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Showing 321 to 340 of 1076 Records

• 2014 (10) TMI 763
  

  Denial of CENVAT Credit - Capital goods - Credit taken on MS tanks - Held that:- By no stretch of imagination one can deny that MS Tank used in the manufacturing process is not a plant, machinery, apparatus, equipment etc. items in question were used in the erection of various machineries such as, - new additional Electrostatic Precipitator for raw mill project, additional fly ash handling system, MMD crusher etc., for the Dry Process Cement Manufacturing Plant. It is evident that MS Angles, MS Beams,MS Channels etc., were used in the erection of machineries it become component of the same, which are integral part of Dry Process Cement Manufacturing Plant. It is noted that Fly Ash handlish system is a pollution control equipment and particularly mentioned in 2(A)(A)(ii) of Rules, 2004. The allegation in the above show-cause notice that the Chapter Heading of these items were not covered under Rule 2(a) of the Rules, 2004, is not sustainable, in respect of Pollution control equipments because the rule does not specify the tariff headings under which pollution control equipment should be falling. The appellant established that these items were used for erection of capital goods namely Dry Process Cement Manufacturing Plant, which falls under Chapter 84, as mentioned in Serial No.(i) of Rules 2(a)(A). Thus, the items in question are covered in serial No.(iii) of Rules 2(a)(A) of the Rules, CBEC has clarified that all parts, components, accessories which are to be used with capital goods in serial (i) and (ii) of Rules 2(a)(A) and classifiable under any chapter heading are eligible for availment of CENVAT credit. A plain reading of serial (iii) cannot lead to a different conclusion either.

  The keyword is that such goods must be used in the factory for the manufacture of the final products and it is relatable to plant, equipment, machinery set out in Explanation (1)(a) to Sec.57Q and which is used for producing or processing any goods or bringing about any change in any substance for the manufacture of final product. The intent is wide enough to accept MS Tank as capital goods. Following decision of The Commissioner of Central Excise & Service Tax Versus M/s. India Cements Ltd. [2014 (7) TMI 881 - MADRAS HIGH COURT] - Decided against Revenue.

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• 2014 (10) TMI 762
  

  Condonation of delay - ground for seeking condonation of delay is that the appellant was not properly guided in the matter of preferring appeal and was also worried about the huge amount that he would be required to pay at the time of preferring the appeal - Held that:- From the facts stated in the memorandum of application, it appears that the work carried out by the appellant is mainly in the nature of labour work, as such, the case put forth by the appellant that he were not aware of the intricacies of law, and therefore, could not approach the Tribunal in time appears to be quite plausible. It appears that the appellant was represented by a Chartered Accountant before the appellate authority and, therefore, relied upon him to give him proper guidance. However, since no proper guidance was given till the appellant contacted the learned advocate who represents him before the Tribunal, there was a delay in preferring the appeal. In the opinion of this court, the appellant had all the reason to hold a reasonable belief that he would be given proper guidance by the Chartered Accountant who had represented him before the appellate authority - Matter restored before Tribunal - Delay condoned.

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• 2014 (10) TMI 761
  

  Condonation of delay - ground for seeking condonation of delay is that the appellant was not properly guided in the matter of preferring appeal and was also worried about the huge amount that he would be required to pay at the time of preferring the appeal - Held that:- From the facts stated in the memorandum of application, it appears that the work carried out by the appellant is mainly in the nature of labour work, as such, the case put forth by the appellant that he were not aware of the intricacies of law, and therefore, could not approach the Tribunal in time appears to be quite plausible. It appears that the appellant was represented by a Chartered Accountant before the appellate authority and, therefore, relied upon him to give him proper guidance. However, since no proper guidance was given till the appellant contacted the learned advocate who represents him before the Tribunal, there was a delay in preferring the appeal. In the opinion of this court, the appellant had all the reason to hold a reasonable belief that he would be given proper guidance by the Chartered Accountant who had represented him before the appellate authority - Matter restored before Tribunal - Delay condoned.

