Apr 242014
 

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Central Excise – Dated:- 24-4-2014 – Waiver of pre-deposit – MRP Valuation u/s 4A – Insulated Wares – when there is no requirement of affixation of MRP on ………………

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Apr 242014
 

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M/s. Arihant Industries and M/s. Navkar Industries Versus Commissioner of Central Excise Daman – Central Excise – CESTAT AHMEDABAD – Tri – Waiver of pre-deposit – Demand of differential duty – MRP Valuation under Section 4A of the Central Excise Act, 1944 – Insulated Wares – Held that:- there is no dispute that the items which are cleared and sold by the appellant are without affixation of MRP by them. It is also admitted that the said items are being distributed free by the purchasers. In such circumstances, when there is no requirement of affixation of MRP on the said final products, the clarification by the CBEC in the Central Excise manual prima facie would cover the issue. In our view, the appellant has made out a strong prima facie case for the waiver of pre-deposit of amounts involved. Accordingly, the applications for waiver of pre-deposit of amounts involved are allowed and recovery thereof stayed till the disposal of appeals – Stay granted. – 2014 (4) TMI 838 – CESTAT AHMEDABAD – TMI – Appeal No. : E/793 & 794 of 2012 – - Dated:- 3-1-2013 – Mr. M.V. Ravindran and Mr. B.S.V. Murthy, JJ. For the Appellant: Shri S.J. Vyas, Advocate For the Respondent : Shri Manoj Kutty, A.R. ORDER Per : Mr. M.V. Ravindaran; These two stay petitions raise the same issue and hence they are being disposed of by a common order. 2. These two stay petitions are filed for the waiver of pre-deposit of the amounts confirmed by the adjudicating authority as differential duty liability along with interest and penalties have been imposed on the ground that the appellants herein have not discharged the duty liability on the final product i.e. Insulated Ware which are covered by the provisions of MRP Valuation under Section 4A of the Central Excise Act, 1944. It is ………………

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Apr 242014
 

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COMMISSIONER OF C. EX. & ST., RAIPUR Versus PRAKASH INDUSTRIES LTD. – Central Excise – CESTAT NEW DELHI – Tri – Valuation of goods – sister concern – revenue neutral exercise – Revenue contends that assessee should have cleared the goods to their sister units at the assessable value arrived at in terms of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, which provided for adoption of assessable value as 110% of the cost of production or manufacture of such goods – Held that:- admittedly goods were being cleared by the respondents on payment of duty and it is not a case of clandestine removal. The only objection of the Revenue was that the assessable value was adopted on the lower side inasmuch as the same should have been arrived at by taking into consideration 110% of cost of production. At this stage, we note that whatever duty was paid by the respondents was being availed as Cenvat credit by their sister concern. As such, the differential duty required to be paid by the present respondents was available as Cenvat credit to their sister concern, thus making the entire exercise as revenue neutral. There are umpteen number of decisions holding that in such a scenario, no mala fide can be attributed to the assessee. As such, we find no favours with the Revenue’s contention that short payment was made by the respondents on account of any mala fide so as to ignore the provisions of Section 11A(2B) – Decided against Revenue. – 2014 (4) TMI 835 – CESTAT NEW DELHI – 2013 (290) E.L.T. 693 (Tri. – Del.) – E/2576/2012 – A/55180/2013-EX(BR)(PB) – Dated:- 3-1-2013 – Ms. Archana Wadhwa and Shri Sahab Singh, JJ. Shri M.S. Negi, DR, for the Appellant. None, for the Respondent. ORDER On matter being called, nobody appeared for the respondents. Accordingly, we have heard learned DR and have gone through the impugned order. 2. A very short issue is involved in the present appeal. The respondent was engaged in the manufacture of iron and steel products which they were clearing to their own sister concern located at Raipur. The said clearances were being made by them on payment of appropriate duty of excise. However, Revenue entertained a view that they should have cleared the goods to their sister units at the assessable value arrived at in terms of Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, which provided for adoption of assessable value as 110% of the cost of production or manufacture of such goods. Inasmuch as the respondent were transferring the goods to their sister units, they were required to pay duty at the value of 110% of cost of production in the terms of Board s Circular No. 643/34/2002-CX., dat………………

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Apr 242014
 

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Central Excise – Dated:- 24-4-2014 – Valuation of goods – differential duty required to be paid by the present respondents was available as Cenvat cre………………

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Apr 242014
 

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Commissioner of Customs Versus American Power Conversion (India) (P.) Ltd. – Customs – KARNATAKA HIGH COURT – HC – Liability for Penalty & Interest – Deposition of Duty before issuance of show cause notice – Whether penalty and interest could be imposed when the duty had been deposited before the issuance of the show cause notice – Judgment in Union of India v. Rajasthan Spg. Wvg. Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] and UNION OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [2007 (7) TMI 307 - SUPREME COURT OF INDIA] followed – The Supreme Court has taken a view that the payment of duty/differential duty, whether before or after the show cause notice is issued cannot alter the liability for payment – The law laid down in the judgments relied upon by Tribunal in the impugned order is no more a good law and that it stands set aside – Appeal allowed wherein hardly Rs.50,000/- penalty had been imposed – Accordingly, the order dated 12-07-2005 passed by the CESTAT in Appeal No.C/ 195/2004 is set aside – Decided against the assessee. – 2014 (4) TMI 833 – KARNATAKA HIGH COURT – TMI – CSTA No. 24 of 2006 – - Dated:- 16-1-2014 – DILIP B. BHOSALE AND B. Manohar, JJ. For the Appellant : Sri. Y. Hariprasad For the Respondent : Sri. N. Anand for Sri. K.S. Ravishankar JUDGMENT Dilip B. Bhosale, J. This Customs Appeal is directed against the common order dated 12-07-2005 by which, three appeals, including the appeal filed by the respondent bearing Appeal No.C/195/2004, were allowed insofar as levy of penalty and interest is concerned. By this order, the CESTAT set aside the order confirming the penalty and interest passed by the Adjudicating authority and the Appellate Authority dated 3-7-2003 and 19-02-2004, respectively. 2. The ………………

