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Central Excise - Case Laws
Showing 61 to 80 of 196 Records
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2014 (6) TMI 717
Waiver of pre-deposit of duty - Classification Zymegold plus - Tariff Heading 3101 00 99 or under Tariff Heading 3808 - Held that:- As per the Chemical Examiner’s report dated 3-9-2010 and as the applicant submitted the write up in respect of the product in question and the applicant admitted presence of technical grade urea in the product in question. Therefore, the product in question cannot be classified as organic fertilizer under Tariff Heading 31 of the Central Excise Tariff. In respect of the limitation, we find that the applicants were regularly clearing the product in question at nil rate of duty by claiming classification under Tariff Heading 3101 00 99 of the Central Excise Tariff and filing statutory returns - The demand for the normal period of limitation as quantified in Annexure to the Show Cause Notice comes to Rs. 36 lakhs. - stay granted partly.
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2014 (6) TMI 716
Waiver of pre-deposit of duty - import of electric bicycles in CKD condition - assembling the electric bicycles by procuring certain indigenous parts such as tyres, tubes and shock absorbers - duty as per Notification No. 6/2006-C.E., dated 1-3-2006 - Held that:- goods were declared as electric bicycles in CKD condition and paid appropriate customs duty by classifying the same under Heading 8711.9091 which covers other electrically operated motor cycle. In view of this, prima facie the applicant has a strong case in their favour. Pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.
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2014 (6) TMI 687
Denial of refund claim - Removal of the used capital goods without payment of duty - Subsequent reversal of the entire amount of credit originally taken on the said capital goods under protest - Held that:- Reversal of CENVAT credit of 2.5% for each quarter of an year from the date of taking of CENVAT credit on capital goods. - matter should be examined in the light of the decision of the Larger Bench of the Tribunal in the case of Navodhaya Plastic Industries Ltd. (2013 (12) TMI 82 - CESTAT CHENNAI). Accordingly, I set aside the impugned orders and remand the matter back to the adjudicating authority to decide the matter afresh - Decided in favour of assessee.
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2014 (6) TMI 686
Valuation of goods - Related parties - mutuality of interest - appellant and M/s Mayer Organics Pvt. Ltd. (MOPL) are interconnected units - Rejection of valuation of goods - Held that:- There is absolutely no discussion about relationship between MOPL and the appellant. - In the case relied upon by the assessee, the Tribunal had observed that in respect of one item, the appellant was already paying Excise duty on the basis of price at which the goods were sold by MOPL and the issues of related person are not relevant. On going through both the orders of the Tribunal as well as Hon'ble Supreme Court, we find that the issue was not considered by them. We find that Hon'ble Supreme Court also did not consider this issue. In the absence of a specific challenge to the findings, prima facie, we find that the conclusion of the Commissioner that both the appellant and MOPL are related because they are interconnected undertakings and mutuality of interest has to be considered to have attained finality. Therefore, in our opinion, the appellant does not have prima face case. - Conditional stay granted.
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2014 (6) TMI 685
Reversal of CENVAT Credit - Supply of goods to 100% EOU without payment of duty - deemed export - Whether the capital goods can be removed without reversing the CENVAT credit to an EOU unit availing the benefit of Notification No. 22/2003-CE - Held that:- Commissioner (Appeals) has rightly relied upon the circular issued by the Board wherein it has been clarified that inputs can be considered as excisable goods and clearance of the same can be placed on par with clearance of excisable goods. Even though Rule 19(2) of Central Excise Rules was not cited nor discussed by any of the lower authorities, I still feel that also will be relevant. According to Rule 19(2) of Central Excise Rules, any materials can be cleared without payment of duty by a manufacturer for export. Provisions of Rule 19(2) which provide for clearance of goods without payment of duty irrespective of the fact that they were manufactured by the assessee or otherwise in my opinion would cover the issue in favour of the appellant.
