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Showing 341 to 360 of 748 Records
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2009 (9) TMI 751
Jurisdiction of Commissioner of Customs (Appeals) - power to remand - valuation dispute - Held that: - The Commissioner (Appeals) has no power to remand the matter after the Finance Act, 2001 came into force - It is not in dispute that the new evidence seen by the appellate authority was not available to the original authority. Therefore, the case requires to be examined afresh by the original authority - appeal allowed by way of remand.
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2009 (9) TMI 750
Issues:
Interpretation of the term 'manufacture' under the Central Excise Act for 100% EOU benefits, applicability of excise duty on goods cleared from 100% EOU to DTA, eligibility of cotton sliver as a manufactured product, compliance with Exim Policy for clearances from 100% EOU, justification of penalty imposition.
Analysis:
The case involved a 100% Export Oriented Unit (EOU) permitted to export yarn, which had cleared contamination-free cotton sliver into the Domestic Tariff Area (DTA). The original authority and the Commissioner (Appeals) held that the term 'manufacture' for extending benefits to 100% EOU should be construed liberally, requiring goods cleared from 100% EOU to DTA to pay excise duty equal to customs duty on imported goods. A demand of Rs. 12,48,480/- was confirmed along with penalties.
The Company Secretary argued that the cotton sliver cleared did not meet the definition of 'manufacture' under the Central Excise Act, thus excise duty should not apply. Alternatively, if duty was to be imposed, it should be 30% of the normal duty for such imported cotton sliver. Reference was made to a Tribunal decision stating that not all activities under EOU scheme amount to 'manufacture' as per Section 2(f) of the Central Excise Act.
The Senior Departmental Representative (SDR) contended that the EOU scheme extends benefits to activities not strictly considered 'manufacture' under Section 2(f), citing a Board Circular. It was argued that the cotton sliver was not an exported product, making clearances to DTA against the EOU scheme. The SDR sought pre-deposit of the amounts demanded.
The Tribunal noted that 100% EOU aims to provide benefits to manufacturers for export purposes. In this case, the cotton sliver was not intended for export as per the Letter of Permission (LOP) and had not been exported. Goods cleared from 100% EOU were deemed to discharge duty as if imported into India, subject to conditions under Notification No. 22/2003. It was found that the conditions for DTA clearances of cotton sliver were not met, justifying duty demand but not penalty imposition.
The Tribunal directed the applicant to deposit the duty amount within a specified timeframe, waiving pre-deposit of penalty and interest. The decision was based on prima facie views for the stay petition's disposal, emphasizing compliance with duty payment while considering penalty waiver.
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2009 (9) TMI 749
Issues Involved:
1. Cancellation of penalty u/s 271(1)(c) of the Income-tax Act.
2. Determination of whether the loss incurred by the assessee is a speculation loss.
3. Assessment of the assessee's disclosure of material facts and the legitimacy of the claim.
Summary:
1. Cancellation of Penalty u/s 271(1)(c) of the Income-tax Act:
The primary issue was whether the Commissioner of Income-tax (Appeals) erred in cancelling the penalty of Rs. 5,39,620 levied u/s 271(1)(c) of the Income-tax Act. The Assessing Officer had initiated penalty proceedings on the grounds that the assessee had concealed particulars of income or furnished inaccurate particulars. However, the Commissioner of Income-tax (Appeals) cancelled the penalty, noting that the issue was debatable with divergent court opinions and that the assessee had disclosed all material facts required for computation of income.
2. Determination of Speculation Loss:
The assessee purchased 75,800 shares of Shardul Securities Ltd. at Rs. 22 per share, which were valued at Rs. 4 per share at the end of the financial year, resulting in a loss of Rs. 13,64,400. The Assessing Officer treated this as a speculation loss u/s 73 and allowed it to be carried forward. The Commissioner of Income-tax (Appeals) observed that the issue was debatable and that the disallowance was made purely on a question of law, thus penalty u/s 271(1)(c) could not be imposed.