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Apr 242014
 

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VAT and Sales Tax – Dated:- 24-4-2014 – Scope of term Goods u/s 2 (d) of the Act – Taxation of Transfer of Right to use goods – besides plants and machinery, entire land and building………………

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Apr 242014
 

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VAT and Sales Tax – Dated:- 24-4-2014 – Waiver of Pre-deposit – when the petitioners have neither pleaded any undue hardship and / or financial hardship it cannot be said that the learne………………

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Apr 242014
 

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For digital signature for online filing of applications/returns etc. – VAT – Delhi – 02/2014-15 – Dated:- 23-4-2014 – GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI DEPARTMENT OF TRADE AND TAXES VYAPAR BHAWAN, I.P.ESTATE, NEW,DELHI-110002 No. F.3(377)/Policy/VAT/2013/PF/16-23 Dated : 23/04/2014 CIRCULAR NO. 02 of 2014-15 The Government of National Capital Territory of Delhi in exercise of the powers conferred by section 100A of the Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005), has issued a notification vide No.F.3(21)/Fin(Rev-l)/2013-14/dsvi/347 dated 26/03/2014 for use of digital signature for online filing of applications/returns etc. Therefore, all registered dealers can avail of the facility by obtaining digital signatures from any pf the certifying authorities. The dealers filing the returns online by using digital signature need not" to file Return verification Form in Form DVAT-56. 2. You may please see that in near future all applications/documents would be accepted when signed using digital signatures. The hard copy of such documents need not be filed with the Department if a document/return/application etc., is submitted using………………

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Apr 242014
 

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Sri M/s. Ajit Exports Versus M/s. MBS Impex Private Limited. – Corporate Laws – ANDHRA PRADESH HIGH COURT – HC – Winding up of company – whether the jewellery was manufactured from out of the gold supplied by the respondent or from out of its own gold by the petitioner – Held that:- there is no dispute about the manufacturing of jewellery by the petitioner at the request of the respondent and exporting the same to the designated customer of the respondent at Dubai. The value of jewellery exported by the petitioner and received by the respondents customer is also not in dispute – Such a dispute would not have arisen if there were clear terms of understanding between the parties. The petitioner filed a copy of the MOU, a perusal of which would show that the same is bereft of essential terms such as the quantity of jewellery that was agreed to be exported and whether the jewellery has to be manufactured from out of the gold supplied by the respondent or from out of the petitioners own gold. This Court is at a loss to know as to the reason for such a cryptic MOU between the parties while dealing with a very valuable subject matter of the contract, namely; manufacturing and exporting of gold ornaments. Under Section 433 read with Section 434 of the Act, a company cannot be ordered to be wound up, unless either the debt is admitted or the dispute as to the debt raised by the respondent is not bona fide. In the absence of a clear understanding between the parties stipulating that the petitioner will manufacture the jewellery from out of its own gold or at least any contemporaneous correspondence between the parties unequivocally proving the claim of the petitioner that it has manufactured the jewellery from out of its own gold and that the respondent has not supplied the gold, it is not possible for this Court to hold that the denial of the debt by the respondent is not bona fide. The respondent has filed purported vouchers in order to substantiate its plea that it has supplied its own gold under the said vouchers to the petitioner. However, the petitioner raised a plea that these vouchers are fabricated. This Court, while exercising its jurisdiction under the Act, will not adjudicate on this disputed issue – Company petition does not deserve to be admitted, as it has not satisfied the requirements of Sections 433 and 434 of the Act – Decided against appellant. – 2014 (4) TMI 831 – ANDHRA PRADESH HIGH COURT – TMI – Company Petition No. 180 of 2011 – - Dated:- 12-2-2014 – C. V. Nagarjuna Reddy,JJ. For the Petitioner : Mr. V. S. Raju For the Respondent : Mr. S. Ravi, Senior Counsel for Mr. J. Prabhakar ORDER This company petition is filed under Sections 433(e) and 439(1)(b) read with Section 434(1)(a) of the Companies Act, 1956 (for short 'the Act'), for ordering winding up of the respondent company for non-payment of debt due to the petitioner. The petitioner has pleaded that it is a partnership firm and that the respondent is a private limited company with authorized capital of Rs.25,00,00,000/- divided into 2,50,00,000 equity shares of Rs.10/- each and its issued, subscribed and paid up capital is Rs.9,65,00,000/- divided into 96,50,000 equity shares of Rs.10/- each. That the respondent is mainly engaged in the business of manufacture and sale of gold jewellery, that it has approached the petitioner and represented that it had a confirmed export order for manufacture and supply of jewellery to M/s. Samrah Gold Factory, L.L.C., P.O. Sharjah, UAE, and that based on the said representation of the respondent, they have entered into a Memorandum of Understanding (for short 'MOU') on 25.08.2008. The petitioner further pleaded that under the said MOU, it was agreed that the respondent is responsible for realization of the proceeds from the importer in Sharjah, UAE, for gold jewellery exported, within the timeframe allowed by the Reserve bank of India, that the petitioner shall avail all the benefits of Noida Special Economic Zone (NSEZ), where the manufacturing unit of the petitioner is located, and that the respondent shall pay the due amount to the petitioner firm in Indian rupees and is responsible for realization within the timeframe allowed by Reserve Bank of India. The petitioner also pleaded that in terms of the said MOU and as per the instructions received from the respondent, it has manufactured and exported gold jewellery to M/s. Samrah Gold Factory, through Indian Airlines. The petitioner specifically pleaded that it has manufactured the gold jewellery and exported on behalf of the respondent from out of its own raw material (raw gold). It was further pleaded that in accordance with para 9.62 of the Foreign Trade Policy 2004-2009, the invoices raised in the name of the respondent were sent by the petitioner along with other shipping documents to the consignee and that receipt of the goods was duly acknowledged by the importer. That in terms of the agreement between the parties, the petitioner raised 11 debit notes for a total sum of Rs.70,97,56,084/-, that on 05.09.2008, the respondent paid a sum of Rs.2,00,00,000/- as part payment of the amount of Rs.70,97,56,084/-, that the respondent was indebted to the petitioner in a sum of Rs.68,97,56,084/- as on 26.09.2008 and it is liable to pay interest at 24% per annum from 26.09.2008 till the date of actual payment. The petitioner further pleaded that in partial discharge of its liability, the respondent has issued two cheques, one for Rs.1,00,00,000/-and another for Rs.10,00,00,000/-, that when the same were presented to its bankers, they were returned as dishonoured and that it has initiated proceedings under Section 138 of the Negotiable Instruments Act against the respondent for dishonour of the cheques. That as the respondent failed to honour its commitment relating to payment of due amounts, the petitioner has sent a statutory notice on 18.02.2011 under Section ………………

