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2013 (12) TMI 1527
Deduction of tax at source on the payment of interest on compensation awarded - Held that:- No tax is to be deducted at source from compensation awarded in lieu of acquisition of agricultural land. In respect of `interest' it has to be seen whether interest is a part of compensation. If answer is in affirmative then tax cannot be deducted at source. If, however, it is for delay in making payment it does not form part of compensation and tax may be deducted at source. In view of specific finding of Hon'ble Supreme Court in Ghanshyam's case (2009 (7) TMI 12 - SUPREME COURT ) amount awarded under Section 28 of the Land Acquisition Act is accretion in value of land and interest thereon forms part of compensation; income tax cannot be deducted at source when land acquired is agricultural land.
Admittedly, in the instant case the land was agricultural land and enhanced compensation and interest was awarded under Section 28 of the Act.
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2013 (12) TMI 1526
Addition on cessation of liability - Held that:- On the facts of the case it reveals that not only the existence of outstanding liability of labour charges for so many years is improbable in the normal course of business but the assessee has also failed to give any evidence regarding the genuineness of the creditors, identity of the creditors or any payment of the liability subsequently till date, despite specific query by us on this point. Under such circumstances it is held to be a case of cessation of liability. Accordingly, the appeal of the Revenue is hereby allowed and the action of the AO in adding the said labour charges into the income of the assessee is upheld.
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2013 (12) TMI 1525
Exemption under Section 54(1) - Whether the Tribunal committed an error in holding that the assessee would be entitled to claim exemption under Section 54 in respect of two separate residential houses acquired out of the capital gains, when the Section contemplates exemption in respect of "a" house for the current assessment year? - Held that:- It is clear that the assessee was not attempting to evade tax. In fact, after purchasing two residential houses, still there remained unutilized capital gain, which he has offered for tax. Therefore, as held in the aforesaid Rukminiamma's case, the context in which the expression "a residential house" is used in Section 54 makes it clear that it was not the intention of the legislature to convey the meaning that it refers to a single residential house. The letter "a" in the context, which is used, should not be construed as meaning singular, but being a indefinite article, the said expression should be read in consonance with the other words "buildings and lands" and therefore, the singular "a residential house" also permits use of plural by virtue of Section 13(2) of the General Clauses Act.
Therefore, we are of the view, in the facts and circumstances of this case, the acquisition of two residential houses by the assessee out of the capital gains falls within the phrase "residential house" and accordingly, the assessee is entitled to the benefit conferred under Section 54(1) of the Act. However, we make it clear that while interpreting this word, the Court or the Tribunal or the authorities have to keep in mind the facts of the particular case. When we have held "a" cannot be read as singular, it also cannot be read as multiples and so as to avoid paying tax under Section 45 of the Act. Therefore, in the facts and circumstances of this case, we answer the first substantial question of law raised in favour of the assessee and against the Revenue.
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2013 (12) TMI 1524
Exemption u/s 54 - Held that:- Tribunal allowed the exemption while rendering the decision has followed the decisions of this Court in the case of CIT vs. Syed Ali Adil (2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT) and also the Delhi High Court in the case of CIT vs. Gita Duggal [2013 (3) TMI 101 - DELHI HIGH COURT ] on the same issue
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2013 (12) TMI 1523
Issues involved: Application for waiver of pre-deposit of Cenvat credit and penalty under Section 11AC of the Central Excise Act, 1944.
Waiver of Pre-deposit of Cenvat credit: The applicant sought waiver of pre-deposit of Cenvat credit of Rs. 1,04,040/- and penalty imposed under Section 11AC of the Central Excise Act, 1944. The advocate argued that the input service credit on valuation of fixed assets falls under business activities, making it eligible as per Rule 2(l) of Cenvat Credit Rules, 2004. It was highlighted that no notice was issued by the department for the subsequent period, indicating that Service Tax was not charged on the impugned activity. The Revenue did not contest the absence of any other show cause notice on the issue. The tribunal acknowledged that the valuation of fixed assets is indeed related to business activities, making it eligible for input service credit. Since no other show cause notice was issued for prospective periods, the tribunal concluded that the applicant had a valid case for full waiver of the pre-deposit, and accordingly, the Stay Petition was allowed.
