Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 9, 2015
Case Laws in this Newsletter:
Income Tax
Customs
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Claim of business loss rejected - loss comprised of deposit relatable to dealership/distributorship and the balance referable to cylinder hire charges due to fraud/cheating on him - the said deposit made should not be treated as revenue in nature and the loss thereof must not be treated as business loss. - HC
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Revision u/s 263 - Once the assessment order dated 29.12.2008 merged with the order dated 9.2.2010 passed under Section 154 of the Act, the notice under Section 263 of the Act questioning the veracity and legality of the original assessment order dated 29.12.2008 was patently erroneous and invalid - HC
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Entitlement to relief under Section 80IA in respect of new 650 TPK Kiln - the presumption on the part of the revenue that the benefit under section 80 IA would not apply unless there is a new Undertaking is not traceable to sub-section (2). - HC
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TDS u/s 194H on incentives given to dealers - Anyone who achieved the actual sale target was entitled to visit the foreign destination - the relationship of principal and agent, was absent in the case - foreign travel expenses of the dealers could not be disallowed under Section 40(a)(ia) - HC
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Deemed dividend u/s 2(22)(e) - AO failed to appreciate that term ‘deposit’ cannot means ‘loan’ or ‘advance’ - these amounts are in nature of Inter Corporate Deposits (ICD), which has been given one corporate to another corporate and therefore, no loan or advance as contemplated u/s.2(22)(e) - AT
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Section-45(4) of the Act mandates the assessee firm to be liable for capital gain tax arising out of the transfer of its asset to the retiring partner even in the circumstance when the partnership is reconstituted on retirement of a partner. - AT
Customs
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If goods bore Australia marking, Appraising Officers of Department should have objected at time of import – Since no objection was raised at time of import, assessments cannot be reopened for valuation under guise of mis-declaration of country of origin - SC
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Classification of Ghana Teak rough Square Logs - all nuisances have been taken into consideration and discussed by the tribunal while holding that goods in question, viz., 'Ghana Teak rough Square Logs' would be classified under Heading 44.03 - order of tribunal sustained - SC
FEMA
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Application filed beyond period of limitation – Condonation of Delay –Application for condonation of delay cannot be decided as matter of routine as vested right accrues in favour of opposite party and benefit of such right cannot be disturbed lightly - HC
Service Tax
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Denial of CENVAT Credit - supplementary invoice - Merely because department has detected and service provider has paid service tax, that alone is not sufficient to make allegation that there is suppression of fact on the part of the appellant. - AT
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Order beyond the scope of show cause notice - interpretation of SCN - Since this Court has found that the petitioner has made out strong prima facie case, the CESTAT should have directed the total waiver. - HC
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Condonation of Delay - The petitioner is lethargic, but, certainly not an ignorant person and is knowing all fine niceties of law. Vigilant petitioner should have file their appeal within the limitation period or at least within condonable delay period - Condonation dened - HC
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Eligible person to get the refund - manufacture or the merchant exporter - There is some dispute about who is entitled to the refund of service tax, but in any case, the department cannot hold the service tax since they are not entitled to do so. - SC
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Apex Court dismissed the appeal against the order of tribunal [2014 (11) TMI 82 - CESTAT MUMBAI] wherein it was held that, sponsorship of sports events are exempted from the taxable service - SC
Central Excise
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Clandestine manufacturing and removal of goods - dummy job work units - prime reason given by the Tribunal while dropping the demand is that there is hardly any evidence on record to prove the allegations made against the two respondents herein. We find this to be totally erroneous - demand confirmed - SC
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Levy of duty on walk-in cooler - If the assessee acted on the basis of the said position in law which was prevailing at that time (though over-ruled subsequently) it would show that the action of the assessee was bonafide. - Demand set aside on the ground of period of limitation - SC
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The insurance policy for the transportation of the goods was taken by the assessee on behalf of the purchaser - the cost of transportation and insurance could not have been included for arriving at the price of the goods for the purpose of excise duty. - SC
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Demand of penalty - Once there was a scope for entertaining a doubt, and there is no willful mis-statement or suppression of facts, then, penalty is not called for. The imposition is only in the event the ingredients necessary to be satisfied are attracted and so satisfied - HC
VAT
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The Government shall speak only in one voice. It has only one policy. The departments are to implement the Government policy and not their own policy - merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification. - SC
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Failure to publish Notification in Official Gazette will render Notification ineffective – But impugned Notifications being operational and having been operated, its validity or otherwise is of no consequence - HC
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Classification of Fire Bricks – Entry 32, schedule I and Schedule VII – Supreme Court accepted that sun-dried bricks and fire burnt bricks are of two categories, in absence of specific entry being there generic and natural meaning had to be given to entry and same would have to be taxed as falling in same entry - HC
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Non-production of ST-38 form – It was not controverted that petitioner was exempted unit – Though there was technical defect in not producing Form ST=38 but there was no attempt to evade tax – Therefore, sustaining of penalty under Section 37(6) of Haryana General Sales Tax Act, 1973 by Tribunal was unjustified - HC
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Levy of tax – Non-Submission of C-Form – Grant of Exemption Certificate – Exemption certificate issued to petitioner grants immunity from payment of tax within capex limit for certain period – Such facility cannot be withdrawn - HC
Case Laws:
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Income Tax
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2015 (9) TMI 337
Unexplained investment in factory building and factory land - rectification of mistake - Held that:- As at the time of hearing of the Tax Appeal, the assessee did not point out before this Court that they have already preferred rectification application before the Tribunal which is pending nor even at the time of deciding the rectification application (subsequently) by the Tribunal it was pointed out before the Tribunal that against the judgment and order passed by the learned Tribunal which is sought to be rectified, they preferred appeal, which has been dismissed by the Division Bench on merits. Shri Shah, learned counsel for the petitioner is not in a position to dispute the above. Under the circumstances, now it is not open for the petitioner to contend that despite the dismissal of appeal by this Court, rectification application would be maintainable, on issues / grounds, which came to be earlier considered by the Division Bench while deciding the Tax Appeal under the guise of the rectification, the petitioner-assessee cannot have the second round of litigation on the same ground / issue which earlier came to be considered by the Division Bench of this Court [2015 (9) TMI 330 - GUJARAT HIGH COURT] and Division Bench dismissed the appeal on merits. In view of the above, present petition under Article 226 of the Constitution of India is not required to be entertained, more particularly, when on the ground / issue which is sought to be canvassed, more particularly, valuation adopted by the Assessing Officer while making addition of ₹ 22,70,370/, the appeal at the instance of the very petitioner – assessee against the order passed by the learned Tribunal passed has been dismissed on merits, this Court is not required to exercise appellate jurisdiction over the order passed by the Division Bench of this Court. Under the circumstances, present petition deserves to be dismissed. - Decided against assessee.
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2015 (9) TMI 336
Review u/s 263 - incorrect allowance of set off of unabsorbed depreciation - as per CIT(A) incorrect allowance of set off of unabsorbed depreciation by AO and permitting the carry forward of depreciation allowance relating to A.Ys. 1997-98 and 1998-99 beyond the stipulated quarantine period of eight years and setting off the same against the income of A.Y. 2007-08 is unsustainable in law - Tribunal quashing the order u/s.263 holding that the review of assessment was merely on change of opinion - Held that:- It is required to be noted that at the relevant time, when the learned ITAT passed the impugned judgment and order, there was direct decision of jurisdictional High Court rendered in the case of General Motors India (P) Ltd Vs. Deputy Commissioner of Income Tax (2012 (8) TMI 714 - GUJARAT HIGH COURT) wherein held that any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever, which was binding to the learned ITAT. Under the circumstances, it cannot be said that the learned ITAT has committed any error and/or illegality and following binding decision of this Court in the case of General Motors India (P) Ltd Vs. Deputy Commissioner of Income Tax (supra) in passing the impugned judgment and order. - Decided in favour of assessee.
