Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
September 9, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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GST bill - One more step - President Pranab Mukherjee gives assent to the constitutional amendment bill today - now, the government is expected to notify the GST Council soon
Income Tax
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The NOIDA has been constituted by the State Act and, therefore, entitled to exemption of payment of tax at source under section 194-A(1) of the Act. - HC
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Section 13 does not debar the main whole-time trustee/trustees from meeting their basic needs from the funds of the institution/trust particularly when they are not deriving any monetary benefit from the institution/trust. - HC
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Transfer pricing adjustments - TPO directed to take into account 30% additional cost base to account "free of cost" material and revised the OP/TC margin of 13.65% for determining the arm's length margin as claimed by the Assessee. - HC
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TDS u/s 194H - non deduction of tds - genuineness of the transaction - a desperate attempt has been made by the AO to characterize the payments made by the Assessee to VEEPL as brokerage - expenses towards consolidation of land was not liable to deduction of tax at source u/s 194H - HC
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The entire addition was based on the conditional surrender made by the assessee. The AO did not honour the condition of not levying penalty and went ahead and issued notice for levying penalty u/s 271(1)(c) - No penalty - AT
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The loss cannot be called notional since the fall in the exchange rate has already taken place in the accounting year. - AT
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Disallowance u/s 040(a)(ia) - the amount paid by the AOP (Joint-venture) to its member without deduction of tax - works contract, since the payee has admittedly filed its return of income disclosing the impugned receipts and income earned by it embedded in the receipt has been duly offered for taxation, disallowance deleted - AT
Customs
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Claim of exemption from SAD under Section 3(5) of the Customs Tariff Act, 1962 - Applicant is eligible to claim the benefit of exemption from payment of SAD under Notification No. 21/2012-Cus on import of pre-packaged goods. - AAR
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Valuation - import of goods from third party and sale in India under the brand name of foreign holding company - applicant and the overseas third party manufacturers do not qualify as “related entities‟ - valuation to be done on transaction value of import - AAR
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Refund of export duty - Once the assessment of levy has become final the assessee cannot seek to reopen it nor can he claim refund without reopening such assessment, only on the basis of decision in another person's case - AT
Indian Laws
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The demand of entertainment tax from the exhibitors for the period specified in the notification dated 29.3.2008 (Annexure-I) is illegal and therefore the assessment to tax under the Assam Act - HC
Service Tax
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Denial of refund claim - Rule 5 of CCR, 2004 – input services – export of services – export turnover - branches turnover neither included in export turnover nor in the total turnover of the assesse - AT
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Cenvat credit - input services - the appellants are entitled to cenvat credit on the insurance services used for insuring plant and machinery, building, stock and other assets of the appellant. - AT
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Cenvat credit - input services used for sale of waste and scrap which is arising out of manufacturing of final product - Auction Service is eligible input service and credit is permissible - AT
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Availability of exemption-Notification No. 4/2013-SC dated 1st March, 2013 - in case there is a common agreement of obtaining the sanction and then build an individual house, it would be covered under the exemption notification. - AAR
VAT
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The appellants were neither paying the rubber cess nor collecting the same from the traders to whom they have sold the goods. Therefore, the notional rubber cess could not be included in the sales turnover - SC
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Validity of orders of assessment – TNVAT Act, 2006 – several issues could be sorted out if personal hearing is granted in which the dealer can be called upon to clarify all the doubts. - HC
Case Laws:
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Income Tax
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2016 (9) TMI 308
TDS u/s 194A on Interes - Whether NOIDA is a corporation established by U.P. Industrial Area Development Act, 1976 and not a body established under the aforesaid Act - Held that:- NOIDA has been granted a status of a Municipality under Article 243-Q of the Constitution of India which deals with the constitution of a Municipality. Notification dated 24 December 2001 provides that having regard to the size of NOIDA which has been declared to be an Industrial Development Area by a notification dated 17 April 1976 and the municipal services being provided by NOIDA, the Governor is pleased to specify that NOIDA would be an "Industrial Township" with effect from the date of publication of the notification. This clearly means that instead of Municipal Corporation providing services, NOIDA would provide the said services and if that be so, then as observed by the Supreme Court in S.S. Dhanoa (1981 (5) TMI 124 - SUPREME COURT ), NOIDA will owe its existence to an Act of the State. The NOIDA has been constituted by the State Act and, therefore, entitled to exemption of payment of tax at source under section 194-A(1) of the Act. See Commissioner of Income Tax (Tds) And Another Versus Canara Bank [2016 (5) TMI 570 - ALLAHABAD HIGH COURT]- Decided against the revenue.
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2016 (9) TMI 307
Registration as a Trust under Section 12AA cancelled - Held that:- It was stated that the objects of the trust were wholly charitable and religious in nature. The ITAT has in its impugned order set out in some detail the contents of the said affidavit regarding the creation of the Trust in Central Tibet in 1159 AD and its objectives and activities over the years. The Court concurs with the ITAT that a formal deed of trust was not necessary for the grant of registration under Section 12A/12AA of the Act. On the question whether the objects and purposes of the Trust were charitable thereby qualifying for registration, the ITAT has set out in its impugned order in detail, the objects of the Trust as declared in the affidavit filed by the 17th Karmapa. It concluded from reading of the various aims and objects that they were charitable in nature. It has been rightly pointed out by the ITAT that it is not necessary that present aims and objects of the Trust should be the same at the time of its establishment. As further rightly pointed out, the stage for examining if the income of the Trust was being applied for its objects would arise only when a return of income is filed by the Trust. The said issue would not affect the grant of registration. Whether the fact that the 17th Karmapa who is the supreme head of the Trust was taking food and clothes and meeting his basic needs from the funds of the Trust resulted in a violation of Section 13 of the Act? - Held that:- The ITAT correctly held that "Section 13 does not debar the main whole-time trustee/trustees from meeting their basic needs from the funds of the institution/trust particularly when they are not deriving any monetary benefit from the institution/trust." - Decided in favour of assessee
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2016 (9) TMI 306
Transfer pricing adjustments - Benefit of 30% given in the profit margin of Titagarh Wagons Ltd. (TWL) for the "free of cost supplies" received by TWL from the Railways - Held that:- TPO has not taken into consideration the proper information related to the free of cost. material provided by the Railways to Titagarh Wagons Ltd. as well as to Texmaco Ltd. and thus the said information is necessary to take into account the functions performed, assets employed and risks assumed ("FAR"). Ld. DRP in his finding also has directed Ld. TPO to take these aspects while allowing the said comparables. There is no doubt that these two companies are having the major role in supplying coaches to the Indian Railway and these are proper comparables if all the aspects are taken into consideration including the free of cost material value. Therefore, Ld. TPO is directed to take into account 30% additional cost base to account "free of cost" material and revised the OP/TC margin of 13.65% for determining the arm's length margin as claimed by the Assessee.
