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2011 (2) TMI 1376
Whether there is any infirmity in the link evidence merely because there was a delay of few days in sending the sample to the office of the Chemical Examiner?
Whether merely because the prosecution has not examined any independent witness, would not necessarily lead to the conclusion that the appellant has been falsely implicated?
Whether Section 50 of the NDPS Act would not be applicable?
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2011 (2) TMI 1375
Issues Involved
1. Bringing legal representatives of the deceased sole respondent on record.
2. Setting aside the dismissal order dated 6.2.1998 and restoring the appeal.
3. Setting aside the abatement caused due to the death of the sole respondent.
4. Impleading a new petitioner in the appeal.
5. Condonation of delay in filing the petition seeking to set aside the dismissal order.
Detailed Analysis
1. Bringing Legal Representatives on Record:
The respondent sought to bring the legal representatives of the deceased sole respondent (original plaintiff) on record under Order 22 Rule 4 of the CPC. The original plaintiff had died on 25th February 1990, and despite intimation, the appellants failed to bring the legal representatives on record. The High Court directed the government pleader to take steps, which were not complied with, leading to the appeal's abatement.
2. Setting Aside the Dismissal Order:
The High Court had dismissed the appeal on 6th February 1998 due to the appellants' failure to bring the legal representatives on record. The dismissal was challenged, and the respondents filed an application to set aside this dismissal. The Supreme Court noted that the High Court had recorded the negligence of the respondents in pursuing the appeal but still condoned the delay without justification.
3. Setting Aside the Abatement:
The abatement caused due to the death of the sole respondent was sought to be set aside under Order 9 Rule 9 read with section 151 CPC. The High Court had initially observed severe lapses on the part of the appellants and their counsel but proceeded to condone the delay and set aside the abatement, which the Supreme Court found unjustifiable.
4. Impleading a New Petitioner:
A petition under Order 1 Rule 10 CPC was filed to implead a new petitioner in the appeal. The High Court allowed this petition, but the Supreme Court found no justification for allowing the impleading of the new petitioner, considering the overall negligence and delay in the case.
5. Condonation of Delay:
The High Court condoned a delay of 883 days in filing the petition to set aside the dismissal order and a delay of 3703 days to bring the legal representatives on record. The Supreme Court emphasized that the law of limitation must be enforced properly and cannot be rendered redundant by unjustified condonation of delays. The Court referred to its previous judgments, emphasizing that while courts adopt a liberal approach in condoning delays, such discretion must be exercised within reasonable bounds and justified by sufficient cause.
Supreme Court's Conclusion:
The Supreme Court found the High Court's decision to condone the delay and set aside the abatement unjustifiable, given the clear negligence and lack of plausible explanation by the respondents. The judgment emphasized the need for judicial balance and restraint, criticizing the High Court's use of intemperate language and sarcastic remarks. The Supreme Court set aside the High Court's judgment, restoring the situation to the state as it was on 6th February 1998, meaning the appeal stood abated and dismissed. The appeals were allowed with no order as to costs.
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2011 (2) TMI 1374
CENVAT credit - filing of general declaration instead of consignment-wise declaration - Held that: - the Commissioner (Appeals) allowed the appeal of the assessee holding that assessee is eligible to claim the benefit of exemption on the ground that procedure was substantially complied with as provided in N/N. dated 3.12.2004 - appeal dismissed.
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2011 (2) TMI 1373
The Supreme Court dismissed the appeal in the case with citation 2011 (2) TMI 1373 - SC. The judges were Mukundakam Sharma and Anil R. Dave.
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2011 (2) TMI 1372
Whether the appellant is eligible and entitled for the pensionary benefits under the Allahabad Bank Employees Pension Scheme, 1890 [hereinafter referred to as "Old Pension Scheme"] in terms of the Allahabad Bank Officers Service Regulations, 1979 [hereinafter referred to as "the 1979 Regulations"]?
