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TMI Blog2010 (12) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise Department after due verification of the said parties, has issued refund at 10 per cent. to the assessee. As Tribunal has given sufficient, cogent and convincing reasons for the conclusion arrived at by it no reason to take a different view. In the circumstances, this ground of appeal is dismissed Disallowance of claim of export commission - Assessing Officer found that assessee did not furnish any agreement for paying commission nor did it file any proof of such remittance routed through the Reserve Bank of India (RBI). The foreign agents'commission was allowable up to 12 per cent. under the Central Excise and Customs Rules, while giving the DEPB benefit, but the same was required to be proved beyond doubt as required by the RBI guidelines - Held that:- Except one party, all other communications were on letter heads of the respective parties. It was further found that none of the payments had come beyond six months, but the same were within six months as could be verifiable from the bank realization certificates enclosed annexed in the paper book. The Tribunal recorded that each of the transactions between the assessee as the seller and the two buyers were mediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of eligibility for deduction under section 80HHC of the Income-tax Act to the Assessing Officer ? (4) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has committed an error in reversing the order of the Commissioner of Income-tax (Appeals)-III, Surat, without assigning any cogent and relevant reasons ? (5) Whether, on the facts and in the circumstances of the case, the order of the Income-tax Appellate Tribunal is contrary to the evidence and material on the record of the case and, hence, perverse or not ?" 2 The assessee is an individual and is engaged in the business of exporting of processed cloth. The assessment year is 2004-05 and the corresponding accounting period is the financial year 2003-04. 3. The proposed questions No. 1, 2 and 3 relate to three difference issues whereas proposed questions No. 4 and 5 are general in nature relating to all the first three questions. 4. In relation to proposed question No. 1, the Assessing Officer observed that the assessee had made total purchases of Rs. 24,88,63,282 and to verify the same, issued notices under section 133(6) of the Act. In case of 17 parties, the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have to pay cenvat at 10 per cent. and the cost of purchase such material from the genuine dealers would be higher. The Assessing Officer, there-fore, concluded that the purchases were inflated by 10 per cent. of the purchase price shown because cenvat was not paid on such purchases and, therefore, the additional income earned by purchasing grey without bills was computed at 10 per cent. of the purchases and addition of Rs.1,67,59,134 was made to the income. 5. Being aggrieved, the assessee preferred an appeal before the Commissioner (Appeals), but did not succeed. Before the Commissioner (Appeals), it was submitted on behalf of the assessee that during the assessment proceedings, all books of account and purchase bills with detailed addresses of the parties were furnished. These bills contained excise registration number and the relevant division of the Department where those suppliers were assessed. No adverse inference could be drawn in case the parties were not found, since the assessee gave the addresses on the basis of purchase bills and it was quite likely that those parties subsequently closed the business or shifted to some other place. The assessee made payments fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferring to paragraph 12 of the impugned order, it was submitted that the finding that it may be possible that the sellers might have surrendered licence/registration, out of which they were earning and might have closed the business and were not traceable for that reason, is not based on any evidence or material on the record and as such, the impugned order is perverse. 7. On the other hand Mr. S. N. Soparkar, learned senior advocate appearing for the respondent invited attention to the paper book which formed part of the record before the Assessing Officer. Attention was invited to the written submissions submitted before the Commissioner (Appeals) whereby his attention was drawn to the copies of various cheques issued by the assessee to his suppliers. Sample copies whereof are attached to the paper book at pages 468 to 498. Inviting attention to the copies of cheques at pages 469 onwards, it was pointed out that all the said cheques were account payee cheques. Attention was also invited to the invoices issued by the sellers all of which form part of the paper book. Attention was invited to the certificates issued by the central excise authorities evidencing payment of duty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and spot inquiry by the inspector of the office. It was further recorded that during the appellate proceedings also, the assessee was asked to produce at least some of the parties for verification, but the same was not done on the ground that the said parties might have closed down their business or would have left the city for good or could have changed their addresses. It was also recorded that the assessee had not furnished certificate from his bank as to whether the payment was made by account payee cheques to these parties, which was required to verify the claim of the assessee that most of the payment to the suppliers was made by account payee cheques. The Commissioner (Appeals) was, accordingly, of the view that this proved that the payments were made either in cash or by crossed or bearer cheques which could be easily endorsed to third parties or could be easily encashed. It was also noted that the assessee had purchased huge quantities from each of the so-called registered dealers and could not produce even a single party for verification nor any evidence was produced before the Assessing Officer or before him that the payments to these parties were made through account pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d