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Case Laws
Showing 261 to 280 of 1076 Records
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2014 (10) TMI 823
Levy of penalty under section 271(1)(c) - Non inclusion of hospitality allowance and telephone allowance - Held that:- A perusal of the assessment order clearly shows that the Assessing Officer has treated the amount of ₹ 5,000 per month towards hospitality allowance reimbursement and ₹ 1,000 per month towards telephone allowance reimbursement as the salary income of the assessee. Admittedly the letter dated September 6, 2010, which has also been extracted by the Assessing Officer clearly shows that the amounts are only reimbursements. The amounts having been shown as reimbursement the same cannot be treated as income in the hands of the assessee especially under the head "Salary". Consequently, non-inclusion of the same in the assessee's return of income could not be treated as concealment of income. In any case, the assessee is not in appeal against the addition made in the assessment order, however, that would not bar the assessee from raising its plea of reasonable cause in the penalty proceedings. A perusal of the letter issued by the Orissa Engineering College clearly mentioning the same to be reimbursement, the same cannot be treated as the salaried income of the assessee, which has been concealed by the assessee. In these circumstances, we are of the view that the penalty levied by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is unsustainable and consequently deleted. - Decided in favour of assessee.
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2014 (10) TMI 822
Valuation - Rejection of books of accounts - reference to the Departmental Valuation Officer for the valuation of the building of cold storage and plant and machinery - held that:- Unfortunately, despite the judgment of the apex court rendered [2009 (10) TMI 569 - Supreme Court of India] the Assessing Officer has made a reference to the Departmental Valuation Officer even without examining the books of account ; what to say about its rejection. This callous attitude of the Assessing Officer cannot be appreciated. This is not only a single case where the Assessing Officer has made reference to the Departmental Valuation Officer without even examining the books of account ; we have come across a number of cases like this. We are, therefore, of the view that the Department should take necessary step to educate their own Assessing Officer so that while framing the assessment, they should be aware of the law laid down by the hon'ble apex court and High Courts through their judicial pronouncements. - where the reference was made by the Assessing Officer even without verifying the books of account, what to say about its rejection, the reference is totally illegal and the illegal report submitted consequent thereto cannot be a valid report and no addition on the basis of the same can be made on account of unexplained investment in the cold storage - Decided against Revenue.
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2014 (10) TMI 821
Disallowance of depreciation - grievance of the Revenue is that the Commissioner of Income-tax (Appeals) has failed to appreciate that the scanners and printers can be operated even without a computer and hence cannot become part of computer system for being eligible for depreciation at the rate of 60 per cent - Held that:- Commissioner of Income-tax (Appeals) has followed the decision of the Special Bench of the Tribunal in the case of Deputy CIT v. Datacraft India Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] wherein it is held that routers and switches are to be classified as computer peripherals and depreciation at the rate of 60 per cent be allowed. The Commissioner of Income-tax (Appeals) has also considered the decision of the hon'ble Delhi High Court in the case of CIT v. Bonanza [2011 (8) TMI 1058 - DELHI HIGH COURT] wherein it was held that depreciation at the rate of 60 per cent. is allowable on computer peripherals. We find that the printers, scanners, projectors as well as port- switches are all functionally dependent on computers and therefore, the order of the Commissioner of Income-tax (Appeals) is in consonance with the precedents on the issue and the learned Departmental representative has not been able to place any other decision to the contrary before us. In view of the same, we see no reason to interfere with the order of the Commissioner of Income-tax (Appeals) - Decided against Revenue.
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2014 (10) TMI 820
Capital receipt or Revenue receipt - Whether the amount of ₹ 49,21,087 received by the assessee on account of clean development mechanism (CDM) is capital or revenue receipt - Held that:- Similar view has been taken by the co-ordinate Bench of the Tribunal in the cases of Sri Velayudhaswamy Spinning Mills P. Ltd. v. Deputy CIT [2015 (4) TMI 132 - ITAT CHENNAI], Sri Ambika Cotton Mills Ltd. v. Deputy CIT [2014 (3) TMI 428 - ITAT CHENNAI] and many other similar cases. - The hon'ble Andhra Pradesh High Court in the appeal of the Revenue in CIT v. My Home Power Ltd. in [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] has upheld the view taken by the Hyderabad Bench in the case of My Home Power Ltd. v. Deputy CIT [2012 (11) TMI 288 - ITAT HYDERABAD]. - amount received by the assessee on account of CDM (carbon credits) is capital in nature. The impugned order is set aside - Decided in favour of assessee.
