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2014 (11) TMI 829
Cargo handling service - Held that:- appellants have undertaken the activity under the work order which is for hiring of tipper for loading of coal from mines to B.G. Siding at Saoner and also hiring of loaders for loading of coal into tippers and thereafter loading of coal to the wagons. The contention of the appellant is that this activity comes under the scope of transportation of goods by road whereas the Revenue held that the activity comes under the scope of cargo handling service. after taking into consideration the activity undertaken in the mines, which is similar to the activity undertaken by the appellant, held that the activity such as hiring of pay loader for mechanical transfer within the mining area comes under the service of taxable service of cargo handling service. Tribunal in the case of Om Shiv Transport (2013 (5) TMI 110 - CESTAT NEW DELHI) after relying upon the decision of the Hon'ble Orissa High Court, held that the activity undertaken similar to the activity undertaken by the appellants comes under the cargo handling service and not under transportation of goods - Decided against assessee.
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2014 (11) TMI 828
Classification of goods - Classification of Herbal Shikakai Powder under the name of "Ragaa" - Classification under sub-heading 3003.39 as "other medicaments" or under Chapter Heading 3305.99 as per Note 2 to Chapter 33 read with Chapter Note 1 (d) to Chapter 30 of the Schedule to the Central Excise Tariff Act, 1985 attracting 30% adv - Held that:- issue relates to classification of Herbal Shikakai Powder is no longer res integra in view of the decision of the Tribunal in the case of Commissioner of Central Excise, Trichirapalli Vs Medi Herbs - [2006 (7) TMI 25 - CESTAT, CHENNAI]. It has been held that Herbal Shikakai Powder is classifiable as cosmetic under sub-heading 3305.99 of the CETA'85 during the period September 1996 to December 1997 and September 1996 to March 1997. The Hon'ble Karnataka High Court in the case of Shri Ramakrishna Soapnut Works Vs Superintendent - [2001 (7) TMI 153 - HIGH COURT OF KARNATAKA AT BANGALORE] held that Shikakai Powder (used as a shampoo for cleaning hair) would fall under Heading 33.05 of the CETA under the residuary item 'others'.
Tribunal in the case of CCE Tiruchirapalli Vs Medi Herbs (2006 (7) TMI 25 - CESTAT, CHENNAI) on the same product in the context of Board's Circular No.333/49/97-CX dt. 10.9.97 held that assessee was bound to pay duty on the goods in question for six months prior to 10.9.1997 by following the judgement of the Hon'ble Supreme Court in the case of ITW Signode India Ltd. Vs Collector - [2003 (11) TMI 114 - SUPREME COURT OF INDIA]. Hence, the demand of duty for the period prior to 10.9.97 is sustainable and the findings of the Commissioner (Appeals) to that extent is liable to be set aside. However, we agree with the finding of the Commissioner (Appeals) that demand increased by way of corrigendum to SCN is hit by limitation - assessee is liable to pay demand of duty for six months prior to 10.9.1997 - Decided partly in favour of Revenue.
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2014 (11) TMI 827
SSI Exemption - Notification No.8/2003-CE dt.01.03.2003 - Clearance of vitrified tiles - Mis-declaration of goods - Demand of differential duty - Imposition of interest and penalty - whether the confirmation of demand of the duty on the appellant along with interest and penalties imposed by invoking extended period is correct or otherwise - Held that:- show cause notice dt.21.01.2010 is barred by limitation and extended period cannot be invoked as the appellant may be guilty of not informing the Department about the manufacturing activity, but it was definitely not a willful suppression or mis-statement with intention to evade duty. On perusal of the records, we find that it was appellant who had approached the Departmental authorities for granting of Central Excise registration on crossing the threshold limit of ₹ 1.5 crores turnover as is envisaged in Notification No.8/2003-CE. We also find from the records that the main appellant had recorded all the manufacturing activities and all clearances in the books of accounts, which is evident from the fact that show cause notice has been issued based upon such records only.
