extended period. We also take note that service tax liability on the appellant when discharged will be available as a credit to RSIC which can be used by RSIC for discharging their overall service tax liability. As such, to impute motivation to the appellant for intention to evade payment of duty is not sustainable. In the facts and circumstances of this case, we find that the demand for extended period is not sustainable. We have also perused the reasons recorded by the Original Authority for invoking extended period of demand. He recorded that but for the Department's investigation the non-payment of tax would not have come to the notice. Further, the balance sheet for certain years have not been furnished in time by the appellant which was obtained from Registrar of Companies. As such, it was held that the appellants willfully suppressed material facts. We find that the service tax demand against the appellant was sought to be confirmed mainly on the basis of the terms of agreement between the appellant and RSIC. The gross receipt of RSIC and service tax payment thereupon is available with the Department. A portion of that receipt is now being taxed under BIS at the hands of the appellant. The service tax liability is as such on the arrangement based on agreement which is also the basis for payment of full service tax by RSIC. In other words, the service tax liability of both RSIC and the appellant has common source agreement. As such, we find the demand for extended period is not sustainable in the present case. - Appeal disposed of
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2016 (9) TMI 1023
Classification and Taxability - mining service - service provided by the appellants for transportation of goods within the mining area - Held that:- the issue involved in this case is squarely covered by the decision of the Tribunal in the case of Arjuna Carriers Pvt. Ltd. Vs. CST, Raipur [2014 (11) TMI 1048 - CESTAT NEW DELHI] wherein it has been held that mere handling of coal and movement of the same through the motor vehicles or any other means of transport would not constitute mining service for the purpose of levy of service tax. Therefore, the impugned service is not classifiable as mining service. - Decided in favour of appellant
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Central Excise
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2016 (9) TMI 1022
Condonation of delay - 117 days - because of financial constraint since the company was unable to deposit the 10% requisite amount, there is delay in preferring the appeal - Held that:- it is by now well settled that the condonation of delay though is required to be sufficiently explained but at the same time, if the Court finds that there is substantial case to be considered in the appeal, the Court may also examine as to whether the delay could be condoned by imposing suitable costs or not. It is true that, the delay may operate as bar in pursuing the proceedings but, to what extent the discretion should be exercised would vary from facts to facts. Financial inability cannot be a ground which need not be considered at the time of condonation of delay. On the contrary, financial inability can be one of the valid grounds for accepting the contention that the appellant was prevented by sufficient reasons in not preferring the appeal. We do not want to express any view on the merits of the appeal but it suffices to observe that it was the case to be considered in the appeal. It may be that in a given case, Court may decline to exercise discretion for condoning the delay, if, during the period of delay, the rights of the parties are substantially altered and/or irreversible situation is created but we do not find any of the requirements are satisfied in the present case. The Tribunal ought to have exercised the discretion for condonation of delay. Further, declining the exercise of discretion for condonation of delay may result into grave injustice to the appellant and appellant would be deprived of the case to be considered on merits, more particularly, when no prejudice is going to be cause to the respondent-Department, since on the demand, the interest if ultimately is maintained, it is to follow. Under these circumstances, we find that the appeal deserves to be allowed. Delay deserves to be condoned and the Tribunal should be directed to decide the appeal on merits. Therefore, the impugned order of the Tribunal is set aside with the observation that the delay in preferring the appeal shall stand condoned on condition that the appellant pays a cost of ₹ 10,000/- to the respondent within a period of four weeks from today. - Decided in favour of appellant
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2016 (9) TMI 1021
