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Showing 301 to 320 of 2855 Records
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2015 (10) TMI 2563
Unexplained deposit - Held that:- In the present case assessee was called upon to explain the deposits made in her savings bank account to the extent of ₹ 15,00,000/-. The assessee was required to satisfactorily explain the source of the cash deposit in the savings bank account during the assessment year. For the purpose of explaining the source of cash deposit, the assessee has submitted that the amount was received by her on account of sale of her plot to one Shri Shakeel Khan vide documents dated 4.6.2007 . The sale consideration received by her was deposited by her in savings bank account after finalization of sale.
The assessee transferred this plot on the basis of Agreement to Sale, Will and General Power of Attorney. The General Power of Attorney had been registered in favour of Shri Shakeel Khan on 04.06.2007. The assessee’s case prima facie appears to be in favour of assessee that no one without any receipt of consideration would register the General Power of Attorney in favour of a stranger. But it is also undisputed fact that on verification from the side of Shri Shakeel Khan through statement recorded under section 131 has shown that he had denied having given ₹ 15,00,000/- against the sale consideration as claimed by the assessee. Thereafter Shri Shakeel Khan had sold this plot subdividing to third party on subsequent date through registered sale deed. There is no evidence about subsequent sale and what status has been shown in the registered sale deed of Shri Shakeel Khan. On verification of bank account, it is also clear that assessee has withdrawn money from the bank account in which cash of ₹ 15,00,000/- were deposited for purchase of residential house. It is also found from the copy of account that assessee had also taken loan from Punjab National Bank for construction of the house. All these facts are required to be re-examined by the AO which has not been considered at the time of assessment as well as by the ld. CIT (A), which shall explain the nature of transaction. Accordingly, we set aside this issue to the file of AO for fresh decision after affording opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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2015 (10) TMI 2562
Denial of Cenvat credit - Rule 3 of the Cenvat Credit Rules - Held that: - Since the supplier of bright bar are duly registered with the Central Excise Department and discharged appropriate duty liability on the said goods, in my opinion, cenvat benefit cannot be denied to the recipient manufacturer, the appellant in the present case - Decided in favor of the assessee.
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2015 (10) TMI 2561
Ingenuine trade creditors - assessee submitted that records of the trade creditors were not maintained during the year because assessee had not maintained any books of accounts due to applicability of provisions of section 44AE - Held that:- Assessee had failed to give names, addresses, confirmation, bank statement and transactions details of the creditors. In the absence of these details, the claim of the assessee regarding sundry creditors is not acceptable particularly when there was no such creditor in the year ended on 31.3.2005 and the nature of business is stated to be the same. The AO has also reproduced the cash flow statement on page 3 of his assessment order which shows that against the receipt of ₹ 30.55 lacs, the assessee has shown expenses of ₹ 12.64 lacs resulting in a surplus of ₹ 17.90 lacs against which the assesee has declared income of ₹ 2.10. lacs only u/s 44AE of the Act.
As per the provisions of section 44AE such income is taxable even if the assessee has not maintained books of accounts. When the assessee has shown a cash surplus of ₹ 17.92 lacs as against the declared income of ₹ 2.10 lacs such excess cash surplus has to be explained. If the assessee is claiming to have trade creditors to the tune of ₹ 9,80,000/-, he is bound to substantiate the same, if required to do so. Although the assessee is not required to maintain regular books of accounts, he is bound to furnish information regarding trade creditors if he has claimed their existence. Under these facts it cannot be accepted that the trade creditors shown by the assessee are genuine.
AO has made an addition on the basis of the statement of affairs and the cash flow statement drawn and submitted by the assessee himself and hence the assessee cannot rightfully claim that he is not obliged to substantiate the same by taking shelter under the provisions of section 44AE of the Act. - Decided against assessee.
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2015 (10) TMI 2560
Disallowance u/s 24(a) - treatment to rental income as ‘Income from house property’ instead of ‘Income from business and profession' - rental income earned from stock in trade - Held that:- More enquiry is required to be conducted by the AO to ascertain the true nature of assessee’s activities with a view to ascertain whether the letting was a business activity or was exploitation of property by the owner. In our view, for that purposes AO is required to make more enquiries like whether there are any other source of income besides giving the properties on rent or what is true intention of the assessee by letting the property or whether the properties were leased out interregnum period waiting actual the sale of the property with a view to mitigate the loss as would have been done by an ordinary property owner. We notice that the various portions of the property, like the ground floor, 1st floor, 6th floor and 7th floor were lying vacant as mentioned in the closing stock as on 31.3.2011. In our opinion, AO should also bear in mind the status of vacant floors in the property while deciding the issue.
