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Showing 421 to 440 of 1359 Records
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2015 (4) TMI 941
Application for notification under section 801A(4)(iii) rejected - application for approval of the Information Technology Park under the Industrial Park Scheme, 2008 - Non fulfillment of conditions - revenue contended that it is apparent that they have included the area of common facility and infrastructure facility and it is at variance with the conditions set out in the Industrial Park Scheme, 2008 - Held that:- That there is difference between the commencing of a work or grant of such certificates enabling the commencing of development and provided in section 347. Thus, the development permission is sought under section 44 of the Maharashtra Regional Town Planning Act, 1966. Accordingly, it may be granted as contained in the certificate conditionally or unconditionally. Once such certificates are issued by a Competent Authority and certifying the work has having been completed or the premises being fit to be occupied on the same being completed, then, it is not for anybody else to question the contents. They shall be under such circumstances taken as conclusive evidence of the commencement and completion of the work. Unless these certificates are obtained by perpetuating a fraud or they can be termed as suspicious, we do not see how the authorities like the Central Board of Direct Taxes or the Commissioner can question the contents and moreso by exhibiting their ignorance completely. If they have a doubt about the genuineness or authenticity of such certificates, nothing prevents them from seeking clarifications from the Municipal or Planning Authorities.
Therefore, when the Architect has issued a certificate, based on which the project is undertaken and completed, then, we do not see what more is needed. The Board should have been aware of the fact that no project or construction for development can be undertaken or completed unless the plans for the same are furnished in advance and approval and sanction thereof is obtained from the Municipal Corporation. They have a full set of engineers and experts who apply their mind and sanction and approve the building construction plans and in terms of the Development Control Rules, 1991 which are in place. In such circumstances, we do not see what discrepancy can be found with the Architect's certificate. However, in relation to that as well, we do not find any application of common area for use as industrial park.
There is further stipulation that no industrial unit, along with the units of an associated enterprise shall occupy more than twenty-five per cent of the allocable area for industrial activity or commercial activity. Thus, what has to be understood with reference to the definition of term allocable as above in sub-para (2A) of para 2 of the Scheme takes care and disentitles a person from a notification if the industrial park is not owned by only one undertaking and industrial unit did not undertake activity defined in para 2(j) of the Scheme. To facilitate industrial activity that these conditions are incorporated or inserted. In such circumstances, we do not understand as to how para 4(2a) and 4(6) of the Scheme have been violated.
As a result of the above discussion, we set aside the order dated 21st November, 2014. The application of the petitioners dated 22nd February, 2011 together with all further details and specifications provided by them shall be considered afresh and requisite order in accordance with law be passed as expeditiously as possible and within a period of four weeks from the date of receipt of a copy of this order. - Decided in favour of assessee for statistical purposes.
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2015 (4) TMI 940
Jurisdiction of CIT(A) to make a reference to DVO to determine the FMV of the property - The Revenue insists on the fact that the power is being exercised only under Section 250(4) of the Act alone. - Held that:- Power to make further enquiry under Section 250(4) of the Act can only be in respect of issues which arise under the Act and for which specific provision have been made and the Assessing Officer has failed to do what he ought to have done. Thus, this power of enquiry though very wide has to find its source in one of the substantive provisions of the Act. It is in the context of substantive provisions that the CIT(A) has to examine whether Assessing Officer either did no enquiry at all or made insufficient enquiry. This power cannot be exercised dehors the substantive provisions of the Act. We find that the only provisions then existing to make reference to the DVO for the purposes of determining the FMV to compute the capital gains was found in Section 55A of the Act.
It is undisputed that the power of a CIT(A) is coterminus with that of the Assessing Officer. In fact, the CIT(A) can do what the Assessing Officer can do and has failed to do as held by the Apex Court in Commissioner of Income Tax v/s. Kanpur Coal Syndicate [1964 (4) TMI 18 - SUPREME Court]. Thus, in this case, even according to the Petitioner, the Assessing Officer could make a reference to the DVO but he failed to do so during the assessment proceedings. it is undisputed that during the assessment proceedings before him, the Assessing Officer could have made a reference to the DVO and yet he choose not do or failed to do. This failure or conscious decision of not referring to the DVO could be a subject matter of examination by the CIT(A), in an appeal before him. In this case, the issue of the FMV as on 1st April, 1981 was admittedly raised by the Petitioner in its appeal before the CIT(A). Thus the CIT(A) during the appellate proceedings before him can exercise powers under Section 55A of the Act and can make such enquiry in terms of Section 250(4) of the Act, either himself or direct the Assessing Officer to do so and report in terms of Section 250(4) of the Act.