3. Assessment of Disclosure and Legitimacy of Claim:
The assessee had disclosed all material facts in the profit and loss account and balance sheet. The Commissioner of Income-tax (Appeals) noted that the loss was not claimed on the basis of any false fact or by suppressing facts. The Tribunal agreed, stating that the explanation given by the assessee was bona fide and supported by various judicial decisions. The Tribunal emphasized that penalty proceedings are distinct from assessment proceedings and that merely because an addition is made, it does not automatically lead to penalty. The Tribunal concluded that the assessee had not concealed income or furnished inaccurate particulars, and thus, no penalty u/s 271(1)(c) could be imposed.
Conclusion:
The Tribunal upheld the decision of the Commissioner of Income-tax (Appeals) to cancel the penalty, noting that the assessee had disclosed all material facts and that the issue was debatable with two possible opinions. The appeal filed by the Revenue was dismissed.
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2009 (9) TMI 748
Issues Involved:
1. Sustaining the addition of Rs. 3,00,000.
2. Sustaining the addition of Rs. 3,92,672.
3. Confirmation of additions made under section 68 of the Income-tax Act, 1961.
Detailed Analysis:
Issue 1: Sustaining the Addition of Rs. 3,00,000
The assessee claimed that Rs. 3,00,000 was a gift received from Shri J. B. Malik. The Assessing Officer (AO) found discrepancies in the bank documents provided by the assessee and noted that the assessee could not establish any relationship or reason for the gift. The AO also highlighted inconsistencies in the assessee's statements during the search and subsequent explanations. The Commissioner of Income-tax (Appeals) (CIT(A)) upheld the AO's decision, citing the lack of evidence regarding the donor's identity and capacity, and the absence of a plausible reason for the gift. The Tribunal agreed with the AO and CIT(A), emphasizing that mere movement of funds through banking channels does not prove the genuineness of the gift. The Tribunal concluded that the assessee failed to discharge the burden of proving the donor's capacity and the genuineness of the gift.
Issue 2: Sustaining the Addition of Rs. 3,92,672
The assessee claimed this amount as a gift from Shri Y. P. Malik, a British citizen. The AO noted that the assessee had admitted during the search that foreign gifts were arranged against cash payments. The CIT(A) upheld the addition, pointing out the lack of evidence regarding the donor's capacity and the absence of any relationship or reason for the gift. The Tribunal concurred, noting that the assessee failed to prove the genuineness of the gift and the donor's capacity. The Tribunal also emphasized that the assessee's retraction of his statement made during the search was not supported by any evidence of coercion or duress.
Issue 3: Confirmation of Additions Made Under Section 68
The assessee argued that the amounts were credited in his bank account and not in his books of account, thus section 68 should not apply. The Tribunal, however, stated that the nature and source of the credits must still be explained. The Tribunal held that the assessee failed to provide a satisfactory explanation for the credits, and thus, the amounts could be treated as income from undisclosed sources. The Tribunal also noted that the AO's mention of section 68 was not crucial; what mattered was the unexplained nature of the credits, which justified the additions.
Conclusion:
The Tribunal dismissed the appeal, holding that the assessee failed to prove the capacity of the donors and the genuineness of the gifts. The Tribunal emphasized that mere identification of the donor and movement of funds through banking channels are insufficient to establish the genuineness of a gift. The Tribunal upheld the additions made by the AO and CIT(A), concluding that the amounts represented income from undisclosed sources.
