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2009 (5) TMI 969
Issues Involved:
1. Appointment of inspectors to investigate the affairs of the company under Sections 235(2), 236, and 237 of the Companies Act, 1956.
2. Allegations of oppression and mismanagement under Sections 397 and 398 of the Companies Act, 1956.
3. Discrepancies in the company's financial statements and misappropriation of funds.
4. Denial of shareholder rights and representation on the board.
5. Request for purchase of shares by the majority group or the company.
Issue-wise Detailed Analysis:
1. Appointment of Inspectors to Investigate the Affairs of the Company:
The petitioner sought an order under Sections 235(2), 236, and 237 of the Companies Act, 1956, for the appointment of inspectors to investigate the affairs of the company. The petitioner alleged that there were significant discrepancies in the company's financial statements and that funds were being misappropriated. However, the court noted that the purpose of Section 235(2) is not to order an investigation into the economic working of the company unless there is material to show that the fall in profits was due to illegal acts. The court found that the allegations made in the petitions were insufficient to maintain C.P. No. 32 of 1999 and that no case had been made out under Section 235(2) read with Sections 236 and 237 of the Act. The Registrar of Companies had already carried out an inspection under Section 209A of the Act, and prosecutions had been launched based on the inspection report.
2. Allegations of Oppression and Mismanagement:
The petitioner filed C.P. No. 31 of 2003 under Sections 397 and 398 of the Companies Act, 1956, alleging oppression and mismanagement. The petitioner claimed that he was denied representation on the board and access to the company's books of accounts. The court noted that the petitioner had not filed a rejoinder to the counter affidavit despite being given repeated opportunities. The court found that the petitioner had failed to make out a case of oppression and/or mismanagement. However, the court acknowledged the dissatisfaction of the petitioner, who held 25% of the shares but was not allowed any representation on the board.
3. Discrepancies in the Company's Financial Statements and Misappropriation of Funds:
The petitioner pointed out several discrepancies in the company's financial statements, including differences in sales figures, undervaluation of stock, and manipulation of expenses. The petitioner alleged that the respondents were using different sets of accounts for different purposes and that the accounts were rewritten. The court noted that the allegations made by the petitioner were not sufficient to warrant an investigation under Section 235(2) of the Act. The court also noted that the Registrar of Companies had already carried out an inspection under Section 209A of the Act, and prosecutions had been launched based on the inspection report.
4. Denial of Shareholder Rights and Representation on the Board:
The petitioner claimed that he was denied his legal and proprietary rights as a shareholder, including representation on the board and access to the company's books of accounts. The court noted that the petitioner held 25% of the shares but was not allowed any representation on the board. The court acknowledged the petitioner's dissatisfaction and noted that the respondents had not denied that the petitioner sought representation on the board or the purchase of his shares at Rs. 500 per share.
5. Request for Purchase of Shares by the Majority Group or the Company:
The petitioner requested that the respondents be directed to purchase his shares at Rs. 500 per share or that the company be directed to purchase the shares with a consequent reduction in share capital. The court noted that the petitioner and the respondents were not able to go together in the company. To end the matters complained of and in the interest of the company, the court directed the respondents to buy the shares of the petitioner at Rs. 500 per share or to make the company purchase the shares at the same rate with a consequent reduction in share capital. Alternatively, the respondents were given the liberty to sell their shareholding to the petitioner at Rs. 500 per share within two months of receipt of the order.
Conclusion:
The court disposed of Company Petitions Nos. 32 of 1999 and 31 of 2003 by directing the respondents to buy the petitioner's shares at Rs. 500 per share or to make the company purchase the shares with a consequent reduction in share capital. All company applications were disposed of, and all interim orders were vacated. No order as to costs was made.
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2009 (5) TMI 968
Issues Involved:
1. Whether the complainant must produce proof of despatch of the notice at the pre-summoning stage under Section 138 of the Negotiable Instruments Act (NI Act).
2. Whether the presumption of service of notice can be drawn under Section 27 of the General Clauses Act, 1897 (GC Act).
3. The applicability of Section 144 of the NI Act in the context of service of legal notice.
4. The requirement of an affidavit proving the accused's residence at the address to which the notice was sent.
Issue-wise Detailed Analysis:
1. Proof of Despatch of Notice at Pre-summoning Stage:
The court examined whether the complainant must produce proof of despatch of the notice at the pre-summoning stage under Section 138 NI Act. The complaint was dismissed by the Metropolitan Magistrate (MM) because the complainant did not provide proof of delivery, such as a delivery report, signed acknowledgment due card, or an internet-generated report. The MM held that without such proof, it would be unsafe to presume service of the notice, which is a prerequisite for taking cognizance of the offence under Section 138 NI Act.
