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Showing 501 to 520 of 2184 Records
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2018 (5) TMI 1686
Disallowance of entertainment expenditure since incurred for non-business purposes - Held that:- Assessee produced sufficient documentary evidences to prove the genuineness of the expenses - however, without properly examining the evidence brought on record, AO disallowed the expenditure on ad–hoc basis - thus disallowance made by the AO is deleted - Decided in favor of assessee.
Disallowance u/s 40(a)(i) for payment towards global support service fees - Held that:- It has not been established on record that while rendering the services, EMCAP has made available technical knowledge, knowhow, skill, etc. - thus payment made by the assessee cannot be considered as fees for technical services as defined under Article 12(4)(b) of the India– Singapore tax treaty - in earlier AYs also assessee has not deducted TDS on payment of global support service fee and no disallowance was made - thus being no difference in facts in the impugned assessment year, considering that the payment was made under the same contract, even, applying the rule of consistency, no disallowance under section 40(a)(i) can be made - Decided in favor of assessee.
Additions made on account of non-reconciliation of AIS payment of sales tax/professional tax - Held that:- AO has not brought on record sufficient evidence to prove that claim made by the assessee was factually incorrect - thus further investigation is required - matter is restored back to the file of AO for fresh adjudication.
Transfer pricing adjustments - method of determination of Arm's Length Price - selection of comparables - Held that:- To determine the ALP of the IT's entered into by the assessee with its AE's, under the head BOSS, further verification is required - thus in the interest of justice, the issue is restored back to the file of the AO /TPO - also reasonable opportunity of hearing shall be given to the assessee - Decided partly in favor of assessee.
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2018 (5) TMI 1685
Depreciation at higher rate on rolls @ 80% - calculation of WDV - CIT(A) accepted the claim of depreciation on pro-rate basis - taking the written down value appearing in the depreciation schedule prepared for the purpose of Companies Act. - Held that:- CIT(A) is not justified to accept the written down value of rolls determined by the assessee on proportionate basis, in view of the provision of sub-section (6) of section 43.
As per section 43(6)(b), the WDV in case of assets acquired before the previous year is defined to mean the actual cost of the asset less all depreciation actually allowed to him - thus WDV is required to be determined as per section 43(6)(b) - matter is restored to the file of AO for fresh adjudication giving the assessee an opportunity to determine the opening W.D.V. of rolls in accordance with section 43(6)(b) - Decided in favour of revenue for statistical purpose.
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2018 (5) TMI 1684
Disallowance made u/s 40A(2)(b) - unbalanced payment to doctors i.e. 84% of salaries being paid to four doctors, and 16% salaries being paid to the remaining seven doctors - whether the four doctors are specified persons - Held that:- No finding by the Assessing Officer about as to what constitutes fair market price of the services rendered by the promoter directors and that he has simply proceeded to make an adhoc disallowance @ 15% out of the payments made to these persons.
Remuneration of doctors must depend on their market worth, and determination of such market worth is uninfluenced by what other professionals in their area of expertise earn - in view of the case CIT v. Ashok J. Patel (2013 (12) TMI 1480 - GUJARAT HIGH COURT)] adhoc disallowances u/s 40A(2) are not permissible - simply because a payment is ‘high’, it need not be ‘excessive’ too, but then the Assessing Officer has used the expressions ‘high’ and ‘excessive’ rather interchangeably. - Decided in favor of assessee.
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2018 (5) TMI 1683
Purchase of Research & Development Assets - Claim of deduction u/s 35 - expenditure incurred on in-house R&D facility - Expenditure on improvement and upgrading of products - Capital or Revenue - Held that:- The expenditure that is sought to be excluded u/s.43(4)(ii) of the Act is an expenditure which the assessee incurs in acquiring rights in or arising out of scientific research already done by somebody. - The objective behind the exclusion clause in section 43(4)(ii) of the Act appears to be that expenditure on scientific research should be on the research actually carried out by the assessee in-house and it should not merely spend money in acquiring rights in OR arising out of scientific research carried out by some other person.
In any event, there is no distinction as to whether the expenditure incurred is capital or revenue, because while the provisions of section 35(1) of the Act allows deduction of revenue expenditure, the provisions of section 35(1)(iv) of the Act allows deduction in respect of capital expenditure. - thus respectfully following the decision of the Hon'ble Karnataka High Court in the case of CIT Vs.Talisma Corpn (P) Ltd. [2013 (12) TMI 1419 - KARNATAKA HIGH COURT] AO is directed to allow the deduction claimed by the assessee under Section 35(1)(iv) - Decided in favor of assessee.
