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Showing 441 to 460 of 1666 Records
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2017 (10) TMI 1227
Rectification of mistake - both the Commissioners as well as the CESTAT has not passed any order with regard to the levy of penalty - Held that: - Since there was no suppression or concealment on the part of the applicant, therefore the imposition of penalty is not justified. Moreover since the demand itself is not sustainable to a large extent, therefore there can be no case for imposition of penalty and therefore, I allow the application and hold that the appellants are not liable to penalty and the amount of penalty which is imposed in the Order-in-Original is dropped - ROM application allowed.
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2017 (10) TMI 1226
Clandestine removal - clearance of processed MMF under the cover of 139 challans - Held that: - In view of the fact that the Director has not specifically admitted that the goods were removed clandestinely from the factory and in view of the fact that the challans contained the name of the consignee as ‘self’, it can be concluded that the charges of clandestine removal cannot be levelled against the appellant with regard to the goods covered under 139 challans - demand set aside.
Removal of the goods under the cover of 22 challans - Held that: - In view of the fact that the Director of the Company has admitted that the goods were removed without payment of Central Excise duty, the Central Excise duty demand confirmed in respect of clearance of disputed goods in respect of 22 challans is proper and justified and the impugned order cannot be interfered with at this juncture.
Penalty - Held that: - Since the adjudicating authority has not given the option to the appellant to deposit the reduced amount of penalty of 25%, such option should be available to the appellant. Accordingly, the adjudicating authority is directed to quantify the amount of reduced penalty, which is required to be paid by the appellant.
Personal penalty on the Director of the appellant company - Held that: - the department has not specifically brought on any evidence, showing his involvement in clandestine removal of goods - provisions of Rule 26 of Central Excise Rules, 2002 cannot be invoked for imposition of personal penalty - penalty set aside.
Appeal allowed in part and part matter on remand.
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2017 (10) TMI 1225
CENVAT credit - credit taken was disputed by the Department on the ground that the inputs used in the trial production were converted into waste and scrap; and that since the goods were not used for manufacture of finished goods - Held that: - As per the statutory provisions, taking of Cenvat Credit is subject to the condition that the inputs and capital goods are received in the factory of manufacture of final product. In this case, the fact is not under dispute that the disputed goods were received in the factory and intended for use in the manufacture of excisable final product.
Since the appellant commenced its manufacturing activities on trial basis and commissioning of its plant facilities, those goods were used in such trial run. Accordingly, after use in the manufacturing processes, the inputs became waste. Since, the goods have been put to use for the intended purpose and admittedly received in the factory of manufacture, the requirement of Rule 3 ibid has been duly complied with for the purpose of availment of Cenvat credit.
Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 1224
CENVAT credit - time limitation - maalfide intent - Held that: - the Department took more than 3 and half years for issuing the show cause notice from the date of reply to the spot Memo - no iota of evidence was brought on record to show that the appellant had indulged into malpractices or had fraudulent motive in availment of Cenvat Credit in respect of non-availability of subject goods in the factory - Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 1223
Rectification of mistake - application for change in the cause title of the appeal - Held that: - application for change in the cause title of the appeal inasmuch as the appellant, who was earlier known as M/s Met Trade India ltd., is now, Metenere Ltd., w.e.f. 21.11.2013 - In view of the fact of change in the company's name, we allow the miscellaneous applications and replace the old name of the appellant with the new name.
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2017 (10) TMI 1222
Penalty - Duty paid under protest before issaunce of SCN - NCCD - EC - SHEC - whether the penalty is imposable upon the assessee u/r 25 of the CER, 2002, read with section 11AC of the CeEA, 1944 for violation of provisions of Rule 4 and 8 of CER, 2002 and the provision of N/N. 50/2003, with intent to payment of duty - Held that: - Hon’ble Bombay High Court in the case of CCE Mumbai Vs. Hindustan Petroleum Corporation Ltd. [2016 (12) TMI 1269 - BOMBAY HIGH COURT] observed that ‘in case of non-payment or short-payment of duty, penalty gets automatically attracted and authority had no discretion - the issue is relating to National Calamity Contingent Duty (NCCD); Education Cess, and Secondary and Higher Education Cess which was neither created by the Central Excise Act, 1944, nor a subject matter of Ministry of Finance - penalty sustained - appeal dismissed - decided against appellant.
