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TMI Tax Updates - e-Newsletter
September 3, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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IDS - no enquiry would be made by the Income-tax Department in respect of sources of undisclosed income or investment in movable or immovable property declared in a valid declaration made
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Revision u/s 263 - the assessee had produced list of hundreds of farmers, producers to whom such payments were made and documents concerning their lands were also produced. Merely because there were some minor discrepancies in some of them would not be sufficient to conclude that the Assessing Officer did not make a proper inquiry - HC
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Eligibility of exemption u/s 54F(4) - the entire amount which was subject to capital gain tax had not been utilized for the purpose of construction of new house nor were the unutilized amounts deposited in the notified Bank Accounts - No exemption - HC
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The depreciation, whether claimed or not, cannot be foisted upon the assessee even prior to insertion of Explanation 5 to S.32 (1) of the Act with effect from 01/04/2002, while calculating deduction under Chapter VI-A of the Act. - HC
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Disallowance on account of loss from house property - joint ownership with the wife - assessee claimed that the installments towards the repayment of the loan taken from bank for purchase of the property were paid by him only not by his wife - claim allowed - AT
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Without using the services of the directors, the key decisions of the business cannot be taken. Therefore, it is essential to give remuneration as per Rules and Regulations of the company. In view of this, this expenditure is allowable as business expenditure. - AT
Customs
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DEPB licence / scrips - Genuineness – Once it is established that the appellants had no role in fabrication or forgery of the impugned documents, there is no ground for imposition of penalty either on the appellant or on the Executive Director - AT
Service Tax
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CENVAT credit - asset management company - appellants are eligible for taking credit on the service tax paid by them on brokerage commission - AT
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Valuation - if the receipt is for reimbursing the expenditure incurred for the purpose of providing clearing and forwarding agent services, the same will not form part of the value of the services. - AT
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CENVAT credit - an assessee cannot be denied the benefit of Cenvat Credit of duty on the ground that no manufacturing activity was involved, when the assessee has admittedly cleared its final product on payment of duty. - AT
Central Excise
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Classification - Is the product manufactured by the appellant is RMC (Ready mix concrete) or concrete mix - appellants are also adding plasticizers to improve the quality of the concrete - the product manufactured by the appellants is RMC - AT
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Cenvat credit - Catering Services’ and ‘Tour Operator’ (Bus) services - Since they have taken inadmissible credit, the penalty under Rule 15(1) of Cenvat Credit Rules, 2004 which does not require the presence of mens rea is also upheld - AT
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Valuation - demand - fire detection & alarm system installed at various sites - value of purchased/procured various items/components like photo electronic smoke detectors, thermal detectors, addressable monitor modules fault isolator modules, fire alarm panel, repeater panels, electronic hooters etc. not to be included - AT
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Cenvat Credit - if the inputs were to include every product which is somehow related to the premises where the manufacturing process goes on, then there may not be a need to provide a definition of the term capital goods and therefore, the acceptance of the contention of the assessee would render the definition of the term “capital goods” to be redundant as well as the provisions relating to extending the benefit of Cenvat credit to the capital goods. - AT
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Waste solvent that arises during the course of manufacturing of bulk drugs are not dutiable. - AT
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Imposition of penalty - appellant contend that it is purely a matter of interpretation - Cenvat Credit in respect of construction services for the construction of guest house, staff quarters, flooring work at colony, septic tank of security barracks, club house, bank building, hawankund shed, temple etc. - No penalty - AT
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Valuation - installation and commissioning charges could not be included in the value of the goods. - AT
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Cenvat credit - service tax on rent for its corporate /head office at Delhi - nexus with the manufacture of the finished goods - Since the demand has been confirmed by the lower authorities on a ground which is beyond the show cause notice, the demand cannot be fastened against the appellant. - AT
Case Laws:
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Income Tax
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2016 (9) TMI 71
Revision u/s 263 - addition u/s 40A(3) - AO limited the disallowance only to 20% of expenditure - CIT(A) directed the Assessing Officer to verify the genuineness of the claim of purchases of URD Kapas by making necessary investigation and verification in respect of agricultural land holding, crop taken and actual purchases by the assessee from the concerned traders and then pass a fresh order of assessment - Held that:- As noted, the Assessing Officer in the process of framing assessment had made inquiries with the assessee regarding cash payments in excess of ₹ 20,000/-. The assessee pointed out that such payments were for purchase of cotton and the payments were made to the producers. This being an agricultural products such payments would be outside the purview of Section 40A(3) of the Act. The Commissioner, however, found that there were certain discrepancies in the records produced. We notice that the assessee had produced list of hundreds of farmers, producers to whom such payments were made and documents concerning their lands were also produced. Merely because there were some minor discrepancies in some of them would not be sufficient to conclude that the Assessing Officer did not make a proper inquiry. The revisional powers could not have been exercised for making better or further inquiry. - Decided against revenue
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2016 (9) TMI 70
Eligibility of exemption u/s 54F(4)- Held that:- The return of income is admittedly filed on 4th November, 1996. In terms of Section 54F(4) of the Act as interpreted by the Gauhati High Court in Rajesh Kumar Jalan (2006 (8) TMI 126 - GAUHATI High Court ) the amounts subject to capital gain on sale of the capital asset for purpose of exemption, has to be utilized before the date of filing of return of income. In this case 4th November, 1996 is the date of filing the return of Income. It is not disputed that on 4th November, 1996 when the return of income was filed, the entire amount which was subject to capital gain tax had not been utilized for the purpose of construction of new house nor were the unutilized amounts deposited in the notified Bank Accounts in terms of Section 54F(4) of the Act before filing the return of income. It is also to be noted that in line with the interpretation of Gauhati High Court on Section 54F(4) of the Act, the Assessing Officer had taken into account all amounts utilized for construction of a house before filing the return of income on 4th November, 1996 for extending the benefit of exemption under Section 54F of the Act. Therefore, in the present facts, the decision of the Gauhati High Court in Rajesh Kumar Jalan (supra) would not apply so as to hold that the appellant had complied with the Section 54F(4) of the Act. - Decided against assessee
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2016 (9) TMI 69
Calculation of deduction under Chapter VI-A - Tribunal held that depreciation, whether claimed or not, has to be foisted upon the assessee even prior to insertion of Explanation 5 to S.32 (1) of the Act with effect from 01/04/2002 - Held that:- While deciding the matter, in the case of Seshasayee Paper and Board Ltd. v. Deputy Commissioner of Income-Tax, (2015 (5) TMI 590 - SUPREME COURT ), the Supreme Court observed that once the entire depreciation, namely, the unabsorbed depreciation allowance of the previous year gets merged into the depreciation of the current year, it would become an integral part thereof. Legal fiction makes it one whole thereby making it possible for the assessee to claim set-off of unabsorbed carried forward depreciation as well. Once the unabsorbed carried forward depreciation has become a part of the depreciation of the current year, it is not open to the assessee to bifurcate the two again and exercise its choice to claim the depreciation of the current year under Section 32 (1) of the Act taking a position that since unabsorbed depreciation of the previous years is not claimed, it cannot be thrust upon the assessee. Applying this ratio, in our view, the Tribunal has committed an error while passing the impugned order and it is held that the depreciation, whether claimed or not, cannot be foisted upon the assessee even prior to insertion of Explanation 5 to S.32 (1) of the Act with effect from 01/04/2002, while calculating deduction under Chapter VI-A of the Act. Accordingly, this appeal is allowed. The question posed for our consideration is answered in favour of the assessee and against the revenue.
