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Case Laws
Showing 381 to 400 of 1843 Records
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2017 (1) TMI 1465
Classification of goods - “Shower to Shower” - “Listerine Mouthwash” - “Listerine Cool Mint Mouthwash” - “Savlon” - whether falls within the ambit of drug and medicine or not? - penalty u/s 61 - Held that: - Insofar as “Shower to Shower” and “Listerine Mouth Wash” are concerned, in my view these two products can be used by any person irrespective of prescribing by a medical doctor for one to feel fresh and to avoid/remove body odour or to remove bad smell in body/mouth, and in my view these are products which are freely available in the market and merely because there may be some percentage of acid or ethanol or similar ingredients, it cannot be said that they can be said to be like a medicine or even can be said to be a medicine or a drug - A minor percentage of acid/ethanol which may be available in almost all cosmetics as well, cannot justify the claim as raised by assessee that they have to be classified as drugs/medicine - the claim of the petitioner is required to be rejected and accordingly the petitions insofar as the assessee is concerned, is required to be dismissed.
Savlon - Held that: - The Apex Court in the case of ICPA Health Products Pvt. Ltd. v. CCE [2004 (4) TMI 77 - SUPREME COURT OF INDIA] was considering a case of Hexiperp, Hexiscrub (Surgiscrub) and Hexiaque, which also contain Chloral Hex dine Gluconate Solution BP, which is also available in “Savlon” and held it to be a medicine - the finding reached by the Tax Board, in my view, is just and proper and is not required to be interfered with.
Penalty u/s 61 - Held that: - Admittedly, it is a case where an issue of classification of entries is there and the issue becomes debatable once the assessee claims that it is a drug/medicine and Revenue may dispute to be falling in the general category or as a cosmetic but at least penalty cannot be levied in such a case. Though it is a case of survey and some material was gathered by the AO during the course of survey but that by itself does not mean that the assessee has concealed the particulars so as to be visited with penalty u/s 61 - The Apex Court as well as this Court have in identical cases held that when there is an issue of classification and issue being debatable, the penalty is not leviable/imposable/sustainable.
Appeal allowed - decided partly in favor of appellant and partly in favor of Revenue.
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2017 (1) TMI 1464
Clandestine removal - shortage of goods - S.S. Ingots - S.S. Flats - case of Revenue is that since the statement furnished by appellant No. 2 that non-duty paid S.S. Flats seized from the cutters owned by the appellant No. 1, is voluntarily and not retracted, no further evidence is required to prove clandestine removal of such goods - Held that: - the Transporter Sh. Jaswant in his statement dated 17-2-2006 has confirmed that the goods of appellant No. 1 had been transported to various rolling mills, including to the premises of Super Metal Re-rollers Pvt. Ltd., Delhi and also S.S. Flats were transported to the premises of cutters at Wazirpur Ind. Area, Delhi. The above statements recorded by the Department corroborate the fact that SS Ingots were removed from the factory to the job worker for conversion into SS Flats, which were seized from the premises of cutters. Further, the voluntary statement of the appellant No. 2 that S.S. Flats stored in the premises of the cutters are not duty paid goods, strengthen the case of Revenue that the S.S. Flats recovered from the premises of cutters were manufactured out of non-duty paid S.S. Ingots removed from the factory of the appellant No. 1 - demand of duty with penalty upheld.
Considering the value of S.S. Flats seized from the premises of cutters and involvement of duty liability thereon, the quantum of redemption fine and penalty reduced.
Appeal allowed in part.
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2017 (1) TMI 1463
Business Auxiliary Services - activity of acting as intermediary for their sister concern Hira Industries Ltd., in connection with crushing up ore of another person - whether taxable under the head BAS or otherwise? - Held that: - sub-clause (iv) has no application to the facts of the present case regarding promotion and marketing of service. Though, there is no written agreement, it is apparent that the activity of the appellant promoted the services rendered by their sister concern. This much is clear from the nature of consideration received by the appellant, which is categorized as liaisoning charges in P & L account - demand upheld.
Extended period of limitation - Held that: - the allegation of fraud, suppression and wilful misstatement cannot be sustained in the facts of the present case for one of transaction carried out by the appellant during the year, 2005 - extended period cannot be invoked.
Appeal allowed on the issue of time bar.
