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Showing 301 to 320 of 1437 Records
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2015 (3) TMI 1143
Appropriate authority to hear appeals - Bills of Entry filed at JNCH, Nhava Sheva were assessed after enhancing declared value by 5% in terms of enhancement in value by Special Valuation Branch, New Delhi - Appellant filed appeals before Commissioner (Appeals) Nhava Sheva against the assessment orders in respect of the above Bills of Entry but it said that appeal can only be filed before the jurisdictional Commissioner (Appeals), New Delhi - Held that: The Commissioner (Appeals) has misread the provisions of law as well as Board Circular No. 29/2012. The legal provisions are very clear. Any appeal against assessment order passed by Customs at JNCH will lie to the jurisdictional Commissioner (Appeals) Nhava Sheva. The Board Circular No. 29/2012, in fact, supports this view and states that the work relating to appeal etc. will continue to be handled by the jurisdictional Commissioner of Customs. For the sake of uniformity, the circular also states that Director General Valuation will provide its views on the orders passed by the Adjudicating Authority, which will be given due consideration when the orders are examined by Commissioner of Customs for review or acceptance of the orders under Section 129D of the Customs Act. Therefore, we hold that Commissioner (Appeals), Nhava Sheva is the appropriate authority to hear the appeals against assessment orders passed by Nhava Sheva, Customs.
In the peculiar circumstances of the case where the views of DGOV are considered by all reviewing authorities, we would request DGOV to direct the Adjudicating Authority in Delhi to decide the case expeditiously in the interest of justice as well as in the interest of Revenue. Only after the case is decided by SVB Delhi, will the Commissioner (Appeals) Nhava Sheva be able to take a view.
Payment of EDD - Transactions involving related party investigated by Special Valuation Branch - Held that: As per the clear instructions of the Board in Circular No. 11/2001-Cus., dated 23-2-2001 as well as Mumbai High Court order in the case of E.I., DuPont India Pvt. Ltd. 2014 (8) TMI 290 - BOMBAY HIGH COURT, no additional EDD will be payable by the appellant. - Decided in favour of appellant
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2015 (3) TMI 1142
Re-assessment in terms of rejection of transaction value- Appellants imported cloves describing them as “Cloves FAQ Grade CG-3 (origin as Madagascar as per contract and declared value of USD 2000 PMT CIF- The primary adjudicating authority held that “no grade or quality” has been mentioned in the contract and same mentioned in the invoice to hoodwink the revenue therefore the transaction value rejected and assessed at USD 3000 PMT (CIF) on the basis of value of identical goods under Rule 5 of Custom Valuation (Determination of Valuation of Imported Goods) Rules, 2007- Held that: appellants produced international Trade Centre (UNCTAD/WTO) Market Brief 2006 regarding market of clove in European Union wherein it is clearly stated that in the EU the most popular quality is CG-3 quality from Madagascar and Zanzibar. Obviously, the adjudicating authority has mis-guided himself into believing that there was no CG-3 grade cloves and so the appellants tried to hoodwink Revenue. It is also seen that the re-assessment has been done only on the ground of adopting the value of identical goods sold for export to India and imported at or about the same time as the goods being valued. In this regard, it is useful to refer to the definition of “identical goods” given in Rule 2(d) of the said Valuation Rules in terms of which one of the conditions for the goods to be called “identical goods” is that they should be produced in the country in which the goods being valued were produced. This condition is obviously not satisfied as it is an admitted fact that the impugned cloves are of Madagascar origin while the value adopted for re-assessment was in respect of cloves of Zanzibar origin. In the case of CC, Chennai v. Forte Garments 2001 (12) TMI 184 - CEGAT, CHENNAI, the Tribunal noted that “for the purpose of enhancing value, Revenue is required to produce contemporaneous imports from the same country pertaining to the same goods and the same time and quantity and quality in order to reject the transaction value.” Therefore, the reassessment under Rule 5 ibid based on the value of cloves of different country of origin is unsustainable. - Decided in favour of appellant with consequential relief
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2015 (3) TMI 1141
Reopening of assessment - assessment has been framed u/s.158BA - Addition on unaccounted investments - Held that:- It is an admitted fact that action u/s.132 of the I.T. Act was carried out simultaneously in the case of the Pat Sanstha as well as that of the assessee. No evidence whatsoever was found during the course of search in case of the assessee that he has made such fictitious fixed deposits. No investigation whatsoever was carried out by the AO to find out as to who are the real beneficiaries. Nothing has been brought on record to show that the money has come back to the assessee. Although the Ld.CIT(A) has directed the AO to tax the same in the hands of the concerned persons, we find the Ld.CIT(A) has not given any specific direction to tax the same in the hands of the assessee Mr. Radhe Shyam B. Agrawal. It is also an admitted fact that the Patsanstha as well as the revenue have challenged the order of the CIT(A) before the Tribunal and the Tribunal vide order dated 31-12- 2012 has allowed the appeal of the assessee and dismissed the appeal of the revenue. We therefore find merit in the argument of the Ld. Counsel for the assessee that the AO could not have issued notice u/s.147 of the I.T. Act before the order attained finality.
