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Showing 481 to 500 of 1495 Records
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2016 (6) TMI 1016
Claim of exemption - manufacturer of industrial valves - conventional energy device or non-conventional energy device - Notification No.6/2002-CE dt. 1.3.2002 - Held that:- The grant of fiscal benefit being allowed to non-conventional energy device/system specified in List No.9 appended to the notification does not bring the appellant to the ambit of the notification to claim exemption. Appellant’s submission would have been considered had the appellant primarily manufactured non-conventional energy device/systems so as to attract Item No.16 of List 9. That being not shown there shall be no grant of relief under the notification following Hon'ble Supreme Court’s decision in CC (Imports), Mumbai Vs Tullow India Operations Ltd. - [2005 (10) TMI 502 - SUPREME COURT OF INDIA] - Demand confirmed - Decided against the assessee.
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2016 (6) TMI 1015
Valuation - relating parties - allowed 25% discount to sole buyer purchasing goods for above ₹ 60 lakhs - It is seen that M/s. Seth Trading Company is a partnership firm of four partners who are wives / sons of Directors of the appellant company. Hence by entertaining a view that the transaction between the appellant and M/s. Seth Trading Company can be considered as transaction between interconnected undertakings in terms of section 2(g) of MRTP Act 1969, proceedings were initiated to demand Central Excise duty short paid due to undervaluation of excisable goods.
Held that:- As correctly pointed out by Ld. Commissioner (A) for rendering the buyer a related person of the respondent in terms of sub section 4(3)(b) of the Central Excise Act 1944, relationship as described in clauses (ii), (iii) or (iv) has to be established and it is to be true that the buyer is also holding company or a subsidiary company of the assessee.
There is no reason to consider the existence of outstanding amount as a reason for rejecting the transaction value including the trade discount offered to all. Working in the same premises or the trading firm using the logo and name of the manufacturing firm by itself are of no consequence to consider the transaction value as tainted. - Demand set aside - Decided in favor of assessee.
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2016 (6) TMI 1014
Clandestine removal of goods - figures of stock reported in their financial accounts (3 CD Returns) filed with the Income Tax authorities were different from stocks reported in their RG-1 register. - no stock verification has been done nor any evidence of clandestine clearance has been recorded. - Held that:- The entire case has been booked on the mismatch between the figures reported in 3CD returns filed with Income Tax authorities and the RG-1 register and there has been no physical verification of stock. There is no evidence of any clandestine clearance being made. Moreover the criteria for recording stocks as per the standards of ICAI and Income Tax are different from the criteria for recording stocks under Central Excise law. - Revenue failed to prove its case - Demand set aside - Decided in favor of assessee.
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2016 (6) TMI 1013
Refund claim on the services, namely, CHA service and courier service - failure to fulfill the conditions prescribed in the Notification No. 17/2009-ST dated 7.7.2009 - Held that:- As the appellant has been able to establish correlation between the service provider’s invoice and exporter from the invoices and shipping bills, in that circumstance, the appellant is entitled for refund claim in respect of CHA service.
Regarding courier service, the objection is only that in the invoices issued by the courier agency service, export invoice number & IEC code of the appellant are not mentioned. There is no dispute that the details of the appellant/exporter as also description of goods are mentioned in these invoices.
Refund allowed in both the cases - Decided in favor of assessee.
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2016 (6) TMI 1012
Cenvat Credit - allegation of non receipt of inputs - investigation was conducted and it was found that number of vehicles mentioned in the invoices issued to the appellants are not capable of for transportation of goods as these vehicles registration numbers are of two wheelers /light motor vehicles. - In fact during the impugned period, the owner of vehicles had transported the goods used fake vehicles number to avoid local taxes to that effect they have produced the newspaper report which admits the during the impugned period, the owner of vehicles had transported the goods used fake vehicle registration number and a drive was launched against those vehicle owners
Held that:- the adjudicating authority is required to examine the newspaper report before denial of credit to the appellants. If there is any truth in the newspaper report, the same may be considered as evidence produced by the appellants for receipt of the inputs. Both sides are at liberty to produce the evidence in their favour to reach to real conclusion whether the appellants have received inputs or not. - Matter remanded back.
