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Showing 361 to 380 of 383 Records

• 2012 (1) TMI 47
  

  Doctrine of restitution - Sales Tax incentive under the Government of Gujarat "Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000" being opted by Essar – commencement of commercial production got delayed due to writ petition in the nature of PIL filed before the High Court - Government extended the time upto 15.08.2003 – request for further extension by company got denied - writ petition filed by company in High Court on ground that delay in commencement of commercial production was on account of the injunction granted by the High Court - High Court extended the time limit for commencement of commercial production from 15.08.2003 to 02.04.2007 - firstly on the principle of restitution and secondly, that the company cannot be made to lose the benefit under the Sales Tax Waiver Scheme, for an act of Court – Government argued that impugned judgment is not by consent – Held that:- The concept of restitution is a remedy against unjust enrichment or unjust benefit. Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. In present case, the State has not at all gained or received any benefit as a result of the stay orders passed by the High Court on the second PILs. Therefore, the principle of restitution cannot be applied against the State. The judgment of the High Court to that extent is erroneous.

  Regarding second principle that the company cannot be made to lose the benefit, for an act of Court - Held that:- Mere mistake or error committed by Court cannot be a ground for restitution. This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State. Therefore, judgement of High Court is set aside.

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• 2012 (1) TMI 42
  

  Plea for restoring penalty imposed in the original order – shortage of inputs found during search - duty has been paid along with admissible interest – CESTAT upheld order of Commissioner(Appeals) reducing penalty - Held that:- Discretion exercised by the CESTAT does not suffer from any jurisdictional error nor it violates any provision of law. Further, Revenue has not been able to point out anything from the record for taking a view different than the one taken by the CESTAT and the Commissioner (Appeals). - Decided against the Revenue.

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• 2012 (1) TMI 40
  

  Validity of re-opening of assessment beyond the period of four years from the end of the relevant A.Y. 2004-05 - reasons recorded does not allege failure on the part of the assessee to disclose fully all material facts – Held that:- The only reason for re-opening of assessment was that the housing project developed by the petitioner occupied commercial establishment exceeding 5% of the constructed area. Admittedly, clause (d) of section 80IB(10) restricting commercial construction, not to be in excess of 5% was introduced subsequently and does not have retrospective effect. In that view of the matter, there was no scope for reopening the assessment already closed. Further, there is no allegation that the assessee had concealed any material particularly – Decided in favor of assessee.

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• 2012 (1) TMI 39
  

  Penalty u/s 271(1)(c) – two views were possible regarding taxability in the hands of the members of the A.O.P or in the hands of A.O.P. - matter referred to Special Bench – decided in favor of Revenue - Held that:- There were two views possible inasmuch as the Tribunal itself was in doubt as to which of the two views were to be preferred. And for this very reason, Tribunal required the matter to be considered by a Special Bench. It cannot be said that prior to that date, the assessee could not have had such a doubt in its mind when it had indeed filed its return. It is a settled principal of law that where two views are possible a penalty cannot be imposed on the assessee – Decided in favor of assessee.

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• 2012 (1) TMI 37
  

  Exemption u/s 5(2) of the Central Sales Tax Act, 1956 - Sale in the course of import – assessee entered into contract with Canara Bank, Bangalore for sale of Bank Note Processing System BPS-204 – another contract with German manufacturer for import of same – assessee claiming it to be sale in the course of import - Held that:- To claim exemptionu/s 5(2), import should have a direct nexus and should be connected with the transaction of sale in India. In present case, the import was by the appellant in his own name. The appellant had entered into an earlier contract with Canara Bank but for the purpose of said contract the appellant was not the agent of the supplier in Germany. Contract with Canara Bank and contract with the German company, both were on principal to principal basis. They were two independent transactions. Back to back contracts by themselves do not establish and prove that the first part of Section 5(2) is attracted and applicable. The import may have been with the intention to supply the imported goods to the Canara Bank but could have been diverted to another third person, without violation/default of the contract between the appellant and the Canara Bank. Thus, it does not qualifies for exemption under Section 5(2). - Decided against the assessee.

