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2015 (8) TMI 1542 - DELHI HIGH COURT
Suit for declaration to be the owner of property - Possession of property - restraint from parting with possession of the suit land.
HELD THAT:- A perusal of the original plaint would evince that there is no admission made by the appellant that it is not in possession of the suit land. The plaint has been very inartistically drafted and unfortunately the lawyer has not even used the word that originally Amir Chand and Brij Lal and thereafter Matwal Chand held the properties on behalf of the plaintiff as trustees, pending formal constitution of the plaintiff as a body incorporate. The entire pleadings in the plaint, meaningfully read, pleads so. But yet the counsel did not formally incorporate said aspect in the pleadings. It is trite that it is the substance of the pleadings which matters and not the form. Meaningfully read, the suit is based upon the plea that the suit property was purchased by Amir Chand and Brij Lal for the benefit of the members of Jhang Biradari Association and the beneficiaries would be such persons who become members of the plaintiff and were migrants to India from Jhang upon partition.
It is apparent that while giving ink to the thought of the author i.e. drafting the prayer in the application seeking interim relief, giving reflection to the thought of the plaintiff, the counsel has in a mechanical way prayed that the defendants be restrained from parting with possession of the suit land.
A right to sue accruing has not to be confused with the cause of action. The wrong alleged, when committed, infringing upon a right would give rise to a right to sue. Simultaneously would accrue the cause of action to sue. The facts pleaded for purposes of cause of action have a nexus to the prayer and the pleadings to bring out the cause of action would not be the pleadings to determine when did the cause of action accrue or when did the right to sue commence. Limitation would commence from the date when the right to sue accrued - It is settled law that a cue can be had from the Indian Trust Act, 1882 for understanding the various terms as well as the salient features attached to a Trust.
Once a Trust always a Trust, is the trite proposition of law, like one another proposition, 'once a mortgage always a mortgage'. The Trust property cannot be allowed to be dissipated in any manner - It is a common principle that whenever a Trustee dies his legal representatives, not necessarily only the legal heirs of the deceased trustee, could rightly manage the property till a proper trustee is appointed. Even a trustee de son tort could safeguard the trust property.
There are two elements involved in the concept possession, namely, 'corpus possessionis' and 'animus possidendi'. The owner need not necessarily be in physical possession at all times. Besides, in the case of a Trust the physical possession by the trustee would actually be a case of custody of the property being with the trustee and legal possession being with the trust - There was no need to seek any cancellation of the sale-deed dated May 16, 1962 because in the plaint the said sale-deed has not been challenged. Meaningfully read, the pleading is that Amir Chand and Brij Lal executed the sale-deed in question in favour of Matwal Chand because Matwal Chand was the Secretary of the Association and he held the property as a trustee.
Impugned order is set aside - application filed by the appellant to amend the plaint is allowed.
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2015 (8) TMI 1541 - ITAT KOLKATA
Revision u/s 263 by CIT - Addition u/s 68 - HELD THAT:- As decided in M/S SUBHLAKSHMI VANIJYA PVT. LTD., TULSI TRACOM PVT. LTD., KOLKATA AND OTHERS [2015 (8) TMI 174 - ITAT KOLKATA] contention of the assessee that since the AO of the assessee company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable.
Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order - the notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases.
Limitation period for passing order is to be counted from the date of passing the order u/s 147 read with sec. 143(3) and not the date of Intimation issued u/s 143(1) of the Act, which is not an order for the purposes of section 263. In all the cases, the orders have been passed within the time limit. CIT having jurisdiction over the AO who passed order w/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT.
Addition in the hands of a company can be made u/s 68 in its first year of incorporation.After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid.
Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day. Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given-by the CIT.
Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act. Appeal dismissed.
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2015 (8) TMI 1540 - DELHI HIGH COURT
Appointment of a Local Commissioner to visit the premises of the defendants to seize the offending goods - HELD THAT:- The Local Commissioner shall visit the premises of the defendants, without prior notice to them, and make an inventory of all the impugned materials. He shall also take into custody the aforesaid materials, which shall be sealed and returned to the defendants on superdari with a direction to produce them before this Court as and when directed - The Local Commissioner shall be entitled to take the assistance of the representatives of the plaintiffs and seek police aid if deemed necessary, to execute the commission. The SHO of the area concerned shall render all necessary assistance to the Local Commissioner in the execution of the commission, if such a request is made in that regard.
The application is disposed of.