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2017 (10) TMI 1221
Valuation - includibility - the cash discounts on the goods sold to the dealer from depot/branches directly from factory at the time of clearance of the said goods - Held that: - an identical issue has come up before this Tribunal in the assessee-Appellants’ own case M/s Kisan Irrigation Ltd. Vs CCE, Indore [2016 (1) TMI 696 – CESTAT, New Delhi], where it was held that As relying on Purolator India case [2015 (8) TMI 1014 - SUPREME COURT ] it is held that the appellants are entitled for claiming deduction of cash discount from the transaction value on the clearances made from the factory to all the customers - appeal allowed - decided in favor of appellant.
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2017 (10) TMI 1220
Clandestine removal - DMO - Whether duty have been rightly demanded on the 71 drums of DMO lying in the factory premises on the date of inspection/panchnama dated 27/07/2006?
Held that: - there is lack of sufficient material on record to support the contention of the Revenue that the DMO so found and seized was in marketable stage - Revenue have failed to investigate further on the assertions and explanations given by the appellant that the DMO was not marketable but requires further stages of processing to make it marketable and also insisted on test report, which was not done and as such, there is lack of material to support the allegations in the show cause notice - ALSO, DMO was found inside the factory premises and there was no action and/or attempt on the part of the appellant to remove the same clandestinely.
Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (10) TMI 1219
Rescinding of sales tax exemption - The Government of Gujarat had provided certain exemptions from payment of sales tax in case of certified manufacturers registered under the Khadi Board. On the purchases also, the petitioner was subject to certain condition not liable to pay tax. These exemptions were granted under the Gujarat Sales Tax Act. With the replacement of the State Sales Tax Act by the VAT Act w.e.f. 01.04.2006, such exemptions stood withdrawn.
Held that: - section 41 of the Act pertains to remission of tax penalty or interest. It was in exercise of powers under sub-section (1) of section 41 that the Government had issued a notification dated 27.02.2009 granting remission of whole of the tax payable on the specified products by a certified manufacturer on the sale of such goods. This was subject to limits imposed in terms of condition No.1 to the notification. Condition No.3 provided that the said certified manufacturer would issue tax invoice or retail invoice in accordance with the provisions of the VAT Act. In essence, the Government desired to waive tax component on sale of such specified goods by the certified manufacturer dealers.
In whatever manner the accounting treatment may be given to such tax component, the loss to the ex-chequer would be limited to 4+1% of the tax which, under the said notification, Government had decided to forgo. If the contention of the Assessing Officer is that the assessee having shown to have collected the tax from the purchaser and not deposited with the Government refund by granting refund of such amount, the Government revenue would suffer double loss, such contention is plainly erroneous.
The decision of the Assessing Authority to deny the tax remission to the petitioner is set aside. The Assessing authority shall pass fresh order granting such benefit to the assessee with further statutory benefits if any available - petition allowed by way of remand.
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2017 (10) TMI 1218
Appeal against draft order maintainability - Held that:- We notice that AO passed draft assessment order pertaining to the assessment year under consideration on 19.12.2011. Thereafter the AO passed final order on 24.2.2012. The assessee challenged draft order passed by the AO and the Ld. CIT(A) passed detailed order dated 27.11.2012. Thereafter the Ld. CIT(A) again passed order dated 26.2.2013 holding that appeal against draft order is not maintainable. Since the Ld. CIT(A) has nullified his own order, which is under challenge, these cross appeals have become infructuous. Hence, we allow the application dated 11/08/2017 and dismiss both the appeals being infructuous.