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2017 (1) TMI 1462
Condonation of 265 days delay in filing revision application challenging rejection of application of discharge of the applicant-original accused - Held that:- It is well settled that the term 'Sufficient Cause' needs liberal construction. When cause of substantial justice is pitted against technicalities of law, cause of substantial justice gets preference. In the case in hand, the applicant is an aged person and he is stated to be working as a clerk with DFPL for reconciliation of old accounts. Availability of funds, ailment, suffering of shock as such, are natural consequences when age of the applicant is concerned. In this view of the matter, for the stated reasons, delay is condoned. Application is allowed.
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2017 (1) TMI 1461
Maintainability of appeal - the decision in the case of Japan Airlines International Co. Ltd. Versus C.S.T. New Delhi [2016 (7) TMI 1077 - CESTAT NEW DELHI] contested - Held that: - Learned counsel for the respondent points out that the order impugned in the appeal has since been recalled by the Customs, Excise & Service Tax Appellate Tribunal by its order dated 13-1-2017 and the appeal has been directed to be listed for fresh hearing - we do not consider it necessary to entertain this appeal - appeal is dismissed as having become infructuous.
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2017 (1) TMI 1460
CENVAT credit - General Insurance Service - Rule 2(1) of CCR - Held that: - Even after amendment in the definition of ‘input service’ the General Insurance relating to the Marine Cargo and Fire and Burglary which are directly connected with the business are included in the definition of ‘input service’ - the exclusion clause is only in respect of General Insurance pertaining to motor vehicle and not to other kinds of insurance such as Marine Cargo Open Policy, Standard Fire and Special Perils Policy, Burglary Floater Policy and other properties of the company - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1459
Penalty u/s 76, 77 and 78 - non-payment of service tax - Consulting Engineer Service - Held that: - Since the amount of service tax claimed by the appellant was deposited by MPCON into Central Government account as per the policy adopted by them, the service tax cannot further be claimed from the appellant. Thus, in this case, no mala fides can be attributed to the appellant, justifying imposition of penalty - penalty set aside.
Interest - Held that: - since the service tax in question was not deposited within the stipulated time frame and deposited belatedly by MPCON on behalf of the appellant, we are of the view that the appellant is liable to pay interest on such delayed payment of service tax.
Appeal allowed in part.
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2017 (1) TMI 1458
Penalty u/s 271(1)(c) - Held that:- The issue arising herein is concluded against the Revenue by virtue of the decision of this Court in CIT v/s. Shri Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT]. In the above case, an identical issue on facts and law as arising herein came up for consideration in the respondent-assessee's husband's case. This Court refused to entertain the Revenue's appeal. No substantial question of law
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2017 (1) TMI 1457
Valuation - goods cleared to sister units - profit element - includibility - whether the assessee has undervalued the goods i.e. Sponge iron by not including the profit element? - Held that: - The CBEC initially issued circular No. 354/81/2000-TRU dated 30.06.2000, wherein how to arrive at the value has been explained in Para 21. This was further clarified vide circular No. 692/8/2003-CX dated 13.02.2003 to work out the cost of production for captive consumption in accordance with CAS-4. Therefore, the objection raised by audit is not correct as the goods were consumed under Notification No. 67/95-CE dated 16.03.1995 and in these cases value of goods cannot be determined under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000.
Valuation - captive consumption - whether the assessee has failed to include the cost of packing materials in respect of Sponge iron captively consumed? - Held that: - the cost of packing materials has already been taken in excess when compared to the assessable value of packing material according to Audit Report - the charges made in the show cause notice regarding Undervaluation of the Sponge Iron captively used and there-by value of final product has been suppressed, is not sustainable and is liable to be dropped.
Appeal dismissed - decided against Revenue.
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2017 (1) TMI 1456
Procedure followed by the Tribunal in deciding appeals, pending before it, filed by the Revenue, as well as the assessee - difference of opinion between two Members of the Bench - change of accounting system - Held that:- Having gone through the record, we find that the dissenting opinion were rendered by the Accountant Member and the Judicial Member of the Tribunal on October 16, 1996 and thereafter both the Members stated points on which they differed which we have noticed above. The Third Member, i.e., Senior Vice-President, Sri V. Dongzathang, rendered his opinion vide order dated March 26, 1998. It answered question No. 1 by observing, when the assessee and Revenue both are aggrieved by an order of the Commissioner of Income-tax (Appeals) it is incumbent upon the Tribunal to adjudicate issue raised before it and pass such order thereon as it thinks fit. Question No. 1, therefore was answered in the affirmative.
Question No. 2 was answered stating that there is no need of changing entire system of accounting adopted by the assessee as the entries in accounts are correct and complete on the basis of which correct income chargeable to tax can be computed.