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2015 (8) TMI 1539 - ITAT KOLKATA
Disallowance of job charges @ 10% - Non rejection of books of accounts - HELD THAT:- Addition has been made only on estimated basis by the AO and the ld. AO disallowed 20% of the job charges and the ld. CIT(A) restricted the same to 10% of the job charges is totally unwarranted as the entire books of account and vouchers were duly produced by the assessee during the course of assessment proceedings. Without rejection of the books of account, the action of the ld. AO as well as the CIT(A) in sustaining the addition on an estimated basis is arbitrary and unwarranted. Hence no hesitation to delete the said addition made in the sum of ₹ 9,000/- being 10% of the job charges. Hence, this ground of appeal is allowed.
Disallowance of administrative expenses - HELD THAT:- Addition has been made only on estimated basis by the AO and the ld. AO disallowed 20% of the administrative expenses and the ld. CIT(A) upholding the action of AO is totally unwarranted as the entire books of account and vouchers were duly produced by the assessee during the course of assessment proceedings. Without rejection of the books of account, the action of the ld. AO as well as the ld. CIT(A) erred in sustaining the addition on an estimated basis is arbitrary and unwarranted.
Addition being professional fees received by the assessee from I.C.I.C.I. Prudential Life Insurance Corporation Ltd.- HELD THAT:- As seen from the materials available on record that ICICI Prudential Life Insurance Corporation Ltd had cut a cheque on 21.03.2008 and tax was duly deducted on the same which is mentioned in the TDS certificate of the assessee and in consonance with the mercantile method of accounting followed by the assessee, the assessee ought to have disclosed this receipt as income in A.Y.2008-09. Hence the action of the assessee in not disclosing the same is not appreciated. However, it is also seen that the assessee has offered the same in A.Y.2009-10 on receipt basis - hereby direct the ld. AO to withdraw that income in A.Y.2009-10 together with TDS thereon to meet the ends of justice and in order to avoid double taxation of the same receipt. Accordingly, this ground of appeal is dismissed subjected to the directions contained herein above
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2015 (8) TMI 1538 - ITAT CHANDIGARH
Revision u/s 263 by CIT - Incorrect calculation of capital gain/loss - FMV determination - valuation of sold property as on 1.4.1981 taken - apparent discrepancy and lack of proper investigations during the assessment proceedings - lack or enquiry v/s inadequate enquiry - HELD THAT:- Assessee has not only disclosed the way it had made calculation of capital loss, it had also enclosed all the corroborative evidences together with the return of income - AO had raised a specific query which the assessee had duly replied. In view of this, it cannot be said that the AO has not applied his mind as alleged by CIT that he has not made proper investigation during the assessment proceedings. Assessing Officer was fully aware of the whole matter.
Even after passing of the assessment order, he has issued notice under section 133(6) of the Act and also the notice under section 154 of the Act, which were duly replied by the assessee. Even the notice under section 154 of the Act mentions the facts which have been stated in the notice under section 263 of the Act issued by the learned Commissioner of Income Tax later on. In view of these evidences, it cannot be said that this is a case of lack of enquiry/investigation.
On the appraisal of the said plethora of evidences, if the Assessing Officer takes a view which is not in consonance with the view of the learned Commissioner of Income Tax, it cannot give the learned Commissioner of Income Tax the jurisdiction under section 263 of the Act. This is certainly not a case of lack of enquiry, at most, it may be a case of inadequate enquiry, which also to our mind, in the facts and circumstances of the case, does not seem correct.
There was some mistake in the Valuation Report of Registered Valuer, which the assessee enclosed with the return of income, also does not advance the case of the Department. It is a case in which on the basis of evidences filed by the assessee, the Assessing Officer forms an opinion and then makes the assessment. There is nothing illegal in this. There is no law which says that the Valuation Report has to be drawn in a certain specific fashion. The valuation is an art and any Valuation Officer who is registered by the Government to make such kind of valuation can make his own basis for valuing the property. In the present case, the Valuation has been done by a Registered Valuer, which the Assessing Officer has perused and formed an opinion. No specific procedure has been prescribed under the Statute as to how the Assessing Officer has to react in such situation.
As per the assessee, the value taken is in accordance with the report of the Registered Valuer, which the Assessing Officer accepted while the learned Commissioner of Income Tax wanted to substitute the same to the value of some other property purchased by the assessee itself a few months later - Assessing Officer being an Adjudicating Officer has to form an opinion on the basis of evidences, which he has duly done. If the learned Commissioner of Income Tax on the same set of evidence draws different opinion, it being a question of fact, does not give him jurisdiction to revise the same under section 263 - Decided in favour of assessee.