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2016 (9) TMI 68
Disallowance on account of loss from house property - joint ownership with the wife - assessee claimed that the installments towards the repayment of the loan taken from bank for purchase of the property were paid by him only not by his wife - Held that:- Nothing is brought on record to substantiate that the wife of the assessee made any contribution towards purchase of the house under consideration or the income from that house was assessable in her hands also. Furthermore, this claim of the assessee that the entire investment was made by him and installments towards term loan were paid has not been rebutted. Therefore, the income of the house, if any, should have been taxed in the hands of the assessee. Similarly, if loss from the house property was there the benefit was to be given towards that loss to the assessee only since the house was shown by the assessee in joint ownership with his wife for safety purposes. In that view of the matter the impugned order is set aside on this issue and the AO is directed to allow the claim of the assessee. Disallowance of the short term capital loss - Held that:- In the former part of this order it has already been observed that the assessee made the entire payments for purchasing the house property and the name of his wife was entered only for the security purposes. Therefore, the ld. CIT(A) was not justified in restricting the short term capital loss claimed by the assessee to the extent of 50%. I, therefore, considering the peculiar facts of this case set aside the impugned order on this issue and direct the AO to allow the claim of the assessee for short term capital loss.
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2016 (9) TMI 67
Allowable business expenditure - directors remuneration - Held that:- As regards directors remuneration debited in the profit and loss account we find that it was for the purpose of business. The directors remuneration is authorized by Article of Association of Company which is within the limit. The statutory auditor of the company has not commented against this expenditure. It is a part of administrative expenditure. Without using the services of the directors, the key decisions of the business cannot be taken. Therefore, it is essential to give remuneration as per Rules and Regulations of the company. In view of this, this expenditure is allowable as business expenditure. Disallowance of interest on bank loans and processing charges on such loans - AO has disallowed these expenditure because no any business activity has been done - Held that:- After analyzing the balance sheet of the company, we find that there is no vast difference between the figures of balance sheet as compared to the previous year except schedule-9 relating to loans and advances (advances recoverable in cash or in kind), which has been increased by ₹ 8,44,28,188/- in asset side of the balance sheet and in schedule 2, secured loans has been enhanced by ₹ 8,17,55,868/- at liability side in the balance sheet. The company has paid interest & processing charges on this loan to the bank. The interest paid is allowable u/s. 36(1)(iii) of the IT Act for purchase of asset only when such assets are first put to use in the business. It is clear from the audited accounts of the company and submissions made before the lower authorities that the aforesaid term loan has been given as advance for purchase of land. However, the record reveals that no such land stood purchased by the assessee company. Therefore, once the asset in the form of land, for which the assessee is said to have given the advance, does not stand proved in possession of the assessee, there is no question of its use for the purpose of business. Only advancing the money for acquisition of asset does not qualify the deduction of interest unless the said asset is acquired by the assessee company and is put to use by it for the purpose of business. In the instant case, no such circumstances exist. Therefore, in these peculiar facts and circumstances, in our considered opinion, the assessee is not entitled to get deduction of interest and processing charges on the impugned loan as revenue expenditure. Decided partly in favour of assessee
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2016 (9) TMI 66
Addition on account of unexplained credit to the capital account of the assessee - Held that:- The sources of receipts are reasonably explained by the assessee. There is no dispute that the money was received, through banking channels, from Dubai and even the source of funds in Dubai has been explained and stands accepted. There is no basis for seeking to tax the same income again in the hands of the assessee. Under these circumstances, we are not inclined to disturb very well reasoned conclusions arrived at by the learned CIT (A) and ITAT. No specific infirmities have been pointed out in the reasoning and analysis of learned CIT(A). Learned Departmental Representative seeks an opportunity to examine all these factors, and, for that purpose prays for restoration of matter to the file of the assessing officer. It can thus be seen that concurrently the CIT (Appeals) and the Tribunal came to the conclusion that the amount in question was already taxed before the Settlement Commission in the declarations made by the group companies. We see no reason to interfere - Decided against revenue
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2016 (9) TMI 65
Revision u/s 263 - Tribunal quashing the revision order passed by the Commissioner of Income-tax setting aside the assessment and to consider the land purchase deeds found at the time of the search, which the Assessing Officer had failed to examine and consider before passing the assessment order - Held that:- Revenue pointed out the other submissions advanced on behalf of the assessee goes to show that the assessee was asserting right in respect of the property purchased. There is some substance in the submission of Mr. Agarwal. In that view of the matter, the order passed by the learned Tribunal with regard to the land purchased allegedly at an under value is set aside and the order of the CIT is restored. It will, however, be open to the assessee to adduce appropriate evidence that the assessee was not connected with the land purchased, evidenced by the title deeds found during the course of search at the premises of the assessee. - Decided in favour of the revenue.
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2016 (9) TMI 64
Disallowance made under Section 14A in the re-assessment pending - Held that:- Question is squarely answered by the proviso to section 14A which reads as follows:- "Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001." - Decided in favour of assessee.
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2016 (9) TMI 63
Claim for setting off Unabsorbed Depreciation and Business Loss - Whether ITAT was justified in law in allowing the assessee’s claim for setting off Unabsorbed Depreciation and Business Loss in respect of 100% Export Oriented Unit of the assessee against the profit of other units? - Held that:- The learned Tribunal passed a right order. But it would have been better, if the learned Tribunal had clarified that the set off was to be allowed in the order as laid down in Section 70 and other relevant sections of the Income Tax Act. In that view of the matter, we dispose of the appeal by directing that the losses shall be allowed to be set off and depreciation shall be allowed to be set off in accordance with law.
