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2007 (10) TMI 686
Issues Involved:
1. Cancellation of the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961.
2. Validity of the revised return filed by the assessee.
3. Satisfaction of the Assessing Officer (AO) regarding the concealment of income.
Detailed Analysis:
1. Cancellation of the Penalty Levied under Section 271(1)(c):
The appeal was filed by the revenue against the order of the Commissioner (Appeals) canceling the penalty of Rs. 17,46,500 levied by the AO under Section 271(1)(c). The revenue contended that the Commissioner (Appeals) erred in law and on facts by not appreciating that the revised return was filed after the detection of concealed income by the AO, and that mere submission of a revised return does not provide immunity from penalty proceedings. The revenue also argued that the Commissioner (Appeals) failed to consider the ratio of various judicial decisions which support the imposition of penalty in similar circumstances.
2. Validity of the Revised Return Filed by the Assessee:
The assessee filed a revised return surrendering Rs. 49,00,000 as income because it could not establish the genuineness of the share application money. The AO initiated penalty proceedings under Section 271(1)(c) on the ground that the revised return was not voluntary but was filed only after the AO's inquiry. The AO held that the revised return was prompted by the specific query raised by the department and thus could not be considered within the ambit of Section 139(5) of the Act. The AO relied on the decision in Sunanda Ram Deka v. CIT to support his view that mere filing of a revised return is insufficient to avoid penalty.
3. Satisfaction of the Assessing Officer Regarding the Concealment of Income:
The Commissioner (Appeals) canceled the penalty by observing that the AO had not made any specific query about a particular shareholding before the revised return was filed. The Commissioner (Appeals) found that the AO's notice under Section 142(1) contained general queries and did not specifically address the share application money. The revised return was filed suo motu by the assessee, and there was no detection of concealment by the AO. The Commissioner (Appeals) noted that the AO accepted the revised return as valid and did not indicate any specific concealment in the assessment order, thus the penalty under Section 271(1)(c) was not justified.
The Tribunal examined whether the AO was satisfied during the assessment proceedings that the conditions for imposing penalty under Section 271(1)(c) were met. The Tribunal referred to various judicial precedents, including the Supreme Court's decision in S.V. Angidi Chettiar's case, which emphasized that the AO must be satisfied about the concealment of income during the assessment proceedings. The Tribunal noted that the AO's assessment order did not reflect any satisfaction regarding the concealment of income or furnishing of inaccurate particulars by the assessee. The Tribunal concluded that the AO had not arrived at the requisite satisfaction for assuming jurisdiction to issue the penalty notice under Section 271(1)(c).
Conclusion:
The Tribunal upheld the order of the Commissioner (Appeals) canceling the penalty of Rs. 17,46,500. It held that the AO had not demonstrated the necessary satisfaction regarding the concealment of income before initiating penalty proceedings. The appeal filed by the revenue was dismissed, and the penalty levied under Section 271(1)(c) was deemed unjustified.
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2007 (10) TMI 685
Issues involved: Allegation of money lending without a license under Karnataka Money Lenders Act, 1961.
The plaintiff alleged that he was a commission agent and had borrowed a specific amount from the defendant for securing regular supply of areca nuts. The plaintiff filed a suit for recovery of this amount with interest. The defendant, however, contended that the plaintiff was a money-lender without a required license under the Karnataka Money Lenders Act, 1961, making the suit not maintainable.
The Trial Court initially decreed the suit in favor of the plaintiff, but the High Court set aside this decree, leading to the appeal before the Supreme Court.
The key contention revolved around the interpretation of the term "money-lender" as defined in Section 2(10) of the Karnataka Money Lenders Act. The appellant argued that he did not fall under this definition as his primary objective was not money lending but ensuring a steady supply of areca nuts. The respondent, on the other hand, asserted that based on the definitions provided in the Act, the appellant qualified as a money-lender.
The Supreme Court emphasized the need for a purposive interpretation of legal provisions, considering the underlying objective of the legislation. Referring to precedents, the Court highlighted that statutory expressions should align with the legislative intent to achieve the desired purpose. In this context, the Court concluded that the appellant, by advancing loans to secure a regular supply of goods, did not engage in the business of money lending in the strict sense intended by the Act.