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Apr 242014
 

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The Commissioner Trade Tax UP. Lucknow Versus Triveni NL. Ltd. – VAT and Sales Tax – ALLAHABAD HIGH COURT – HC – Scope of term Goods u/s 2 (d) of the Act – Taxation of Transfer of Right to use goods – plant and machinery attached to earth – Movable Property or not – Claim for exemptions – rent received for plant and machinery – immovable property – Rent Agreement – Whether machinery can be held to be goods so as to attract tax liability under Act, 1948 – Absence of intention to severe plants and machinery – Held that:- For a property and to be regarded as attached property, it must become attached to immovable property as permanently as a building or a tree is attached to earth – If, in the nature of things, the property is a movable property and for its beneficial use or enjoyment, it is necessary to embed it or fix it on earth, though permanently, that is, when it is in use, it may not be regarded as immovable property, but not otherwise – Here, besides plants and machinery, entire land and building was leased out and there was no provision/agreement that plants and machinery shall be severed or removed from earth – Removal of plants and machinery would not have allowed the factory to run – There is no agreement between parties that plants and machinery shall be severed or removed from earth – Even according to definition of goods under Section 2(d) in view of this Court, it cannot be included therein. The term goods is defined under Section 2(d) and this is in conformity with definition of immoveable property as contained in Section 3(26) of General Clauses Act 1897 – Items, which are fastened to or attached to earth or something attached to earth are not included in the definition of goods unless there is an agreement between the parties that those items etc. would be severed pursuant to contract of sale between the parties, which is not the case here – It is not the case of the Revenue that there was any intention of parties to severe plants and machinery attached to earth – In fact, there was a lease to run entire factory and not to remove or severe plant and machinery attached or fastened to earth, which are installed in the aforesaid factory to make it functional – In view thereof and considering judgment of Tribunal, this Court do not find that plants and machinery in the case in hand can be treated to be goods within the meaning of Section 2(d) so as to attract and taxability – Therefore, revision is dismissed – Decided against Revenue. – 2014 (4) TMI 842 – ALLAHABAD HIGH COURT – TMI – Sales/Trade Tax Revision No. – 910 of 2001, Sales/Trade Tax Revision No. – 911 of 2001, Sales/Trade Tax Revision No. – 912 of 2001 – - Dated:- 13-1-2014 – Hon'ble Sudhir Agarwal,JJ. For the Applicant : C. S. C For the Respondent : A. P. Mathur ORDER 1. Heard learned Standing Counsel for the revisionist and perused the record. 2. In all these revisions, which have arisen from the orders of Tribunal, though in respect to different assessment years, but following three common questions of law have been raised, pressed and argued and therefore, all these revisions are being decided by this common judgment. "A. Whether on the facts and in the circumstances of the case, Trade Tax Tribunal is legally justified to hold that the plant and machinery attached to earth is not moveable property for taxing the transfer of right to use the goods under the provisions of Section 3F of the U.P.Trade Tax Act? B. Whether on the facts and in the circumstances of the case, Trade Tax Tribunal is legally justified to allow dealer's claim for exemptions on the amount received on account of rent for plant and machinery by ignoring the law laid down by the Hon'ble Supreme Court in the matter of S/S Sirpur Paper Mills Vs. Collector of Central Excise Hyderabad AIR 1998 SC 1489? C. Whether on the facts and in the circumstances of the case, Trade Tax Tribunal is legally correct to allow dealer's claim of exemption on the ground that the machinery installed is immovable property being attached to earth even though the machinery was installed and attached to earth for better functioning and operational efficiency? D. Whether on the facts and in the circumstances of the case, Trade Tax Tribunal is legally justified to hold that the agreement was made outside the State despite there was no mention of place of agreement on the stamps?" 3. The brief facts relevant in this case are that assessee and one M/s Gangeshwar Ltd., executed a lease deed in respect of an industrial unit situated at Deoband (Uttar Pradesh). The entire industrial unit including land, plant and machinery was leased out to the assessee for the purpose of running the same. The Assessing Authority took a view that plants and machinery are such as can be removed from the earth by loosening nut and bolts etc. and therefore, they constitute goods, as defined under Section 2(d) of U.P. Sales Tax Act, 1948 (hereinafter referred to as "Act, 1948") and transfer of goods with the right to use thereof is taxable under Act, 1948. The first appellate authority dismissed appeal confirming the view taken by Assessing Authority but the Tribunal has reversed the above view taken by authorities below, hence this revision at the instance of Revenue. 4. It is, however, admitted that plants and machinery, in the case in hand, is such which is fixed or attached to earth or to the things embedded or attached to earth. Now the question which has to be considered, "whether these items can be held to be "goods" so as to attract tax liability under Act, 1948." 5. This question has been considered time and again by various courts including Apex court. The term "goods" is defined under Section 2(d) of Act, 1948 and reads as under: "'Goods' mean every kind or class of movable property and includes all material, commodities and articles involved in the execution of a works contract, and growing crops, grass, trees and things attached to, or fastened to anything permanently attached to the earth which, under the contract of sale, are agreed to be severed, but does not include actionable claims, stocks, shares, securities or postal stationary sold by the Postal Department." (emphasis added) 6. Anything, which is permanently attached to earth or fastened to anything permanently attached to the earth, would not be covered by definition of 'goods' unless under the contract of sale, parties have agreed that those things or items are to be severed. This is in conformity with definition of "immoveable property" as contained in Section 3(26) of General Clauses Act (Central) 1897, which reads as under: "'immovable property' shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth." 7. Under Section 3 of the Transfer of Property Act 1882 (hereinafter referred to as "Act, 1882") the term "immoveable property" has also been defined and it reads as under: "immoveable property" does not include standing timber, growing crops or grass." 8. Whether plants and machinery set up in a factory premises fastened to earth or things attached to earth can be held to be a moveable or immoveable property, came to be considered before this Court in Official Liquidator Vs. Sri Krishna Deo and Ors., AIR 1959 All 247. The Court appointed an Advocate Commissioner to inspect premises of company to ascertain whether machinery and plants were fixed and attached to earth or not. The report submitted shows that plants and machinery of company were either embedded in the earth or permanently fastened to things attached to earth. On behalf of State, argument was raised that most parts of machinery are fixed to their bases with bolts and nuts, and can be removed by removing the nuts. It thus cannot be said that such machineries are permanently fastened inasmuch as, the same can be moved away by removing the nuts and hence should be held "movable property". The argument was noticed and rejected, by following House of Lords decision in Reynolds Vs. Ashby & Son, 1904 ACJ 466, wherein Lord Lindley has observed: "The purpose for which the machines were obtained and fixed seems to me unmistakable; it was to complete and use the building as a factory. It is true that the machines could be removed if necessary, but the concrete beds and bolts prepared for thorn negative any idea of treating the mac………………

