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Showing 201 to 220 of 1076 Records
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2014 (10) TMI 884
Order of pre deposit - Demand of Central Excise Duty - clandestine removal - Held that:- The material fact manifesting evasion of ₹ 9,39,10,915/- as outcome of investigations, gravity of allegations and strength of evidences on record prima facie show that interest of revenue has been prejudiced by the appellant causing loss to it. This calls for pre-deposit to work out an interim modality since balance of convenience tilts in favour of Revenue and without pre-deposit order, irreparable injury may be sustained by Revenue. We are of the opinion that order of pre-deposit shall not cause under hardship to the appellants in view of the ratio laid down by Supreme Court in the case of Benara Valves Ltd. v. CCE reporting (2006 (11) TMI 6 - SUPREME COURT OF INDIA ).
Therefore keeping in view above findings and prejudice caused to Revenue, Appellant (M/s. KPPPL) are directed to deposit an amount of ₹ 5,00,00,000/- (Rupees five crores only) within eight weeks of receipt of this order and submit compliance on 30-12-2014. Subject to compliance to this direction, realisation of the balance of amount of duty of ₹ 4,39,10,915/- followed by interest on the duty as well as penalty shall remained stayed during the pendency of the appeal.
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2014 (10) TMI 883
Leviability of Service tax - Rendering Club’s or Association’s Membership Service during the period 2007-08 to 2011-12 - Revenue considered ‘donations’, ‘subscriptions’, ‘entrance fee’ and ‘election deposit forfeited’ as the total taxable income for all the five years and demanded Service Tax on this income - Held that:- ‘subscription’, ‘entrance fee’ and lorry stand collection totalling to ₹ 2,99,085/- for the year 2010-11 and ₹ 3,31,750/- for the year 2011-12 is liable for Service Tax after allowing the threshold exemption value for the year 2010-11 determined along with value of taxable service for other services held taxable elsewhere in this order.
Leviability of Service tax - Rendering Supply of Tangible Goods Service during the period 2007-08 to 2011-12 - Revenue demanded Service Tax on the basis of the description ‘Hire charges’ reflected in the financial statements of the Sangam and construed the activity of transporting petroleum products from oil companies namely HPCL as Supply of Tangible Goods Service - Held that:- the applicants rebuttal of the Revenue’s claim, substantiated with brimming facts and reasoning, is acceptable and that the nature of activity involved in transportation of petroleum products from the oil companies to the respective destinations by the applicant in their tanker trucks gets covered within the scope of GTA service also gets support from the fact that the same has been accepted by the respective jurisdictional authority and assessed to Service Tax on HPCL and they complied with payment of the Service Tax under Reverse Charge Mechanism and filed periodic ST-3 returns. Moreover, if the Service Tax on the Supply of Tangible Goods Service is paid the same would be available as CENVAT credit for payment of Service Tax on GTA service, thereby making the exercise revenue neutral. Therefore, the entire Service Tax of ₹ 3,50,451/- demanded on this activity in the impugned show cause notice is infructuous and not sustainable in law.
Leviability of Service tax - Rendering Business Auxiliary Service during the period 2007-08 to 2011-12 - Applicant repudiated the demand in respect of turnover discount rebate and incentives received from the principals and spare parts suppliers, performance bonus/and reimbursement of expenses received towards maintenance of petrol bunk and uniforms of the employees etc., mentioning that the same are related to trading activity carried on by the applicant and did not come under the scope of service - Held that:- the Service tax demanded in respect of the activities namely performance bonus, uniform subsidy are not liable for Service Tax as the same is accrued to the applicant on their trading activities. These activities and receipts of income are relatable to the trading activities. Therefore the entire demand of ₹ 1,18,688/- made under the heading Business Auxiliary Service is not sustainable in law.