Ultimately, the Supreme Court allowed the appeal, setting aside the High Court's judgment and reinstating the Trial Court's decision in favor of the plaintiff. No costs were awarded in this matter.
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2007 (10) TMI 684
Issues involved:
The issues involved in this legal judgment include lack of territorial jurisdiction of a court to entertain a suit, interpretation of Section 20 of the Code of Civil Procedure, and the application of the doctrine of dominus litus.
Lack of Territorial Jurisdiction:
The appellant borrowed a sum of Rs. 6,02,000 from the respondent in Saudi Arabia and executed a promissory note there. The respondent filed a suit for recovery of the amount in the Court of Subordinate Judge, Attingal, Kerala, even though both parties were residing in Saudi Arabia. The Trial Judge dismissed the appellant's application challenging the court's jurisdiction, holding that the court had territorial jurisdiction as the defendant was a resident within its jurisdiction. The High Court, however, acknowledged that the court did not have territorial jurisdiction at the time of the suit but decided that the suit need not be returned as the defendant had permanently moved to India after the suit was filed.
Interpretation of Section 20 of CPC:
The High Court considered Section 20 of the Code of Civil Procedure, which deals with the jurisdiction of courts based on the defendant's residence or place of business. It was noted that the material date for invoking Section 20 is the institution of the suit, not any subsequent change in residence. The Court emphasized that the change of residence after the court's decision does not confer territorial jurisdiction on the court.
Application of Doctrine of Dominus Litus:
The doctrine of dominus litus, which gives the plaintiff the right to choose the forum for filing a suit, was discussed in relation to Sections 15 to 18 of the Code of Civil Procedure. It was clarified that this doctrine does not apply when invoking Section 20, which specifies the places where a suit can be filed based on the defendant's residence or business location.
In conclusion, the Supreme Court set aside the High Court's judgment, ruling that the court in Attingal did not have territorial jurisdiction to entertain the suit. The appeal was allowed, and no costs were awarded in this case.
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2007 (10) TMI 683
Commission of an offence u/s 420 of the Indian Penal Code (IPC) - Execution of the sale deed - False Or Misleading representation - Suit Properties are different from the subject matter of the Deed of Sale - Whether a case of cheating within the meaning of Section 415 of the IPC has been made out or not - civil suit has already been filed - Application for quashing the complaint filled u/s 482 of CrPC - HC dismissed the application - HELD THAT:- While executing the sale deed, the appellant herein did not make any false or misleading representation. There had also not been any dishonest act of inducement on his part to do or omit to do anything which he could not have done or omitted to have done if he were not so deceived. Admittedly, the matter is pending before a competent civil court. A decision of a competent court of law is required to be taken in this behalf. Essentially, the dispute between the parties is a civil dispute.
For the purpose of establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. In a case of this nature, it is permissible in law to consider the stand taken by a party in a pending civil litigation. We do not, however, mean to lay down a law that the liability of a person cannot be both civil and criminal at the same time. But when a stand has been taken in a complaint petition which is contrary to or inconsistent with the stand taken by him in a civil suit, it assumes significance. Had the fact as purported to have been represented before us that the appellant herein got the said two rooms demolished and concealed the said fact at the time of execution of the deed of sale, the matter might have been different. As the deed of sale was executed on 30.9.2005 and the purported demolition took place on 29.9.2005, it was expected that the complainant/first respondent would come out with her real grievance in the written statement filed by her in the aforementioned suit. She, for reasons best known to her, did not choose to do so.
Therefore, we are of the opinion that, no case has been made out for proceeding with the criminal case - Thus, the impugned judgment cannot be sustained. It is set aside accordingly. Appeal is allowed.
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2007 (10) TMI 682
Issues Involved:
1. Allegations of oppression and mismanagement in the affairs of the respondent companies.
2. Validity and enforcement of the Memorandum of Understanding (MOU) dated November 9, 2005.
3. Adherence to the schedule of payment as per the MOU.
4. Validity of actions taken by the respondents, including transfer of shares, appointment of directors, and changes in the company's structure and management.