Thus, the CIT(A) can make further enquiries into FMV as on 1st April, 1981 in view of the Assessing Officer failing to make such enquiry under Section 55A of the Act while passing the Assessment Order. The only other provision to make a reference to a Valuation Officer is Section 142A of the Act introduced by Finance (No.2) Act 2004 with retrospective effect 15th November, 1972. Section 142A of the Act deals with determination of the FMV of investments referred to in Section 69 or 69B of the Act or to the value of bullion, jewellery or other valuable articles referred to Section 69A or 69B of the Act or in respect of FMV of any property referred to in Section 56(2) of the Act. In this case, the reference which had to be made by Assessing Officer to the DVO is under Chapter IV - part (E) of the Act while the reference which is to be made under Section 142A of the Act is in respect of Chapter IV - part (F) and Chapter VI of the Act. Therefore, Section 142A of the Act would have no application to the present facts. It is a settled position that the provisions of Section 55A of the Act which were amended in 2012 by substituting the following words “as it variance with its FMV” for “is less than its FMV” is clarifactory and not retrospective as held by this Court in CIT v/s. Puja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT ]. Therefore, the Revenue did not contend that the provisions of Section 55A of the Act is retrospective. It, therefore, follows that where admittedly the value arrived at by the Registered Valuer of the land is more than its FMV, no jurisdiction is acquired by the authorities to invoke Section 55A of the Act.
We, therefore, find that the impugned notices dated 26th December, 2006 and 2nd February, 2007 of the DVO not having been issued under Section 55A of the Act according to the Revenue, are quashed and set aside. However, the CIT(A) is at liberty to exercise powers under Section 250(4) read with Section 55A of the Act, if he is of the opinion that the conditions for its invocation are satisfied after hearing the Petitioner's on the above aspect.
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2015 (4) TMI 939
Computation of Capital gain in respect of sale of residential house - Deduction u/s 54 of Income Tax Act, 1961 - Correct Section for claiming exemption not mentioned in the return - Held that:- We are of the considered opinion that even if a wrong section was mentioned by the assessee in the return, it was the duty of the Assessing Officer to assist the tax payer in a reasonable way and to provide the relief if due to the assessee. This attitude rather will help the Revenue in assessing the income correctly. A correct advice by the Department would inspire the confidence of public at large. Even identical guidelines/instructions have been issued from time to time by the CBDT to its Officers (Circular No. 14(XL-35) dated 11.4.1955 and letter No. F.81/27/65-IT(B) dated 18.5.1965).
If due to ignorance a wrong section has been mentioned by the assessee, it is the duty of the Assessing Officer to advise the assessee about the correct claim and also to assess the tax legitimately. This is the clear intention of the legislature. Without adverting further, we deem it appropriate to remand this file to the file of the learned Assessing Officer to examine the claim of the assessee afresh under provisions of section 54F of the Act, after providing due opportunity of being heard to the assessee. The assessee is also at liberty to furnish evidence, if any, to substantiate his claim.
So far as the invocation of section 50C of the Act is concerned, the ld. CIT(A) held that the Assessing Officer rightly took the fair market value of the properties as adopted by the stamp valuation authority for computation of capital gain. Section 50C was inserted by the Finance Act, 2002 with effect from 1.4.2003. As per sub-clause (a) to sub-section (2) to section 50C, where the assessee claims before the Assessing Officer that the value adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) exceeds the fair value of the property as on the date of transfer, the Assessing Officer may refer the valuation of the capital asset to the Valuation Officer. Since we have remanded the issue of section 54F of the Act to the file of the learned Assessing Officer, therefore, the Assessing Officer is directed to examine the claim of the assessee on this point also. - Appeal of the assessee is allowed for statistical purposes.
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2015 (4) TMI 938
Chit Fund Company - Disallowance of interest paid on deposits received from chit subscribers - Interest free advances given to sister concerns - AO disallowed interest expense on the basis of diversion of income for non-business purpose - CIT(A) disallowed interest expenses on account of non business expenditure - Disallowance u/s 14A - Disallowance of dividend paid to chit subscribers on non deduction of tax at source, treating it as Interest paid - Held that:- It is manifest from the relevant clause of the Byelaws governing the scheme of chit fund that the interest at the rate of 6% was payable by the assessee company on the instalments received in advance form the subscribers. Such interest was required to be calculated monthly and kept separately by the assessee, and accordingly in compliance with clause 5(d) of the Bye-laws, the amount of instalments received in advance from the subscribers was kept by the assessee separately in the form of bank deposits. In our opinion, receipt of advance instalments from the subscribers, payment of interest thereon at 6% per annum and investment of the amount of such advance subscriptions separately in the bank deposits in compliance with the bye laws of the chit fund scheme, thus was integral part of the business of the assessee of running the chit fund, and consequently, interest received by the assessee on such bank deposits constituted its business income.