Further another point which was submitted by the learned counsel for the respondent that would be relevant is that after 2004, 100% EOU was eligible for the CENVAT credit. Therefore even if the assessee were to reverse the CENVAT credit the receiving unit would have taken the credit and if they could not utilize the same for payment of duty they could have claimed refund - Following decision of Solectron Centum Electronics Ltd. [2008 (11) TMI 538 - CESTAT, NEW DELHI] - Decided against Revenue.
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2014 (6) TMI 684
Duty demand - Clubbing of demands - Revenue clubbed their clearances in the hands of Kandhari Radio Corporation - Held that:- Facts of each case suggest their own fate and characteristics as well as nature thereof for settlement. When there was no job-work agreement, nor there was anything on record to repel the allegations in the show cause notice, we have no other go but to hold that Jeet Enterprises, Hi-Tech Electrical Industries and Kandhari Separators were manufacturers and duty liability in their hands should be determined - Decided against assessee.
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2014 (6) TMI 683
Failure to deposit the duty electronically - Penalty under Rule 27 ibid for violation of the proviso to Rule 8(1) ibid 19 times - whether for each violation, maximum penalty of Rs. 5,000/- and on this basis total penalty of Rs. 95,000/- should be imposed or whether the penalty of Rs. 10,000/- upheld by the Commissioner (Appeals) is sufficient - Held that:- In terms of 3rd Proviso to Rule 8(1), in case of an assessee whose monthly duty payment is Rs. 50 lacs or above, he is required to deposit the duty electronically through internet banking and violation to do so would invite penalty under Rule 27 according to which the contraventions in respect of which no penalty has been prescribed elsewhere, would attract penalty not exceeding Rs. 5,000/-. It is clear that Rs. 5,000/- is the maximum penalty and Adjudicating Authority in its discretion may imposed lower penalty also. Looking to the reasons for the respondent’s inability to comply with provisions of 3rd proviso to Rule 27(1), I am of the view that maximum penalty of Rs. 5,000/- under Rule 27 is not called for and as such I am of the view that the penalty imposed by the Adjudicating Authority which has been upheld by CCE (Appeals) is sufficient - Decided against Revenue.
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2014 (6) TMI 682
Valuation of goods - Deduction on account of transportation charges - Held that:- period involved is from 1-7-2000 to 11-9-2000 and the show cause notice stand issued on 30-4-2002. The adjudicating authority has invoked the longer period of limitation by observing that in terms of Board’s Circular No. 249/83/96-CX., dated 11-10-1996, invoices were not required to be submitted to the department and the assessee’s failure to show transportation charges separately in the invoices came to the notice of the Revenue at the time of visit of the officers to their factory. We find no justification in the above reasoning of the adjudicating authority. If the invoices were not to be submitted to the Revenue, failure of the assessee not to file the same with the Revenue cannot be held to be any suppression of facts with any mala fide intent. If the assessee does not do what he is not required to do under the law, he cannot be charged with any suppression or misstatement - Demand barred by limitation - Decided in favour of assessee.
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2014 (6) TMI 681
Waiver of pre-deposit of duty - Valuation of goods - Job work - applicants are not including the value of waste and scrap retained by them in the value of finished products for the purpose of payment of duty - Held that:- Major portion of the demand is in respect of the goods manufactured on behalf of Steel Authority of India Ltd. The applicants are paying duty at the sale price of Steel Authority of India Ltd. as per the provisions of Rule 10A of the Valuation Rules. In this situation, the value of waste and scrap retained by the applicant cannot be considered as additional consideration - In respect of the goods manufactured on behalf of KEC International Ltd., in similar situation in the case of Sanvijay Rolling & Engineering Ltd. vide order dated 15-11-2011, the Tribunal directed the assessee to pre-deposit part amount of duty and the Hon’ble Bombay High Court set aside the order passed by the Tribunal. In view of the above, the applicant has made out a strong case, therefore pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.