We find that the Third Member instead of answering questions has looked into the correctness of decision of two differing Members and observed that they have not looked into the relevant circumstances and should re-decide ground of appeal after giving opportunity to both the sides. The Third Member, it appears, forgot his position that he was not sitting in appeal over the opinion rendered by two Members of the Tribunal since jurisdiction of Third Member was co-ordinate and it was his duty to hear the two sides and decide question referred for its opinion in one or other way and not to make comments in the manner in which two differing Members have rendered their opinion for deciding certain issues.
Unfortunately, Third Member has looked into question No. 5 as if he was sitting in appeal over different opinions recorded by two Members and this approach on the part of the Third Member is clearly erroneous. Whether any purpose would be served by answering question No. 5 or not was not within the domain of the Third Member for the reason that it was under a statutory duty to answer questions referred for its opinion in one or other way. Some of the observations made by the Third Member of the Tribunal commenting upon differing Members of the Bench are clearly beyond his authority.
As already said, he was not hearing an appeal of judgment of two Members of the Tribunal but was under an obligation to render his own opinion after hearing the parties on specific points rendered by two differing Members. Interestingly, this strange approach and manner of functioning of the Third Member has put the Regular Bench in a difficult situation. In the order dated December 31, 2003, the Division Bench found it a rare case wherein judgment was not possible in the manner in which it was required by section 255(4). The Bench, however, found itself obliged to comply with the Third Member's opinion of reopening issues and requiring re-hearing of appeals of the assessee/Department as well as cross-objection on the points of difference.
This situation was created by the Third Member who appears to have forgotten its own duty and statutory obligation that it has to decide specific points referred for its opinion and not to sit in appeal over the entire matter and take its own decision independently and bereft of points formulated by different Members and referred for opinion of the Third Member.
We have no option but are constrained to observe that the order and approach of the Third Member is patently erroneous, illegal, impermissible and constitutionally unsustainable in law rendering the order dated December 31, 2003, passed by the Regular Bench, unsustainable.
We answer in favour of the appellants and accordingly set aside not only the order passed by the Regular Bench on December 31, 2003 but also the Third Member's order dated March 26, 1998 and remand the matter to the President of the Tribunal to nominate another Bench constituting one or more Members to consider and decide the seven points formulated by differing Members in their order dated October 16, 1996 for giving opinion thereon and thereafter the Regular Bench may decide the matter in the light of the majority opinion as contemplated in section 255(4) of the Act, 1961.
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2017 (1) TMI 1455
Clandestine removal - penalty - whether shortage of finished goods detected during stock taking can be held as shortage due to clandestine removal of goods, without any cogent evidence? - Held that: - it was observed that during the last six months i.e. from July 2010 to 24 January 2011, they have produced 8712.220 MT of MS Ingot and the shortage detected is only 0.63% of the production during the period in question and hence a very small negligible difference has been found which in no way can be removed clandestinely - there is no evidence on record of clandestine removal of the goods. In other words, it is a case of mere shortage of goods during stock verification and imposition of penalty under Section 11AC of the Act is not warranted.
In the case of Commissioner of Central Excise and Service Tax, Ludhiana v. Anand Foundries Engineers [2015 (11) TMI 1166 - PUNJAB & HARYANA HIGH COURT], the Hon’ble Punjab and Haryana High Court dismissed the appeal filed the by the Revenue. It has been observed that the assessee, in his statement, had admitted only to shortage and not to clandestine removal of the goods. The charge of clandestine removal is not established.
Penalty set aside - duty with interest upheld - appeal allowed in part.
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2017 (1) TMI 1454
Appeal is admitted on the following substantial questions of law:
“(i) Whether the income from the duty draw back and sale of export license does not qualify as profit derived by an undertaking from the export out of India of eligible articles or things for allowing deduction u/s 10BA of the Act?
(ii) Whether the order of the Ld. Tribunal does not got vitiated on account of apparent inconsistency of reversing the order of Ld. CIT(A) and simultaneously setting aside the ground of appeal to the Ld. Assessing Officer?”