5. Compliance with statutory provisions and Articles of Association.
6. Petitioner's right to pre-emption and proper notice of meetings.
Issue-Wise Detailed Analysis:
1. Allegations of Oppression and Mismanagement:
The petitioner alleged acts of oppression and mismanagement by the respondents in the affairs of the respondent companies. The petitioner contended that the respondents colluded to oust him from the companies and deprive the companies of their legitimate money. The petitioner argued that the respondents' actions, including hurriedly transferring assets and altering the company's structure without proper adherence to the MOU, were prejudicial to the interest of the companies and oppressive against him.
2. Validity and Enforcement of the MOU:
The MOU dated November 9, 2005, was a central issue in the case. The petitioner argued that the MOU was entered into for the transfer of the companies' land and building and that the terms of the MOU, including the schedule of payment, were not adhered to by the respondents. The respondents contended that the MOU was a simple share purchase agreement and that the petitioner had no grounds for grievance as the full consideration was offered to him. The Board found that the MOU was not merely a share transfer agreement but involved the transfer of the companies' land and building, and the respondents' actions were in violation of the MOU's terms.
3. Adherence to the Schedule of Payment:
The petitioner argued that the respondents did not adhere to the schedule of payment as per the MOU, and the full consideration amount was not paid within the stipulated time. The respondents contended that payments were made, but the petitioner refused to accept them. The Board found that the respondents failed to demonstrate that payments were made in accordance with the MOU, and the petitioner's contentions regarding non-adherence to the payment schedule remained uncontroverted.
4. Validity of Actions Taken by the Respondents:
The petitioner challenged various actions taken by the respondents, including the transfer of shares, appointment of new directors, change of the registered office, and alteration of the company's structure. The petitioner argued that these actions were taken without proper notice and in violation of statutory provisions and the Articles of Association. The Board found that the respondents' actions were oppressive and prejudicial to the interest of the companies and the petitioner. The Board set aside the increase in share capital and all allotments of shares made subsequent to the MOU, restoring the status quo ante.
5. Compliance with Statutory Provisions and Articles of Association:
The petitioner argued that the respondents violated statutory provisions and the Articles of Association, including the requirement for proper notice of meetings and the petitioner's right to pre-emption. The Board found that the respondents failed to provide proper notice of meetings and violated the petitioner's right to pre-emption. The actions taken in the alleged meetings were found to be illegal and invalid.
6. Petitioner's Right to Pre-emption and Proper Notice of Meetings:
The petitioner contended that his right to pre-emption was violated when shares were allotted to respondents without offering them to him first. The Board found that the petitioner's right to pre-emption was indeed violated, and the respondents failed to provide proper notice of meetings, making the actions taken in those meetings invalid.
Conclusion:
The Board found that the respondents' actions constituted oppression and mismanagement. The MOU was not adhered to, and the respondents' actions were prejudicial to the interest of the companies and the petitioner. The Board set aside the increase in share capital and all subsequent allotments of shares, restored the status quo ante, and upheld the petitioner's directorial complaints. The petitions were disposed of with directions to restore the status quo ante and no order as to costs.
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2007 (10) TMI 681
Allegations of criminal misconduct - Refusal to grant sanction u/s 197 of CrPC for prosecution of Ms. Mayawati (Chief minister) and Shri Naseemuddin Siddiqui - Project known as 'Taj Heritage Corridor Project' - CBI investigated into the matter and asked to furnish a self-contained note as regards its findings against the erring officers and holders of public posts - A detailed report was submitted by it - HELD THAT:- It is one tiling to say that this Court will not refrain from exercising its jurisdiction from issuing any direction for protection of cultural heritage and the ecology and environment; but then in discharge of the said duty, this Court should not take upon itself the task of determining the guilt or otherwise of an individual involved in the criminal proceeding. It should not embark upon an enquiry in regard to the allegations of criminal misconduct so as to form an opinion one way or the other so as to prima facie determine guilt of a person or otherwise. Any direction which could be issued, in our opinion, has already been issued by us on 27.11.2006.