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2015 (9) TMI 335
Claim of business loss rejected - loss comprised of deposit relatable to dealership/distributorship and the balance referable to cylinder hire charges due to fraud/cheating on him - business loss v/s capital loss - Held that:- Admittedly, the assessee had not commenced its distributorship business. The deposits made by the assessee was for the purpose of acquiring profit and securing dealership/distributorship. Originally, the assessee was in the business of manufacturing handloom silk and not in the business of LPG distributorship. Hence, the purpose of entering into such a new business must be considered to be for the purpose of securing an enduring benefit of a capital nature and hence, the deposit made in that regard cannot be treated as expenditure in the course of carrying on the existing business. The deposit was made by the assessee pursuant to an agreement between the parties for getting dealership/distributorship of LPG. Hence, the deposit made by the assessee was for the purpose of acquiring a profit-making asset to carry on business in LPG. Therefore, the said deposit made should not be treated as revenue in nature and the loss thereof must not be treated as business loss. The loss thereof was a loss suffered on the capital account and could not be deducted on the basis that it was a business loss. See Hasimara Industries Ltd. v. Commissioner of Income Tax and another reported in [1997 (9) TMI 5 - SUPREME Court]. - Decided against the assessee
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2015 (9) TMI 334
Validity of reopening of assessment - as per revenue treatment of service income for the purpose of calculation of deduction u/s 80 HHC was not discussed at any prior stage, and the assessee had made no clear submission in this regard in earlier proceedings - ITAT held that reopening beyond 4 years from the assessment year was bad in law as the assessee has not failed to disclose truly and fully all material facts necessary for assessment - Held that:- Separate schedule had been appended with the profit & loss statement showing the service income separately and it had been duly certified by the Auditor's Certificate in the requisite form. The interest on excise duty and the sales tax has been reduced from the said claim and the deduction had been modified and therefore, all the facts had been disclosed and there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The assessee had done his duties and it was for the Assessing Officer to draw the correct inference from the primary facts and not the responsibility of the assessee and there was no default on its part and the appeal filed by the revenue was dismissed. The reason for reopening, thus, being merely a change of opinion on account of the subsequent judgment of in Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] would not give the Assessing Officer the jurisdiction to reopen as he would, thus, be reviewing his earlier decision which has been held not to be permissible. Similarly, in the absence of allegations that the assessee failed to disclose fully and truly all material facts, the assumption of jurisdiction was not justified. - Decided in favour of assessee
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2015 (9) TMI 333
Penalty levied u/s. 271(1)(c) - furnishing inaccurate particulars of income by making inadmissible claim on account of interest paid to foreign party - Tribunal deleted the penalty - Held that:- It is a settled position in law that mere disallowance in quantum proceedings would not ipso facto lead to imposition of penalty. The tests to be applied in imposing penalty are different and distinct from the tests to be applied in disallowing an expenditure in quantum proceedings. In the present case, Respondent-Assessee has made a complete disclosure of particulars of income and expenditure by disclosing it in its account and also making a note in its Accounts viz. awaiting the permission of the RBI to make the payment. Moreover, the explanation offered by the Respondent-Assessee was not found to be false. The decision of the Apex Court held in CIT v/s. Reliance Petro Products (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] has held that where details supplied in returns of Income are neither incorrect or false, penalty cannot be imposed. A mere making of an claim not sustainable in law, would not invite penalty. - Decided in favour of assessee. Furnishing inaccurate particulars of income by making inadmissible claim on account of compensation paid - non deduction of TDS - Tribunal deleted the penalty - Held that:- Tribunal records the fact that due to the negotiation with the Shahs, the amount of compensation was reduced from ₹ 64.72 lakhs to ₹ 45 lakhs and the Respondent-Assessee had deducted the tax at the time of actual payment. The balance provision for compensation made in its account, was reversed. The impugned order to our mind correctly records the fact that disallowance in this case is not done on account of the expenditure being bogus but merely because the requirement of deducting tax at source had not been complied with by the Respondent-Assessee. The explanation offered by the Respondent-Assessee that no tax was deducted by it because no compensation was payable, as it was still under negotiation. It was only on the amount of compensation payable being determined and paid that tax was deducted. The decision of the Apex Court in Reliance Petro Products (supra) which Mr. Mohanty, sought to distinguish would continue to apply as the distinctions made do not touch the aspect with which we are concerned viz. Is penalty imposable if particulars are disclosed but the claim is disallowed. In such a case the Apex Court has held that penalty is not imposable. In this case, it has been held that claim made was on a bonafide view. The view taken by the Tribunal in the impugned order is a possible view to the effect that the Respondent-Assessee had a bona fide belief that they are not liable to deduct tax at the time of the making a provision as negotiations were still in progress. - Decided in favour of assessee.
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2015 (9) TMI 332
Revision u/s 263 - Rectification of mistake - Entitlement for interest exemption under Section 10(15)(iv)(e) allowed but claim of such amount under Section 80HHC denied - AO disallowing the interest exemption contending that on the basis of the direction of CIT(A) the issue being a legal matter, the error was being rectified under Section 154 of the Act as a mistake apparent from the record.whether Tribunal was not justified in setting aside the order of the Commissioner under Section 263 of the Act, inasmuch as, the assessment order was inconsistent with the direction of the Tribunal passed in the earlier round of litigation? Held that:- AO while passing a fresh assessment order on 29.12.2008 considered the directions of the Tribunal and also considered the provisions of Section 10(15)(iv)(e) of the Act in detail and, after considering the evidence that was brought on record, came to the conclusion that conditions prescribed under Section 10(15)(iv)(e) of the Act are satisfied and that the assessee was entitled for exemption on interest received. In our view, such finding of the assessing officer, assuming it to be erroneous cannot be rectified in proceedings under Section 154 of the Act on the ground that a mistake apparent on the face of the record had occurred in the assessment order inasmuch as the assessment order was passed by a process of reasoning and after applying its mind. Once an order has been given by a process of reasoning and assuming that two views are possible it still cannot be treated as a mistake apparent from the record. We also find that the order under Section 154 of the Act has been passed by the assessing officer on the dictates of the Commissioner. The assessing officer is a quasi-judicial authority and is required to apply its own mind and cannot function on the dictates and directions of another authority. Consequently, on this ground also, the order of the assessing authority under Section 154 of the Act cannot be sustained. In so far as the appeal filed by the Department is concerned, we are of the opinion, that the Commissioner of Income Tax had no jurisdiction to pass an order under Section 263 of the Act. The Commissioner of Income Tax assumes jurisdiction under Section 263 of the Act when it issues a notice to the assessee under Section 263 of the Act to show cause as to why the order of the assessing authority should not be set aside on the ground that the assessment order was pre-judicial to the interest of the revenue. On this aspect, the assumption of jurisdiction takes place when a notice is issued under Section 263 of the Act. This notice under Section 263 of the Act was issued by the Commissioner on 18.3.2011 much after the assessment order dated 29.12.2008 was modified by an order dated 9.2.2010 under Section 154 of the Act. Once the assessment order dated 29.12.2008 merged with the order dated 9.2.2010 passed under Section 154 of the Act, the notice under Section 263 of the Act questioning the veracity and legality of the original assessment order dated 29.12.2008 was patently erroneous and invalid and, consequently, all the proceedings initiated pursuant to the said notice including the order dated 30.3.2011, passed under Section 263 of the Act, was also invalid and was rightly set aside by the Tribunal though for different reasons.
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2015 (9) TMI 331
Entitlement to relief under Section 80IA in respect of new 650 TPK Kiln - ITAT denied claim - Held that:- There is no denial of the fact that by setting up a new Kiln, the maximum production capacity of the appellant was actually increased from what it was earlier. In other words, the activity undertaken by the appellant can, at best, be termed as one of expansion of an existing facility. Unfortunately for the Revenue, clause (i) of sub-section (2) of section 80 IA does not use the expression "expansion". To deny the benefit to the appellant, under clause (i) of sub-section (2), it should fall either under the category of "splitting up of existing unit" or under the category of "reconstruction of the existing unit". Both in the case of splitting up and in the case of reconstruction, there is no expansion. The expression "expansion", as such, is not used in clause (i).It is not the case of the Revenue that the case of the appellant is covered either by clause (ii) or that the appellant does not satisfy the conditions prescribed in any of the three clauses viz., (iii), (iv) or (v). Therefore, the presumption on the part of the respondent that the benefit under section 80 IA would not apply unless there is a new Undertaking is not traceable to sub-section (2). Clause (b) of sub-section (2) of section 80 IA defines an industrial undertaking to have the same meaning as assigned to it in the Explanation to section 33B. The case of the appellant certainly falls under the category of business of manufacture or processing of goods within the meaning of expression under the Explanation to section 33B. Therefore, the meaning to be assigned to the expression "industrial undertaking" as appearing in section 80 IA also stands satisfied in this case. - Decided in favour of the assessee
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2015 (9) TMI 330
Undisclosed investment - Addition of difference in the cost of construction of the factory building - non rejection of books of accounts - Held that:- No question of law arises. The Assessing Officer proceeded to examine the report of valuer supplied by the assessee itself. This was not a case where the Assessing Officer was relying on DVO’s estimation of the cost of the building before the Assessing Officer. The assessee never took the stand before the Assessing Officer that the report may have been inflated since it was prepared primarily for the purpose of seeking bank loan. The assessee also did not raise any contention about the report being inaccurate since the same took into account the entire valuation of the brick kiln also. In fact, as already noted, the contentions of the assessee before the Assessing Officer was that the valuation was erroneous. He raised several grounds in support thereof. He contended that the construction was made through cost effective measures and the report, therefore, was not accurate. To our mind, such question cannot be examined as part of the requirement of substantial question of law. The valuer had also, as noted by the Assessing Officer, full material at his command. Taking into account the nature of construction and the manner in which the same was carried out, simply by suggesting that the valuer committed serious error in accepting the correct valuation of the construction was not sufficient. The contention that the Tribunal had not given sufficient reasons also did not appeal to us. The Tribunal has, as already noted, given its reasons for reinstating Assessing Officer’s orders. As rightly observed by the Tribunal from the facts, the Assessing Officer found that the valuation shown in the books for the cost of the building was much lower than the valuer’s report, and when the Assessing Officer accepted such valuation in preference to the valuation shown in the books by giving cogent reasons, obviously, he was rejecting the book entries made by the assessee for such purpose. - Decided against assessee.