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2014 (10) TMI 819
Detention of goods - Unregistered dealer - offence under Sections 71(1)(b) and 71(3)(e) of the TNVAT Act, 2006 - Compounding of offence - The petitioner did not avail the opportunity given in the detention orders, but, challenging the same, filed Writ Petitions - Considering the submission made by the petitioner and after hearing the learned Government Advocate for the respondent, this Court by order dated 18.12.2012, directed the respondent therein to release the goods forthwith in terms of Section 67 of the TNVAT Act on payment of tax as determined in the notice - Held that:- Now the petitioner has challenged these notices alleging that the authority concerned has no power to take action as alleged in the impugned notices and virtually, the matter has been pre-decided - Court directed to release the goods on payment of tax as determined in the notice dated 12.12.2012 and permit the petitioner to contest the payment of composition of fee on merits. Therefore, it is too late for the petitioner to now contend before this Court that the impugned notices have to be quashed as being without jurisdiction or on any other grounds. - Though the petitioner themselves reconciled with the facts that they would be satisfied if the goods are released subject to payment of tax as determined with liberty to agitate the same on merits before the concerned authority, they cannot now raise the same plea in a second Writ Petition - Decided against assessee.
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2014 (10) TMI 818
Denial of Foreign Trade Policy called Focus Market Scheme - Held that:- Rule 7(f) enables the Director either to refuse or to grant renewal of licence if the applicant is a Managing Partner in a partnership firm or Director of a private limited company having controlling interest over it. Nowhere it is stated, any benefit accrued to the petitioner company or similarly situated applicant would be denied for the reason that for the partnership firm or private limited company in which applicant having controlling interest has liability towards Export Promotion of Capital Goods Scheme. It is to be noted that the petitioners are public limited company and totally different entity, cannot be equated with an individual who may have controlling interest in a partnership firm either as a Managing Partner or as a Director of private limited company. Therefore, I am of the view that the denial of benefit accrued to the petitioner based on this scheme is unsustainable. - Decided in favour of assessee.
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2014 (10) TMI 817
Rent a cab scheme - principle of estoppel in law against a party - appellant has admitted the liability whereas high court has decided that the activity is not taxable in Commissioner, Customs & Central Excise Versus Sachin Malhotra, Raj Kumar Taneja, M/s. Shiva Travels [2014 (10) TMI 816 - UTTARAKHAND HIGH COURT] Case was de-linked on the basis of the fact that the respondent / assessee had effected payments and also filed affidavits to the effect that he will be paying the balance of the amount - Held that:- Article 265 of the Constitution of Indian mandates that no tax can be levied or collected except as provided by law - fact that the respondent / assessee had made some payments and also made promise to make further payments cannot be used against our refusing to interfere with the impugned order. For the reasons, we have already recorded more elaborately in our common judgment passed and connected case, we have, inter alia, found that when there is only a contract of hire and there is no renting of the cab, there is no question of the assessee being assessed in respect of services rendered in connection with rent–a-cab as there is no renting at all. - Decided against the revenue.
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2014 (10) TMI 816
Rent a cab scheme - whether the person engaged in the business of renting cabs, irrespective of the number of vehicles held by him (even if he does not own and has instead rented even a single cab) is not covered under the definition of Rent-a-Cab operator scheme, and not liable to pay Service Tax - Held that:- Unless there is renting of cabs, there is no question of further enquiring as to the services, which may be rendered therein. In other words, any service, which may be rendered and which does not relate to renting of cabs, would be irrelevant for our consideration. When we consider the matter in the said light, we have no doubt in our minds that the Tribunal has, in this case, correctly propounded the principle that, unless the control of the vehicle is made over to the hirer and he is given possession for howsoever short a period, which the contract contemplates, to deal with the vehicle, no doubt subject to the other terms of the contract; there would be no renting.