Also find merit in the submission of the Ld. Counsel for the assessee that once an assessment has been framed u/s.158BA of the Act in relation to undisclosed income for the Block Period as a result of search, there is no question of the AO issuing notice u/s.148 of the I.T. Act for re-opening of such assessment as the said concept is repugnant to the special scheme of assessment of undisclosed income for the Block Period. - Decided in favour of assessee
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2015 (3) TMI 1140
Waiver of pre-deposit - tribunal directed to deposit ₹ 4 crores in three installments - learned Senior Counsel appearing for the appellant submitted that the appellant herein has two units. One is at Tuticorin and another is at Silvasa. According to the learned counsel appearing for the appellant, the Tribunal directed to pay the amount, which is not according to law. - Held that:- Accordingly, the appellant herein shall deposit the first and second installments together, which comes to ₹ 3 crores (Rupees three crores only), on or before 31.03.2015 and the last installment of ₹ 1 crore (Rupees one crore only), as decided by the second respondent Tribunal, on or before 15.04.2015, without prejudice to the claim of both the parties to this Civil Miscellaneous Appeal.
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2015 (3) TMI 1139
Shortage in stock of finished goods - Held that:- As find that the finished goods have been not physically counted but the stock taking was done on average basis. It is not the accurate and authentic method to ascertain the weight of the physical stock lying in the factory. There is every chance of the error creeping of such weighment. Verification carried out by the officer, being based on eye estimation is not reliable. Hence, the demand of duty raised on the shortages determined on the basis of the eye estimation is not sustainable. Therefore, we do agree with the observation of the ld. Commissioner (Appeals) that the stock taking of finished goods was done on eye estimation basis. In these circumstances demand is not sustainable.
With taking of raw material in the Panchnama, it is mentioned that the raw material is in the bags of 50 kg each and bags have been counted physically. Therefore, the stock has been counted physically. Further, I have seen the raw material is in the stock register as on 17-7-2009 is 1258.935 MT against recorded stock as 1375.235, therefore, the shortage of works out to 608.935 MT of raw material instead of 725.235 MT. In these circumstances, the impugned order is modified to demand duty on shortage of raw material of 608.935 MT. With these observations, the matter is sent to the adjudicating authority to quantify the actual amount of duty payable by the appellant.
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2015 (3) TMI 1138
Cenvat credit on the input received denied - Held that:- As gone through the invoices, in the invoices manufacturer is shown as M/s. Navneet Yarn Pvt Ltd. and the product shown as copper wire, this creates doubt on the genuineness of the manufacturer supplier and also creates doubt that goods have not suffered duty. Goods which they have received in the factory are not duty paid goods. Therefore, the case relied upon the by the ld. Counsel are not relevant to the facts of this case. Moreover, the appellant although received the goods under cover of the invoices issued by the first stage dealer but these goods are not duty paid goods as description of goods do not match. Therefore, the appellant is not entitled to take Cenvat credit on the strength of the invoices issued by the first stage dealer. - Decided against assessee.
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2015 (3) TMI 1137
Writ petition - Rectification of VAT re-assessment - in the re-assessment order Works Contract turn over was not considered - Held that:- undisputedly respondent is the authority, which can exercise the jurisdiction under Section 39(1) and 39(2) of KVAT Act, 2003 while concluding the re-assessment proceedings and impugned order would also indicate that notices had been issued to petitioner prior to initiation of re-assessment proceedings and petitioner had participated in the proceedings before adjudicating authority through authorized representative. In that view of the matter, without expressing any opinion on the claim made in the writ petition and keeping open all contentions to be urged before appellate authority, this writ petition is dismissed. - Appeal dismissed for want of alternate appellate remedy.
