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Showing 361 to 380 of 848 Records
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2010 (10) TMI 885
Confiscation and penalty - Non-accountal of goods - Goods were lying in the factory and non-entry in the statutory record – Held that:- Following the decisions of Ronak Laminex (P) Ltd. (2007 (8) TMI 607 - CESTAT, AHMEDABAD) and Amrut Ceremics (2006 (12) TMI 32 - CESTAT, AHMEDABAD) it is to be held that in this case also, the confiscation and penalty is not warranted under Rule 25 of Central Excise Rules 2002. Hence the impugned order for confiscation and imposition of penalty under Rule 25 is set aside. But as submitted by the learned Advocate, it is a procedural lapse of the Central Excise provision. Hence, the penalty under Rule 27 can be imposed. Accordingly, penalty under Rule 27 is imposed to Rs. 2,000/-, the appeals filed (by the Revenue and assessee) are disposed of and the cross objections are also disposed of in the above manner.
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2010 (10) TMI 884
Penalty u/s 11AC of the Central Excise Act, 1944 r.w.r. 13/15 of of CENVAT Credit Rules, 2002/2004 – Held that:- There is no specific provisions under which the Department wants to impose penalty under Rule 15. There is no proposal for separate penalties in the show cause notice, no specific allegation for specific penalty has been made. Hence the penalties under Rule 15 are not imposable on the assessee and there is proposal for imposing penalty under Section 11AC of the Central Excise Act read with Rule 15 of the Cenvat Credit Rules, 2002/2004 - no merit in the appeals filed by the Revenue. In favour of assessee.
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2010 (10) TMI 883
Cenvat credit on Welding Electrodes used for repair and maintenance of their plant and machinery - whether proper permission of the Committee of two Commissioners has been obtained or not? - Held that:- The assessee is entitled to availament of cenvat credit on welding electrodes, which are being used in maintenance of plant and machinery as capital goods or inputs.
According to section 35(B)(I)(b)(clause ii) there must be two persons or two Commissioners or Chief Commissioners to review the order placed before them and to arrive at a decision whether the appeal is to be filed or not. In this case, although the Commissioner of Central Excise Meerut-I was holding the additional charge of Commissioner of Central Excise Meerut-II but that cannot be termed as a Committee of Commissioners constituted in the provisions of law. Hence the preliminary objection taken by the assessee is a valid objection. Hence the appeals filed by the Revenue are not proper and correct in view of the law as there is not proper permission from the Committee of Commissioners to file the appeals before this Tribunal. In favour of assessee.
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2010 (10) TMI 882
Confiscation - Penalty - Circular No. 21/95-Cus., dated 10-3-95 - Notification No. 13/81- Cus., dated 9-2-1981 - Held that:- As decided in Delta World Tele Systems v. Commissioner of C. EX., Pune-III reported [2008 (3) TMI 66 - CESTAT MUMBAI] the Tribunal vacated the demand of duty and order of confiscation of warehoused goods seized from an EOU as premature since duty could be demanded on warehoused goods only on their removal from the warehouse.
The issue involved in the instant case is also nonfulfillment of export obligation. Capital goods had not been removed from the warehouse clandestinely or otherwise. We find that failure on the part of MBPL was that it had not used the capital goods procured under EOU scheme for manufacture and export of software. In such a situation, it was mandatory that the Commissioner obtained clearance from the Development Commissioner before initiating action against the EOU. The proceedings contrary to the binding Circular of CBEC is not maintainable. The impugned order is liable to be set aside.
As there is no dispute that the impugned goods were seized from a warehouse licensed under Section 65 of the Customs Act. Duty can be levied and collected on such goods only on their removal from the warehouse. Goods had been seized when the period allowed to fulfill export obligation was yet to expire. In the instant case, therefore, the demand of duty, interest and order of confiscation vide the impugned order are liable to be set aside as premature following the above decision. Accordingly we set aside the impugned order. MBPL shall pay duty as offered by them in accordance with law - penalty deleted too.