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2015 (8) TMI 1537 - ITAT HYDERABAD
Revision u/s 263 by CIT - delayed contribution of employees contribution to P.F. - HELD THAT:- As contributions are not deposited as prescribed under the P.F. Act., but the payments are made before the due date of furnishing the return under section 139(1) as required by law under section 43B. Therefore, we are of the opinion that the case on hand is squarely covered by the decision of Essae Teraoka P. Ltd. [2014 (3) TMI 386 - KARNATAKA HIGH COURT] and also case of Imerys Ceramics (India) P. Ltd [2012 (7) TMI 699 - ITAT, HYDERABAD]Respectfully following the above decisions, we are of the opinion that the assessment order is not erroneous and prejudicial to the interests of the Revenue in so far as allowing of deduction of employees contribution to P.F. is concerned. Accordingly, we set aside the order passed by the Pr. CIT-II under section 263 and restore that of the Assessing Officer. Appeal of the assessee is allowed.
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2015 (8) TMI 1536 - ITAT LUCKNOW
Enhancement by Ld. CIT(A) - no notice required u/s 251(2) was given by the Ld. CIT(A) to the assessee for enhancement - HELD THAT:- We find force in the submission of Ld. DR of the Revenue that in the present case, there is no enhancement by Ld. CIT(A) in respect of disallowance of interest and salaries paid to partners because the same was not allowed by the AO also and therefore, there was no requirement to issue notice u/s 251(2) of the Act by Ld. CIT(A). Therefore, Ground No.1 (a) of the assessee.
Allowability of deduction in respect of interest and salary paid by the assessee firm to its partners - HELD THAT:- As in the assessment order, it is observed by the AO that no bills/vouchers and books of account or any other supporting vouchers have been produced before him and therefore, he had no option but to estimate the income to the best of his judgment. He has invoked the provision of Section 144 of the Act although not specifically stated in the assessment order. As per sub section (5) of section 184, where there is on the part of firm any such failure as mentioned in section 144, the firm shall be assessed without allowing deduction of any payment of interest and salary etc. to any partner of the firm in computing the income chargeable under the head business income. Hence, in the facts of the present case, Section 184(5) of the Act is applicable and as a consequence, deduction on account of interest and salary payment to partners is not allowable. Hence, on this issue, we do not find any reason to interfere in the order of the Ld. CIT(A). Accordingly, Ground No. 1 and 2 are rejected.
Fresh capital introduced by the new partners who have joined the firm in the present case - HELD THAT:- CIT(A) also confirmed these additions on this basis that during the assessment proceedings or appellate proceedings, the assessee did not furnish their addresses PAN or their confirmation. In view of these facts that acknowledgement of filing income tax return/intimation in respect of four new partners out of six new partners is available in paper book, we feel it proper that this matter should go back to the file of the AO for fresh decision.
Credit of TDS - HELD THAT:- There is no mention in the assessment order for allowing lesser amount of credit for TDS. Hence, we feel that on this issue also, the matter should go back to the file of the AO for fresh decision.
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2015 (8) TMI 1535 - SUPREME COURT
Forgery - criminal conspiracy - cheating and use of forged documents - embezzlement of public money - respondent wants the proceedings to be quashed on account of settlement with the bank - HELD THAT:- The development in means of communication, science & technology etc. have led to an enormous increase in economic crimes viz. phishing, ATM frauds etc. which are being committed by intelligent but devious individuals involving huge sums of public or government money. These are actually public wrongs or crimes committed against society and the gravity and magnitude attached to these offences is concentrated at public at large.
The inherent power of the High Court under Section 482 Cr.P.C. should be sparingly used. Only when the Court comes to the conclusion that there would be manifest injustice or there would be abuse of the process of the Court if such power is not exercised, Court would quash the proceedings. In economic offences Court must not only keep in view that money has been paid to the bank which has been defrauded but also the society at large - If the prosecution against the economic offenders are not allowed to continue, the entire community is aggrieved.
The High Court while exercising its inherent power ignored all the facts viz. the impact of the offence, the use of the State machinery to keep the matter pending for so many years coupled with the fraudulent conduct of the respondent - the order passed by the High Court is set aside and the trial court is directed to proceed with the matter expeditiously in accordance with law - Appeal allowed - decided in favor of appellant.
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2015 (8) TMI 1534 - ITAT CHENNAI
Disallowance being the contribution made to employees’ superannuation fund - whether the contribution made by the assessee is allowable u/s 37? - HELD THAT:- In the case before the Madras High Court, Kattabomman Transport Corporation paid to the Government in order to enable the Government to credit the amount so paid to the Provident Fund Account of the Government employees who were at the point of time working in the Transport Corporation. The Government, after receipt of the amount from the Transport Corporation, credited to the Provident Fund Account of the concerned employees.