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2016 (9) TMI 305
TDS u/s 194H - non deduction of tds - genuineness of the transaction - Held that:- Although the entire MOU was placed before the AO there was no discussion of the MOU to support the conclusion that the agreement between the Assessee and VEEPL was a sham agreement. The second difficulty is that although the AO has raised questions regarding the genuineness of the transaction it does not appear to be based on any enquiry undertaken by the AO. The AO could have easily invoked the statutory power to undertake the enquiry if he had any doubt about the genuineness of the agreement between the Assessee and the VEEPL. Thirdly, the Court finds that a desperate attempt has been made by the AO to characterize the payments made by the Assessee to VEEPL as brokerage, although admittedly, the payment made amounted to ₹ 7,93,47,974. In particular, the Court finds that the plausible explanation offered by the Assessee in its letter dated 15th December 2009 bringing out the distinction between a consolidator and a broker has not been addressed by the AO. Court is satisfied that such payments could not be characterized as brokerage only for the purposes of bringing it within the ambit of Section 194H of the Act. In that sense, the basic background facts concerning the MOU entered into by the Assessee with the VEEPL is no different from the MOU entered into by the Assessees in the similar cases with VEEPL as aforementioned. - Decided in favour of assessee
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2016 (9) TMI 304
Penalty u/s 271(1)(c) - unexplained cash deposit - assessee surrendered an amount of ₹ 20 lac on a condition that the AO shall not levy penalty u/s 271(1)(c) of the Act, as per mutual discussions - AO had not complied with the conditions laid down by the assessee for surrender - CIT(A) upheld the addition on the ground that the assessee had made a surrender & came to a conclusion that the assessee had taken into account the opening balance while surrendering the amount of ₹ 20 lac - Held that:- as far as the opening balance is concerned, the assessment of the earlier assessment year was reopened and the claims of the assessee was accepted. Order was passed u/s 143(3) read with section 148 of the Act on 25.2.2014. Thus, the opening balance cannot be added. Coming to the surrender made by the assessee, as find that this is a conditional surrender. The assessee, in his detailed reply dated 27.12.2011, explained the sources of cash deposit made during the year. It was submitted that the assessee was having sufficient cash in hand at the beginning of the year amounting to ₹ 22,36,415/-. As already stated, this opening balance was explained by filing the financial statement as well as the assessment order for the assessment year 2008-09. The assessee, in his detailed explanation, had explained monthwise, the cash deposits made in the savings bank account along with the corresponding sources. This explanation runs into ten pages. Cash memos with regard to the sales made of MS BARS was also furnished. The AO has not pointed out any defect or discrepancy in these details submitted by the assessee. The entire addition was based on the conditional surrender made by the assessee. The AO did not honour the condition of not levying penalty and went ahead and issued notice for levying penalty u/s 271(1)(c). The AO, in my view, should have entirely rejected the offer of the assessee and gone ahead with his finding based on evidence or, in the alternative, desisted from initiating penalty proceedings. In this case, the AO chose to accept only a part of the statement. As the submissions of the assessee vide letter dated 27.12.2011 were not factually controverted by any of the authorities, the addition made merely on the ground of disclosure cannot be sustained. The assessee has explained the source of each deposit with evidence and the AO has not found any fault in the claim made by the assessee. No defects were pointed out. Hence, the addition in question is hereby deleted. - Decided in favour of assessee
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2016 (9) TMI 303
Disallowance on account of foreign exchange fluctuation loss - Held that:- The issue in dispute stands decided in the decisions of ITAT Delhi Benches in assessee’s own cases for A.Y. 1999-2000 and 2001- 02 in favour of the assessee [2006 (12) TMI 175 - ITAT DELHI-C ] and (2006 (10) TMI 184 - ITAT DELHI-D ) respectively. The special Bench of ITAT, Delhi also in the case of Oil & Natural Gas Corpn. Ltd. vs. DY. CIT (2002 (8) TMI 802 - ITAT DELHI) has held that the loss cannot be called notional since the fall in the exchange rate has already taken place in the accounting year. The Special Bench has also referred to the Accounting Standards-11 where it has been provided that the long-term liabilities should be restated and the loss should be charged to the Profit and Loss account of each year. In view of these principles of law, the finding of the ld. CIT(A) that the assessee has claimed foreign exchange fluctuation loss on the entire amount of current liabilities and not on the transactions of the current year, in our opinion, does not stand on sound footings and is liable to be set aside. In the assessment year 2013-14, the department itself has accepted foreign exchange fluctuation loss under identical circumstances. Not only this, the assessee has been following a consistent policy on re-statement of foreign currency payables and whenever there is a gain the same is duly offered to tax as also noted by ld. CIT(A) in a chart at page 31 of the impugned order wherein the gains arising consequent to conversion at closing exchange rate have been duly offered to tax by the assessee. Therefore, the ld. Authorities below are not justified to take different view in the instant year. In view of these discussions, we do not find any justification to support the orders of the authorities below. Accordingly, the appeal of the assessee is found to have merit and deserves to be allowed in favour of assessee
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2016 (9) TMI 302
Disallowance u/s 040(a)(ia) - assessee in default - the amount paid by the AOP (Joint-venture) to its member without deduction of tax - works contract - it contended that, joint venture does not execute any contract but was a conduit for obtaining work, receiving payments against work done by the individual constituents and distribution of amounts in their individual shares as per the agreed ratio. - Held that:- Respectfully following the decision of the Co-ordinate Bench of the Tribunal in the case of ITO vs. Shraddha & Mahalaxmi Joint Venture and Others (2014 (12) TMI 347 - ITAT PUNE ), we are inclined to hold against the Revenue. We simultaneously find that the case of the assessee is fully supported by CBDT Circular No.07/2016 We also simultaneously take affirmative note of the argument on behalf of the assessee that rigours of section 40(a)(ia) are diluted in the facts of the case since the payee has admittedly filed its return of income disclosing the impugned receipts and income earned by it embedded in the receipt has been duly offered for taxation. In this view of the matter, the assessee Joint Venture cannot be treated as assessee in default in view of the decision of the Hon’ble Delhi High Court in the case of Ansal Land Mark Township (P.) Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT ) and the decision of the Co-ordinate Bench of the Tribunal in the case of ITO vs. Shri Chandrakant J. Mandale (supra). Thus, seen from any angle, we find no infirmity in the order of the CIT(A). Accordingly, the appeal of the Revenue is dismissed.