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2014 (6) TMI 680
Waiver of pre-deposit of duty - 100% EOU - Clearance of fruit pulp to their DTA unit - DTA unit got processed the fruit pulp and ultimately sold the juice. - Revenue is of the view that the applicants and the DTA are related person, therefore the applicants are liable to pay duly on MRP on the juice cleared by the DTA unit - Held that:- applicants cleared fruit pulp and are liable to pay appropriate duty on the fruit pulp and not on the juice, hence the applicant has a prima facie case in their favour and the amount already deposited is sufficient for hearing of the appeal. Pre-deposit of the remaining dues is therefore waived and recovery thereof stayed for hearing of the appeal. - Stay granted.
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2014 (6) TMI 679
SSI exemption - manufacture of medicines - Use of brand name of others - Notification No.8/2001 dated 1.2.2001 - Penalty - Held that:- during investigation, Sanjeev Aggarwal, proprietor of the respondent firm was examined under section 14 of Central Excise Act, 1944 wherein he admitted that they are manufacturing goods on behalf of M/s. Soft Pharmaceutical, Chandigarh under their brand name but on 19.3.2004, Shri Sanjeev Agarwal changed his stand and submitted that actually the goods were sold under his brand name and not of M/s Soft pharmaceutical, Chandigarh and they are not paying any royalty to the said firm.
The second statement of the respondent appear to be an afterthought, particularly, for the reason that the respondent have not led any evidence which will indicate that the goods, in question, were not sold under the brand of M/s Soft Pharmaceutical or M/s Pharmaceutical were promoter of the said product. In support of his contention, learned Counsel for the respondent had today produced packing box of one of the product ‘Vigor Plus’. On perusal of the packing, we find that this bears logo of Soft Pharmaceutical. Therefore, it is apparent that the Respondent were clearing the goods under the brand name of M/s Soft Pharmaceutical. Though the name of M/s Soft Pharmaceutical has been shown as promoter but they cannot be termed as distributor of goods for the reason that the Respondent had been selling the goods under the brand name of another person. - Respondent were clearing the goods under the brand name other person as such, they were not entitled to benefit of SSI exemption of Notification No.8/2001 - However, penalty is reduced to 25% of demand - Decided partly in favour of assesee.
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2014 (6) TMI 653
Non-payment of interest on alleged delayed payment of rebate claim - Rebate claim sanctioned but appropriated towards the appellant’s arrear liability - Held that:- Rebate claim of the appellant was filed on 29/04/2010 which was found admissible and sanctioned on 28/07/2010. However, the same was adjusted against some arrears pending against the appellant. The appropriation made by the Revenue was protested by the appellants that such adjustment without putting them to notice was not permissible. Separate appeals filed against the cases of arrears, against which adjustment was made and CESTAT vide order dt 4/10/2010 remanded those case back to the Commissioner (A) to decide the appeals without insisting for a pre-deposit. In the light of above factual matrix, adjustment of arrears from the rebate claim were not justified when separate appeals/stay applications were pending before the appropriate appellate authorities. Full rebate payment was due to the appellant after three months from the date (29/4/2010) of filing the rebate claim but was paid only on 13/5/2011 by the Adjudicating Authority. Interest from 29/7/2010 to 13/5/2011 is payable to the appellant as the rebate claim in fact was sanctioned on 28/7/2010 but adjusted against some arrears which were separately under litigations. - Decided in favour of assessee.
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2014 (6) TMI 652
Duty evasion - Shortage in stock - Clandestine removal of goods - Held that:- The material facts with evidence brought out by investigation as depicted in the preceding paragraphs appears to have force and truth, not being discarded by Respondent. Statements recorded brought out evidence to support the case of investigation. There was neither any hypothesis nor any presumption made by investigation. Investigation made its story of evasion believable bringing out the manner of causing evasion backed by cogent evidence depicted as aforesaid. The electronic record (computer data) proved the modus operandi of the respondent. Fabrication of the records proved evasion of excise duty. This is vividly clear from para 15 of the adjudication order. When the deficiency of stock was found by investigation and that remained unexplained, that is enough to make allegation of unaccounted removal of such goods. No evidence was there to show reason of evacuation of stock - Decided in favour of Revenue.