We may observe that while entertaining a public interest litigation in a given case, this Court may exercise a jurisdiction to set aside the decision of a constitutional authority, but we are not concerned with such a situation. We, therefore, are of the view that we need not go further than what we have already said in our order dated 27.11.2006 to go into the correctness or otherwise of the order of the Governor. If no sanction of the Governor was required or if he has committed an error in passing the said order, the appropriate court, in our opinion, would be entitled to deal therewith, but not this Bench.
We, therefore, are of the opinion that this Bench should not entertain the application filed by the learned Amicus Curiae. The said application is dismissed with the aforesaid observations.
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2007 (10) TMI 680
The Gujarat High Court dismissed a petition regarding the exemption of a partnership firm engaged in dyeing cotton fabrics without power. The court found disputed facts regarding the use of power in the dyeing process, leading to the dismissal of the petition under Article 226 of the Constitution of India.
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2007 (10) TMI 679
The High Court of Bombay expedited the hearing of an appeal related to Central Excise. The respondents waived service and the appeal will be heard along with another case.
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2007 (10) TMI 678
Suit for Perpetual Injunction - Right of worship in temple upon inheritance thereof from their predecessor - turn of Pooja comes after every 12 years - High Court committed a serious error in passing the impugned judgment insofar as it failed to take into consideration that in terms of condition No.2(C) of the agreement, the first respondent was not entitled to gold, sliver and money etc. which were offered to the deity and not to himself in his personal capacity - consent decree - HELD THAT:- It is equally well settled that which construing a decree, the court can and in appropriate case ought to take into consideration the pleadings as well as the proceedings leading upto the decree. In order to find out the meaning of the words employed in a decree, the Court has to ascertain the circumstances under which these words came to be used. {See Bhavan Vaja & Ors. v. Solanki Hanuji Khodaji Mansang & Anr.[1972 (2) TMI 94 - SUPREME COURT]}.
It is now also a trite law that in the event the document is vague, the same must be construed having regard to surroundings and/or attending circumstances.
The nature of the document also plays an important part for construction thereof. The suit filed by the parties, inter alia, involved the question of interpretation of the said consent decree. Parties adduced evidences, inter alia, in regard to the nature of poojas and offerings made to the priest in their individual capacity. Their rights in regard to offer poojas in the temple are itself not in dispute. In a case of this nature where a consent decree does not refer to the entire disputes between the parties and some vaguness remained, the factual background as also the manner in which existence of rights have been claimed by the parties would be relevant.
The consent decree, appears to be meant to be operative for a limited period viz. 1956 and 1961.
If any of the party to the suit was entitled to keep with him even such non-perishable goods which were to be offered to the Deity, the question of using the terms in his individual capacity was not necessary. The parties, therefore, were allowed to lead evidence, to show as to what ceremonies are performed by the Priest in his individual capacity and not necessarily offering pooja to the Deity. A devotee may arrange a special ceremony or a special pooja and entrust the same to be done by one or the other Priest of the said temple. The courts, therefore, were required to construe the terms implied in the consent decree having regard to the customs in regard to holding of religious and other functions in the temple by the devotees.
Equally important was the conduct of the parties soon thereafter. We have noticed hereinbefore that the father of the defendant No.1 executed deeds of sale in favour of the plaintiff s father. The relationship between the parties and their status were referred to therein. Defendant No.1 s father in the said document accepted the right of the plaintiff s father of having equal right to the offerings and offer poojas during the turn of said Neelawwa. It is not the case of the defendants that such statements came to be made by reason of any fraud or inducement or threat on the part of the plaintiff s father.
That being so, the said statements were relevant. The learned Trial Judge as also the Court of the First Appeal, in our opinion, cannot be said to have committed any mistake in taking the same into consideration for determining the rights of the parties. The High Court, in our opinion, was, thus, not correct in reversing the judgment and decree passed by the learned Trial Judge as also the Court of Appeal.
We, however, make it clear that we have not gone into the question as to whether any offerings made in Hundies for development shall go to any of the parties or not. Such a question having not been gone into by the courts below, we refrain ourselves from doing so.
Thus, the impugned judgment is set aside. The appeal is allowed.