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2013 (12) TMI 1522
The Appellate Tribunal CESTAT NEW DELHI ruled that a commission agent involved in questionable accounting practices with code language must pay a penalty of Rs. 1 lakh within six weeks. The agent's innocence was questioned due to potential connivance with an evader, prejudicing the interest of Revenue. The agent's compliance was required by a specified date.
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2013 (12) TMI 1521
Issues involved: Appeal against Service Tax demand, disallowed Cenvat credit, recovery of disallowed Cenvat credit, interest, and penalties.
Service Tax Demand: The appellant appealed against an adjudication order confirming a Service Tax demand of Rs. 5,56,15,882, disallowing Cenvat credit of Rs. 1,73,85,377, directing recovery of disallowed Cenvat credit availment of Rs. 1,22,53,815, appropriating Rs. 48,84,111 already remitted by the appellant towards the assessed Service Tax liability, and imposing interest and penalties.
Initiation of Proceedings: Proceedings were initiated based on a show cause notice indicating that the appellant was providing construction of "residential complex" service without proper registration, filing returns, or remitting Service Tax due for the period from 1-11-2006 to 30-9-2010.
Defenses Raised: The appellant raised defenses including involvement in construction of residential apartments, transfer of property in goods, classification under "works contract" service u/s 65(105)(zzzza) of the Finance Act, benefits of composition under the Works Contract (Composition Scheme of Payment of Service Tax) Rules, 2007, and reference to Board circulars for guidance on classification and availment of benefits.
Adjudication Authority's Conclusion: The Authority concluded that the service provided cannot be classified as works contract service even if it falls within the scope of the later category, based on registration under construction of residential complex service and remittance of Service Tax under that category. The Authority held that the gross amount charged for providing the service would be the amount liable to the levy of Service Tax.
Irregular Availment of Cenvat Credit: The appellant was alleged to have irregularly availed and utilized Cenvat credit in contravention of Rule 9 of Cenvat Credit Rules, 2004. The appellant failed to produce documentary evidence in support of the availment of credit, leading to a finding of irregular availment of Cenvat credit.
Judgment: The Tribunal quashed the adjudication order, waiving pre-deposit and allowing the appeal, citing the obligation of the adjudicating authority to properly classify the service provided and the necessity to analyze the characteristics of the service in terms of the provisions of the Act for accurate classification.
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2013 (12) TMI 1520
The Supreme Court condoned delay, granted leave, and expedited the hearing in the case. (Citation: 2013 (12) TMI 1520 - SC Order)
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2013 (12) TMI 1519
Issues involved: Availment of Cenvat credit on duty paid by the supplier for coal received during a period when coal was exempted from duty.
Summary:
Issue 1: Availment of Cenvat credit on duty paid by the supplier The appellants availed Cenvat credit on duty paid by the supplier for coal received during a period when coal was exempted from duty. The Revenue's contention was that since coal was exempted during that period, the supplier should not have paid the duty. However, it was established that the supplier indeed paid the duty, and the appellants rightfully availed the credit of duty paid by the supplier. The principle that the payment made at the supplier's end cannot be questioned at the recipient's end was upheld. Reference was made to the decisions of the Hon'ble Punjab and Haryana High Court in similar cases, such as Commissioner of Central Excise, Chandigarh vs. Ranbaxy Labs Ltd. [2006 (203) ELT 213 (P&H)] and V.G. Steel Industry vs. CCE [2012 (27) STR 94 (P&H)]. The Tribunal found no need to delve into other decisions due to the clear legal position established by the aforementioned judgments.
Decision: The Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellants. The stay petition and appeal were disposed of accordingly.
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2013 (12) TMI 1518
Denial of SSI Exemption - whether the benefit of Notification No. 175/86-C.E., dated 1-3-86 is available to the goods manufactured by them and whether the demand of Central Excise duty is hit by time limit specified in Section 11A(1) of the Central Excise Act.
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2013 (12) TMI 1517
The contribution towards provident fund, even if deposited beyond the stipulated period, is allowable by virtue of the amendment and the disallowance under section 14A of the Income Tax Act, 1961 is plainly contrary to the provisions of the statute.