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2016 (9) TMI 62
Set off of refunds against tax remaining payable - writ petition filed by the Kerala State Beverages (M & M) Corporation Ltd. challenging Ext.P7 and for a direction to the respondent to grant refund of the amount adjusted as per Ext.P2 letter - Held that:- True that, at the time when Ext.P1 order was passed on 30/01/2015, the refund order was not in existence and it came into effect only on 06/02/2015. However, merely for the reason that there is some irregularity in the procedure adopted by the Department, we do not think that any direction can be issued, as prayed for.
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2016 (9) TMI 61
Computation of “total turnover” for the purposes of reduction u/s 80HHC - whether will not include Sales Tax and Excise Duty even after insertion of Section 145A? - Held that:- Applying the ratio of law laid down by the Honble Supreme Court in the case of Lakshmi Machine Works (2007 (4) TMI 202 - SUPREME Court ) to the facts of the cases on hand, the question raised is held against the Revenue and it is held that the learned Tribunal has not committed any error in holding that the excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC. - Decided in favour of the assessee. Also see Commissioner of Income Tax Versus Pogagen Amp Nagarsheth Powertronics Ltd. [2014 (3) TMI 934 - GUJARAT HIGH COURT ]
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2016 (9) TMI 60
Reopening notice against non existent entity - Held that:- Reopening notice to a nonexisting company and framing an assessment consequent thereto is a issue which goes to the root of the jurisdiction of the Assessing Officer to assess the nonexisting company. Thus, prima facie, both the impugned notice dated March 24, 2015 and the assessment order dated March 28, 2016, are without jurisdiction.
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2016 (9) TMI 59
Allowability of prior period expenses - Held that:- A finding of fact has been recorded by the appellate authorities that approval for payment of the said expenditure was given during the year under appeal therefore the liability crystallised during the year and similar method was being regularly followed by the assessee consistently and when there is a finding recorded by the appellate authorities that the expenditure crystallised during the year, was written in the books this year and on year to year basis was claimed in the same manner and fashion was rightly claimed and allowed during the year, is a finding of fact. Allowability of expenditure incurred on State Renewal Fund - Held that:- The said expenditure also goes to show that the renewal fund was set up by the State Government and was created with the object of providing a safety net for the workers likely to be effected by restricting in the State Public Enterprise and that a finding of fact has been recorded that the contribution made to the State Renewal fund is solely for the purposes of the welfare and benefit of the employees. In our view, it is for the assessee to decide whether any expenditure should be incurred in the course of business and expenditure of this nature being for business expediency is certainly allowable deduction under section 37(1) of the Act. In our view any normal expenditure for the welfare and benefit of the employees is allowable expenditure under section 37(1), the Tribunal has come to a finding of fact that it was a legal obligation of the respondent-assessee towards contribution of the said amount to the State Renewal Fund and there being a legal obligation as well in our view the Tribunal has come to a correct conclusion.
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2016 (9) TMI 58
Disallowance of EMI Residual - tribunal deleted addition - Held that:- The assessee had sold during the year a portfolio of individual home loans aggregating ₹ 8109.09 lakhs by way of stock-in-trade on the date of transfer, which represented the principal value only of the loan portfolios of various persons for which the assessee was entitled to earn income by way of services with reference to the differential rate of interest as per the specific agreements with the beneficiaries. The above amount of ₹ 8109.09 lakhs did not have any profit element during the corresponding financial year 2000-01. However, in the light of the agreement with the beneficiaries, the assessee was entitled to retain the differential amount of interest recovered from the borrowers in excess of the agreed rate of interest. Evidently, therefore, the differential amount (residual EMI) would accrue to the assessee only as and when such interest amount in excess of the agreed amount was recovered by it. Such amount would, therefore, be taxable in the year in which the same had accrued to the assessee. It is an admitted position that the EMI residual income had subsequently been brought to tax in the year in which the related recoveries were made. In these circumstances, the view taken by the Tribunal does not suffer from any legal infirmity, warranting interference. The appeals, therefore, fail and are accordingly summarily dismissed. - Decided against revenue
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2016 (9) TMI 57
Entitlement to exemption u/s 11 - whether the earning of income from the four streams would disentitle it to exemption in terms of section 11(4A) of the Act? - Held that:- The Income-tax Appellate Tribunal has, in the impugned order, while reversing the decision of the Assessing Officer and the Commissioner of Income-tax (Appeals), accepted the case of the assessee that the activities in question were incidental to the main activity of the hospital itself and were not undertaken with a profit earning motive. The Income-tax Appellate Tribunal also noticed that for the assessment years earlier and later to the assessment year in question, the Assessing Officer accepted the assessee's case and allowed its claim for exemption. In particular, the Income- tax Appellate Tribunal has accepted the contention of the assessee that it maintained separate ledgers for each of the sources of income and thereby fulfilled the requirement of section 11(4A) of the Act. Having heard the learned counsel for the parties, the court is of the view that the view taken by the Income-tax Appellate Tribunal on the basis of the record is a plausible one and does not give rise to any substantial questions of law
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2016 (9) TMI 56
TDS u/s 194A - demand created under section 201(1) and (1A) in respect of Punjab Infrastructure Development Board, treating the assessee in default for non deduction of tds - whether no automatic exemption is available, even if the assessee is exempted under section 10(23C)(iv) of the Act ? - ITAT deleted the demand - Held that:- The Commissioner of Income-tax (Appeals) and the Tribunal on appreciation of material on record have concurrently recorded that if an organisation is exempted from payment of tax there was no need for deduction of tax at source by the assessee. Learned counsel for the Revenue was not able to demonstrate that the approach of the Commissioner of Income-tax (Appeals) and the Tribunal was erroneous or perverse or that the findings of fact recorded were based on misreading or misappreciation of evidence on record. The view of the Commissioner of Income-tax (Appeals) and the Tribunal is in conformity with the decision of the apex court in Hindustan Coca Cola Beverage P. Ltd. v. CIT [2007 (8) TMI 12 - SUPREME COURT OF INDIA ], where it has been held as under : "Be that as it may, the Circular No. 275/201/95-IT(B), dated January 29, 1997, issued by the Central Board of Direct Taxes, in our considered opinion, should put an end to the controversy. The circular declares 'no demand visualized under section 201(1) of the Income- tax Act should be enforced after the tax deductor has satisfied the officer-in-charge of TDS, that taxes due have been paid by the deductee-assessee. However, this will not alter the liability to charge interest under section 201(1A) of the Act till the date of payment of taxes by the deductee-assessee or the liability for penalty under section 271C of the Income-tax Act'." - Decided against revenue
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2016 (9) TMI 55