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2007 (10) TMI 677
Issues Involved:
1. Appointment of a sole arbitrator.
2. Alleged breaches of contract by respondents.
3. Validity of the arbitration clause and notice.
4. Responsibilities and obligations under the tripartite agreement.
5. Composition of the arbitral tribunal.
Detailed Analysis:
1. Appointment of a Sole Arbitrator:
The applicant-Citibank filed an application under Sections 11(5), 11(10), and 11(12) read with Section 10 of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator for an international commercial arbitration. Citibank proposed Hon'ble Mr. Justice S. P. Bharucha as the sole arbitrator, while the respondents suggested a three-member arbitral tribunal, nominating Hon'ble Mr. Justice M. H. Kania as their arbitrator.
2. Alleged Breaches of Contract by Respondents:
Citibank alleged that the respondents, TLC and WIPL, failed to fulfill their obligations under the "Fly for Sure" program, resulting in numerous customer complaints. Citibank claimed that the respondents engaged in questionable practices, such as not honoring booking confirmations and pressuring customers to change travel dates or destinations. Despite repeated communications, the respondents failed to address these issues, leading Citibank to terminate the agreement and seek arbitration.
3. Validity of the Arbitration Clause and Notice:
Respondent No. 1-TLC contended that the arbitration notice was invalid under Section 21 of the Act, as it did not specify the disputes or claims. However, the court found that the arbitration clause (Clause 10) was broad enough to cover all disputes arising out of the agreement. The court held that the arbitration agreement was not vague or uncertain and that the disputes were arbitrable.
4. Responsibilities and Obligations under the Tripartite Agreement:
The agreement, effective from 01.10.2005 to 31.08.2006, outlined the responsibilities of the respondents to provide services to Citibank's customers. The respondents were jointly and severally liable for ensuring the fulfillment of the "Fly for Sure" program. Citibank alleged that the respondents failed to meet these obligations, leading to customer dissatisfaction and reputational damage.
5. Composition of the Arbitral Tribunal:
The court considered the suggestion of a three-member arbitral tribunal but found it unnecessary and burdensome. The court emphasized that the arbitration clause did not require an even number of arbitrators and that a sole arbitrator would be more efficient and cost-effective.
Conclusion:
The court appointed Hon'ble Mrs. Justice Sujata V. Manohar, retired Judge of the Supreme Court, as the sole arbitrator to resolve the disputes between Citibank and the respondents. The application was disposed of without any order as to costs.
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2007 (10) TMI 676
Issues Involved:
1. Deletion from the array of parties and vacation of the Company Law Board's order.
2. Referral of parties to arbitration.
3. Impleadment of new parties.
4. Allegations of oppression and mismanagement under Sections 397 and 398 of the Companies Act, 1956.
Issue-wise Detailed Analysis:
1. Deletion from the array of parties and vacation of the Company Law Board's order:
The R-3 (Sh. Anandrao Gaekwar) sought deletion from the array of parties and vacation of the Company Law Board's order dated 2.8.2007. The petitioner argued that R-3 was a necessary party due to his involvement in the Tripartite Agreement dated 18.6.1998 and the development agreement concerning the land on perpetual lease with R-3. The petitioner had paid Rs. 5 lakhs to R-3, and the dispute involved the development project on R-3's land. The Company Law Board found that R-3 was a necessary party for effective adjudication and dismissed R-3's application for non-impleadment.
2. Referral of parties to arbitration:
R-1 (M/s Unique Construction Pvt. Ltd.) and R-2 (Sh. Rajesh Kumar Jain) filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the parties to arbitration. The petitioner objected, arguing that the respondents had already submitted to the jurisdiction of the Company Law Board by filing their reply to the C.P. No. 111/07. The Company Law Board found that the application under Section 8 was not filed in accordance with the mandatory requirements and that the allegations of oppression and mismanagement could not be adjudicated without reference to the Articles of the company. The Board held that the matter could not be referred to arbitration and dismissed the application.
3. Impleadment of new parties:
The petitioner's application (C.A. No. 433/07) seeking to amend the memo of parties was dismissed as not pressed.