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2013 (12) TMI 1516
Issues involved: Interpretation of Section 80 for penalty imposition in case of suppression of income in service tax returns.
Summary: The case involved the appellant engaged in providing renting of car service, where proceedings were initiated due to a variance in income declared in ST-3 returns compared to income tax returns. The appellant argued that the difference arose from a bonafide belief that they were not liable to pay service tax on cars rented to specific entities. Despite accepting the demand and paying the differential tax with interest before a show-cause notice, the Revenue appealed against the Commissioner(Appeals) decision to set aside the penalty invoking Section 80. The Revenue contended that the appellant's belief was unfounded and penalty should have been imposed due to suppression of income.
Upon review, the Tribunal found the Revenue's stance incorrect on both counts. The Tribunal highlighted that if penalty was mandatory in cases of suppression, Section 80 would be redundant. The Tribunal acknowledged that anyone could hold a belief similar to the appellant's in this scenario. Consequently, the Tribunal upheld the decision of the Commissioner(Appeals) and dismissed the Revenue's appeal, emphasizing that the appeal lacked merit.
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2013 (12) TMI 1515
CENVAT Credit – Storage of Inputs outside the factory premises - Applicability of Rule 57 (A) (B) (1) – Whether the duty having been paid on the inputs stored outside the factory premises which was received in the factory, the tribunal was not justified in not considering Rule 57 (A) (B) (1) for the purposes of CENVAT credit - Whether the principle of law i.e.,the applicability of Rule 57 (A) (B) (1) being absolutely the same - Whether the tribunal was not justified in holding that prior permission of the Commissioner was required for storing the inputs outside the factory premises when the circular not put such condition - Denial of CENVAT credit only on the procedural ground of lack of permission from the Commissioner without merits.
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2013 (12) TMI 1514
Restoration of appeal - sale or auction of property - pre-deposit - compliance - this is the second set of applications filed by the applicant for restoration of appeals. In the first set of applications, the very same plea was taken before the Bench and, after considering the very same arguments, which are made today, the Bench was pleased to dismiss the said applications due to loss of considerable time in moving of applications for restoration of appeals, even if the Revenue authorities have attached the property and held that it would not satisfy the condition of stay order passed by the Bench.
Held that: - In the current set of applications which are moved and prosecuted, we find there is no change in situation which warrants our further consideration. Added to that, it is also informed by the learned departmental representative that Revenue authorities have already appointed an auctioneer for auctioning the said property - no merit found for restoration of appeal - application dismissed - decided against assessee.
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2013 (12) TMI 1513
Transfer of cases at Central place for co-ordinated and effective investigation - Petitioners belonged to the same family or group. They were subjected to common search operation. Their assessments were, therefore, under proposal for transfer – Commissioner transferred the case to Ahmedabad.
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2013 (12) TMI 1512
Unexplained investment - addition to gold jewelery - Held that:- Assessee has not offered any explanation either before the Assessing Officer or the Commissioner of Income Tax (Appeals) for excess jewellery found in the course of search as to why it should not be treated as unexplained income. The Commissioner of Income Tax (Appeals) also observed that excess jewellery is arrived only after accounting for all jewellery for which explanation has been offered and accepted. In the circumstances, we do not find any infirmity in the orders passed by the Commissioner of Income Tax (Appeals) in confirming the assessments made by the Assessing Officer. - Decided against assessee.
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2013 (12) TMI 1511
Issues Involved: The issues involved in the judgment are the imposition of penalty on the appellant for receiving inputs without supplying materials, the delay in filing the appeal, the delivery of the order-in-original to the appellant, and the denial of cross-examination of witnesses by the Commissioner (Appeals).
Imposition of Penalty: The order-in-original imposed a penalty of Rs. 26,52,698 on the appellant for receiving inputs without supplying materials. The appellant claimed they were unaware of this penalty until 2012 when informed by the Superintendent of Central Excise. They then obtained a copy of the impugned order and filed an appeal before the Commissioner (Appeals) with a delay. The appellant disputed the delivery of the order-in-original, alleging that the witnesses to the mahazar were not independent and sought cross-examination to prove the delay in receiving the order. The Tribunal found that the cross-examination of witnesses should have been allowed for justice and remanded the matter to the Commissioner (Appeals) for a fresh decision.