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2017 (1) TMI 1453
TPA - comparable selection - Held that:- Assessee is engaged in providing investment advisory services to its Associated Enterprise (A.E), thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2017 (1) TMI 1452
TPA - inclusion/exclusion of certain comparables - Held that:- Assessee- company, engaged in providing non-binding investment advisory services and IT-enabled services(IT-e)to its Associated Enterprise(AE), thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2017 (1) TMI 1451
Addition u/s 68 - identity of creditor - reliance on information borrowed - Held that:- The decision of the AO is based on the information received from the Investigation Wing, statement given by Auditor of M/s VPC Financial Pvt. Ltd., statement of General Manager Hindustan Times Group and submission made by the assessee. The information received from the Investigation Wing is very scanty without any details of bank account and the name of the creditors. AO did not make any enquiry to reveal the real nature of the information received. Hence, the AO could ascertain the names of the creditors, only from the details given by the assessee in response to notice u/s. 148. With regard to reliability of the CA who was supposed to sign the balance sheet, the name of the company mentioned in the reply to question no. 4 mentioned in the impugned assessment order is ‘Mehul Finvest Pvt. Ltd.’ and not M/s VPC Financial Services Pvt. Ltd. Thus, the statement cannot be used as a proof regarding identity issue of the creditor.
The statement of General Manager of Hindustan Times Group only indicates that there was transfer of ownership of M/s VPC Financial Services Pvt. Ltd. Thus, the identity of creditor is established. Moreover, these third party evidences are never confronted to the person confirming the transaction. The AO did not make any further enquiry to verify whether the payment made by the creditor through the banking channel is actually travelled from the coffers of the assessee. Regarding the second category of creditors, the AO did not even mention the source of information he received. No further enquiry was made about these creditors and addition has been made only the based on some assumptions. Hence, the observation of the Ld. CIT(A) that certainly, addition u/s. 68 cannot be justified with a casual approach was right. - Decided in favour of assessee.
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2017 (1) TMI 1450
Refund of excess Customs duty - duty paid in cash which had earlier been sanctioned by the Assistant Commissioner but was reversed by the impugned order - unjust enrichment - Held that: - The appellant relies on Hon’ble Delhi High Court’s decision in the case of Aman Medical Products Ltd. Vs. Commissioner of Customs, Delhi [2009 (9) TMI 41 - DELHI HIGH COURT], where it was held that where there is no contest or lis between the importer and the customs regarding the rate of duty and where there is no assessment order issued by the Customs there could be no challenge or appeal to such order; in such a situation the importer will not be deprived of his right to file refund claim - refund allowed - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1449
Contradicting claim in the computation of income vis-a-vis the amount stated in the Auditors report in Form no. 10B - Held that:- In the present case, in the computation of income assessee claimed deduction of an amount of ₹ 79,54,625/- as application of money in terms of clause (ii)(b) of Explanation to Sec. 11(1) of the Act. Also emerging that in the Audit report in prescribed Form no. 10B annexed with the return, said amount was shown as ₹ 75,78,521/-. The explanation of assessee is that the amount stated in Form no. 10B is an inadvertent mistake. It is quite clear that in the subsequent Assessment Year of 2004-05 when assessee actually spent the said sum, the claim made was to the extent of ₹ 79,54,625/-, as is borne out from the copy of statement of total income for Assessment Year 2004-05 placed in the Paper Book at pages 55 to 66. At the time of hearing, the learned representative pointed out that the claim of application of income to the extent of ₹ 79,54,625/- with respect to Assessment Year 2003-04 stands accepted in the assessment for Assessment Year 2004-05, which has been finalized u/s 143(3) of the Act dated 29.12.2006. Therefore, the furnishing of Form no. 10B at an understated figure of ₹ 75,78,521/- is ostensibly a mistake. Having regard to the entirety of facts and circumstances of the case, we find no reason to uphold the stand of Assessing Officer in making addition - Decided in favour of assessee.
Set-off of Long Term Capital Gain against the brought forward Long Term Capital Loss and carry forward of the balance unabsorbed Long Term Capital Loss - Held that:- CIT(A) has allowed the stand of assessee considering the order of the predecessor CIT(A) in assessee’s own case for the instant assessment year dated 18.1.2007, wherein a similar issue was dealt with arising from the regular assessment framed by the Assessing Officer u/s 143(3) of the Act dated 27.3.2006. Before us, the learned representative for the respondent-assessee pointed out that in the original assessment proceedings, appeal of the assessee was allowed by the CIT(A) after receiving a Remand report from the Assessing Officer wherein such a claim was agreed to by the Assessing Officer. It has also been pointed out that against the order of CIT(A) dated 18.1.2007, which has since been followed by the CIT(A) now, the Department had not come in appeal before the Tribunal.