4. Allegations of oppression and mismanagement under Sections 397 and 398 of the Companies Act, 1956:
The petitioner alleged that the authorized share capital of the company was illegally raised, and shares were illegally allotted to R-2 and his relatives, reducing the petitioner's shareholding to a minority. The petitioner sought the allotment of shares to be declared null and void, the removal of the petitioner and his family from directorship to be declared null and void, and an audited statement of accounts of the project property. The Company Law Board found that the respondents had not provided adequate notice or offer for the allotment of shares, which was in violation of the Articles of the company. The Board set aside the allotment of shares made on 24.11.2003, 14.7.2005, and 27.7.2005, declaring them null and void, and restored the status quo ante. However, the Board did not grant relief regarding the removal of directors or the audited statement of accounts, as these issues were related to the MOU/Agreement before the Arbitrator.
Conclusion:
The Company Law Board dismissed R-3's application for deletion from the array of parties, rejected the application for referring the matter to arbitration, dismissed the petitioner's application for impleadment of new parties, and set aside the illegal allotment of shares while denying relief on directorial and financial matters related to the MOU/Agreement. All interim orders were vacated, and no costs were awarded.
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2007 (10) TMI 675
Challenged the Judgment and final order passed by the High Court - Grant of probate - validity of the Will - suit for declaration and permanent injunction - Joint Hindu family properties - HELD THAT:- In our view, the High Court as well as the Civil Court have acted illegally and with material irregularity in the exercise of their jurisdiction in dismissing the suit on the aforesaid preliminary issue by holding that after the probate having been granted by the competent probate court and affirmed by this Court, the Civil Court had no jurisdiction to proceed with the suit.
We do not find any reason as to how the High Court as well as the civil court could come to a conclusion that after the probate of the Will executed by late S.Kirpal Singh was granted, the suit for declaration for title and injunction on the above allegation could not be said to be maintainable in law. The High Court also while holding that the suit was not maintainable, in view of the probate granted of the Will of late S.Kirpal Singh had relied on a decision of this Court, as noted herein earlier, in the case of Rukmani Devi (supra). We are not in a position to agree with the High Court that this decision could at all be applicable in the facts and circumstances of the present case. A plain reading of this decision would not show that after the grant of probate by a competent court, the suit for title and permanent injunction cannot be said to be maintainable in law. What this Court held in that decision is that once a probate is granted by a competent court, it would become conclusive of the validity of the Will itself, but, that cannot be decisive whether the probate court would also decide the title of the testator in the suit properties which, in our view, can only be decided by the civil court on evidence. It is true that the probate of the Will granted by the competent probate court would be admitted into evidence that may be taken into consideration by the civil court while deciding the suit for title but grant of probate cannot be decisive for declaration of title and injunction whether at all the testator had any title to the suit properties or not.
Such being the position, we, therefore, hold that the High Court as well as the trial court had acted illegally in dismissing the suit of the appellant on the aforesaid sole ground after framing the preliminary issue. For the reasons aforesaid, the judgments of the High Court as well as of the trial court are set aside. The appeal is allowed to the extent indicated above. The trial court is now directed to decide the suit after framing issues, including the issue of maintainability of the suit after the probate being granted, if not already framed in the meantime and dispose of the same within a year from the date of production of a copy of this order before the trial court.
Before parting with this judgment, we may express one more aspect. As noted herein earlier, a suit was dismissed by the trial court which was affirmed by the High Court in revision after framing preliminary issue which we have already noted herein earlier. A question may arise whether the preliminary issue could be raised without deciding the other issues and the suit could be dismissed in view of Order XIV, Rule 2 of the Code of Civil Procedure. In view of our decision in this matter, we do not feel it proper to dwell on this aspect which is kept open for future consideration.
Thus, the impugned order is set aside. The appeal is allowed. There will be no order as to costs.
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2007 (10) TMI 674
The High Court of Bombay admitted the Central Excise Appeal based on substantial questions of law regarding modvat benefit under Rule 57Q and the process of rebuilding Raw Mill and Cement Mill through welding for cement manufacture. Shri V.R. Thakur represented the appellant, and Shri F.T. Mirza represented the respondent who waived notice.
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2007 (10) TMI 673
Issues involved: Challenge to order of Customs, Excise and Service Tax Appellate Tribunal by Revenue regarding MODVAT benefit extension and Rule 57G of Central Excise Rules 1944.