In those circumstances, the Madras High Court found that the payment is not in any way affected by sec. 36 of the Act. The payment so made is deductible under sec. 37 of the Act, being part of the business expenditure. In this case also, by virtue of operation of section 20 of Tamilnadu Maritime Board Act, the erstwhile Government employees of Tamilnadu Port Department became the employees of Tamilnadu Maritime Board. The Government clarified in the letter dated 21.11.1996 that the employees so allotted to the Tamilnadu Maritime Board will have the same tenure, remuneration, rights and privileges - if the claim could not be allowed u/s 36 of the Act, the same has to be allowed u/s 37.
Payment made by the assessee to the extent has to be treated as business expenditure in the hands of the assessee in view of the judgment of the Madras High Court in Kattabomman Transport Corporation Ltd.[1998 (9) TMI 2 - MADRAS HIGH COURT] - AO is directed to allow the claim of the assessee u/s 37. Appeal of the assessee stands allowed.
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2015 (8) TMI 1533 - SUPREME COURT
Conspiracy - Furnishing of false Search Report/NEC/legal opinion by panel advocates - intent to cheat the bank - facilitate obtaining of loan by the concerned persons - HELD THAT:- Taking into account the contents of the FIR, we are left with the impression that the said allegations are bald and omnibus and do not make any specific reference to the role of the appellants in any alleged conspiracy. In Central Bureau of Investigation versus K. Narayana Rao [2013 (7) TMI 588 - SUPREME COURT] to which one of us (Ranjan Gogoi, J.) was a party, it has been held by this Court that a criminal prosecution on the basis of such bald and omnibus statement/allegations against the panel advocates of the Bank ought not to be allowed to proceed as the same constitute an abuse of the process of the Court and such prosecution may in all likelihood be abortive and futile.
The High Court was plainly wrong in refusing to interdict the proceedings against the appellants - Appeal allowed.
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2015 (8) TMI 1532 - KARNATAKA HIGH COURT
Seeking direction for considering the proposal of the petitioner No.1 for rescheduling the loan - HELD THAT:- When the matter was heard on the earlier date, this Court was of the opinion that any consideration by the respondents would arise only if the petitioner makes a firm commitment to pay the substantial sum to the respondents towards the amount due and thereafter seek an opportunity for rescheduling the loan. In that light, if the amount is paid, all other considerations with regard to the examination by the respondents to provide accommodation for payment of the remaining amount under any one of its settlement schemes or any other rescheduling would arise.
The petitioner has filed an affidavit sworn to by the Managing Director of the first petitioner. Among the other statements made in the affidavit, in paragraph No.9 the Managing Director on behalf of the first petitioner has undertaken to pay a sum of ₹ 5 crores so as to enable consideration of their case for accommodation/ rescheduling by the respondents in accordance with law. The said amount is undertaken to be paid in two instalments.
Taking note of the affidavit that has been filed before this Court, an opportunity requires to be granted to the petitioner to comply with the undertaking and then seek for rescheduling of the loan from the respondents by also indicating the consequence of non-compliance. In this regard, it is made clear that if the first instalment is deposited as undertaken, the respondent would thereafter wait for the deposit of the second instalment and on the second instalment being deposited, the request to be made by the petitioner for rescheduling would be considered in accordance with law - the communication dated 26.10.2010 which is assailed in this petition and was kept in abeyance by this Court is directed to be kept in abeyance till the expiry of the dates as indicated above for payment.
Petition disposed off.
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2015 (8) TMI 1531 - PATNA HIGH COURT
Proceeding for forfeiture of property - restrictions on import of steel or steel utensils from Nepal - Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 - HELD THAT:- It is not very necessary to hold this question, because, the notice that Bharat Prasad and Shyam Babu have been detained in COFEPOSA for indulging in several schemes, that itself gives them jurisdiction. Further, in the notice under Section 6 of the “SAFEMA” itself, it is noticed that report in terms of Section 6 of the Act, having been received from the Income Tax Authorities, there was “reason to believe” that conditions existed for forfeiture of properties.
It is well established that existence of materials is a condition precedent for forming a “reason to believe”, but, it is not open for the court to go into the question of sufficiency of materials - In the present case, if we see the notice, which gives the fact for “reason to believe”, that Bharat Prasad and Shyam Babu had been detained under COFEPOSA and that a report about unexplained stocks of steel utensils had been received from the Income Tax Department. There was neither any inquiry nor any report nor any material suggested that the properties which were sought to be forfeited were illegally acquired properties.