The learned CIT(A), therefore, was not justified in treating such interest as income from other sources. Similarly, the learned CIT(A), in our opinion, was not justified in confirming the disallowance made by the Assessing Officer on account of interest paid by the assessee on the instalments received in advance from the customers of the chit funds, as the said interest paid by the assessee as per the scheme of the chit funds, clearly constituted expenditure incurred by it wholly and exclusively for the purpose of its business. According to us, there was a direct nexus between the interest paid by the assessee on the said instalments deposited by the members with its business of running a chit fund, and the same, therefore, was allowable as business expenditure, as rightly claimed by the assessee. We, therefore, delete the disallowance made by the Assessing Officer and confirmed by the learned CIT(A) on account of such interest and allow ground no.2 of the assessee’s appeal.
Disallowance u/s 14A - It is observed that investment in the range of ₹ 25 to 30 crores was made by the assessee company in the shares during the year under consideration and in order to manage the investment of this volume, which also involved taking decisions from time to time regarding change in the portfolio, certain expenditure was required to be incurred, which cannot be as low as 1 or 2% of the exempt dividend income, as claimed by the learned counsel for the assessee. Having regard to the facts of the case including especially the quantum of investment made by the assessee in the shares, the quantum of dividend income received during the year under consideration, etc., we are of the view that it would be fair and reasonable to estimate the expenditure incurred by the assessee for earning of exempt dividend income at ₹ 2,32,375 being 5% of the exempt dividend income. We accordingly restrict the disallowance made by the Assessing Officer and confirmed by the CIT(A) under S.14A to ₹ 2,32,375 and allow partly ground No.3 of the assessee’s appeal.
Disallowance of dividend paid to chit subscribers on non deduction of tax at source - As agreed by the learned representatives of both the sides, the issue involved in the appeal of the Revenue is squarely covered in favour of the assessee by the decision of the coordinate bench of this Tribunal in assessee’s own case [2012 (2) TMI 468 - ITAT HYDERABAD] for assessment year 2008-09 rendered vide order dated 24.2.2012, wherein a similar disallowance made by the Assessing Officer was held to be unsustainable, following the decision of the Madras high Court in the case of Bilahari investments (P)Ltd. [2006 (6) TMI 59 - MADRAS HIGH COURT], wherein it was held that the dividend distributed by the assessee did not part-take the character of interest and consequently, the assessee was not liable to deduct tax at source. Respectfully following these judicial pronouncements in assessee’s own case on similar issue, we uphold the impugned order of the learned CIT(A), deleting the disallowance made by the Assessing Officer under S.40a(ia) on account of dividend paid by the assessee to the chit subscribers for non-deduction of tax at source and dismiss the appeal of the Revenue. - In the result, appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed.
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2015 (4) TMI 937
Denial of refund claim - SAD - Notification no. 102/2007 dt.14.09.2007 - Claim filed with wrong jurisdiction officer - Held that:- notification does not requires the claim to be filed with the jurisdictional customs officer, who, in this case, was the proper officer at CFS, Mulund. By mistake, their consultant filed these claims in question at Dadri. The said claims were forwarded after a few months by Customs to ICD, Mulund. There is no dispute on the fact that the claims were filed within the stipulated time limit of one year but with ICD Dadri. There is also no dispute on the fact that the claims were received subsequently in CFS Mulund. I note that although notification 102/2007 requires refund claim to be filed with the jurisdictional Customs authorities. A similar issue came up before the Gujarat High Court relating to Notification no. 41/2007-ST wherein also the requirement of filing refund before the jurisdictional Customs officer was stipulated. - Following decision of Commissioner of Central Excise vs. AIA Engineering Ltd. [2010 (9) TMI 555 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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2015 (4) TMI 936
Taxability of Trust as a dealer under Kerala General Sales Tax Act, 1963 - Activities carried out by trust like dealing in scrap items etc., other than its statutory functions - Trust is a statutory authority constituted for rendering port services under the Major Port Trusts Act, 1963 - Held that:- Since the definition of “dealer” is wide to include transactions conducted in the course of business or otherwise, to answer the question posed before us, we do not deem it necessary to examine the nature of activity carried out by the assessee-Port Trust in as much as whether it falls under the definition of “business” under the Act or not.