Thus we restore the matter to the file of AO to decide afresh after affording reasonable opportunity of being heard to the assessee.
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2015 (10) TMI 2559
Revision u/s 263 - assessee is not entitled to claim deduction u/s 10AA of the Act on purely trading activity - Held that:- On perusal of order of the AO as well as submission filed before the AO during the assessment proceedings, it is clear that the AO has raised a specific query in relation to deduction claimed by the assessee u/s 10AA of the Act. In response, the assessee has filed the reply alongwith report u/s 10AA in form No. 56F. Thereafter, the AO has raised further enquiries and the assessee filed the detailed reply which is mentioned hereinabove. Therefore, it is clear that specific query was raised by the AO and on perusal of the details and reply submitted by the assessee, the AO allowed deduction u/s 10AA of the Act to the assessee. In this regard, it is clearly not a case where there is lack of enquiry by the AO. On similar facts in the case of another assessee in the case of M/s. Goenka Diamond and Jewels Ltd. [2012 (3) TMI 258 - ITAT JAIPUR] the Coordinate Bench of ITAT has taken a view that deduction u/s 10AA is available in respect of trading activity. - Decided in favour of assessee
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2015 (10) TMI 2558
Penalty U/s 271(1)(c) - undisclosed cash deposits - voluntary disclosure of income - Held that:- Surrender subject to non-initiating the penalty proceeding and prosecution does not absolve the assessee from liability of penalty. The material fact is that the assessee offered any explanation for concealment or furnishing of inaccurate particulars of income to be seen. Penalty proceeding and satisfaction of the Assessing Officer need not be recorded in a particular manner. Therefore, the assessee does not get any immunity from the penalty on the ground that appeal has been admitted before the Hon'ble High Court which also does not make issue before the Hon'ble High Court debatable. The fact is that the assessee had deposited cash from undisclosed source, which has not been explained by him before the lower authority. Thus we confirm the order of the ld CIT(A). - Decided against assessee.
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2015 (10) TMI 2557
Exemption under section 10BA to a trading and export firm which was not involved in manufacturing or production of eligible artistic articles - Held that:- As per sub-section (6) of section 10BA, the sub-section (8) and sub-section (1) of section 80IA also applicable in relation to the undertaking referred to in this section as they apply for the purpose of undertaking referred to in section 80IA. Section 10BA was inserted by the Finance Act, 2003 with effect from 1.4.2004 whereas section 80IA was inserted by the Finance Act, 1999 with effect from 1.4.2000. Originally section 80IA was inserted by the Finance Act, 1991 with effect from 1.4.1991. The languages of both the sections are same but the effective dates are different. Therefore, findings of Hon’ble Supreme Court in the case of Liberty India [2009 (8) TMI 63 - SUPREME COURT] squarely are applicable in case of deduction claimed by the assessee under section 10BA and credited duty draw back and DEPB in the Profit & Loss Account, but is not derived income from undertaking. Therefore, we reverse the order of ld. CIT (A) to that extent.
Hon’ble Supreme Court in the case of Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA ) held that entire sale proceeds not to be treated as profits but only difference between sale value and face value of credit – DEPB credit chargeable as income under section 28(iiib) in year in which applied for against exports. Further, profit on transfer of credit chargeable under section 28(iiid) in year in which transferred.
Thus Assessing Officer is directed to recalculate the income accordingly.
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2015 (10) TMI 2556
Penalty levied u/s 271(1)(c) - Estimation of income on the basis of the material seized during the search conducted by the Excise authorities - Held that:- On the basis of admission made by the assessee, the income was estimated on the basis of past history of the assessee and that was based on the material found referred herein above . The addition made by the AO, though was challenged before ld. CIT (A) and before the ITAT, but the Tribunal sustained the addition on the basis of the material admitted by the assessee in the proceedings initiated by the Excise Department. In our view, the ld. Counsel for the assessee is not right in his contention that whenever an assessment is made on the basis of flat rate of profit on estimation basis, no inference can be made that the assessee has concealed the income. In the present case, the AO has estimated the income on the basis of the material seized during the search conducted by the Excise authorities and admission made by the assessee. Therefore it is not a case of mere estimation but was a case of deriving income based on undisclosed investment/purchases and undisclosed sales of the product. In our view, assessee has concealed the particulars of income and, therefore, the assessee is liable for imposition of penalty on account of concealed income. Therefore, we find no infirmity in the order of ld. CIT (A) which is confirmed. - Decided against assessee.