Disallowance under Section 40(a)(ia) in the absence of details - Held that:- From going through the submissions of ld. AR we understand that the only reason for which ld. Assessing Officer has not allowed the deduction that there is no record about the type of expenditure of ₹ 14.40 lacs as the same has been mentioned as miscellaneous expenses and if an expenditure on which TDS is not required to be deducted then such expenses cannot be allowed in this year as they pertained to earlier years.We are, therefore, of the view that this issue needs to be set aside to the file of Assessing Officer before whom necessary details will be supplied by the assessee showing the type of expenditure, year of incurring such expenditure and provisions of TDS applicable on this expenditure was incurred. Eligibility of depreciation - Held that:- The assessee has proved beyond doubt that the impugned assets consisting of 5 trucks purchased for ₹ 67,34,004/- satisfy all the conditions as provided u/s 32 of the Act and, therefore, are eligible for depreciation Disallowance on depreciation on the assets treating them capital working in progress - Held that:- On the examination of the detailed annexure-3 at page 188 of the paper book there appears details of assets costing ₹ 27,83,223/- which were transferred from capital work in progress to fixed assets a/c. under plant & machinery head and were put to use on 3rd May, 2008. Similarly, on page 195 of this paper book shows that assets of ₹ 3,15,984/- under electrical installation head were put to use on 22nd May, 2008. Auditors remark which both the lower authorities are referring to is appearing at remarked-3 of Annexure-3 on depreciation details for FY 2008-09 in form 3CD report is just referring that the addition during the year includes the capital work in progress which means that the addition includes some assets which have been purchased during the year and some assets which were forming of capital work in progress upto previous year were now shifted under the block of assets for the purpose of claiming depreciation. We are of the view that remark of statutory auditors has to be seen in totality that Annexure-3A of the same assets duly certified by the same auditor giving bifurcation of each and every assets to the date of its being put to use and above all the depreciation for the year claimed by the assessee is also duly certified by the same auditor. Therefore, we are of the view that no disallowance was called for on depreciation of ₹ 4,64,850/- on the assets of ₹ 30,99,207/- treating them capital working in progress upto FY 2007-08 and FU 2008-09 i.e. the Asst. Year under consideration, We allow this ground of assessee. Addition u/s 14A - Held that:- No disallowance is called for u/s 14A as assessee has not claimed any exempt income in the year under appeal. Disallowance being the provision for diminution in assets - Held that:- Respectfully following the judgment of Hon. Jurisdictional High Court in the case of CIT vs. Abdul Razak & Co. (1981 (2) TMI 27 - GUJARAT High Court), we are of the considered opinion that sundry debit balance written off for ₹ 56,000/- should be allowed as a revenue expenditure. This ground of assessee is allowed Deduction u/s 40(a)(ia) - Held that:- As in the given circumstances when there is no dispute to the genuineness of the expenditure which proves that these expenses of ₹ 36.3 lacs were actually incurred in earlier years but could not have been claimed for some reason or other. Even if these expenditure had been claimed, they certainly would have been disallowed u/s 40(a)(ia) of the Act as no tax was deducted and deposited. This exercise of deducting and depositing TDS was carried out in the year under appeal which fulfills all the conditions of section 40(a)(ia) of the Act which allows to claim deduction of such expenditure in the year in which due taxes (TDS) are deposited. By claiming this expenditure of ₹ 36.3 in this year there is no impact to the Revenue in terms of tax liability. We are, therefore, of the view that assessee should be allowed deduction u/s 40(a)(ia) of the Act for ₹ 36.3 lacs and therefore, no interference is called for in the order of ld. CIT(A) with respect to this ground. Accordingly this ground of Revenue is dismissed. TDS u/s 192 or 194H - Whether commission or brokerage paid to Chairman/whole time Director is part of salary on which TDS is deducted u/s 192 of the Act or it is to be treated as commission/brokerage on which TDS is deductible u/s 194H - addition u/s 40(a)(ia) - Held that:- Thus issue has been settled by the Co-ordinate Bench, Kolkata in the case of Jahangir Biri Factory (P) Ltd. v. Dy. CIT (2009 (3) TMI 215 - ITAT CALCUTTA-C ) wherein it has been held that commission paid to the Directors as per their terms of employment for the work done in their capacity as whole time directors should have been treated as an incentive in addition to salary, bonus and other perquisites and they do not fall under the purview of sec.194H or 194J. It is true that tax is deductible on such commission at the rate prescribed u/s 192 of the Act, since such commission is nothing but part of salary and the appellant has failed to deduct such tax. However, provisions of sec.40(a)(ia) of the Act do not cover expenditure subject to tax deductible u/s 192 of the Act. We are therefore of the view that the impugned amount of commission/brokerage paid to directors is a part of salary and remuneration to the Chairman and Managing Directors and income-tax is required to be deducted at source u/s 192 of the Act. Where the assessee has deducted and deposited the part of TDS during the year and the remaining in the following year on the commission paid to whole time directors which is in the nature of salary is rightly subject to TDS u/s 192 of the Act and not u/s 194H of the Act and, therefore, no disallowance is called for u/s 40(a)(ia) of the Act Disallowance on account of interest on non interest bearing advance - Held that:- We find that assessee company is dealing with edible oil and non-edible oil and the gross turnover of ₹ 1478.7 crores and profit before taxes at ₹ 13.49 crores. We further observe that reserve and surplus of ₹ 42.56 crores stood along with 6.47 crores as capital as on 31/3/2008. We also observe that total of share capital reserve and surplus at ₹ 49.03 crores is almost 3 times of loan funds of ₹ 15.36 crores. The reason for observing these financial datas are to analyse that assessee company is having huge turnover, heavy profits, sufficient capital basis and availability of interest-free funds. Further we find that there is no dispute to the basic finanancial results i.e. GP or NP of the company and audited books of account have been accepted by the Revenue. Now as far as M/s N. K. Industries is concerned, we find that assessee is regularly purchasing non-edible oil on exclusive basis and if we analyse the advances standing at the end of the month with the monthly sales of the assessee company, we find that the monthly sales of the company are approx. ₹ 120 crores and the closing balance of M/s N. K.Indus. is approx. ₹ 10 crores. These transactions are undoubtedly business transactions and there is no evidence on record to show that these are interest free advances. These are purely business advances and profit earning company in the regular course of business and for commercial expediency has to keep funds advanced to the supplier of raw material to have uninterrupted supply of quality goods. We are of the view that ld. Assessing Officer was not justified in making disallowance of ₹ 84 lacs on the advances to M/s N.K. Industries. As far as advances of ₹ 50 lacs to Vipul Industries is concerned which has been settled in the subsequent year seems to be a normal business advance looking to the over all financial volume of assessee company and do not call for any disallowance of interest. Similarly in the case of Guru Commodities and Pearl Energy calling debit balances of ₹ 25000/- and ₹ 646627/- are also old advances and revenue has also not brought on record any evidence to prove that these are non-business advances, we are of the view that in the given facts and circumstances of the case where assessee has sufficient interest free funds, liquid funds and profit earning business, these advances have been made in the regular course of business for commercial expediency. Accordingly, no disallowance was called for ₹ 91,07,595/- on account of interest expenditure u/s 36(1)(iii) of the Act as the advances were for business purposes, commercial expediency and no nexus being proved by the Revenue for actual diversion of interest bearing funds to non-interest bearing advances. No interference is called for in the order of ld. CIT(A). In the result, appeal of Revenue is dismissed.