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• 2014 (10) TMI 760
  

  Reference application - Whether the Tribunal was correct in merely dismissing the appeal without having taken the Boards Review order into consideration - Held that:- The power conferred upon the Board under Section 35H of the Act is somewhat typical. Normally, the taxing statutes do not provide for any appeal by the Department, against the order passed by the original or assessing authority. It is only the prerogative of the assessee to prefer an appeal against the order of assessment. Thereafter, if the Department suffers any order to its detriment in appeal, it can certainly carry the matter in further appeal to the CEGAT, or such authority as may be prescribed. wherever a departmental authority is conferred with the power to reopen, or review the proceedings, under the Act to satisfy itself, it has either to confirm or modify or set aside the orders, under its consideration. Under Section 35E of the Act, the order passed in the first instance has to satisfy itself about the correctness thereof. However, if it finds that the order under its consideration is not correct, the only course left open to it, is to require an authority under the Act to prefer an appeal before the Board against such an order. Beyond that, it cannot express any view on merits. Even on close verification of grounds of Reference, hardly there exists any element of law in them - Decided against Revenue.

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• 2014 (10) TMI 759
  

  Waiver of pre deposit - Extension of stay order beyond period of 365 days - Held that:- Tribunal has noted that a waiver of pre-deposit and unconditional stay on the realisation of the adjudicated liability was granted by the Tribunal since a prima facie case was found in favour of the assessee. The Tribunal has also observed that the appeal has not been disposed of only on account of the pendency of several older appeals and not on account of any delay on the part of the assessee - ends of justice would be met if the Tribunal is requested to dispose of the appeal expeditiously and preferably within a period of six months from date of order - Matter remanded back

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• 2014 (10) TMI 758
  

  Denial of CENVAT Credit - assessee availed the credit of CVD as paid as per the direction of settlement commission - levy of penalty would on the Managing Director and the Authorized Signatory - Held that:- Settlement Commission in its order has given a categorical finding that as the consequence of their order, the assessees are entitled to a certificate of payment of Counter Veiling duty from the Jurisdictional Commissioner or the DRI who are duty bound to issue such certificate. Consequently, the certificates issued by the DRI in consequence of the order of the Settlement Commission is perfectly legal. Further, Rule 57E is not applicable. We find that the Counter Veiling duty was paid by the assessee in August, 2002 and the certificate was issued on 6th August, 2002 by the DRI. The Cenvat Credit Rules, 2002 came into existence with effect from 1st March, 2002 and, consequently, the Cenvat Credit Rules became applicable. We are of the opinion that Rule 57E of the Central Excise Rules, 1944 is not applicable in the instant case.

  With regard to imposition of penalty for contravening the provision of Rule 57E(3), (4) and (5) of the Central Excise Rules, 1944 and Rule 7(1)(b) of the Cenvat Credit Rules, 2002, the Settlement Commission granted full immunity to the assessee for levy of penalty or fine under the Act in respect of matters covered in the dispute. - contravention done the Ex-Managing Director and the Authorised Signatory was one of the dispute which was settled by the Settlement Commission and, consequently, it was no longer open to the department to issue a show cause notice for levying such penalty - Decided against Revenue.

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• 2014 (10) TMI 757
  

  Waiver of pre deposit - Wrong claim of SSI Exemption - Quantum of pre-deposit made - Tribunal ordered the assessee to deposit 25% of duty - Held that:- keeping in view the totality of the facts and circumstances of the case coupled with the fact that the appellant has already deposited a sum of ₹ 25 lacs in terms of the order dated 14.8.2014, we are of the opinion that the ends of justice would be met if the Tribunal is directed to hear the appeal on merits without insisting for pre-deposit of the remaining amount - Decided in favour of assessee.

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• 2014 (10) TMI 756
  

  Failure to fulfill export obligation - Held that:- appellants have failed to fulfill the export obligation and therefore, the duty demand with interest made in the order is fully justified and it cannot be said that liability is disputable - appellant has not been able to make out a prima facie case in their favour at all. - stay denied.

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• 2014 (10) TMI 755
  

  Confiscation of foreign currencies u/s 113(d) - penalty u/s 114 - appellant was carrying foreign currency without the permission of RBI - Held that:- The authorities took note of the voluntary statement recorded under Section 108 of the Act, wherein the petitioner had categorically admitted that he was taking the currency clandestinely on behalf of one Abdullah for monetary consideration. This particular evidence was held to be acceptable and cannot be brushed aside and there is no record to show that the statement of the petitioner was recorded under duress/pressure and the same was not voluntary. It is settled legal proposition that statement recorded under Section 108 of the Act is admissible unlike a statement recorded by a Police Officer. Thus, the Appellate authority and the Revisional authority considering the peculiar facts and circumstances of the case, the nature of concealment of currency and the fact that the petitioner was carrying the currency on behalf someone else for monetary consideration, rejected the request for redemption. Therefore, I find no valid reasons to interfere with the concurrent finding of the three authorities - Decided against assessee.