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2015 (10) TMI 2555
Disallowance u/s 40A(2)(b) in respect of professional fees - payment to a partnership firm whose partners are having substantial interest in the business of the assessee company - Held that:- As decided in assessee's own case in AY 2007-08 the onus u/s 40(A)(2) being directly on the Revenue, we find that the same has not been discharged by it in any manner. For, a satisfaction of the ingredients of the section would require an analysis of the services provided, and (further) categorizing them into various components, as (say): retainership, foreign exchange matters, appearance fee, etc. It is only such a comprehensive analysis, the details of the expenditure being available from the relevant bills raised, so that the details of the charges raised qua various services performed or charged for is available, that would yield the basis for a decision with regard to the reasonability thereof, including with reference to the legitimate needs of the assessee’s business, could if at all be taken; in the clear absence of which, the Revenue’s case is no more than an allegation or a surmise. The assessee has rightly relied on the decision in the case of Upper India Publishing House (P.) Ltd. v. CIT, (1978 (12) TMI 2 - SUPREME Court ). We, accordingly, find little merit in the Revenue’s case, and direct the deletion of the impugned disallowance. - Decided in favour of assessee
Disallowance u/s 115JB - unascertained liability - As per ld. AR, it is an ascertained liability as it represents actual payment of management fees to RIICO in order to arrive at the settlement of secured loan as per scheme of BIFR - Held that:- The contention of ld. AR has neither been controverted by the lower authorities nor by ld. DR. It is thus clearly a case of actual payment of management fees and the same cannot be held to be a provision towards an unascertained liability u/s 115JB(2) (c ) of the Act.
As regards the other observation of the AO that the said amount has been shown below the line, in our view, whether the amount is shown above the line or below the line, so long as the amount is charged to profit and loss account and profit and loss account has been prepared in accordance with Companies Act, the same should be allowable in computing the book profits subject to specific adjustments as specified in Section 115JB. In this regard, in response to the specific query from the Bench, it was informed by ld. AR that the amount has been actually charged to the profit and loss account for the year under consideration. Hence, the contention of the AO does not have a legal basis and hence does not find favour with us. Accordingly, we are of the considered view that ld. CIT(A) is not justified in confirming the addition - Decided in favour of assessee
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2015 (10) TMI 2554
TDS u/s 194C - non deduction of tds on payment to truck drivers - Held that:- The assessee is a transporter but did not own any truck but arrange the truck from the market. The customer is generally made contract to transporter for arranging the trucks for transportation of goods. In the present case, the assessee is an intermediary and conduit to make available the trucks from the market and issue GR in his own name but only charged commission for making builty. It is a fact that the customers deduct tax in the name of appellant but the truck owners was to be paid the amount of TDS by the assessee. The assessee got the refund and adjust the refund against the payment made by him to the truck drivers. The assessee has not debited any expenses on account of freight charges in the P&L account. Therefore, Section 40(a)(ia) is not applicable and is also not liable to be deducted TDS U/s 149C of the Act.
The assessee also had filed Form No. 15J before the Addl.CIT and at the time of assessment proceedings before the Assessing Officer, which has not been controverted by the DR. if the assessee has produced the evidence regarding submission of Form No. 15-J before the lower authority, in which some fault had been found on the ground that no signature, number of receipts has been provided by the Range office, is not any fault on part of the assessee. The assessee has furnished the Form No. 15-J in the office of the Commissioner. Various Courts also even considered and held justified Form No. 15-J before the Assessing Officer at the time of assessment proceedings. Therefore, we reverse the order of the ld CIT(A). Accordingly, this appeal is allowed in favour of assessee
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2015 (10) TMI 2553
Denial of TCS credit u/s 206C(1C) - Held that:- The fact that State Govt. has collected TDS and paid it to Govt. treasury is undisputed. It is abundantly clear that assessee's case is covered under the TCS provisions and that is why the TCS is collected in this behalf u/s 206C. It is undisputed fact that that TCS payment is duly certified by payer Rajasthan Govt. in prescribed Form No. 27D; consequently the credit of TCS has to be given to assessee as a matter of right, more so, when the corresponding income from contracted activities as per Rajasthan Minor Minerals Concession Rules, 1986, is included in assessee's income. In these facts and circumstances, I find merit in the arguments of the ld. Counsel for the assessee that denial of credit tantamount to confiscating assessee's tax for which corresponding income is included in its taxable income. Such confiscation amounts to unjust enrichment on the part of the Govt. which is not permissible. In view of the entirety of the facts and circumstances of the case, the assessee claim of credit of TCS amount as mentioned above is justified and deserves to be allowed. This ground of the assessee in both the years is allowed.