Disallowance of interest expenditure u/s 14A incurred on earning exempt income - Held that:- Taking into consideration the fact that the assessee had earned exempt dividend income of ₹ 7,13,70,554, the disallowance as computed under Rule 8D(2)(ii) at ₹ 52,53,500; which works out to approx. 7.36% thereof is reasonable in the facts and circumstances of the case in the year under consideration and is therefore upheld - thus AO is directed to delete disallowance under Rule 8D(2)(ii) sustained by the learned CIT(A) and uphold the disallowance made by the authorities below under Rule 8D(2)(iii) - partly allowed in favor of assessee.
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2018 (5) TMI 1682
Levy of CVD - import of “Customised Software” - denial of benefit under Notification No. 6/2006-Central Excise dated 01.03.2006 to “Customised Software” produced by the appellant - difference between “Packaged” software and “Customised Software”
Held that:- In all the “Packaged Software” no rights such as copyright, trade mark or any other intellectual property rights, patent copy right etc. are transferred to the buyer. Similarly source code is also not transferred. The right to use “Packaged Software” is also a nonexclusive right. However just existence of these factors do not make any software “Packaged Software”. Even in the “Customised Software” by virtue of contract between parties that all the rights can be retained by the supplier of the software. Conclusion reached on this ground is not proper.
Non-exclusive right to use the software - Held that:- Even in “Packaged” software the rights transferred, if any, are nonexclusive right to use the said software. Even in “Customised Software” it is possible that parties may agree to the same conditions. It is to the contracting party to decide the manner in which the right are to be transferred. These issues do not determine the nature of ‘software’.
The difference between “Packaged” software and “Customised Software” has not been examined with respect to exact nature of the software of imported. The importer is claiming the benefit of exemption N/N. 6/2006-Central Excise dated 01.03.2006 - the matter remanded to the original Adjudicating Authority to examination all the documents submitted by the appellant and give a clear finding on the “Customised” or “Packaged” nature of software depending of the features of software itself and other data submitted by the importer - appeal allowed by way of remand.
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2018 (5) TMI 1681
Confiscation of gold jewellery - gold jewellery was recovered in the DRI Office - smuggling activities - as per revenue passenger has failed to explain the possession of the smuggled goods and as such are liable for confiscation - Held that:- Gold is an item which is notified under Section 123 of the Customs Act, 1962 - It is seen that there is no foreign marking on the jewellery. Revenue has not placed any proof to substantiate that the jewellery was smuggled into India other than the statement of the passenger - appeal dismissed - decided against Revenue.
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2018 (5) TMI 1680
Penalty u/s 114A - undervaluation of imported goods - used printing, cutting machines - submission of undervalued invoice to Customs for payment of duty - Held that:- Original authority has considered all the documents as well as the statements of the Proprietor and thereafter, re-determined the value of imported goods which has been accepted by the Proprietor and has paid the duty.
As per the proviso to Section 114A of the Act, the lower appellate authority ought to have set aside the imposition of penalty under Section 112(a) of the Customs Act but instead of doing that the appellate authority has set aside the penalty under Section 114A of the Customs Act and has wrongly sustained the penalty imposed under Section 112(a) of the Customs Act - penalty on the appellant under Section 112(a) is set aside and penalty under Section 114A is sustained and upheld.
Quantum of Redemption fine - Held that:- Keeping in view the valuation done by original authority on the basis of the documents and the basis of admission of the proprietor, the authorities have found that the goods are valued at ₹ 91,82,096/- being the transaction value for the purpose of assessment under Rule 3 of the Customs Valuation Rules, 2007 read with Section 14 of the Customs Act, 1962 - redemption fine upheld.
Appeal allowed in part.
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2018 (5) TMI 1679
Business Auxiliary Services - the amount as retained by the appellant on account of RTO handling charges - Held that:- The matter is no more res-integra as in the case of Arpanna Automotive Pvt. Ltd. vs. CC & CE [2016 (3) TMI 308 - CESTAT MUMBAI] has held that helping the purchases of with the registration with the RTO cannot be considered as an activity under Business Auxiliary Service and, therefore, service tax cannot be demanded on the amount retained by the appellant in respect of RTO registration fee.
The charges received and retained by the applicant from the customers for facilitating RTO registration is not chargeable to service tax under business auxiliary service - appeal allowed - Decided in favor of appellant.