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2011 (2) TMI 1371
Whether University means all the four universities of Orissa, not only Utkal University at Bhubneshwar?
Whether the respondent herein had been appointed by following the procedure prescribed by the law for making the appointment?
Whether UGC pay scale could be given prior to the date of according grant-in-aid benefits?
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2011 (2) TMI 1370
Commercial Training or Coaching Services- Explanation inserted in Section 65(105)(zzc) of Finance Act, 1994 by Finance Act, 2010 w.e.f. 01.07.2003 having its retrospective effect thus Tribunal directed to examine de novo in the light of explanation inserted - the issue is similar to the case of COMMR. OF ST., CHENNAI Versus GREAT LAKES INSTITUTE OF MANAGEMENT LTD. [2010 (5) TMI 186 - SUPREME COURT] where while allowing the appeal filed by the Commissioner of Sales Tax, Chennai, the Three Judges referred to the newly inserted Explanation in Section 65(105)(zzc) of Finance Act, 1994 by Finance Act, 2010 which was made effective from 1st of July, 2003 - Held that: - Since we are also concerned with the same issues in these appeals, we also pass a similar order allowing the present appeals and directing the Tribunal to examine the case de novo in the light of the aforesaid Explanation inserted in the Act - matter on remand.
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2011 (2) TMI 1369
Issues involved: The judgment involves two main issues - 1) Confirmation of assessing short-term capital gain as income from business or profession, and 2) Enhancement of disallowance of expenses u/s 14A.
Issue 1 - Short-term capital gain assessment: The assessee, engaged in retail trade, admitted short-term capital gain of Rs. 30,81,610. The assessee treated investments as capital assets, following consistency in previous years. The Assessing Officer (A.O.) treated the sale of mutual fund units as business income due to short holding periods. The CIT(A) upheld this decision, stating the assessee entered into transactions for trading purposes. However, the Tribunal found that the assessee treated shares and units as investments, not stock in trade, as per the balance sheet and Memorandum and Articles of Association. Relying on a High Court decision, the Tribunal held the profit from the sale of mutual funds should be taxed under capital gains, not business income.
Issue 2 - Disallowance of expenses u/s 14A: The assessee claimed dividend income of Rs. 1,39,442, with the A.O. disallowing a portion of expenses for earning exempt income. The CIT(A) applied Rule 8D of IT Rules to enhance the disallowance. However, the Tribunal referred to a Bombay High Court decision stating Rule 8D is not retrospective and should apply from Assessment Year 2008-09. Thus, the Tribunal set aside the matter to the A.O. to determine the disallowance of expenditure related to exempt income in line with the High Court decision.
In conclusion, the appeal by the assessee was partly allowed for statistical purposes, with the Tribunal providing directions to the A.O. based on legal precedents and interpretations of relevant provisions.
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2011 (2) TMI 1368
Issues involved: Assessment years 2005-2006 and 2006-2007; Deletion of disallowance of Referral fee as revenue expenditure; Treatment of website development expenses as revenue expenditure; Addition of exchange fluctuation loss; Deletion of addition of Referral fee as revenue expenditure for 2006-2007.
Assessment Year 2005-2006:
1. Referral Fee Disallowance: The issue pertains to the deletion of disallowance of Referral fee as revenue expenditure. The assessee paid commission to various parties for introducing clients, which was confirmed by the parties directly to the AO. The AO treated the payments as capital expenditure, but the CIT(A) deleted the addition. The Tribunal upheld the CIT(A)'s decision citing the payment facilitated business operations more profitably without affecting fixed capital, following the precedent set by the Hon'ble Supreme Court.
2. Website Development Expenses: The dispute involves treating website development expenses as revenue expenditure. The AO considered it a capital asset, leading to an addition, but the CIT(A) overturned this decision. The Tribunal upheld the CIT(A)'s decision based on the Hon'ble Delhi High Court's ruling that such expenses are revenue expenditure even if they result in enduring benefits, especially since the expenditure was for website upgradation, not initial development.