2. Presumption of Service under Section 27 GC Act:
The petitioner argued that since the notice was sent by registered post, Section 27 of the GC Act should be invoked to presume service. The MM, however, concluded that the presumption of service could not be automatically drawn unless there was evidence like a delivery report or postal endorsement. The court emphasized that the presumption under Section 27 GC Act applies only when the complainant can show that the notice was sent to the correct address and there is some feedback from the postal department or courier service.
3. Applicability of Section 144 NI Act:
The court discussed Section 144 NI Act, which allows summons to be sent by speed post or courier service and considers them duly served if an acknowledgment or postal endorsement is received. The court reasoned that the same standard should apply to the service of legal notices before filing a complaint. This ensures that the address used for sending the notice and the summons is consistent, preventing the complaint from being stalled due to non-service of summons.
4. Requirement of an Affidavit:
The court held that merely filing an affidavit stating that the accused resides at the address given in the legal notice is insufficient. The affidavit must include further proof, such as a postal certificate or an endorsement by a courier service agency, confirming that the accused resides at the address and is refusing to accept the notice. Without such documentary proof, the affidavit does not satisfy the requirements of Section 138(b) read with Section 138(c) NI Act.
Conclusion:
The court upheld the MM's decision, emphasizing that the complainant must provide some form of proof of delivery of the legal notice to satisfy the requirements under Section 138 NI Act. The petition was dismissed, reinforcing the need for strict adherence to procedural requirements to ensure the effectiveness of the penal provisions in the NI Act.
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2009 (5) TMI 967
Issues involved:
Challenge to order passed by Division Bench of Madras High Court under Section 47-A of Indian Stamp Act, 1899.
Details of the Judgment:
The appellant claimed ownership of land previously owned by a sick industry under the 1985 Act. The sale of the land was conducted by statutory authorities, and the appellant submitted the highest bid, which was accepted. However, the District Revenue Officer initiated proceedings under Section 47-A, alleging under-valuation. The appellant challenged the jurisdiction of the authorities, but his objections were dismissed, and he was directed to pay additional stamp duty. The High Court remanded the matter for reevaluation, stating that the sale was not between government entities. The appellant argued that the sale was conducted under BIFR's orders, while the respondents contended that BIFR acted as a mediator.
To understand the conflicting views, the relevant sections of the Act and Rules were examined. Section 47-A outlines the procedure for dealing with undervalued instruments, emphasizing the need for a reason to believe in under-valuation with fraudulent intent. The rules specify the principles for determining market value, focusing on lands, buildings, and other properties. The appellant's case demonstrated that the sale was conducted under BIFR's orders, with no evidence of under-valuation for stamp duty evasion.
The State argued that the disclosed sale value did not represent market value, but the Court disagreed, emphasizing that the property was sold openly through a bidding process. The Court clarified that under Section 47-A, there must be a genuine suspicion of under-valuation, which was absent in this case. The sale was executed at the disclosed price, and there was no basis for invoking Section 47-A. The Court set aside the High Court's order, allowing the appeal with no costs incurred.
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2009 (5) TMI 966
Non granting interest on the amount of the Award - from the date of the incident or from the date of filing of the claim petition till actual payment of the awarded sum - Held that:- The Courts are consistent in their view that normally when a money decree is passed, it is most essential that interest be granted for the period during which the money was due, but could not be utilized by the person in whose favour an order of recovery of money was passed. Accordingly, payment of interest follows as a matter of course when a money decree is passed. The only question to be decided is since when is such interest payable on such a decree.
In the instant case, the claim for compensation accrued on 13th November, 1998, when Kunhi Moosa, the husband of the Appellant No.1, died on account of being thrown out of the moving train. The claim before the Railway Claims Tribunal, Ernakulam, (O.A.No.68/1999) was filed immediately thereafter in 1999. There was no delay on the part of the claimants/appellants in making the claim, which was ultimately granted for the maximum amount of ₹ 4 lakhs on 26th March, 2007. Even if, the appellants may not be entitled to claim interest from the date of the accident, we are of the view that the claim to interest on the awarded sum has to be allowed from the date of the application till the date of recovery, since the appellant cannot be faulted for the delay of approximately 8 years in the making of the Award by the Railway Claims Tribunal. Had the Tribunal not delayed the matter for so long, the appellants would have been entitled to the beneficial interest of the amount awarded from a much earlier date and we see no reason why they should be deprived of such benefit. As we have indicated earlier, payment of interest is basically compensation for being denied the use of the money during the period which the same could have been made available to the claimants.
Both the Tribunal, as also the High Court, were wrong in not granting any interest whatsoever to the appellants, except by way of a default clause, which is contrary to the established principles relating to payment of interest on money claims.
We, therefore, allow the appeal and modify the order of the High Court dated 24.5.2007 affirming the order of the Trial Court and direct that the awarded sum will carry interest @6% simple interest per annum from the date of the application till the date of the Award and, thereafter, at the rate of 9% per annum till the date of actual payment of the same.