Under the rent-a-cab scheme, the hirer is endowed with the freedom to take the vehicle, wherever he wishes, and he is only obliged to keep the holder of the licence informed of his movements from time to time. When a person chooses to hire a car, which is offered on the strength of a permit issued by the Motor Vehicles Department, then the owner of the vehicle, who may or may not be the driver, will offer his service while retaining the control and possession of the vehicle with himself. The customer is merely enabled to make use of the vehicle by travelling in the vehicle. In the case of a passenger, he is expected to pay the metered charges, which is usually collected on the basis of the number of kilometers travelled. These are all matters, which are regulated by the Government. Unlike the said scenario, in the case of a rent-a-cab scheme, as is clear from the very fundamental principle underlying the scheme, it is to give the hirer the freedom to use the vehicle as he pleases, which, undoubtedly, implies that he must have possession and control over the vehicle. This is the fundamental distinction between rent-a-cab and a pure case of hiring
Though both, rent and hire, may, in a different context, have the same connotation; in the context of rent-a-cab scheme and hiring, we are of the view that they signify two different transactions. What the lawgiver has chosen fit to tax by way of imposition of service tax is only transaction relating to business of renting of cabs. It is also pertinent to bear in mind that, in the case of hiring, the hirer may refuse to provide the service to the prospective customer. - when the lawgiver introduced this new source of taxation, it must be treated as having been aware of the distinct concept of renting a cab for which there is provision in the Central Legislation, namely, Section 75 of the Motor Vehicles Act and also a scheme stood framed as early as in 1989. We are, therefore, of the view that, unless there is control, which is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act.
Decision of Punjab & Haryana High Court in Commissioner of Central Excise, Chandigarh Versus M/s Kuldeep Singh Gill [2010 (4) TMI 283 - PUNJAB & HARYANA HIGH COURT] distinguished - Decided against Revenue.
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2014 (10) TMI 815
Waiver of pre-deposit of service tax - Commercial and Industrial Construction - exemption Notification No.1/2006-ST, dated 01.03.2006 - Held that:- Prima facie, we find that the applicant availed the benefit of exemption Notification knowing fully well they are not eligible for Cenvat credit and, therefore, it is a clear mis-statement of facts. Hence, the applicant is directed to make a pre-deposit of ₹ 1,00,000 within a period of six weeks from today. Upon deposit of the same, pre-deposit of balance amount of tax, interest and penalty shall remain waived and recovery thereof stayed till the disposal of the appeal - partial stay granted.
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2014 (10) TMI 814
Waiver of pre deposit - valuation - Repair and maintenance service - inclusion of value of spares/parts required for repair and maintenance - Held that:- value of spares and materials used was mentioned in the main part as a summary and there was an annexure to invoice showing details of spares and materials used and sold for the purpose of providing service. Therefore, we found on going through the records and invoice produced that the appellant have followed the provisions of Notification No. 12/2003 and it is not only the fact that they had paid tax as per West Bengal State Govt. VAT Act and on ‘deemed sale’ portion, they have also clearly shown the details of spares/parts used and sold during the course of repair and maintenance. Therefore, appellants have made out prima facie case for complete waiver and stay against recovery. Accordingly, the requirement of pre-deposit is waived and stay against recovery is granted during pendency of the appeal - Stay granted.
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2014 (10) TMI 813
Classification of service - Scientific or technical consulting services or survey and map-making service - Held that:- Revenue wants to classify the service under ‘scientific and technical consultancy service’. As per the provisions of the Finance Act, ‘Scientific or technical consultancy’ means any advice, consultancy, or scientific or technical assistance, rendered in any manner, either directly or indirectly, by a scientist or a technocrat, or any science or technology institution or organization, to any person, in one or more disciplines of science or technology. - Respondents had not provided any advice or consultancy or scientific or technical assistance rather the respondents had undertaken a job of digitization of maps. In view of this, we find no infirmity in the impugned order - Decided against Revenue.