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2015 (9) TMI 329
Disallowance of expenses incurred on VRS - AO had treated the same as unascertained liability - Tribunal confirming the order of the CIT(A) in deleting the addition - Tribunal dated 31st October, 2012 stands modified by the order dated 10th July, 2015 passed in Miscellaneous Applications Held that:- So far as Questions (a) to (d) are concerned, Revenue is not pressing the same. So far as Question (e) is concerned, at this stage, we decline to answer the same. This is so as otherwise we would have two Appeals from the same order i.e. dated 12th August, 2012 as modified by the order dated 10th July, 2015 of the Tribunal in respect of the subject Assessment Year. Moreover, it is likely that if this Appeal is disposed of after the impugned order being modified by the order dated 10th July, 2015, question may arise whether it is open to file a fresh Appeal from the same order. In the circumstances, it would be more appropriate if Revenue file one consolidated Appeal from the impugned order dated 31st October, 2012 as modified by the order dated 10th July, 2015 passed by the Tribunal in the Miscellaneous Application, urging all its questions. In view of the above, though we dismiss the present Appeal, we grant liberty to the Revenue to raise all issues including the one raised here by filing a fresh appeal from the order dated 31st August, 2012 as modified by the order of the Tribunal dated 10th July, 2015 on the rectification application.
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2015 (9) TMI 328
Interest free deposit in favour of the sister concern - excess security deposit purportedly made by the Assessee in respect of renting of the premises from DEWPL - liability to TDS under Section 194H - Held that:- The making of the interest free deposit in favour of the sister concern was its business decision and it gained no undue advantage. On the second issue, it was held that the elements of income were not embedded in the reimbursement made to its sister concern and therefore the Assessee was not obliged to deduct TDS. As regards reimbursement made to KPL, as pointed out by the ITAT, it did not appear to have any element of income warranting deduction of tax at source under Section 194C of the Act. The ITAT also concurred with the view of the CIT (A) that since no element of income was embedded in the reimbursement, the Assessee was not obliged to deduct TDS. The decision entirely appears to be on factual basis. Relevant to AY 2009-10, the other issue concerns the travelling expenses paid to dealers. There was no basis for AO to come to the conclusion that this payment was actually in the nature of commission to the agents. It was noticed that the entitlement to foreign travel was not proportionate to the volume of business conducted through a particular dealer/sub-dealer. Anyone who achieved the actual sale target was entitled to visit the foreign destination. In order to characterize the payment as commission, for the purposes of Section 194H of the Act, it was essential first to establish the relationship of principal and agent, which admittedly was absent in the case of the Assessee. Consequently, the CIT (A) correctly held that the foreign travel expenses of the dealers could not be disallowed under Section 40(a)(ia) of the Act. - Decided in favour of assessee.
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2015 (9) TMI 326
Transfer pricing adjustment - Whether transaction by which incipient (raw material for manufacture of Human Mono component and Highly Purified insulin in 40 IU Vials) is supplied by Novo Nordisk A/S to TPL and the transaction by which the Assessee engages the services of TPL to convert the incipient into Human Mono component and Highly Purified insulin in 40 IU Vials and ultimately sells the same in Indian market on behalf of Novo Nordisk A/S. can be considered as an International Transaction between two Associated Enterprises attracting the provisions of Sec.92(1) of the Act? - Held that:- The transaction by which supply of excepients was made by Novo Nordisk A/S to TPL was in effect an international transaction between the Assessee and Novo Nordisk A/S. The income from such transaction had to be computed having regard to Arm’s Length Price as laid down in Sec.92(1) of the Act. The conditions laid down in Sec.92B(1) of the Act are satisfied and there is no necessity in our view to look to the provisions of Sec.92B(2) or Sec.92A(2) of the Act, though the reasons given by the DRP in its order on this aspect also, in our view is acceptable. The transaction between TPL and the Assessee for manufacture of Human Mono component and Highly Purified insulin in 40 IU Vials, in our view, cannot fall within the ambit of the provisions of sec.92(1) of the Act. The reason for the above conclusion is that tax base erosion in India can happen only at the point of time of supply of insulin crystals by Novo Nordisk A/S. Thereafter it is the Assessee who gets the crystals converted into manufacture of Human Mono component and Highly Purified insulin in 40 IU Vials and sells it in the Indian market. This transaction cannot result in erosion of tax base in India. The income of TPL from manufacture is subjected to tax in India. The sale of finished products by Assessee is subjected to tax in India. Therefore there can be no tax base erosion in India from the transaction of manufacture of Human Mono component and Highly Purified insulin in 40 IU Vials by Assessee through TPL. - Decided in favour of assessee. Determination of ALP - Whether the transaction of supply of raw material excepient/insulin crystal by Novo Nordisk A/S to the Assessee can be benchmarked for the purpose of determining ALP together with the international transaction of import of products directly from Novo Nordisk A/S and selling the same in India ( which is purely distribution function performed by the Assessee on behalf of Novo Nordisk A/S) on the plea that both the transactions are interlinked and therefore have to be benchmarked together? - Held that:- The two transactions have no connection whatsoever and can be evaluated individually. While the sale of imported products is a trading activity, the purchase of raw material would be part of manufacturing activity and different parameters would need consideration for determining ALP of the two transactions. We find that the TPO characterized both the transactions as “Manufacturing” and adopted a combined approach in determining ALP. The DRP has also fallen into the same error. The DRP carved out the consideration in so far as it relates to supply of raw material by Novo Nordisk A/S is concerned but applied “Profit Split Method” (PSM) and determined a sum of ₹ 3.14 crores as addition to be made on account of adjustment to ALP. In our view the entire approach by the TPO and DRP in this regard is erroneous. In our view it would be just and appropriate to set aside the order of the TPO /DRP in this regard and direct that the determination of ALP of the international transaction of (i) supply of raw material by Novo Nordisk A/S to the Assessee and (ii) import of product directly from Novo Nordisk A/S and sale of such products, which is in the nature of trading, separately. The segmental results as given by the Assessee in the chart given as ANNEXURE- 1 to this order should be adopted in this regard. As to what is the Most Appropriate Method (MAM) to be adopted will depend on the stand taken by the Assessee in its TP study and the opinion of the TPO on the approach adopted by the TPO. The application of Profit Split Method (PSM) as the MAM in our view requires reconsideration, as the Assessee’s request for a personal hearing before applying PSM as MAM has not been considered by the DRP. The subvention fee is claimed to be paid by Novo Nordisk A/S just to help the Assessee to help survive and that there is no specific services rendered by the Assessee. The subvention fee will therefore need to be set off against any transfer pricing adjustment that might ultimately be made. Thus the subvention fee will not be subjected to any ALP test and will only go to reduce the addition on account of determination of ALP, if any, that might ultimately survive - Decided in favour of assessee by way of remand. Disallowance made u/s.40(a)(ia) - Held that:- The order of the AO making disallowance u/s.40(a)(ia) of the Act which was sustained by the AO/DRP is set aside and the issue of disallowance u/.s.40(a)(ia) of the Act is directed to be decided afresh by the AO in the light of the certificate in form No.26-A filed by the Assessee and in the light of the decision referred to by the learned counsel for the Assessee. The correctness of the sale value as claimed by the Assessee will also be verified by the AO. The AO will afford opportunity of being heard to the Assessee before deciding the issue with liberty to furnish additional evidence to substantiate the claim of the Assessee. - Decided in favour of assessee by way of remand. Determination of ALP in respect of an international transaction of rendering IT enabled Services(ITES) by the Assessee to its AE - issue of inclusion/exclusion of companies as comparables - Held that:- Accentia Technologies Limited be excluded from the list of comparables as there was acquisition of a company by M/s. Accentia Technologies Limited during the relevant year, and the said company, therefore, cannot be considered as comparable due to this extraordinary event which occurred in the relevant year as rightly held by the Tribunal inter alia in the case of Excellence Data Research P. Ltd. (2014 (9) TMI 126 - ITAT HYDERABAD ). Infosys BPO be excluded from the list of comparables as the said company cannot be taken as comparable because of its uncomparable size of operations. See CIT Versus Agnity India Technologies Pvt. Ltd. [2013 (7) TMI 696 - DELHI HIGH COURT ] Adjustment in the arm’s length price with respect to co-ordination/monitoring services relating to clinical trial activities undertaken in India provided by the Assessee to its associated enterprises - Held that:- Facts with regard to the activities carried out by it on behalf of the AE for which the Assessee received administrative support service fee are within its knowledge. It has to substantiate that clinical research was in fact carried out by a third party pursuant to agreement with the AE and not with the Assessee and that the Assessee only carried out coordination activity for which it received payment from AE. Mere assertion before TPO/DRP and description of functional profile in the TP study will not be sufficient. We therefore direct the TPO to consider the issue afresh. The Assessee has to substantiate the real activities with supporting evidence and show that it did not carry out any clinical trial and that it acted only as co-ordinator between the AE and independent clinical trial service providers or hospitals. In the event of the Assessee’s activities held to be clinical trial than the AO/TPO shall afford the Assessee opportunity to object to the comparability of the comparables that has been chosen or might be chosen by the TPO and in particular the additional evidence in the form of annual reports of Choksi Laboratories Ltd., NG Indusrtries Ltd. And Suven Life Sciences Ltd., sought to be filed before us should be permitted to be filed in the set aside proceedings. - Decided in favour of assessee by way of remand.
