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2009 (6) TMI 967
CENVAT credit - rent-a-cab services - car maintenance service - photography service - outdoor catering service - Held that: - the issue stands settled in favour of the respondents by the decision of the larger Bench of the Tribunal in Commissioner of Central Excise, Mumbai vs GTC Industries Ltd. [2008 (9) TMI 56 - CESTAT MUMBAI] holding that CENVAT credit is admissible on "outdoor catering service" as 'outdoor catering service' is an input service relating to business.
Rent-a-cab service - photography service - repair and maintenance of vehicles - Held that: - the credit of service tax on all the above services involved in the present batch of the appeals is held to be available to the respondents.
Appeal dismissed - decided against Revenue.
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2009 (6) TMI 966
Levy of penalty u/s 271C - delay in deposit of Tax deducted at source (TDS) - belated remittance of the TDS - Quantum of penalty which in this case is above ₹ 1.1 crore - Counsel for the appellant has drawn a distinction between clauses (a) and (b) of Section 271C (1). According to him penalty under clause (a) is only for failure to deduct tax as required under any of the provisions of Chapter XVIIB.
HELD THAT:- We are unable to accept the contention because the first part of clause (b) of Section 271C(1) i.e. failure to pay whole or any part of tax as required, takes in the tax deducted under clause (a) under any of the provisions of Chapter XVIIB. In our view, failure to deduct or failure to remit recovered tax, both will attract penalty u/s 271C. the contention of the appellant fails and we uphold the finding of the Tribunal dismissing the challenge against levy of penalty.
Quantum of penalty - The Tribunal has not considered challenge against quantum of penalty in so much details probably because in the penalty order it is stated that only minimum penalty is levied. So far as failure on the part of the assessee to remit the tax recovered at source is concerned, we do not think there can be any justifying circumstance for delay in remittance because assessee cannot divert tax recovered for the Government towards working capital or any other purpose.
Defence available u/s 273B does not cover failure in payment of recovered tax. However, if there is failure to remit on account of failure to recover for any reason whatsoever, then the case calls for reduction of penalty, if not waiver. Similarly, we feel recovery and remittance of tax, though with delay but with interest, before detection is certainly a mitigating circumstance for waiver or reduction of penalty. Further, if full amount of tax with interest was paid before levy of penalty, we feel quantum reduction is called for by the AO. Therefore, we direct AO to reconsider the quantum of penalty.
The appeal is accordingly disposed of upholding the order of the Tribunal on the levy of penalty, but with direction to the AO to grant further reduction in penalty, if any new fact or circumstance is brought to the notice
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2009 (6) TMI 965
Demand of tax and penalty levied under section 30B(3) of the Kerala General Sales Tax Act, 1963 - Held that:- In this case goods started its movement from Tuticorin to Karnataka through Kerala and it never reached Karnataka. Therefore the appellant cannot treat the local sale of timber in Kerala during its movement as an inter-State sale from Karnataka. The Central sales tax if any paid in Karnataka is a clear violation of section 9(1) of the Central Sales Tax Act. Therefore all the contentions of the appellant fail. However we feel even now that the appellant can be exonerated from penalty provided the entire tax with interest up to date payable under section 30B(3) read with section 23(3A) is paid within one month from receipt of this judgment. If the appellant settles the tax liability with interest payable under section 23A as above before the officer concerned, he will revoke the penalty.
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2009 (6) TMI 964
Whether the Tribunal was justified in confirming disallowance of exemption claimed on the purchase tax payable under section 5A of the Kerala General Sales Tax Act, 1963, on paddy under SRO No. 1729 of 1993?
Held that: - If the petitioner's contention is accepted, then every commodity when assessed under section 5A will become taxable at the point of last purchase and so much so, benefit of notification will be available. This is obviously not intended by the Government while issuing the notification because applying this logic, every commodity when purchased and consumed in manufacture by an SSI unit becomes taxable at the point of last purchase in the State and will be entitled to exemption - notification has to be read consistent with the other provisions of the Act - petition dismissed - decided against petitioner.