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2016 (9) TMI 54
Addition on account of accrued interest on NPAs - Held that:- We find that the ld.CIT(A) by a well-reasoned order and following the decision rendered by the Hon’ble Bombay High Court in the case of CIT vs. M/s.Deogiri Nagari Sahakari Bank Ltd [2015 (1) TMI 1218 - BOMBAY HIGH COURT] has held that notional interest income on accrual basis on the NPA accounts cannot be brought to tax. Before us, Revenue has not brought any contrary binding decision in its support. In view of the aforesaid set of facts, we see no reason to interfere with the order of the ld.CIT(A) and thus, the ground of Revenue is dismissed.
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Customs
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2016 (9) TMI 76
Waiver of pre-deposit - Section 35F(iii) of the Central Excise Act, 1944 - Section 129E of the Customs Act, 1962 - CBEC Circular No.984/8/2014-CX dated 16.09.2014 – defective memos - whether Appellants are required to deposit an additional 10% of duty confirmed, while filing Appeal before CESTAT against Orders passed by the first appellate authority over and above 7.5% deposit made before the first appellate authority ? – Held that: - After success at the level of first appellate authority may be Legislature wants that the case has passed one test of first appeal successfully and Revenue deserves an additional 10% of the duty or penalty as deposit till the issue is finally decided in the second appellate stage. Appellants required to pay additional 10% of duty confirmed. Defect Memoranda were thus correctly issued by CESTAT Registry – all appeals dismissed on account of non-compliance – decided against appellant.
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2016 (9) TMI 75
Imposition of redemption fine – confiscation - Sec 125 of the Customs Act 1962 – imported goods not available for confiscation – bond / bank guarantee – Held that: - in the case of Weston components Ltd. Vs. CC, New Delhi 2000 (1) TMI 45 - SUPREME COURT OF INDIA, it was held that, for ordering confiscation / redemption either the goods should be physically available for confiscation or an instrument in the form of bond / bank guarantee should exist when the goods were released to the Respondent. Here it was argued that a bond / Bank guarantee has been executed by the appellant. Adjournment was given to the AR to produce such Bond / Bank guarantee executed by the Respondent. No such Bond / Bank guarantee executed by the appellant is brought on record till date. The matter is remanded to the Adjudicating authority for the limited purpose of deciding the matter afresh in the light of Bond / Bank Guarantee if any executed at the time of release of the imported goods. If there is no Bond and or Bank Guarantee given by the Respondent at the time of release of goods then no redemption fine can be imposed – matter remanded – appeal allowed.
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2016 (9) TMI 74
Review petition – stay application – Held that: - only ground under which Revenue filed this appeal is that department has filed a review petition in the Apex Court in the case of M/s. SRF Ltd. 2015 (4) TMI 561 - SUPREME COURT which is pending in the Apex Court. In view of dismissal of the review petition of the department by Apex Court by order dated 15.07.2016, appeals filed by the department are not sustainable – appeals filed by Revenue dismissed – stay applications dismissed.
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2016 (9) TMI 73
Imposition of penalty – lenient consideration on the quantum of penalty – IE code – mis-declared imports – rejection of declared value – Held that: - racket of smugglers abused the IE code granted by DGFT and also mis-declared the goods and upon detection of the mis-declaration they have vanished. When statements were recorded from different importers, the authority also found that benami transactions were made and some name lenders operated the action. The ill-gots were parked to the total detriment of the customs – no grant of relief – appeal rejected – decided against appellant.
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2016 (9) TMI 72
Genuineness of DEPB licence / scrips – clearance of crude palmolien - Notification No.45/2002-Cus dated 22.04.2002 – principles of natural justice – Held that: - it was established in the case Aafloat Textiles 2009 (2) TMI 75 - SUPREME COURT that it was for the buyer to establish that he had no knowledge about the genuineness or otherwise of the SIL in question. The appellant have established that they had no knowledge about the non-genuineness of the documents. Recovery of duty with interest – Held that: - there is no estoppel, bar or impediment which can preclude the department from demand and recovery, at the earliest, of the wrongful benefit which accrued to the appellant on account of the impugned documents – demand of duty and interest sustainable. Imposition of penalty – Held that: - Once it is established that the appellants had no role in fabrication or forgery of the impugned documents, there is no ground for imposition of penalty either on the appellant or on the Executive Director – penalty set aside – appeal disposed off – partly decided in favor of appellant.
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Service Tax
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2016 (9) TMI 100
Job work - Cenvat credit - Service tax paid on outward freight charges (GTA services) - for transporting the manufactured biscuits from their factory to the depots of M/s PPPL - Held that:- it is found that there is an arrangement/agreement between the Assessee and M/s Parle Products Pvt. Ltd had been in existence for manufacture of biscuits on job work basis and transportation of the manufactured biscuits to their various depots. Therefore, the judgment of Tribunal in the case of M.P. Biscuits Pvt. Ltd Vs CCE Allahabad [2012 (10) TMI 623 - CESTAT, New Delhi] is squarely applicable to the facts of the case. It is also found that the duty paid on input raw materials and packaging materials by M/s PPPL which was supplied for conversion into biscuits were availed as credit by the assessee and there is no dispute in this regard. I find force in the argument of the appellant that the basis on which Kohinoor Biscuits case was rendered by the Division Bench of this Tribunal, that since the biscuits are assessable to Section 4A, hence the place of removal ought to be considered as factory gate, relying on the judgment of this Tribunal in Ultratech Cement Ltd case, cannot be considered a good law, as the said judgment was not accepted by Hon'ble Chhatisgarh High Court in their order dt.05.08.2014 reported as Ultratech Cement Ltd. Vs. Commissioner of Central Excise, Raipur [2014 (8) TMI 788 - CHHATTISGARH HIGH COURT]. Besides, the said judgment was rendered relating to the period 2009, that is, after amendment to the definition of input service w.e.f. 01.4.2008. Also, it is crystal clear from the judgment of the Hon'ble Gujrat High Court in CCE Vs Parth Poly Wooven Pvt. Ltd. [2011 (4) TMI 975 - GUJARAT HIGH COURT] that cenvat credit on GTA service(out ward freight) from the place of removal to the purchaser s premises prior to 01.04.2008 was admissible. Interpreting the scope of means & includes employed in the definition of input service as was in existence prior to 01.04.2008. - Decided against the Revenue
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2016 (9) TMI 99
CENVAT credit - asset management company - input services received from mutual fund agents and distributors – Rule 2(l) of Cenvat Credit Rules, 2004 - Held that: - the appellants are eligible for taking credit on the service tax paid by them on brokerage commission and the demand confirmed by the adjudicating authority is liable to be set aside. This issue has been already decided in case [2016 (1) TMI 23 - CESTAT CHENNAI] – appeal allowed – decided in favor of appellant.