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2015 (3) TMI 1136
Set off of unabsorbed depreciation - Held that:- This decision of the Hon’ble Gujarat High Court has been followed in several decisions rendered by the Co-ordinate Benches of the Tribunal. Respectfully following the ratio of Hon’ble Gujarat High Court, we direct the AO to allow the set off of unabsorbed depreciation pertaining to the A.Y. 1997-98 to 2000-01 in the respective A.Ys. 2005-06 to 2008-09 in accordance with the decision of General Motors India Pvt. Ltd. (2012 (8) TMI 714 - GUJARAT HIGH COURT ). Accordingly, the ground raised by the assessee in all the appeals are treated as allowed.
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2015 (3) TMI 1135
Disallowance u/s 14A - interest payment to the partners on their capital balance - Held that:- It is pertinent to note that the profit of the partnership firm is distributed among the partners in the ratio of their profit sharing. The interest payment to the partners on their capital balance is not revenue neutral as the same is taxable in the hands of the partners. In a case where no interest is provided on the capital account of partners, the corresponding profit/income of the partnership firm is assessed to tax and the share of the partner is exempt in their hands. Therefore when there is a direct relation between the share in the profit of the firm and the interest on capital account then the said interest cannot be treated as an expenditure to be attributable for earning the dividend income. Accordingly, in the facts and circumstances of the case, we delete the addition to the extent of disallowance u/s 14A on account of interest expenditure which is not on the borrowed fund but on the capital contributed by the partners - Decided partly in favour of assessee
Disallowance on account of foreign commission payment u/s 40(a)(i) for want of TDS - Held that:- The income from the offshore supplies is not taxable in the hands of the assessee under the regular provisions of Income tax Act, 1961. In such a situation there is no need to examine the provisions of DTAA for ascertaining whether there is a permanent establishment of the assess in India or not - Decided in favour of assessee
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2015 (3) TMI 1134
Import of prohibited goods - The first respondent herein wanted to import into India a trophy of one stuffed leopard which he shot in Zambia. Leopard is a protected and prohibited species under Schedule I of the Wild Life (Protection) Act, 1972 and also under the Convention of International Trade on Endangered Species of Wild Fauna and Flora (CITES). Therefore, requisite permission under the aforesaid provisions is needed to import such a trophy.
Held that:- What flows from the conjoint reading from the aforesaid provisions is that before import of any specimen of species included in Appendix I, prior import permit of Scientific Authority and Management Authority is required and before such a permit is given, the opinion of Scientific Authority as well as the Management Authority on particular aspects is required. Insofar as the Scientific Authority is concerned, it would look into the matter from two angles, namely, that the import is not detrimental to the survival of the species involved and further the proposed recipient is suitably equipped of house and care for it. Insofar as the Management Authority is concerned, it is to satisfy itself that the specimen is not to be used for primary commercial purposes.
The High Court while observing that the only function of the Management Authority was to ensure that ‘specimen’ is not to be used for commercial purpose looked into the function of Management Authority alone. Error is committed by glossing over the function of the Scientific Authority. This resulted in passing the impugned directions which are clearly erroneous.
The judgment of the High Court, therefore, is not sustainable.
We may record at this stage that after the High Court had pronounced the judgment, respondent No. 1 got the aforesaid item cleared from the Customs and is in possession thereof as of now. In such circumstances, we are of the opinion that appropriate course of action would be to permit respondent No. 1 to apply to the Scientific Authority for necessary permission in the light of the observations made hereinabove.
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2015 (3) TMI 1133
Transfer Pricing adjustment on account of difference in the issue price of equity shares to the holding company and ALP computed by the TPO treated as loan advanced to the AE - Held that:- This issue regarding computation of fair market value of shares issued by the Indian subsidiary to its holding company and shortfall in premium was treated by the TPO as income as well as loan advance given to the holding company and consequent addition has been considered by the Hon’ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd (2014 (10) TMI 278 - BOMBAY HIGH COURT ). Thus we delete the addition made by the authorities below on account of shortfall in premium for issuance of equity shares by the assessee to its holding company has been treated as deemed loan - Decided in favour of assessee
Credit of TDS denied - Held that:- Since the assessee has already filed a petition u/s 154 for grant of credit for tax deducted at source. Accordingly, we direct AO to verify the claim of assessee and then pass the appropriate order.