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• 2012 (1) TMI 36
  

  Production capacity based duty – application of Rule 5 of the Hot Re-rolling Steels Mills Annual Capacity Determination Rules, 1997 - manufacturer had made changes in installed machinery or any part thereof after seeking approval of the Commissioner of Excise in terms of Rule 4(2) of 1997 Rules – Period involved 01.09.97 to 31.03.2000 - Held that:- Supreme Court held in case of CCE vs Doaba Steel Rolling Mills (2011 - TMI - 204191 - Supreme Court Of India) that Rule 5 springs into action and has to be given full effect to where annual capacity is determined/ redetermined by applying the formula prescribed in sub-rule (3) of Rule 3. In the absence of any other Rule, sub rule (3) of Rule 3 would be attracted for re-determination of production capacity of a factory, on furnishing of information to the Commissioner as contemplated in Rule 4(2) of the 1997 Rules. Thus, in present case Rule 5 of 1997 Rules would apply and the annual capacity so determined shall be deemed to be actual production during the financial year 1996-97, which is period involved in the present case. - Decided in favor of Revenue.

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• 2012 (1) TMI 35
  

  Whether the provisions of section 32 of SICA would override the effect on the provisions of section 43B – BIFR recommended to consider granting exemption from the provisions of Section 43B – Tribunal relied on circular No.523 dated 05.10.1988 and 576 dated 31.08.1990 issued by the BIFR while allowing appeals - Held that:- Circular No.523 dated 05.10.1988 relates to the provisions of section 41(1), 79 and 115J and not section 43B. Thus, such reliance placed is unsustainable.

  By virtue of the provisions of section 32 of SICA, the scheme framed u/s 18 shall have the effect of overriding the provisions of the Income Tax Act, be it even the provisions of section 43B. Though u/s 43B, the A.O. may not have any discretion to allow any deduction in respect of interest payable, it is the case of the revenue that by virtue of the provisions of section 32 of SICA, the assessee, who has taken over the sick industry, would have the benefit of the provisions of the scheme. Therefore, the substantial question of law is answered in the negative i.e. against the revenue.

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• 2012 (1) TMI 34
  

  Fund or institution established for charitable purposes - Application for registration u/s 10(23C)(iv) rejected by the Director General of Income Tax(Exemptions) on ground that records and accounts were not properly maintained – Held that:- In the present case, the reasons given in the order do not appear to be germane to the conclusion reached. As indicated the explanation/justification of the petitioner has not been considered. Keeping in view the aforesaid aspects we set aside the order and pass an order of remit and direct the respondent to decide the application for registration u/s 10(23C)(iv) afresh keeping in mind the observations made in the case of American Hotel and Lodging Association Educational Institute vs CBDT & others (2008 - TMI - 4477 - Supreme Court Of India).

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• 2012 (1) TMI 33
  

  Whether service provided to the assessee by a non-resident prior to insertion of Section 66A of the Finance Act, 1994, is exigible to service tax – provision introduced on 18.4.2006 - Held that:- The issue is no longer res integra. Any service provided to the assessee by a non-resident prior to insertion of Section 66A of the Finance Act, 1994, was not exigible to service tax. See CCE vs M/s Kansal Hosiery Exports (2012 - TMI - 208473 - Punjab And Haryana High Court ), CCE v. Bhandari Hosiery Exports Ltd. (2009 - TMI - 35335 - Punjab And Haryana High Court ), Indian National Shipowners Association v. Union of India (2008 - TMI - 32013 - High Court Of Bombay)– Decided against the Revenue.

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• 2012 (1) TMI 31
  

  Whether claim of refund arising out of final assessment to be made vide an application u/s 27 or the same has to be refunded immediately u/s 18 not requiring assessee to move an application – bill of entries of import were provisionally assessed on 24.08.98 & 02.02.99 and duty was paid – refund arised on final assessment on 21.06.99, 15.06.99 – whether clause of unjust enrichment u/s 27(2) would be applicable - Held that:- The assessee has paid provisional duty which gets reduced on final assessment. The assessee, therefore, becomes entitled to refund which is payable in terms of Rule 9B of the Excise Act, 1944 or Section 18 of the Act. For refund on this account, no application is required to be filed u/s 27 of the Act and therefore, sub-Section (2) relating to unjust enrichment is not applicable. Further, insertions vide sub-sections (3), (4) and (5) to Section 18 are effective from 13.07.06 and obviously are not applicable to the case in hand as they do not have retrospective effect. - Decided in favor of assessee.