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2016 (9) TMI 301
Enhancement of income - Held that:- While accepting the books of accounts, estimating the income to ₹ 1,00,000/- by the ld.Tribunal is not permissible in law & the Tribunal ought not to have estimated income having accepted books of accounts. - Decided in favour of assessee.
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2016 (9) TMI 300
AO jurisdiction to issue notice under Section 158-BC - Held that:- Perusal of the warrant clearly shows that the names of Ms. Umlesh Goyal and Ms. Surbhi Goyal, has not been written in the warrant of authorisation. Thus, when names of the two assessees herein does not find mention in the warrant of authorisation, the AO has no jurisdiction to issue notice under Section 158-BC, and the issuance of notice was illegal and has rightly been annulled by the CIT(A) and confirmed by the Tribunal. Since by the exercise of the power a serious invasion is made upon the rights, privacy and freedom of the taxpayer, the power must be exercised strictly in accordance with law and only for the purposes for which the law authorises it to be exercised. If the action of the officer issuing the authorisation or of the designated officer is challenged, the officer concerned must satisfy the court about the correctness of his action. Therefore, in our considered view a search under Section 132(1) has to be "person specific". The Authority authorising search has to have information in his possession in respect of a person and such a person should be specifically named in search warrant and since names of the assessees having not figured in the authorisation of warrant as having been proved on the basis of Form 45 which has been reproduced by us in para 16 hereinbefore, the AO has exceeded its jurisdiction in issuing the notice under Section 158-BC and initiation of the proceedings being invalid, all subsequent action of A.O. including order of assessment is not sustainable in law. We need not go into the issue about issuance of notice under Section 158-BD instead of Section 158-BC particularly in view of the fact that learned counsel for the Revenue fairly conceded that Section 158-BD was not in existence at the time when the search on 23.3.1999 was conducted and the same was inserted with effect from 1.6.2002. After at-least 1.6.2002 an AO does get a right to assess a person, if satisfied on the material found that undisclosed income belongs to any person other than even the person searched.For the reasons assigned and our observation that when a search action under Section 132(1) has to be "person specific" & when admittedly the names of the present assessees did not figure in the warrant, we hold the AO had committed an apparent error to assess the assessees. Accordingly, we answer the question of law in favour of the assessee and against the Revenue.
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2016 (9) TMI 299
Rejection of application under Section 245R(2) - advance ruling - Held that:- It is evident on a plain reading of the notice that it does not address itself to any specific question; it does not even disclose application of mind to the returns save and except the fact that they conform to the instructions which compelled the AO to issue a scrutiny notice on account of the international transaction reported by the assessee. The previous authority of this Court in Hyosung (2016 (2) TMI 575 - DELHI HIGH COURT) and L.S. Cable (2016 (5) TMI 698 - DELHI HIGH COURT ) had the occasion to deal with identical notices. It was positively ruled that such notices ipso facto would be insufficient to attract the automatic rejection route under proviso to Section 245R(2) of the Act. Consequently, we have no hesitation in holding that the impugned order of the Ruling Authority in rejecting the application is untenable. Consequently, the order is quashed and set aside. The petitioner’s application shall now be processed and independently dealt with on its merits in accordance with law by the Ruling Authority. The parties shall be present before the Advance Ruling Authority on 13.09.2016. The writ petition is allowed in the above terms.
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2016 (9) TMI 298
Violation of the provisions of Section 269T - Held that:- Worldwide Township has propounded an appropriate interpretation to the provision consistent with appropriate business targets in the commercial world. Undoubtedly Section 269T is meant to discourage cash transactions and has penal consequences - evident from Section 271E. Whilst, strict construction is the norm, at the same time, we are not persuaded that the interpretation in Worldwide Township in any manner deviated from the text of the Statute.
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2016 (9) TMI 297
Penalty u/s 271(1)(c) - Assessee had filed its returns under Section 115JB - Held that:- What is of importance is that at the time when jurisdiction is assumed by the AO – i.e. upon completion of proceedings or within the time stipulated by forming an opinion that there is no concealment of income, there should be objective material to reach the conclusion that such concealment is material having regard to the nature and circumstances of the case, especially where two computations are involved. At the stage when the AO sought to assume jurisdiction and form an opinion, the assessment was completed under Section 115JB. Concededly, there was no concealment of any material particulars in respect of that part of the return. The concealment found was in respect of normal computation. That the normal computation involved certain disallowances at later and higher stages of the proceedings at the first appellate and the ITAT’s proceedings reflect the unfortunate circumstances of the litigating parties. That would not in any manner deviate from the fact as to whether the AO could have assumed, on the basis of the opinion that there was concealment of income which led to revenue loss. If the revenue evasion were to be accepted, a satisfaction which was otherwise warranted at the time when it was recorded because of operation of Section 115JB(1) or other such like provision would remain pending for about 15 years and the revenue can hopefully urge at later stage that an opinion formed which was not valid at the time it was made, can be revived after a period of hibernation to revisit the assessee. Such circumstances can hardly be called satisfactory or lead to any certainty; it will anyway lead to no certainty in law at all; we are satisfied that no question of law arises.
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2016 (9) TMI 296
Jurisdiction of the Commission to entertain a settlement application - Held that:- The declaration of law by this Court is binding on all authorities within the State including the Commission. The petitioner was entitled to proceed on the basis that till the service of the assessment order, the case continues to be pending with the Assessing Officer. Therefore, it was open to him to invoke the provisions of Chapter XIXA of the Act on 30th March, 2016 as till that date the assessment order was not served upon him. Moreover, the petitioner brought to our notice that even the Commission had on its website represented that an application for settlement could be filed with it, till such time the assessment order is served upon the petitioner. By this representation under caption F.A.Q., the Commission admittedly held out that an application for settlement would be accepted till service of the assessment order. Admittedly, this representation was made till the impugned order was passed on 12th April, 2016. We find that in the present facts, the petitioner was entitled to act upon the above representation. It is not fair for the State to now take up the stand that on the proper interpretation of the provisions of law, the representation made by it is not in accordance with law. At the very highest, even according to the Revenue, the issue is not clear as it is subject to interpretation, at the very least, therefore, the Commission must be held bound by its representation. As it was its understanding on interpretation of Chapter XIX A of the Act. In any case, the petitioner could not be prejudiced for acting in terms of the representation. We are informed that the above representation is withdrawn by the Commission post 12th April, 2016. Therefore, on the above ground also in the present facts, the impugned order is not sustainable. The impugned order dated 12th April, 2016 of the Commission being Exh.G. to the petition is quashed and set aside. The application for settlement is restored to the file of the Commission at the stage of 245D(1) of the Act. The period of 14 days as provided in Section 245D(1) of the Act, will run from the date this order is first communicated by either of the parties to the Commission.