The substantive restrictions on import of steel utensils was brought about in 19th May, 1969, and these purchases of properties, partition in the family in the year 1962, were all much much prior to that. In our view, applying the Wednesbury principle the decision of the Competent Authority and the Appellate Authority as well as the learned Single Judge, who has not gone into the question of denial at all, cannot be sustained.
Petition allowed.
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2015 (8) TMI 1530 - ITAT CHENNAI
Bogus Payment of commission - HELD THAT:- As observed that the assessee has failed to discharge its burden cast upon it with regard to payment of commission as a genuine payment. Therefore, the order passed by the ld. CIT(A) was confirmed and the appeal filed by the assessee was dismissed. Further, the assessee has not pointed out any apparent mistake in the order passed by the Tribunal. Accordingly, the miscellaneous petition filed by the assessee stands dismissed.
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2015 (8) TMI 1529 - SC ORDER
Dishonor of Cheque - it was held by High Court that The documents which are produced does not either support the stand that they are not involved in day today business of the first accused and that their resignation was much prior to the cheques were dishonoured - HELD THAT:- The special leave petitions are dismissed.
However, the petitioners are at liberty to apply for discharge and that will be considered by the trial court on its own merits.
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2015 (8) TMI 1528 - SC ORDER
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- As the tax effect is only ₹ 65,000/- approximately, this appeal cannot be entertained.
Appeal dismissed.
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2015 (8) TMI 1527 - SC ORDER
Maintainability of appeal - question of facts - appropriate forum - HELD THAT:- The matter pertains purely to a question of fact and no question of law is involved - the appeal cannot be entertained.
Appeal dismissed.
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2015 (8) TMI 1526 - SC ORDER
Duty demand - Suppression of facts - Place of removal - Creation of dummy unit to evade duty - Under valuation of goods - Invocation of extended period of limitation - Penalty u/s 11AC - Burden of proof - SSI Exemption - It was held by Tribunal that There was no suppression or misstatement of facts with an intention to evade payment of duty nor there was any evidence either documentary or otherwise comingforth to support the case of Revenue - HELD THAT:- There are no reason to interfere with the order passed by the CESTAT - appeal dismissed.
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2015 (8) TMI 1525 - SC ORDER
Waiver of pre deposit - Valuation of goods - dealers of Maruti Suzuki are charging price over and above the ex-showroom price from the ultimate customers of the vehicles - HELD THAT:- Four weeks’ time granted from today to comply with the orders and directions issued by the High Court.
The Tribunal is required to dispose of the appeals as early as possible.
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2015 (8) TMI 1524 - SUPREME COURT
Recovery of dues of deficit stamp duty - Section 54(1A) of the Gujarat Stamp Act, 1958 - HELD THAT:- It is manifest that the instrument of mortgage came into existence only after separate loan agreements were executed by the borrower with the lenders with regard to separate loan advanced by those lenders to the Respondent borrower. The mortgage deed which recites at length as to how and under what circumstances property was mortgaged with the security trustee for and on behalf of lender bank.
It is clear that Section 4 deals with single transaction completed in several instruments, whereas Section 5 deals only with the instrument which comprises more than one transaction and it is immaterial for the purpose whether those transactions are of the same category or of different categories - It appears from the trustee document that altogether 13 banks lent money to the mortgagor, details of which have been described in the schedule and for the repayment of money, the borrower entered into separate loan agreements with 13 financial institutions. Had this borrower entered into a separate mortgage deed with these financial institutions in order to secure the loan there would have been a separate document for distinct transactions. On proper construction of this indenture of mortgage it can safely be regarded as 13 distinct transactions which falls Under Section 5 of the Act.
It is held that the Respondent is liable to pay deficit stamp duty together with interest as directed by the revenue authorities - Appeal allowed.
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2015 (8) TMI 1523 - CESTAT MUMBAI
Revocation of CHA License - forfeiture of security deposit - HELD THAT:- The licence has been inoperative for more than 4 years. More than 2 years have passed since the revocation was set aside by the Tribunal. In such cases, where the question of livelihood is involved, in the interest of justice it would be only fair to restore the operation of the licence till the final verdict - The restoration of operation of licence will not prejudice the interest of Revenue, till final verdict of the Hon’ble High Court. We observe that in cases of Excise evasion, the factory of assessee is not shut down. Therefore in terms of equity, it is only fair and just that the licence is allowed to be operative in terms of the Tribunal’s Order.
The Commissioner, under Rule 41 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 is directed to give effect to our Order dated 18-3-2013 to secure the ends of justice.
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