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2018 (5) TMI 1678
GTA Services - allegation in the Order-in-Appeal is that the appellant had incurred freight charges in relation to transportation of goods by road in the goods carriage - suppression of facts - Extended period of limitation - penalty - Held that:- The appellant never disputed that they had not paid the service tax in time. They have also paid interest on some of the services when pointed out by audit - there can be no dispute as the appellant is liable to pay interest as applicable on service tax.
Extended period of limitation - Held that:- Suppression of fact is a sufficient ground for invoking the extended period of demand. Intent is essential when the allegation is of contravention of any other provisions of the chapter of Finance Act or rules made thereunder. Once suppression is established, it does not appear from the Act that intent to suppression also needs to be established - Appellant was already registered with the Service Tax Department for rendering these services and therefore is expected to disclose the full value of the services rendered which he has not done. Thus, he has suppressed the facts and the extended period of payment has clearly invokable.
The appellant is liable to pay the full service tax for the extended period along with interest and is also liable for penalty under section 78 of the Finance Act, 1994 except service tax on Goods Transport Agency Services - Appeal allowed in part.
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2018 (5) TMI 1677
Interest on delayed refund - Refund of pre-deposit alongwith Interest - amount deposited under the proviso to Section 35F - Section 35FF of CEA - Held that:- It is a mandate that the amount of pre-deposit be refunded, consequent upon the order of the appellate authority, the interest as such for the time being fixed by the Central Government shall be paid on the ground of refund from the date of payment of amount till the date of refund of such amount - assessee shall be entitled to refund of the amount deposited alongwith interest at prescribed rate from the date of making such deposit to the date of refund in terms of Section 35FF of the CEA 1944 or Section 129EE of the CA 1962. Thus, there is no reason as to why the interest in the present case be withheld.
The appellant is entitled to the interest on the refund of its pre-deposit under Section 35FF of the CEA - Appeal allowed.
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2018 (5) TMI 1676
Job work - Demand of service tax - Manufacturing activity or not - appellant are undertaking rubber backing and rubber edging of polypropylene carpets on job work basis - whether the activity carried out by the appellant amounts to manufacture as defined under Section 2(f) of the Central Excise Act, 1944? - Held that:- The appellant is undertaking the work of rubber backing and edging and also using the polypropylene sheet supplied by the principal-manufacturer which amounts to manufacture of rubber mats falling under Tariff Heading 4016 9100 - also, appellant is paying the VAT on the product.
Demand set aside - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1675
Business Auxiliary Services - contracts with the North Western Indian Railway, Jodhpur Division involving cleaning of bed rolls, towels, pillow covers and blankets - the appellant also entered into separate agreement with M/s.P.K. Shefi to work as their sub-contractor to carry out similar services - Held that:- From the wording of the contract and the activities carried out by the appellant, it is seen that the same are required to be considered as a composite service and it will not be proper to vivisect the services into the various components even though the contract specified the different components and separate charges for the same.
The appellant is required to carry out the above services to the customers of Railways, who are passengers travelling in the AC compartments. Since it is the responsibility of the Railways to provide the services and the appellant has provide the services on behalf of the Railways, the services are rightly classifiable under “Business Auxiliary Service”.
The classification of the service under “Business Auxiliary Service” upheld - Since the appellant has not even got registered their services for payment of service tax, penalty also upheld.
Appeal dismissed - decided against appellant.
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2018 (5) TMI 1674
Valuation - Cargo Handling Services - non inclusion of reimbursable expenses - demand differential service tax - Held that:- The issue regarding the inclusion of re-imbursable expenses into the value of consideration for payment of service tax was the subject matter in the case of Union of India Vs. M/s.International Consultants and Technocrafts Pvt. Ltd. [2018 (3) TMI 357 –Supreme Court of India], wherein held that the inclusion of such reimbursable expenditure was not justified and Rule 5 of the Service Tax Rules which was held to be un-constitutional and ultra virues of the provisions of Section 66 and 67 of the Finance Act, 1994 - Decided against Revenue.
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2018 (5) TMI 1673
Valuation - Maintenance or Repair Service - electricity received from the Grid - inclusion of charges recovered for the electricity generated by the appellant using generators and supplied to the tenants - Held that:- There can be no levy of service tax on the electricity charges which are reimbursed to appellant by the tenants - However, we are unable to come to the conclusion regarding the amount of electricity generated by the appellant and supplied to the tenants by using thereown generating sets. The payment for which is includible in the maintenance charges.