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2014 (6) TMI 651
Reversal of CENVAT Credit - Clearance of old and used capital goods to their other units on payment of duty on the transaction value - Held that:- Larger Bench of the Tribunal in the case of CCE Vs. Navodhaya Plastic Industries Ltd. - [2013 (12) TMI 82 - CESTAT CHENNAI], following the decision of the Hon’ble Madras High Court in the case of CCE Vs. Rogini Mills Ltd. - [2010 (10) TMI 424 - MADRAS HIGH COURT], held that reversal of CENVAT credit of 2.5% for each quarter of an year from the date of taking of CENVAT credit - matter should be examined in the light of the Larger Bench of the Tribunal in the case of Navodhaya Plastic Industries Ltd. (supra). Accordingly, I set aside the impugned orders and remand the matter back to the adjudicating authority to decide the matter afresh after considering the decision of the Larger Bench in the case of Navodhaya Plastic Industries Ltd. (supra) - Decided in favour of assessee.
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2014 (6) TMI 650
CENVAT credit - availment on MS/HR plates used for fabrication of capital goods - Held that:- Commissioner has failed to discuss the issues in detail. Commissioner has observed that the assessee had admittedly imported plant and machinery under project imports and nowhere they had stated that they had procured only parts of the machinery under Project Import Scheme; since under project imports complete machinery is imported, MS sheets and HR plates have been used for fabrication of structurals and other capital assets. The observation in this paragraph shows that the Commissioner came to the conclusion that the appellant is not eligible for the credit because under project import full machinery would have been imported and therefore MS plates/HR sheets must have been used for structurals. The submission made by the appellant regarding actual use of MS plates/HR sheets have not been considered at all. Moreover the fact that the appellant factory was being set up and therefore parts would have been fabricated has also not been taken into account.
Impugned order suffers from non-consideration of all the submissions made by the appellants and the issues in proper perspective. - matter remanded back - Decided in favour of assessee.
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2014 (6) TMI 649
Cenvat credit of duty paid on raw materials, capital goods and input services utilised in the captive power plant. - Benefit of Section 80-I of the Income-tax claimed - revenue contended that, the same cannot be held to be a part of the appellant’s factory for the purpose of excise - Held that:- appellant’s claim of captive power plant being a new industrial undertaking before the Income-tax authorities was held as not against the appellants claim of the same being a captive power plant before the Excise authorities for the purpose of Cenvat credit. Further the Tribunal in the case of Sangam Spinners v. CCE, Jaipur [2006 (9) TMI 28 - CESTAT,NEW DELHI] held that captive power plant was held to be a part of the factory even when the same was taken up as a separate division by the appellant in their balance sheet - Decided in favour of assessee.
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2014 (6) TMI 648
Waiver of pre deposit - CENVAT Credit - Credit on stapler pins - appellant after availing credit of duty paid on the stapler pins cleared the carton pack on an MRP which is inclusive of the cost of the stapler pins. - Held that:- prima facie appellant is not undertaking any further activity on stapler pins procured by them from the other manufacturer. The same simply accompany the staplers manufactured by them on which duty has already been paid. The stapler pins are also duty paid. As such, we at this stage, find no justifiable reasons to direct the applicant to pay the duty for the second time in respect of the same stapler pins on which no activity is done by them - Stay granted.
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2014 (6) TMI 647
Waiver of pre-deposit of duty - Import of coca beans - CVD paid @ 4% - Credit on CVD paid - Held that:- During the course of manufacture, cocoa beans are retrieved from the shell and shells are discarded. The applicants are selling the cocoa shells in the open market without payment of duty. The case of the Revenue is that the Cenvat credit is availed on the common inputs and cocoa shells are cleared without payment, therefore applicants are liable to pay 5% of the value of exempted cocoa shells cleared without payment of duty under Rule 6(2) of Cenvat Credit Rules, 2004. cocoa shell is a waste, hence prima facie, the applicants have a strong case. Hence, pre-deposit of the dues is waived and recovery thereof is stayed during the pendency of the appeal - Stay granted.