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2016 (9) TMI 295
Deduction under Section 80IB(10) - Held that:- It is not disputed that the housing projects referred to as Omaxe Grandwoods (GH-03), Noida and Omaxe Palm Greens-I, Greater Noida are real estate developments that are complete on a stand-alone basis. The said projects comprise of towers of residential units alongwith common areas, facilities and amenities for the residents of those towers. Thus, considered on a standalone basis, the said real estate developments would constitute an integrated development independent of the other housing schemes developed by the Assessee on the adjoining lands. The expression ‘housing project’ has not been defined under Section 80IB of the Act and thus, must be construed in its ordinary sense and in the context that Section 80 IB (10) which specifies the attributes of an eligible housing project. In the present case a real estate development which on a standalone basis is complete in all respects, that is, it includes the dwelling units, the necessary infrastructure, common areas and common facilities for the residents of the dwelling units would constitute a housing project for the purpose of Section 80IB of the Act and we find no infirmity with the decision of the CIT(A) and the ITAT. The decision in the case of Brahma Associates (2011 (2) TMI 373 - BOMBAY HIGH COURT ) is wholly inapplicable in the facts of the present case wherein held that the commercial establishments, which were a part of the housing project could not be excluded for the purposes of deduction available under Section 80IB of the Act. The Court held that the benefit was available to an Assessee in respect of income derived from the entire project and was not limited to the income derived from the sale of residential units alone. The said decision is of no assistance to the Revenue as this is not a case where income from a part of the housing project is sought to be considered for computing the deduction under Section 80IB; in the present case, the finding is that the income from the housing schemes in respect of which deductions are claimed are by themselves standalone complete housing projects. - Decided in favour of assessee
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2016 (9) TMI 294
Carry forward or set off of loss - Held that:- More than eleven years have passed from the relevant assessment year and, therefore, whether the set off of the loss determined in this year was claimed by the assessee in any of the subsequent year. In our opinion, if no set off of loss is claimed by the assessee in the subsequent year, then the quantum of the loss, whether it is ₹ 10.55 crores or ₹ 12.44 crores, became only of academic nature. Learned DR fairly submitted that if no set off of loss is claimed in the subsequent year, the appeal can be treated as of academic nature having no tax effect either for the assessee or for the Revenue. The assessee, vide letter dated 16th August, 2016, has submitted in writing that the assessee company has not set off the above mentioned loss incurred in assessment year 2004-05 against any income of the assessee company in the subsequent years. Once no set off of loss determined in assessment year 2004-05 is claimed by the assessee in the subsequent year, and the time limit for carry forward or set off of loss has expired, in our opinion, the amount of loss determined does not have any tax effect so far as the assessee or the Revenue is concerned. We, therefore, hold that Revenue’s appeal has effectively nil tax effect. Therefore, the CBDT Circular No. 21/2015 dated 10th December, 2015 is squarely applicable. Learned counsel for the assessee was also fair enough to say that the assessee’s cross-objection should also be treated as of academic nature because the quantum of loss determined will have no consequence to the assessee also. In view of the above, we deem it proper to dismiss the Revenue’s appeal as well as assessee’s crossobjection being of academic nature only.
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2016 (9) TMI 293
Reopening of assessment - information supplied by Investigation Wing - Held that:- AO has merely acted in mechanical manner on receipt of the report from the Investigation Wing that “he has reason to believe that income of ₹ 54,00,000/- has escaped assessment for the assessment year 2002-03 due to failure on the part of the assessee to disclose fully or truly all material facts necessary for assessment. AO has not even satisfied himself to prima facie make out that income of ₹ 54,00,000/- has escaped assessment in the year under assessment by pursuing record. AO has been provided with copies of share application forms containing names, addresses, PAN, bank details and confirmation of the investors, he was required to conduct the independent investigation to satisfy himself that such and such income has escaped assessment before assuming jurisdiction u/s 147 of the Act. Even on merits when the assessee had provided copies of share application forms containing names, addresses, PAN, bank details and confirmation of the investors, the onus stood shifted to the AO to prove that these are the shell companies and not to fasten the liability of the assessee on the ground that assessee has failed to produce the aforesaid six investor companies, moreso assessee cannot be called upon to prove negative. Thus forming an opinion merely on the basis of information supplied by Investigation Wing of the revenue that such and such company has provided an accommodation entries to the assessee to the tune of ₹ 54,00,000/- does not amount to the satisfaction of the AO in any manner whatsoever to reopen the case u/s 147 of the Act; - Decided in favour of assessee
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2016 (9) TMI 292
Treatment of profit earned on sale of land - business income OR capital gain - Held that:- Merely because no return was filed by the assessee in earlier years in absence of any taxable income, the character of land would not automatically get changed from ‘investment’ to ‘stock-in-trade’. The other allegation of the AO is also without any basis and legal substance wherein it was stated that the assessee firm was constituted for the main object of development and trading in immovable properties, therefore, the impugned land should also be necessarily characterised as part of stock-intrade. We find no basis for such a bald allegation. It is well settled law that a person can plan its affairs in such a manner so as to minimize its tax burden and there would be nothing wrong in it, so long as approach of a taxpayer is not bogus or false and no tax evasion is perpetuated. In the facts brought before us, nothing has been brought on record by the lower authorities to counter the factual assertions made by the assessee. The assessee has consistently kept these amounts as part of ‘investments’ since last so many years. No business at all has been done by the assessee firm. Its income has never been assessed under the head income from business. Nothing has been shown to indicate if the assessee ever treated the impugned land as part of the ‘stock-in-trade’ at any point of time in the past decade, and the assessment order has been passed merely on the basis of surmises and conjecture which have no place in the eyes of law. We do not find any justification on the part of lower authorities to re-characterise the income earned from sale of land as ‘income from business’. The assessee had rightly shown the same as ‘income under the head capital gains’. Benefit of set off of brought forward long term capital loss disallowed - Held that:- As submitted before us that though the return for A.Y. 2006-07 was filed on 30th October 2006 i.e. within the time limit extended by the Central Board of Direct Taxes vide its notification dated 24th July 2006, but the AO omitted to grant the benefit of set off of brought forward long term capital loss under some erroneous assumption of facts with regard to time limit of filing of return and actual date of file of return.We find that it is a matter of proper verification of facts and therefore, this issue is sent back to the file of the AO to verify the requisite facts with regard to actual date of filing of return and extended due date of filing of return and claim made by the assessee in the return of income filed in A.Y. 2006-07 with respect to carry forward of long term capital loss.