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2014 (10) TMI 812
Business auxiliary service - Appellant are dealer of motor vehicles - Appellant provide table space to bank to promote their business - Held that:- Revenue had not produced any evidence by way of agreement or any guidelines from the Bank or financial institutions for the basis of giving commission to the appellants. In absence of such evidence, it cannot be said that the appellants provided any business auxiliary service to the Bank or financial institution. In view of the above, the impugned order is set aside - Decided in favour of assessee.
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2014 (10) TMI 811
Non complaince of pre deposit order - Held that:- When the matter was called, none appeared from the appellant side. However, a letter dt.2.6.2014 has been received from the appellant wherein he has requested that due to bad financial condition, the appellant is not in a position to deposit any part of directed amount and requested that condition of pre-deposit may be waived and appeal may be heard on merits. I find no valid ground for waiver of pre-deposit has been made by the appellant nor advocate of the appellant is present in the case. Even no case of financial stress was made before the bench when stay application was first heard. In view of above, there is no ground for interference in the earlier order - Appeal dismissed for non compliance.
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2014 (10) TMI 810
Writ petition against the SCN issued under VAT - SCN issued for rectification of the exemption fees certificate in prescribed form VAT-14 - Held that:- While the jurisdiction of the assessing authority under section 33 of the Act of 2003 to rectify the apparent mistake as such is not challenged and possibly cannot be challenged also, the mixed questions of facts and law including certain complex questions, if decided by this court at this stage, would be like putting the cart before the horse. The assessing authority has the quasi-judicial discretion and authority to decide all these questions, which are raised in the present writ petitions and this court is at loss to understand how without even replying the show-cause notice, the petitioner-company chose to straightway invoke the extraordinary jurisdiction of this court under article 226 of the Constitution of India for challenging the impugned rectification proceedings. Taking a view in favour of the Revenue is within the discretion of the assessing; authority and to contend otherwise is the pain of such proceedings for the assessee but it cannot mean that every such show-cause notice or appealable order passed upon such show-cause notice has to be adjudged as right or wrong in writ jurisdiction.
If the thing to be delivered has any individual existence before the delivery as the sole property of the party who is to deliver it, then it is a sale. If the bulk of material used in construction belongs to the manufacturer who sells the end-product for a price, then it is a strong pointer to the conclusion that the contract is in substance one for the sale of goods and not one for labour. However, the test is not decisive. It is not the bulk of the material alone but the relative importance of the material qua the work, skill and labour of the payee which also has to be seen. If the major component of the end-product is the material consumed in producing the chattel to be delivered and skill and labour are employed for converting the main components into the end-products, and the skill and labour are, only incidentally used, the delivery of the end-product by the seller to the buyer would constitute a sale. On the other hand, if the main object of the contract is to avail of the skill and labour of the seller though some material or components may be incidentally used during the process of the end-product being brought into existence by the investment of skill and labour of the supplier, the transaction would be a contract for work and labour.
While the exemption fees in lieu of tax on works contract is admittedly based on the total value of the contract, which total value may comprise of the taxable portion (supply of goods) of works contract as well as non-taxable (labour and service) of such works contract, still the exemption fee is levied on the gross total value of the contract, therefore, the question of imposition of tax on taxable portion of works contract does not arise in the present case of question of relating to exemption fees on gross value of the contract and, therefore, the judgments relied upon by the learned counsel for the petitioner seeking to contend that the assessing authority is not entitled to levy higher amount of exemption fee on the basis of law propounded in these judgments is an argument, with respects, is an argument off the mark and, therefore, the same is liable to be rejected.
Court is not inclined to pronounce upon the identity of two contracts as one and the same is left open for the assessing authority to do so after the assessee files its reply along with relevant evidence and the assessing authority adjudicates upon the said issues, this court cannot agree with the contention of learned counsel for the petitioner that the two contracts in question lie in a water tight separate compartment and cannot be treated as one integrated contract. The said integrated one contract from the stage of designing to commissioning of plant and equipments, if it is ultimately held to be one integrated contract, may fall under clause (3) of the notification dated August 11, 2006 rather than clause (2). Be that as it may, since all these questions are open questions yet to be decided by the assessing authority, this court, advisedly, does not want to go into the finer details of the questions of facts and apply, the law propounded by the superior courts at this stage. - Decided against Assessee.