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2016 (6) TMI 1011
Remission of duty - destruction of indigenous / imported raw material due to fire - Held that:- Commissioner has rejected the appellant’s remission application by simpliciter observing that the remission of duty is subject to satisfaction of Commissioner. However, no reasons stands given by the adjudicating as to why he was not satisfied about the factum of fire and the consequent destruction of the final products. Various evidences on record clearly lead one to believe that the fire had admittedly occurred, for which FIR was launched and fire brigade were summoned and insurance claim was made.
Next ground adopted by the Commissioner for rejection of the remission is that assessee had not taken sufficient measures to protect the portion of the value of the goods which represent duty element while the goods were in his possession. Undisputedly the value of the goods was insured by the appellant and there is no requirement or legal provision for insuring the duty element. If the duty element is also required to be insured and reimbursed by the insurance company, then there is no need for the assessee to ask for remission of duty in which case the provision of remission of duty would become redundant.
Regarding rejection of remission for loss of imported inputs - import of the inputs in terms of notification no. 52/2003-CUS, cannot be made the ground for denying the remission of duty in case of subsequent destruction of the inputs. - Remission allowed - Demand set aside - Decided in favor of assessee.
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2016 (6) TMI 1010
Cenvat Credit - reversal of credit on consumable goods - Held that:- The impugned order records the assertion that the appellant had consumed the said consumables within the factory for fabricating items and paid duty on such fabricated items. The impugned order does not deal with this issue at all. If the appellants have used within the factory for manufacture of fabricated items and paid duty thereon, they would be entitled to credit. - Matter remanded back for verification - Decided partly in favor of assessee.
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2016 (6) TMI 1009
Cenvat Credit on MS Angles, Channels, MS Plates etc., as capital goods - The appellant is engaged in manufacture of writing and printing paper, newprint and krafts paper. - Held that:- credit on MS items used for fabrication in repairs and maintenance of capital goods within the factory allowed. - Decided in favor of assessee.
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2016 (6) TMI 1008
Transfer pricing adjustment - whether the services are actually rendered by the AE - Held that:- As the condition of rendition of services should be satisfied by the assessee so as to allow the same as expenditure. In the present case, assessee-company had not produced any evidence in support of rendering of services before the TPO. It is only before us, by way of additional evidence, assessee-company has filed some material, in support of the actual services rendered by the AE. The CIT(A) had no occasion to examine this evidence as it was claimed that this evidence was filed for the first time before us . Therefore, the CIT(A), without examining the aspect of actual rendition of services by the AE in respect of IT services, had directed the allowance of expenditure. Therefore, in interests of justice, we restore this issue to the file of the AO for purposes of verification of this evidence and come to conclusion whether the services are actually rendered by the AE or not and direct the TPO/AO to bench mark the transaction of rendering of services of market management support services, after being satisfied himself that the services are actually rendered by the AE.
On the principle of consistency, we hold that each assessment year is separate and distinct. The principles of res judicata have no application to income-tax assessment proceedings. Simply because in the preceding year, this expenditure came to be allowed without any probe or enquiry it does not preclude the AO from making the enquiries on these issues.
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2016 (6) TMI 1007
Disallowance of stamp duty expenses - expenses actually incurred by the appellant for executing contract with Maharashtra State Road Transport Corporation - Held that:- The payment of stamp duty is not for business expediency but it is in the nature of a compulsory levy under the Bombay Stamp Act. It is legally settled that accounting practice cannot over rider the provisions of the Income Tax Act, 1961. Stamp duty paid by the appellant during the year under consideration is a compulsory statutory levy and would not restrict the profits of the future years and ordinarily revenue expenditure incurred wholly and exclusively for the purpose of business must be allowed in its entirety in the year in which it is incurred and it cannot be spread over a number of years. If any statutory expense is required to be paid, in view of decision of the Apex Court in India Cements Ltd. v. Commissioner of Income Tax (1965 (12) TMI 22 - SUPREME Court ), such expense is required to be allowed in the same year.