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2009 (6) TMI 963
... ... ... ... ..... ernment Pleader (Taxes) for the petitioner. Having regard to the concurrent findings of the Appellate Assistant Commissioner as well as that of Sales Tax Appellate Tribunal, which findings relating to the production of original form F declarations were based on the verification report of the assessing authority himself in having stated in uncontroverted terms that original portion of form F declarations produced by the assessee tallied with the duplicate form F declarations placed before him and that apart, the statement of accounts filed by the agents in their States were also found in order, it is too late in the day for the petitioner to have come forward with this writ petition challenging the said orders of the Appellate Assistant Commissioner as well as that of the Tribunal. We do not find any scope at all to interfere with the said orders. The writ petition, therefore, fails and the same is dismissed. No costs. Consequently, connected miscellaneous petition is closed.
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2009 (6) TMI 962
Penal interest levied applying section 24(3) of the Tamil Nadu General Sales Tax Act for belated payment of additional sales tax - Held that:- On the above limited ground of not giving notice and opportunity of hearing to the petitioner before imposing penalty, the impugned orders are set aside and the matters are remitted back to the respondent. The first respondent is directed to issue notice to the petitioner with regard to the liability of the petitioner to pay penalty amount, within a period of two weeks from the date of receipt of copy of this order.
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2009 (6) TMI 961
Penalty levied under section 12(3) of the Tamil Nadu General Sales Tax Act, 1959 - Tribunal deleted the penalty - Held that:- In the case on hand, a perusal of the order of the assessing authority dated December 29, 2000 does not disclose in any part of the order that the account particulars furnished by the respondent were either incorrect or incomplete. On the other hand, the assessment of tax came to be made by accepting the accounts particulars furnished by the respondent, while rejecting the stand of the respondent that the business activities of the respondent do not call for levy of any tax liability.
Thus we are convinced that the levy of penalty as imposed by the assessing authority and as confirmed by the first appellate authority was wholly improper and was not in conformity with the stipulations contained in section 12(3)(b) of the Act. Consequently, the order of the Tribunal in having interfered with the same is perfectly justified.
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2009 (6) TMI 960
Depreciation in the computation of taxable turnover for works contract of the respondent for the year 1997-98 - Held that:- In the absence of any specific provision in section 5C, depreciation on machinery or tools is not eligible for any deduction in the computation of taxable turnover on works contract. Besides this “charges for obtaining on hire or otherwise” in sub-clause (c)(ii) can only mean charges paid for obtaining machinery or tools under any other arrangement other than hire. In other words, if the charges are paid on any other terms, i.e., other than on hire arrangement for availing of the facility of machinery and tools, then only such charges are eligible for deduction, which certainly does not include depreciation because notional expenditure in the form of amortisation of cost of machinery and tools owned by the contractor is not visualised in section 5C(1)(c)(ii) of the Act. Sales tax revision allowed.
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2009 (6) TMI 959
... ... ... ... ..... ity, by the respondent during the year is around Rs.37 lakhs, whereas the total turnover is around Rs. 1.63 crores. The respondent could not correlate the charges levied and the amenity provided to any customer in any given case. Therefore, it is only a dubious method to evade payment of tax. In the same set of facts the Bombay High Court has in East India Hotels Ltd. v. State of Maharashtra 1995 99 STC 197 held that luxury separately charged by a hotelier for supply of food and drink in the hotel forms part of turnover. We are of the view that the ratio of the decision of the Bombay High Court applies to this case also and the only difference is that the respondent is bifurcating price under another head amenities as against the word luxury used by the hotelier in Bombay. We, therefore, allow the revision case on this issue by reversing the order of the Tribunal and that of the first appellate authority and by restoring the assessment of amenity charges as part of turnover.
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2009 (6) TMI 958
Deduction towards labour charges claim disallowed - Held that:- The honourable Tribunal and revisional authority are right in disallowing the deductions claimed by the petitioner as a works contractor in view of rule 6(4)(m) of the KST Rules and the law laid down by the honourable Supreme Court in the case of Gannon Dunkerley [1992 (11) TMI 254 - SUPREME COURT OF INDIA].
Questions of law framed by the petitioner do not arise for consideration as the impugned judgment and review order is based on facts and law and therefore we answer the same against the petitioner as the Appellate Tribunal has granted the reliefs to the petitioner after noticing the fact that not giving deductions of ₹ 3,96,826.72 paid by him towards labour charges in which as per the decision of the Supreme Court referred to supra, the assessing authority has to examine the claim of the petitioner including the claim of ₹ 9,22,611.46 said to have paid towards the labour charges. Appeal dismissed.