In the Madras Port Trust case [1999 (3) TMI 500 - SUPREME COURT OF INDIA], this Court has laid emphasis on the expression "carrying on business" in the context of the TN Act, and it is in that context it has reached the conclusion that the Madras Port Trust is not engaged in any business which is a necessary prerequisite under the definition of a “dealer” under the TN Act. In the Act herein, the necessity of a person carrying on business to be placed under the definition of “dealer” is absent. The definition expressly includes the persons who whether in course of business or not engage in the sale or transfer of goods and thus, does not mandate the requirement of conducting business for a person to be exigible under the Act. The contradistinction between the definition of “dealer” under the TN Act and the Act makes it abundantly clear that the observations of this Court in Madras Port Trust case, which refer to the definition of TN Act and interprets it to reach the conclusion of the Trust not being exigible to tax, cannot be accepted in the instant case.
It is further pertinent to notice that the TN Act was amended by Act 22 of 2002 whereby explanation (3) was added to definition clause 2(g) of the TN Act. By the said amendment the Madras Port Trust has now been declared as a dealer under the TN Act. Explanation (3) states that if the port trust disposes of any goods including unclaimed or confiscated or unserviceable or scrap surplus, old or obsolete goods or discarded material or waste products whether by auction or otherwise directly or through an agent for cash or for deferred payment or for any other valuable consideration, notwithstanding anything contained in the TNGST Act, it shall be deemed to be a dealer for the purpose of the Act. Therefore, by amendment act the legislature has specifically brought in Port Trust also within the definition of "dealer" under Section 2(g) of the Act and thus, the substratum of the judgment in Madras Port Trust case has been lost.
In light of the foregoing discussions, we are of the considered opinion that the activities of the assessee in respect of buying, selling, supplying or distributing goods, executing works contract, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether in course of business or not, would fall within the purview of Section 2(viii) of the Act. Hence, the assessee-Port Trust would fall within the meaning of "dealer" under Section 2(viii) of the Act and is consequently assessable to tax under the Act. - Decided against the appellant.
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2015 (4) TMI 935
Validity of circular directing to reverse the credit to the extent of waste - TNVAT - Demand of VAT on the invisible loss of yarn emerging during manufacturing process - Refund was vat credit was claimed on export - Circular No.22/2011 dated 20.10.2011 - Held that:- Head of the Department is entitled to give administrative instruction, which shall be binding on all his subordinates. The problem would arise only when certain subordinates without due application of mind mechanically apply the circular/guideline/instruction and proceed to take action unmindful of the factual and legal position. There might be cases where the administrative head will issue instructions to the subordinates for the day-to-day conduct of the affairs of the establishment. But in the instant case, the subordinate officers as well as the Commissioner are all authorities functioning under a taxation statute and each one of them exercising quasi judicial function. Therefore, even though the Commissioner may be the Head of the Department, the manner, in which a particular return is to be assessed or a refund has to be granted or refused cannot be issued in the form of guideline or instruction to the Assessing Officer. - assessing officer cannot be solely guided by the impugned guidelines and has to exercise his quasi-judicial powers. In any event there is no cause of action to challenge the impugned circular.
Question of quashing the impugned circular is unnecessary in the light of the stand taken by the respondents that the impugned circular is not statutory and at best could serve as guideline. A note of caution is added by observing that no Assessing Officer or Adjudication Authority exercising powers under the VAT Act or Rules framed thereunder can blindly follow the circular while considering a return or refund claim. Accordingly the challenge to the impugned circular is held to be unnecessary since the circular is a non-statutory circular and is in the nature of guideline and the prayer for quashing the circular is rejected
Whether Section 18 of the TNVAT Act is a Scheme by itself or whether the benefit to a dealer under Section 18 is subject to the conditions prescribed under Section 19(9) of the TNVAT Act - Held that:- Section 18 of the VAT Act is not an independent provision, not a scheme by itself and forms part of the statute. Consequently, the Input tax credit or refund, which is claimed under Section 18 of the VAT Act is subject to restrictions and conditions under Section 19 of the Act. - Decision in the case of Ashoka Marketing Ltd., and another Vs. Punjab National Bank and others [1990 (8) TMI 393 - SUPREME COURT] followed.
Registered dealer, who claims for refund of the input tax under Section 18(2), which itself in the nature of credit has to first satisfy that the circumstances set out in Section 19(9) are not attracted. Therefore, it is not sufficient for the registered dealer to merely state or show that the goods were used in the manufacture and there is nothing more to be done by him and he would be entitled to the entire credit of the tax paid by him on the input by way of refund. The said contention cannot be accepted in the light of the discussion made above.
Therefore whether it is a process loss or manufacturing loss or destruction or theft, loss while process loss or manufacturing loss or destruction or theft, loss while in storage, damage in transit or destruction at some intermediary stage of manufacture are to be established before the assessing officer by the dealer and to satisfy the assessing officer that loss of the goods purchased is not covered under any one or more of the contingencies under Section 19(9) of the Act.