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• 2014 (10) TMI 754
  

  Valuation of goods - Addition of royalty for technical know how fees - Held that:- Under Rule 9(1)(c), the cost of technical know-how and payment of royalty is includible in the price of the imported goods if the said payment constitutes a condition pre-requisite for the supply of the imported goods by the foreign supplier. If such a condition exists then the payment made towards technical know-how and royalties has to be included in the price of the imported goods. On the other hand, if such payment has no nexus with the wording of the imported goods then such payment was not includible in the price of the imported goods - provisions of Rule 10(1)(c) of Customs Valuation Rule (CVR), 2007 are pari materia to Rule 9(1)(c) of the CVR, 1988 - Decided in favour of assessee.

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• 2014 (10) TMI 753
  

  Valuation of goods - Undervaluation of goods - Determination of transaction value - Held that:- As per the Public Notice, all the importers are required to furnish the details like nature, type, quality, grade of constituent materials used for the frame, filling and upholstery of the furniture. Moreover, size, capacity, brand, model or article number is also required to be furnished. The weight of the item in kilograms irrespective of the unit quantity code and the Maximum Retail Price is also required to be declared by the importers to determine the value on the basis of contemporaneous import/similar or comparable goods is to be seen in receipt of the declaration made by the importers on the basis of consequent material only. More over furniture is an item which in normal course is sold and bought in the market on the basis of real price. We further find that particularly furniture with material filling and upholstery cannot be comparable with details of descriptions on the same with the comparable goods. Further size, capacity, brand, model are also required to be considered at the time of valuation of the goods. As both the lower authorities have failed to exercise in the absence of any similar or comparable goods available, the rejection of the transfer value is not correct. We further find that it is not the case of the department that transaction value declared by the appellant is not genuine. Accordingly, the rejection of transaction value is set aside - Decided in favour of assessee.

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• 2014 (10) TMI 752
  

  Unexplained credits u/s 68 – Acceptance of additional evidence - Notice sent to assessee but assessee did not appear before AO – Cash deposit in the assessee’s bank account treated as income from undisclosed sources – Held that:- The contention of the assessee that cash were out of sale proceeds collected by assessee on behalf of his employer M/s. Anup Service Station was not supported by any corroborating evidence like name & address of the persons form whom the cash was collected - Since the assessee has acted as an agent on behalf of his employer, to collect cash for his employer and, therefore, all customers would only have account of Anup Service Station in their books, and assessee’s name shall never appear in their books of accounts and therefore, AO is wrong, impractical and misplaced - CIT(A) had passed a well reasoned and speaking order to delete the addition of ₹ 21,37,000/- out of ₹ 21,82,500/- as it is glorifiable with the documentary evidence – there is no reason to interfere in the order of the CIT(A) – Decided against revenue.

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• 2014 (10) TMI 751
  

  Cancellation of penalty u/s 271(1)(c) - Refund of amount - Assessee contended that since he succeeded before the Tribunal against the order of assessment, by virtue of provisions of section 275(1A) of the Act, the revenue were required to delete the penalty and refund the amount of penalty – Held that:- The order of penalty was made against the assessee on the basis of the assessment of income done by the AO - since the addition of the amount in the income of the assessee for the purpose of assessment was removed by the order of the Tribunal, the penalty imposed upon the assessee u/s 271 (1)(c) of the Act was required to be cancelled by making necessary order u/s 275(1A) of the Act and the amount of penalty recovered from the assessee by adjustment was required to be refunded to the assessee - since the concerned authorities who were under obligation to pass necessary order for cancellation of penalty by giving effect to the order made in favour of the assessee since failed in passing necessary order for cancelling of penalty and for refund of the penalty amount, the assessee is justified in invoking the powers of the Court under Article 226 of the Constitution of India seeking direction to refund the amount of penalty.