On the background of such factual matrix, we agree that the appellant cannot be charged with willful suppression of the fact with intent to evade payment of duty. This our view is due to the fact that the appellant may have mis-read the notification No.8/2003-CE. In our view, the reading of Notification No.8/2003-CE is itself confusing and may be a situation wherein the appellant, as claimed by the ld. Counsel, are not highly literate. extended period can be invoked only when there is an intention to evade payment of duty and not mere failure to pay duty. Their lordships have also held that there should be something more i.e. the assessee must be aware that duty was leviable and it must be deliberately avoiding paying duty. As the appellants themselves had approached the Departmental authorities for granting of licence after crossing the threshold limit - Appellant has made out a case. The impugned order is unsustainable and liable to be set aside. - Following decision of Tamil Nadu Housing Board [1994 (9) TMI 69 - SUPREME COURT OF INDIA] - Decided in favour of assessee.
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2014 (11) TMI 826
Cenvat Credit - Input services - Credit of insurance premium amount - Held that:- Tribunal has failed to refer to the background facts. It has also not referred to the fact that whether the services and termed as input services in the case of Idea Cellular (2011 (1) TMI 811 - CESTAT, NEW DELHI) are identical or similar to one involved in the present case. - Having perused the order passed by the Tribunal and being totally dissatisfied with inadequate and crypt reasoning that the present Appeal is allowed. The impugned order of the Tribunal is quashed and set aside. - Matter restored before the tribunal - Decided in favor of revenue.
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2014 (11) TMI 825
Confiscation of goods - clandestine removal - goods kept at residential premises of appellants - SSI Exemption - Whether the decision of the Customs, Excise and Service Tax Appellate Tribunal upholding demand of ₹ 58,54,825/- and confiscation of 24 air-conditioners along with duty and penalty demand of ₹ 3,16,800/- is perverse and contrary to the facts on record - Delhi High Court admitted the appeal of the assessee against the decision of CESTAT New Delhi [2014 (2) TMI 1094 - CESTAT NEW DELHI (LB)].
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2014 (11) TMI 824
Waiver of pre-deposit - Wrongful availment of CENVAT Credit - Held that:- The proceeding was initiated on an allegation that the petitioners have not done any manufacturing activities and there was a wrongful availment of the Cenvat credit. It does not admit any debate that the Cenvat credit is as good as cash provided the same is availed in the manner permissible under the relevant rules and the statute. It is no doubt true that the statement of the persons made before the authority if adversely affect the interest of the assessee, the authority must provide an opportunity to the assessee to cross-examine the same witness. This plea appeared to have been taken by the petitioners before the original authority as well as appellate authority. The said authorities did not find any substance therein. However, the matter is at large before the Tribunal where the Tribunal shall consider all the factual aspects at the time of deciding the appeal finally. The Tribunal found that the petitioners have been able to make out an arguable case and have granted waiver to the extent of 75% so far as it relates to the demand and 90% of the penalty imposed on the director of the company and a total waiver of the statutory penalty. Such discretion cannot be said to be perverse and so unreasonable that it cannot be allowed to stand for a moment - Decide against assessee.
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2014 (11) TMI 823
Application for supply of documents - petitioners require the photocopies of the documents/files seized under the panchnama, dated 7-12-2013, which have been seized from the possession of the petitioners, in his day-to-day business and while having correspondence with different authorities - Held that:- Petitioners have demanded the photocopies of the record and documents seized from them under the cover of the panchnama, dated 7-12-2013, which came to be seized from the possession of the petitioners. It is required to be noted that as such the petitioners are not demanding the original of the record and documents seized under the cover of the panchnama, dated 7-12-2013. The petitioners are ready and willing to bear the expenditure towards the photocopies of the record and documents seized and are ready and willing to deposit ₹ 10,000/- more towards the manpower, etc. The aforesaid request has been denied mainly relying upon Clause 55(m) of the Central Excise Intelligence and Investigation Manual as well as on the ground that the petitioners are not cooperating in the inquiry/investigation. An affidavit-in-rejoinder is filed on behalf of the petitioners disputing that the petitioners are not cooperating. On the ground that the petitioners are not cooperating in the inquiry/investigation, the prayer of the petitioners to supply the photocopies of the documents seized cannot be denied. If, it is found that, the petitioners are not cooperating in the inquiry/investigation, it will always be open for the Department to proceed further with the inquiry/investigation ex parte on the basis of the material on record and proceed further with the same.