The Assessing Officers appear to be have been impulsive after issuance of the impugned guideline partly precipitated by the dealers since they did not avail opportunity granted by the Honourable Division Bench before whom they agreed to demonstrate their manufacturing process before their concerned Assessing Authority that there is no loss of material. Be that as it may, the earlier round of litigation did not decide the merits of the issue. Therefore, the same cannot be an embargo for the petitioners, who may be the members of the earlier writ petitioner association and in any event, there was no finding on the legal issues while deciding the earlier writ petitions or that matter in the Writ Appeal.
Going by the object of the enactment, the Assessing Officer is bound to examine the refund claim under Section 18 in accordance with the procedure stipulated for availing input tax credit by applying Section 19 of the VAT Act and it is only then, the Authority can pass an order on a refund claim. Therefore, the processing of refund application under Form W is in effect akin to an assessment proceedings since the benefit which flows under claim in Form W, is in effect, the amount which the dealer avail as refund would be a credit if the transaction was not a zero rated sale. - Assessing Officers were not justified in adopting uniform percentage as invisible loss and calling upon the dealer to reverse the refund/input tax credit availed to that extent. Consequently, all notices issued to the petitioner for reopening and all consequential order passed reversing the input tax credit to the extent of either 4% or 5% or adhoc basis stands set aside. However, liberty is granted to the concerned Assessing Officer to issue show cause notices to the petitioners clearly setting out the circumstances under which they propose to revise or call upon the petitioner to reverse refund sanctioned and after receiving their objections shall proceed in accordance with law.
Section 18 of VAT Act is subject to the restrictions and conditions under Section 19 of VAT Act. Therefore, if in a given cases of wrong availment, Section 19 provides for reversal. Therefore, it is incorrect to state that once the refund is granted, reopening does not arise. Such interpretation is not in consonance with the scheme of the Act; more so, when what is given to the petitioner is concession or set-off. - Decided partly in favour of assessee.
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2015 (4) TMI 934
Waiver of pre deposit - It is contended by the petitioner that the Tribunal has ignored from consideration the strong prima facie case in favour of the petitioner - O.C. Stamps were not affixed on Form E - Held that:- petitioner has placed reliance on a Division Bench judgment of this Court reported in [2013 (6) TMI 28 - ALLAHABAD HIGH COURT] Mawana Sugars Ltd. Vs. Deputy Commissioner, Commercial Tax and others. It is further contended that the petitioner is in debt to the tune of ₹ 66,78,59,922/- having taken loan from the District Co-operative Bank Ltd., Lakhimpur Kheri. As such the financial condition of the petitioner is not such that it may be able to deposit any amount. It is contended that the relevant facts for consideration of the application for waiver having not been considered, the impugned order suffers from non application of mind. It is further contended that the petitioner Co-operative society is managed and controlled by the State of U.P. and being its instrumentality, the Tribunal ought not to have insisted on deposit of any amount as a condition precedent for consideration of stay application. - Impugned order dated 29.8.2014 passed by the Tribunal is quashed - Decided in favour of assessee.
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2015 (4) TMI 933
Denial of Cenvat credit - Contravention of Rule 57 AB, 57 AC and 57 AE of the Central Excise Rules, 1944 - Availment of Cenvat credit without receiving goods - Held that:- The respondent, unearthed a fraudulent availing of MODVAT/CENVAT credit based upon fraudulent GR receipts and other documents issued by Shri R.K.Gupta, Proprietor of R.K.Enterprises. The respondent recovered fraudulent stamps, documents, GR receipts, books and other material from the premises of Shri R.K.Gupta, who thereafter made a statement admitting to the bogus transactions. It would also be appropriate to point out that Shri R.K.Gupta did not possess any manufacturing facility or any godown from where he could supply goods. The appellant has admittedly availed CENVAT credit on goods received from Shri R.K.Gupta.
It was held by tribunal that "there is no dispute about the fact that GRs under which the goods had been dispatched by the registered dealer M/s R.K.Enterprises are bogus and had been fabricated by him. In fact, the owner of one of the truck which was used for transportation of the goods covered under invoice No.241 & 258 in her statement has clearly stated that she is not aware of the transportation of any goods of M/s R.K.Enterprises.” I also find that appellant has not challenged this order of the Tribunal. Commissioner (Appeal) has held that burden of proof that goods were received and used for manufacture of final product lies on the appellant and same has not been discharged by them. In view of the fact that the order of the Tribunal was not challenged and also the fact that appellant did not prove receipt and use of the goods in the manufacture of find products, there is no infirmity in the order passed by the Commissioner (Appeal). Accordingly I uphold the order in appeal and reject the appeal of the appellant.”