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2015 (3) TMI 1132
Disallowance u/s. 40(a)(i) on payment to the licensor - non tds - AO made the disallowance treating the nature of the amount to be that of royalty - Held that:- Keeping in view of the decision of the Hon’ble Jurisdictional High Court passed in the case of CIT vs. Dynamic Vertical Sofware India (P) Ltd [2011 (2) TMI 77 - DELHI HIGH COURT] wherein held that the assessee has been purchasing the software from Microsoft and sold it further in Indian market - By no stretch of imagination it would be termed as "royalty" - No TDS - Decided in favour of assessee.
Disallowance u/s. 40(a)(ai) on payment to Catche License Procurement & Software update - Held that:- The amount was paid to M/s Intersystem India Pvt. Ltd., Gurgaon relating to payment of Catche Licenses Procurement. This has also been disallowed by the AO invoking the provision of section 40(a)(ia) for non deduction of TDS, treating the nature of payment as royalty. In view of the submissions made under Ground No. 2, as aforesaid, the disallowance is not called for - Decided in favour of assessee.
Disallowance on account of expenditure made on Tour to Maldives - Held that:- The total expenses incurred on foreign travel to Maldives were ₹ 4,43,893 out of which an amount of ₹ 2,96,861 only has been disallowed which shows that the AO himself does not fully think the expenses not for business purposes. We also find that similar addition was made in AY 2007-08, which was deleted by CIT(A), the department did not go in further appeal. In view of above detailed discussions, we are of the considered view that such adhoc disallowance cannot be upheld.- Decided in favour of assessee.
Disallowance on account of expenditure made on client hardware - Held that:- The facts are that the agreement was an going agreement and software are generally implemented on make shift servers and once it is tested and completed in all respects, it is moved to the New Server. Copies of emails from Mr. Rajiv Saxena, Sir Ganga Ram Hospital are placed which shows that the assessee has settled the claim of the client on 50% i.e. for ₹ 4,38,980. We find considerable force in the finding of the Ld. CIT(A) that the assessee has also filed a copy of the debit note dated 20.4.2007 raised by Sir Ganga Ram Hospital. In view of the facts of the case, Ld. CIT(A) was of the opinion that the liability to incur the expenditure arose during the year and the AO was not justified in holding it to be pertaining to prior period.- Decided in favour of assessee.
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2015 (3) TMI 1131
Disallowance u/s 14A - penalty u/s Sec 271(1)(c ) - Held that:- For levy of penalty the AO must show that there was furnishing of inaccurate particulars of income or that the explanation furnished by the assessee was not bonafide one. The findings given in the assessment proceedings cannot operate as resjudicata, because the considerations that arise in the penalty proceedings are different from those in the assessment proceedings. The AO has brought nothing on record to suggest that the explanation of the assessee was false or devoid of bonafide. As per Explanation 1 to Sec 271(1)(c ), if the AO finds that the explanation offered by the assesse is false, then the penalty can be levied on the amount which is found to be concealed. Therefore, the whole idea behind Explanation 1 is that the AO has to first record reasons for arriving at a conclusion that there is concealment on the part of the assessee. After seeking an explanation if the authority comes to a conclusion that it is false, then the AO can proceed to levy the penalty. The findings given in the assessment proceedings cannot operate as res-judicata, because the considerations that arise in the penalty proceedings are different from those in the assessment proceeding.
In case of Reliance Petroproducts (2010 (3) TMI 80 - SUPREME COURT ), Hon’ble Supreme Court has deleted the penalty, which was imposed on account of disallowance of interest paid on loans taken for purchase of shares. Accordingly, we do not find any infirmity in the order of CIT(A) for deleting penalty levied with reference to disallowance of expenses u/s.14A of the IT Act. - Decided in favour of assessee.