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2015 (9) TMI 325
Transfer pricing adjustment - CIT(A) deleted the addition - Held that:- For A.Y.04-05, similar issue has been decided by ITAT in favour of assessee following case of associate concern viz. M/s Dishman Pharmaceuticals & Chemicals Ltd. In view of above, CIT(A) was justified to direct the Assessing Officer to delete the adjustment made in assessment order in respect of Arm’s Length Price because PBIT of 17.13% is very much comparable and better than the industry average of 12.87%. Even margins with AE at 16.66% are better than overall PBIT. TPO was not justified in applying comparable Uncontrolled Price method and compare the purchase of 72,000kgs. Worth ₹ 5,25,69,297/- made from Germany with meager quantity of 2,000 kgs. Worth of ₹ 10,40,000/- made from Indian Party. Domestic and international rates cannot be compared. Fundamental requirement, in any of the method selected, is selection of comparables for benchmarking international transaction. Assessing Officer ought to have taken into consideration FAR analysis and should also take into account various factors such as, quality, quantity, pricing factors, government policy and transportation cost before comparing controlled transaction with uncontrolled transaction. Assessing Officer ought to have evaluated all the methods of transfer pricing, however, he selected directly CUP method being easy in apply. Assessing Officer has taken price from Database without pointing out any comparable cases. The industry average is not a comparable instance as held by the Special Bench in case of Aztec Software & Technology Services Ltd. Vs. ACIT (2007 (7) TMI 50 - ITAT BANGALORE). In view of above decision, order of CIT(A) on the issue is upheld. - Decided against revenue. Additions on account of deficit/excess consumption of raw materials - CIT(A) deleted the addition - Held that:- As going through the order of ITAT for A.Y. 2002-03, wherein issue has been decided in favour of assessee wherein the appellant had shown less consumption of certain input raw material of ₹ 63,04,605/- and the only inference is the same have been purchased from outside the books of account and the same is liable to be added as the investment from undisclosed sources and the appellant has shown more consumption of certain items to the extent of ₹ 1,32,57,449/- which has not been consumed and therefore, the purchased to this extent have been inflated to reduce the profit of the company. Thus the total addition which is liable to be made is ₹ 1,95,62,054/-. After considering the addition of ₹ 89,10,074/-, the income which is to be further enhanced is ₹ 1,06,51,333/-. Therefore, the AO is directed to enhance the income by ₹ 1,06,51,980/- Accordingly this ground is dismissed with direction to enhance the income by ₹ 1,06,51,980/- - Decided against revenue Interest expenditure disallowed u/s 36(I)(iii) - CIT(A) allowed claim - Held that:- CIT(A) granted relief to assessee by observing that issue is directly covered by the decision of S. A. Builders [2006 (12) TMI 82 - SUPREME COURT] wherein it has been held that money advance to sister concern can be considered as out of commercial expediency. In present case, money has been advanced to sister concern out of commercial expediency and therefore, following the decision of S. A. Builders (supra), no disallowance is called for. In any case, assesse has substantial interest free funds at its disposal so as to justify the advance to Associate concern as per accounts, obtaining balance of M/s. Dishman Pharmaceutical & Chemicals Ltd. was outstanding at ₹ 4 crore against which paid up capital and surplus of assesse was at ₹ 1,50,00,000/- and ₹ 6,98,59,670/- respectively. Further during year under consideration, assesse has given sum of ₹ 2,70,00,000/- to M/s. Dishman Pharmaceutical & Chemicals Ltd. against which they have returned amount of ₹ 3,85,90,000/- and therefore, on contrary, amount has been repaid during year under consideration. In view of this, disallowance was correctly deleted. - Decided against revenue Deemed dividend u/s 2(22)(e) - CIT(A) delted the addition - Held that:- As assessee and M/s Dishman Pharmaceuticals & Chemicals Ltd, both are engaged in business of manufacturing bulk drugs and chemicals. One of the condition for invoking provisions of Section 2(22)(e) of the Act is that money should be paid either by way of loans or advances. CIT(A) has rightly observed that these amounts are in nature of Inter Corporate Deposits (ICD), which has been given one corporate to another corporate and therefore, no loan or advance as contemplated u/s.2(22)(e) of the Act. CIT(A) from the ledger accounts observed that such accounts are in nature of deposits. Assessing Officer failed to appreciate that term ‘deposit’ cannot means ‘loan’ or ‘advance’. Accordingly, CIT(A) was justified in observing that Inter Corporate Deposits (ICD) being different from loans or advances, will not come under the purview of deemed dividend u/s.2(22)(e). See Bombay Oil Industries Ltd. vs. DCIT [2009 (1) TMI 519 - ITAT MUMBAI] - Decided against revenue
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2015 (9) TMI 324
Revision u/s 263 - assessee claimed wrong exemption of ₹ 3,56,96,300/- against the total investment of ₹ 2,54,62,812/- under section 54 - Commissioner of Income Tax noted that the assessee had sold farm house, therefore, cannot claim deduction under section 54 of the Act and further the assessee is not entitled for deduction under section 54F - Held that:- It is clear that the specific queries were raised by the Assessing Officer at assessment stage regarding long term capital gains and the Assessing Officer was satisfied with the explanation of the assessee. This itself would be an indication of application of mind by the Assessing Officer while passing the assessment order. When the Assessing Officer was satisfied with the explanation of the assessee with regard to the claim made under section 54 of the Act and he made part addition on the same, therefore, no fault could be found with the order of the Assessing Officer. When the Assessing Officer has adopted one of the courses permissible in law and the Commissioner do not agree with him, it cannot be treated as erroneous order prejudicial to the interests of the Revenue unless the view taken by the Assessing Officer is unsustainable in law Thus Assessing Officer examined the issue of long term capital gain in accordance with section 54 of the Act at assessment stage, therefore, assessment order cannot be said to be erroneous in so far as prejudicial to the interests of the assessee. The learned Commissioner of Income Tax was, therefore, not justified in cancelling the assessment order under section 143(3) of the Act. He should not have exercised the jurisdiction under section 263 of the Income Tax Act. - Decided in favour of assessee,
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2015 (9) TMI 323
Disallowance of payment of interest u/s 40(a)(ia) for non deduction of tax - Held that:- Section 40(a)(ia) would cover not only to the amounts which are payable as on 31st March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirement of the said provision exist. By following the judgments of the Calcutta High Court in Crescent Export Syndicate (2013 (5) TMI 510 - CALCUTTA HIGH COURT) and the Gujarat High Court in Sikandarkhan N Tunvar (2013 (5) TMI 457 - GUJARAT HIGH COURT), this Tribunal is of the considered opinion that the decision of the Special Bench of this Tribunal in the case of M/s Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] and the judgment of the Allahabad High Court in Vector Shipping Services (P) Ltd (2013 (7) TMI 622 - ALLAHABAD HIGH COURT ) are not applicable to the facts of the case under consideration whereas the judgments of the Calcutta High Court in Crescent Export Syndicate (supra) and the Gujarat High Court in Sikandarkhan N Tunvar (supra) are squarely applicable to the facts of the case. We do not see any infirmity in the orders of the lower authorities. Accordingly, the orders of the lower authorities are confirmed. - Decided against assessee.
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2015 (9) TMI 322
Rejection of books of accounts - trading addition - CIT(A) deleted the addition - CIT(A) deleting the addition made by the AO on account of undisclosed sale - whether assessee could not prove that the scrap was retained by the job workers? - Held that:- The assessee's regular books of account cannot be rejected on the basis of the issues like stock of oil and lubricants and consumables stores which constitutes day to day purchases and the stock is comparatively small. Besides such items being inflammable on preponderance of probabilities also can't be stored in huge quantity. Similarly, maintaining the consolidated trading account of manufacturing and job work also cannot be a reason to reject the books of account inasmuch as they are interconnected. Assessee deals in manufacturing and job working for self and others.The books of account are maintained on consistent accounting practices in earlier years and no such rejection has been made. The books of account were upheld in earlier years. AO rejected the books of account in AY 2006-2007 ITAT found that these defects are not major and the books of account of the assessee cannot be rejected on ipse dixit. Apropos scrap generation, there is no evidence at all to show that vendors or sub-vendors returned the scrap which was sold by the appellant outside the books of account. As evident, the job workers had not returned the scrap to the appellant, sub vendors including M/s. Alankar Automobiles (P) Ltd. had shown income from sale of scrap of ₹ 3,30,000/- in its books of account. There being no evidence on the record to suggest that these sub-vendors had ever returned the scrap to assessee, no adverse inference can be drawn against the appellant merely on surmise and conjectures. Apropos trading additions, assessee had furnished quantitative details of raw materials consumed, finished goods produced, scrap generated and burning loss. Consequently there was no justification in the rejection of books of the assessee, therefore no estimation of GP can be resorted to in the given facts and circumstances. The AO's allegation that the job charges paid to sister concerns is in violation of Section 40A(2)(b) was not established by citing any projection of unreasonableness or comparative cases. Similarly, non-returned of scrap by sister concerns is comparable with unrelated concerns and held to be a customary practice in this trade. Relevant TDS was deducted from the job workers which were duly paid in the Govt. treasury and no discrepancy whatsoever was indicated in this behalf. Since the books of account are upheld, there is no question of applying the estimation of gross profit. Besides, assessee's GP is better than assessment year 2006-07 and 2007-08. In assessment year 2006-07, ITAT dismissing revenue appeal, in assessee's own case upheld the gross profit rate at declared GP of 14.54%. Thus the assessee gross profit is as long as 14.54%. Therefore, the current year gross profit rate cannot be held to be low. See ACIT vs. M/s. Pushp Enterprises [2015 (3) TMI 1019 - ITAT JAIPUR] - Decided in favour of assessee.