  Claim of interest on amount to be refunded – Held that:- Section 244 of the Act provides for interest on refund where no claim is needed - Section 244 shall not apply in respect of any assessment for the AY commencing on 1st May, 1989 or any subsequent assessment orders - Section 244A of the Act would apply for interest on refunds – relying upon Sandvik Asia Ltd. Vs. Commissioner of Income Tax I, Pune and others [2006 (1) TMI 55 - SUPREME Court] - a person should only be taxed in accordance with law and hence where excess amounts of tax are collected from an assessee or any amounts are wrongfully withheld from an assessee without authority of law the revenue must compensate the assessee – revenue are directed to refund the penalty amount of ₹ 1,13,32,499.00 to the assessee within a period of two months from the date of receipt of this order with interest on such amount of penalty as per the provisions of section 244(A)(1)(b) of the Act – Decided in favour of assessee.

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• 2014 (10) TMI 750
  

  Validity of transfer of cases from DCIT, Circle Shimla to ACIT/DCIT Central Circle-I, Chandigarh - Whether the execution/implementation of the orders would be a ground for dismissing the writ petitions at the threshold stage – Held that:-The writ petitioners have questioned the show cause notices and the orders on the ground that these are unconstitutional, illegal, bad in law and have resulted in depriving the petitioners from contesting their cases conveniently at Shimla.

  Whether the show cause notices and the orders impugned are bad in law, are liable to be quashed or otherwise and whether the writ petitions would lie - is to be determined after hearing the parties on merits - Following the decision in State of H.P. & ors. Vs. Prem Lal - the preliminary objection raised by the respondent fails and is rejected - the interim direction i.e. stay order granted is adversely affecting the respondent since the actions which are to be drawn in a time bound manner would become time barred or not, since the parties have not argued the cases on merits, it is not fair to return findings whether the stay is to be vacated or to be made absolute - it is made clear that in case any action becomes time barred in the interregnum, the period from the date of passing of the stay order shall be excluded, while computing the time limit - the writ petition is to be hear expeditiously.

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• 2014 (10) TMI 749
  

  Deemed dividend u/s 2(22)(e) – Amount advances to shareholders - Whether lending of the amount to the shareholder is in the ordinary course of its business and that the activity of lending of money constitutes substantial part of the business of the company are based on material on record or not – Held that:- The assessee-company owed certain sum during the assessment year and it had a sum of ₹ 1,12,24,745 to the credit of the subsidiary company which is much in excess of the amount of ₹ 27,59,932/- sought to be brought to tax under deemed dividend - the subsidiary company was advancing money to the assessee company for the purpose of purchase of raw material and to make payments to M/s. Hindalco Limited to meet their business/trading liabilities - the Tribunal rightly recorded that there is no element of deemed dividend and the amount of undistributed dividend of the subsidiary company cannot be said to be deemed dividend of the assessee company - there was a running account between the parties and interest was charged - Apart from that, a sum of ₹ 1,12,24,745/- was standing to the credit of the subsidiary company – thus, there was no reason to interfere in the order of the Tribunal – Decided against revenue.

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• 2014 (10) TMI 748
  

  Payment of commission to non-resident agents – Liability to deduct TDS – Question of law not challenged before Tribunal - Held that:- The question of deduction of tax at source under Section 195 would arise only if the payment of commission to a non-resident is chargeable to tax in India the fact that the payment was remitted directly abroad and it cannot be held to have been received on or on behalf of the agent in India - The circular No.7 dt. 22/10/2009 cannot be considered retrospectively to make it applicable for payments made before that date – The Tribunal had rightly held that the non-residents/ foreign agents have provided services for earning commission and the services have been rendered outside India, the Commission so earned by non-resident is a business profit – the question framed was not challenged before the Tribunal, then on what basis substantial question of law can be said to be raised - This shows the lackadaisical approach of the revenue officers - the question does not arise out of the order of Tribunal.

  It is a finding of fact arrived at by the CIT(A) after elaborate discussion that rate of commission was same for all the foreign agents and when AO has been satisfied about other payments nothing was brought on record by the AO to justify about disallowance of commission payment to these two foreign agents, merely because amount is more, that by itself does not justify disallowance and AO has to bring on record something more to disallow any payment, there is also a finding of fact appreciated by the CIT(A) that the assessee had to establish in foreign markets which are highly competitive, therefore services of these foreign agents/companies was taken by the assessee – thus, no substantial question of law arises for consideration – Decided against revenue.