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2009 (9) TMI 747
Issues Involved:
1. Taxability of Rs. 7 crores received on transfer of marketing network.
2. Disallowance of Rs. 3,40,29,192 being a part of the leave encashment provision.
3. Disallowance of Rs. 16,85,000 under section 14A being expenditure incurred related to exempt income.
4. Treatment of Rs. 32,87,653 as revenue expenses or capital in nature.
5. Deduction of Rs. 23,63,586 being cost of advertisement film.
6. Addition of Rs. 63,90,570 to the valuation of closing stock.
Detailed Analysis:
1. Taxability of Rs. 7 Crores Received on Transfer of Marketing Network:
The primary issue was whether Rs. 7 crores received by the assessee for transferring the marketing network of pharmaceutical products should be treated as a capital receipt or as business income. The Assessing Officer (AO) and the Commissioner of Income-tax (Appeals) (CIT(A)) held that the amount was taxable as business income under section 28 of the Income-tax Act, as it was a profit earned in the normal course of business. The AO concluded that the termination of the agreement did not impair the profit-making structure of the assessee-company, and the assessee continued to manufacture the same products under a toll manufacturing agreement. The Tribunal upheld this view, stating that the entire business activity of the assessee had not come to a standstill and the amount received was incidental to the business.
2. Disallowance of Rs. 3,40,29,192 Being a Part of the Leave Encashment Provision:
The AO disallowed the provision for leave encashment, stating that the assessee had changed its accounting method to reduce tax liability. The CIT(A) allowed Rs. 1,43,06,438 as incremental liability for the year, following the Supreme Court's decision in Bharat Earth Movers v. CIT. The Tribunal upheld the CIT(A)'s decision, noting that the provision for earlier periods could not be allowed in the current year.
3. Disallowance of Rs. 16,85,000 Under Section 14A Being Expenditure Incurred Related to Exempt Income:
The AO disallowed Rs. 16,85,000 as interest attributable to investment in UTI, invoking section 14A. The CIT(A) confirmed this disallowance. The assessee did not press this ground during the hearing, and the Tribunal upheld the CIT(A)'s decision, referencing the Special Bench decision in ITO v. Daga Capital Management Pvt. Ltd.
4. Treatment of Rs. 32,87,653 as Revenue Expenses or Capital in Nature:
The AO treated Rs. 3,78,72,745 spent on repairs to plant and machinery as capital expenditure. The CIT(A) deleted the disallowance, finding that the expenses were for maintaining existing assets and did not create new assets. The Tribunal upheld the CIT(A)'s decision, noting that the repairs were necessary to keep the machinery in running condition and did not bring new assets into existence.
5. Deduction of Rs. 23,63,586 Being Cost of Advertisement Film:
The AO disallowed the cost of film production for advertisement, treating it as capital expenditure. The CIT(A) deleted the disallowance, citing the Supreme Court's decision in Empire Jute Co. Ltd. v. CIT. The Tribunal confirmed the CIT(A)'s decision, noting that the issue was covered by its earlier decision in the assessee's case for the assessment year 1999-2000.
6. Addition of Rs. 63,90,570 to the Valuation of Closing Stock:
The AO added Rs. 63,90,570 to the closing stock valuation for freight and octroi expenses. The CIT(A) deleted the addition, stating that opening and closing stock should be valued using the same method. The Tribunal upheld the CIT(A)'s decision, referencing its earlier order in the assessee's case for the assessment year 1999-2000.
Conclusion:
The Tribunal dismissed both the assessee's and the Revenue's appeals, upholding the CIT(A)'s decisions on all issues. The Rs. 7 crores received on transfer of marketing network was deemed taxable as business income, while the disallowances and additions made by the AO were either confirmed or deleted based on established precedents and the specific facts of the case.
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2009 (9) TMI 746
The appellate tribunal in Chennai condoned a six-day delay in filing the appeal due to illness. The demand was confirmed as materials were consumed and not sold for abatement benefit. A prima facie case was found based on a previous tribunal order, granting waiver and stay on recovery pending appeal decision.