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Customs
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2016 (9) TMI 319
Claim of exemption from SAD under Section 3(5) of the Customs Tariff Act, 1962 – import of pre-packaged goods and sale thereafter - The thrust of submissions made by Revenue is that the conditions contained in Notification No. 21/2012-Cus dated 17.03.2012 are not satisfied in respect of the goods proposed to be imported by the applicant, therefore, goods cannot be exempted from additional duty of Customs (SAD) levied under Section 3 (5) of the Customs Tariff Act. – Held that: - to get benefit of exemption applicant need to satisfy two conditions of Notification No. 21/2012-Cus. namely declaration of the State of destination where goods are intended to be taken immediately after importation and declaration of His VAT registration No. or Sales Tax registration No. or Central Sales tax registration No., as the case may be in said State – the applicant satisfies both the conditions mentioned above. As the pre-packaged commodities in this case are covered by Chapter II of said Rules i.e. provisions applicable to packages intended for retail sale, the same should also satisfy all conditions regarding declarations to be made on every package, as per Rule 6 including sub-rule (e) regarding declaring the RSP of the package. As pre packaged goods to be imported would have declaration of RSP on them, this condition is also met. Applicant is eligible to claim the benefit of exemption from payment of SAD under Notification No. 21/2012-Cus on import of pre-packaged goods.
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2016 (9) TMI 318
Valuation - import of goods from third party and sale in India under the brand name of foreign holding company - principal to principal relationship - applicability of Section 14 of the Act read with the Customs Valuation (Determination of Values of Imported Goods) Rules, 2007? – Held that: - applicant and the overseas third party manufacturers do not qualify as “related entities‟ in as much as none of the conditions specified in Rule 2(2) of the Customs Valuation (Determinations of Value of Imported goods) Rules, 2007 is satisfied; that it is also clear that the price paid by the applicant to the overseas third party manufacturers will be based on the purchase invoices and is the sole consideration for the sale transaction – value of invoice raised will form the transaction value. Trade Mark/ License Fee - payment made in terms of the foreign collaboration agreement - payment under Rule 10 (1)( c)of the Rules – is the above amount required to be added to the Transaction Value of the said goods for levy of Customs Duty under the Act read with the Rules – Held that: - the applicant will pay the Trademark License fee in lieu of grant of right to exploit and use of associated trademark for sale of said goods; that such Trademark License fee will be payable on the basis of the sales made by the applicant in India; that said activities for which the applicant will pay the license fee are post importation activities and are not related to the sale of goods by the third party manufacturers to the applicant. Further, the said payment of Trademark License Fee is a not condition for sale between the third party manufacturers and the applicant – the trademark fee and payment under foreign collaboration agreement do not qualify as payment made under Rule 10 (1)( c)of the Rules and need not be added to the transaction value. Sales and Business Support Fee - payment under Rule 10 (1)( c)of the Rules - is the above amount required to be added to the Transaction Value of the said goods for levy of Customs Duty under the Act read with the Rules – Held that: - payment not made under condition for sale – payment do not qualify as payment under Rule 10 (1)( c)of the Rules and need not be added to the transaction value. There is no Agreement between third party manufacturers and H & M GBC where the third party manufacturers agreed to supply the goods to only such party who enters into an Agreement with the H&M GBC under the Foreign Collaboration Agreement and the Trademark License Agreement. The role of H &M GBC is only restricted to in identifying independent third party manufacturers.
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2016 (9) TMI 317
Refund application – CVD – unjust enrichment - whether CVD has been passed on and collected from the end users? - decision on similar issue passed in the case Yu Televentures v. Union of India [2016 (8) TMI 184 - DELHI HIGH COURT] – Held that: - the operative portion of the case should be similar to the case of Yu Televenture - Refund allowed – refund to be made along with interest.
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2016 (9) TMI 316
Maintainability of the writ petition - waiver of pre-deposit - Held that: - the Court will not be justified in conducting an enquiry regarding the maintainability of the writ petition at this stage, especially when the writ petition has been admitted as early as on 19.1.2015 and an interim direction had been issued by the Court, not to reject the appeal during the pendency of this writ petition - writ petition maintainable. Reduction of pre-deposit amount - maintainability - principles of natural justice - Held that: - predeposit is a statutory restriction imposed on the petitioner. The amount of pre-deposit too high for the petitioner to make payment - amount of pre-deposit reduced - appeal to be considered on grounds of merits after compliance of payment of pre-deposit - petition disposed off - decided partly in favor of petitioner.
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2016 (9) TMI 315
Restoration of the Redemption fine imposed earlier - section 125 of the Customs Act, 1962 - Held that: - The Court notes that the Order-in-Original in this case did not make the ultimate purchaser i.e. the Respondent herein liable for payment of duty. The duty liability was fastened on to the first purchaser - the reduced amount of redemption fine upheld. Restoration of penalty - Held that: - As far as the deletion of the penalty is concerned, the Department has failed to prove the involvement of the Respondent in the illegal import of the car in question - deletion of penalty upheld. Appeal rejected - decided against Revenue.
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2016 (9) TMI 314
Rejection of refund claim - refund of export duty - mild steel items - angles - channels - pipes - clearance from DTA to SEZ - duty paid under protest - withdrawal of protest and finalisation of assessment - Held that: - It is a well settled position of law when a claim is preferred by an assessee before the Departmental Authority the same has to be processed within the scope of the legal provisions and the sanctioning authority cannot entertain any claim beyond the statutory time limit prescribed under the law. The decision in the case Mafatlal Industries Ltd. vs. Union of India [1996 (12) TMI 50 - SUPREME COURT OF INDIA] is held appropriate, where, it was decided that it is not open to any person to make a refund claim on the basis of a decision of a court or Tribunal rendered in the case of another person. Once the assessment of levy has become final the assessee cannot seek to reopen it nor can he claim refund without reopening such assessment, only on the basis of decision in another person's case - Section 72 of the Contract Act or for that matter Section 17 (1) (c) of the Limitation Act, 1963 has no application to such a claim for refund - appeal dismissed - decided against appellant.