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Apr 242014
 

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Jessop & Co. Ltd. Versus The State of Tamil Nadu Rep., by the Commercial Tax Officer, – VAT and Sales Tax – MADRAS HIGH COURT – HC – Nature of agreement – Whether transaction was sale or a works contract – Levy of penalty – evasion of tax – Held that:- contract is a not a simple sale, it is a composite works contract, u/s 3-B of the TNGST Act – and not a simple sale – The contract provides for assembling of design, manufacture assembling, supply erection, commissioning and handing over within a period and the second crane to be erected, commissioned and handed over – In the light of the nature of agreement the taxable turnover, hence, has to be worked out only in accordance with the provisions under Section 3B of the Tamil Nadu General Sales Tax Act – Various terms of the agreement show that the assessee entered into an agreement with Japanese Corporation and signed a collaboration agreement with M/s.Hitachi Limited for importing components required for cranes and whereby, Hitachi had agreed to sell the drawings and other necessary documents to the assessee – and the second crane to be erected, commissioned and handed over – the nature of agreement and the taxable turnover has to be worked out only in accordance with the provisions under Section 3B – assessment set aside – Matter remitted back to the AO for re-working out the deduction – In absence of details available in the books of accounts as regards the turnover not involving transfer of property of goods, the agreement falls u/s 3B(e), the assessee entitled to deduction at 30% as by way of standard deduction – Decided partly against assessee. – 2014 (4) TMI 841 – MADRAS HIGH COURT – TMI – Tax Case (Revision) No. 2332 of 2008 – - Dated:- 7-11-2013 – Chitra Venkataraman And T. S. Sivagnanam,JJ. For the Petitioner : Mr. N. Inbarajan For the Respondent : Mr. Manokar Sundaram A.G.P (Taxes) ORDER (The Order of the Court was made by Chitra Venkataraman, J.) The assessee is on revision as against the order of the Sales Tax Appellate Tribunal (Additional Bench), Madras, relating to the assessment year 1986-87. 2. The assessee herein is a Government of India undertaking, dealing in erection of cranes. It entered into a contract with Madras Port Trust for designing, manufacture, supply, erection, commissioning and handing over of 2 Nos., of tyre mounted transfer cranes with telescopic spreaders and supply of one number additional telescopic spreader. An agreement was entered into between the parties fixing lump sum amount of Rs.3,77,00,000/- for design, manufacture, supply, erection, commissioning and handing over of 2 Nos., tyre mounted transfer crane with 2 telescopic spreaders one for each cranes and for the supply of one number additional telescopic spreader at a cost of Rs.20,48,000/-, totalling to Rs.3,97,48,000/-. The agreement also gave the payment terms, the completion period by erection and commissioning and handing over. The assessee executed a contract with the Port Trust and supplied goods as ordered therein. On 23.09.1987, there was an inspection on the place of the business in Port Trust and found that the assessee had executed a contract and had also collected sales tax to an extent of Rs.9,08,683/-. Thus, on further investigation with the Port Trust, the Assessing Officer found that there were payments for the assessment years 1986-87 and 1987-88. The assessee submitted that as the works contract executed in the course of interstate trade, it was not liable to sales tax under the provisions of the Tamil Nadu General Sales Tax Act. 3. A reading of the order of assessment shows that in spite of an opportunity granted to the assessee to file its objections to the proposal to assess the transaction, the assessee did not produce the relevant documents nor filed its reply. Thus ultimately, the Assessing Officer determined the turnover for the assessment year 1986-87 at Rs.5,55,58,933/- and granted 5% deduction towards erection charges and arrived at taxable turnover for the assessment year 1986-87 at Rs.5,27,80,987/-. Having regard to the failure on the part of the assessee in not disclosing the turnover, penalty at 150% of the tax due on the actual turnover was also made. Aggrieved by the same, the assessee went on appeal before the Appellate Assistant Commissioner (Commercial Taxes). 4. On perusal of the materials, the first Appellate Authority pointed out that the goods were moved from Calcutta and from foreign countries. The assessee was provided with a site by the Port Trust apart from electricity and water at cost for assembling the cranes. Thus, the crane was to be assembled only in the Madras Port Trust and there was transfer of property in the cranes only in Tamil Nadu. The first Appellate Authority rejected the contention of the assessee on inter-State works contract and going by the terms of agreement, the First Appellate Authority held that the transaction was amenable to composite works contract. 5. On the question of levy of penalty under Section 12(3) of the TNGST Act, the First Appellate Authority pointed out that in spite of the issue of summons, the assessee, being a Government of India Undertaking, did not respond to the summons issued by the statutory authority and produced their books of accounts for scrutiny. In these circumstances, the First Appellate Authority further pointed out that the assessee had collected taxes even without registration. The Port Trust authorities had also provided for sales tax at 5% on 70% of the contract value in the price structure. Therefore, the first Appellate Authority confirmed the order of the Assessing Authority. Aggrieved by the same, the assessee went on further appeal before the Tamil Nadu Sales Tax Appellate Tribunal. 6. Before the Sales Tax Appellate Tribunal, on the question as to whether the contract was one for sale of goods or for executing works, it pointed out that the contract was a composite contract for a sum of Rs.3,77,00,000/-for the design, manufacture, supply erection, commissioning and handing over of 2 numbers tyre mounted transfer cranes with two telescopic spreaders, one for each crane and for the supply of one number additional telescopic spreader at a cost of Rs.20,48,000/- totalling to Rs.3,97,48,000/-. This included customs duty at 84.8%, excise duty at 12% and sales tax at 5% on 70% of contract value. 7. The Sales Tax Appellate Tribunal further pointed out to the assessees letter dated 19.02.1996, wherein it was stated that the cranes could not be moved from one site to another and the movement of the cranes was restricted to a particular site or yard in the Port and that too for a fixed distance, thus, it could not be termed as mobile cranes. In the light of the facts found, the Sales Tax Appellate Tribunal applied the decision in the case of Mazgaon Docks Ltd reported in [100 STC 57], and held that the erection of two tyre mounted cranes in the Port Trust by the assessee was only a sale and not a works contract. Taking note of the fact that the assessee had not chosen to register themselves as a dealer and they had willfully attempted to evade tax and further noting that the assessee is a Government of India undertaking and there being no scope for personal gain, the Sales Tax Appellate Tribunal held that there was no sufficient materials to hold that the assessee wanted to willfully evade payment of tax. In the circumstance………………