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2015 (9) TMI 321
Validity of the re-assessment proceedings u/s.147 - Commissioner of Income Tax (Appeals) sustaining the order of the Assessing Officer who had made addition by invoking the provisions of section 45(4) and treating the settlement of an asset in favour of the retiring partner as capital gain - CIT(A) confirmed re-assessment order and additions thereon - Held that:- It is pertinent to mention here that the transfer of the asset is by the firm which is a “legal entity” to the retiring partner another distinct legal entity being an “individual”. Therefore, it is crystal clear that capital gain will arise in the hands of the transferor viz. the assessee firm and not the transferee viz. the retiring partner Mrs. Aruna Visvewar. Section-45(4) of the Act mandates the assessee firm to be liable for capital gain tax arising out of the transfer of its asset to the retiring partner even in the circumstance when the partnership is reconstituted on retirement of a partner. Further, the loan taken by the assessee firm for purchase of the asset which is transferred cannot be factored because the loan does not alter the cost of the assets purchased or the value of the asset transferred to the transferee. Therefore we do not have any hesitation to confirm the order of the Ld. CIT (A) as well as the order of the Ld. Assessing Officer. - Decided against assessee.
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2015 (9) TMI 320
Validity of assessment order u/s.153 C r.w.s.153 A - penalty u/s.271(1)(c) - Held that:- A Although various additions were made we are confined to the penalty levied on addition of ₹ 11,50,000/- made by the Assessing Officer u/s.68 of the I.T. Act and proportionate interest thereon amounting to ₹ 2,53,000/-. Admittedly, apart from the addition of ₹ 5 lakhs no other addition has been made on the basis of incriminating material found and seized from the premises of Shri Shreeram H. Soni which relates to the assessee. The loan amount of ₹ 6,50,000/- obtained from different persons are already appearing in the balance sheet filed in the original return of income and nothing was detected due to the search. Further, the Assessing Officer in the assessment order has made addition on the ground that although the assessee filed the confirmation letters, however, the assessee could not file the PAN numbers, and addresses of the concerned loan creditors. This in our opinion may be sufficient for making addition in the quantum proceedings but certainly not in the penalty proceedings for levy of penalty u/s.271(1)(c) of the I.T. Act in an assessment framed u/s.153C r.w.s. 153A. In this view of the matter we hold that the assessee is not liable to penalty u/s.271(1)(c) of the I.T. Act on the amount of ₹ 6.50 lakhs since the same was not based on any incriminating material found during the course of search and the addition was based on the basis of loan creditors found from the balance sheet already filed prior to the search along with the original return of income. We accordingly set aside the order of the CIT(A) and direct the AO to cancel the penalty levied on addition of ₹ 11,50,000/- and proportionate interest thereon. The grounds raised by the assessee are accordingly allowed. - Decided partly in favour of assessee.
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2015 (9) TMI 319
Addition made u/s 68 - assessee trust has violated the conditions for grant of exemption u/s 12A - CIT(A) deleted the addition - Held that:- . On a consideration thereof on facts, we are of the view that the impugned order cannot stand in the eyes of the law. The CIT(A) has failed to address the speaking findings on record made by the AO namely that the assessee had collected funds through illegal means. The so called donations through entry operators who admittedly did no business whatsoever and only provided accommodation entries cannot be termed as “donations” let alone “voluntary donations” in the eyes of law. It is a matter of record that at the relevant point of time the assessee was in need of funds for making payments to DDA and the urgency in the need of funds as per record was addressed by arranging the funds through illegal means in contravention of law. These facts on record have not been addressed by the CIT(A). The impugned order in both the years is contrary to the facts on record and also the judicial precedent cited by the Ld. Sr. DR who has placed reliance on the judgement of the Delhi High Court in the case of CIT vs Sh. Vishwa Vigyan Telugu Linguistic Minority Education Society (2012 (6) TMI 542 - DELHI HIGH COURT ). Accordingly in view of the detailed reasons given hereinabove, we find that the departmental appeal deserves to be allowed. The impugned order having failed to address the relevant crucial facts considering the judicial precedent is set aside. The issue is restored back to the file to the CIT(A) with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. - Decided in favour of revenue for statistical purposes.
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2015 (9) TMI 318
Penalty under Section 271(1)(c) - Assessee did not adjust the dividend income against short-term capital gain in view of Section 94(7) - Tribunal held that penalty under Section 271(1)(c) is not leviable when parameters laid in Explanation 1(B) of Section 271(1)(c) stands satisfied - Held that:- Order of the Tribunal is based on finding of fact, which is not shown to be perverse as Tribunal held that the respondent-assessee having made complete disclosure in the return of income, the fact that during the assessment proceedings a claim was made by the respondent - assessee to the effect that Section 94(7) would not be applicable in their case, cannot be a ground for imposing penalty. The Tribunal relied upon the decision of the Apex Court in the matter of CIT v. Reliance Petroproducts (P.) Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein it has been held that levy of penalty is not justified merely because a claim made by the assessee has been rejected. The Tribunal also records a finding of fact that all details of loss claimed has been stated in the return of income and making a bona fide claim to be exempted from the provisions of Section 94(7) would not amount to furnishing of inaccurate particulars or concealing income on the part of the respondent - assessee. - Decided in favour of Assessee.
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Customs
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2015 (9) TMI 369
Classification of Vessel with surplus fuel under CTH 8908 – Appellants filed bills of entry for clearance of vessels alongwith surplus fuel to be classifiable under CTH 8908 – Vide impugned order redemption fine and penalties in respect of importation of vessels for breaking purpose along with surplus fuel was imposed – Held that:- Tribunal on identical issue in case of A G Enterprises and Others vs. Commissioner of Customs (Prev.) Jamnagar [2014 (8) TMI 44 - CESTAT AHMEDABAD] held that as per clarification/opinion of Joint DGFT, surplus fuel stored in fuel tanks of vessels/ship brought for breaking up is classifiable under 89.08 along with main vessel – Well settled law that clarifications on Import Policy issued by office of DGFT is binding on Customs – As imports under ITC(HS) 89.08 are free without any restrictions, therefore, such MGO/HSD contained in vessels brought in for breaking up, cannot be held as liable for confiscation under Customs Act, 1962 and no penalties upon appellants are imposable – In view of decision of Tribunal appeals are allowed –Decided in favour of Assesse.
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2015 (9) TMI 345
Mis-declaration of country of origin – Imposition of duties, fines and penalty – Commissioner vide order imposed duties, redemption fine and penalty – Tribunal set aside order of Commissioner after re-appreciating entire evidence – Whether tribunal is right in setting aside order imposing duties, fines and penalty – Held that:- no material was produced by Department to indicate payment by assesse importer on basis of such alleged invoice showing higher amounts – Declaration of country of origin were to be made by supplier/exporter, if goods bore Australia marking, Appraising Officers of Department should have objected at time of import – Since no objection was raised at time of import, assessments cannot be reopened for valuation under guise of mis-declaration of country of origin – No cogent material was collected to substantiate allegations – It is matter of year 1997 and it seems that exercise of remitting matter back may be futile – Therefore, appeal dismissed as no question of law involved – Decided against Revenue.
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2015 (9) TMI 344
Classification of Ghana Teak rough Square Logs - Tribunal vide impugned order [2005 (7) TMI 137 - CESTAT, NEW DELHI] set aside order of commissioner and upheld classification of goods only under Heading 44.03 of CETA - Supreme Court after going through the orders passed by Appellate Tribunal, court found that all nuisances have been taken into consideration and discussed while holding that goods in question, viz., 'Ghana Teak rough Square Logs' would be classified under Heading 44.03 - Therefore, court of opinion that no question of law arises - Appeal dismissed.
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2015 (9) TMI 343
Conspiracy to make fictitious exports – Retraction of statement – Cross-examination of Witness – Tribunal in second round allowed Revenue appeals and imposed penalty under section 14(1) of Customs Act, 1962 upon appellant by concluding that both appellant and one other were involved in transactions which led to inflated and bogus claims of refund / rebate / drawback – Held that:- Adjudicating Authority observes that allegations against appellant are that he entered into conspiracy to make fictitious export to Russia against repayment of state credits granted to erstwhile Soviet Union Republic (USSR) and colluded with others – Appellant retracted his statements at first available opportunity – He filed additional interim reply specifically stating therein that DRI and his officials coerced him to write statement inculpating him – This affidavit, though received by DRI, has not been rebutted – Tribunal has not concluded that Commissioner's reasoning is either perverse or vitiated by any error of law apparent on face of record – Instead, Tribunal makes reference to general principle that retraction of statement and cross-examination of certain persons would not make any dent in plethora of evidence produced by Department and confessions of various persons – Therefore, further finding that case cannot be demolished merely by cross-examination of witnesses by ignoring circumstances and corroborative evidence is equally vitiated because crossexamination may contain admissions – Thus, Tribunal's conclusions cannot be sustained and are vitiated by errors of law apparent on face of record – Tribunal's order deserves to be quashed and set aside – Decided in favour of appellant.