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Service Tax
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2016 (9) TMI 331
Availability of exemption-Notification No. 4/2013-SC dated 1st March, 2013 – proper applicant from filing application of Advance ruling - private limited company – public limited company – Held that: - the exemption under Notification No. 4/2013-SC dated 1st March, 2013 is available to public limited company as well as private limited company. The applicant, being public limited company, is a proper applicant. Building of a single house for the customer – taxability – independent service – bundled service - obtaining of necessary sanctions from the Gram Panchayat for being able to construct the house – Held that: - if there is an independent agreement only for the purposes of obtaining the necessary sanctions from the local self government including the ‘Gram Panchayat’ then it would undoubtedly amount to an independent service. If it is a ‘bundled service’ it will mean thereby that the company will obtain the necessary sanctions and then will build an individual house. There will be no independent agreement regarding obtaining of sanctions and if there is any, the company will pay the Service Tax over that - in case there is a common agreement of obtaining the sanction and then build an individual house, it would be covered under the exemption notification – exemption available – matter disposed off
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2016 (9) TMI 330
Availability of CENVAT credit – availability of refund - Rule 5 of the Cenvat Credit Rules, 2004 – GTA services - Whether the goods cleared at the factory gate, depot or any other place of removal and delivered at the port of export shall entitle the appellants to the Cenvat credit of the service tax paid on transportation of such goods from any of the above places or such tax refundable under Rule 5 of the Cenvat Credit Rules, 2004 wherever the Cenvat credit is not adjustable? - Whether Cenvat Credit is admissible in respect of service tax paid on transportation of the goods cleared from the places in question? – Held that: - the appellant is only a recipient of services and that there is no sale, but only transfer to its own units. The consent of the appellant recorded and further decision is to be taken by the adjudicating authority - the Original Authority has to frame proper issues, adjudicate by providing an opportunity of hearing as contemplated under the Central Excise Act 1944 and the Rules framed thereunder and pass appropriate orders on merits, within a period of two months from the date of receipt of a copy of this order – matter disposed off.
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2016 (9) TMI 329
Confirmation of auction – bidding - Removal of aircraft – highest bid below reserved price – bonafides of the service tax commissionerate and the attempts made till date - Held that : - the casual attitude of the Service Tax Commissionerate is not approved, for it ought to indicate with clarity, precision and completeness how the auction was finalised and what are its detailed terms and conditions - to test the bona fides of the auction purchaser and to enable him to complete the auction by depositing the balance amount, the matter is placed for decision - petition allowed - decided in favor of petitioner.
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2016 (9) TMI 328
Liability of service tax – writ jurisdiction - alternative remedy of appeal - Section 35 of the Excise Act, 1944 - road construction/renovation works - Commercial and Industrial Construction Service – section 65(105)(zzq) of the Finance Act, 1994 - Works Contract Service – section 65(105)(zzzza) of the Finance Act, 1994 - Notification No.24/2009-Service Tax dated 27.07.2009 – Held that: - the contentions of the petitioners that the authorities concerned have taken a wrong decision or have reached to a wrong conclusion with incorrect determination of any question do not make out a case of want of jurisdiction. It remains trite that a Judicial Authority, when having jurisdiction to decide the matter, would not be considered having acted without jurisdiction by merely coming to a wrong conclusion, whether on law or on facts. Thus, the suggestion that the orders impugned suffer from want of jurisdiction, being wholly baseless, is required to be rejected - if the petitioners file the respective appeals within thirty days with the requisite pre-deposit, the Appellate Authority may examine the matter on merits while ignoring the question of limitation. Pre-deposit – section 35 F of the Central Excise Act, 1944 - the submissions of the petitioners are unacceptable that making of pre-deposit is of such a hardship that may result in depriving them access to the appellate forum – requirement of payment of pre-deposit upheld.
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2016 (9) TMI 327
Demand of service tax with interest - Adjustment of excess service tax paid of previous month with the subsequent months – Rule 6(3) of the Service Tax Rules, 1994 – whether suo moto adjustment of excess paid Service Tax in the subsequent months can be made, when there is a separate procedure to claim refund of the excess paid taxes under Section 11B of the Central Excise Act 1944? – Held that: - the respondent-BSNL ought to have applied for refund of service tax paid in excess for certain months, in terms of Section 83 of the Finance Act, 1994, read with Section 11B of the Central Excise Act, 1944 and they cannot suo-motu adjust the excess payment of service tax, for certain months against the Service Tax, due to be paid for the subsequent period, in terms of Rule 6(3) of the Service Tax Rules, 1994 – matter remanded to the original adjudicating authority with a direction to consider the applicability of Rule 6(3) of the Service Tax Rules, to the facts of these cases and record a finding, as to whether, the assessee can suo-motu adjust the tax or entitled to refund of the excess payment of service tax, during the relevant period – matter to be decided by original adjudicating authority within a period of eight weeks, from the date of receipt of a copy of this order – CMA disposed off.
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2016 (9) TMI 326
Cenvat credit - Auction Service - Service tax paid during the period from March 2012 to December 2012 - service used for clearing the waste and scrap and used material available in the factory - received to ensure free flow of production material service - Held that:- in the case of Mangalam Cement Ltd. Vs CCE & ST Jaipur [2015 (9) TMI 942 - CESTAT NEW DELHI], the Tribunal has held that sale of waste and scrap which is arising out of manufacturing of final product is part of the business of manufacture and held the said service as eligible service and allowed the credit. Therefore by following the same ratio, I hold that Auction Service is eligible input service and credit is permissible. Cenvat credit - Cab Service - Service tax paid during the period from March 2012 to December 2012 - Held that:- it is found that this very Bench in the case of S.K.D. Lakshmanan Fireworks Industries Vs C.C.E. & S.T., Tirunelveli [2015 (12) TMI 1102 - CESTAT CHENNAI] has held that Rent-a-cab service availed by a manufacturer is not an eligible input service for the purpose of availing service tax credit. Therefore, by following the ratio, I hold that cenvat credit availed