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2016 (9) TMI 98
Valuation – clearing and forwarding services – godown rent – loading and unloading charges - is reimbursement expenses added in assessable value of the services? – Demand of tax and interest – penalty under section 76 and 78 of the Finance Act, 1994 - Held that: - the similar issue held in the case of Commissioner of S.T. Chennai Vs. Sangamitra Services Agency 2013 (7) TMI 862 - MADRAS HIGH COURT, where it was held that if the receipt is for reimbursing the expenditure incurred for the purpose of providing clearing and forwarding agent services, the same will not form part of the value of the services. Demand barred by limitation – Held that: - as appeal allowed on merits, appellant’s stand of demand being barred by limitation not relevant – appeal allowed – decided in favor of appellant.
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2016 (9) TMI 97
Restoration of appeal and stay order - notice of personal hearing – approach of appellant in pursuing its appeal/stay application – Held that: - on the casual approach of the applicant in pursuing its statutory right of appeal, some cost should be imposed on the applicant. Therefore, the applicant to deposit cost of ₹ 5,000/- into the Prime Minister's Relief Fund, within a period of one week and to report compliance of such deposit – restoration of stay and appeal granted – miscellaneous application disposed off.
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2016 (9) TMI 96
CENVAT credit – manufacture of soaps and detergent – job-work – service tax paid by job-worker – the process of conversion of absolute unusable detergent material into scrap - manufacturing process – Held that: - an assessee cannot be denied the benefit of Cenvat Credit of duty on the ground that no manufacturing activity was involved, when the assessee has admittedly cleared its final product on payment of duty. Similar issue decided in the case Asian Colour Coated Ispat Ltd 2014 (9) TMI 974 - CESTAT NEW DELHI. – appeal allowed – decided in favor of appellant.
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2016 (9) TMI 95
Rejection of refund claim - export – input services – CHA services – terminal handling services - notification 41/2012-ST dated 29.06.2012 – place of removal - Notification No. 1/2016-ST dated 03.02.2016 – Held that: - Notification No. 41/2012-ST dated 29.6.2012 has been amended by Notification No. 1/2016-ST dated 03.02.2016 by which the explanation has been substituted. The said notification has been given retrospective effect with effect from the date of parent notification which is 29.06.2012 - specified services means taxable services that have been used beyond factory or any other place or premises of production or manufacture of the said goods – refund of service tax paid available – appeal allowed – decided in favor of appellant.
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2016 (9) TMI 94
Stay application – demand of tax, interest and penalty – works contract service – construction service rendered to PHED – outside the scope of commerce and industry – abatement – Held that: - the building constructed for Jaipur Development authority would not fall outside the scope of being meant for commerce or industry – pre-deposit of 10% of demand to be paid for maintainability of appeal - recovery of the remaining adjudicated liability is stayed during pendency of the appeal – matter disposed off.
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Central Excise
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2016 (9) TMI 93
Valuation - Includability - in the assessable value of the goods i.e. monoliths/signages cleared from the factory - amounts collected by the respondent as charges towards erection, installation and commissioning charges and pre-delivery inspection charges - Held that:- the issue is now squarely covered by the judgment of the apex court in the case of Thermax Ltd. vs. CCE [1998 (4) TMI 134 - SUPREME COURT OF INDIA] wherein it was held that the installation and commissioning charges have to be treated as assessable value of the goods supplied by the appellants are not correct, so the installation and commissioning charges could not be included in the value of the goods. Therefore, in view of the same, the impugned order is correct and legal and does not suffer from any infirmity. - Decided against the Revenue
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2016 (9) TMI 92
Classification - Is the product manufactured by the appellant is RMC (Ready mix concrete) or concrete mix and whether benefit of Notification No. 4/97 dated 01.03.1997 is available to the appellant in respect of the product manufactured by them - Held that:- the mix manufactured by the appellant is specially made for Mahindra & Mahindra and is manufactured with precision of a high standard and is delivered to the customer at his site. Thus prima facie it fulfills the criteria identified by the Hon’ble Supreme Court in its decision in the case of Larson & Toubro [2015 (10) TMI 612 - SUPREME COURT]. In the instant case the appellants are also adding plasticizers to improve the quality of the concrete. In view of above it is held that the product manufactured by the appellants is RMC and the appellants are not entitled under Notification No. 4/97 dated 01.03.1997. Invokation of extended period of limitation - Held that:- the decision of the Hon’ble Supreme Court in the case of Continental Foundation Jt. Venture [2007 (8) TMI 11 - SUPREME COURT OF INDIA] is squarely on this issue. Therefore, as the period as well as the issue involved is roughly the same. Relying upon the above said decision of the Hon’ble Supreme Court we hold that the extended period of limitation cannot be invoked in this case. - Decided in favour of appellant
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2016 (9) TMI 91
Cenvat credit - Catering Services’ and ‘Tour Operator’ (Bus) services - part of an amount was recovered from the employees - Held that:- the issue is no longer res integra as the judgements in the case of M/s. Ultratech Cement [2010 (10) TMI 13 - BOMBAY HIGH COURT ], wherein it was held that once the Service Tax is borne by the ultimate consumers of the service, namely, the worker, the manufacturer cannot take credit of that part of the service tax, which is borne by the consumer, M/s Castrol India Ltd. [2015 (9) TMI 1335 - CESTAT MUMBAI] and Cema Electric Lighting Products India P. Ltd. [2013 (4) TMI 328 - CESTAT AHMEDABAD] have held in favour of Revenue. The argument that there is no restriction in the Cenvat Credit Rules, 2004 does not come to the rescue of the appellant as the law is already settled. Since they have taken inadmissible credit, the penalty under Rule 15(1) of Cenvat Credit Rules, 2004 which does not require the presence of mens rea is also upheld. - Decided against the appellant
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2016 (9) TMI 90