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• 2014 (10) TMI 747
  

  Applicability of section 50C - Cases of transfer of land or building where the transaction was not registered with the stamp duty valuation authority within the purview of section 50C or not - Valuation of agricultural land as on 1.1.1981 – Held that:- The AO held that the provisions of Section 50C of the Act were applicable as the transfer of property had been carried out vide a registered sale deed and not in pursuance of sale agreement - CIT(A) held that capital gains arise on transfer of a capital asset and the effective date for computing the capital gain is the date of transfer of capital asset - Since the computation of income from capital gain on sale of land was to be made on the amount of full consideration received or accruing on the date of transfer and on the date of transfer of the land, the provision of Section 50C was not attracted, the AO was not justified in adopting the value assessed by the stamp duty valuation officer on a subsequent year - When the registration of the land sold by the assessee was done after the date of transfer of land, the provisions of Section 50C of the Act were not applicable – the order of the Tribunal is to be set aside and the matter is remitted back to the Tribunal for fresh adjudication in the light of Commissioner of Income Tax III, Ludhiana vs. M/s New P. Grand Resorts, GT Road, Jagraon [2014 (10) TMI 619 - PUNJAB & HARYANA HIGH COURT] - Decided in favour of revenue.

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• 2014 (10) TMI 746
  

  Violation of principles of natural justice – Opportunity of being heard not provided – Mandatory requirement u/s 245 not fulfilled - Adjustment of refund against outstanding penalty demand – Held that:- As decided in Glaxo Smith Kline Asia (P.) Ltd v. CIT [2007 (1) TMI 113 - DELHI High Court] - before invoking the power u/s 245, the officer is expected to give an intimation in writing to the assessee to whom the refund is due informing him of the action proposed to be taken under the section - On the same date on which the intimation was issued the adjustment was made simultaneously - This is contrary to the spirit of the provisions of Section 245 inasmuch as no opportunity of hearing was given to the assessee before the adjustment was made - Therefore, on this ground alone the adjustment order is to be quashed – Decided in favour of assessee.

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• 2014 (10) TMI 745
  

  Computation of MAT - Entitlement for unabsorbed depreciation - Unabsorbed business loss - Whether the Tribunal is right in holding that "loss" in explanation (iv) to section 115J means net loss after deduction of depreciation and that the assessee was entitled to deduction of unabsorbed depreciation – Held that:- Following the decision in Surana Steels (P) Ltd. vs. Deputy Commissioner of Income-Tax [1999 (4) TMI 5 - SUPREME Court] - a plain reading of Section 115J shows that if the assessee be a company and its total income determined under the Income-tax Act in respect of a previous year be less than thirty per cent of its book profit, fictionally it will be deemed that its total income chargeable to tax for the relevant previous year was an amount equal to thirty per cent of such book profit - The depreciation is provided for in the Profit and Loss Account - The loss is arrived at after taking into account the depreciation provided - the word loss as used in proviso clause (b) to Section 205 (1) signifies the amount arrived at after taking into account the amount of depreciation and it has to be so read and understood in the context of Section 115J of the Income-tax Act, 1961 - the term 'loss' as occurring in clause (b) of the proviso to Section 205 (1) of the Companies Act has to be understood and read as the amount arrived at after taking into account the depreciation and that If 'loss' were to be taken as pre-depreciation loss then the resultant computation will not be in conformity with the tenor of the provisions of Section 205 – the order of the Tribunal is upheld – Decided against revenue.

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• 2014 (10) TMI 744
  

  Allowability of deduction u/s 80HH and 80I – Ship breaking activity amounts to manufacture and production or not – Whether the Tribunal was right in allowing the deduction u/s 80-HH and 80-I holding that ship breaking activity gives rise to manufacturing and production of altogether a new article or thing - Held that:- Following the decision in Vijay Ship Breaking Corporation and Others vs. C.I.T [2008 (10) TMI 6 - SUPREME COURT] - the ship breaking activity resulted in production of articles which emerged when the ship breaking activity stood undertaken - the important test which distinguishes the word "production" from "manufacture" is that the word "production" is wider than the word "manufacture" - the word "production" cannot derive its colour from the word "manufacture” - the word "production" is wider than the word "manufacture" - the word "production" has a wider connotation than the word "manufacture" - the Tribunal was right in allowing the deduction u/s 80HH and 80-I to the assessee holding that the ship breaking activity gave rise to the production of a distinct and different article - ship breaking activity gave rise to the production of a distinct and different article and therefore the deduction u/s 80HH and 80-I is required to be given – thus, the order of the Tribunal is upheld – Decided against Revenue.

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