by the appellant-manufacturer on the service tax paid on Rent-a-cab service for picking up and dropping down of its employees to the factory and back is not proper and denied as the said service is not an eligible input service and credit is not admissible to the appellant. Cenvat credit - Courier Service - Service tax paid during the period from March 2012 to December 2012 - service used to correspond with government agencies, customers and suppliers - Held that:- the interaction with government agencies is regarding statutory compliance. The interaction with customer is related to marketing of excisable goods and that of supplier is for procurement of materials. Credit cannot be disallowed as the service utilized by appellant is in relation to manufacture. Cenvat credit - Foreign Exchange Service - Service tax paid during the period from March 2012 to December 2012 - Held that:- the Tribunal in the case of Sterlite Industries India Ltd. [2015 (9) TMI 1399 - CESTAT CHENNAI], has held that foreign exchange money service is inextricably connected with business and relevant for export and import and hence eligible to input service credit. Therefore, by following the same ruling, I hold that credit on this service is not deniable. Cenvat credit - Mobile Telephone Service - Service tax paid during the period from March 2012 to December 2012 - Held that:- I am of the view that the telecommunication service is a most important and vital service for day-to-day affairs of a company. This view is also affirmed by the Hon'ble Bombay High Court in the case of CCE Nagpur Vs Ultratech Cement [2010 (9) TMI 19 - High Court of Bombay]. Accordingly, I hold that appellants are entitled to avail credit on this service. Cenvat credit - Printing Work Service - Service tax paid during the period from March 2012 to December 2012 - service relates to sharing of registry documents, export invoice etc. by the appellant - Held that:- the activity of the appellant of sharing of registry documents, export invoices etc. has a direct nexus with the manufacture and clearance of the final product inasmuch as there can be no clearance without these documents. Hence appellants are entitled to this credit. Cenvat credit - Travel Agency Service - Service tax paid during the period from March 2012 to December 2012 - Held that:- as long as the Travel Agency Service is not received for personal benefit of any employee but meant for travel of office personnel, credit is not deniable. This service is in connection with production, planning, import, marketing etc. The Hon'ble Gujarat High Court in the case of Principal Commissioner Vs Essar Oil Ltd. [2015 (12) TMI 1062 - GUJARAT HIGH COURT] has allowed credit on this service. Therefore, by following the very same ratio, I hold that credit is allowable. Cenvat credit - Certification Audit Service - Service tax paid during the period from March 2012 to December 2012 - service was received for obtaining ISO certificates - Held that:- this Tribunal in the case of Rotork Control (India) Pvt. Ltd. Vs CCE Chennai [2010 (6) TMI 336 - CESTAT, CHENNAI], has held that consultancy services are essential inputs in relation to the manufacturing activity as such services have been availed in obtaining ISO certification of the assessees' products and hence held the same as eligible input service. Since the ISO certification (service) is a must for marketing, therefore by following the ratio of above decision of Tribunal, I hold that appellants are entitled to credit on this service. - Decided partly in favour of appellant
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2016 (9) TMI 325
Cenvat credit - input services - used for insuring plant and machinery, building stock and other assets to cover up the risk of damage which may occur due to fire, burglary etc. - Held that:- I observe that the reliance placed by the Commissioner (Appeals) on the decision of the Apex Court in Maruti Suzuki case law and the Sundaram Brake linings case law is inapplicable since the decision in Maruti Suzuki is no longer a good law in view of the decision of the larger Bench of the Hon’ble Supreme Court in the case of Ramala Sahkari Chini Mills ltd vs. CCEx Meerut I [2016 (2) TMI 902 - SUPREME COURT] and also the decision of this Tribunal in Sundaram Brake Linings is reversed by the Hon’ble High Court of Madras in the case of The Commissioner of Central Excise, Chennai III Commissionerate Versus M/s. Visteon Powertrain Control Systems (P) Limited, Customs, Excise & Service Tax Appellate Tribunal [2015 (3) TMI 736 - MADRAS HIGH COURT]. By following the decision of the Tribunal in the case of Sundaram Clayton Ltd. Vs CCE [2016 (6) TMI 161 - CESTAT CHENNAI], DCW Ltd. Vs CCE [2015 (5) TMI 973 - CESTAT CHENNAI] and CCE Vs India Cements [2011 (2) TMI 786 - CESTAT, CHENNAI], wherein it was held that insurance service protects raw materials and finished goods in transit as well assets of the company, for which credit cannot be denied for availing this service, the appellants are entitled to cenvat credit on the insurance services used for insuring plant and machinery, building, stock and other assets of the appellant. Imposition of interest and penalty - employee insurance services involving an amount of ₹ 10,442/- - appellant has already reversed the credit availed - Held that:- appellants have admitted the liability on Employee Insurance Service involving an amount of ₹ 10,442, the same is upheld. However, since there is no dispute that they had sufficient brought forward balance in their credit account which was not utilized, there is no reason to levy interest on the unutilized credit. Similarly, there is no evidence on record that appellant had intent to avail ineligible credit, Therefore, no penalty is imposable. The amount of ₹ 10,442/- is confirmed and the interest and penalty are set aside. - Decided in favour of appellant
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2016 (9) TMI 324
Denial of refund claim - Rule 5 of CCR, 2004 – input services – export of services – export turnover – should the turnover of branches of assesse located in South Africa and UK be treated as export turnover? - Section 65B(44) - services – POPOS rules, 2012 - Rule 2 (6A) - Export of Services – Held that: - As per explanation 3(b) of Section 65B(44), if a person is having two establishment one in taxable territory and other in non taxable territory both shall be treated as distinct persons. The branch office of the assessee is in non- taxable territory, therefore the branches are distinct persons - the business turnover of the said branches can not be treated export turnover of the assesse - branches of the assessee who are provider of service not located in taxable territory, the service provided by the branches of the assessee are not export of service. Whether the value of service provided by the overseas branches of the assessee should be included in the ‘total turnover’ of the assesse - Held that: - Once it is held that branches’ turnover is not export being branches are distinct person, the same principle will apply for the purpose of total turnover of the assessee. Department cannot take contrary stand that in one hand the branches turnover is not export turnover and in other hand it is addable in total turnover of the assesse - branches turnover neither included in export turnover nor in the total turnover of the assesse – appeal disposed off – denial of refund justified – decided against assessee.