On considering Clause 55 of the Central Excise Intelligence and Investigation Manual as a whole it confers certain right upon the assessee/occupant of the premises at the time of search and seizure. One of the right conferred is Clause 55(m). However, there is no specific bar and/or provisions under which the petitioners can be denied the photocopies of the documents seized that too when it is asked at the cost of the petitioners. - As such there is no justification on the part of the concerned respondents in not providing photocopies of the documents seized under the panchnama, dated 7-12-2013 - Decided in favour of assessee.
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2014 (11) TMI 822
Recovery of CENVAT Credit - removal as such - rollers/cylinders were used for printing and when they became worn out, the same were again cleared to their vendors for new engraving/dechroming - Bombay High Court admitted the appeal of the assessee against the order of Tribunal [2013 (9) TMI 167 - CESTAT MUMBAI] on the following substantial questions of law :
Whether, the CESTAT was correct in confirming the duty demand when the law is settled by the decisions of the two High Courts?
Whether, the CESTAT was right in relying upon the decision of the Larger Bench of the Tribunal which was not passed in terms of Rule 3(5) of Cenvat Credit Rules 2004?
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2014 (11) TMI 821
SSI benefit under notification No. 8/2000 C.E., dated 1-3-2000 - whether the Small Scale Industry exemption granted to the respondent can be extended till 23-9-2000, since the respondent has been amalgamated with other Textile Company, by name, Palani Andavar Cotton and Synthetic Spinners Limited on 1-4-2000 - Held that:- High Court has not given specific date with regard to effect of date of amalgamation. But, admittedly the respondent has been amalgamated with Palani Andavar Cotton and Synthetic Spinners Limited on 1-4-2000. Since in the order passed by the High Court no specific date has been given apart from the date of amalgamation i.e., on 1-4-2000 and also on the basis of the decision referred to supra, it is made clear that in the instant case the Court can very well come to a conclusion that the so called amalgamation has been given effect to from 1-4-2000. Since amalgamation is having its effect from 1-4-2000, the Small Scale Industry exemption granted till 23-9-2000 to the respondent cannot be accepted. To put it in short, after 1-4-2000 i.e., from the date of amalgamation the respondent has been clothed a new company. Under the said circumstances, the respondent is not entitled to avail Small Scale Industry exemption which has been granted earlier till 23-9-2000.
CESTAT, without considering the fact that no specific date is available in the order passed by the High Court with regard to effect of amalgamation and also without considering the resolution passed by the Board of Directors of the respondent to the effect that amalgamation has come into effect from 1-4-2000, has erroneously allowed the appeal and thereby set aside the order passed by the Commissioner of Central Excise (Appeals) and in view of the discussions made earlier, the argument advanced by the learned counsel appearing for the appellant is really having merit, whereas the argument putforth on the side of the learned counsel appearing for the respondent does not hold good and further the substantial questions of law raised on the side of the appellant are having substance and altogether the present Civil Miscellaneous Appeal is liable to be allowed - Decided in favour of revenue.
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2014 (11) TMI 820
Maintainability of appeal - Clandestine removal and manufacture of goods - Held that:- appeals are not maintainable under Section 35L of the Central Excise Act, 1944 since the issues raised are of clandestine removal of manufactured goods and clandestine manufacture of goods. Solicitor General seeks leave to withdraw these appeals with liberty to file an appropriate appeal in the High Court under Section 35G of the Act. In the event of an appeal being filed under Section 35G of the Act within three months from today, the High Court shall consider the appeal without raising any question regarding limitation - Decided against Revenue.
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2014 (11) TMI 819
Valuation of goods - Inclusion of royalty in assessable value of goods - Held that:- Tribunal [2014 (5) TMI 944 - CESTAT MUMBAI] has not assigned any reason while upsetting the order of the Commissioner (Appeals), we are of the view, without going into the merits/demerits of the case, that the matter should be reconsidered by the Tribunal - Decided in favour of Revenue.