The Apex Court in the case of Taparia Tools Ltd. v. Joint Commissioner of Income-Tax (2015 (3) TMI 853 - SUPREME COURT ) also observed that as per the ordinary rule revenue expenditure incurred in a particular year is to be allowed in that year. Thus, if the assessee claims that expenditure in that year, the Department cannot deny it. However, in a case where the assessee himself wants to spread the expenditure over a period of ensuing years, it can be allowed only if the principle of “matching concept” is satisfied, which upto now has been restricted to cases of debentures. Therefore, it is rightly observed by the CIT (A) that the expense is required to be allowed in the same year. - Decided in favour of assessee
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2016 (6) TMI 1006
Inclusion of income under the deeming provisions of section 68 under the head “income from other sources” - Set off of business loss against the income under the head “income from other sources” - Held that:- Respectfully following the judgment of Fakir Mohammed Haji Hassan (2000 (8) TMI 44 - GUJARAT High Court ), Kim Pharma Private Limited Vs. CIT (2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT) and Gujarat Infra Pipes Private Limited (2009 (12) TMI 976 - ITAT AHMEDABAD) held that deemed income under 69, 69A, 69B, & 69C of the Act are not assessable under the head income from other sources we hold that business loss in the case of assessee cannot be set off against the income assessed under the deeming provisions of section 68, which is not falling under any of the five heads of income
Addition to income - amount added by the assessee himself in his computation of income - Held that:- Commissioner of Income Tax(Appeals) has deleted these two additions on the ground that same were not discussed in the body of the assessment order. We find that whether those two additions are made by the assessee itself in the computation of income, is a matter of verification and, therefore, in the interest of justice, we restore the matter to the file of the Assessing Officer with the direction to verify whether the same was already added by the assessee in the computation of income, and if so, then the additions made by the AO are justified.
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2016 (6) TMI 1005
Transfer pricing adjustment - whether the segregation of these two transactions of payment of Royalty and Fees for technical services from the other international transactions, is justified? - Held that:- When we consider more than one separate transaction under the combined umbrella of TNMM on an entity level, it is quite possible that a probable addition on account of transfer pricing adjustment arising from one international transaction may be usurped by the income from the other international transaction giving higher income on transacted value. That is the reason for which the legislature has provided for determining the ALP of each international transaction separately from the others. As the international transactions of payment of royalty and fees for technical services are separate transactions and not closely linked with the other transactions with which the assessee has merged them, we cannot permit such merger or aggregation for the purpose of the determining their ALP on entity level under TNMM. We, therefore, reject this contention raised on behalf of the assessee.
Thus the TPO was justified in segregating the international transactions of payment of royalty and fees for technical services from other international transactions as these are not linked with import of raw material etc. from its AE. The assessee’s contention in this regard is, ergo, repelled.
Selection of the most appropriate method - Held that:- As fairly settled through a catena of decisions that the CUP is the most appropriate method to determine the ALP of an international transaction because it seeks to compare the price charged or paid for property transferred or services rendered provided proper comparables are available. It is under this method alone that the price charged or paid is directly compared with the price charged or paid in an uncontrolled comparable transaction. Rest of the four specific methods seek to make comparison of the price charged or paid indirectly through the medium of normal profit arising in a comparable uncontrolled transaction. Further, the CUP method is a transaction specific method which strives to determine the ALP of an international transaction on a micro level, thereby lending more credibility to the ALP of a transaction. As such, we hold that the CUP is the most appropriate method for determining the ALP of these transactions under the present circumstances and the TPO was justified in applying the CUP as the most appropriate method.
Determination of ALP under CUP method - Held that:- We approve the application of the CUP as the most appropriate method in the given circumstances for determining the ALP of the international transaction of royalty and fees for technical services, but, the manner of selection of comparables also cannot be upheld.
Whether rate of Royalty/FTS approved by RBI is always at ALP ? - Held that:- hat we need to do in a transfer pricing analysis is to find out a comparable case engaged in the same line of business. The rate of royalty for use of technical know-how of industrial equipments cannot be considered as comparable with that of electronic goods. Even within the overall electronic goods segment, there can be different products or components and the technical know-how required for components cannot be compared with the electronic goods on the whole. In our considered opinion, at best, the rate of royalty approved by the RBI has a persuasive value in the process of determination of ALP of Royalty for a particular case and cannot be considered as conclusive.We, therefore, refuse to accept the payment of royalty and fees for technical services at ALP simply on the ground that it was paid at the maximum rate stipulated by the Reserve Bank of India.