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2010 (10) TMI 881
Manufacture - packing and re-packing the input - Cenvat Credit on the items viz. “Tooth Brush” - Held that:- Provisions contained in Section 2(f) of the Central Excise Act, 1944 which defines the word “manufacture”. It includes any process in relation to the goods specified in the Third Schedule, which includes packing or re-packing of such goods in a unit container. In the Third Schedule, at Serial No. 38, under Heading - Sub-Heading of Tariff Item, Entry No. 3306, is in respect of tooth paste. Hence, the process of packing and re-packing the input, that is, toothbrush and tooth paste in a unit container would fall within the ambit of “manufacture” as defined under the Act and as such, the assessee would be entitled to claim cenvat credit on such input.
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2010 (10) TMI 880
Revision application - rebate claims denied as original, duplicate and triplicate copy of ARE-1, duplicate copy of invoice were not enclosed with the said claims - Held that:- Government observes that instead of rejecting the rebate claims for non-submissions of the original copies of the ARE-1s purportedly lost by the applicant as per FIR lodged with the Police authorities, the Asstt. Commissioner should have considered collateral evidence to verify whether the duty paid goods have actually been exported or not, Government sets aside the impugned orders and remands the case back to the original adjudicating authority to decide the case afresh after giving proper opportunity to the applicant who may submit all requisite collateral evidences/documents to prove the export of duty paid goods as per provisions of Notification No. 19/2004-C.E. (N.T.), dated 6-9-04 read with Rule 18 of Central Excise Rules, 2002, order-in-appeal and order-in-original are set aside, Revision application is being disposed in above terms.
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2010 (10) TMI 876
Seizure - delay in releasing the goods and an executive fiat not to comply with the order dated 16-9-2010 passed by this Court. Held that:- Despite the fact that the order directing release of the goods had been made long back, whereby, the applicants/respondents were directed to release the goods forthwith, it is a matter of regret that the despite the fact that the applicants/original respondents have not challenged the said order before any higher forum, they have not complied with the same, which requires to be viewed seriously. However, as a last opportunity, the applicants/original respondents are directed to comply with the order dated 16-9-2010 passed by this Court, Counsel for the applicants shall communicate this order to the concerned applicant/original respondents for necessary compliance, all these three miscellaneous civil applications are dismissed
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2010 (10) TMI 874
Principle of doctrine of merger – Held that:- Principle underlying doctrine of merger can not be made applicable. The Revenue was aggrieved by part of the Order, which was detrimental to their interest, Revenue was entitled to file an independent proceeding in the shape of Appeal before the appropriate Authorities and Tribunal. Accordingly, the Revenue preferred Appeal to the Commissioner (Appeals). We direct the CESTAT to consider the Appeal filed by respondent-assessee on merits along with Appeal filed by the Revenue and dispose of the same by a common Judgment and order, after hearing concerned parties, Appeal is allowed accordingly.
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2010 (10) TMI 868
CENVAT credit on the capital goods used in the fly ash extraction denied - Held that:- As neither the extraction of fly ash takes place in the captive plant nor the fly ash generated is exclusively used in the factory of the appellant. This itself is sufficient to reject the claim of the appellant. The decision of the Ahmedabad Electricity Co. Ltd. case (2003 (10) TMI 47 - SUPREME COURT OF INDIA) also lends support to the view taken by the Commissioner (Appeals).
Decision of Birla Corporation Ltd. case (2007 (3) TMI 10 - SUPREME COURT OF INDIA) as relied upon by assessee was in relation to a question as to whether the duty paid on the spares of the ropeway used for the purpose of transporting crushed limestone from mines located at 4.2 kms. away from the factory could have been availed as Modvat credit. The said matter did not involve any other issue particularly regarding the captive use and necessity of subsidiary plant being a captive plant. Being so, the decision is of no help in the matter in hand. Against assessee.
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2010 (10) TMI 867
Jurisdiction u/s 263 for making further disallowance in respect of labour charges - Held that:- CITs calculation that labour charges is to be disallowed at Rs. 8,27,726 is totally based on his assumptions and presumptions and cannot be made a basis invoking his jurisdiction under section 263 of the Act. Merely because the AO has decided to disallow sum of Rs. 1 lac on ad hoc basis after making necessary enquiry, that by itself, cannot be a ground to invoke powers under section 263 conferred upon CIT. It is well settled that section 263 does not visualize a case of substitution of the judgment of the CIT for that of the AO, who passed the assessment order unless the decision is held to be erroneous.