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2014 (11) TMI 818
Exemption under Notification No.21/2002-CUs dated 01/03/2002 - Non submission of certificates for finished goods - Revenue contends that in the absence of such a certificate from DGHC, the coated pipes, which are manufactured under bond is liable to import duty at the time of clearance from bond and accordingly issued show-cause notices proposing to demand Customs duty on the entire value of the coated pipes - Held that:- Both the bare pipes as well as the coated pipes were for use for oil exploration/exploitation and the essentiality certificate issued by the DGHC clearly evidence this fact. Though, the certificate specifically mentions serial No.215 of the Notification NO.21/2002, the finished products are also specified therein and the said finished products figure in List 12 to Notification No.21/2002, which also exempts the said goods from import duty vide Serial No. 216 subject to production of essentiality certificate from DGHC. Since the end use not in dispute, the appellant would be entitled the benefit of Serial No. 216 even though they have not specifically claimed the exemption. Since the assessment of duty liability has to be done by the Customs, notwithstanding the fact that the appellant did not claim the benefit of exemption, the same should have been extended to the respondent importer. Further, we observe that the demands covered under show-cause notice dated 07/04/2010 and 17/07/2009 are clearly time barred, inasmuch as the entire transactions were fully known to the department and the respondent's clearance of coated pipes to Bombay High under shipping bills were also approved by the Customs authorities concerned - Decided against Revenue.
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2014 (11) TMI 817
Waiver of pre deposit - Benefit of exemption Notification No. 26/2000-Cus. dated 1.3.2000 - origin of goods - Free Trade Agreement between the Democratic Socialistic Republic of Sri Lanka and Republic of India - contravention of the conditions of the Rules, 2000 - Confiscation of goods - Imposition of interest and penalty - Held that:- the importer shall prove to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, in accordance with the Customs Tariff (Determination of Origin of Goods under the Free Trade Agreement (ISFTA) between the Democratic Socialistic Republic of Sri Lanka and Republic of India), Rules, 2000 published with the Notification of the Govt. of India in the Ministry of Finance, Department of Revenue, Notification No.19/2000-Cus. dated 6.3.2000 that the goods in respect of which the benefit of this exemption is claimed are the origin of Sri Lanka. letter of the Department of Commerce, Sri Lanka that the cost statement were not declared in respect of import from France and South Korea. It is also seen that the DRI officers had also found several materials which would reveal the doubt in respect of the authenticity of the certificate of country of origin. Thus, there is a factual dispute, which would be examined at the time of hearing the appeal at length. applicant has not made out a strong prima facie case for waiver of entire amount of dues - Partial stay granted.
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2014 (11) TMI 816
Confiscation of goods - Redemption fine and penalty - Violation of condition 5 of the Notification 29/97 - Held that:- As in this case the appellant has opted to shift from zero duty EPCG licence to 10% duty EPCG licence, the same has been accepted by the DGFT and the amendment of the licence has been made retrospective. Therefore, the customs authorities have no authority to demand duty in violation of the condition 5 of the Notification 29/97 from the appellant - Decided in favour of assessee.
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2014 (11) TMI 815
Confiscation of goods - Redemption fine and penalty - performing office M/s.Bureau Veritas, Madagascar does not figure in Appendix 28 of Hand Book of Procedures (Vol.I) - Held that:- The goods were examined and found to be as declared. Further, the goods were accompanied with pre-shipment certificate of M/s.Bureau Veritas, Mumbai along with certificate of M/s.Bureau Veritas, Madagascar. following the decision of Senor Metals Pvt. Ltd. (2008 (8) TMI 238 - GUJARAT HIGH COURT), the impugned order is set aside
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2014 (11) TMI 814
Allowability of depreciation on gas toner - Whether the Tribunal is right in confirming the order passed by the CIT(A) holding that depreciation on gas toner is allowable at the rate of 100% treating the same as gas cylinders, as against depreciation at the rate of 25% granted by the AO – Held that:- As decided in assesse’s own case for the earlier assessment year, it has been held that the Tribunal rightly allowed 100% depreciation on the gas cylinder which was mounted on vehicle, the gas cylinder had a capacity of more than 1000 kg., still Tribunal held it to be gas cylinder because it was used for transporting gas – the order of the Tribunal is upheld – Decided against revenue.