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Apr 242014
 

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Oil And Natural Gas Corporation Limited Versus State of Gujarat & 3 – VAT and Sales Tax – GUJARAT HIGH COURT – HC – Waiver of Pre-deposit – Condition for waiver – Undue hardship – Under the GST Act and under Central Sales Tax Act – Disposal of stay – Held that:- On merely establishing a prima facie case, interim order of protection should not be passed – But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand – Petitions for stay should not be disposed of in a routine matter unmindful of the consequence flowing from the order requiring the assessee to deposit full or part of the demand – Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest – Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens’ faith in the impartiality of public administration, interim relief can be given. While dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interest of Revenue have to be kept in view – There are two important expressions in Section 35(f) – One is undue hardship – This is a matter within the special knowledge of the applicant for waiver and has to be established by him – A mere assertion about undue hardship would not be sufficient – It was noted by this Court in S. Vasudeva Vs State of Karnataka and Ors. [1993 (3) TMI 350 - SUPREME COURT OF INDIA] that under Indian conditions expression “Undue hardship” is normally related to economic hardship – “Undue” which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it – Undue hardship is caused when the hardship is not warranted by the circumstances – Relying upon Mehsana District Cooperative Milk P.U. Ltd. vs. Union of Indina [2003 (3) TMI 113 - SUPREME COURT OF INDIA] – The conditions as to predeposit in appeal can be waived mainly on the ground of undue hardship/ financial hardships – Moreover, when the petitioners have neither pleaded any undue hardship and / or financial hardship it cannot be said that the learned Tribunal has committed any error and / or illegality in directing the petitioner original appellant to deposit a sum of Rs. 20 crores as predeposit – Petitions fail and are dismissed – Decided against assessee. – 2014 (4) TMI 840 – GUJARAT HIGH COURT – TMI – Special Civil Application No. 13564 of 2013, Special Civil Application No. 13567 of 2013, Special Civil Application No. 13574 of 2013 – - Dated:- 26-9-2013 – M. R. Shah And Sonia Gokani,JJ. For the Petitioner : Mr. Akshat Khare, Advocate, Mrs. Suman Khare, Advocate For the Respondent : Mr. Jaymin Gandhi Assit. Government Pleader JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1.0. As common question of law and facts arise in these petitions and as such are between the same parties, all these petitions are disposed of by this common order. 2.0. Special Civil Application Nos. 13564 of 2013 and 13574 of 2013 have been preferred by the petitioners hereinoriginal appellantsONGC challenging the impugned order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad (hereinafter referred to as the Tribunal ) passed in Second Appeal Nos. 427 of 2013 and 428 of 2013, by which, the learned Tribunal has directed to the petitioners hereinoriginal appellants to deposit a sum of Rs. 10 crores only as pre deposit against the total demand of Rs. 279,27,61,029/under the Gujarat Sales Tax Act and demand of Rs.20,92,70,258/under Central Sales Tax Act. 2.1. Special Civil Application No.13567 of 2013 has been preferred by the petitioner herein original appellant ONGC challenging the impugned order passed by the learned Tribunal dated 31.7.2013 passed in Second Appeal No. 448 of 2013, by which, the learned Tribunal has directed the petitioneroriginal appellant to deposit a sum of Rs. 10 crores only as pre deposit, against the total demand of Rs.473,14,84,532/against the petitioner. 3.0. That the assessment order has been passed by the Assessing Officer for the assessment period 200809 under the Gujarat VAT Act as well as under the Central Sales Tax Act on 9.4.2013 and as a result thereof the total demand of Rs.279,27,61,029/has been raised under the Gujarat VAT Act and a demand of Rs.20,92,70,258/has been raised under the CST Act against the petitioners hereinoriginal appellants. Being aggrieved and dissatisfied with the assessment order dated 9.4.2013, the petitioners preferred appeals before the Joint Commissioner of Commercial Tax. The said appeals have been dismissed by the Joint Commissioner of Commercial Tax vide order dated 2.5.2013. Feeling aggrieved and dissatisfied with the said order dated 2.5.2013, the petitioners have preferred Second Appeal Nos. 427 of 2013 and 428 of 2013. In the said appeals, the petitioner original appellant submitted the application for stay / waiver of predeposit and by impugned order dated 29.7.2013, the learned Tribunal has directed the petitioner hereinoriginal appellant to deposit a sum of Rs. 10 crores only as predeposit and on such deposit, the department is directed to not to take any coercive action against the appellant for recovery of outstanding demand. 3.1. Similar order has been passed by the learned Tribunal in Second Appeal No. 448 of 2013. Against the impugned orders of predeposit of Rs.10 crores each, the petitioners herein original appellantONGC have preferred present Special Civil Applications under Article 226 of the Constitution of India. 4.0. Shri Akshat Khare, learned advocate appearing on behalf of the respective petitioners has vehemently submitted that in the facts and circumstances of the case, the learned Tribunal has materially erred in directing the petitioner herein original appellantONGC a Public Sector Undertaking to deposit a sum of Rs.10 crores (in each appeals i.e. in all Rs.20 crores) as pre deposit. It is submitted that as such the learned Tribunal has not properly appreciated the fact that the appellant is a Public Sector Undertaking and is in Distribution of Oil and therefore, if the petitioners are directed to deposit of Rs.20 crores, it may affect the public distribution system. It is submitted that in earlier appeals with respect to earlier assessment year, the earlier Tribunal granted unconditional stay on total waiver of predeposit. 4.1. Shri Akshat Khare, learned advocate appearing on behalf of the respective petitioners has heavily relied upon the decision of the Hon ble Supreme Court in the case of M/s. Pennar Industries vs. State of Andhra Pradesh reported in (2009)3 SCC 177 as well as another decision of the Hon ble Supreme Court in the case of Ravi Gupta vs. Commissioner of Sales Tax, Delhi reported in (2009) 5 SCC 208 in support of his prayer to quash and set aside the impugned orders of predeposit and direct the learned Tribunal to decide the appeal without insisting for deposit of any amount towards predeposit. 