Leviability of Service tax - Rendering Renting of Immovable Property Service during the period 2007-08 to 2011-12 - Applicant submitted that they rented out vacant land to M/s. HPCL and Service Tax is not required to be paid, on the rental of vacant land in terms of Ministry’s Circular No. DOF/334/1/2007-TRU, dated 28-2-2007 and reckoned the Service Tax liability on the renting of vacant land only from 1-7-2010 to 31-3-2012 - Held that:- the total value of service on account of rental of immovable property works out to ₹ 14,25,776/- for the year 2010-11 and ₹ 20,07,593/- for the year 2011-12 is liable for Service Tax after allowing the threshold exemption value for the year 2010-11 determined along with value of taxable service for other services held taxable elsewhere in this order.
Threshold exemption and Service tax liability and interest - Appellant contended that they were liable for Service Tax only from the year 2009-10, that too after availing the threshold exemption limit of ₹ 8/10 lakhs for the respective financial year but revenue contended that the applicant has exceeded the threshold limit during the preceding financial year itself by clubbing the Service tax liability arrived at, on the various services provided by the applicant - Held that:- the applicant is eligible for total exemption for Service Tax for the years 2007-08 to 2009-10 and are liable to pay Service Tax on the service value of ₹ 7,24,861/- in excess of the threshold exemption limit of ₹ 10 lakhs for the year 2010-11 and no exemption for the year 2011-12, in terms of Notification No. 06/2/2005-S.T., dated 1-3-2005 and Notification No. 33/2012-S.T., dated 20-6-2012. Also the cum-tax benefit sought for by the applicant in terms of Section 67(2) is not admissible. Accordingly, the claim of the applicant for cum-tax benefit is disallowed and is arrived at the Service Tax liability at ₹ 3,15,613/- and applicable interest thereon. Also the applicant had admitted a total liability of ₹ 3,80,796/-and interest of ₹ 40,675/- payable thereon in their application filed in terms of Section 32E of the Act, ibid and during the hearings.
Imposition of penalty - Non-payment of Service tax - Held that:- in view of the true and full disclosure of tax liability and co-operation extended by the applicant the Bench takes a lenient view and extend partial immunity from penalty to the applicant.
Prosecution - Section 32K of Central Excise Act, 1944 - the applicant is granted immunity from prosecution under Section 32K of Central Excise Act, 1944, as made applicable to Service Tax vide Section 83 of the Finance Act, 1994. - Matter disposed of
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2014 (10) TMI 882
The Appellate Tribunal CESTAT CHENNAI dismissed the appeal due to non-compliance of the stay order requiring the predeposit of differential duty of Rs. 1,58,81,401. No one appeared on behalf of the applicant.
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2014 (10) TMI 881
Seeking grant of leave - Arrangement of illegal import of Polyester Yarn from Nepal - Confessional statement recorded but respondent retracted at the time of examination - Held that:- there is no valid and legal retraction by the Respondent in the present case. As per various case laws, a retracted confession could be used as a corroborative piece of evidence but cannot form the sole basis for returning a finding of guilt. There can be conviction only if there is an independent corroboration of the retracted statement. Also where the confessional statement was retracted, the burden shifted on the prosecution to prove that it was made voluntarily. It was pointed out that the confessional statement made by the accused while in custody was weak in nature. Also the witnesses who implicated the Respondent were not produced for cross-examination. Therefore, no grounds have been made out for grant of leave to appeal. - Decided against the department
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2014 (10) TMI 880
Validity of assessment - time limit - period of limitation - whether the order was served on the appellant well beyond the time of limitation? - Held that:- Revenue is unable to point out from the records whether the assessment order was dispatched from the office before 31.03.2 006. Therefore, it is clear when the same was received by the assessee on 18.04.2006, it might have been dispatched few days prior to that and subsequent to 31.03.2006 . In that view of the matter, the order passed is barred by law of limitation. In that view of the matter, the additional substantial question of law framed today is answered in favour of the assessee and against the revenue.