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2015 (9) TMI 342
Possession of Contrabands – Appeal against Conviction – Appellant stood convicted under Section 20(b)(ii)(c) of NDPS Act for being in possession of 61.49 kg ganja and has been sentenced to undergo Rigorous Imprisonment and to pay fine – Held that:- PW.4 along with PWs. 1, 3 and 6 have denied suggestions that nothing was recovered from possession of appellant and that all proceedings was conducted in police station – PW.9 clearly demonstrates that only four sealed sample were send to FSL, and not FSL form along with same – FSL form, is an important safe guard to avoid any suspicion and same not having been sent to laboratory along with sealed samples raises serious doubts about samples being tampered with – There is no DD entry regarding such secret information having been received by PW.4. – Total non-compliance with requirement of Section 42 has been held to be impermissible – Though there has been delay of one and half months in sending sample to FSL, there is nothing on record to suggest or to come to opinion that said sealed samples were tampered with – Based on findings, it is difficult to uphold conviction –Appeal allowed and appellant directed to be released from custody – Decided in favour of Appellant.
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2015 (9) TMI 341
Evasion of duty – Appeal against conviction – BSF apprehended accused while traveling on motorcycle and 213 gold biscuits of foreign origin were recovered – Trial Court ordered conviction and sentence accused 3 and 5 under Section 135 while accused-4 was declared proclaimed offender – In appeal accused-5 was acquitted while conviction of accused-3 was upheld – Held that:- Evident from statements of accused-3 parents as well as her confessional statement that she had been forced to accompany her parents on day of recovery – Accused-3 was unmarried girl at relevant time and had no option but to succumb to pressure of her parents – In these circumstances, it would be just and expedient to reduce sentence qua imprisonment of accused-3 to period already undergone by her – Accordingly, conviction of accused-3 under Section 135 of Act is upheld – However, sentence qua imprisonment is reduced – Revision hereby disposed of.
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2015 (9) TMI 340
Cancellation of LEO grant – Furnishing of bank guarantee – Second respondent cancelled LEO granted to petitioner, thereby, petitioner was prevented from exporting river sand to Maldives – Single Judge passed order of interim direction by which, petitioner was directed to furnish Bank Guarantee for value of entire sand, which has been loaded in vessel and direction was issued to 1st and 2nd respondents to issue necessary sail order to Vessel subject to furnishing Bank Guarantee – Held that:- Admittedly petitioner complied with order and has furnished Bank Guarantee – Export of quantity of 3,750 MT of river sand has already been completed – Therefore there is no necessity to pass any orders since export has already been completed subject to certain conditions, which was not questioned by Customs Department – No further order is required to be passed – Petition closed. Selling of unshipped quantity of goods – Petitioner challenges order passed by 2nd respondent to sell unshipped quantity of 250 MT of River sand – If second respondent is of opinion that sand, which was sought to be exported and presently lying in Karaikal Port premises has been quarried elsewhere other than Karaikal, that should have been ascertained after proper adjudication into matter for which purpose, petitioner should have been afforded opportunity – Since this procedure having not been followed, prima facie conclusion arrived at by 2nd respondent have to be faulted – However, in order to safeguard interest of Revenue, Court inclined to issue directions without setting aside impugned proceedings – Petition disposed of.
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2015 (9) TMI 339
Evasion of Duty – Smuggling foreign origin silver – Appellants were intercepted with silver slabs and they did not had any valid document for possessing recovered silver – They were convicted and sentenced under section 135 of Customs Act, 1962 – Held that:- there were ample evidence on record that applicants were smuggling foreign origin silver slabs and thus have contravented provisions of import (control) order No. 17/55 – Thus conviction of applicants was based on proper appreciation of evidence, therefore, conviction recorded by Courts hereby maintained – Section 135(3) provides reasons which shall not be considered as special and adequate reasons for awarding sentence of imprisonment for term of less than one year – Applicant No. 2 has undergone surgery and had filed medical papers before Court – Considering his ill-health and sentence already suffered, appellant-2 has made out case for imprisonment of sentence less than one year – Appellants have already suffered jail sentence of about 20 months, in such circumstances their jail sentence reduced up to 20 months – Decided partially in favour of Appellants.
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FEMA
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2015 (9) TMI 338
Application filed beyond period of limitation – Condonation of Delay – Appeal was preferred against final order of Tribunal which was allowed and order of adjudication was quashed – Aggrieved by said order of tribunal, appeal was filed before High court which is objected on ground that it has been preferred beyond period of limitation – Held that:- Apparently, appeal has been filed after inordinate delay of 832 days. Section 35 of FEMA permits appeal to be filed within 60 days from date of communication of order of Appellate Tribunal on any question of law – Proviso authorises High Courts to extend appeal to be filed within next 60 days, if it is satisfied that appellant was prevented by sufficient cause – Undoubtedly, Section 54 FERA permits appeal to be filed to High Court within 60 days – High Court shall not entertain any appeal under Section 54 if filed after expiry of 60 days unless High Court is satisfied that appellant was prevented by sufficient cause. Reasons given by appellant for delay in filing appeal do not constitute sufficient cause –Rather reveals that there was inaction and negligence on part of various officers – No attempt was made for long seven months to rectify it and refile appeal – Application for condonation of delay cannot be decided as matter of routine as vested right accrues in favour of opposite party and benefit of such right cannot be disturbed lightly – No merit found in application of appellant seeking condonation of delay – Accordingly, other applications are also dismissed – Decided against Applicant
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Service Tax
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2015 (9) TMI 368
Admission of additional evidence - Classification of service - Advertising agency service or Renting of immovable property - appellants have contended that they were not providing any advertising agency service and were in fact renting space from Railways which they used to further give on rent - Held that:- Commissioner (Appeals) referred to Rule 5 of the Central Excise (Appeals) Rules, 2001 and held that additional evidence can be considered only when the adjudicating authority has refused to admit evidence which ought to have been admitted or the appellant was prevented by sufficient cause from producing the evidence which he was called to produce by the adjudicating authority or where the appellant was prevented before the adjudicating authority in evidence which is relevant to any ground of appeal etc. Accordingly the Commissioner (Appeals) refused to admit evidence relating to the contention of the appellant that they were only renting out the space which they themselves rented from the Railways and were not providing any advertising agency service. - in the interest of justice additional evidence in support of the appellants' aforesaid contention should be admitted - matter remanded back - Decided in favor of assessee.
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2015 (9) TMI 367
Denial of CENVAT Credit - supplementary invoice - service provider had paid the service tax after detecting by the department - Interest u/s 11AA - Business Auxiliary Services - Job works - Suppression of facts - Held that:- Service provider has carried out the job on the material supplied by the appellant and the said job work goods returned to the appellant. Appellant has used the said goods in the manufacture of other final product which has been cleared on payment of duty. Thus job work activity was exempted from payment of service tax. In view of this position when activity itself was not taxable and the appellant has discharged the service tax admittedly due to pointing out by the audit officers no suppression can be alleged. It was also observed that Jurisdictional officer of service provider has not issued any show cause notice to the service provider for recovery of the service tax. Service provider made categorical request for waiver of show cause notice under Section 73(3) of Finance Act, 1994 on the ground that they have paid service tax alongwith interest. Payment of service tax by the service provider and issuance of supplementary invoices there against there is no suppression of facts on the part of the service provider. It is also observed that in the entire proceedings, in the present case, only ground for denial of Cenvat Credit is that service provider has paid service tax on detection by the department. Merely because department has detected and service provider has paid service tax, that alone is not sufficient to make allegation that there is suppression of fact on the part of the appellant. - since there is no suppression of facts, misdeclaration, fraud etc. on the part of the service provider in making payment of service tax and issuance of supplementary invoices, the appellant has correctly availed the Cenvat Credit, therefore impugned order is modified - Decided in favour of assessee.
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2015 (9) TMI 366
Condonation of delay - Issue related to Renting of immovable property - Held that:- It is not in dispute that similar issues with respect to taxability of services rendered in the renting of immovable property are pending before the Supreme Court in the case of M/s Retailers Association of India v. Union of India & Ors, and further the appellants own case for the earlier and subsequent years are pending before the Tribunal - Coupled with this fact, the aspect that the order dated 26.03.2012 came to be served on the employee of a sister concern and the same came to the notice of the appellant belatedly, cannot be ignored. No motive as such can be attributed to the appellant for not filing appeal in time, especially in view of the fact that the appellant is diligently agitating the issue involved as against the assessment for the previous years and also for subsequent years, which fact is not disputed before us. In the facts and circumstances of the case, the Tribunal could have taken a lenient view and, by putting the appellant on terms, could have condoned the delay. Inasmuch as the Tribunal failed to exercise the discretion, considering the facts of the case, we are inclined to allow the appeal, however, on condition of the appellant depositing a sum of ₹ 3,50,000 /- - Delay condoned.
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2015 (9) TMI 365
Order beyond the scope of show cause notice - interpretation of SCN - waiver of pre-deposit - whether a new or foreign case can be made out by an adjudicating officer without affording an opportunity to the noticee to defend the charge. - Composition scheme under Works contract service - In paragraph 4.13 of the Order-in-Original, the adjudicating authority have explicitly and clearly recorded the violation of Rule 3(3) of the said rules and held that since the conditions of the composite scheme has not been fulfilled, it cannot be accepted that any Service Tax has been paid on excavation service provided by the noticee in course of shaft sinking. Held that:- This Court does not find from the show cause notice that there is any reflection of Rule 3(3) of the said rules which could only see the light of the day in the order of the adjudicating authority. Though Mr. Das was much vocal in saying that during the recording of the evidence of the officer of the noticee, the offence to the said provision has been recorded but this Court does not find the aforesaid submission to be tenable. If in the preceding page of the show cause some recording which may justify the invocation of the aforesaid rules was apparent, there is no difficulty in including the aforesaid violation in paragraph 7 thereof where the authority jotted down the violation of the specific provision of the Act. Since this Court have simply decided on the ground that a matter foreign to the show cause notice was the basis for adjudication which is clearly impermissible in law, this Court find that the petitioner has made out a strong prima facie case for the purpose of dispensation of pre-deposit conditions. Since this Court has found that the petitioner has made out strong prima facie case, the CESTAT should have directed the total waiver. This Court, therefore, find that this order of the Tribunal is illegal, arbitrary and have been made without application of mind and is, therefore, not sustainable. - stay granted.