5.0. Present petitions are opposed by Shri Jaymin Gandhi, learned Assistant Government Pleader on behalf of the respondent. It is submitted that as such against the total demand of approximately Rs. 800 crores (in all these appeals) as such the learned Tribunal has directed the petitionersoriginal appellants to deposit a total sum of Rs. 20 crores only, which in the facts and circumstances of the case cannot be said to be illegal and / or perverse. It is submitted that as such the petitioners hereinoriginal appellants have never pleaded any undue hardship and / or financial hardship, which are relevant consideration while deciding the application for waiver of predeposit. 5.1. Shri Gandhi, learned Assistant Government Pleader has heavily relied upon the decision of the Hon ble Supreme Court in the case of Mehsana District Cooperative Milk P.U. Ltd vs. Union of India reported in 2003 (154) ELT 347(SC) as well as decision of the Hon ble Supreme Court in the case of Benara Valves Ltd vs. Commissioner of Central Excise reported in (2006) 13 SCC 347. He has also relied upon the decision of the Division Bench of this Court in the case of M/s. Explosion Proof Electrical Control And Ors vs. Commissioner of Central Excise and Customs Vapi reported in 2012(2) GLR 1673 as well as recent unreported decision of this Court in the case of Aircomp Enterprise vs. Union of India & Others reported in Special Civil Application No.13925 of 2013 in support of his prayer to dismiss the present petition. 6.0. Heard learned advocates for the respective parties at length. At the outset, it is required to be noted that by impugned orders, the learned Tribunal has directed the petitioners hereinoriginal appellants to deposit a total sum of Rs.20 crores against the total approximately demand of Rs.800 crores, as predeposit and on such deposit further recovery of demand has been stayed. At the outset, it is required to be noted that as such the petitioners have never pleaded any undue hardship and / or any financial hardship. When the present petitions were preferred it was the case on behalf of the petitioners that the identical question with respect to earlier assessment years is pending before the Tribunal and the Tribunal had heard the appeals and the issue is recurring in nature, the Tribunal may be directed to hear the appeals w………………

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Apr 242014
 

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M/s Delphi Automotive Systems Pvt. Ltd. Versus CCE, Noida – Central Excise – CESTAT NEW DELHI – Tri – Waiver of pre deposit – Denial of CENVAT Credit – Cenvat credit of service tax paid on housekeeping and cleaning service availed for cleaning of the factory shed, legal services and event management service availed for organising functions for honouring the employees for their outstanding work – Held that:- Prima facie, I find that so far as the service of housekeeping and cleaning availed in respect of the factory shed is concerned, keeping the factory neat and clean is a statutory requirement in terms of Section 11 of Factories Act, 1948 and, hence, this service has to be treated as service having direct nexus with the manufacture of the final product, as without compliance with the provisions of the Factory Act, no manufacturer can engage in the manufacturing activity. Therefore, the impugned order disallowing the Cenvat credit in respect of this service is not correct. Impugned orders denying the Cenvat credit in respect of the above-mentioned services are not correct and the appellant have strong prima facie case in their favour. Hence, the requirement of pre-deposit of Cenvat credit demands, interest thereon and penalty is waived for hearing of these appeals and recovery thereof is stayed till the disposal of the appeals – Stay granted. – 2014 (4) TMI 839 – CESTAT NEW DELHI – TMI – Appeal No. 3378 and 3389 of 2012 (SM) – Stay Order No. 55353-55354/2013 – Dated:- 4-1-2013 – Shri Rakesh Kumar, J. For the Appellant: Shri Anandh Venkataramani, Advocate For the Respondent: Shri B.B. Sharma, Authorized Representative (SDR) ORDER Per. Rakesh Kumar :- The appellant are manufacturers of automobile parts. The period of dispute in this case is from April 2007 to October 2008 and from April 2010 to June 2011. The dispute for the first period i.e. from April 2007 to October 2008 is as to whether during this period, the appellant were eligible for Cenvat credit of service tax paid on housekeeping and cleaning service availed for cleaning of the factory shed, legal services and event management service availed for organising functions for honouring the employees for their outstanding work. The Cenvat credit availed in respect of these services is Rs. 3,29,193/-. The point of dispute in respect of the second period of dispute i.e. from July 2010 to June 2011 is as to whether the appellant during this period were eligible for Cenvat credit in respect of the service of housekeeping and cleaning for factory shed and event management availed. The event management service, has been availed up to March 2011. During this period also the event management had been availed for organising functions for honouring the employees for their outstanding performance. The department in both the cases being of the view these services are not eligible the Cenvat credit, issued show cause notices for denying the Cenvat credit and its recovery alongwith interest and also for imposition of penalty. The show cause notice dated 22/6/11 for the period from April 2007 to October 2008 was issued by invoking extended period under proviso to Section 11A (1) of the Central Excise Act, 1944. Both the show cause notices were adjudicated by jurisdictional Assistant Commissioner who by two separate orders confirmed the above-mentioned Cenvat credit demands alongwith interest. While in respect of first period of dispute, penalty of equal amount was imposed, in the second period of dispute, penalty of Rs. 25,000/- was imposed. On appeal to Commissioner (Appeals), both the orders were upheld by two separate orders-in-appeal against which these appeals have been filed alongwith stay applications. 2. Heard both the sides in respect of stay applications. 3. Shri Anandh Venkataramani, Advocate, the learned Counsel for the appellant, pleaded that so far as the service of housekeeping and cleaning of the factory shed is concerned, the appellant in accordance with the provisions of Section 11 of the Factories Act, 1948 are required to keep the factory clean and free from effluvia arising from any drain, privy or other nuisance and imparticular the floor of every work room shall be cleaned at least once in every week, that in view of the………………