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2009 (6) TMI 957
Arrears of tax and penalty relating to the assessment years 1998-99 and 2001-02 - whether service of notice is not made as contemplated under rule 52(1) of the Tamil Nadu General Sales Tax Rules, 1959?
Held that:- Nowhere, either in the Tamil Nadu General Sales Tax Act or in the Rules, service of notices at the residential address is mandated. If the address of the dealer is known to the assessing authority, the mode of service would be registered post or if none of the modes is practicable, the affixture in some conspicuous place at the last known place of business or residence is the proper mode of service.
In this case, after passing of the final orders, the same were served on the assessee on February 28, 2004 and June 7, 2003 respectively by way of affixtures. Therefore, service of notices was done by following rule 52(1)(c) and (d), which could be sufficient service, thus do not find any infirmity in the mode of service. As such, the writ petitions fail and stand dismissed.
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2009 (6) TMI 956
... ... ... ... ..... enalty is not warranted, because till the issue has been settled by the apex court in the case of 20th Century Finance Corpn. Ltd. v. State of Maharashtra 2000 119 STC 182, it was a debatable issue. This contention is having some force, because having taken into consideration the difficulties experienced by the dealers, Commissioner has issued a circular No. Acts Cell-I/12975/ 2001 dated February 28, 2001, wherein it is stated that in respect of the assessment year 1999-2000 and prior to 1999-2000 completed assessment need not be reopened to give effect to the Supreme Court decision and pending assessment can be completed by the above guidelines. Admittedly, this case is prior to 1999-2000. The dispute is related to the transaction of the like nature. The circular would clearly apply to the case of the assessee. In the light of what is stated in the foregoing paragraphs, the writ petition is disposed of confirming the levy of tax, and setting aside the imposition of penalty.
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2009 (6) TMI 955
Levy of penalty - Held that:- If a registered dealer honestly believes that any particular goods are embraced by the certificate of registration it is only a case under section 10(b). The inclusion of these materials subsequently and made on the belief that use of form C was only for legitimate use for the company and has so made a representation, he cannot be held guilty under section 10(b) of the Act and therefore the Tribunal came to the right conclusion that no levy of penalty could be imposed on the assessee under section 10(b) and cannot be interfered with at this stage. Appeal dismissed.
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2009 (6) TMI 954
... ... ... ... ..... ransactions before the assessing officer and thereby the assessing officer had no opportunity to consider any particular item of turnover, which would fall within the ambit of escapement from assessment. In the case on hand, it was admitted that the entire sales turnover relating to monafilament niwar was made available by the assessee before the original authority, who with his eyes wide-open thought it fit at that point of time that the said item was exempted from tax by virtue of the circular instructions issued by the Commissioner of Commercial Tax dated March 31, 1993. The issue cannot therefore be brought under the concept of escapement assessment , for which alone invoking of section 16(1)(a) of the Act, is permissible under the provisions of the Act. In such circumstances, we do not find any merit to entertain this tax revision inasmuch as we do not find any question of law involved in this revision. The revision fails and the same is accordingly dismissed. No costs.
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2009 (6) TMI 953
Non entitlement to payment of tax at compounded rate in respect of works contract executed in the form of supply and installation of kitchen cabinet
Held that:- Clause (ii) applies in respect of every divisible contract and even where specified goods are locally procured such goods will attract tax at scheduled rate as provided under section 6(1)(e) of the Act and the balance portion of work that is fabrication, supply and installation of kitchen cabinets with top, fittings, partitions, etc., by the appellant will be assessed as works contract. In view of the proposed amendment, and in view of the discussion above, we are of the view that there cannot be any absolute bar against payment of tax at compounded rate on the works executed involving fabrication, supply and installation of kitchen cabinets.
While the Commissioner's finding that in respect of supply of specified goods tax is payable at the rate provided in the Schedule is correct, we vacate that part of the order where he says that no compounding is permissible in respect of remaining work relating to fabrication, supply and installation of kitchen cabinets. Appeal partly allowed upholding the impugned order of the Commissioner issued under section 94 of the Act and by directing the assessing officer to consider eligibility for compounding depending upon the nature of contract executed in each case and to make assessment accordingly.