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2009 (9) TMI 745
Issues:
1. Liability to pay service tax under Business Auxiliary Service (BAS) for undertaking job work of Heat Treatment.
2. Applicability of penalty under Sections 70, 77, and 78 of the Finance Act 1994.
3. Correctness of demand notice issued under Section 68 instead of Section 73(1).
4. Exclusion of job work from BAS due to double taxation concerns.
Analysis:
Issue 1: Liability to pay service tax under BAS for Heat Treatment job work
The appellant was alleged to have undertaken job work without obtaining Service Tax registration under BAS. The lower authority confirmed the demand, stating that Heat Treatment job work falls under the definition of BAS. However, the appellant argued that the process was incidental to manufacturing and provided a Chartered Engineer's Certificate to support this claim. During the hearing, it was highlighted that the goods after Heat Treatment were returned to the original suppliers, who paid Central Excise duty on the final products. The judgment emphasized that the job worker's charges are included in the final product, subject to Central Excise duty. It was concluded that the appellant's activity did not amount to manufacture, and since Central Excise duty was paid on the job charges, demanding Service tax under BAS would result in double taxation. The judgment referenced a notification exempting goods processed using raw materials supplied by clients and cleared on payment of Central Excise duty, supporting the exclusion of the appellant's job work from BAS.
Issue 2: Applicability of penalty
The judgment deemed the penalty imposed as unauthorized, citing Section 73(3) of the Act, which prevents penal action in certain cases. As the demand itself was found unsustainable, the question of paying interest and penalty did not arise. The appellant's argument that the penalty was imposed without legal authority was upheld, further supporting the decision to exclude the job work from BAS.
Issue 3: Correctness of demand notice
The judgment criticized the demand notice for being issued under Section 68 instead of Section 73(1) and confirmed under the same section rather than Section 73(2). This procedural error was highlighted as a factor contributing to the unsustainability of the demand.
Issue 4: Exclusion of job work from BAS
The judgment emphasized the principle of equity in tax imposition, highlighting the potential for double taxation if Service tax under BAS was applied to the appellant's job work. By considering the Central Excise duty paid on the job charges and the subsequent manufacturing process by the original suppliers, it was concluded that the appellant's job work should be excluded from BAS to avoid double taxation. The judgment referenced a relevant notification supporting this exclusion and held that the appellant was not liable to pay service tax during the period in question.
In conclusion, the appeal was allowed, setting aside the impugned order passed by the Joint Commissioner, Central Excise, Pune-II based on the detailed analysis and findings related to the issues raised in the case.
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2009 (9) TMI 744
Issues involved: Application for waiver of service tax, denial of abatement on value of materials, suppression of facts, pre-deposit of tax amount.
Waiver of Service Tax:
The judgment pertains to an application for waiver of service tax of Rs. 1,66,227/- along with interest and penalty under Section 78 of Chapter V of the Finance Act, 1994. The demand was confirmed against the assessees providing maintenance and repair services, with the denial of abatement on the value of materials sold during the service, as per Notification No. 12/03-ST dated 20-6-03. The benefit of abatement was refused on the basis that materials like ironbents, screws, plates, etc., were used for repair work and not sold. The applicants' admission of non-payment of sales tax did not negate the occurrence of a sale of materials. The Tribunal found no prima facie case in the applicants' submissions, hence rejecting their plea at this stage.
Suppression of Facts:
Although the show cause notice alleged suppression of facts, which was upheld by the lower authorities, the applicants did not contest this charge before the adjudicating authority or the lower appellate authority. Despite the allegation of suppression, the applicants failed to raise any plea against it. Consequently, the Tribunal directed the applicants to pre-deposit the tax amount within eight weeks from the date of the judgment. Upon such deposit, the pre-deposit of penalty would be waived, and the recovery stayed pending the appeal. Failure to comply with this direction would lead to the dismissal of the appeal, with a compliance report due on 7-12-2009.
Conclusion:
The judgment underscores the importance of compliance with tax regulations and the necessity of addressing allegations promptly during legal proceedings to avoid adverse consequences.