Interest charged by the Govt. on late deposit of royalty installments under the head royalty expenses - allowable expenditure u/s 31(1) - Held that:- Interest @ 12% paid to Govt. for late deposit of monthly royalty instalemnts for delay in payment is clearly compensatory in nature and not penal in nature as held by the lower authorities. My view is fortified by above judgments. The contentions about the business expediency and allowability of interest in the view of the decision of Hon'ble Apex Court in the case of S.A. Builders vs. CIT (2006 (12) TMI 82 - SUPREME COURT) is well placed and deserves to be accepted. These being the Govt. payments, find no merit in the findings of the ld. CIT(A) that no evidence was produced in this behalf as the payments are demonstrated by the assessee's account in assessment year 2007-08. In view of thee facts and circumstances of the case, the payment of royalty expense is compensatory in nature and is an allowable expenditure u/s 31(1) of the Act.
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2015 (10) TMI 2552
Revision u/s 263 - turnover non disclosure - Held that:- We are of the view that on the facts and turnover available on record, AO has already verified and reconciled Form 16 of the respective companies. It shows that all the gross turnovers were properly reported and offered for tax. Relying on the judgment of the Hon’ble Gujarat High Court in case of CIT Vs. Smt. Minalben S. Parikh (1994 (10) TMI 9 - GUJARAT High Court ), there has to be twin test, not only erroneous but also prejudicial to the interests of revenue. In the given case, the turnover relating to assessee and JV companies were submitted before AO and also reconciled with the statutory form 16 filed by M/s FA CAO (Construction) and South Central Railway with books of the assessee and JV companies. It demonstrates that there is no escapement of income or prejudicial to the interests of revenue. Moreover, if we add the turnover of the JV companies to the assessee’s gross turnover, it amounts to double taxation. Accordingly, we hereby reject the observations of the Pr. CIT and quash the order passed by him u/s 263 of the Act. - Decided in favour of assessee.
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2015 (10) TMI 2551
Levy of penalty under S.271(1)(c) - claim u/s 80IB made - Held that:- A new line of business engaged in by the assessee, viz. manufacture and sale of electronic street light timers, has come to light, and it led to disclosure in the returns filed in response to notices under S.153A, higher income than what was declared earlier by the assessee. Assessing Officer in the present case is not attributing any concealment or furnishing of inaccurate particulars in respect of the entire income relating to this new line of business, but confining himself only to the claims made for deduction under S.80IB, while proposing penalty under S.271(1)(c). This approach of the Assessing Officer, in considered opinion is not justified.
Having not proposed any penalty in relation to the larger portion of profit of the new line of business, there is no justification for penalty in relation only to the claim made by the assessee for deduction under S.80IB of the Act. Had the assessee not made the claim for deduction under S.80IB, if the approach of the Assessing Officer is approved, there is no case for penalty for concealment, because everything would have remained profit of the new line of business discovered, in relation to which no penalty proceedings were initiated. Considering in the light of the fact that disclosure of profits from such business did not attract any penalty u/s 271(1)(c), making a claim u/s 80IB out of those profits can only be considered as genuine claim.
This is not a fit case for levy of penalty under S.271(1)(c) - Decided in favour of assessee.
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2015 (10) TMI 2550
Refund - Period of limitation - delay in filing refund application due to Seizure of goods - Notification No. 102/07-Cus dated 14.09.2007 - Held that: - it was beyond the control of the appellant to file the refund claim within one year from the relevant date for the reason that the goods were seized by the Customs Department, which were ultimately released pursuant to the direction of the Hon’ble Punjab & Haryana High Court vide order dated 28.08.2012 - the provisions of Section 14 of the Limitation Act, 1963, which provides for “exclusion of time” for computation of period of limitation, applies - Decided in favor of the assessee.
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2015 (10) TMI 2549
Clearance of goods without payment of duty - invoices supplied to buyer without supplying the goods enabling the buyers to avail Cenvat credit on the strength of invoices - availing of CENVAT credit fraudulently - SSI exemption - whether demand of interest u/s 11AB of the Act justified? - Held that: - during the impugned period, provision of Section 11AB of the Act were not in force which were introduced with effect from 28-9-1996 and the period involved is prior to that date. Therefore, the demand of interest confirmed against the appellant is set aside as there was no provision to demand interest during the relevant time.