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2015 (3) TMI 1130
Recovery of duty - Rule 8 of the PMPM Rules - as per revenue the appellant have used the machines installed for the manufacture of the pouches of MRP of 50 Paisa also in addition to the pouches of MRP of Rs. One, it would be treated as addition of new machine - required to pay duty on 49 machines, 47 machines 47 machines, 61 machines and 57 machines respectively at the rate applicable for the MRP of 50 Paisa per pouch, in addition to the duty already paid by them in respect of the same number of machines at the rate applicable for the MRP of Rs. One. - Held that:- As in terms of the retrospective amendment effective from 13th April, 2010, made by section 101 of the Finance Act, 2014, when a manufacturer in a particular month manufacturers Gutkha of different RSPs on the same machines, his duty liability in respect of that machine would be at the rate applicable to the highest RSP. In our view, this retrospective amendemnt is in accordance with the 6th proviso to Rule 9 and also in accordance with the provisions of Rule 5 and this retrospective amendment to Rule 8 of PMPM Rules, shows that it was not the intention of the Government that in a case where in a month a particular machine is used to produce Gutkha pouches of more than one RSP, each RSP is to be treated as separate machine for the purpose of charging duty, but the intention was to charge duty inasmuch as situation at the rate applicable to the highest RSP.
For this reason also, there is no reason for interpreting the first proviso to Rule 8 during the period prior to 13.04.2010 in a manner which would result in levy of duty on the quantity which is more than the deemed production per machine per month as specified in rule 5 as the retrospective amendment to Rule 8 of the PMPM Rules w.e.f. 13.04.2010 shows that the intention of the Government was to levy duty at the rate applicable to highest RSP on a machine during a particular month when during that month, on that machine, pouches of different RSPs had been produced. Moreover, it is well settled principle of the interpretation of the statute that different provisions of a statute must be construed harmoniously and, therefore, in this case, 1st proviso to Rule 8 of the PMPM Rules cannot be interprested so as to result in levy of duty on the quantity which is more than the deemed production per machine per month as specified in Rule 5. When for the purpose of rule 5, in case of a packing machine manufacturing Gutkha pouches of RSP of ₹ 1, the RSP of ₹ 0.50 piece is not a new RSP, for the purpose of First Proviso to Rule 8, it cannot be treated as new RSP. - Decided in favour of assessee.
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2015 (3) TMI 1129
Recovery of service tax - petitioner had filed Special Civil Application No.3620 of 2015 for the purpose of installments. By order dated 12.03.2015, Division Bench of this Court allowed the petitioner to withdraw the petition to make representation before the authorities.
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2015 (3) TMI 1128
Addition u/s 68 - ingenue purchase of shares - Held that:- We found that during the year assessee has purchased 67.200 shares of Karuna Cables Ltd. from Alliance at market rate for ₹ 10,15,405/-. Copies of contract notes and bills issued by Alliance towards purchase of shares were placed on page 12-17 of compilation. Copy of ledger account for the broker M/s. Alliance Intermediaries & Network Ltd. in the books of the appellant for the period from 01.04.2004 to 31.03.2005 and 01.04.2005 to 31.03.2006 alongwith its confirmation of accounts was also placed at pages 18-20 of compilation. Bank statement of the assessee whereby the payments made to the broker have duly been reflected, were also enclosed in the paper book.
We also found that the above share were credited in the demat Account of the assessee held with ICICI Bank, copy of demat statement was placed on page 21-22 of compilation. A reference to the same would show that the shares of Karuna Cables were received in the demat Account of the assessee on purchase and then transferred to the DP account of the assessee maintained with the broker Rajidas Nagarmal Consultants Pvt. Ltd. through whom sales have been effected on the stock exchange platform. We also found that in the instant case, only purchase has been effected from Alliance, whereas sale has been effected through another broker i.e. M/s. Ramjidas Nagarmal Consultants Pvt. Ltd. who has no connection with Mr. Mukesh Chokshi and there is nothing on record which suggests that M/s. Ramjidas Nagarmal Consultants Pvt. Ltd. has issued bogus bills to the assessee or above sale transaction is not genuine. With regard to the statement of Mr. Mukesh Chokshi recorded, it was contended by Ld. AR that in the statement of Mr. Mukesh Chokshi, the assessee was not named. Further, during the course of assessment proceedings, the assessee had requested the ld. AO to allow an opportunity to cross examine Mr. Mukesh Chokshi. However the Ld. AO could not make available Mr. Mukesh Chokshi for cross examination.
Thus purchase and sale of shares by the assessee was a genuine transaction, and hence, addition made by the AO cannot be endorsed. - Decided in favour of assessee.