The appellant having failed to prove to the satisfaction of the authorities receipt and consumption of goods received from Shri R.K.Gupta, we have no hesitation in holding that no question of law much less the question of law framed by the appellant arises for adjudication. - Decided against the assessee.
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2015 (4) TMI 932
Clearance of Aviation Turbine Fuel from Unregistered export warehouse - Amended Notification No. 47/01-CE (NT) dated 26/6/01 allows removal of petroleum products without payment of duty for export warehousing - Held that:- The appellant have a warehouse for storage of various petroleum products including ATF at Shakur Basti. Beside this, BPCL and HPCL also have similar warehouses at Shakur Basti for the purpose of export. During period prior to 06/9/04, non-duty paid petroleum products including Aviation Turbine Fuel were being received in these warehouses and while the Aviation Turbine Fuel was being supplied as export under bond under Rule 19 to Foreign going aircrafts, other petroleum products were being cleared on payment of duty. During the period prior to 6/9/04 Notification No. 46/01-CE dated 26/6/01 permitted clearances of any excisable goods by a manufacturer without payment of duty to a bonded warehouse for export there from there under Rule 19 subject to condition that the warehouse is located at the approved station and the same has been approved by the Commissioner. This notification issued under Rule 20 (1) of the Central Excise Rules, 2001 was applicable to all excisable goods including the petroleum products and the same is still in force and has not been amended. Notification No. 47/01-CE (NT)dated 26/6/01 also issued under Rule 20 (1) of the Central Excise Rules, 2001 permitted removal of only certain excisable goods mentioned in the table annexed to this notification, without payment of duty to a bonded warehouse or from one bonded warehouse to another bonded warehouse.
By amending Notification No. 17/04-CE (NT) dated 04/9/04 Sl. No. 1 of the table to the Notification No. 47/01-CE (NT) was deleted as a result of which w.e.f. 06/9/04 the petroleum products manufactured by refinery could no longer be cleared without payment of duty to a bonded warehouses. However, as mentioned above, Notification No. 46/01-CE (NT) still continued and has not been amended in any manner. In other words w.e.f. 06/9/04, while the oil refineries could no longer clear the petroleum products without payment of duty to a bonded warehouses for storage there, they could still clear the petroleum products for the purpose of export to a bonded warehouse for export from that warehouse. It is for this reason that the Board vide Circular No. 798/31/04-CX dated 08/9/04 clarified that while the facility of removal of petroleum products without payment of duty from a Refinery to a bonded warehouse or from one bonded warehouse to another bonded warehouse has been withdrawn w.e.f. 06/9/04 vide Notification No. 17/04-CE (NT) dated 04/9/04, the facility of removal of petroleum products without payment of duty for export warehousing continues to be available under Notification No. 46/01-CE (NT). This position was reiterated again in the Board s Circular No. 804/1/2005-CX. dated 04/1/05 and in this Circular the Board also clarified that for the purpose of exports, separate storage of the duty paid and non-duty paid petroleum products is not required subject to condition that tank wise account is maintained about the receipt and discharge of duty paid and non-duty paid petroleum products.
The only objection of the Department in this case is that the Shakur Basti Warehouse is not approved by the Commissioner and separate registration as intermediate warehouse has not been obtained. In our view this objection is without any basis, as we find that immediately after amendment to Notification No. 47/01-CE (NT) by Notification dated 04/9/04, the appellant under their letter dated 13/9/04 addressed to the Commissioner and had requested for converting the existing bonded warehouse at Shakur Basti as export warehouse under Rule 20 for export of ATF and in response to this Circular, the Department had clarified that since they are already holding a Central Excise registration No. AAAC 116814XM001 with the Division, the same registration number would be used for intermediate export warehouse for export clearances. Thus this letter clearly shows that the required registration as intermediate export warehouse has already been granted to the Shakur Basti Warehouse. In view of this, the allegation in the show cause notice that Indian Oil Corporation, Shakur Basti, New Delhi is not a registered export warehouse and therefore is not entitled to receive duty free ATF from IOC s Refinery at Panipat is absolutely without any basis. In view of this, we hold that the impugned order is not sustainable. - Decided in favour of appellant.
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2015 (4) TMI 931
Rerolling process of the hot roll flat bars - Classification of process as hot rolling or cold rolling - Manufacturing activity or not - Held that:- Merely on the basis on the types of customers who were buying the products or the statements of the suppliers of the rolling stands that the rolls supplied by them were suitable for cold rolling, it cannot be concluded that the product of the appellant was a cold roll product. In terms of the HSN explanatory notes, if a hot rolled product has been subjected to very light cold rolling process known as skin pass or pinch pass without significant reduction of thickness, the process does not result in change of the character of the finished product as hot roll product. In this case, the stand of the appellant from the very beginning has been that there has not been any significant change in thickness. No evidence has been produce that this claim of the appellant is not correct.