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2014 (6) TMI 622
Denial of CENVAT Credit - various items used and consumed for setting up such a refinery - non-filing of the declaration - HTPE sheets, insulation packages, domestic (refractory) anchors etc. though not falling under specific Chapters of 84, 85 and 90, are used in the refinery as either components or spares in the plant and machinery which are used for the manufacturing of the final products - Substantial time was taken for setting up the entire refinery - Held that:- Capital goods and other goods were received and consumed in the setting up of the unit, mere non-filing of the declaration cannot be a ground for denial of credit in the view which has been upheld by the Hon’ble High Court of Madras in the case of Kothari Sugars & Chemicals (2008 (10) TMI 627 - Madras High Court ). We also find strong force in the contentions raised by the Ld. Counsel that sustantative benefits should not be denied to an assessee only on the ground of non-fulfillment of procedural conditions.
As long as, there being no dispute as to the duty paid character of the capital goods / other goods, and the receipt in and consumption thereof, there cannot be the denial of Cenvat Credit to the appellant. - Decision in the case of Jewel Brushes Pvt. Ltd. [2008 (4) TMI 644 - CESTAT, AHMEDABAD], Steelco Gujarat Ltd. [2010 (2) TMI 307 - GUJARAT HIGH COURT] and Vimal Enterprises [2005 (7) TMI 111 - HIGH COURT OF GUJARAT AT AHMEDABAD] followed - Credit allowed.
As regards HTPE sheets, insulation packages, domestic (refractory) anchors etc. - Held that:- the items and the usage thereof which has been demonstrated before us, from the documents on records, clearly indicate that these items were consumed / used as components, spares or parts of the various machineries which were either fabricated and installed alongwith bought out items for setting up of the refinery. - Decision in the case of Essar Steel Ltd. [2008 (12) TMI 566 - CESTAT, AHMEDABAD] followed - Credit allowed.
As regards credit in respect of consumables such as enamels, paints, polyester resins, electrodes and chemicals - Held that:- Appellant has been able to demonstrate before us and also canvassed before the adjudicating authority that these items were essential items without which factory could not be set up and needed for maintenance due to substantial time taken for setting up the entire refinery. Since it is undisputed that these items were used in the factory premises for maintaining of the plant and machinery, fabrication of machinery, not having the stock of the said items cannot be a ground for denial of the Cenvat Credit the appellant. - Credit allowed.
Demand of interest on Reversal of Cenvat Credit where assessee has accepted the credit is ineligible - Held that:- It is also undisputed that they have reversed the said amount. In our view, all the arguments made by the Ld. Counsel that interest cannot be charged, would not carry the case any further, as the Apex Court in the case of Indswift Laboratories Ltd. (2011 (2) TMI 6 - Supreme Court), was specifically interpreting the provisions of Rule 14 of the Cenvat Credit Rules, 2004 and held that even if the credit is taken and subsequently reversed, interest liability arises. Respectfully following the ratio laid down, we hold that the appellant is liable to pay the interest on the amount.
Decided partly in favour of assessee.
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2014 (6) TMI 621
Valuation of goods – valuation of the toilet soaps - Section 4 of Central Excise Act, 1944 - Inclusion of advertisement charges - inclusion of amounts received under non-compete agreement and trademarks licence fee agreement as they are additional considerations - confiscation of machinery - Held that:- the buyer, PGG has incurred advertisement and sales promotion expenses on the toilet soaps manufactured by and purchased from GSL. In terms of the Joint Venture Agreement, there was an understanding between the two parties, that is, GSL will manufacture and sell the toilet soaps to PGG and PGG will market these soaps to the ultimate consumers. There is nothing on record nor any produced before us that there has been any flow back of consideration from PGG to GSL. After conceding that PGG and GSL are not related, there cannot be any presumption of flow back from PGG to GSL unless there is a direct evidence to that effect which is lacking in the present case - the demand of excise duty by including the cost of advertising and sales promotion expenses incurred by PGG cannot be legally sustained. - Decided in favor of assessee.