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2017 (10) TMI 1217
Interim Stay seeked - Held that:- The instant case is one of search and seizure and pertains to valuation of the property and certain records were relied on by the Assessing Officer to make the subject assessment. Therefore, this Court is of the view that the petitioners should be put on condition for being entitled to grant of stay. It is submitted by the learned counsel that total tax liability in respect of the four petitioners is ₹ 3,03,28,295/- and interest of revenue would be safeguarded if 15% of the tax demand is directed to be paid by the petitioners. 15% of the said amount works out to ₹ 45,49,244/- out of which 8 lakhs has already been recovered. Hence, there will be a direction to the petitioners to pay ₹ 37,49,244/- for being entitled to a grant of stay. The payment shall be effected in one lump sum or installments within a period of 12 weeks from the date of receipt of a copy of this order.
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2017 (10) TMI 1216
Addition on account of interest on debit balance of the partners capital account by invoking of Section 40(b)(iv) - Held that:- The partners were required to pay interest on the debit balance at the same rate which was applicable on their credit balance. In the present case, it is not in dispute that there was debit balance in the account of the partners, however, the said debit balance has been considered by the AO on the last date of the year. In my opinion, the interest is to be charged on day to day basis and not on the balance at the end of the year. In the present case, since there is clear provision in the partnership deed for charging the interest on the debit balance of the partners and the assessee is also paying interest on the credit balance to the partners. Therefore, do not see any infirmity in the impugned order passed by the ld. CIT(A). However, the AO is required to work out the interest to be charged on the debit balance on day to day basis and not at the end of the year, for this limited purpose, the issue is restored back to the file of the AO.
Disallowance of the telephone expenses, car repairs & maintenance as well as care car petrol expenses - Held that:- In the present case, the assessee admitted before the ld. CIT(A) that no separate telephone or vehicles were there for the personal use and that no log-book was maintained for running of the cars, in such circumstances, the personal use by the partners and the employees cannot be ruled out in such type of cases. However, the disallowance made by the AO and sustained by the ld. CIT(A) appears to be on higher side. I, therefore, considering the totality of the facts and to meet the ends of justice, deem it appropriate to reduce the disallowance to the extent of 10% of expenses incurred on telephone, car repairs & maintenance and car petrol instead of 1/8th made by the AO and sustained by the ld. CIT(A).
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2017 (10) TMI 1215
Deduction u/s 10BA - income from the duty draw back and sale of export license qualification as profit derived by an undertaking from the export out of India of eligible articles or things - Held that:- The view taken by the Supreme Court in the case of Commissioner of Income-Tax V/s Meghalaya Steels Ltd. [2016 (3) TMI 375 - SUPREME COURT] held that Shri Radhakrishnan is not correct in his submission that assistance by way of subsidies which are reimbursed on the incurring of costs relatable to a business, are under the head “income from other sources”, which is a residuary head of income that can be availed only if income does not fall under any of the other four heads of income. Section 28(iii)(b) specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income tax under the head “profits and gains of business or profession”. If cash assistance received or receivable against exports schemes are included as being income under the head “profits and gains of business or profession”, it is obvious that subsidies which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head “profits and gains of business or profession”, and not under the head “income from other sources”.
For the reasons given by us, we are of the view that the Gauhati, Calcutta and Delhi High Courts have correctly construed Sections 80- IB and 80-IC. The Himachal Pradesh High Court, having wrongly interpreted the judgments in Sterling Foods and Liberty India to arrive at the opposite conclusion, is held to be wrongly decided for the reasons given by us hereinabove.
Therefore, the matter is remitted back to the AO to decide the same in the light of aforesaid decisions. It is made clear that we have not expressed anything on merits.
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2017 (10) TMI 1214
Entitlement to exemption u/s 10(37) - non furnishing information in respect of growing of Crop on the agricultural land during the year 2007-08 - Held that:- Since the finding of fact has been given by all the authorities that the appellant was not carrying on any agricultural activity in the plot in question in preceding two years prior to 07.10.2008, the appellant would not be entitled to the benefit of Section 10(37) of the Act. - Decided against the assessee and in favour of the department.