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2009 (9) TMI 743
Issues:
1. Whether the activities of 'supply of manpower' fall under 'manpower recruitment or supply agency' service.
2. Whether there is intention on the part of the appellant in not registering and paying Service tax.
Analysis:
Issue 1:
The appellant contended that the lower authority did not address their final reply properly regarding the applicability of 'manpower recruitment or supply agency' service. However, the lower authority concluded that the activities of the appellant fell under this category as defined in Section 65 of the Act. The definition includes any person providing services for recruitment or supply of manpower to a client. Since the appellant supplied manpower commercially to clients, the lower authority's conclusion was upheld.
Issue 2:
Regarding the appellant's intention in not registering and paying Service tax, it was found that the appellant had registered under 'Business Auxiliary Service' in 2004 but did not pay Service tax. The appellant was unsure if their service fell under 'manpower recruitment or supply agency' service. The record did not show deliberate evasion, fraud, or suppression of facts by the appellant. The appellant's confusion was evident, and upon notification by the department, they promptly paid the dues. As per legal precedent, the extended period for penalty imposition is inapplicable without evidence of deliberate evasion. Therefore, the penalty under Section 78 was set aside. However, the appellant was liable to pay penalties under Sections 76 and 77 for late payment and interest under Section 75.
In conclusion, the appeal was disposed of with modifications, setting aside the penalty under Section 78 but upholding penalties under Sections 76 and 77, along with interest under Section 75.
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2009 (9) TMI 742
Issues involved: Condonation of delay in filing appeal, waiver of pre-deposit of Service tax and Education Cess, imposition of penalty under Section 78 of Finance Act, 1994.
Condonation of delay in filing appeal: The appellants filed applications seeking condonation of a 12-day delay in filing the appeal. After hearing both sides, it was found that the appellants were prevented by sufficient cause in filing the appeal in time. The delay was condoned, and the COD application was allowed.
Waiver of pre-deposit of Service tax and Education Cess: The stay application sought waiver of pre-deposit of Service tax amounting to Rs. 4,22,156/- and Education Cess of Rs. 28,407/-, found due from the appellants for security services rendered. The impugned order confirmed the demand of Service tax and imposed a penalty under Section 78 of the Finance Act, 1994.
Imposition of penalty under Section 78 of Finance Act, 1994: The appellants had rendered taxable services during the material period but failed to discharge the tax liability even after being registered with the Department. The appellants claimed ignorance of the tax liability as the reason for non-payment. However, this plea was not raised before the lower authority. Considering the deposit of Rs. 13,602/- already made by the appellants, it was ordered for them to pre-deposit a further amount of Rs. 2,00,000/- within three weeks. Compliance was to be reported by a specified date, upon which there would be a waiver of pre-deposit of the balance dues and a stay of recovery pending the decision in the appeal.
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2009 (9) TMI 741
Issues Involved: Application for condonation of delay in filing the appeal.
Summary:
The Appellate Tribunal CESTAT Bangalore heard an application for condonation of delay of 571 days in filing an appeal by the appellant, M/s. BSNL. The grounds for condonation included the heavy workload and departmental difficulties faced by the appellant, leading to the delay in filing the appeal. The appellant argued that the delay was not deliberate but due to unavoidable circumstances.
The appellant's counsel cited a judgment of the Apex Court in the case of State of Nagaland v. Lipok Ao & Others, emphasizing the need to consider delays sympathetically, especially in cases where public interest may suffer due to the dismissal of a meritorious appeal.
After hearing both sides, the Tribunal found that there was no evidence on record to support the reasons provided by the appellant for the delay. The Tribunal noted that the grounds for seeking condonation were not convincing and lacked specific averments regarding the cause of delay. Consequently, the Tribunal dismissed the condonation of delay application, leading to the dismissal of the appeal as well.
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2009 (9) TMI 740
The Appellate Tribunal CESTAT CHENNAI granted a waiver of pre-deposit and stay of recovery in a case involving service tax demand on the ground of 'completion and finishing' services during construction of commercial complexes. The decision was based on a strong prima facie case and a previous stay order in a similar case.