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2014 (10) TMI 809
Exemption Notification No.30/2004-CE - Whether the appellants are eligible to the benefit of exemption under Sr.No.6 of the Notification No.30/2004-CE, dt.09.07.2004, as amended, when the appellants are having more than one factories and also have the facilities of manufacturing POY in a factory other than the factory of the appellants where the benefit of Notification No.30/2004-CE, dt.09.07.2004 is being availed - Held that:- The ‘act of manufacture’ is being undertaken by the appellants factory to whom demand show cause notices are issued and each factory will make the person carrying out the activity of manufacture as the ‘manufacturer’. There is nothing in the definition of Section-2(f) to indicate that a ‘legal entity’ only has to be considered as a ‘manufacturer’. Rather each ‘assessee’ has to be treated as a manufacturer and not the entire group of companies as claimed by the Revenue. In the present proceedings also even the demands have been issued by the Revenue to the individual assessee carrying out the exempted processes and not to the head offices of the group companies as a legal entity. Therefore, we are of the considered view that the word ‘manufacturer’ used in Sr.No.6 of the Notification No.30/2004-CE has to be interpreted as a unit where the ‘act of manufacture’ is being undertaken which is the individual factory and not all the factories of a group of companies.
As appellants were filing periodical ER-1 returns claiming exemption under Notification No.6/2000-CE. As the words used in both the Notification No.30/2004-CE and Notification No.6/2000-CE are ‘in his factory’, therefore, appellants could have entertained a bonafide belief that words ‘in his factory’ used in Notification No.30/2004-CE means the ‘same factory’ and thus cannot be fastened with the tag of ‘with intent to evade duty’ for invoking extended period. Appellants obtained separate registrations for the manufacturing activity in each factory and were paying duty on POY which will definitely involve captive consumption valuation, under Rule-8/9 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000, while sending POY from the factory manufacturing POY to factory undertaking texturising/draw twisting etc. In view of the above observations demands raised beyond a period of one year are also time barred. - admissibility of CENVAT Credit on duty paid on POY as on merits it is held that appellants are eligible to exemption under Notification No.30/2004-CE dt.9.7.2004 as amended - Decided in favour of assessee.
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2014 (10) TMI 808
Denial of the benefit of Notification No. 06/2006 dt. 1.3.2006 amended by Notification No. 12/2012 dt. 17.3.2012 - whether the LSP and anchor rings, and tower doors can be considered to be covered under ‘wind operated electricity generator, its components and parts' which are exempted under Notification No. 6/2006 - Held that:- in case the intention of Govt. was to exempt towers and foundation and its parts, then the notification would have specifically exempted non-conventional energy systems/devices as a whole. Rather, the notification exempts only those non-conventional energy devices/systems which are specified in List-5. And list-5 mentions only wind operated electricity generator, its components and parts. A notification has to be construed by the language its uses. And the language of the present notification is clear. It does not require an extrapolated interpretation.
Assessee not been able to satisfy us that the terms wind mill (which includes tower and foundation) and wind operator electricity generator are synonymous or used interchangeably. The guidelines and the forms filed as per requirement of Ministry of New and Renewable Energy nowhere equate the two terms; in fact the Application form at Serial No. 1 (f) of the Ministry's format referred to by Ld. Counsel only refers to ‘Forged Steel Rings for manufacture of special bearings for use in wind operated electricity generators'. It does not refer to tower doors or foundation rings which are completely different items. It is our considered view that the doors, anchor rings and LSP do not fall under the phrase ‘wind operated electricity generator'.
The appellants have relied on the judgement of Pushpam Forging [2005 (7) TMI 242 - CESTAT, MUMBAI] which allowed exemption to flanges used in towers and against which order the civil appeal filed by the Department was dismissed by Hon'ble Supreme Court on 20.1.2006. But this decision was not on merits. On the other hand, we find that in the case of Uniflex Cables Ltd. vs. Commissioner [2011 (8) TMI 63 - SUPREME COURT OF INDIA] which is a later decision pronounced in 2011, the Supreme Court referring to the case of Nicco Corporation [2006 (3) TMI 48 - SUPREME COURT OF INDIA] held that the electric cables cannot be considered as parts of wind mills or any specifically designed devices.