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2014 (10) TMI 879
Allowability of depreciation on goodwill - Held that:- The issue of allowability of depreciation on goodwill should be decided in favour of the assessee. As such, Revenue has not bought any contrary material to suggest that the claim of depreciation on goodwill is not genuine and the same is not eligible for depreciation. See Smifs Securities Limited [2012 (8) TMI 713 - SUPREME COURT] - Decided in favour of assessee.
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2014 (10) TMI 878
Demand of Service Tax - Already paid under GTA services - Appellant as a transport agency discharged its tax liability on the amount of consideration, it received from its customers but Revenue created tax liability on the ground that by promoting the business of individual truck owners as the appellant does not have its own trucks and taken it on rent under an agreement , they have earned the said amount as commission and they are again liable to pay service tax on the said amount Held that: the appellant has already discharged its service tax liability on the total collected amount from its customers, creating a duty liability in respect of a part amount from the same would amount to double taxation followed by the Tribunal's case in Jai Shree Road Lines v. CCE, Jaipur-II 2014 (1) TMI 717 - CESTAT NEW DELHI. - Decided in favour of appellant
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2014 (10) TMI 877
Eligibility of CENVAT Credit on the basis of a certificate dated-29/11/2011 issued by Dy. Commissioner of Customs relating to eleven bills of entry against which the goods were imported by the appellant in the year 2006 to 2008 - Penalty imposed under Rule 15 read with Section 11AC of CEA, 1944 - Held that:- It is the claim of the appellant that even though initially it was brought under advance license scheme, but later duty was discharged in the year 2011 and the same were taken for manufacture of goods meant for local clearances. We find from the submission of the appellant that the goods all along had been kept and later used in the manufacture of the finished goods. This aspect was not examined being not placed before the Ld. Commissioner alongwith the documents. Both sides agree that these facts need to be verified by the adjudicating authority. In the result, we find that it is a fit case of remand to the Ld. Commissioner for determination of the issues afresh after taking into consideration, the evidences on record and that would be produced by the appellant. It is made clear that all issues are kept open.Needless to mention that a reasonable opportunity of hearing be granted to the Appellant
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2014 (10) TMI 876
Penalty levied u/s 271AAA - Held that:- Revenue has not asked the assessee to disclose the manner in which such income was earned. In any case once the income is surrendered during the course of search u/s 132(4) it can be safely assumed that during discussion the assessee must have disclosed the manner. In any case we find force in the submissions of the Ld. Counsel for the assessee that if the explanation of the assessee has been accepted for a sum of ₹ 1987500 out of total surrender of ₹ 4 crores then same manner should have been accepted for the whole of the amount. It is not clear from the penalty order how explanation for ₹ 1987500 was accepted. In any case the Ld. CIT(A) has considered all these issues in detail and the D.R. for the Revenue has not referred to any material or decision which can controvert the findings of the CIT(A). In the following cases which have been relied on by the Ld. Counsel for the assessee which was clearly held that penalty is not leviable - Decided in favour of assessee
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2014 (10) TMI 875
SSI Exemption - Clubbing of the value of clearances - Whether value of clearances made by M/s. Parag Industries was required to be clubbed with the clearances made by the appellant - Extended period of limitation - Tribunal in [2013 (11) TMI 689 - CESTAT NEW DELHI] has confirmed the demand - Held that:- Revenue clearly proves its case establishing total concern, control, nexus and inseparable link between the assessee and its other proprietary concern viz., Parag Industries
The question is fully covered by the decision of the Apex court in the case of Modi Alkalies & Chemicals Ltd. [2004 (8) TMI 108 - SUPREME COURT OF INDIA]. In the subsequent decision of the Apex Court in Parle Bislery Pvt. Ltd. [2010 (12) TMI 26 - Supreme Court of India], the view taken in earlier decision has been upheld and, thus, the above two decisions of the Apex Court are binding on us. - Appeal dismissed - Decided against the assessee.