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Apr 242014
 

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Comstar Automotive Technologies Pvt. Ltd. Versus CCE Chennai-III – Central Excise – CESTAT CHENNAI – Tri – Denial of CENVAT Credit – Outdoor catering service – Held that:- waiver and stay can be granted to the appellant in this case, inasmuch as all the significant facts were pleaded before the adjudicating authority as evidenced by the impugned order and these very facts have been reiterated before us at the Bar. Moreover, the crucial mandatory requirement of maintaining canteen as per the provisions of Section 46 of the Factories Act has been specifically incorporated in the grounds of appeal – Stay granted. – 2014 (4) TMI 837 – CESTAT CHENNAI – TMI – E/169/12 – - Dated:- 3-1-2013 – Shri P.G. Chacko and Shri Mathew John, JJ.For the Appellant: Shri G. Natarajan, AdvocateFor the Respondent: Shri P. Arul, Superintendent (AR)ORDERPer P.G. Chacko;On a perusal of the records, we find that the adjudicating authority has denied CENVAT credit of Rs.16,58,941/- to the appellant on ‘outdoor catering service’ which was used during the material period for providing food in the factory canteen to workers. The appellant pleaded before the learned Commissioner that they were providing canteen facility as it was mandatory under Section 46 of the Factories Act. The learned counsel for the appellant reiterates this plea and submits that, during the material period, the appellant had employed more than 250 workers and hence provided canteen facility to them. It is further submitted that t………………

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Apr 242014
 

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GIRNAR FIBRES LIMITED Versus CCE. INDORE – Central Excise – CESTAT NEW DELHI – Tri – Waiver of pre deposit – Availment of CENVAT Credit – GTA Service – Held that:- amendment in Rule 2(p) was taken note by the Division Bench of Tribunal in Shree Rajasthan Syntex Ltd. vs. CCE reported in [2011 (8) TMI 265 - CESTAT, NEW DELHI] and it was held that inasmuch as there was no simultaneous amendment in the provisions of Rule 2(r) the utilizing of the credit for disposal of Service Tax liability by the respondent was in accordance with the law – Stay granted. – 2014 (4) TMI 836 – CESTAT NEW DELHI – TMI – Appeal E / 691 / 2012 – ORDER NO .SO/55279/13-EX(Br) – Dated:- 3-1-2013 – Smt. Archana Wadhwa and Shri Sahab Singh, JJ. For the Respondent: Shri M.S. Negi, SDR ORDER Per Archana Wadhwa (for the Bench): The appellants have made a request for adjournment. However, we find that matter has been repeatedly coming up on board and was being adjourned at the request of advocate of the appellant. As such, after rejecting the request of adjournment, we proceed to decide the stay petition after hearing the learned DR and after going through the impugned order. 2. The appellant was engaged in the manufacture of cotton yarn, which were exempted from excise duty. They were procuring some services from outside India on which they were required to pay service tax on reverse charge basis. The appellant discharged the service tax lia………………

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Apr 242014
 

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AUDCO INDIA PVT LTD Versus CCE, CHENNAI-III – Central Excise – CESTAT CHENNAI – Tri – Denial of CENVAT Credit – Waiver of pre deposit – outdoor catering service – Held that:- Commissioner examined the scope of the definition of input service independently and arrived at a conclusion against the assessee. This apart, we find that a few factual aspects are crucial in determining whether the appellant can claim the benefit of the two judgements. Firstly, the appellant should clearly plead the number of workers employed in the factory during the material period. Secondly, they should also clearly state whether the cost of service was included in the cost of production of the final products, and if so to what extent. Appellant has not pleaded any of these. They have not even claimed that no amount was recovered from the employees towards the cost of the service. In other words. the appellant has failed to set up the requisite factual foundation for claiming the benefit of the Honble High Courts judgements. In this scenario, we are unable to hold that they have made out a clear prima facie case against the demand. nevertheless, for the moment, we are not impressed with the way in which the case of Ultratech Cement Ltd. was distinguished by the adjudicating authority – Following decision of CCE, Nagpur Versus Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT] and Commissioner of Central Excise, Bangalore-III, Commissionerate Versus Stanzen Toyotetsu India (P.) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT] – Conditional stay granted. – 2014 (4) TMI 834 – CESTAT CHENNAI – TMI – E/101/12 – MISC ORDER NO.40079/2013 – Dated:- 3-1-2013 – P G Chacko And Mathew John, JJ. For the Appellant : Shri N Prasad, Adv. For the Respondent : Shri D P Naidu, Addl. Commr. (AR) Per: P G Chacko: On a perusal of the records and hearing both sides, we find that the adjudicating authority has denied CENVAT credit to the extent of Rs.21,65,184/- to the appellant for the period from September 2007 to September 2010 in respect of outdoor catering service which was used by them for supply of food in their factory canteen to the workers. 2. Learned counsel for the appellant has claimed prima facie case on the strength of two High Court decisions viz. Commissioner Vs Ultratech Cement Ltd. – 2010 (20) STR 577 (Bom.) and Commissioner Vs Stanzen Toyotetsu India (P) Ltd. – 2011 (23) STR 444 ( Kar.). Claiming support from these decisions, the learned counsel submits that the supply of food to the factory w………………