certificate, ARE-1. According to the assessee, thereafter, the seller had surrendered the licence/registration which he was earlier having and as such, since he had surrendered and closed the business, he was not traceable. It was pointed out from the invoices of the various parties, that the sellers had included 10 per cent. stated to be cenvat tax which the assessee had paid and included in the purchase value. According to the assessee, the purchases could not be doubted because the whole procedure including the addresses, had been verified by the Excise Department who are not in the assessee's control. From the copies of the aforesaid duty paid certificates, it is clear that there are columns like invoice number, date, quantity of material, assessable value, total of 10 per cent. cenvat paid, entry number, date, etc., all of which have been verified and mentioned as verified by the concerned authorities of the Excise Department. 11. The Tribunal, in the impugned order, has upon appreciation of the evidence on record, found that the assessee had purchased the duty paid goods and availed of cenvat credit in terms of the Cenvat Credit Rules. According to the Tribunal, it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue, this finding of the Tribunal has been vehemently assailed. How-ever, as pointed out by the learned counsel appearing for the assessee, copies of various cheques formed part of the paper book before the Assessing Officer which clearly shows that payments to several parties have in fact been made by account payee cheques. It is in the background of the aforesaid findings of fact recorded by it that the Tribunal was of the view that the authorities below were not justified in making addition by disallowing 10 per cent. of the cenvat credit. 12. Thus, it is apparent that the Tribunal has based its conclusions on findings of fact recorded by it upon appreciation of the evidence on record. Having regard to the submissions advanced by the learned counsel for the respective parties, and having perused the record of the case, it is not possible to state that the findings recorded by the Tribunal are based on irrelevant material or that any relevant material has been ignored. The learned counsel for the appellant is not ina position to indicate any evidence to the contrary from the record of the case. The Tribunal has given sufficient, cogent and convincing reasons for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Tribunal has recorded a finding that the commission agents might have been appointed by the buyers, the assessee is entitled to deduction of payment of commission to agents appointed by the buyers, which is contrary to the normal principles for payment of commission to the agents. According to the learned counsel, the assessee could not produce any evidence on record as to what services were rendered by which agent, for which commission payment has been made by the assessee and claimed as deduction. It was contended that the findings recorded by the Tribunal that considering the nature of the service rendered by the agent, even if they are appointed by the buyers, the services were indirectly rendered to the assessee is without any basis whatsoever. It was submitted that there is no evidence or material on record to record such a finding and that not a single agreement had been produced by the assessee on record to substantiate the findings recorded by the Tribunal. 16. On the other hand, Mr. S. N. Soparkar, learned senior advocate appearing on behalf of the respondent-assessee, submitted that the assessee has shown the net deduction after payment of commission, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that such types of transactions had already been accepted by the Board and that, this was not a new concept of deducting commission from invoice value. It was submitted that whatever amount was received by the assessee as net consideration of export had been offered as export turnover and the Department had failed to bring on record any evidence to the effect that the assessee had received gross export turnover. 20. The Tribunal, after considering the rival submissions and after appreciating the evidence on record, found that the receipt of commission amount had been duly confirmed by the agents which in turn meant that the amount which had been deducted from the invoice value actually represented commission payments which were finally received by the agent. This had been done in accordance with the terms and conditions agreed upon between the buyers and the seller, even though there was no formal agreement. The agents had unequivocally confirmed and reconfirmed the nature of the transactions and that the absence of any formal agreement could not be held to be a ground to dismiss the claim of the assessee. There were clear contra confirmations from the agents. Thus, onc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Tribunal recorded that each of the transactions between the assessee as the seller and the two buyers were mediated by agents, whose existence was established beyond doubt, by the confirmation letters. Secondly, there was rendering of services. The agents had clearly written that they had rendered services ; in procuring samples, deciding the orders and settling all matters between the buyers and seller including payments by the buyers to the seller. The existence of the agents and their functioning was for the benefit of the assessee as well. The Tribunal, accordingly, was of the view that the claim of the assessee towards commission payment deserves to be allowed. 22. From the facts noted hereinabove, it is apparent that the conclusion arrived at by the Tribunal is based upon findings of fact recorded by it after appreciating the evidence on record, which have not been dislodged by the Revenue by pointing out any evidence to the contrary. The reasons assigned by the Tribunal for arriving at its conclusion are reasonable and convincing. On behalf of the Revenue nothing has been pointed out to persuade the court to take a different view. In the circumstances, the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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