The judgment of the tribunal in the case of BharatBhai B. Gala vs CCE Ahmadabad [2007 (6) TMI 11 - CESTAT,AHMEDABAD]cited by the Ld. DR is not applicable to the facts of this case, as the dispute in this case is as to whether the process undertaken by the appellant is process of hot rolling or cold rolling and this point has to be decided on the basis of the criteria prescribed in this regard in the HSN explanatory notes. No tests have been done to establish as to whether the Appellant s final product has the characteristics of cold rolled product. In view of this, we hold that the impugned order is not sustainable. - Decided in favour of appellant.
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2015 (4) TMI 930
Benefit of SSI exemption Notification No 9/2003-CE dtd 1.3.2003 - assessee cleared their products Zip Fasteners bearing brand name of MIG, GVM and TLR belonging to M/s Madura Coats Pvt Ltd to their own central depot - Held that:- Assessee manufactured and cleared Zip fasteners with sliders bearing the brand /trade name MIG, GUN, TLR belonging to Madura Coats Pvt Ltd. - it is clearly evident from the record that the appellant cleared Zip fasteners with sliders, which were bearing the brand /trade name of Madura Coats Pvt Ltd. Para 4 of SSI exemption notification No 9/2003 provides that the exemption contained in this notification shall not apply to the specified goods bearing a brand name or trade name, whether registered or not, of another person. So, it is to be considered as to whether the goods were cleared by the assessee bearing any brand name of other person. - in the earlier SSI exemption Notification No. 175/86, 1/93 it was specifically mentioned where a manufacturer affixes the specified goods with a brand name , which are absent in the present SSI exemption notification. Admittedly, the assessee had cleared the specified goods bearing brand name of other person. - case of Kohinoor Plastics Ltd (2005 (8) TMI 115 - SUPREME COURT OF INDIA) would squarely apply in the present case. Therefore, we do not find any merit in the submissions of the Ld Advocate. - There is no material available of suppression of facts with intent to evade payment of duty. So, the Commissioner (Appeals) rightly set aside the penalty. - there is no reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.
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2015 (4) TMI 929
Rejection of rebate claim - Pan Masala Packing Machines - Abatement claim on pro rata basis - Held that:- From the language of Rule 10 it is clear that for claiming abatement under Rule 10, there must be total stoppage of the machines which have to be sealed in such a manner that same cannot be operated and besides this, there should be no clearances of any specified goods during the period of stoppage of production for which abatement has been claimed. From the objectives of notifying the goods for assessment and collection of duty based on capacity of production, as mentioned in Section 3A(1) of the Central Excise Act, 1944 and from perusal of the Rules framed under Section 3A(1), it is clear that these rules Shave been framed keeping in view the widespread duty evasion by Pan masala/Gutka manufacturers and the provisions of various rules of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 including Rule 10 thereof must be seen in this background.
The interpretation of Rule 10 sought by the appellant would be not only against the provisions of this rule but would also be against the smooth functioning of the system of collection of duty from Gutka/Pan masala units, as envisaged under these Rules. It appears that it is not the case of the appellant that during the period of abatement, there was total stoppage of production and clearances. - There is very much clear that there should be complete stoppage of the machine which is not in the matter in hand. Therefore, I find that both the lower authorities have concluded correctly that the appellant has not satisfied the condition of the grant of abatement as production in the factory of the notified goods was in operation. Therefore, I hold that the appellant is not entitled for abatement. - Decided against assessee.
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2015 (4) TMI 928
Denial of CENVAT Credit - Bogus invoices - Held that:- Both the authorities below failed to appreciate that the Department had not provided the relied upon documents. On perusal of the Adjudication order, I find that the Adjudicating authority observed that appellants were directed to collect the copies of the relied upon documents from DGCEI office. - Adjudicating authority directed the appellants to collect the documents from DGCEI office, who has not supplied the documents to them, as contended by the respondents. But, the Commissioner (Appeals) observed that the documents were supplied with the show cause notice, which is totally mis-conceived, inconsistent and contradicting. The ld.Advocate Shri S.J. Vyas fairly submit that they could not file the reply to the show cause notice as the documents were not supplied to them. I agree with the submissions of the learned Advocate that if the Department fails to supply the relied upon documents, it is difficult to file the reply to the show cause notice and therefore, the impugned orders are not sustainable on this ground alone. - Matter remanded back - Decided in favour of assessee.