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2014 (11) TMI 813
Validity of reopening of assessment u/s 147 – Claim u/s 80HHC verified and accepted by AO or not – Held that:- The Tribunal rightly relied upon Commissioner of Income Tax Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] wherein it has been held that the concept of 'Change of Opinion' on the part of AO to reopen the assessment does not stand obliterated after the substitution of Section 147 of the Income Tax Act, 1961, by the Direct Tax Laws (Amendment) Acts, 1987 and 1989 and that after the amendment, the AO has to have reason to believe that income has escaped assessment, but, this does not imply that the AO can reopen an assessment on mere change of opinion - the concept of 'Change of Opinion' must be treated as an in-built test to check the abuse of power - while allowing the claim of the assessee u/s 80HHC, detailed inquiry was made and only after verifying the assessee's contention, which was found to be correct, the AO had allowed the claim of the assessee - It goes without saying that once a query was raised and it was answered satisfactorily by the assessee at the time of original assessment and when the same attained finality, after the AO gave his clear finding in favour of the assessee, it was not open to the AO to reopen the assessment – the order of the Tribunal is upheld – Decided against revenue.
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2014 (11) TMI 812
Estimation of GP @ 12.5% or 1.03% - Whether the Tribunal was right in estimating the gross profit of 12.5% against the gross profit of 1.03% shown by the assessee without recording any cogent and convincing reasons in support – Held that:- The average profit which has been considered for this industry is around 3 to 7% - The Tribunal has directed addition at the rate of 12.5% which is on the higher side – assessee has fairly conceded that excess 7% is on higher side and that at the most 3% may be applied - maximum and minimum of the profit rate to be 5% - the AO is directed to apply 5% G.P rate as the rate of 12.5 % is drastically higher and 1.03% is drastically lower - Gross profit rate of 5% is the average rate of the industry - Gross profit rate of 5% be applied and income of the assessee be estimated - decided partly in favour of assessee.
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2014 (11) TMI 811
Admission of appeal – Five questions of law formulated which can be termed as substantial question or not – Held that:- The matters in appeal is already decided in favour of assessee by the Tribunal – the only question which can be termed as substantial question is whether the Tribunal erred in law in directing to allow deduction u/s80HHC on labour charges, since in assessee's case there was no direct nexus between labour charges receipt and export business of the assessee which can be termed as substantial question - Decided partly in favour of revenue.
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2014 (11) TMI 810
Taxability of enture undisclosed receipt or income imbedded into it - Validity of admission of new plea – Discharge of onus - Whether the ITAT was justified in law in admitting a new plea contrary to the facts on record that the net profit in respect of supervision charges should be linked to the receipts of booking of flats contrary to the provisions of Rule 29 read with rule 10 of the Appellate Tribunal Rules and whether the assessee has received unaccounted receipts was justified in law in holding that the AO has to discharge onus in respect of on-money by showing that assessee has invested ₹ 1,58,59,400 out of such receipts whereas claim of assessee for extra expenditure was found to be incorrect – Held that:- In Commissioner of Income Tax vs. Gurubachhan Singh J. Juneja [2008 (2) TMI 177 - GUJARAT HIGH COURT] it has been held that in absence of any material on record to show that there was any unexplained investment made by the assessee which was reflected by the undisclosed sales.
Following the decision in DY. CIT (ASSTT) Versus PANNA CORPORATION [2014 (11) TMI 797 - GUJARAT HIGH COURT] - The Tribunal rightly held that the entire sales could not have been added as income of the assessee, but only to the extent the estimated profits embedded in the sales for which the net profit rate was adopted entailing addition of income on the suppressed amount of sales - unless there is a finding to the effect that investment by way of incurring the cost in acquiring the goods which have been sold has been made by the assessee and that has also not been disclosed, such addition could not be sustained - not the entire receipts, but the profit element embedded in such receipts can be brought to tax and no interference is required to be made in the decision of the Tribunal accepting such element of profit out of total undisclosed receipt – the order of the Tribunal is upheld – Decided against revenue.
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