100% EOU - Whether the CESTAT has committed substantial error of law in deciding the case of appellant without production of documents/evidence, which are already seized and in the custody of the respondent authority. Also whether CESTAT has committed substantial error of law in casting the burden of proof on the appellant where the documents/evidence, which are already seized and in the custody of the respondent authority - appellant exported goods under the cover of six ARE-1s during the period from 13.2.2002 to 17.3.2003 but failed to produce proof of export in respect of 2 ARE-1s, both dated 29.1.2003, involving central excise duty - Held that:- the Tribunal, after affording an opportunity of hearing to the parties, has noted that by an order, the matter was remanded to the adjudicating authority to consider the question of eligibility of the appellant to the benefit of Notification No. 125/84 CE dated 20.5.1984. That before the Tribunal the appellant had submitted that though they had prepared the said two ARE-1s, the same were subsequently cancelled, but there was no corresponding entry in their export register. The Tribunal with reference to the letter dated 28.4.2003 to which reference has been made for the appellant, found that the Superintendent of Customs detained some register for verification and that the matter was fixed for personal hearing before the adjudicating authority on four occasions. The Tribunal further found that there was no evidence to the effect that the appellant had approached the Superintendent of Customs for release of the goods which were detained in 2003, nor was the seizure memorandum produced by the appellant. The Tribunal took note of the fact that it had remanded the matter twice and upon appreciating the evidence on record, found that there was no dispute on facts that the appellant had cleared the goods under cover of ARE-1s without payment of duty and that the same was not recorded in the export register. That, the appellant failed to provide any evidence that the two ARE-1s were cancelled and also found that the plea of seizure of the documents is without any basis. It is in these circumstances that the Tribunal, upon appreciation of the evidence on record, has not accepted the case of the appellant that there was seizure of documents and that there was any failure on the part of the adjudicating authority to furnish such documents to the appellant. Therefore, it is not possible to state that the conclusion arrived at by the Tribunal is, in any manner, contrary to the material on record. The impugned order passed by the Tribunal does not give rise to any question of law, much less, a substantial question of law, warranting interference. - Decided against the appellant
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2016 (9) TMI 1020
Recovery of Cenvat credit - inputs and inputs contained in semi-finished goods - incident of fire took place in factory - destruction of plants and machinery, raw materials, stock of Work in Progress (WIP) goods and finished goods - Held that:- as far as the CENVAT Credit on inputs lying in stock, as such, destroyed in fire, it is crystal clear that the same had not been used in or in relation to the manufacture of final product in their factory; thus the criterion of use, the basis on which the CENVAT Credit on inputs contained in WIP goods, has been allowed in the aforesaid cases, is undoubtedly not fulfilled. Thus, the credit involved on the inputs lying in stock and destroyed in the fire before being put to use could not be allowed to the Appellant and the same is required to be paid back/reversed. Period of limitation - Demand pertaining to inputs contained in WIP - Held that:- the demand is not barred by limitation, in as much as even though an incident of fire took place on 07.12.2005, the Department was not categorically informed about the extent of damage of the inputs on which CENVAT Credit availed, and as such lying in stock destroyed in fire. It is not out of place to assume that the Appellant had informed the extent of damage of finished goods on 07th April 2006 when they filed remission application of the duty involved on the finished goods. The details of inputs destroyed in fire were furnished in May 2006. Therefore, the ld.Commissioner is right in considering that the demand is within the normal period of limitation of one year prescribed under sec. 11A being issued in Feb.2007. Demand of interest - amount paid by the appellant - Held that:- it is found that the decision relied upon by the appellant was rendered relying upon the Division Bench judgment of the Tribunal in the case of Fleet Industries Vs CCE [2008 (8) TMI 317 - CESTAT, AHMEDABAD], in observing that Section 11AB would apply only to the cases of non-levy or short-levy of excise duty by non-payment of duty by the due date and not applicable to the inputs destroyed. We find that the said reasoning of the Tribunal did not find support from Hon'ble Gujarat High Court in the case of CCE Vs Fleet Industries [2010 (12) TMI 420 - GUJARAT HIGH COURT]. Hence, appropriate interest is payable on the credit amount reversed by the appellant. Imposition of penalty - Rule 15(1) of Cenvat Credit Rules, 2004 - Held that:- we are of the view that the inputs lying in stock were destroyed in fire and the CENVAT credit involved, on such destruction, was required to be reversed since it was not used in or in relation to the manufacture of finished goods, the purpose for which it was procured and credit availed. It is observed that though the fire took place on 07.12.2005, the Preventive Officers during their visit on 09.03.2006 noticed that the appellants had not reversed the CENVAT credit. It is also observed that the appellants had filed remission application only on 07.04.2006. In view of the same, penalty is imposable under Rule 15(1) of the Cenvat Credit Rules, 2004 for contravention of any of the provisions of the said rules which invites liability to penalty under the provisions of the said Rule. Therefore, we find that the penalty is rightly imposed by the Commissioner (Appeals) in the impugned order under the said rule. However, we find that the penalty of ₹ 10 Lakh imposed by him is excessive and therefore, is reduced to ₹ 3,00,000/- (Rupees three lakhs). - Appeal disposed of