Valuation - demand - for the period January 1997 to September 1997 - fire detection & alarm system installed at various sites - purchased/procured various items/components like photo electronic smoke detectors, thermal detectors, addressable monitor modules fault isolator modules, fire alarm panel, repeater panels, electronic hooters etc - Held that:- the issue is squarely covered by the judgements of this Tribunal in the case of Zicom Electronics Security Systems Ltd. [2006 (6) TMI 57 - CESTAT,MUMBAI] and Datamatics Information Tech Ltd. [2005 (7) TMI 168 - CESTAT, MUMBAI]. In these two cases, the Tribunal was considering whether procurement of components of burglar, fire alarm systems and CCTV systems and installing the same at the site of the customer value is to includible or not in the value of manufactured goods and it was held in favour of the assessee. Nothing was brought to our notice that these judgements are upturned by any higher judicial forum. Similarly procured products or components are used in the current appeal and installed at the site of the customer, the ratio will apply and we hold on merits the appeal succeeds, as in essence the demand of duty is on the presumption that fire alarm system is manufactured for value taken is of bought-out items. Invokation of extended period of limitation - Held that:- we find that the earlier orders of the Commissioners of Central Excise, Pune I and III, in an identical issue and in respect of very same assessee were not contested is the claim. Nothing was brought to our notice that these orders are contested in higher judicial fora. Therefore, since the demand for the earlier period (by invoking extended period) was dropped by two Commissioners of Central Excise, as adjudicating authority, the current show-cause notice which is invoking the extended period for the demand of duty is unsustainable on limitation also. - Decided in favour of appellant
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2016 (9) TMI 89
Cenvat Credit - Whether the asbestos sheet is covered under the ambit of capital goods or not - Held that:- the adjudicating authority in his findings clearly brought out what are capital goods and came to the conclusion that Asbestos sheets are not capital goods and the credit so availed on these items is recoverable. Further he has invoked extended period for suppression of facts with an intent to evade payment of duty and hence penalised them under Rule 15 (2) of CCR, 2004. I totally agree with the order passed by the First Appellate Authority and it is also a fact that there has been a specific exclusion in the definition of capital goods. The ld. Commissioner (A) is therefore right in holding that if the inputs were to include every product which is somehow related to the premises where the manufacturing process goes on, then there may not be a need to provide a definition of the term capital goods and therefore, the acceptance of the contention of the assessee would render the definition of the term “capital goods” to be redundant as well as the provisions relating to extending the benefit of Cenvat credit to the capital goods. Invokation of extended period of limitation - Held that:- the contention of the appellant that the credit was availed in Oct 2011 and the notice demanding recovery of credit was issued on 3.6.2014; that the availment of credit was reflected duly in ER 1 returns and that the cenvat credit were regularly scrutinised by audit officials has nowhere been contested to be wrong by the revenue. It is also to be borne in mind that the appellant mill is managed by the Govt. of Tamilnadu. Therefore, the invocation of extended period is unsustainable. - Decided in favour of appellant
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2016 (9) TMI 88
Demand of duty - clearance of waste solvent in the guise of bio-manure - amount has been appropriated against sanctioned rebate claim of the other appeals - Held that:- the taxability / dutiability of the waste solvent has been decided in favour of the assessee in CCE v. Aurobindo Pharma [2016 (8) TMI 1017 - CESTAT ALLAHABAD]. Hon'ble High Court of Andhra Pradesh has in a speaking order categorically recorded that waste solvent that arises during the course of manufacturing of bulk drugs are not dutiable. Therefore, the impugned orders wherein the demand of duty is confirmed are unsustainable and liable to be set aside. Since the impugned orders wherein the demand of duty liability has been set aside, appeals No. E/89375/13 and E/85614/15 consequently needs to be allowed and rebate amount appropriated against pending demand of appeals are to be held as incorrect. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 87
Imposition of penalty - appellant contend that it is purely a matter of interpretation - Cenvat Credit in respect of construction services for the construction of guest house, staff quarters, flooring work at colony, septic tank of security barracks, club house, bank building, hawankund shed, temple etc. - Held that:- in this matter I observe that there are various contradictory judgments of Tribunals on the similar issue and Cenvat credit on services received in residential complex/colony is allowed in number of cases by Tribunal. It is purely a matter of interpretation of statute and hence no penalty is imposable in the instant case. Invokation of extended period of limitation - Demand - Cenvat credit - construction services for the construction of guest house, staff quarters, flooring work at colony, septic tank of security barracks, club house, bank building, hawankund shed, temple etc. - relation to manufacture of final product - Held that:- it is found that during the relevant period the appellant have been regularly submitting all the cenvatable invoices along with their monthly ER-1 return, as evident from the covering letter of monthly ER-1 return. The Ld. Commissioner (Appeals) admitted that on the issue of Cenvat Credit on construction services, there were contradictory judgments and the issue involved is purely the matter of interpretation of statute. This finding of the Ld. Commissioner has not been challenged by the Revenue, therefore it attained finality. With this finding also suppression of fact cannot be alleged on the appellant. For this reason also the extended period of demand could not have been invoked. Therefore, in the present case, for the demand of period July 2005 to January 2008, the show cause notice was issue on 8.12.2009 is clearly time bar. Since the entire demand is not sustainable on the ground of time bar itself, I do not feel necessary to deal with merit of the issue on admissibility of Cenvat Credit. Hence the impugned order is set aside. - Decided in favour of appellant
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2016 (9) TMI 86
Excisability - Press-mud - arose during the process of manufacture of excisable goods i.e. Sugar, and sold on consideration - Held that:- the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of UOI vs. DSCL Sugar Limited [2015 (10) TMI 566 - SUPREME COURT] read with the decision of the Hon'ble Allahabad High Court in the case of CCE, Lucknow vs. Kisan Sahakari Chini Mills Limited [2013 (10) TMI 1197 - ALLAHABAD HIGH COURT]. - Decided in favour of appellant
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2016 (9) TMI 85
Cenvat credit - 'MS Flats', 'MS Sheets', 'MS Bolt' and 'MS Plate Chequered' used in the manufacturing unit - Held that:- the issue is no longer res integra and has been settled in favour by a plethora of judgments, including that of CCE & C, Visakhapatnam Vs Rastriya Ispat Nigam Ltd., [2011 (4) TMI 1098 - ANDHRA PRADESH HIGH COURT] where the Hon'ble High Court inter-alia held that credit on steel sheets used in repair and maintainance of capital goods is eligible for credit. Even this very Bench, in the case of CCE & ST, Visakhapatnam vs HPCL [2016 (6) TMI 606 - CESTAT HYDERABAD] and also in the case of Orient Cements Vs CCE & ST, Hyderabad-I has also echoed this view and held that credit of duty on MS items (HR plates/sheets) used for repair and maintainence is admissible. Therefore, by following the ratio laid down in the aforesaid judgments, the appeal is allowed in toto. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 84