Whether the TP provisions apply when deduction is available under the Act ? - Held that:- The eligibility of the assessee to deduction u/s 80IC of the Act does not operate as a bar on determining the ALP of international transaction undertaken by it and further the enhancement of income due to such transfer pricing addition cannot be considered for allowing the benefit of deduction under this section.
Rule of Consistency - Held that:- For the year under consideration, the TPO has separated the international transactions of payment of royalty and fees for technical services from other international transactions by treating the remaining at ALP under the TNMM. There is a sea change in the approach adopted by the authorities in the preceding year vis-à-vis the current year. The fact that the TPO proceeded on a wrong premise in the preceding year without considering the international transactions of royalty and fees for technical services as separate from the others, cannot give a licence to the assessee to claim that the same wrong approach be repeated in the subsequent years as well. In an earlier part of this order, we have approved the action of the TPO in segregating these two international transactions from the remaining transactions and determining their ALP separately. Under such circumstances, the assessee cannot seek deletion of addition on the principle of consistency because of a completely changed scenario in the instant year. Such a rule of consistency, if at all, could have been pleaded if the TPO in the preceding year had also segregated such two transactions and benchmarked them same separately under the CUP method, which the DRP would have overturned. Since no such exercise was done by the TPO in the preceding year when the proceedings went on an altogether different line, we cannot approve the argument of the ld. AR for accepting these two international transactions at ALP.
Thus we set aside the impugned order and remit the matter to the file of AO/TPO for a fresh determination of the ALP of the international transaction of payment of royalty and fees for technical services
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2016 (6) TMI 1004
Revision u/s 263 - genuineness of the gift proved - Held that:- Assessing Officer was satisfied, consequent to making an enquiry and examining the evidence produced by the Assessing Officer, establishing the identity and creditworthiness of the donor as also the genuineness of the gift. The CIT in his order of Revision, does not indicate any doubts in respect of the genuineness of the evidence produced by the Assessee. The satisfaction of the Assessing Officer on the basis of the documents produced is not shown to be erroneous in the absence of making a further enquiry. It is made clear that our above observations should not be inferred to mean that it is open to the Assessing Officer to enquire into the source of source for the purpose of the present facts. This is a case where a view has been taken by the Assessing Officer on enquiry. Even if this view, in the opinion of the CIT is not correct, it would not permit him to exercise power under Section 263 of the Act. In fact, the Apex Court in Amitabh Bachchan (2016 (5) TMI 493 - SUPREME COURT ) has observed that there can be no doubt that where the view taken by the Assessing Officer is a possible view, interference under Section 263 of the Act, is not permissible. - Decided in favour of assessee
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2016 (6) TMI 1003
Benefit of Exemption Notification No.64/88, dated 01.03.1988 after repealed by Notification No.99/1994, dated 01.03.1994. - Import of certain sophisticated machines for the Hospital and installation thereof - the appellant / respondent withdrew and cancelled all Customs Duty Exemption Certificate issued to the respondent / petitioner under Notification No.64/88-Cus, dated 01.03.1988 and also rejected the request for issuance of installation certificate.
The respondent / petitioner, who benefited the tax exemption are bound to discharge their liability during the period when the said Notification No.64/88 was in force. The authorities can enforce such obligation only during that period when the notification was in force and not for the subsequent period. - In this case, notification was rescinded on 01.03.1994. The authorities are not correct in cancelling the Customs Duty Exemption Certificates issued under Notification No.64/88, dated 01.03.1988, saying that the respondent / petitioner had not complied with the conditions for the subsequent period, namely 1994 to 1998. - Decided in favor of assessee and against the revenue.
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2016 (6) TMI 1002
Delay in filing of an appeal before the Commissioner of Central Excise (Appeals) - Condonation of delay - Order impugned before the appellate authority is dated 09.03.2012. Appeal has been filed on 14.08.2012. Admittedly, it is within the extended period of limitation - Held that:- When the Hon'ble Supreme Court has described the manner of disposal of an appeal, as illegality, the same can be corrected by this Court, in exercise of the powers under Article 226 of the Constitution of India and no useful purpose would be served in relegating the appellants to approach the alternative remedy. Courts have held that a writ petition is maintainable, when the act committed is per se illegal, and contrary to the statute.