CIT on perusal of the records opined that the estimate made by the concerned officer was on the lower side and left to the CIT, he would have estimated the income at a higher figure than the One determined by the ITO. That would not vest the CIT with powers to re-examine the accounts and determine the income himself at a higher figure. This is because the ITO has exercised the quasi judicial power vested with him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the CIT does not fully satisfy with the conclusion, therefore, quash the order passed by CIT, the appeal filed by the assessee is allowed.
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2010 (10) TMI 864
Reassessment - notice under s. 148 - AO passed an order under s. 153(3)(ii) r/w s.254 of the IT Act and added an amount on account of transport subsidy by observing subsequent order of the Hon'ble Tribunal 'C' Bench, Kolkata relating to the asst. yr. 1997-98 read together with another order of the Hon'ble Tribunal 'A' Bench, Kolkata in respect of the same assessee on a similar point, for the asst. yr. 2001-02 - Held that:- AO while assessing the income for another assessment year other than the one decided by the appellate authorities, shall follow the procedure laid down under s. 150. Further, in sub-s. (1) of s. 150, it has been categorically mentioned that notice under s. 148 may be issued for making reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by the authorities in any proceedings under this Act by way of appeal, reference or revision. Therefore, while doing the reassessment in giving effect to the Tribunal's order in respect of assessment years other than the one involved in the appeal before the Tribunal, the AO should necessarily issue a notice under s. 148 and should have completed assessment under s. 147. Since, in this case, it is apparent that no notice under s. 148 has been issued, orders of CIT(A) set aside, who has confirmed the orders of the AO passed under s. 254 r.w s. 153(3)(ii), as the AO has no jurisdiction in passing the said order for the asst. yr. 1998-99, quashed the assessment order for the asst. yr. 1998-99, the consequential orders passed in the subsequent assessment years have become infructuous and the same are hereby also quashed, all the appeals of the assessee are allowed.
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2010 (10) TMI 863
Disallowance u/s 40(c) - whether value of perquisite arising to the director on account of interest attributable to interest free amount advanced to him should be determined by allocating the said interest in the proportion as the borrowed funds of the assessee company bear to the total funds – Held that:- Following the judgment of V.M. Salgaocar and Bros. (P) Ltd. (2000 (4) TMI 2 - SUPREME Court) it was held that giving of interest-free loan to any employee was not covered by the provision of disallowance under Section 40A(5) or Section 40(c) of the Income Tax Act, 1961, question referred is answered against the revenue and in favour of the assessee.
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2010 (10) TMI 862
Deduction of exchange rate fluctuation on the outstanding loan - AO found that the loan remained outstanding and the exchange rate fluctuation is not actual liability but is only a provision which cannot be allowed - assessee contended that loan account maintained in the Balance Sheet is in Indian rupee and at the end of the previous year, foreign exchange fluctuation is added to the rupee liability which is claimed as deduction by the assessee – Held that:- Even though there is force in the contention of assessee, there is nothing to indicate in the orders of any of the authorities below as to when the assessee availed the loan and for every year whether the assessee was claiming deduction whenever exchange rate fluctuation was adverse to them. If the practice adopted by the assessee is correct, then whenever exchange rate fluctuation goes to reduce the rupee liability of the loan, the same should be taken as income of the relevant year - Matter requires reconsideration by the AO.
Depreciation disallowed by AO for the reason that machinery itself is installed on 31.3.2002 - Held that:- The assessee obviously procured the machinery from manufacturer and machinery of this value will certainly involve installation with all integrated facilities, trial run and commissioning. Even assuming that keeping the machinery ready for use itself is sufficient for claiming depreciation, assessee has to establish that the machinery was brought to it's site and installation and commissioning were done which is possible only after trial run. Since none of the authorities has considered these matters, remand the matter to the assessing officer to reconsider the same with documentary evidence about the transport, installation, trial run and commissioning of the machinery.
Entitlement for deduction of amounts paid to two consultants - Held that:- No merit in this ground because assessee was carrying on business and the advice given by them was for the purpose of business and so much so, the Tribunal rightly held that expenditure is revenue in nature entitling the assessee for deduction. We therefore dismiss the appeal on this issue
Disallowance of expenses incurred by the assessee on behalf of Hindustan Lever Ltd. - Held that:- assessee's counsel contended that expenditure is a business expenditure and is allowable and there is nothing to indicate the Hindustan Lever Ltd. has reimbursed though assessee may have a claim of reimbursement. We do not find any justification for the departmental appeal on this issue because if amount incurred by the assessee is reimbursed the same is assessable under Section 41(2). Consequently we dismiss the appeal on this issue.