Though we could have decided this case finally on the basis of our findings recorded above, as a matter of judicial discipline the matter may be placed before the Hon'ble President for constitution of a Larger Bench because our view is contrary to the view taken by a Co-ordinate Bench in the matter of the same assessee for a different period. - Matter referred to larger bench.
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2014 (10) TMI 807
Denial of CENVAT Credit - Capital goods - initially capital goods used for manufacturing of exempted goods only - Held that:- Capital goods had been received during period from September 2004 to August 2005 when the Cenvat credit had been taken and according to the appellant at that time, they had intention to use these goods for the manufacture of fruit pulp based soft drink (exempted goods) as well as for manufacture of aerated waters (dutiable goods) and for this reason only, they had availed capital goods Cenvat credit, while initially using the machinery only for manufacture for the exempted final product. This aspect has to be verified on the basis of records. If the appellant at the time of receipt of the capital goods during September 2004 to August 2005 period, had filed any declaration to the Department or had sent some letter to the Department intimating that they would be using this machinery for manufacture of dutiable final product (aerated waters) as well as exempted final product (the fruit pulp based soft drinks), or there is any other evidence indicating that at the time of receipt, the appellant had plans to use the machinery, in question, for manufacture of dutiable as well as exempted final products [like the machinery, without any modification, being capable of manufacture of both the dutiable final products (aerated/carborated waters) as well as exempted final products (MAAZA) alongwith declaration/intimation of dual use], they would be eligible for Cenvat credit.
If there is no such evidence, it would have to be presumed that at the time of receipt, they had plans to use the capital goods, in question, only for manufacture of the fruit pulp based soft drinks (exempted final product) and it is only subsequently they decided to switch over to manufacture of dutiable final product (aerated waters) and in that event, in accordance with the Tribunal s judgment in case of Surya Roshni Ltd. (2003 (5) TMI 95 - CEGAT, NEW DELHI) and Spenta International Ltd. (2007 (8) TMI 25 - CESTAT, MUMBAI), they would not be eligible for Cenvat credit. Accordingly, the impugned order is set aside and the matter is remanded to the Commissioner for denovo decision, keeping in view our above observations.
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2014 (10) TMI 806
Cenvat credit - non distribution of credit by the Input service distribution in proportion to the turnover of advertisement and sales promotion service - Held that:- during the period of dispute i.e. during the period prior to 01/07/2002, there was no provision that the credit distributed by the corporate office/head office of a company as Input Service Distributor to its manufacturing units or units providing Output Service should be in-proportion to their turnover. If such a provision had been there, to the extent the sales promotion and advertisement services were used by the units exclusively engaged in the manufacture of exempted final products, the Cenvat credit would not have been distributed.
There is substance in the contention of the appellant that condition (b) is applicable in respect of service which is used in a unit exclusively engaged in manufacture of exempted final product or providing of exempted services and this provision would not be applicable to services like advertisement or publicity services which are used outside the manufacturing unit and which cannot be said to be the service used in a manufacturing unit. - stay granted.
Recovery of credit from ISD - Held that:- When much amount of service tax Cenvat credit has been distributed by the corporate office among its manufacturing units and since separate proceedings have been initiated against the manufacturing units for recovery of the credit, there is no justification for recovering the credit amount from the Input Service Distributor. Moreover, the corporate office of the appellant company as Input Service Distributor is neither a manufacturer nor an output service provider and, hence, the provisions of Rule 14 would not be applicable. In fact when the head office or corporate office of a company, is registered as Input Service Distributor (ISD) and it is alleged that credit has been wrongly taken and passed on by the ISD, the proceedings are initiated against the manufacturing units/output service providers which have taken the Cenvat credit on the basis of ISD invoices issued by the head office/corporate office as ISD. Therefore, in this case initiation of the proceedings for recovery of Cenvat credit alleged to have been wrongly passed on, against the corporate office (Input Service Distributor) and imposition of penalty on them were not called for. prima facie view that the provisions of Rule 26 (2) are not attracted to this case and, hence, the requirement of pre-deposit of penalty is also waived - stay granted.