Valuation - interest free maintenance advance and security deposit - whether adjustment of interest free maintenance advance and security deposit towards maintenance charges on month to month basis has been done or not? - demand of service tax - Held that - In respect of interest free maintenance advance, the appellant has admitted the liability for payment of service tax from the date such advance has been received. Such liability has also been paid with interest and we uphold the same. In respect of security deposit, the amounts cannot be included in the consideration as long as the same remains interest free advance to be returned to tenant at a subsequent date - the appellant directed to submit details to the adjudicating authority, duly certified by the Chartered Accountant, to the effect whether security deposit also stands adjusted towards maintenance charges during the disputed period - matter on remand.
CENVAT credit - service tax paid on the various services claimed as input services - services procured by the appellant from sub-contractors - Held that:- If the sub-contractor services relate only to maintenance service, the restriction imposed by Rule 6(3) will not be applicable to the appellant - matter remanded to the adjudicating authority who will examine the claim of the appellant and pass denovo decision in this regard.
Period of limitation - The adjudicating authority also to consider the plea of extended period.
Appeal disposed off.
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2018 (5) TMI 1672
Classification of services - construction work - composite works contract - whether appellant’s case is covered under the category of works contract services or CICS? - refund claim - Held that:- There is no dispute as to the fact that for the period September, 2004 to July, 2006, appellant had executed project of Madikheda Hydel project for the Government of Madhya Pradesh. It is also undisputed these projects were executed under composite contract, which has been always claimed by the appellant.
The issue is no more res integra, the Apex Court in the case of Larsen & Toubro Ltd., [2015 (8) TMI 749 - SUPREME COURT] was considering a similar issue, as to whether Revenue Authorities can vivisect a composite contract and levy tax under other various services head prior to 01.06.2006 or otherwise, where it was held that any charge to tax under the five heads in Section 65(105) would only be of service contracts simpliciter and not composite indivisible works contracts.
Appeal dismissed - decided against appellant.
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2018 (5) TMI 1671
Refund of unutilized CENVAT credit - Time Limitation - Section 11B of the Central Excise Act as made applicable to Finance Act, 1994 - Held that:- Larger Bench in the case of CCE & CST, Bangalore Vs. Span Infotech (India) Pvt. Ltd. [2018 (2) TMI 946 - CESTAT BANGALORE], has unanimously held that the relevant date for the purposes of deciding the time limit for consideration of refund claim under Rule 5 of CENVAT Credit Rules may be taken as the end of the quarter in which the FIRCs are received in cases where refund claims are filed on a quarterly basis - the appeal needs to be remanded back to the original authority to dispose of the refund claim as per the decision of the Larger Bench - appeal allowed by way of remand.
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2018 (5) TMI 1670
Principles of Natural Justice denied - Non independent application of mind - various contentions raised were not dealt with - retracted statements - clandestine manufacture and removal of tobacco/gutkha without payment of central excise duty and education cess - Whether the appellant is right that the order passed by the CESTAT is contrary to law as it does not examine and discuss the contentions and issues of facts and law as raised and had arisen for consideration? - Whether the findings recorded by the Customs, Excise and Service Tax Appellate Tribunal are perverse as they do not meet the mandate and requirement of law?
Held that: - The Tribunal is the final fact finding authority under the Act i.e. the Central Excise Act, 1940. As a final fact finding authority and the first appellate authority against the order-in-original in the present case, the Tribunal was required to examine the statements, documentary evidence, consider the effect of retraction with reference to the legal position and thereupon arrive at definitive and considered decision. No doubt, as the final fact finding authority, the Tribunal can rely upon the reasoning, findings or inferences given in the order-in- original there has to be also fresh and independent application of mind and not a mere reproduction and repetition even if the final conclusion is one of affirmation.
In the present case, the impugned order on all aspects and contentions merely reproduces the order-in-original, without specifically and independently examining and dealing with diverse contentions. Reference and independent and exhaustive elucidation of the factual contentions raised by the appellants and consideration of legal issues based upon the said contentions is conspicuously lacking and missing. The impugned order suffers on this account.
The impugned order fails to independently and specifically deal with and examine the contentions raised by the appellants.
The aforesaid substantial questions of law are answered in favour of the appellants and against the respondent with an order of remand to the Tribunal for fresh decision.