Imposition of penalty u/r 173Q of the Erstwhile Rules - Held that: - I have gone through the provisions of Rule 173Q wherein for certain contravention by the assessee, the goods are to be held liable for confiscation and thereafter penalties are imposable. I have gone through the impugned order wherein the goods are not held liable for confiscation and penalty have been imposed on the appellant. Further, I find that no specific clause of Rule 173Q has been mentioned in the impugned order to impose penalty on the appellant. Therefore, relying on the decision of Hon’ble Apex Court in the case of AMRIT FOODS Versus COMMISSIONER OF CENTRAL EXCISE, UP. [2005 (10) TMI 96 - SUPREME COURT OF INDIA], I hold that penalty under Rule 173Q of the Rules is not imposable on the appellant.
Demand of interest and penalty not sustainable - appeal allowed - decided in favor of appellant.
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2015 (10) TMI 2548
Waiver of pre-deposit - waiver of penalties u/s 78 and penalties under other provisions of Finance Act, 1994 - scope of works contract service - Held that: - the Service Tax on ‘works contract service’ has been levied w.e.f. 01.06.2007 wherein the scope and meaning of ‘works contract’ has been defined under the Finance Act, 1994. Therefore, there is no necessity to look into the other Acts for the definition of ‘works contract’.
Quantification - ‘Repair and maintenance services’ - ‘GTA services’ - Held that: - on computation of demand relating to ‘repair and maintenance services’ and ‘GTA services’ the dispute would be resolved at the time of disposal of the appeal.
At this stage we are of the opinion that the applicant could not make out a case for total waiver of pre-deposit of dues adjudged. Considering the financial hardship expressed by the ld. C.A. that the company is incurring losses for the last three years and in the interest of Revenue, it would be appropriate to direct the applicant to deposit ₹ 6.00 Lakhs in addition to the amount of ₹ 4.18 Lakhs already deposited. Consequently, the applicant is directed to deposit ₹ 6.00 Lakhs within a period of 8 weeks and on deposit of the said amount, balance dues adjudged would stand waived and its recovery stayed during the pendency of the appeal - stay granted partly.
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2015 (10) TMI 2547
Demand of duty with interest - related person - laundry soap - whether the duty be levied and exemption notification withdrawn on the ground that the director of M/s. Washwell Soap (P) Ltd. is relative of the proprietor of the appellants and they are related person - Held that: - Both concerns are owned by close family relations. Shri Devilal Somani, proprietor of Devilal Kutir Soap, his wife and his father Shri Ladu Ram Somani are directors of M/s.Washwell Soap Pvt.Ltd. It is seen stated that Shri Devilal Somani had relinquished the directorship of M/s. Washwell Soap (P) Ltd. on 1.6.1999. Be that as it may, there is no evidence placed to bring out any mutuality of interest between two concerns to treat them as related persons.
Commonness of the directors or even one or two directors being relatives of the director/partner of other concern cannot make the two as related persons unless there is evidence of mutuality of interest of two concerns, or interest of one in the business of the other.
There is no categorical statement in the declaration that they are related persons. Moreover, the department has not carried out any investigation to ascertain whether there is mutuality of interest - the demand of duty, interest and penalties are unsustainable - appeal allowed - decided in favor of appellant.
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2015 (10) TMI 2546
Imposition of penalty u/s 114(iii) of the Customs Act, 1962 - Mis-declaration of goods to avail Duty drawback - classification of exported goods - Jute Twine or Jute Yarn - product exported considered as Jute twine as per trade practice - whether penalty u/s 114 correctly imposed upon the appellant? - Held that: - The opening para of the Order-in-Original dated 30.11.2011 conveys that some exporters were exporting Jute yarn in the fuise of Jute Yarn, which support the view of the appellant that there was a general practice in trade to consider the export goods as Jute Twine. If the visual examination only was sufficient to distinguish Jute Twine and Jute Yarn then even the Customs examination officer could have also detected the same. Department had to approach Institute of Technology, Kolkata to arrive at a conclusion that goods exported were in fact Jute Yarn. - appellant cannot be held responsible for deliberate mis-declaration to avail higher DBK and no penalty attracted upon the appellant - appeal allowed - decided in favor of appellant.