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Apr 242014
 

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SONIA OVERSEAS PVT. LTD. Versus UNION OF INDIA – Customs – Punjab and Haryana High Court – HC – Validity of Assistant Commissioner order – Genuineness of the transaction value – Alternate Remedy – Procedure for appeals – Section 14 of the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 – Held that:- The impugned order is appealable – An assessment has to be finalised after considering provisions of the Act and the Rules – Norms issued by a department, as rightly asserted by counsel for the revenue, are merely guidelines – A guideline whether styled as a norm or an instruction, is framed for guidance and, therefore, cannot replace statutory provisions – The necessity to issue guidelines and instructions arises from the extremely complicated taxation regime which more often than not is incomprehensible even to experts – Norms, guidelines and directions cannot replace provisions of the statute or the Rules – Impugned order is admittedly appealable – The petitioner is relegated to the remedy of filing the appeal – Decided in favour of Appellants. – 2014 (4) TMI 832 – Punjab and Haryana High Court – 2014 (300) E.L.T. 165 (P & H) – C.W.P. No. 12322 of 2013 – - Dated:- 31-10-2013 – Rajive Bhalla and Dr. Bharat Bhushan Parsoon, JJ. Shri Jagmohan Bansal, Advocate, for the Petitioner. Shri Kamal Sehgal, Advocate, for the Respondent. ORDER The petitioner is before us challenging order dated 16-7-2013 passed by the Assistant Commissioner of Customs, CFS, Focal Point, Ludhiana (Respondent No. 3) primarily on a plea that the order has been passed in gross and blatant violation of Section 14 of the Customs Act, 1962 (for short, the Act) and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 (for short, the Rules). 2. Counsel for the petitioner submits that the respondents have based their conclusions upon a formula/norms devised by the Commissioner of Customs, Nhava Sheva which, in essence, denudes discretion conferred upon an Assessing Officer. The formula/norm came up for consideration in CWP No. 9152 of 2010 – M/s. Ganesh Agro v. Union of India and Others decided on 1-12-2010 [2012 (276) E.L.T. 459 (P & H)] and it was held that these norms cannot be applied mechanically without considering the genuineness of the transaction value or value calculated as per the statute. The respondents have applied these norms without considering genuineness of the transaction value or recording any finding that the transaction value is incorrect. 3. Counsel for the revenue submits, on the basis of a judgment of the Hon ble Supreme Court in Union of India v. Guwahati Carbon Ltd. – 2012 (278) E.L.T. 26 (S.C.) that the Act is a complete ………………

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Apr 242014
 

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Clarification regarding treatment of expenditure incurred for development of roads/highways in BOT agreements under Income-tax Act, 1961 –regarding. – Income Tax – 09/2014 – Dated:- 23-4-2014 – Circular No. 09 /2014 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes North Block, New Delhi Dated the 23rd of April, 2014 Subject: – Clarification regarding treatment of expenditure incurred for development of roads/highways in BOT agreements under Income-tax Act, 1961 –regarding. It has come to the notice of the Board that disputes have arisen as to whether the expenditure incurred on development and construction of infrastructural facilities like road /highways on Build-Operate-Transfer ('BOT') basis with right to collect toll is entitled for depreciation under section 32(1)(ii) of the Act or the same can be amortized by treating it as an allowable business expenditure under the relevant provisions of the Income-tax Act, 1961 ('Act'). 2. In such projects, the developer (hereinafter referred to as 'assessee'), in terms of concessionaire agreement with Government or its agencies is required to construct, develop and maintain the infrastructural facility of roads/highways which, inter-alia, includes laying of read, bridges, highways, approach roads, culverts, public amenities etc. at its own cost and is utilization thereof for a specified period. In lieu of consideration of the expenditure incurred on construction, operation and maintenance of the infrastructure facility covered by the period of the agreement, the assessee is accorded a right to collect toll from users of such facility. The expenditure incurred by such assessee on development and construction of such infrastructural facility are capitalized in the accounts. It is seen that in returns-of income, assessees are generally claiming depreciation on such capitalized expenditure treating it as an 'intangible asset' in terms of section; 32(1)(ii) of the Act while in assessments, such claims are, being disallowed by the Assessing Officer on the grounds that such infrastructural facility is not owned, wholly or partly, by the taxpayer which is an essential condition for claiming depreciation and further right to collect toll does not fall in any of the categories of 'intangible assets' specified in sub-clause(ii) of sub-section (1) of secton 32 of the Act, 3. In BOT arrangements for development of roads/highways, as a matter of general practice, possession of land is handed over to the assessee by the Government/notified authority for the purposes of Construction of the project without any actual transfer of ownership and such assessee has only a right to develop and maintain such asset. It also enjoys the benefits arising from use of asset through collection of Toll for a specified period without having actual ownership over such asset. Therefore, the rights in the land remain vested with the Government or its agencies. Thus, as assessee does not hold any rights in the project except recovery of toll fee to recoup the expenditure incurred, it cannot therefore be treated as an owner of the property, either wholly or partly, for purposes of allow ability of depreciation under section 32(1)(4) of the Act. Thus, present provisi………………

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