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2015 (9) TMI 364
Condonation of Delay - Delay in filing of appeal before Commissioner (Appeals) - petitioners claiming benefit of Section 14 of the Limitation Act of 1963, to exclude the time consumed in disposal of the writ petition before this Court in computation of the delay - Held that:- Sufficient cause is an expression which is found in various statutes. It essentially means as adequate or enough. There cannot be any straitjacket formula for accepting or rejecting the explanation furnished for delay caused in taking steps. - the causes shown for condonation have no acceptable value. In that view of the matter, the appeal deserves to be dismissed which we direct. There will be no order as to costs. There is tendency of those persons who are liable to make payment of the tax+interest+penalty to take a chance before this Court. This "chance taking petitioner" has filed a writ petition before this Court at his own peril and risk because some times it takes time for final adjudication of the writ and on another hand the period of limitation has already been started. It ought to be kept in mind by this type of "chance taking petitioner" that they should simultaneously prefer statutory appeals also so that whenever there are such type of clauses that limitation cannot be condoned beyond the period of thirty days the appeal may not be dismissed for want of condonation of delay. The petitioner is lethargic, but, certainly not an ignorant person and is knowing all fine niceties of law. Vigilant petitioner should have file their appeal within the limitation period or at least within condonable delay period. - Decision in the case of Flemingo (Duty Free Shop) Pvt. Ltd. [2015 (1) TMI 22 - BOMBAY HIGH COURT] followed - Decided against the assessee.
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2015 (9) TMI 363
Waiver of pre-deposit - export of service or not - air travel agents - commission / overriding commission - IATA agents - general sales agent, in respect of cargo sales and passenger sales - Extended period of limitation - Held that:- Circular No. 111, dated 24-2-2009 provides that if the benefits of the service accrues outside India, it will be export of taxable service. Furthermore, the issue of 5% commission paid to IATA agents and incentive paid to IATA agents, who have already discharged Service Tax liability, for the purpose of Service Tax, would have to be considered on merits so as to exclude those substantial amounts from out of the purview of tax liability mulcted on the appellant. The Tribunal has not considered the calculation as probable amount as shown above. This Court, prima facie feels that the Tribunal should have taken the above factors into consideration while ordering pre-deposit. The plea that the pre-deposit order is onerous, and would cause undue hardship on a running business organisation is, therefore, tenable. Further, the appellant has also pleaded that such pre-deposit will erode the working capital of the company and if the amount is directed to be paid, it will seriously jeopardize the running business of the appellant, which is a travel agent, and, its business would almost come to a standstill. The order of ₹ 35 lakhs as pre-deposit ordered by the Tribunal is modified and the appellant is directed to deposit a sum of ₹ 15 lakhs. - Decided partly in favor of assessee.
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2015 (9) TMI 362
Eligible person to get the refund - manufacture or the merchant exporter - Held that:- It is quite clear that refund of service tax is due either to the petitioner or to the merchant exporter. There is some dispute about who is entitled to the refund of service tax, but in any case, the respondents cannot hold the service tax since they are not entitled to do so. The service tax should be refunded to the petitioner within six weeks. In case, the merchant exporter has any issue in this regard with the petitioner, he can always take up the matter before an appropriate forum - Decided in favor of the assessee.
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2015 (9) TMI 361
Sponsorship service - matches conducted by the Indian premier League (IPL) - Apex Court dismissed the appeal against the order of tribunal [2014 (11) TMI 82 - CESTAT MUMBAI] wherein it was held that, sponsorship of sports events are exempted from the taxable service
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Central Excise
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2015 (9) TMI 356
Clandestine manufacturing and removal of goods - dummy job work units - fictitious invoices showing much lower quantities/value than the actual - tribunal had set aside the demand - Held that:- On going through the order of the Tribunal we find that the prime reason given by the Tribunal in support of its order is that there is hardly any evidence on record to prove the allegations made against the two respondents herein. We find this to be totally erroneous. We have already reproduced the material which was relied upon by the Commissioner in his order. It is for this reason that some of the discussion from the order of the Commissioner is extracted as well - Decision of tribunal reversed - Demand confirmed - Decided in favor of revenue.
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2015 (9) TMI 355
Levy of duty on walk-in cooler - Extended period of limitation - A Walk-in cooler consists of an insulated room with a door. A cooling unit is fixed on the top panel of this enclosure and cool air is blown in to maintain low temperature therein. - Whether in the nature of REFRIGERATING AND AIR-CONDITIONING APPLIANCES AND MACHINERY, ALL SORTS AND PARTS THEREOF falling under item no. 29A - Held that:- many High Courts had taken the view that the tax on Walk-in coolers would not be covered by item No.29A (3). If the assessee acted on the basis of the said position in law which was prevailing at that time (though over-ruled subsequently) it would show that the action of the assessee was bonafide. - Demand set aside on the ground of period of limitation - Decided in favor of assessee.
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2015 (9) TMI 354
Rectification of mistake - Earlier tribunal in [2014 (2) TMI 716 - CESTAT NEW DELHI] had rejected the application for rectifiation of mistake - Apex Court has restored the matter before the tribunal subject to the cost of ₹ 1,00,000/-.
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2015 (9) TMI 353
Exemption of duty on Yarn - effect of amendment notifications - the expression “or draw twisted or texturised yarn” was deleted and the entry then read “dyed, printed, bleached or mercerised, yarn whether single, multiple (folded) or cabled, manufactured in a factory, which does not have the facilities (including plant and equipment) for producing single yarn”. - The revenue does not dispute that the assessee is covered by entry against serial No. 116A of the Notification No. 34/97, dated 6th June, 1997. If that be so, then assessee is entitled to take benefit of exemption Notification No. 34/97 and it is exempted from payment of duty on dyed yarn. - the view taken by the Tribunal [2002 (8) TMI 221 - CEGAT, MUMBAI] is not legally flawed - Decided against the revenue.
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2015 (9) TMI 352
Valuation - inclusion of cost of transportation and insurance policy - Held that:- the insurance policy for the transportation of the goods was taken by the assessee on behalf of the purchaser - the cost of transportation and insurance could not have been included for arriving at the price of the goods for the purpose of excise duty.
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2015 (9) TMI 351
Duty demand - Duty paid through debit made in CENVAT Credit account - contravention of the provisions of Rule 8(3) of the Central Excise Rules, 2002 - Held that:- A bare reading of Rule 14 would indicate that where the assessee has taken or utilized wrongly or has been erroneously refunded the CENVAT credit, then authorities would be entitled to recover the same from the manufacturer or the provider of the output service and provisions of Sections 11A and 11AB of Central Excise Act or Sections 73 and 75 of the Finance Act would apply mutatis mutandis for effecting such recoveries. Thus, before initiating recovery proceedings, it would be incumbent upon the authorities to issue notice to the petitioners under Section 11A of the Act for having either utilized the CENVAT credit wrongly for bringing such action within the scope of sub-rule (3A) or to construe such transaction as having cleared the goods without payment of duty or in other words, such belated utilization of CENVAT credit for payment of central excise duty to be construed as one in contravention of sub-rule (3A) of Rule 8 - Court is of the view that impugned notices cannot be sustained as it is contrary to Rule 14 of CENVAT Credit Rules, 2004, and in violation of natural justice. - Decided in favour of assessee.
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2015 (9) TMI 350
Demand of penalty - willful mis-statement or suppression of facts or contravention of any of the provisions of the Central Excise Act or the Rules - Intention to evade duty - Held that:- The adjudicating authority having not recorded any such satisfaction there was no justification for upholding the imposition of penalty. The Tribunal may have recorded a single line conclusion and with regard to requantification of duty dispute, but we have independently perused the record, applied our mind and found that the ingredients of Section 11AC are not attracted to the given facts and circumstances. Therefore, even if the duty demand is confirmed, the Tribunal's direction deleting penalty is not required to be interfered with by us in our further appellate jurisdiction. - Once there was a scope for entertaining a doubt, and there is no willful mis-statement or suppression of facts, then, penalty is not called for. The imposition is only in the event the ingredients necessary to be satisfied are attracted and so satisfied - Decided against Revenue.
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2015 (9) TMI 349
Benefit of exemption under Notification No.8 of 1997 - Held that:- Notification No.8 of 1997 is not amended by Notification No.13 of 1998. It may have been amended by Notification No.7 of 1998 dated 2nd June, 1998, but that is not what has been pressed into service before us. What has been pressed into service is the allegation and in the show cause notice pertaining to the amendment to Notification No.8 of 1997 by a Notification No.13 of 1998. A perusal of the copy of the 1998 Notification does not reveal that it purports to or rather amends the earlier Notification No.8 of 1997. In the circumstances, the Tribunal's view is that if there are Notifications and granting benefits to an assessee in force, availment under one which was more beneficial could not be said to be an illegal or erroneous act. This finding of the Tribunal is imminently possible and given the fact situation. We do not find that the Notification either is superseded or amended as claimed by the Revenue. In the circumstances, the finding of fact does not raise any substantial question of law - Decided against Revenue.