3. Exchange Fluctuation Loss: The AO made an addition on account of exchange fluctuation loss, treating a portion as contingent liability. The CIT(A) deleted this addition, and the Tribunal agreed. The loss was related to restatement of assets/liabilities other than capital accounts, and the Tribunal found it allowable as deduction for revenue purposes based on a Supreme Court judgement.
Assessment Year 2006-2007:
4. Referral Fee Disallowance: The sole ground in this appeal concerns the deletion of addition of Referral fee as revenue expenditure. The facts were similar to the previous year, and following the decision made for 2005-2006, the Tribunal upheld the deletion of the addition for this year as well.
In conclusion, the Tribunal dismissed both appeals, upholding the decisions regarding the treatment of Referral fees and website development expenses as revenue expenditure, and the allowance of exchange fluctuation loss as deduction based on legal precedents.
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2011 (2) TMI 1367
Validity of registration certificate - Vipulam Enterprises had stopped manufacturing activities and therefore, the registration was automatically invalid whereby, the question of surrendering, cancelling or revoking the registration did not arise - priority regarding Central Excise dues - Held that: - merely because the defaulter unit, though it had ceased to carry on business on the premises in question, had failed to apply for deregistration, the same should not, in any manner, come in the way of the petitioners in obtaining central excise registration in respect of the premises in question. A case where an existing unit is functioning from the same premises may stand on a different footing, but when the erstwhile unit has stopped functioning at the premises and the premises have not been transferred by the owner of the said unit but by a secured creditor in favour of a bonafide purchaser, things would stand on a different footing. A Central Excise registration in respect of a unit cannot continue for all times to come despite the fact that the unit has ceased to function since long, merely because the said unit has not surrendered its registration certificate or applied for deregistration or central excise authorities have not revoked the same - the stand adopted by the respondent authority that in respect of the same premises, since the earlier registration has not been cancelled, fresh registration cannot be granted to another person is not backed by any statutory provision and as such, cannot be accepted.
The action of the respondents in denying registration to the petitioner in respect of the subject property on the ground that the registration of the erstwhile unit has not been cancelled is not a valid ground for refusing registration to the petitioner - petition allowed - decided in favor of petitioner.
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2011 (2) TMI 1366
Issues involved: The judgment involves the liability of assessees to pay service tax on goods transport operator's service (GTO service) for the period from 16.7.1997 to 2.6.1998, along with interest and penalties. The main issue is whether recipients of GTO service were liable to pay service tax under Section 68(1) of the Finance Act, 1994.
Details of the Judgment:
1. The assessees, engaged in manufacturing excisable products, availed GTO service for transporting materials to their factories during the disputed period but did not pay service tax on the freight. Show-cause notices were issued demanding service tax, interest, and penalties. The original authority confirmed the demands and imposed penalties. Appeals were filed by assessees to the Commissioner (Appeals), who upheld the orders in some cases and granted relief in others. The present appeals are by assessees and the Revenue against these decisions.
2. Written submissions styled as "cross objections" were presented by respondents in some cases.
3. The substantive issue revolves around conflicting decisions cited by both parties, with assessees relying on the Tribunal's decision in L.H. Sugar Factories case, affirmed by the Supreme Court, while the Revenue citing other cases for support. The issue is whether the assessees are liable to pay service tax based on the relevant provisions of the Finance Act, 1994.
4. The Tribunal's decision in L.H. Sugar Factories case held that show-cause notices issued to recipients of GTO service were not maintainable under Section 73 of the Finance Act, 1994. The apex court affirmed this decision, emphasizing the distinction between liability to file returns under Section 70 and Section 71A.
5. The assessees argue that the apex court's judgment supports their case, while the Revenue contends that a different view in Gujarat Ambuja Cements case should apply. The Tribunal finds that the legislative intent and historical context support the assessees' position based on the L.H. Sugar Factories decision.