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2016 (9) TMI 1019
Refund claim - unjust enrichment - appellant applied for provisional assessment - collected the duty amount from the customers and have not submitted proper documentary evidence to prove that they have not passed on the incidence of duty to the customers - Held that:- in the present case it is not disputed that all the three refund claims have arisen due to finalization of provisional assessment during the period from April 1998 to December 1998. The appellant submitted that when the assessments are provisional and such assessments are finalized in terms of Rule 9B of Central Excise Rules 1944 then the provisions of Section 11B are not applicable to such cases when the assessments are finalized. He further submitted that this issue is no more res integra and relied upon the judgment of the Hon’ble Supreme Court of India in the case of CCE vs. Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT OF INDIA]. Therefore, in view of the same, the impugned order is set aside. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 1018
Refund claim - unjust enrichment - whether the refund sanctioned by Assistant Commissioner is wrong, since the appellants have not proved that they have not passed on the duty burden - duty paid under protest - refund pertains to refund of pre-deposit amount - only - Held that:- it is found that the respondents have not produced any specific documentary evidence to prove that the duty has not been passed to other person/ buyer to nullify the doctrine of unjust-enrichment. I do not find that they were forced by any authority and that they followed correctly the provisions of law applicable to under protest payments. It is also found that the respondents have submitted that they were forced to debit the duty, that they made the payment under protest at the time of preventive checks of the goods sold during the period 01.04.1997 to 27.09.1997 but I do not find any evidence proving forced recovery debit and also there is no endorsement on the TR-6 challans for payment under protest as prescribed under Rule 233B of the Central Excise Rules, 1944. The Hon’ble Supreme Court in the case of Mafatlal Industries Limited vs. UOI [1996 (12) TMI 50 - SUPREME COURT OF INDIA] and in the case of Sahkari Khand Udyog Mandal Limited vs. Commissioner [2005 (3) TMI 116 - SUPREME COURT OF INDIA] held that no refund can be made unless it is established that burden of duty is not passed on to others. Therefore, in view of the same, we find no infirmity in the impugned order of Commissioner (Appeals) which is upheld. - Decided against the appellant
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2016 (9) TMI 1017
Period of limitation - Refund claim - duty paid on discounts which were passed subsequent to the clearance of the goods from the depots - appellant contended that the data relating to the discounts for calculating refund claim could be available only after its sale from the depots, therefore, the time of sale from the depots, be considered as relevant date for the purpose of computing the period of limitation - Held that:- it is clear that the payment of duty should be the basis for computing the period of limitation prescribed under Sec.11B of CEA, 1944 for claiming refund of duty and not the time sale of the goods from the depots as argued by the Department. The provision should be read as it is, no addition or subtraction is permitted in understanding its meaning. - Decided against the appellant
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2016 (9) TMI 1016
Suppressed production of clandestine clearances of goods without payment of duty - approximation production considering average yield of the product viz. zinc oxide out of the raw material issued - department has not gone beyond the approximation of yield shown as 70 to 84% - average yield overall had been shown as 77.60%. - Demand alongwith interest and imposition of penalty. Held that:- there is nothing on record from the Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant. The evidences in the form of approximation and averaging production as 77.6% and one statement of Shri Agarwal, Director of the appellant company cannot be called a prudent conclusion of the production estimate. Therefore, we are of the considered view that the department has not discharged its burden of conclusively proving the case of suppressed production and clandestine clearance by the appellants. In this regard we seek support from Hon’ble Allahabad High Court’s decision in the case of Continental Cement Company Vs. Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] and Supreme Court’s decision in the case of Oudh Sugar Mills Ltd. Vs. Union of India [1962 (3) TMI 75 - SUPREME COURT OF INDIA] and CESTAT’s in the case of Punalur Paper Mills Ltd. Vs. CCE [2008 (8) TMI 471 - CESTAT, BANGALORE]. In view of the above, the impugned order in respect of confirmation of duty for alleged suppressed production, and imposition of fine and penalty on the appellant No. 1 and imposition of personal penalty of ₹ 40 lakhs on Shri Agarwal who is appellant No. 2 are hereby set aside. Demand - inputs short found - duty deposited by the assessee-appellant and was appropriated to the Government account by the impugned order - Held that:- there has not been any submissions by the appellants. Therefore, this part of the order confirming the said duty does not warrant any intervention from this Tribunal. It is hereby sustained. - Appeals disposed of
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2016 (9) TMI 1015
Manufacture - whether the appellant-assessee is the ‘manufacturer’ of PET bottle - appellant-assessee procures pre-forms required to manufacture of PET bottles and supply the same to job worker who converts the pre-forms into PET bottles and there upon fills the same with fruit pulp which is an exempted product - Held that:- the appellant-assessee cannot be considered as a ‘manufacturer’ of PET bottle for the simple reason that they have not undertaken any such process. In other words, if they supply pre-form to the job worker to be converted into PET bottles and for the further use in packing the fruit pulp, the same cannot make the appellant -assessee as a manufacturer. The admitted fact of the case is the job worker is an independent legal entity and irrespective of ownership of pre-form or the PET bottle the appellant-assessee having been not involved in any process of manufacture cannot be held as a manufacturer for excise duty purposes. Notification No. 10/96-CE dated 23.07.1996 - captive consumption - eligibility for exemption - Held that:- it is found that the fruit pulp cannot be marketed without being packed in the bottle. The packed fruit pulp is the product subjected to excise levy. In the manufacture of such packed fruit pulp, PET bottle is apparently consumed. By applying to the ratio of decision of the Tribunal in the case of Mihijam Vanaspati Limited vs. CCE, Jamshedpur [2001 (1) TMI 152 - CEGAT, KOLKATA]and also in Rama Phosphate Ltd. vs. CCE, Indore [2002 (12) TMI 291 - CEGAT, NEW DELHI] wherein Tribunal held that when the tin containers manufactured by the appellant are captively used for packing vanaspati within the factory, the exemption is available to such tin container, the exemption is available to appellant-assessee. - Decided in favour of assessee
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2016 (9) TMI 1014
Rectification of mistake - seeking rectification of various errors in the final order - Held that:- it is found that the Bench has categorically recorded the findings on all the submissions made by the applicant-respondent. The Bench has also clearly indicated why it has arrived at a conclusion to hold that prior to 1.7.2000, the provisions of Rule 6(b)(ii) of the Valuation Rules, 2000 needs to be applied into, read with circular. The Bench has clearly indicated why conclusion was reached as to the expenses in respect of indirect/overhead charges needs to be included in the value/cost of the product. In our considered view, we find that all the points which have been raised by the appellant as error apparent on the face of the record, was addressed to and findings were recorded by the Bench in unequivocal terms after considering the very same submissions made. We find that the applicant-respondent is trying to reargue the entire case by stating that these are mistakes apparent on the face of the record. This is not in consonance with the settled law that error apparent on the face of the record should not be an alibi for rearguing the entire case. - Decided against the appellant
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2016 (9) TMI 1013
Imposition of penalty - Section 11AC of Central Excise Act, 1944 - manufacture and clearance of Electroplating Chemicals like Gold Potassium Cynide (GPC) without payment of duty - Commissioner (Appeals), has not extended an option to pay 25% of the penalty as prescribed under Section 11AC of Central Excise Act, 1944 - Held that:- it is found that the learned Commissioner (Appeals) has analyzed the evidences and arrived at the conclusion that the Appellant has indulged in clandestine manufacture and clearance of GPC during the relevant period. Also, he has considered the role of the Managing Director Shri Chandrakantbhai L. Shah in the said activity of the Appellant of clandestine manufacture and clearance of GPC. Therefore, I do not find any reason to record a different finding than that arrived at by the learned Commissioner (Appeals). Reduction of mandatory penalty - Held that:- I do not see any justification in the impugned order in reducing mandatory penalty imposed