Inclusion of non-compete fee - Held that:- there is a JVA between GSL and PGG and as part of the JVA, three agreements, namely, manufacturing agreement, trade mark agreement and non-competition agreement have been entered into among/between the parties. - these are all co-terminus with JVA and all the three agreements are integrally connected with each other and are inseparable. - Following the decision of Alnoori Tobacco Products [2004 (7) TMI 91 - SUPREME COURT OF INDIA] three cases relied upon by the assessee rejected as Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect - the consideration paid by PGG to GSL under the non-compete agreement and through G&B to GSL under the trademark agreement should have a definite bearing on the price paid by PGG to GSL under the manufacturing agreement and the pricing formula adopted therein. - addition of non-compete fee confirmed - Decided against the assessee.
Inclusion of trade mark licence fee paid by PGG to G&B - Held that:- On termination of the JVA, the trade marks were transferred back to GSL by G&B for a nominal consideration of Rs. Ten thousand vide Godrej Trade Mark Registered User Agreement dated 20/05/1996. Thus the whole arrangement of assignment of trade marks by GSL to G&B, grant of right to use the trade mark to PGG, transfer back of the trade marks to GSL for a nominal sum was only a mechanism adopted for routing the payment for the trade mark indirectly to GSL through G&B. The Trade marks pertained to the toilet soaps manufactured by GSL and were incorporated on the product itself apart from the packages for the toilet soaps. - Thus the trade marks provide a commercial identity to the product or service and adds value to the product. Trade marks or brand names link a particular product with a particular manufacturer. - The reasons adduced for inclusion of non-compete fee in the assessable value, in the preceding paragraphs, would apply equally well in the case of trademarks also. - Decided against the assessee.
Extended period of limitation - Held that:- it is evident that the appellant had never disclosed the existence of various agreements in respect of manufacture of toilet soaps. In the price declarations filed by the appellant with the department, there was no mention of any of the agreements with PGG and others. The fact of receipt of non-compete fee and trademark licence fee by GSL was also not informed/declared to the department. Thus it is a clear case of deliberate non-disclosure on the part of the appellant with an intent to evade payment of appropriate excise duty - Extended period of limitation invoked - Decided against the assessee.
Levy of interest - Held that:- interest under Section 11AB on the duty demand confirmed will be operative only from 28-9-1996 and not earlier.
Levy of penalty u/s 11AC - Held that:- When the goods were cleared and duty became due, the said provisions was not in existence. Therefore, imposition of penalty under section 11AC of the Act on GSL cannot be sustained. - Penalties waived - Decided in favor of assessee.
Levy of penalty on related parties and personal penalty on directors - Held that:- In the present case, the responsibility of correct declaration of price, assessing and paying excise duty, complying with the statutory provisions was on GSL and not on PGG, PGIL and G&B. In other words, there was no statutory obligation or requirement on PGG, PGIL and G&B to do any act in respect of their transactions with GSL. Further the issues involved related to interpretation of statutory provisions relating to valuation of the goods which was the sole responsibility of GSL. In these circumstances, imposition of penalties on these parties are not warranted. - Penalties waived.
Confiscation of plant and machinery - Held that:- confiscation is justified in as much as GSL tried to evade excise duty by mis-declaration of value and suppression of facts. Rule 173Q of the Central Excise Rules, 1944, mandates such confiscation. Thus the confiscation and grant of redemption in lieu of confiscation on payment of fine has to be upheld. - Decided against the assessee.
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