The aforesaid factual matrix brought out by the learned representative for the assessee is not disputed by the Revenue. Therefore, in our view, the CIT(A) made no mistake in allowing the claim of assessee and, therefore, the Revenue has to fail in its appeal. - Decided in favour of assessee.
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2017 (1) TMI 1448
Rebate of service tax paid by the appellant as per the invoices raised by them for export - N/N. 12/2005-ST dated 19/04/2005 - Held that: - service tax paid by the appellant as per the invoices raised by them for export - the appellant is entitled to the rebate claim under the provisions of N/N. 12/2005-ST.
So far the issue of rejection of the claim on the ground that the same have exceeded the estimate filed in declaration, we hold that such interpretation is uncalled for and against the spirit of the notification. The prior declaration is only an estimate and there is bound to be difference with the actual claim - No part of rebate can be rejected on the ground that declaration or intimation filed appellant amount mentioned is different from actual claim.
Matter remanded back to the Adjudicating authority for limited purpose of verifying the fact that the appellant have only erroneously shown the rebate amount in the Cenvat credit column in the return, wherein they have not taken Cenvat credit as claimed by them - appeal allowed by way of remand.
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2017 (1) TMI 1447
Refund claim - whether the appellant is entitled to refund of service tax paid on 'clearing and forwarding agent services' utilized for the purpose of export with respect to export transaction during the period from July to September, 2008, in view of amendment to N/N. 41/2007 vide N/N. 33/2008-ST dated 07/12/2008, when in the Schedule to the earlier notification Item No.19 was inserted for services received by an exporter that were provided by a 'clearing and forwarding agent' in relation to export or goods exported by the exporter?
Held that: - the addition of C & F Service vide N/N. 07/12/2008 being entry number 19 in the schedule to N/N. 41/2007 is clarificatory in nature. Accordingly, following the ruling of Hon’ble Bombay High Court in the case of WNS Global Service (P) Ltd. Versus Commissioner of Service Tax, Mumbai [2008 (1) TMI 94 - CESTAT, MUMBAI], the appellant is entitled to refund of input services including C & F services received prior to 07/12/2008 as the same have been utilized for the purpose of export of goods.
The other ground of rejection also does not stand that the appellant also availed duty drawback in view of deletion of proviso '(e)' in N/N. 41/2007 vide amending N/N. 33/2008.
Refund allowed - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 1446
Penalty u/s 271(1)(c) - incorrect computation of capital gain - assessee Suo Moto carried out corrections and paid tax+ interest upon detection of error but prior to detection by the AO - assessee had trusted the computation by his earlier CA as correct until errors and omissions were detected by new CA - Held that:- As per rule of evidence, there is distinction between set of facts “not proved” and facts disproved and facts proved. Benefit of the principle that mere non-satisfactory nature of explanation furnished cannot amount to proof of falsity of explanation furnished can apply in case the fact-finding authority reaches to a stage where it can only conclude that the fact alleged is “not proved” which would result that except rejection of the explanation furnished by the assessee, there is no material to sustain the plea of concealment.
But, on the other hand, if the state of affairs reveals a stage where one can positively reach a conclusion that the fact alleged is proved or disproved, the principle that mere rejection of explanation cannot result in levy of penalty will have no application. To reach this stage also, inquiry will have to be undertaken of the disclosure made in the return or in the statement annexed to the return and to arrive at a finding whether the particulars disclosed are truthful, or false or not proved to be satisfactory.
In the first case, it would be a positive case of no concealment, in the second stage, it would be a positive case of concealment and in the third case, benefit of doubt will go in favour of assessee. But in either case, inquiry must proceed from the stage the alleged disclosure has taken place and not stop at that stage and close the inquiry at the threshold on the abstract principle that mere rejection of explanation does not result into levy of penalty.
In the present case also the Revenue has no where proved the allegation of concealment despite explanation offered by the assessee. The AO has not detected the income rather assessee suo moto declared the same and that also without any enquiry. The actual position in law is that merely because the assessee’s addition has been confirmed, that cannot automatically bring in levy of penalty for concealment. If the assessee offers an explanation, the Revenue authorities have to consider the acceptability of the explanation and pass necessary orders. In the present case, the Revenue has not rejected the explanation of the assessee and merely levied the penalty on the basis that income of the assessee is assessed. In view of the above facts, we are of the considered view that CIT(A) has erred in confirming the action of the AO in levying penalty for furnishing of inaccurate particulars of income u/s 271(1)(c) of the Act. - Decided in favour of assessee.
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