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2014 (10) TMI 874
Deduction u/s 80IC(2) - Held that:- AO has examined the condition of allowability of the claim u/s 80IC in the initial assessment year of the claims i.e. A.Y. 2005-06 itself in an order passed u/s 143(3) of the Act. This was followed in the subsequent A.Y. These assessments are not disturbed till date. There is no change in the facts and circumstances of the case. Only a fresh view, contrary to the earlier view is taken during this impugned Assessment year on the same set of facts and exemption is denied. This cannot be permitted as held by the Jurisdictional High Court in the case of Delhi Patra Prakasham Ltd. (2013 (6) TMI 70 - DELHI HIGH COURT). Respectfully following the same, we uphold the order of the Ld. CIT(A) for different reasons. - Decided in favour of assessee.
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2014 (10) TMI 873
Computation of deduction under section 10B - as held by CIT(A) unabsorbed depreciation must not be set off against the income of undertaking before giving deduction under section 10B - Held that:- The issue in appeal has been decided by the co-ordinate Bench of this Tribunal in the case of S.R.A.Systems Ltd [2014 (3) TMI 357 - ITAT CHENNAI] following the decision of the Hon’ble Supreme Court in the case of M/s. Himatsingka Seide Ltd. (2013 (10) TMI 823 - SUPREME COURT ) as held that the brought forward depreciation has to be adjusted against the profits of the EOU before computing the exemption allowable u/s.10B. The provisions of section 10A are pari materia with the provisions of section 10B of the Act. - Decided in favour of revenue
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2014 (10) TMI 872
Renting of immovable property - leasing/renting of immovable property for a hotel - Held that:- the issue is no more res integra and the Tribunal in the case of Jai Mahal Hotels Private Limited Vs. CCE [2014 (7) TMI 540 - CESTAT NEW DELHI] has held that leasing/renting of immovable property for a hotel is expressly excluded from the ambit of the taxable service under Section 65(105)(zzzz). - appellants were under no tax liability for payment of service tax on the said activity.
Renting of another premises - assessee treated the entire consideration, as cum-tax - Held that:- Original Adjudicating Authority directed to examine and verify the above ledger and their claim that the tax amount has not been given to them by their customers and to re-decide the issue accordingly - matter remanded back.
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2014 (10) TMI 871
Rejection of books of accounts - Held that:- In the Remand Report the contentions of the assessee that the AO was not justified in rejecting the books of accounts was accepted by the AO. The AO also accepted the contention that he has not been able to point out any discrepancy in the books of accounts and stock record produced by the assessee before him. Thus, in our view, the First Appellate Authority had no other option but to reject the action of AO in rejecting the books of accounts. - Decided against revenue
Valuation of finished goods - Held that:- The AO in para (ii)(a) of his remand report specifically mentioned that he has examined copy of the ledger account on packing material, stock record etc. The AO was not able to point out any discrepancy in the claim of the assessee that the cost of finished goods does not include the cost of packing material. In the absence of any adverse finding by the AO, in the remand report, the First Appellate Authority was right in accepting this claim of the assessee.- Decided against revenue
Scrap @ 48.93% allowed by CIT(A) - Held that:- In the remand report the AO has, on the issue of generation of scrap, accepted the fact that the assessee has produced complete details of the scrap generated and scrap sold. The AO also obtained necessary confirmations from the parties to whom the scrap was sold. The AO also accepted the fact that the percentage of scrap fixed by the excise authorities was only, for the purpose of giving incentives to the assessee and has no effect on the actual facts of the case.The assessee had submitted various letters to the excise authorities for revision of the norms of scrap fixed by them. In view of the above observations by the AO in the remand report, we find no infirmity in the order of the First Appellate Authority - Decided against revenue
Addition made on account of business promotion expenses - CIT(A) deleted the addition - Held that:- AO had made an adhoc disallowance without specifying any details. The assessee had produced complete details of these expenses during the course of remand proceedings. In view of the above, we do not find any infirmity in the order of the First Appellate Authority.- Decided against revenue
Addition made on account of incentive and commission expenses - CIT(A) deleted the addition - Held that:- The appellant has been paying this commission every year. During the year it has paid commission. The disallowance in view of the above details and the nature of the services rendered by the recipient was not justified.- Decided against revenue
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2014 (10) TMI 870
Interest paid to foreign suppliers without TDS - Addition made under section 40(a)(ia) - CIT(A) deleted the addition - Held that:- Interest would be taxable if it arose out of indebtedness. The words “any other form of indebtedness” from sources in the other territory could only mean interest arising or accruing as a separate “source” of income. It would not include interest payable on the unpaid purchase money agreed to be part of the sale consideration. There was nothing in the initial contract by way of novation converting the balance of consideration into a loan. Hence, the interest received by the seller cannot be regarded as interest on money lent notwithstanding the nomenclature adopted by the parties. The assessee was immune from liability either wholly or partly to income-tax in view of the provisions of the Double Taxation Avoidance Agreement between the Federal Republic of Germany and India. . Accordingly, the assessee is not liable to deduct TDS on that usance interest and the provisions of seciton195 r.w.s. 40(a)(ia) are not applicable - Decided in favour of assessee.