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2009 (9) TMI 739
The delay of 15 days in filing the appeal is condoned. The appellants paid Rs. 23,370/- plus interest against the service tax of Rs. 73,323/- demanded. The appeal is remanded to the lower appellate authority without further pre-deposit.
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2009 (9) TMI 738
Issues involved: Stay petition against waiver of pre-deposit of duty, interest, and penalties u/s 76, 77, and 78 in a Service Tax case involving inclusion of discount received from electronic media.
Summary:
The Appellate Tribunal CESTAT Bangalore considered a stay petition challenging the waiver of pre-deposit amounts including duty, interest, and penalties under various sections. The issue revolved around the inclusion of a discount received by the appellant from electronic media in the Service Tax liability. The Tribunal noted that the appellant had already discharged the Service Tax liability on service charges collected from clients. Citing a previous decision, the Tribunal found that the inclusion of the discount amount for Service Tax liability seemed incorrect. Consequently, the Tribunal granted a waiver of pre-deposit and stayed the recovery of the amounts until the appeal was disposed of.
In detail, the confirmation of the demand of Service Tax arose from the appellant not discharging the Service Tax liability on the commission received from advertisement media. The appellant contended that they received a discount from electronic media and paid 85% of the amount charged by print media along with Service Tax. The issue was whether the discount received should be included for discharging the Service Tax liability. The Tribunal found that the appellant had already paid Service Tax on service charges collected from clients, making the inclusion of the discount amount for Service Tax liability incorrect. This view was supported by a previous decision of the Tribunal in a similar case.
The Tribunal considered submissions from both sides and reviewed the records. It was noted that the appellant had discharged the Service Tax liability on service charges collected from clients. Therefore, the inclusion of the discount amount from electronic media for Service Tax liability was deemed incorrect. Citing a previous decision, the Tribunal found that the appellant had made a prima facie case for waiver of pre-deposit. As a result, the Tribunal waived the pre-deposit amounts and stayed the recovery until the appeal was disposed of. The decision was pronounced in court on 25-9-2009.
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2009 (9) TMI 737
The appellate tribunal upheld the Service tax demand of Rs. 35,171 and penalties on a Customs House Agent for Business Auxiliary Service provided from 2003 to 2006. The appellants were ordered to deposit the full amount within four weeks, with waiver of balance dues pending appeal decision.
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2009 (9) TMI 736
The Appellate Tribunal CESTAT CHENNAI allowed the application for waiver of pre-deposit of service tax, interest, and penalty on food supplied free of delivery charges to corporate offices. The waiver was based on Board's Circular No. F. No. 332/82/97-TRU, dated 24-9-1997 and Circular No. 80/10/2004-S.T., dated 17-9-2004. Recovery of the amounts in question was stayed pending the appeal.
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2009 (9) TMI 735
The following is a summary of the key points from the given text:
The text is a legal document that discusses a case involving a service tax liability on various activities under the Finance Act, 1994. The activities in question include the erection of telecommunication towers, construction of petrol pumps, industrial buildings, and railway signaling systems. The case involves a dispute over whether these activities constitute works contracts. The applicant contests the service tax liability and has produced evidence to indicate that the activities are declared as works contracts. The Adjudicating Authority has confirmed a certain amount of service tax, which the applicant has partially deposited. The court has waived the pre-deposit of the remaining balance and stayed the recovery of the amount until the appeal is disposed of.
The legal document is a detailed account of the case, the activities involved, the arguments presented, and the decision made by the court. It provides a comprehensive overview of the legal proceedings and the factors considered in reaching the final judgment.
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2009 (9) TMI 734
Issues:
1. Stay petition against waiver of pre-deposit of service tax, denial of cenvat credit, penalties under different sections.