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• 2012 (1) TMI 30
  

  Validity of power of Tribunal to grant statutory right to the assessee to deposit the amount of penalty u/s 11 AC of the Central Excise Act - Show-cause notice issued by Assistant Commissioner raising the demand and imposing penalty did not indicate regarding the benefit of depositing the amount within 30 days – Held that:- Once an earlier order was not passed in accordance with the provisions of Section 11 AC of the Act then the Tribunal was fully justified in granting one opportunity to the assessee to pay the amount of penalty in terms of proviso to Section 11 AC of the Act within a period of 30 days by earning the benefit of paying penal amount to the extent of 25% instead of amount equivalent to the amount of duty. - Decided against the revenue.

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• 2012 (1) TMI 28
  

  Whether service provided to the assessee by a non-resident prior to insertion of Section 66A of the Finance Act, 1994, is exigible to service tax – The provision was introduced on 18.4.2006 - period involved 9.7.2004 to 18.1.2006 - Held that:- Any service provided to the assessee by a non-resident prior to insertion of Section 66A of the Finance Act, 1994, was not exigible to service tax. See Commissioner of Central Excise v. Bhandari Hosiery Exports Ltd. (2009 - TMI - 35335 - Punjab And Haryana High Court ) and Indian National Ship Owners Association v. Union of India (2008 -TMI - 32013 - HIGH COURT OF BOMBAY) – Decided against the Revenue.

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• 2012 (1) TMI 27
  

  Whether the addition and mixing of polymer and additives to base bitumen results in the manufacture of a new marketable commodity and as such exigible to Excise duty – assessee engaged in the supply of Polymer Modified Bitumen (PMB) & Crumbled Rubber Modified Bitumen (CRMB) – Revenue contended that such process carried out amounted to manufacture – Held that:- In this case, neither in the Section Note nor in the Chapter Note nor in the Tariff Item do we find any indication that the process indicated is to amount to manufacture. Thus, it is evident that the said process of adding polymers and additives to the heated bitumen to get a better quality bitumen, viz. PMB or CRMB, cannot be given an extended meaning under the expression manufacture in terms of Section 2(f) (ii) of the Act. The said process did not result in transformation of bitumen into a new product having a different identity, characteristic and use. It is well settled that mere improvement in quality does not amount to manufacture.

  Thus, PMB or CRMB cannot be treated as bituminous mixtures falling under CSH 27150090 and shall continue to be classified under CSH 27132000 pertaining to tariff for petroleum bitumen. - Decided against the Revenue.

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• 2012 (1) TMI 25
  

  Dis-allowance of interest expense from allegadly interest income by Revenue – assessee, wholly owned subsidiary of Power Finance Corporation (PFC) was incorporated as a special purpose vehicle (SPV) for inviting bids for construction and building of an ultra mega power project - Commitment Advance received from Power Procurement Utilities of the States concerned transferred to PFC - PFC paid interest on the unutilized Commitment Advance - interest paid to the Power Procurement Utilities on the Commitment Advance reduced from interest income received from PFC credited to the capital work in progress - Held that:- CIT (Appeals) and Tribunal have specifically held that the interest income & interest expense, both were on capital account. This is not a case of surplus funds, which were available and investment were made in fixed deposits to earn interest. The interest paid to the power procurement utilities on commitment advances was capitalized. Interest paid and interest received were inextricably linked and have a commonality about their nature and character. They cannot be treated differently. - Decided against the Revenue

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• 2012 (1) TMI 24
  

  Penalty for concealment u/s 271(1)(c) – Business of money-lending – share application money deposited converted into loan in A.Y. 98-99 – non-acknowledgement of debt by receiver company(DISL) – no interest charged on such converted loans – wrote off loan as bad debts – deduction of bad debts disallowed by Department – Held that:- Though assessee furnished the director’s report, the actual write off, filing of balance sheets, memorandum and articles of association, letter to DISL etc. however, the assessee did not bring to the notice of the A.O. that no interest from the converted loan had been offered and assessed to income tax in any of the earlier previous years. If no interest was charged the amount cannot be considered as a money lending advance since the essence of money lending business is the charging of interest. When one of the important conditions for the allowability of bad debt u/s 36(2)(i) was not satisfied and the same was within the knowledge of the assessee, it was duty bound to disclose the same in order to show its bonafide. The particulars furnished by the assessee were thus not complete, and were, therefore, inaccurate. Order of the Tribunal restoring the penalty is upheld. - Decided against the Assessee.

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• 2012 (1) TMI 19
  

  Whether the glass bottles and crates which are used for selling beverages and were re-usable would be exigible to excise duty or not – Section 35 G of the Central Excise Act - Held that:- Once there is a pure finding of fact that beverage alone are sold without selling of bottles and crates then it would be obvious that no excise duty would be chargeable on the bottles and crates. No question of law much less a substantive question of law within the meaning of Section 35G of the Act would arise. - Decided against the Revenue.