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2009 (6) TMI 952
Entertain and register the sale certificate issued in favour of the petitioner-bank in respect of the property - Held that:- In the present case, as the matter is still pending before the first respondent for registration of the sale deed in question, and in the absence of any affidavit, we are not inclined to give any specific finding or direction with regard to the registration of the same.
We are of the view that the first respondent should consider the matter in its proper perspective and decide the question of registration of the sale deed in question within one month from the date of receipt/production of a copy of this order
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2009 (6) TMI 951
... ... ... ... ..... sition, the fact that the body had suffered tax earlier is of no consequence. The question is whether the sale was of the finished vehicle or that of two independent goods, namely, the chassis and the body. . . Applying the ratio laid down in the above referred to decisions to the facts of this case, even though the respondent herein paid tax at the time of purchase of the chassis and thereafter built the body over it, having regard to the undisputed fact that what was sold by the respondent later was the lorry as a whole, the tax suffered on the chassis was immaterial, inasmuch as the product sold was the lorry, the value of which is liable to be taxed under the provisions of the Act. We, therefore, find that the order of the Tribunal in having interfered with the order of the assessing authority is not justified. Accordingly, the Tribunal 39 s order is set aside. The order of the assessing authority dated January 31, 1992 stands restored. The revision is allowed. No costs.
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2009 (6) TMI 950
Whether when a Governmental organisation, namely, railway would categorically indicate by virtue of this letter that there was no supply involved and what was the work awarded was only the labour contract, the finding of the suo motu enquiry is not legally sustainable?
Held that:- The reliance placed by the first appellate court and the appellant herein on the letter issued by the railway authorities much belatedly in respect of the contract that it would only denote the works contract cannot be accepted and this has been rightly done by the suo motu authority during the suo motu order.
The letter issued by the authority relied upon by the appellant cannot be accepted as a material fact and it will not have any sanctity as against the original agreement or the tender contract as entered into between the railway authority and the assessee. The Joint Commissioner III (SMR) of Commercial Taxes, had given a specific finding that it is an undisputed fact that jelly was supplied for carrying out various types of works whether it is renewal of track or track sleeper renewal.
Apart from that, he has also given a finding that the extracts taken from Southern Railway had clearly indicated that the dealer had supplied jelly worth ₹ 2,24,518 to the Railway Department during the relevant year and that the assessee sold condemned articles for ₹ 7,000. Such findings of fact have been clearly extracted by the authorities below. We are not able in any way, to assail the factual findings coupled with the clauses found in the agreement. We do not find any valid reason to interfere with the orders of the authority below as the reasonings are well-founded. Hence, the appeal filed by the assessee is dismissed.
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2009 (6) TMI 949
Whether at the time of transfer of title to the goods, the goods have crossed the custom frontier or not?
Held that:- The approach of the Tribunal, having regard to the statutory provision, section 2(ab) of the Central Sales Tax Act, and section 2(13) of the Customs Act and also sections 47 and 68 of the Customs Act, holding that the assessee is entitled to exemption, as in this case the goods cannot be regarded as having crossed the customs frontier, when it was warehoused, is correct and we do not find any merit in the writ petitions. The writ petitions stand dismissed.
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2009 (6) TMI 948
... ... ... ... ..... ing but incentives given by manufacturers, and wholesalers to dealers, may be for seasonal sales or may be for annual sales. Such incentives are normally given by credit note at the end of the season or at the end of the year. These incentives given through credit notes are outside the scope of discount covered by rule 9(a) of the KGST Rules. Since facts are not considered by the assessing officer with reference to monthly returns and annual returns filed and copies of bills raised by the petitioner and credit notes issued, we feel an opportunity can be given to the petitioner to demonstrate before the assessing officer that discount given is of the kind allowable under rule 9(a) as discussed above. We therefore set aside the orders of the Tribunal and that of the lower authorities pertaining to disallowance of discount alone and remand the matter to the assessing officer for verification of records and for allowing the claim to the extent permissible under law stated above.
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