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2017 (10) TMI 1213
Levy of penalty by the AO u/s 271(1)(c) - disallowance of expenditure towards due diligence and professional consultancy - Held that:- We are of the view that the debentures whether convertible or non convertible are in the nature of loan at the time of their issuance and any expenditure incurred on issue of such debentures or bonds had to be regarded as part of the borrowing cost and have to be allowed as a deduction and as a revenue expenditure as held in the case of CIT vs. Secure Meter Ltd. (2008 (11) TMI 66 - HIGH COURT RAJASTHAN ) and CIT vs. ITC Hotels Ltd. (2009 (11) TMI 582 - Karnataka High Court). Once, the two high courts are in favour of assessee holding the Revenue in nature, the issue becomes highly debatable and two views are possible. Once two views are possible the penalty cannot be levied for furnishing of inaccurate particulars of income in view of case of CIT vs. Yahoo India Pvt. Ltd. (2013 (3) TMI 704 - BOMBAY HIGH COURT ). Hence, we are of the view that the CIT(A) has rightly deleted the penalty and we confirm the order of CIT(A). - Decided in favour of assessee.
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2017 (10) TMI 1212
Addition on account of share prices and premium received from six companies - Bogus transactions with shell companies - Held that:- The enquiries undertaken by the Assessing Officer in the first round do not indicate that the Assessing Officer successfully examined if all the Directors of all these six companies along with all the Directors of assessee Company are financially interfaced. The financial activities of six companies were not deeply probed by the Assessing Officer. Assessing Officer merely spoken about meager income of the six companies. Assessee’s submissions relates to the floating of joint venture was not thoroughly examined. Assessing Officer never examined the details of the violations if any in clearing the new business venture. The fact relating to inflow of funds amounting to ₹ 1.5 Crore proposed involving the said companies were not examined by Assessing Officer. Therefore, we are of the view that Assessing Officer failed to bring out the facts for deciding if the said six companies constitutes “Shell Companies”. Assessing Officer is directed to gather relevant facts and examine the persons involved in these transactions involving the inflow of ₹ 1.5 crore. These enquiries are necessary to arrive at the correct judgment on the genuineness of the transactions. Assessing Officer shall grant reasonable opportunity of being heard to the Assessee. Without going into merit of documents placed by assessee and without going into the correctness of the addition of the said amount of ₹ 1.5 Crore, we are of the view that the grounds raised by the assessee are required to be remanded to the file of Assessing Officer for fresh adjudication
Non deduction of tds - payments involved in purchasing raw materials - Held that:- CIT(A) discussed the fact of non-requirement of effecting the TDS on the payments made for purchasing raw materials/finished goods from Shreeya Industries and Viana Lime Industries. The CIT(A) also gave findings that the provisions of section 194C of the Act are not applicable to the transactions of purchased goods from the said two vendors. He accordingly granted relief to the assessee on this count. We find that the same is reasonable and it does not recall for any interference. As such, we proceed to dismiss grounds of appeal raised by the Revenue and accordingly, the same is dismissed.
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2017 (10) TMI 1211
Penalty under section 271D - contravening provisions of section 269SS - proof of business exigency for taking cash loan - assessee-company has accepted a loan of ₹ 12 lakhs from Sri Chennupati Jaganmohan Rao, who is one of the Directors of the assessee-company - whether exceeding overdraft is definitely a compelling circumstances and reasonable cause for obtaining loan by cash?