MODVAT benefit extension: The appeal was filed by Revenue against the Tribunal's order setting aside the Commissioner's decision and remanding the matter to rework the duty payable by the assesse. The Tribunal relied on the Supreme Court judgment in Commissioner v. Nagammai Cotton Mills Ltd., where it was held that Rule 57G of Central Excise Rules 1944 is directory, not mandatory. The main question raised was whether MODVAT benefit can be extended suo moto without filing a declaration as required under Rule 57G. The High Court, citing the Supreme Court judgment in the Nagammai Cotton Mills case, concluded that the question of law had already been addressed and dismissed the appeal.
Rule 57G of Central Excise Rules 1944: The Tribunal's decision to set aside the Commissioner's order was based on the interpretation of Rule 57G. The Tribunal allowed the assesse's appeal and directed the Commissioner to rework the duty payable. However, the High Court, following the Supreme Court's ruling in Commissioner v. Nagammai Cotton Mills Ltd., found that the question of whether MODVAT benefit can be extended without filing a declaration under Rule 57G had already been settled. Consequently, the High Court dismissed the appeal filed by the Revenue challenging the Tribunal's decision.
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2007 (10) TMI 672
The High Court Delhi dismissed the revenue's appeal regarding a notice under section 143(2) served on the assessee outside the period of limitation. The notice was issued by registered post on the last day of limitation, making timely service impossible. The court cited a previous case to emphasize that actual service, not just issuance, is required by the statute. No substantial question of law arose.
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2007 (10) TMI 671
CENVAT/MODVAT credit - capital goods - cement - steel bars - waste - rule 57(U) of the Central Excise Rules, 1944 - Held that: - the cement, steel plates and bars in respect of which modvat credit has been availed of by respondent no.2 have been used for providing support to machines - decided against Revenue.
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2007 (10) TMI 670
Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 challenging penalty proceedings u/s 271(1)(c) for Assessment Year 1995-96.
Summary:
The case involved an appeal by the Revenue against an order passed by the Income Tax Appellate Tribunal imposing a penalty under Section 271(1)(c) of the Income Tax Act for the Assessment Year 1995-96. The Assessing Officer had initiated penalty proceedings and imposed a penalty on the Assessee, which was confirmed by the Commissioner of Income Tax (Appeals). However, the Tribunal allowed the Assessee's appeal, stating that the AO had not recorded satisfaction regarding concealment of facts or furnishing inaccurate particulars by the Assessee, citing relevant case law.
The decision of the Court in Ram Commercial Enterprises Limited, which was upheld by the Supreme Court in subsequent cases, was pivotal in this matter. The Revenue argued that another substantial question of law raised in a different case should be considered by a larger Bench. The argument was that satisfaction for initiating penalty proceedings need not be expressly indicated in the assessment order, but should be discernible from it. However, the Court decided to examine the assessment order in the present case to determine if the satisfaction of the Assessing Officer was discernible.
Upon examination, the Court found that there was no recorded satisfaction by the AO in the assessment order regarding the initiation of penalty proceedings. The Court noted that the issue was more about the interpretation of information provided by the Assessee rather than concealment of particulars. Consequently, the Court concluded that no substantial question of law arose in the appeal and dismissed it.
In conclusion, the Court's decision was based on the lack of discernible satisfaction by the Assessing Officer in the assessment order, leading to the dismissal of the appeal challenging the penalty proceedings under Section 271(1)(c) for the Assessment Year 1995-96.
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2007 (10) TMI 669
Issues:
Appeal against Order-in-Appeal, Cenvat Credit Rules interpretation, Eligibility of Modvat/Cenvat credit on service tax paid on mobile phones.
Analysis:
The appeal was filed against Order-in-Appeal No. SVS/327/NGP-I-/2006, challenging the Commissioner of Central Excise (Appeals), Nagpur's decision regarding the availed Cenvat credit on service tax paid on mobile phones. Despite the respondent's absence, the appeal was considered due to the narrow compass of the issue. The appellant contended that the Commissioner (Appeals) did not interpret the Cenvat Credit Rules correctly and that the credit availed was not covered by a specific Circular dated 20-6-2003.