Payment to foreign technicians - Non deduction of TDS - Tribunal reversed the disallowance - Held that:- Tribunal's order that payment was made outside India for services rendered outside India and so much so, no TDS was called for required no interference.
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2010 (10) TMI 861
Interest on enhanced compensation - assessee is the father of the children who are owners of the land, inherited by them from their maternal grandfather. Enhanced compensation and interest thereon were received on acquisition of the said land. The income received by way of interest was assessed as capital gain in the hands of the father of the minor children under s. 64(1A) of the Act - Held that:- Assessee has neither been able to show how judgment of the Hon'ble Supreme Court in Ghanshyam's case) (2009 (7) TMI 12 - SUPREME COURT) can be distinguished nor he has been able to give any reason for excluding the applicability of s. 64(1A). In these circumstances, view taken by the Tribunal cannot be sustained. Accordingly, the questions raised by the Revenue are answered in its favour, appeal is allowed.
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2010 (10) TMI 860
Valuation of unquoted Government securities - Assessee treats unquoted Government securities as current assets and, therefore, it has to work out the profit or loss in the end of the year for the purpose of payment of tax. The assessee adopted RBI guidelines for valuation of unquoted Government securities and based on the same it claimed a substantial loss – Held that:- Tribunal accepted the assessee's valuation which is based on RBI guidelines. RBI being the apex body issuing guidelines to the Banks for valuation of unquoted Government securities, it is the rational basis which assessee was bound to adopt. The Assessing Officer also has not come out with any formula for computation of market value of unquoted securities and he has no case that the RBI guidelines for valuation is irrational. Thus Tribunal rightly upheld assessee's claim for valuation of unquoted Government securities based on RBI guidelines.
Deduction of provision for bad debts in terms of Section 36(1)(viia) - basis of classifying Branches of the Bank as Rural Branches and other Branches – Held that:- Basic unit as available for identification of rural area in the Census Report can be legitimately adopted. So much so, the above meaning of rural area contained in the Census Report wherein revenue village is treated as a unit of rural area, can be rightly adopted. So much so, "place" referred to in the above definition clause for the purpose of identifying the branch of a Bank as a rural Branch with reference to it's location is the revenue village. Therefore, the finding of the Tribunal that "place" referred to in the definition is the Ward of a local authority like Panchayat or Municipality is incorrect and a rural Branch has to be always in rural areas and the place referred can easily be taken as a Village. Several Wards may come within a village, whether it be in Corporation, Municipality or Panchayats. There can be no Village in a Municipal or Corporation area where the population is less than 10000. So much so, rural Branches are such of the Branches located in a Village where the population in the Village as a unit is less than 10000. Therefore, allow the appeal on this issue by reversing the order of the Tribunal and by restoring the assessment.
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2010 (10) TMI 859
Income distributed by PNB Mutual Fund - whether deduction u/s 80-M allowed - Held that:- A bare reading of provision of Sec 80M clearly spells out that where the gross total income of an assessee which is a domestic company in any previous year includes any income by way of dividends from another domestic company, the assessee shall be entitled to deduction of such dividend from its income as does not exceed the amount of dividend distributed by such domestic company. Thus, the assessee is entitled to deduction when it receives dividend income from another domestic company.
As in the present case, neither the income received from PNB Mutual Fund can be termed as dividend income nor can the said fund be categorized as the domestic company within the meaning of Section 80M the question of law is answered against the assessee.
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2010 (10) TMI 858
Income escaping assessment proceedings u/s 147 - unaccounted gifts, assessee sold one bigha land but no capital gain was shown, assessee made huge investment in shares account & assessee was a director in a company and has shown the liability to the company without showing any income - Held that:- After amendment of s. 147 w.e.f. 1st April, 1989, reassessment can be initiated even if there is disclosure in the return if without considering the particulars of the return, processing is done under s. 143(1) or assessment is made under s. 143(3). No doubt, mere change of opinion by itself is not a ground for reassessment but if there are reasons to believe that tax has escaped, reassessment is permissible. Reasons can be even on the basis of particulars of the return without any new material. Even if proceedings under s. 143(2) are not taken, reassessment proceedings can be taken.