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2015 (10) TMI 2545
Guarantee Fee paid - revenue or capital expenditure - Held that:- It is not in dispute that assessee has taken loans from HUDCO for maintaining and improvement of State Highways and other District roads in State of Haryana and same loan was capitalized. The Haryana Government has given guarantee for State Corporation of HUDCO against grant of loan. For this activity of giving guarantee, the Haryana State Government has taken the Guarantee Fees. The counsel for assessee was directed to explain and justify that it was revenue expenditure. It is also admitted fact that assessee in its books of account has amortized the total guarantee fees of ₹ 1121.56 lacs in the period of loan taken for various schemes i.e. for 13 to 14 years. Therefore, guarantee fees was amortized by the assessee in the books of account. The ld. CIT(Appeals), in the background of these facts noted that assessee is a creation of State Government and no other basis or justification has been submitted for giving guarantee fees to the State Government by its own corporation.
When assessee was asked to justify as to for what purposes, the guarantee fee was paid to the State Government, assessee was not able to explain anything in this regard. It is well settled law that when assessee claimed deduction on account of business expenditure, burden would be upon assessee to prove that the said expenditure was not in the nature of capital expenditure and has been laid out or expended wholly and exclusively for the purpose of business. The assessee, however, failed to produce any evidence or material before authorities below to prove that the guarantee fees paid to State Government, was wholly and exclusively incurred for business purposes. CIT(Appeals) was correct in upholding the addition by treating the Guarantee Fee paid as Capital expenditure - Decide against assessee
Addition u/s 40(a)(ia) - non deduction of tds on the payments made for consultancy charge - Held that:- No merit in this ground of appeal of the assessee. The assessee specifically pleaded before authorities below that since amount is actually paid, therefore, assessee is not required to deduct TDS on the same amount. No other submissions were raised before authorities below. The issue of ‘paid’ and ‘payable’ has already been decided against the assessee by Hon'ble Punjab & Haryana High Court in the case of PMS Diesels (2015 (5) TMI 617 - PUNJAB & HARYANA HIGH COURT ). Now, the ld. counsel for the assessee has come up with new plea that since tax has been deducted, therefore, matter may be remanded to the Assessing Officer. First of all, the plea of the assessee has no merit because once assessee pleaded before authorities below that amount of ₹ 4,03,129/- has been paid on 15.09.2009, where is the question of deduction of TDS on the same amount. Further, assessee has not filed any application for admission of the additional evidences and has not explained any reason why assessee has not filed these documents before the authorities below which have been now filed at pages 11 to 15 of the Paper Book, genuineness of same are in doubt. - Decided against assessee
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2015 (10) TMI 2544
CENVAT credit - service tax paid on the input services used in the provision of both taxable as well as exempted services - requirement of Rule 6 (3) (c) of the Rules complied with - excess cenvat credit, over and above the prescribed limit of 20% utilized by the appellant - Held that: - Where the service provider provides for both taxable as well as exempted service, sub-rule (2) of the said rules provides for maintenance of separate accounts. In the case, where no separate accounts have been maintained, clause (c) of sub rule (3) mandates that “the provider of output service shall utilize credit only to the extent of an amount not exceeding 20% of the amount of service tax payable on output service”. It is not in dispute that the appellant had not paid 20% amount from its cenvat account towards the taxable output services. The case of the Department is that on monthly basis, this 20% calculation has to be done and the same should be paid from the cenvat account; and if any amount is paid over and above 20% during the particular month/period, the same is not in conformity with the statutory provisions, and thus, the assessee is required to pay the cenvat credit.
There are no specific restrictions or prohibitions contained in Rule 6 of the Cenvat Rules, providing for reversal of cenvat credit on monthly/periodic basis. Rather, as per the statutory mandates, the amount of 20% has to be paid during a particular financial year, irrespective of the fact that in some months the amount paid is more and in other months, the payment is less. Payment in this manner will not be treated as irregular.
The decision in the case of Idea Cellular Ltd. Versus Commissioner of Central Excise, Rohtak [2009 (2) TMI 91 - CESTAT NEW DELHI] relied upon where it was held that if during certain months, the credit utilization for payment of service tax was less than the 20% ceiling specified in Rule 6(3)(c) of Cenvat Credit Rules, 2002, the unutilized credit of those months has to be adjusted against utilization in excess of the 20% ceiling, in other months.
Payment of amount by the appellant is in conformity with the provisions of Rule 6(3)(c) of the Cenvat Credit Rules, 2004 - demand of service tax, interest and penalty set aside - appeal allowed - decided in favor of appellant.
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9911796707