2. Confirmation of service tax liability based on services rendered and cost of materials.
3. Liability to service tax for a specific period versus the entire period.
4. Disallowance of Cenvat credit and detailed arguments from both sides.
5. Requirement for detailed examination of facts and evidences.
Analysis:
1. The judgment addresses a stay petition challenging the waiver of pre-deposit concerning service tax, denial of cenvat credit, and various penalties. The appellant contested the service tax liability, arguing that it was based only on services rendered, excluding the cost of materials. The issue involved the confirmation of service tax for a specific period versus the entire duration from July 2003 to March 2007.
2. The appellant, engaged in manufacturing and installation activities, highlighted the separate nature of contracts for ACSR conductors and machinery. The adjudicating authority had calculated the service tax demand considering the sale value of ACSR conductors and the machinery contracts. The appellant had already deposited a significant amount during the adjudication proceedings and faced disallowance of Cenvat credit.
3. The counsel for the appellant emphasized the need for a detailed examination of the issue, while the special counsel for the revenue argued in favor of the service tax liability on the services provided by the appellant. The judgment recognized the contentious nature of the issue, requiring a thorough review of evidence before a final decision could be reached.
4. After considering submissions from both sides and reviewing the records, the tribunal directed the appellant to deposit an additional sum of Rs. 1,00,00,000 within eight weeks. Compliance was to be reported by a specified date, following which the pre-deposit condition for the remaining amounts was waived, and recovery stayed pending the appeal's disposal. The judgment emphasized the need for a comprehensive examination of facts and evidence before reaching a final decision.
5. In conclusion, the judgment reflects a detailed analysis of the service tax liability issue, the need for further deposits by the appellant, and the stay of recovery pending the appeal's final resolution. The decision underscores the importance of a thorough review of evidence and careful consideration before making a final determination on the contentious matter at hand.
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2009 (9) TMI 733
Issues: Application for waiver of pre-deposit of service tax, liability of Goods Transport Agency, exemption on 75% of freight amount
In this judgment by the Appellate Tribunal CESTAT CHENNAI, the issue at hand was the application for waiver of pre-deposit of service tax amounting to Rs. 32,252/- along with interest and penalty. The tax was confirmed on the assessees on the grounds that they had provided services as a Goods Transport Agency. The assessees contended that they supplied Superior Kerosene Oil (SKO) for sale through the public distribution system to holders of family cards and thus should not be liable to tax. However, the tribunal found this plea untenable due to the absence of any exemption in such cases. Nevertheless, the tribunal acknowledged the plea that the assessees were eligible for exemption from payment on 75% of the freight amount, citing a previous order-in-original in their favor. The tribunal directed a pre-deposit of Rs. 10,000/- towards service tax within four weeks, with the balance tax and penalty waived upon such deposit. Failure to comply would result in the vacation of stay and dismissal of the appeal without prior notice. The compliance deadline was set for 6-11-2009.
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2009 (9) TMI 732
Issues involved: Stay petition against waiver of pre-deposit of Service Tax, Penalty u/s 77, and Penalty u/s 76.
The confirmation of demand of service tax has arisen for the period 16-8-2002 to 9-9-2004 under consulting engineer services and subsequent period demand under intellectual property services. The appellant is a recipient of the service for the entire period. The appellant argues that they are not liable to pay service tax prior to 18-4-06 as per Section 66A of the Finance Act. For the period post 18-4-06, the appellant has paid R&D cess and claims benefit under Notification No. 17/04. The appellant shows financial loss in the balance sheet for the year ended 31st December 2008.
The liability post 18-4-06 is contended to be payable by the applicant. The Notification No. 17/04 is deemed applicable, and the R&D cess amount may not be required to be paid. The respondent asserts that service tax is due for the entire period under consulting engineer or IPR service.
The Tribunal finds that the applicant is a recipient of service, thus not liable to pay service tax before 18-4-2006. For the period post 18-4-2006, the issue is debated. Considering the payment of R&D cess and the financial hardship claimed by the appellant, the Tribunal directs the applicant to deposit one crore rupees within six months and report compliance by 10th March 2010. Upon compliance, the pre-deposit condition for the remaining amounts is waived, and recovery is stayed pending appeal disposal.
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