The Commissioner of Service Tax (Appeals) is directed to take the appeal and decide the same, on merits, without being influenced by any of the observations or discussions in the earlier order, dated 30.11.2015, as it has been now set aside by this Court. - Appeal restored before the First appellate authority.
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2016 (6) TMI 1001
Cenvat credit on the CHA service and outward freight paid on export clearances - manufacture of water pumps - adjudicating authority denied the input service credit on the impugned services, on the ground that benefit of Notification No. 17/2009 should have been compulsorily availed by the exporter manufacturer.
Held that:- Since the notification being a conditional exemption notification, it is for the manufacturer to decide whether to avail the said exemption or not. Thus, there is no merit in Revenue's contention that the appellant should have availed the benefit of Notification No. 17/2009 instead of taking Cenvat credit on the impugned services. - Credit allowed - Decided in favor of assessee.
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2016 (6) TMI 1000
Cenvat credit - eligible input services - works contract service - whether appellant is eligible for credit on certain works contract service during the period April 2011 to December 2012. - the works carried out in the factory by appellant for which service tax was paid under the category of works contact service. It is submitted that in line with the business requirements, the appellant made certain changes in the production process, factory layout, and made improvements to the existing facilities to increase volume of production and also to improve quality of the product. Civil contractors were engaged to carry out certain works
Held that:- The inclusive part of the definition includes services related to modernisation, renovation and repair of factory. These works in my opinion would fall within the work of modernisation, renovation and repair works and therefore are eligible for credit. - Credit allowed - decided in favor of assessee.
Cenvat Credit on works contract service of fabrication of pipelines, erection of cooling tower and laying foundation - Held that:- The works contract service in relation to building, civil structure, laying of foundation etc. has been brought within the ambit of exclusion to exclude not only setting up but something more. - The credit availed on services used for laying foundation of tank/cooling tower is disallowed.
Decided partly in favor of assessee.
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2016 (6) TMI 999
Business Auxiliary service (BAS) - activity of toll collection in terms of agreement between the respondents and NHAI - The respondent also undertook their job work of road maintenance and undertaking development and maintenance of road etc. - Held that:- the activities of toll fee collection cannot be held to be a service provided under the category of business auxiliary service - there is no service tax liability - Decided in favor of assessee.
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2016 (6) TMI 998
Cenvat Credit - reversal of credit u/s 6 - clearance of final products to SEZ developers without payment of duty Whether the amendment to the Cenvat Credit Rules 2004, by substituting clause(i) of sub-rule (6) of Rule 6 of Cenvat Credit Rules 2004 by way of notification No.50/2008-C.E (N.T.) dated 31.12.2008 is prospective in operation or retrospective? - Held that:- Tribunal cannot be said to have committed error in following the decision of this Court in case of Fosroc Chemicals (India) Pvt. Ltd., [2014 (9) TMI 633 - KARNATAKA HIGH COURT] - When the issue is already covered by the decision of this Court, it cannot be said that any questions of law would arise for consideration as sought to be canvassed.
On the aspects of appeal preferred before the Apex Court, the learned Counsel has not been able to show that any interim stay has been granted restraining the operation and implementation of the decision of this Court in the above referred matter. - revenue appeal dismissed - Decided against the revenue.
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2016 (6) TMI 997
Revocation of the registration of Central Excise - detection of fraud - opportunity of hearing was not given to the assessee before passing the order of revocation of common registration. - Held that:- while the earlier writ petition was filed by the assessee, it was without taking remedy before the Commissioner (Appeals). The appeal was thus filed and, finding an order of revocation dated 27.11.2013 to be in violation of principles of natural justice, it was interfered by the Commissioner (Appeals). The order of the Commissioner (Appeals) has been upheld by the Tribunal.
A right was accrued with registration in favour of the assessee. If common registration was to be revoked, nobody prevented the revenue to pass proper order by giving an opportunity of hearing to the assessee. The revenue cannot pass unilateral order without hearing other party. It is more so when allegations have been made for playing fraud on the department. - Revenue appeal dismissed. - Decided against the revenue.
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