6. Reviewing decisions in similar cases, the Tribunal notes that amendments to Section 73 of the Finance Act, 1994 post-2004 have an omnibus application to all assessees, unlike the situation before 2004. The Tribunal concludes that the Revenue's reliance on these amendments does not advance their case.
7. Corrections to show-cause notices made by the Revenue do not alter the fundamental requirement of invoking Section 73 for service tax recovery. The Tribunal rejects the argument to read Section 71A with Section 70 in Section 73, emphasizing the need for strict interpretation of statutory provisions.
8. The Tribunal holds that the issue is decided against the Revenue and in favor of the assessees based on the L.H. Sugar Factories decision, affirming that the assessees' appeals are allowed, and the Revenue's appeals are dismissed. Cross objections are also disposed of accordingly.
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2011 (2) TMI 1364
Arbitral award has to be delivered to the party by the arbitral tribunal and the limitation for making an application for correction or interpretation of award under section 33(1) and for making an application for setting aside an award under section 34(3) commences from the date of delivery of such arbitral award by the arbitral tribunal to a party to the arbitration agreement.
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2011 (2) TMI 1363
Nature of Expenditure ''Capital Or Revenue'' - Expenditure incurred on workstations, improvement of interiors and electrical works, cabling and networking of computers, other miscellaneous work, etc on the leasehold premises - Depreciation on the Automated Teller Machines (ATMs) and Encoders - Deduction on account of shortage in stock on physical verification, write offs, etc - Change in revenue recognition policy.
Expenditure incurred on workstations, improvement of interiors and electrical works, cabling and networking of computers, other miscellaneous work, etc on the leasehold premises - Nature of Expenditure - ''Capital Or Revenue'' - CIT(A) restricting the depreciation at 15 per cent only instead of granting the allowance of the expenditure proportionately over the lease period - HELD THAT:- These expenditure may give some benefit to the assessee but the premises being leased premises and that too for a period of three years only it cannot be said that it is giving enduring benefit. Further, the enduring benefit is not the only test for determining the nature of the expenditure. As held by the Hon’ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd.[1997 (4) TMI 5 - SUPREME COURT] if the expenditure is so related to the carrying on of or the conduct of the business, it has to be treated as revenue expenditure. Undoubtedly, the assessee cannot carry on the business in the leased premises without making improvement to the interiors and electrical works, cabling and networking etc. In view of the same, we hold that the expenditure is to be allowed u/s 37 as revenue expenditure. Thus, ground No.2 of the assessee’s appeal is allowed.
Ground No.3 which is an alternative ground to ground No.2 is rejected.
Depreciation on the Automated Teller Machines (ATMs) and Encoders - HELD THAT:- We find that this issue is more or less covered by the decision of the Special Bench in the case of Datacraft India Ltd.[2010 (7) TMI 642 - ITAT, MUMBAI] wherein it has been held that as long as the functions of the computer are performed along with other functions and the other functions are dependent upon the functions of the computer it is a computer entitled to the higher rte of depreciation. The Special Bench has also stated that all the input and output devices of the computer such as key board, mouse, monitor, etc are to form part of the block of computers. Its functions are not limited to the location at which it is placed but it also records the increase or decrease of the balance in the assessee’s account in the bank consequent to such deposit or withdrawal and all this is done instantly.
In the case before us also the ATM machine is doing both the logical, arithmetic and memory functions by manipulations of electronic magnetic or optical impulses giving debit or credit cash and thereafter dispenses the cash and gives a printed receipt. Thus as can be seen, the computer is an intergral part of the ATM machine and on the basis of the information processed by the computer in the ATM machine only, the mechanical functions of the dispensation of cash or deposit of cash is done. Thus it involves the use of internet facilities also to discharge the above functions.
However, as regards the encoders are concerned, we find that they are used for encoding the cheques but whether any processing activity is involved is not clear from the orders of the authorities below. Therefore, we direct the AO to consider if the Encoders also involve any processing activity such as the ATM machine as mentioned above and if it is found to be involving such activity, the AO is directed to allow depreciation at 60% otherwise at 25%. This ground is accordingly partly allowed. In view of the same, we are inclined to hold that the ATM machines are computers and the assessee is entitled to depreciation at the rate of 60%.