In the present case, the CIT(A) set aside the proceedings by wrongly holding that reassessment could not be initiated on the basis of material already disclosed in the return without going into the correctness of the reasons - prima facie the reasons for reassessment are not irrelevant. In any case, the same could have been gone into by the CIT(A) before reassessment was set aside as rightly held by the Tribunal - the view taken by the Tribunal cannot be held to be erroneous. No substantial question of law arises.
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2010 (10) TMI 857
Entitlement of department to collect interest u/s 234D - Held that:- This issue stands decided decision in CIT vs. Kerala Chemicals and Proteins Ltd. (2010 (11) TMI 793 - Kerala High Court) wherein held that the interest is payable only from the date of introduction of the provision, that is, 1st June, 2003.
Interest under s. 244A - AO declined interest because the refund is attributable to an additional claim of deduction of provision for bad debt which was allowed by the first appellate authority - Held that:- If the issue of the proceedings, that is, refund order, is delayed for any period attributable to the assessee, then assessee is not entitled to interest for such period. Further, what is clear from sub-cl. (2) is that, if the officer feels that delay in refund for any period is attributable to the assessee, the matter should be referred to the CIT or Chief CIT or any other notified person for deciding the issue and ordering exclusion of such periods for the purpose of granting interest to the assessee u/s 244A(1). In this case, there was no decision by the CIT or Chief CIT on this issue and so much so, we do not think that the AO made out the case of delay in refund for any period attributable to the assessee disentitling for interest. So much so, the officer has no escape from granting interest to the assessee in terms of s. 244A(1)(a).
Belated claim of deduction of provision for bad debt u/s 36(1)(vii)(a) - whether will disentitle the assessee from getting interest on refund upto the date of making claim - Held that:- In this case assessment was taken up in the usual course and before completion of assessment, assessee made the claim which was considered and rejected by the AO. However, in appeal the claim was allowed and based on CIT(A)'s order the AO granted refund. No material to hold that the delay in establishing the claim with documents that led to refund is attributable to the assessee and so much so this is not a case covered by sub-s. (2) of the Act. We, therefore, hold that belated claim of deduction made on 10th Jan., 2001 by the assessee will not justify denial of interest otherwise eligible under s. 244A(l)(a) from 1st April, 1999 to 10th Jan., 2001.
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2010 (10) TMI 856
Penalty u/s 140 - failure to deposit the entire amount of advance tax - as per assessee default in making payment was on account of financial stringency due to destruction of equipments and material during riots - Held that:- Tribunal in the assessee's case relating to earlier two assessment years thought it appropriate to give benefit on account of difficulties faced by the assessee because of riots and fire on 1.11.1984. As certain breathing period should be reasonably allowed to the assessee on account of unprecedented and unfortunate incidents on account of which it suffered extensive damage and huge losses. Therefore, it is appropriate to allow relief from 25.2.85 to 31.10.1985, It cannot be disputed that under Section 140-A(3) of the Act, levy of penalty is not mandatory. There is no minimum penalty provided. On the facts and circumstances, if the Tribunal having regard to the hardship to the assessee, has waived penalty for a limited period, the view so taken cannot be held to be erroneous - in favour of the assessee.
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2010 (10) TMI 855
Whether deduction u/s 80 HHC is admissible on compensation received by the assessee in lieu of loss arising from tax payment in the absence of disclaimer certificate - Held that:- mere fact that the amount received by the assessee did not fall under Clauses (iiia), (iiib) or (iiic) of Section 28, was not enough to attract Section 80 HHC of the Act. Section 80 HHC of the Act was not attracted to every business income but only to income derived from export, as specified in the said Section. The amount received by the assessee was not shown to be covered by Section 80 HHC of the Act as the same was not from export as required therein. assessee has not been able to show how the compensation received by it will fall under Section 80 HHC of the Act. He only submits that the said income was a business income. Mere fact that the assessee derived business income not falling under Section 80 HHC(4B) explanation (baa)(1), which refers to income covered under Section 28(iiia), (iiib), (iiic) of the Act, is not enough to attract Section 80 HHC of the Actquestion of law raised by the revenue has to be answered in its favour and against the assessee. The appeal is allowed.
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