Duty liability - molasses manufactured locally (indigenously) which are consumed in the manufacturing of rectified sprit which is exempted/non-excisable product - Held that:- the appellant has no case as the molasses which are manufactured in the sugar factory are undisputedly consumed for the manufacturing of rectified sprit/alcohol which is non-excisable product. The benefit of Notification No. 67/95 as amended will not be applicable in the case in hand as it requires the final product should be dutiable which in this case is not so; though the part of the rectified sprit is denatured and Central Excise duty is discharged on it. Invokation of extended period of limitation - Held that:- from the records available it is found that the appellant had kept Revenue authorities informed about the manufacturing activity of molasses and consumption thereof for the manufacturing of rectified sprit and availment of benefit of Notification No. 67/95 as amended. Therefore, the show-cause notice dated 03.01.2001 invoking extended period for demanding duty on molasses for the period in question is blatantly hit by limitation as there was no suppression or misstatement or collusion alleged in the show-cause notice as also no allegation of intention to evade duty on such molasses. - Decided in fvaour of appellant
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2016 (9) TMI 83
Refund claim - cess collected under the Agricultural and Processed Food Products Export Cess Act, 1985 which was repealed w.e.f. 01-06-2006 - amount paid under protest - unjust enrichment - FOB value was inclusive of cess and that its incidence had been passed on - Held that:- by following the dictum laid by the Hon'ble High Court in the Asia Pacific Commodities Ltd Vs Asst. Commissioner of Customs, Kakinada-I [2012 (11) TMI 919 - ANDHRA PRADESH HIGH COURT] wherein it was held that the refund of cess is not hit by the bar of unjust enrichment, the facts and issue being identical, we hold that refund of cess is not hit by unjust enrichment and the appellant is eligible for refund. - Decided in favour of appellant
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2016 (9) TMI 82
Duty liability - parts captively utilised for manufacture of power driven pumps - appellant classified the parts under sub-heading 8413.00 and claimed exemption under Notification 236/86 - parts cleared on payment of 15% duty liability - on scrutiny it was observed that these parts are finished goods themselves i.e. “shaft” and merit classification under sub-Heading 8483.00 attracting duty @ 20% - Held that:- it is found that the identical issue in the case of EIMCO Elecon (India) Ltd. [2008 (11) TMI 492 - CESTAT, AHMEDABAD] this Tribunal has held that classification of modified parts to suit machinery will be classifiable under special Heading of the CETA, 1985. It is also found that the similar issue of classification of pumps - parts and accessories of power driven pumps (such as shaft, worm wheel, nut washer, gasket, valves, bearing etc.) are classifiable in their respective Heading from 84.80 to 84.84 of CETA, 1985 is finding recording on merits by the Bench in the case of Swelore Engg. P. Ltd. [2000 (2) TMI 141 - CEGAT, COURT NO. II, NEW DELHI] which are directly applicable in the case in hand. Therefore, in view of the foregoing and authoritative judicial pronouncements, the impugned order is upheld. - Decided against the appellant
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2016 (9) TMI 81
Waiver of penalty - imposed under Section 78 of the Finance Act, 1994 - invokation of extended period of limitation - service tax payment for the month of February 2007 was paid in the year 2011 - Held that:- it is found that appellant duly discharged the entire tax liability along with interest as appropriated in the adjudication order. The invocation of longer period is invoked only in respect of short payment of tax pertaining to the month of February 2007. The plea of bonafide of appellant merits consideration when the entire tax liability along with interest stands discharged. Therefore, the quantum of penalty imposed under Section 78 is reduced to 25% - Decided partly in favour of appellant
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2016 (9) TMI 80
Demand - clandestine manufacture and removal of plywood without payment of duty during the period 1998-99, 1999-2000 - non-accountal of basic raw materials for manufacture of plywood, namely the face veneers and the core veneers - Held that:- in the assessee's own case for different period on the show cause notice issued on very same allegation, the Tribunal after analysing the facts, evidence and law in detail has held the issue in favor of assessee - Therefore by following the decision laid in the assessee's own case, we are of the view that the demand is not sustainable. The impugned order is set aside. - Decided in favour of appellant with consequential relief
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2016 (9) TMI 79
Restoration of appeals - earlier dismissed for want of clearance from the Committee of Secretaries in 2006 - COD was received in May 2007 and appellant in end of 2014 ie., after more than 7 years of obtaining COD prayed for restoration of appeal as the appellants have now produced the COD clearance - no reason explaining the delay in filing the appeal even after obtaining the COD has been put forward by appellant - Held that:- reasonable delay, and that too satisfactorily explained with reasons thereof can be grounds for favourable consideration of applications for restoration of appeal. Indigent condition of the appellant or the appellant being a small proprietorship firm or even an SSI may also be grounds for condoning the delay and acceding to the restoration of appeal. But in the instant case the appellant is a huge Public Sector Undertaking undeniably having sufficient manpower and other organizational infrastructure and facilities. This being so in our view, such enormous delay, that too unexplained even after giving opportunity for the same borders on the callous. As the appellant PSU having slumbered for so long cannot now wake up and obtain restoration of the appeal. This is precisely what the doctrine of laches propounds. Based on the maxim “vigilantibus et non dormientibus jura subviniunt” – The law aids the vigilant, not those who slumber on their rights. - Decided against the appellant
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2016 (9) TMI 78
Modvat credit - rejected without properly examining - Held that:- the Tribunal while remanding the case for denovo adjudication had observed that issue with reference to Modvat Credit has not been examined properly and had directed the quantification of duty amount payable by appellant. In the denovo adjudication we find that lower authority has glossed over the submission of the appellant that the seized invoices/documents required by them for putting forward a defence have not been supplied by DGCEI. The adjudicating authority has then given the cryptic order without quantifying the duty amount payable as directed by the Tribunal. The lower authority has merely ended with rejection of Modvat Credit without any order for duty to be recovered and fine and penalties to be imposed. Therefore, as the lower authority has merely ended with rejection of Modvat Credit without any order for duty to be recovered and fine and penalties to be imposed, the impugned order is set aside and the matter is remanded to the adjudicating authority for denovo consideration. - Appeal allowed by way of remand
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2016 (9) TMI 77
Cenvat credit - service tax paid on the Commercial and Industrial Construction Services by the service provider while constructing the Pant Nagar plant of appellant - Pant Nagar plant is paying excise duty on the goods which are deemed to be manufactured by them in their plant - Held that:- it is found that the Commissioner (Central Excise & Service Tax), LTU, has not examined the issue completely and in proper perspective. Therefore, the issue needs reconsideration by the Commissioner as regards various claims of the appellant. - Appeal allowed by way of remand
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