Held that:- It is a fact that overdraft facility of the assessee-company with SBI is exceeded and therefore, cheque issued by the company was dishonoured and then only, the Director of the company withdrew the cash from his personal account with Canara Bank and deposited the money in assessee’s account to complete with the day to day commitments as it is for the business expediency and also reasonable cause for the assessee to accept money in cash. We find that when the cheque issued by the assessee-company is dishonoured on the ground of exceeding the overdraft limits, it is a minimum necessity to carry out the activity of the assessee and therefore Sri Chennupati Jaganmohan Rao, who is one of the Directors of the company withdrew the cash from his personal account and deposited the same in the company’s account. Therefore, under those facts and circumstances of the case, loan taken from Sri Chennupati Jaganmohan Rao for the purpose of honour the commitments is a reasonable cause - Decided in favour of assessee.
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2017 (10) TMI 1210
Penalty u/s 271(1)(c) - non-deduction of tax at source and non-remittance to Government of India account - assessee in default - assessee submitted that due to financial crisis, deducted TDS was not paid to the Government account and so far non-deduction of TDS, it is submitted that due to mistake of the Finance Manager, TDS is not deducted - Held that:- Section 271C applies to both the situations where assessee failure to deduct tax at source and failure to remit the recovered tax. Accordingly, the argument advanced by the assessee’s representative is rejected. See M/s. US TECHNOLOGIES INTERNATIONAL PVT Versus CIT [2009 (6) TMI 966 - KERLA HIGH COURT]
Insofar as, non-deduction of TDS is concerned CIT(A) has observed in his order that default committed by the assessee was pointed out during the survey in January, 2013, but assessee did not choose to make payment immediately, some amounts have been paid only after passing of the order under section 201(1) & 201(1A) of the Act on 27/02/2013. Only thereafter in the month of March, further payments have been made. The corresponding interest under section 201(1A) has not been paid till date. The survey was conducted on 22/01/2013, the assessee only paid the amounts in the month of March after passing of the order under section 201(1) & 201(1A) and therefore, it cannot be considered that non-deduction of tax by oversight of the Finance Manager, even it came to the notice of the assessee, it has paid only after two months. Therefore, we find no infirmity in the order passed by the ld. CIT(A) and accordingly interference is not called for. Accordingly, appeal filed by the assessee is dismissed.
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2017 (10) TMI 1209
Levy of interest u/s 201(1A) - non-deduction of tax at source and non-remittance to Government of India account - date from which interest will be chargeable - Held that:- The plain reading of the proviso to section 201(1A) of the Act makes it very clear that even though the assessee is not deemed to be assessee in default under first proviso to sub section (1), the interest under clause (i) shall be payable from the date on which such tax is deductible to the date of furnishing of return of income by such a resident. Therefore, the tax liability in the hands of the deductee has no relation or connection for charging the interest u/s 201(1A) of the Act. Mere non-deduction of tax at source and non-remittance to Government of India account attracts the interest u/s 201(1A) of the Act and that is the reason for which the provision has been inserted to charge interest from the date of the tax deductible to the date of furnishing of return of income by the resident. Since the decisions relied upon by the Ld. A.R. are related prior to insertion of the proviso u/s 201(1A) of the Act, the decisions relied upon by the assesse are not applicable in assessee’s case.
Thus we hold that the interest is chargeable from the date of such tax is deductible to the date of furnishing of return of income and we uphold the order of the Ld. CIT(A) and dismiss the appeals of the assessee.
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2017 (10) TMI 1208
Reopening of assessment - Held that:- The reasons recorded by the AO in this matter solely basing on the information received from the Directorate of Investigation without any independent exercise of mental process cannot be construed as reasons to believe and the consequent proceedings of reopening are bad under law. Further, the approval/sanction of the Addl. CIT, Range 6, New Delhi is also not in accordance with the requirements of Section 151 of the Act, as is held in M/s S. Goyanka Lime and Chemicals Ltd. [2015 (5) TMI 217 - MADHYA PRADESH HIGH COURT] and this also vitiates the proceedings. For these reasons, we hold that the reopening proceedings are bad under law and are liable to be quashed. Since, we are quashed the proceedings on the questions of law, we do not deem it necessary to adjudicate the merits of additions made in this matter. Appeal of the assessee is allowed.
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