Determination of arms length price for the international transaction on Libor plus - Held that:- assessee has justified the interest on the rate prevalent at that relevant point of time. Even though there may be same fraud involved in fixing the rate of international rates, as it became basis for subsequent international transactions at that point of time, We do not see any reason to differ from the LIBOR plus basis points for T.P. comparison. The Revenue cannot contend that rate of interest prevailing in India has to be adopted as the rates in India cannot be compared while loans are obtained abroad, even though funds are flown from India. What is required to be seen is whether the transaction is at arms length or not. Since, the international loan rates are based on LIBOR, we do not see any reason for differing from the Ld. CIT(A) order, which itself based on Coordinate Bench decisions that LIBOR plus basis points is at arm’s length. - Decided against revenue
Expenditure incurred by assessee for implementing ERP at Haridwar Division - revenue v/s capital expenditure - CIT(A) allowed it as revenue - Held that:- The expenditure is for upgrading the existing enterprise resource packaging and since no asset has been created, we agree with the finding that expenditure cannot be treated as capital in nature. Therefore, we uphold the order of the Ld. CIT(A) - Decided against revenue
Disallowance of an amount paid to Sonata Information Technology for I.T. Computer Software treating as capital expenditure - Held that:- As seen from the invoice, assessee has purchased software at ₹ 22,050 and with tax the total cost was at ₹ 22,932. In addition to that software, assessee also purchased 10 user licenses by paying an amount of ₹ 3,95,732 and also one year maintenance totaling to ₹ 85,418, the total invoices value is to an extent of ₹ 5,04,082. How the Ld. CIT(A) has arrived at ₹ 4,94,767 could not be ascertained. Be that as it may, consistent with his stand that license and maintenance fee are revenue expenditure, the amount of ₹ 3,95,732 and ₹ 85,418 are required to be allowed as revenue expenditure. That leaves us software cost of ₹ 22,932 and at best, this amount only can be considered as capital expenditure in nature. A.O. is directed to restrict the amount to that and allow applicable depreciation. The balance of the amount is to be allowed as revenue in nature. - Decided partly in favour of assessee
Entitlement to relief under section 90 - Held that:- Even though DTAA refers to the tax paid in other State, it did not define the word ‘tax paid’. Therefore, reliance is to be taken from the Indian Income Tax Act. Since the term ‘paid’ includes incurred according to the method of accounting, and since, assessee has offered the income on the basis of accrual, even though not fully received, the word ‘incurred’ includes the amount ‘liability to pay’ and there is no dispute that this amount was subsequently discharged. As per the DTAA Article 11, the tax so charged shall not exceed 15% of the gross amount of the interest and accordingly, assessee provided for the tax at 15%. Since the facts are not in dispute and as the assessee has ultimately paid the entire amount of tax on the income so offered, we direct the A.O. to allow the amount as claimed.- Decided against revenue
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2014 (10) TMI 869
Principle of natural justice - reversal of ITC availed by the petitioner - petitioner was not afforded an opportunity of personal hearing. - Held that:- the observation made by the first respondent rejecting the request for personal hearing, that too while finalizing the revision assessment is all the more arbitrary and unreasonable. Hence, the impugned orders are liable to be set aside. Accordingly, these writ petitions are allowed and the impugned orders are set aside and the matters are remanded to the first respondent for fresh consideration.