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2015 (4) TMI 927
SSI exemption - Use of old shareholder's brand name - penalty under Section 11AC - interest under Section 11AB - Held that:- Whole basis of the case that the brand name in question were earlier used by same company under different management and thereafter due to change of management the brand name should have been transferred and in absence of that it cannot be said that brand name belong to the respondent. As far as this basis of demand, we completely disagree with the Revenue that admittedly there is no change in the identity of the company, it is only a change of management. Change of management does not make in change of identity of the company. As regard private limited company it is the company who holds the identity and not share holders, therefore company remained intact irrespective of change of share holders. - In this position if the brand name were owned and used by the same company under the old management there is no need of transfer of brand name from old management to new management because brand name is not owned by the management but it is owned by the company only. - when brand names belong to company how it could be transferred from earlier shareholder to present shareholder. This finding of the Ld. Adjudicating authority is absurd and beyond common sense. In view of our discussion we are of the considered view that the order of the Ld. Commissioner (Appeals) is proper and legal which does not require any interference, therefore the same is upheld - Decided against Revenue.
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2015 (4) TMI 926
Valuation of goods - manufacture of acetylene gas - appellant also manufacture the same product on job-work goods, arrived at the assessable value on the basis of sale price provided by their principal, M/s. BOC Ltd. and discharged the excise liability on the said value - Revenue contends that sale price of the goods manufactured and sold by the appellant to the independent buyer (other than job worker) should be applied for the purpose of valuation of job-work goods also - Held that:- The appellant is manufacturing acetylene gas on job-work basis where the principal M/s. BOC Ltd. is supplying the inputs. The appellant is paying excise duty on the sale-price at which the goods is sold by their principal, M/s. BOC Ltd. As regards the valuation of job-work goods, it is settled by the hon'ble Supreme Court in the case of Ujagar Prints (1988 (11) TMI 106 - SUPREME COURT OF INDIA) that the valuation of job-work goods should be arrived at by taking the cost of raw material plus job-charges including profit of the job-worker. In the present case, the appellant is applying the sale value of the principal and it is not under dispute that the said value is lower than the value computed in terms of hon'ble apex Court judgment in Ujagar Prints (1988 (11) TMI 106 - SUPREME COURT OF INDIA). So long as this factual position is not in dispute, we find that adoption of the value by the appellant is absolutely legal and correct. - Decided in favour of assessee.
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2015 (4) TMI 925
Prohibition on trade - Denial to operate as courier service - cost recovery charges - It is stated that the appointment of the custodian for handling of courier cargo is a precondition prescribed by statute for allowing courier operations and hence, the courier operations can be allowed only after the statutory requirement is fulfilled. - held that:- present stalemate is only because of the communication gap between the third respondent and the first respondent regarding cost recovery charges. The petitioners are penalised on account of the same. Though it is imperative that the third respondent should comply with the mandatory conditions prescribed under Regulation 5 of the Handling of Cargo in Customs Area Regulations 2009, respondents 1 and 2 should not have prevented the petitioners from conducting their operations. - Decided in favour of appellant.
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2015 (4) TMI 924
Impoundation and confiscation of goods - Export of 2496MT sugar - 'Export Release Orders' not obtained - export obligation under 'Advance Authorization' scheme - Imposition of penalty - Held that:- assessee has hopelessly failed to establish the physical incorporation of the imported input in 2006 in the exported sugar in the year 2010. The Assessing Authority and the Tribunal appears to be correct in recording a finding that the appellant has violated the provisions of Customs Act, in exporting sugar without there being any 'Export Release Order' in the facts of this case - tribunal has been more-than fair in reducing the penalty to nearly 1/10 of the original penalty. There is no scope of the penalty being reduced any further by this Court. - Decided against assessee.
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2015 (4) TMI 923
Maintainability of petition - Alternate remedy - Held that:- When an alternative remedy is available, more particularly, in the cases of fiscal nature, invoking of the jurisdiction under Article 226 of the Constitution of India, is not permissible. In fact this Court on 03.02.2015 after referring to the above decisions has dismissed a writ petition in [2015 (2) TMI 437 - MADRAS HIGH COURT] on the very same ground and in [2015 (2) TMI 429 - MADRAS HIGH COURT] - writ petition is not maintainable
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2015 (4) TMI 922
Application for winding up - Doctrine of equitable set-off - Company deposited entire disputed sum in court - Difference of Opinion - Matter referred to Hon'ble Chief Justice - Held that:- Controversy - Whether Winding up petition can be accepted on the ground of principle of equitable set-off ? - Whether Winding up petition can be accepted even if particularly when the company deposited the entire sum in Court.
Since we could not be ad idem on the ultimate result we direct this matter to be placed before the Hon’ble Chief Justice for appropriate assignment of the controversy to a third judge to have His Lordship’s views on the issue so that we could ultimately pass an order on the majority decision.
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