Delivery of Order-in-Original: The appellant contested the delivery of the order-in-original, claiming it was pasted on their premises in 2008 without their knowledge. They argued that the witnesses to the mahazar were not independent as they were connected to the Central Excise Department. The Tribunal acknowledged the lack of clarity on the distance witnesses can be taken from the locality but found that the witnesses were not solely dependent on the Central Excise department. However, the Tribunal held that cross-examination of witnesses should have been allowed to establish the actual delivery date of the order-in-original.
Denial of Cross-Examination: The Commissioner (Appeals) denied the appellant the opportunity to cross-examine the witnesses to the mahazar, leading to the appellant losing the chance to prove the delay in receiving the order-in-original. The Tribunal opined that cross-examination should have been allowed as it was crucial in determining the timeliness of the appeal filing. The Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) with directions to permit cross-examination and decide the case afresh.
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2013 (12) TMI 1510
Legal Judgment: Supreme Court dismissed special leave petition due to delay and on merits. (2013 (12) TMI 1510 - SC Order)
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2013 (12) TMI 1509
MODVAT credit - job work - N/N. 214/86-C.E. - Whether the CESTAT is right in giving relief of ₹ 8,32,966/- to the assessees without considering the procedure laid down in the Notification No. 214/86-C.E. (as amended), dated 25-3-1986? - Held that: - reliance placed in the decision of the case of Commissioner of Central Excise, Chandigarh v. Ranbaxy Labs. Ltd. [2006 (7) TMI 216 - PUNJAB AND HARYANA HIGH COURT], where it was held that the benefit availed by the assessee, of Cenvat credit of the duty paid on the input by the sister concern was not liable to be denied to the assessee on the strength of the N/N. 214/86-C.E., dated 25-3-1986.
Whether the CESTAT is right in holding that Modvat credit availed by an assessee was exactly equivalent to the amount of Excise duty paid by the input manufacturer without availing exemption, the consequence being revenue neutral and hence there could be no demand for reversal of the credit? - Held that: - reliance was placed in the case of Commissioner of Central Excise & Customs, Vadodara v. Narmada Chematur Pharmaceuticals Ltd. [2004 (12) TMI 93 - SUPREME COURT OF INDIA], where it was held that what had been availed of by the assessee by way of Modvat credit, was in respect of the duty paid by the input-manufacturer not availing the exemption, and the fact being the revenue neutral, the question of reversing the claim made by the assessee did not arise.
Appeal dismissed - decided against Revenue.
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2013 (12) TMI 1508
Issues involved: The issues involved in the judgment are related to outstanding excise dues of a company, the sudden demise of key individuals affecting the company's operations, the petitioner's request for relevant documents to file an appeal, and the respondent's reluctance to provide certain documents due to legal questions raised.
Outstanding Excise Dues: The petitioner's husband and father-in-law passed away, leading to the non-existence of the company M/s Daylight Polymers Pvt. Ltd, which manufactured plastic products. Despite informing the department about the company's closure and the sale of its premises, a notice for alleged outstanding excise dues was affixed. The petitioner filed a writ petition seeking relief. The court directed that if the petitioner files an appeal within fifteen days along with necessary applications, the appellate authority should consider and condone the delay and decide on merit.
Request for Documents: The petitioner, facing challenges in filing an appeal due to the unavailability of case records post the demise of key individuals managing the company, requested relevant documents from the Assistant Commissioner. The petitioner's application for documents was not addressed, leading to further grievance and the filing of the instant writ petition.
Reluctance to Provide Documents: The respondent's counsel expressed readiness to furnish documents mentioned in the petitioner's application but cited legal questions raised in the application as a reason for not providing certain documents. The petitioner's counsel emphasized the importance of receiving the documents for the interest of justice.
Judgment: Considering the circumstances and with the consent of both parties, the court directed the Respondent No. 3 to provide the relevant documents mentioned in the petitioner's application expeditiously, within a week. It was further directed that if the petitioner files an appeal within fifteen days of receiving the documents, the appellate authority should consider and condone any delay and decide on merit promptly. The writ petition was disposed of finally, providing relief to the petitioner in obtaining necessary documents for the appeal process.
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