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2014 (10) TMI 868
Deduction under section 80IB(10) - Effect of amendment w.e.f. 01.04.2005 - Retrospectivity - Held that:- Clause (d) being inextricably linked to the date of approval of the housing project, it will have to be held that the clause operates only prospectively i.e. for housing projects approved after 1st April, 2005 - section 80-IB(10)(d) is prospective in nature and can have no application to a housing project that is approved before 31st March, 2005 - clause (d) of section 80-IB(10) is inextricably linked to the date of the approval of the housing project and the subsequent development/construction of the same, and has nothing to do with the profits derived therefrom - See Commissioner of Income Tax V/s. M/s. Brahma Associates (2011 (2) TMI 373 - BOMBAY HIGH COURT) and The Commissioner of Income Tax16 V/s. M/s. Happy Home Enterprises and M/s. Kanakia Spaces Pvt. Ltd. [2014 (9) TMI 707 - BOMBAY HIGH COURT ] – Decided against revenue.
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2014 (10) TMI 867
Penalty u/s.271(1)(c) - Held that:- We find that the assessee has filed a detailed explanation regarding source of acquisition of jewellery found at the lime of survey. The assessee has also made a disclosure at the time of search proceedings, taking into consideration the on-money received on sale of land and certain other investment, and has disclosed an amount in its return of income filed in response to the notice under section 153A of the Act in the name of the assessee or his family members. We find that merely because the explanation of the assessee with regard to the acquisition of some part of the jewellery not accepted by the taxing authorities, it does not follow that the assessee was guilty of concealment of income or filing of inaccurate particulars of income. There is no material brought on record on behalf of the Revenue to suggest that the explanation of the assessee regarding source for acquisition of jewellery was not bond fide. In these facts of the case, we are of the view that it is not a fit case for imposition of penalty under section 271(l)(c) of the Act which is accordingly cancelled - Decided in favour of assessee.
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2014 (10) TMI 866
Penalty u/s 11AC - Commissioner reduced penalty as no clandestine removal of the goods in question - Held that:-Adjudicating authority penalized the appellant under Rule 25 read with Section 11AC of Central Excise of 1944. Rule 25 of Central Excise Rules, 2002 deals with circumstances in which penalty can be imposed taking shelter of section 11AC of Central Excise Act, 1944. The present case is a case which is concerned for non-accountal of excisable goods manufactured or stored by the appellants. It is in respect of shortage noticed in the course of inventory during investigation. When such is the event this is a case inviting penal provision of section 11AC with the aid of Rule of 25 Central Excise 2002. Therefore, the appeal is remanded to the Commissioner (Appeal) to reconsider the provision of law relating to penalty and pass appropriate order granting fair opportunity of hearing to the appellant.
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2014 (10) TMI 865
Clandestine manufacture - Held that:- Facts in the present case are identical to the facts of R A Castings [ 2011 (1) TMI 1302 - Supreme Court of India ] wherein held that in the absence of any evidence to show procurement of raw material, mode of transport of the raw material to the factory, transport documents, details of payment identity of buyers receipt of sales receipt from the buyers and the transporters of the final product, the entire case of the Revenue is based upon assumption and presumption. It was also held that Central Excise authorities have no jurisdiction to examine the appellants statutory records which stand audited and reflected in the income tax returns.and there is virtually no other evidence reflecting upon clandestine manufacture and clearance of the appellants product, we, by following the above decision, set aside the impugned orders and allow all the appeals with consequential relief to the appellants. - Decided in favour of assessee
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