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• 2012 (1) TMI 17
  

  Cenvat / Modvat Credit - plastic films/poly paper used for testing machines - for forming commercial/technical opinion as to their marketability/ excisability - whether plastic films/poly paper would be eligible for credit - whether use of plastic films/poly paper used for testing machines would be held as used in the manufacture of or use in relation to the manufacture of the final products - held that:- the process of testing the customised FandS machines is inextricably connected with the manufacturing process, in as much as, until this process is carried out in terms of the afore-extracted covenant in the purchase order, the manufacturing process is not complete; the machines are not fit for sale and hence not marketable at the factory gate. - the manufacturing process in the present case gets completed on testing of the said machines and hence, the afore-stated goods viz. the flexible plastic films used for testing the FandS machines are inputs used in relation to the manufacture of the final product and would be eligible for Modvat credit under Rule 57A of the Rules. - Decided in favor of assessee.

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• 2012 (1) TMI 12
  

  Deduction u/s 80IC – Quantum of deduction u/s 80IC – new industrial undertaking set up by the assessee in the A.Y. 2005-06 at Dehradun – various documents placed by assessee to prove the existence of Dehradun unit/undertaking - Held that:- In view of the factual findings recorded by the CIT (A), affirmed by the Tribunal, and non-placement of any contrary material or documents by Revenue, there is no reason to interfere with the order of allowing deduction u/s 80IC to assessee. - Decided against the Revenue.

  The assessee may be eligible u/s 80 IC but the quantum of deduction is an incidental but an important aspect which must be considered and examined even though no question has been raised by the appellant on this aspect. The Tribunal did not examine the question of quantum of deduction inspite of the factual matrix referred to and stated in the assessment order. Therefore, the matter is remitted to the Tribunal to decide afresh the quantum of deduction u/s 80IC. - Decided in favor of revenue.

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• 2012 (1) TMI 10
  

  Levy of interest u/s 220(2) - requirement of notice – Held that:- (a) fresh notices of demand need not be issued every time the total income undergoes a change due to appellate or revisional orders - (b) a case where the assessee has paid the full amount of tax demanded by the AO pursuant to the assessment order stands on a different footing from a case where such demand was not satisfied in full and different considerations shall apply to such a case; (c) the original demand made by the AO on the basis of the assessment order is merely kept in abeyance or suspension during the entire proceedings by way of appeal or revision taken against the assessment and gets revived from inception once the assessment gets finally confirmed in those proceedings; (d) when the assessment order is finally affirmed, the doctrine of merger also applies and interest being compensatory in nature, the revenue is entitled to charge the same from the date of the original order which merged with the final appellate order; (e) as a corollary to the above, it follows that where an assessment is restored and the original demand gets revived from inception, the assessee is liable to pay interest u/s.220(2) of the Act from that date on the unpaid amount and any variation in the amount of the demand favourable to the assessee which was directed by any of the appellate authorities in the interregnum has no effect on the liability of the assessee to pay the interest.

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• 2012 (1) TMI 9
  

  Indo French DTAA - foreign company's business of operations of ships in international traffic carried out through agents's fixed place in India – question of existence of a Permanent Establishment – Dependent Agent Permanent Establishment(DAPE) or independent agent - Article 5, 7 & 9 of Indo French DTAA - determination of profits attributable to PE – Relief under article 9 – levy of interest u/s 234B - Held that:- Permanent establishment in the present case will be governed by Article 5(5) read with Article 5(6) of Indo French DTAA. Since there are no findings by the A.O., or the DRP, to the effect that the transactions between the agent and the assessee are not at an arm's length price, the agent is treated to be an independent agent in view of the provisions of Article 5(6). Such a finding by the revenue is a sine qua non for existence of DAPE. Thus, it is held that the assessee did not have any PE in India.

  Having held that the PE did not exist on the facts of this case, it is not really necessary to deal with profit attribution in the case of PEs.

  With respect to relief under Article 9 in respect of freight earnings it is held that the issue is covered against the assessee by a coordinate bench's decision in assessee's own case for the assessment year 2001-02 therefore, the assessee may take up the issue before Hon'ble Courts.

  Levy of interest under section 234 B – A.O. is directed to grant necessary relief. - Decided partly in favor of assessee.

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