Upon reviewing the records, it was found that the respondent had claimed credit for service tax paid on mobile phones from December 2004 to February 2006. The Commissioner (Appeals) concluded that such Modvat/Cenvat credit was indeed eligible, citing the Tribunal's judgment in the case of Indian Rayon & Industries Ltd. v. CCE, Bhavnagar - 2006 (4) S.T.R. 79. The Tribunal's decision emphasized that the old Circular from 2003, which had been relied upon to deny the credit, was no longer applicable under the new Cenvat Credit Rules of 2004.
The Tribunal's ruling highlighted that Rule 4(1) of the Cenvat Credit Rules, 2004 allowed credit for inputs received in the factory of the manufacturer or the premises of the output service provider, without any such restriction for input services. It was noted that the Rules did not prohibit claiming credit for service tax paid on mobile phones, especially considering their increasing use over fixed line phones. Therefore, the Tribunal held that under the new Cenvat Credit Rules, 2004, service tax paid on mobile phones was creditable for eligible service providers and manufacturers.
In line with the Tribunal's decision in the Indian Rayon & Industries Ltd. case, the Commissioner (Appeals) correctly applied the law, leading to the rejection of the Revenue's appeal. The judgment upheld the eligibility of Modvat/Cenvat credit on service tax paid on mobile phones, setting aside the earlier decision and granting consequential benefits to the appellants.
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2007 (10) TMI 668
Regularization of daily wage employees of Cooperative Electric Supply Society in U.P. State Electricity Board (Electricity Board) - Violation of Article 14 of the Constitution - HELD THAT:- In the present case the writ petitioners (respondents herein) only wish that they should not be discriminated against vis-`-vis the original employees of the Electricity Board since they have been taken over by the Electricity Board in the same manner and position . Thus, the writ petitioners have to be deemed to have been appointed in the service of the Electricity Board from the date of their original appointments in the Society. Since they were all appointed in the society before 4.5.1990 they cannot be denied the benefit of the decision of the Electricity Board dated 28.11.1996 permitting regularization of the employees of the Electricity Board who were working from before 4.5.1990. To take a contrary view would violate Article 14 of the Constitution. We have to read Uma Devi s case (supra) in conformity with Article 14 of the Constitution, and we cannot read it in a manner which will make it in conflict with Article 14. The Constitution is the supreme law of the land, and any judgment, not even of the Supreme Court, can violate the Constitution.
In the present case many of the writ petitioners have been working from 1985 i.e. they have put in about 22 years service and it will surely not be reasonable if their claim for regularization is denied even after such a long period of service. Hence apart from discrimination, Article 14 of the Constitution will also be violated on the ground of arbitrariness and unreasonableness if employees who have put in such a long service are denied the benefit of regularization and are made to face the same selection which fresh recruits have to face.
Thus, we find no merit in this appeal. The appeal is accordingly dismissed. No costs.
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2007 (10) TMI 667
Issues involved: Confirmation of differential duty, imposition of interest, penalty under Section 11AC, penalty under Rule 27 for non-filing of returns in time.
Summary:
Confirmation of differential duty, imposition of interest, and penalties under Section 11AC and Rule 27:
The appeal was filed against the order-in-appeal dated 31/01/2006, challenging the confirmation of differential duty, imposition of interest, and penalties under Section 11AC and Rule 27 for non-filing of returns on time. The Ld. Commissioner (Appeals) upheld the penalties imposed, stating that the duty was paid only after the show cause notice was issued, justifying the penalties. However, the appellant contended that any short levy was due to a lack of knowledge and a delay in filing returns, which occurred in a period without any short levy. The Commissioner (Appeals) failed to consider these contentions while upholding the penalties. The Tribunal found these contentions valid and set aside the order upholding the penalties, remanding the matter back to the Commissioner (Appeals) for reconsideration in light of the appellant's submissions. The appeal was allowed in respect of the penalties imposed.
Conclusion:
The impugned order upholding the penalties was set aside, and the matter was remanded back for reconsideration, granting the appellant an opportunity for a personal hearing.
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