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2018 (5) TMI 1669
Penalty u/s 11AC - entire payment of disputed tax was paid by the appellant on or before passing of the order-in-original - Held that:- It is accepted and admitted that the appellant herein did not pay the penalty imposed u/s 11AC of the Central Excise Act. Mere payment of differential duty, i.e. duty on the goods S.S. ingots found short by 4510 kg and S.S. flats found in the premises of M/s Shree Shyam Cutter and M/s Shree Ganesh Cutter would not matter once the conditions for imposition of penalty under Section 11AC was satisfied - the payment of duty, whether made before or after issuing of SCN, is not determinative and a relevant factor for deciding whether or not penalty should be imposed under Section 11AC of the Excise Act. This issue is to be decided having regard to the satisfaction or non-satisfaction of the conditions stipulated in Section 11AC of the Act.
The appellant does not dispute and does not challenge the conditions mentioned in Section 11AC of the Act were satisfied as the appellant does not contest and submit that fraud, misrepresentation or suppression of facts in contravention of provisions of the Act or the Rules were missing and absent - also, appellant had not paid 25% of the penalty within the stipulated time of 30 days. Therefore, 100% penalty has to be paid by the appellant.
Appeal dismissed - Decided against appellant-assessee.
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2018 (5) TMI 1668
Clandestine removal - excesses and shortage of stock - fabric was manufactured and clandestinely removed, without payment of duty - Held that:- A prudent man will not conclude that the fabric was manufactured and clandestinely removed, without payment of duty in the absence of corroborative evidence - The fact that during cross examination, the labour contractor himself said that he gets paid twice for the fabric, once at the grey stage and once at finished stage further dilutes the evidence to substantiate the allegation of clandestine removal of fabric.
The Officers have verified the stocks of the man made fabrics i.e. textiles and raw material and compared them with Form IV respectively and found differences. I agree with the department that the Commissioner should not have ignored the mahazar which was drawn on the spot and instead relying on a passing remark made in the original O-I-O drop the entire demand while ignoring the recorded evidence - there were shortages in one stage and excesses at another. When the stocks were taken on the same day, at same time, it would be reasonable to assume that there was some inaccuracy in recording by the assessee with some stock being shown as issued for processing and not actually being put in the process resulting in excess stock in one stage and a shortage in the other - demand on this count dropped.
Goods found in excess in the vehicle - vehicle was intercepted by the officers based on the information they received and the documents they recovered with the distributors - Held that:- While the Commissioner had questioned the evidence provided by the department and examined it minutely, the vague and baseless statement by the respondent that 5 metres sarees should be taken as 4.2 metres only so that their figures match was accepted by the Commissioner without any basis whatsoever. Therefore, find that the duty of ₹ 3,995/- is payable on this excess goods found in the truck and this along with recovery of duty, confiscation and redemption fine thereon be imposed. The quantity of excess fabric cleared without payment of duty is also liable to be confiscated. As find a redemption fine of ₹ 5,000/- is reasonable for the purpose.
Confiscation of excess goods found in the factory premises - Held that:- The mahazar being a document drawn up at the time should be accepted along with the contention of the respondent that the excess and shortages of the fabrics need to be set off against each other in view of the fact that grey products supposed to have been issued for production were still lying in stock - the excess quantities of fabric as recorded above are liable for confiscation.
Appeal allowed in part.
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2018 (5) TMI 1667
Inadmissible Cenvat credit without receiving any input - No proper documentation - Penalty invoked - invocation of rule 37 of CEA - imported goods further used in the manufacture of finished goods in India - Held that:- It is undisputed fact that goods seized by the department happened to be imported goods, which were not accounted for in the books of the account of the appellant.
After perusal of rule 25 and of the Central Excise Rule, 2002 and 2 (d) of the Central Excise Act, 1944 it is clear that the provisions contained therein are applicable only to the excisable goods. In other words these provisions cannot be extended to imported goods without mentioning the charge in the SCN about the provisions of Customs Act made applicable to Central Excise matters vide Notification, which is not the case here - It is on record that the goods seized and confiscated are imported goods, and therefore, the provision of these Rules, 25/26 is not applicable to the sized imported consignment in the case of hand.
Penalty on the Sh. Ajay Mehra - Held that:- As no contravention of any provisions of Central Excise Act and Rule have been found in the case of seized goods, there is no question of imposition of any penalty on the Sh. Ajay Mehra under the provisions of Central Excise Act, Central Excise Rule and Cenvat credit Rules.
Appeal allowed - decided in favor of appellant.
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