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Central Excise
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2016 (9) TMI 323
Classification - text books and printed work text books - whether to be classified under Chapter 49 of the Central Excise Tariff Act as per petitioner or to be classified under Chapter 48 (4820) as per Revenue - Held that:- the matter assumes some criticality and importance having regard to the use of the work books (which has sought to be treated as exercise books), i.e., education. In case the classification of these articles is in SH4820, the manufacturers/printers would have to pay duty which would be collected ultimately from the consumers, i.e., the students. In these circumstances, we hereby direct the CBEC to consider all aspects of the matter. The petitioner shall furnish relevant details and particulars including a sample or samples of the work book/product in question within two weeks to the CBEC. The CBEC shall thereafter examine the matter and pass appropriate order at its earliest convenience. - Petition disposed of
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2016 (9) TMI 322
Whether the Custom Excise and Service Tax Appellate Tribunal (“CESTAT”) fell into error in omitting delayed payments of duty through CENVAT contrary to Rule 8(3A) - Held that:- it is noticed that there is absolutely no dispute about two critical elements, i.e., firstly that there was about ₹ 3.27 lakhs lying to the credit of the assessee in its CENVAT account and secondly he in fact did paid the amount claiming that the short payment was due to oversight. Having regard to these facts and the circumstance that Rule 8 (3A) itself has been struck down and is no longer in existence, which we entirely concur with, we find no infirmity with the CESTAT’s order. No question of law arises. - Decided against the Revenue
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2016 (9) TMI 321
Validity of Rule 8(3A) of Central Excise Rules, 2002 and notices issued under aforesaid provision - Held that:- three different High Courts of the Country have already declared Rule 8(3A) of Rules, 2002 ultra vires of Constitution being unreasonable, irrational, arbitrary and violative of Article 14 of Constitution. Gujarat High Court has struck down the aforesaid Rule in Indsur Global Limited Vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT]. Madras High Court has done so in Malladi Drugs and Pharmaceuticals Limited Vs. Union of India [2015 (5) TMI 603 - MADRAS HIGH COURT] and Punjab and Haryana High Court has also taken the same view in Sandley Industries Vs. Union of India [2015 (10) TMI 2455 - PUNJAB & HARYANA HIGH COURT]. Therefore, by relying on the aforesaid judgments and for the reasons given therein and on the grounds whereupon the aforesaid provision has been struck down, Rule 8(3A) of Rules 2002 is declared violative of Article 14 of Constitution and as a result thereof, impugned notices dated 26.10.2010, 24.11.2010 and 20.12.2010 which have been issued under the aforesaid provision, are also set aside. - Decided in favour of appellant
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2016 (9) TMI 320
Area Based Exemption - Benefit of exemption from payment of excise duty - Notification No. 56/2003-C.E. dated 25.06.2003 – manufactuter of P & P Medicament – development of industries in the state of Sikkim - special package of incentives vide Memorandum/Notification No. 14(2)/2002-SPS dated 23. 12.2002 (Annexure P-1) – various appeals pending before the the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata – Held that: - direction to the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata to examine the appeals filed by the petitioner herein and take a decision by a reasoned order on its own merit, in accordance with law, at the earliest, preferably within a period of two months – writ petition to be considered after the decision taken by CESTAT, East Regional Bench, Kolkata.
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CST, VAT & Sales Tax
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2016 (9) TMI 313
Validity of orders of assessment – TNVAT Act, 2006 – production of relevant documents - grant of opportunity of personal hearing – Held that: - several issues could be sorted out if personal hearing is granted in which the dealer can be called upon to clarify all the doubts. This will ensure that the assessments are completed in a proper manner without any loopholes and the revenue to be collected by the Government is collected in full. As, an opportunity of personal hearing was not granted to the petitioner and the documents produced by the petitioner was stated to have not been produced, the assessment should be redone – writ petition allowed – decided in favor of petitioner.
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2016 (9) TMI 312
Valuation - rubber cess - rubber plantations - inclusion of notional rubber cess in the sales turnover - Held that: - the issue is similar as decided in the case M/s. Jullunder Rubber Goods Manufacturers' Association vs. Union of India & Anr. [1969 (8) TMI 33 - SUPREME COURT OF INDIA] where it was held that the liability to pay the rubber cess is only that of a manufacturer and the event of liability is the manufacture of goods and not earlier - the stage of sale of goods by the appellant was much prior to the taxable event of rubber cess. The appellants were neither paying the rubber cess nor collecting the same from the traders to whom they have sold the goods. Therefore, the notional rubber cess could not be included in the sales turnover - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 311
Applicability of Section 5(2) of the Kerala General Sales Tax Act, 1963 - first sale - manufacture of cement - raw material supplied by assessee - payment received after adjustment made for clinker by assessee - goods marketted by assessee in its own brand name - is the sale by the brand name holder or the trade mark holder be treated as the first sale? - Cryptom Confectioneries Pvt. Ltd. Vs. State of Kerala [2014 (4) TMI 594 - SUPREME COURT] - is this case binding precedent? - Held that:- in the said decision Section 5(2) was considered and a view has been expressed and, therefore, it cannot be said that a provision has not been referred to or not considered. Hence, it is a binding precedent. Is the decision in the case Cryptom Confectioneries Pvt. Ltd. requires reconsideration? - Held that: - What is limpid is that Section 5(2) is an expression of the Legislative intention that the sales at the hands of the brand name holder and trade mark holder would be treated as the first sale. On a perusal of the agreement entered into between the parties, it is not remotely suggestive of the fact that Cochin Cement Limited is a brand name holder or trade mark holder. Hence, the ambitious submission of Mr. Ganesh has to melt as a glacier, and we say so. Ergo, the decision in Cryptom Confectioneries Pvt. Ltd. does not require reconsideration. Appeal dismissed. Decided against appellant.
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Indian Laws
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2016 (9) TMI 310
Demand of entertainment tax from the exhibitors - assessment to tax under the Assam Act - Held that:- The tax recovered by the exhibitors, as admitted by the 2nd group of litigants, in our view is not collected illegally and therefore we declare that they have no obligation under Section 172 of the Contract Act, to refund any entertainment tax for the exempted period. As earlier noted the charge and levy of tax was never exempted and therefore the cine-goers were not provided any relief under the exemption notification. On the other hand, the exhibitor was freed of their obligation from the liability to the entertainment tax, through the notification issued under Section 8(2) of the Assam Act. Therefore we have no hesitation to hold that incentive was intended for the investors on cineplexes and consequently for the relevant period, the exhibitors can’t be forced to discharge their obligation under Section 3(6) of the Assam Act. Since in the present case, entertainment tax has been levied only on the ground that in spite of the exemption having been granted by the notification dated 29.03.2008, petitioners allegedly collected entertainment tax, the impugned orders of assessment are declared to be illegal, without jurisdiction and therefore the same are set aside and quashed. Following the above discussion and our conclusion in favour of the exhibitors on all the issues as delineated above, we declare that the demand of entertainment tax from the exhibitors for the period specified in the notification dated 29.3.2008 (Annexure-I) is illegal and therefore the assessment to tax under the Assam Act for the petitioners are quashed. The cases are allowed with this declaration.
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2016 (9) TMI 309
Grant of stay against recovery of dues - Hel that:- After giving our anxious consideration to the submissions canvassed by both parties, we are of the view that instead of this Court going into these issues, for the first time and that too, at the stage of hearing of a stay application, interest of justice would be served if we allow this writ petition by quashing and setting aside the impugned order and restoring to the file of the Tribunal the stay application. Accordingly, the writ petition is allowed. The impugned order is set aside and the stay application is restored to the file for a fresh consideration by the Tribunal. It would be open for the petitioner to contend before the Tribunal that the petitioner is a sick industrial company, the reference is pending and the provisions of the SICA would protect it against any recovery by coercive means. The specific aspect of recovery of sales tax dues and that of this Department from the petitioner is included in the proceedings before the BIFR. The arguments to the contrary of the Revenue and based on the legal provisions as referred above, can also be canvassed. The Tribunal shall consider them and pass an appropriate order in accordance with law, as expeditiously as possible and within a period of two months from the date of receipt of a copy of this order. We clarify that we have not expressed any opinion on the rival contentions
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