under Section 11AC of Central Excise Act, 1944 from ₹ 2,29,360/- to ₹ 1.00 lakhs. The Hon'ble Supreme Court in the case of Union of India Vs Dharmendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT] has held that the mandatory penalty imposed under Section 11AC of Central Excise Act, 1944 cannot be reduced. Also, I do not find any reason to interfere with the penalty imposed on the Director as held in the impugned order of the learned Commissioner (Appeals). Therefore, the mandatory penalty as ordered by the Adjudicating authority is restored. However, the Appellant are eligible to exercise the option to pay 25% of the said penalty amount of ₹ 2,29,360/- in view of the judgment of Hon’ble Gujrat High Court in the case of CCE Vs Harish Silk Mills [2010 (2) TMI 494 - GUJARAT HIGH COURT] and CCE Vs G.P.Presstress Concrete Works [2012 (8) TMI 933 - GUJARAT HIGH COURT] on fulfillment of the conditions laid down under Sec. 11AC of CEA, 1944. - Decided partly in favour of appellant
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CST, VAT & Sales Tax
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2016 (9) TMI 1009
Validity of assessment order - TNVAT Act, 2006 - surprise inspection conducted by the Officials of the Enforcement Wing at the place of petitioner's business premises - report filed by the Deputy Commissioner (CT) Enforcement South, dated 21.09.2011, pointing out certain defects - deviation proposal, subitted by assessing officer disagreeing with the views expressed by the Deputy Commissioner (CT) Enforcement South , dated 21.09.2011 - the Deputy Commissioner (CT) Enforcement South, in response to the deviation proposal, issued a two line order, directing the respondent/Assessing Officer to comply with his communication, dated 21.09.2011 - is the assessment made by the assessing officer merely on the basis of proposal sent by enforcement wing is justified and the assessment order issued is valid? Held that: - the Assessing Officer, under the Act, has been conferred powers to independently consider the matter, and, at best, the information furnished by the Enforcement Wing, or Inspecting Officer, could be considered to be in the nature of a first information, and based on such information, if the Assessing Officer proposes to issue a show cause notice, then, he is required to call for explanation from the dealer, and then, it is incumbent upon the Assessing Officer to give his/her own independent reasons, and to pass orders, either accepting the case of the dealer, or rejecting it. However, this basic principle, as to how the assessment has to be made, has not been followed in the instant cases, and since the assessment has been made by the respondent/Assessing Officer, blindly accepting the proposal sent by the Deputy Commissioner (CT) Enforcement South, the impugned orders have to be held to be not sustainable, calling for interference. Order of assessment quashed - matter remanded to the respondent for fresh consideration, who shall independently consider the petitioner's objection, without being, in any manner, influenced by the proposal sent by the Deputy Commissioner (CT) Enforcement South, dated 21.09.2011, and redo the assessment after affording opportunity of personal hearing to the petitioner - petition allowed - decided in favor of petitioner.
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2016 (9) TMI 1008
Review of order passed by assessing authority - validity of pre-assessment notice - completion of assessment - imposition of penalty - the KVAT Act - application for clarification - Held that: - pursuant to the judgment of the Court dated 23.11.2015, the authority for clarification proceeded to take note of the assessment orders passed by the assessing authority and pass an order stating that, in view of the assessment orders already passed, he was not empowered to pass an order on merits in the application for clarification filed by the writ petitioner. It is also relevant to note that even when the writ petitioner filed W.P. (C).No.3579 of 2016 impugning the aforementioned order of the authority for clarification, the respondents in the said writ petition did not have a case that the assessment orders, stated to have been passed by the assessing authority, had been communicated to the writ petitioner before the date of the judgment in W.P.(C). No.35373 of 2015. As a matter of fact, it was under those circumstances that the judgment in W.P.(C).No.3579 of 2016 was passed quashing the assessment orders, and the order passed by the authority for clarification, and directing the latter to pass a fresh order on the application for clarification preferred by the petitioner in the writ petition on merits, and a further direction to the assessing authority to pass fresh assessment orders only after obtaining the order of the authority for clarification - in the absence of a timely review petition seeking review against the judgment dated 23.11.2015 in W.P.(C). No.35373 of 2015, R.P.No.129 of 2016 seeking review of the judgment dated 02.02.2016 in W.P.(C).No.3579 of 2016 cannot succeed - review petitions dismissed - decided against petitioner.
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