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2014 (10) TMI 805
Penalty u/s 11AC - Clandestine removal of goods - document evidence to prove - Held that:- officers had carried out complete physical stock taking of finished goods, and also verified the production register and tallied with physical stock and concluded there was no difference between physical stock and daily production register. This clearly shows that the officers have not found out any shortage or excess of finished goods other than what was recorded in statutory Register i.e. R.G.1. It is seen that the entire allegation in the SCN was made out only on the basis of salary file recovered from the appellant’s premises. in the case of any clandestine removal of excisable goods, it is mandatory on the part of the investigating officers to establish with corroborative evidence of the actual shortage of quantity or excess production and clearance of goods or evidence of payments received, place of delivery to whom the goods are delivered, details of recipients etc. The entire demand of duty has been arrived purely on the basis of quantity shown in salary file and the statement of Shri R.P. Lakshmana Perumal. Apparently, no other evidence has been brought on record to corroborate shortage of quantity as per salary file with daily production register.
Entire investigation has relied only on the salary file which only relates to payment of wages for each labourer. In the absence of any other documentary evidence, the quantity mentioned in the foot note cannot be taken as the total quantity produced during that week. Further, as explained above, the said quantity is not only related to finished goods but related to lap stage production. The adjudicating authority in his order had discussed the issue in detail and by relying on the Tribunal s decisions (supra) had rightly dropped the proceedings against the appellant as well as against Shri R.P Lakshmana Perumal, Managing Director of the company. Therefore, respectfully following the Tribunal s decision (supra) I do not find any merit in the impugned order. Accordingly, the impugned order is set aside and the order of the adjudicating authority is upheld - Decided in favour of assessee.
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2014 (10) TMI 804
CENVAT Credit - reversal of credit when final product become exempt after taking cenvat credit - Rule 6 (1) as well as Rule 11 (3) (ii) of the Cenvat Credit Rules, 2004 - Held that:- sub-Rule would be applicable only in the case when there is only one final product being made from one or more cenvated inputs and that final product has become exempt from duty or if there are more than one final products being made out of one or more cenvated inputs, all the final products have become exempt from duty at the same time. This Rule would not be applicable if more than one final products are being manufactured out of one or more final product and out of them only some have become fully exempt but other final products have remained dutiable. In our view, in such a situation, it would be incorrect to apply this sub-Rule and prohibit the utilization of the Cenvat credit available as on the date of the exemption for payment of the duty on the dutiable final products, as in terms of Rule 3 (4) of the Cenvat Credit Rules, 2004, the Cenvat credit can be utilized for payment of any duty of excise on any final product. Needless to say, various Rules of the Cenvat Credit Rules, 2004, have to be read harmoniously and, therefore, Rule 11 (3) cannot be given an interpretation which is in-conflict with the provisions of Rule 3 (4).
From a perusal of Rule 11 (3) as well as 11 (2) it is clear that these two sub-Rules of Rule 11 are also in accordance with the general principles of the Cenvat credit that no Cenvat credit would be admissible in respect of inputs or input services which have been used in or in relation to manufacture of the exempted final products. As observed by the Apex court in its judgment in the case of CCE, Vadodara vs. Gujarat Narmada Fertlisers Co. Ltd. (2009 (8) TMI 15 - SUPREME COURT) mentioned above, this principle is inbuilt in the very structure of the Cenvat credit scheme and Rule 6 (1) and Rule 6 (2) also merely reiterate and highlight this principle. Therefore, no Cenvat credit would be admissible in respect of any inputs which have been used in or in relation to manufacture of final product.
While the provisions of Rule 11 (3) (ii) of the Cenvat Credit Rules, 2004 are not applicable, the availability of the Cenvat credit in respect of the inputs lying in stock and in process as on 01/03/08 would be subject to the provisions of Rule 6 and the Cenvat credit would be admissible only to the extent these inputs were used in or in relation to manufacture of dutiable final product and would not be admissible in respect of the quantity of the inputs which were used in the manufacture of exempted final products. Accordingly, in respect of clearance of exempted final products, an amount equal to the Cenvat credit involved on the inputs used in the manufacture of those final products shall be payable. - Matter remanded back - Decided in favour of assessee.
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9911796707