Deduction on account of shortage in stock on physical verification, write offs, etc - computing the income under the head ‘profits and gains of business or profession’ - HELD THAT:- We find that the assessee has claimed an exorbitant amount of ₹ 13 crores and odd as damage in stock or shortage in stock and wrote it off and has by itself offered an amount of ₹ 8,06,49,024/- for the next assessment year. It is the duty of the assessee to prove its claim with evidence but it has not been able to substantiate its claim before the authorities below as to the components of shortage of stock and what steps were taken by it to identify the shortage of stock and as to how there is shortage of stock.
Even before us, the assessee has not been able to produce any evidence as to the reasons for the shortage of stock. In view of the same, we are not inclined to accept the contention of the assessee and therefore, we confirm the addition confirmed by the CIT(A). This ground of appeal is accordingly rejected.
Change in revenue recognition policy - change in the nature of contract from the contracts entered into in earlier years and the change in method of execution of the contract - HELD THAT:- The present system being followed by the assessee on recognizing the revenue only after the ATM machines have been properly installed at the premises, in our view, is the correct method of recognizing the revenue as it would be in accordance with the matching principle and the correct income of the assessee can be computed. The learned counsel for the assessee has submitted that the assessee has followed this method after the relevant assessment year and as long as the AO is able to compute the correct income of the assessee from the method of accounting followed by the assessee, the assessee is entitled to change the method of accounting from the method of accounting followed by the assessee, as the assessee is entitled to change the method of accounting. To take this view, we draw strength from the decision of the jurisdictional High Court in the case of Syndicate Bank [2002 (12) TMI 56 - KARNATAKA HIGH COURT]. In view of the same, we allow this ground of appeal.
In the result, the assessee’s appeal is partly allowed.
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2011 (2) TMI 1362
The Kerala High Court allowed the appeal by vacating the Tribunal's order and restoring the demand confirmed in the first appeal, based on a Supreme Court decision in Commissioner of Customs v. Indian Rayon & Industries Ltd (2008).
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2011 (2) TMI 1361
Issues involved: Appeal u/s 35G(1) of Central Excise Act against Tribunal's order affirming penalty u/s 11AC for availing credit before receipt of goods with duty paying documents.
Summary:
The appeal was filed u/s 35G(1) of the Central Excise Act against the Customs, Excise and Service Tax Appellate Tribunal's order imposing penalty u/s 11AC. The Hon'ble Supreme Court had remanded the matter back for reconsideration in light of a previous decision. The Tribunal found that the appellants had availed credit before receiving goods with proper duty paying documents, leading to a shortage in their Cenvat account. As per the decision of the Supreme Court, deliberate actions to evade duty payment warrant penalty u/s 11AC. The Tribunal rightly concluded that the appellants were liable for penalty under this section. The High Court, upon review, found no grounds to interfere with the Tribunal's order and dismissed the appeal for lack of merit. The parties were directed to receive a certified copy of the order within a week.
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2011 (2) TMI 1360
Issues involved: Challenge to conditional stay order granted by CESTAT, violation of principles of natural justice, consideration of undue hardship.
Conditional Stay Order Challenge: The petitioner challenged the order passed by CESTAT granting a conditional stay order, claiming entitlement to three adjournments which were not granted. The petitioner argued that the impugned order violated principles of natural justice by not considering undue hardship. However, the High Court found no merit in the contention, stating that the petitioner, before exercising the right of statutory appeal, is expected to make a pre-deposit of the duty found due by the original authority. The Court clarified that the right to three adjournments for addressing arguments on merits is separate from the right to be heard regarding waiver of pre-deposit and interim stay order. The Court upheld the decision of the appellate authority to decline adjournment and consider the case, noting the mis-declaration of the country of origin in the consignment. The Tribunal granted a conditional stay requiring a deposit of Rs. 10 crores, despite the petitioner not being represented.