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2015 (9) TMI 348
Duty demand - Tribunal reduced demand and penalty - Held that:- Specific finding of fact has been recorded relying upon the documentary evidence as well as on the admission of Sri Narendra Randhwa, Manager Export and Import of the company to the effect that the goods had been removed from the factory on the pretext of demonstration and repair purpose but had been ultimately disposed off in the DTA. The Tribunal has further recorded that although the counsel for assessee submitted that the goods cleared in DTA were manufactured from the indebtedness material but such statement could not be substantiated - finding recorded by the Tribunal could not be successfully assailed the only plea raised is that the notice had been sent at the address of the manufacturing unit which had been vacated by the assessee prior to the date of issuance of notice. order of the Tribunal proceeds on admission of the Manager, Export and Import and further the finding of service of notice being a finding of fact recorded by the Tribunal cannot be gone into by this Court after reappraisal of evidence as is suggested by the appellant. - Decided against assessee.
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2015 (9) TMI 347
Manufacture of polyester filament yarn - Penalty under Rule 173-Q - Imposition of redemption fine on seized goods - Held that:- Buyer M/s. Vidhya Packaging Industries Pvt. Ltd. had returned the goods vide challan No. 133 on 4-6-1997, i.e., a day prior to the alleged inspection. The quantity shown in this challan prepared by M/s. Vidhya Packaging Industries Ltd. tallies with the quantity found during the inspection. Further, we find that due intimation of return of goods was intimated by the respondent to the department concerned, which has been admitted and accepted by the department. Consequently, we are of the opinion that the return of goods appears to be a genuine transaction and is not an afterthought. No evidence has been brought on record by the department to indicate that no such goods were returned by M/s. Vidhya Packaging Industries Ltd. to the respondents. - goods found in the godown of the respondents at the time of inspection were not unaccounted goods but were goods returned from the buyer. The Tribunal was justified in setting aside the order of confiscation and imposition of fine and penalty. We are of the opinion that no substantial question of law arises for consideration in the present appeal. - Decided against Revenue.
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2015 (9) TMI 346
Imposition of penalty - Suppression of facts - Mens Rea - Held that:- entire amount of duty was paid on 29-5-2000 and 24-4-2001 prior to the issuance of show cause notice on 22-10-2002. In view of the admitted fact that the entire amount of ₹ 32,544/- was paid prior to the issuance of the penalty notice and, in the absence of any finding, that the assessee had suppressed the fact with the intent to avail the payment of duty having not been established beyond a reasonable doubt, we are of the opinion, that the show cause notice for imposition of penalty was unwarranted. - No error in the order of the Tribunal, which has cancelled the penalty - Decided against Revenue.
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CST, VAT & Sales Tax
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2015 (9) TMI 370
Rate of CST @2% or 1% - Industrial Policy of the State of Himachal Pradesh - period 01.04.2009 to 17.06.2009 - The whole thrust of the contention advanced by the State is that since the notification under the Act providing for tax concession was issued only on 18.06.2009 wherein it was specifically mentioned that the notification would have immediate effect and would operate for the period ending on 31.03.2013, the appellant is not entitled to the CST concession @ 1% for the intervening period between 01.04.2009 to 18.06.2009. The Government shall speak only in one voice. It has only one policy. The departments are to implement the Government policy and not their own policy. Once the Council of Ministers has taken a decision to extend the 2004 Industrial Policy and extend tax concession beyond 31.03.2009, merely because the Excise and Taxation Department took some time to issue the notification, it cannot be held that the eligible units are not entitled to the concession till the Department issued the notification. No doubt, the statutory notification issued by the Excise and Taxation Department under Section 8(5)(b) of the Act on 18.06.2009 has stated that the eligible units will be entitled to the concession with immediate effect. Merely because such an expression has been used, it cannot be held that the State Government can levy the tax against its own policy. As we have already clarified, it is not the introduction of a new policy but an extension of the benefits under the extended policy. - appellant shall be entitled to the concessional rate of CST @ 1 per cent with effect from 01.04.2009 till 31.03.2013 until it is duly varied by the State Government. - Decided in favor of assessee.
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2015 (9) TMI 360
Seizure of goods – False/incomplete disclosure – Petitions challenging action of respondent-commercial taxes authorities of seizure of goods in transit and vehicles/carriers for alleged violation of Section 60(2) of Bihar Value Added Tax Act, 2005 and action of imposing penalty – Petitioners also challenges constitutional validity of Section 60(4) – Held that:- not in dispute that disclosure made by driver was not true / complete – Section 60 of amended act, 2005 empowers State Government to establish check posts to prevent evasion of tax payable – In case where driver or person in-charge of goods fails to make true and complete disclosure, such failure gives rise to presumption of intention to avoid tax – In such case, authorities concerned are enjoined to seize goods and vehicle or carrier and to impose penalty – Challenge to action of respondent authorities in seizing goods and carriers and of imposing penalty, three times tax assessed on goods, has to be rejected – Respondent authorities acted in discharge of their official duty and cannot be said to be arbitrary or illegal. Constitutional validity of Section 60(4) and Notifications dated 4th July 2012 and 12th July 2012 – Held that:- Section 60 applies not only to goods in transit through State of Bihar, it applies to all goods which are brought in State of Bihar – Goods may have been brought for sale or use in State or goods may have been brought for passing through State – Evidently, Sections 60(3) and 60(4) Act, 2005 is invoked in case of goods which are believed to have been brought in State for sale or use in State, Article 304(b) of Constitution is not attracted – Therefore, challenge to constitutional validity of Section 60(4) rejected – Once statutory presumption of intention to sale or use of goods within State and of intention to avoid tax is raised, machinery prescribed for collection of tax is ancillary and incidental to "Taxes on sale or purchase of goods" under Entry 54 of List II of Schedule VII to Constitution – State Legislature is competent to raise legal presumption of intention to avoid tax and to legislate machinery to prevent tax evasion – Notifications have no bearing upon impugned actions of seizure of goods and vehicles/carriers and imposition of penalty by respondent authorities – Failure to publish Notification in Official Gazette will render Notification ineffective – But impugned Notifications being operational and having been operated, its validity or otherwise is of no consequence – Therefore challenge to Section 60(4) and Notification hereby rejected – Decided against petitioner.
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2015 (9) TMI 359
Classification of Fire Bricks – Entry 32, schedule I and Schedule VII – Assessing authority taxed sale of fire bricks as goods falling under entries 32 of 1st schedule – Deputy Commissioner revised order of authority treating them as unclassified goods / general goods falling under Schedule VII – Tribunal vide impugned order set aside order of commissioner and classified goods under entry 32 – Held that:- usage of these refractory bricks in regular construction work cannot be ruled out, especially considering fact of their quality of heat resistance – Supreme court in Advance Bricks case [1987 (9) TMI 379 - SUPREME COURT OF INDIA] accepted contention of dealer that in absence of classification of entry generic meaning of term in common parlance and dictionaries has to be accepted – Taking into consideration of huge variation in prices of sun-dried bricks to that of fire burnt bricks, Supreme Court accepted that sun-dried bricks and fire burnt bricks are of two categories, in absence of specific entry being there generic and natural meaning had to be given to entry and same would have to be taxed as falling in same entry – Thus, Revision dismissed – Decided against revenue.
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2015 (9) TMI 358
Non-production of ST-38 form – Goods Detained – Exempted Unit - Goods of petitioner were detained on ground that ST 38 form produced was blank and goods were not covered with genuine and proper documents, thereafter penalty was imposed – Tribunal by impugned order, partly allowed appeal by reducing penalty by 50% and holding that though petitioner was exempted unit, yet requirement of carrying duly filled ST 38 form was binding – Held that:- as observed by current court in M/s Crown Gaskets (India)'s case [2003 (10) TMI 617 - PUNJAB AND HARYANA HIGH COURT] where sales and purchases were not leviable to tax, it could not be said that person transporting goods was attempting to evade tax – Thus said principle would be applicable to current case – It was not controverted that petitioner was exempted unit – Though there was technical defect in not producing Form ST=38 but there was no attempt to evade tax – Therefore, sustaining of penalty under Section 37(6) of Haryana General Sales Tax Act, 1973 by Tribunal was unjustified – Petitions allowed – Decided in favour of Assesse.
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2015 (9) TMI 357
Levy of tax – Non-Submission of C-Form – Grant of Exemption Certificate – Petitioner was earlier granted exemption certificate however suo moto revision was taken against said order and petitioner was denied exemption on grounds that he did not submit C form – Whether non submission of C form was valid ground for revoking exemption granted to petitioner – Held that:- As per section 8(4) of CST Act if dealer does not furnish particulars along with C form then was liable to pay tax at 10 per cent., however, if furnished, then was liable to pay tax at four per cent – Admittedly, petitioner was granted exemption from payment of tax with certain capital expenditure for period of nine years – It was held in Yamaha Motor Excorts Limited Versus State of UP [2010 (1) TMI 1060 - ALLAHABAD HIGH COURT] that even if dealer did not submit C form, then in that circumstances also he was eligible to get benefit of set off in accordance with eligibility certificate – Exemption certificate issued to petitioner grants immunity from payment of tax within capex limit for certain period – Such facility cannot be withdrawn – Impugned order hereby quashed – Decided in favour of Assesse.
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