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2015 (3) TMI 1127
Liability to pay interest - non eligibility of assessee for Cenvat credit prior to the date of registration as ‘Business Auxiliary Service’ - Held that:- The assessee had applied for registration under ‘Cable Operator’ service in the year 2005 and he was not liable to pay Service Tax for the ‘Cable Operator’ service. Subsequently, the assessee had applied for change of classification of service rendered by them under ‘Business Auxiliary Service’ and amended registration changing classification of service was made on 22-12-2006. In the meanwhile, they started discharging Service Tax by utilizing Cenvat credit and paid interest wherever there was liability. Interest liability has arisen because the original adjudicating authority took a stand that the assessee was not eligible for Cenvat credit prior to the date of registration as ‘Business Auxiliary Service’. The Commissioner (Appeals) has rightly held that the assessee is eligible for the Cenvat credit. Therefore interest liability does not arise.- Decided in favour of assessee.
Penalty imposed under Sections 76, 77 & 78 of the Finance Act, 1994 - Commissioner (Appeals) set aside the penalty - Held that:- The claim of the assessee that there was some confusion about the classification and they had entertained a bona fide belief that they are not liable to pay Service Tax and there is no intention to evade payment of Service Tax has merits. Therefore, invocation of Section 80 of the Finance Act, 1994, by the Commissioner (Appeals) is in order. - Decided in favour of assessee.
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2015 (3) TMI 1126
Input service credit on freight inward, telecommunication, security services, insurance, consultancy and courier services - whether these are admissible services as per Rule 2(l) of Cenvat Credit Rules, 2004? - Commissioner (Appeals) allowed the claim - Held that:- The issue of availment of Cenvat credit on input services under Rule 2(l) of CCR, 2004 came up in Ultratech Cement [2010 (10) TMI 13 - BOMBAY HIGH COURT], wherein held that any services availed by a manufacturer of excisable goods in the course of their business, is entitled to take Cenvat credit. The case law relied upon by the learned AR are prior to the decision of Hon’ble High Court of Bombay in the case of Ultratech Cement. Therefore, same are not relevant.
Admittedly, in this case also respondent has availed the input service credit on services mentioned being the manufacture of excisable goods in the course of their business. Therefore, they are entitled to take Cenvat credit. Therefore, no infirmity in the impugned order. - Decided against revenue
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2015 (3) TMI 1125
Corrigendum to show cause notice - Denial of natural justice - Entitlement for the Cenvat credit - as in the show cause notice, the charge of suppression of facts from the department thereby invoking the larger period of limitation - Held that:- It is observed and so contended by the appellant that the adjudicating authority has issued Corrigendum dated 22-1-2014 to the aforesaid show cause notice, wherein the period covered in the impugned show cause notice was amended to 04/2012 to 03/2013, after 4-12-2013 referred to in Para 9 of the impugned Order, as the date, on which personal hearing was held. Since there is neither any reference in the impugned Order of any personal hearing being held after issuance of ‘Corrigendum’ nor the department has made any submission in this regard, it is concluded that either no personal hearing was held on 5-3-2014 and even if same was held, the submissions made therein have not been recorded and taken into consideration by the adjudicating authority. In either scenario, the principle of natural justice has been violated by the adjudicating authority as order has been passed without considering defence after issuance of ‘Corrigendum’.
In the case of Penguin Electronics (P) Ltd. v. Commissioner of C. Ex., Mumbai-II [2005 (3) TMI 529 - CESTAT, MUMBAI ], the Hon’ble Tribunal has held that the issue of corrigendum to show cause notice after personal hearing is not valid. Thus the impugned order is annulled so far as it relates to the show cause notice dated 3-9-2013, which is the subject matter of instant appeal, with a direction to the adjudicating authority to decide afresh after granting sufficient opportunity of personal hearing to the appellant.
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2015 (3) TMI 1124
Adjustment of Refund of service tax with interest liability - Interest was arisen as per EA-2000 Audit Objection - Refund was allowed under Notification No. 41/2007-S.T - Held that:- when the audit pointed out that they were not eligible for the credit, the appellant had simply reversed the credit. Once such a reversal was made, and when the audit pointed out that interest was liable to be paid on 29-9-2008, the appropriate procedure to follow was to issue a show cause notice as per sub-section (2B) of Section 11A of Central Excise Act, 1944 which can be applied to service tax also.
As a result of audit objection arrears cannot arise even if it is accepted and paid. If the full amount is not paid by an assessee, recovery proceedings have to be started in accordance with law. Adjustment from the amount available with the department is not one of the recognized mode of recovery of arrears which is not confirmed and no demand has been issued. - Refund allowed - Decided in favor of assessee.
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