Consideration of Undue Hardship: The Court referred to the case of Benara Valves Ltd. v. Commissioner of Central Excise, emphasizing the twin requirements of considering undue hardship and imposing conditions to safeguard the interest of the Revenue. It was highlighted that undue hardship must be established by the applicant for waiver and mere assertion is insufficient. The term 'undue hardship' was explained to mean excessive hardship greater than warranted by the circumstances. In the present case, the mis-declaration by the petitioner led to Anti-dumping duty of Rs. 16,64,78,338.00 in addition to a penalty. Despite the absence of the petitioner's Counsel, the Tribunal granted a stay order on the condition of a Rs. 10 crores deposit, showing consideration even in the petitioner's absence.
Conclusion: The High Court concluded that the impugned order was not vitiated for failing to follow principles of natural justice. Even when considering undue hardship, the order passed was deemed to satisfy the necessary test. The Court found no merits in the petitioner's contentions and dismissed the challenge to the conditional stay order.
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2011 (2) TMI 1359
Issues:
1. Stay application filed by the Commissioner challenging the order of the Appellate Commissioner.
2. Interpretation of Sections 149 and 154 of the Customs Act regarding reassessment of a bill of entry.
3. Clarity of view in the impugned order leading to confusion for the original authority.
Analysis:
1. The Commissioner (Appellant) filed a stay application challenging the order of the Appellate Commissioner, arguing that the order was incorrect, illegal, and not proper. The Appellant contended that the department had reasonable chances of winning the case and requested the stay of the impugned order. The grounds of appeal highlighted various contentions raised by the Revenue, emphasizing the need to differentiate between Sections 149 and 154 of the Customs Act. Referring to settled law, it was argued that no refund claim is sustainable without successfully challenging the assessment of the bill of entry. The Appellant also cited a previous decision in support of their case.
2. The respondent opposed the stay application, citing the observations made in the impugned order and mentioning an application filed before the Assistant Commissioner in line with the direction from the Commissioner (Appeals). The respondent's application, although not explicitly invoking either Section 149 or Section 154, was filed "under both provisions." The respondent highlighted that the refund of the duty amount was still pending, indicating ongoing unresolved issues.
3. Upon reviewing the submissions, it was noted that the Commissioner (Appeals) had allowed the assessee to seek reassessment of a bill of entry under either Section 149 or Section 154 of the Customs Act, despite these provisions operating in distinct fields. This lack of clarity in the order led to the party filing an application without specifying whether it was under Section 149 or Section 154, creating confusion for the original authority. Consequently, the Tribunal found the impugned order to lack a clear perspective, necessitating a stay on its operation to address the ambiguity and ensure proper consideration of the application by the relevant authority.
In conclusion, the Tribunal granted the stay application filed by the Commissioner, emphasizing the need for clarity and proper differentiation between Sections 149 and 154 of the Customs Act to avoid confusion and ensure appropriate assessment procedures.
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2011 (2) TMI 1358
Issues:
Refund of excess excise duty paid, Burden of duty passed on to customers, Validity of issuing credit notes, Interpretation of relevant case laws.
Analysis:
1. Refund of Excess Excise Duty Paid:
The case involved a dispute regarding the refund of excess excise duty paid by the respondent due to a reduction in the duty rate. The original authority sanctioned the refund, which the Commissioner (Appeals) modified to a cash refund to the respondents. The department appealed against this decision.
2. Burden of Duty Passed on to Customers:
The key issue was whether the burden of excess duty paid by the respondents had been passed on to their customers. The department argued that even though credit notes were issued later, the burden had already been shifted to the customers through the initial invoices indicating the higher duty rate.
3. Validity of Issuing Credit Notes:
The Commissioner (Appeals) held that the issuance of credit notes by the respondents indicated that the burden of excess duty had not been passed on to any other person. This was a crucial point in determining the eligibility for a cash refund as opposed to depositing the amount in the Consumer Welfare Fund.
4. Interpretation of Relevant Case Laws:
Both sides relied on various case laws to support their arguments. The department cited cases where the duty burden was considered to have been passed on despite subsequent actions like issuing credit notes. On the other hand, the respondents relied on judgments emphasizing the importance of the transactions between the manufacturer and the first stage dealers in determining the burden of duty.
5. Final Decision:
After considering the submissions and case laws, the Tribunal concluded that the burden of duty had been passed on to the customers by the respondents. Therefore, the order of the Commissioner (Appeals) granting a cash refund was set aside, and the original authority's decision to deposit the refund in the Consumer Welfare Fund was restored. The department's appeal was allowed based on this analysis.
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2011 (2) TMI 1357
Issues involved: Appeal against rejection of conversion of shipping bills u/s 149 of Customs Act, 1962.
Summary:
The appeal was made against the rejection of conversion of shipping bills under the Customs Act, 1962. The appellants exported Metallic Expansion Bellow under Free Shipping Bills but later sought conversion due to a procedural lapse in not indicating the license number. The Tribunal remanded the matter to the Commissioner for reconsideration. The appellants provided evidence to support their request, citing past instances where similar conversions were allowed. However, the Commissioner rejected the conversion, leading to the appeal.
The Tribunal considered the submissions and evidence from both sides. The appellants received the advance license before filing the shipping bills but failed to mention it, claiming they were not regular exporters. The Tribunal noted a previous case where a similar conversion was allowed, but emphasized that the omission posed a risk to revenue as goods under free shipping bills were not examined. The Commissioner's decision was deemed not arbitrary, as the exercise of power under Section 149 is discretionary.
The requirement to claim export under a scheme was to enable necessary checks by customs authorities, which was not possible in this case due to the free shipping bills. The certificates provided by the jurisdictional Central Excise officer and DGFT authorities were considered untimely and not relevant to the export process. The Tribunal emphasized that past favorable decisions did not create a binding precedent, and the appellants should have learned from previous experiences. Ultimately, the appeal was rejected, upholding the Commissioner's decision.
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2011 (2) TMI 1356
Issues: Mis-declaration of goods under EPCG Scheme, Enhancement of value without consent, Imposition of redemption fine and penalty
Mis-declaration of goods under EPCG Scheme:
The case involved a dispute where the respondent imported polished marble slabs under the EPCG Scheme but the goods did not match the specifications mentioned in the license. The respondent admitted the mistake, and the value of the goods was enhanced, leading to confiscation, redemption fine, and penalties. The Revenue contended that the respondent mis-declared the goods and did not have a valid license to import the quantity. However, the respondent argued that they placed an order for specific sizes which were not available from the supplier, and there was no deliberate intention to mis-declare. The Tribunal found that the respondent had amended the license and had discharged the duty liability, concluding that there was no mis-declaration with malicious intent.
Enhancement of value without consent:
The adjudication order included an enhancement in the value of the goods without obtaining the respondent's consent, contrary to Board's Circular. The Tribunal noted that this enhancement lacked proper justification and violated procedural requirements. As the respondent had already paid duty based on the transaction value, the Tribunal deemed the enhancement unjustified. This lack of reasoning for the value enhancement was a key factor in the Tribunal's decision to reject the Revenue's appeal.
Imposition of redemption fine and penalty:
The Revenue sought to restore the redemption fine and penalties imposed on the respondent for the alleged mis-declaration. However, the Tribunal disagreed, highlighting that there was no evidence of deliberate mis-declaration by the respondent. The lower appellate authority had correctly set aside the adjudication order due to the absence of any malicious intent or mis-declaration. The Tribunal upheld the lower authority's decision, emphasizing that without clear allegations of intentional mis-declaration, the imposition of fines and penalties was not justified. The appeal filed by the Revenue was ultimately rejected by the Tribunal.
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9911796707