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2009 (5) TMI 965
Issues Involved:
1. Allegations of oppression and mismanagement.
2. Validity of the share transfer without full consideration.
3. Rectification of the register of members.
4. Authority of the second petitioner to file the petition.
5. Allegations of fraudulent transfer of shares.
6. Jurisdiction of the Company Law Board (CLB) to grant relief.
Issue-wise Detailed Analysis:
1. Allegations of Oppression and Mismanagement:
The petitioners alleged acts of oppression and mismanagement in the affairs of M/s. Blue Pearl Developments P. Ltd. They claimed that the shares were fraudulently transferred without payment of the full consideration. The respondents denied these allegations, asserting that the petitioners had voluntarily signed the share transfer forms and agreements.
2. Validity of the Share Transfer Without Full Consideration:
The petitioners contended that the agreed sale consideration for the shares was not fully paid, rendering the transfer invalid. They argued that only Rs. 175 lakhs out of the total Rs. 1000 lakhs had been paid, and no built-up space was allotted as promised. The respondents countered that the transfer was valid as per the agreement dated August 16, 2006, and that the petitioners had acknowledged receipt of Rs. 150 lakhs. They also claimed that the balance was to be allotted in the form of built-up space.
3. Rectification of the Register of Members:
The petitioners sought rectification of the register of members, asserting that the transfer of shares was invalid due to non-payment of full consideration. The respondents argued that the register of members was updated as per the agreement, and the petitioners had no right to seek rectification after having voluntarily signed the transfer forms.
4. Authority of the Second Petitioner to File the Petition:
The respondents challenged the authority of the second petitioner to file the petition on behalf of the first petitioner-company. They claimed that there was no board or general meeting authorizing such action, and the second petitioner had acted against the interest of the first petitioner-company. The petitioners maintained that the second petitioner had the right to file the petition based on his role and the agreements in place.
5. Allegations of Fraudulent Transfer of Shares:
The petitioners alleged that the share transfers were fraudulent and unauthorized. They claimed that the second petitioner did not attend the board meetings where the transfers were purportedly approved. The respondents refuted these claims, presenting board minutes and agreements showing the petitioners' consent and participation in the share transfer process.
6. Jurisdiction of the Company Law Board (CLB) to Grant Relief:
The CLB concluded that the grievances of the petitioners were related to breach of agreement rather than oppression and mismanagement. It held that such matters should be agitated in a competent civil court, not before the CLB. The CLB also noted that the petitioners did not hold the requisite number of shares to maintain a petition under Sections 397 and 398 of the Companies Act, 1956.
Conclusion:
The CLB dismissed the petition, stating that the petitioners had not made out a case for relief under Sections 397, 398, and 402 of the Companies Act, 1956. It held that the petitioners had voluntarily transferred the shares and any grievances regarding non-payment of consideration should be addressed in a civil court. The CLB also found no evidence of fraud or mismanagement and vacated any interim orders. The registry was directed to return the original documents to the respondents.
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2009 (5) TMI 964
The Delhi High Court issued an order to admit the case regarding the Income Tax Appellate Tribunal's decision on the capital nature of media cost paid for importing Oracle Software. The court framed a substantial question of law for consideration. Paper books to be filed as per High Court Rules. Case listed along with ITA Nos 287/2008 and 683/2009.
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2009 (5) TMI 963
The Supreme Court dismissed the Civil Appeal due to a delay in filing, condoning the delay since the amount involved was only Rs. 80,000. The question of law was kept open.
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2009 (5) TMI 962
... ...
... ... ..... Delay condoned. The Civil Appeal is dismissed.
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2009 (5) TMI 961
Issues Involved:1. Whether the employer could continue with the departmental enquiry proceedings initiated prior to the retirement of the government servant by virtue of Rule 10(1) of the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971? 2. Whether the delay in completing the domestic enquiry proceedings would be fatal to the proceedings? Summary:Issue 1: Continuation of Departmental Enquiry Post-Retirement The Supreme Court examined Rule 10(1) of the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971, which allows the Governor to withhold or withdraw pension if the pensioner is found guilty of grave misconduct or negligence in a departmental or judicial proceeding. The proviso to this rule states that departmental proceedings instituted while the officer was in service shall continue even after the officer's retirement. This rule was upheld in the case of State of West Bengal vs. Haresh C. Banerjee and Others, where the Court recognized the authority of the State to withhold or reduce pension based on departmental proceedings initiated during the officer's service. In the present case, since the departmental enquiry was initiated while the respondent was in service, the employer is permitted to continue with the enquiry proceedings post-retirement. Issue 2: Delay in Completing Enquiry Proceedings The Court held that delay in concluding domestic enquiry proceedings is not inherently fatal. The impact of the delay depends on the facts and circumstances of each case. If the delay is unexplained and protracted, it may prevent the employer from continuing the proceedings. However, if the delay is satisfactorily explained, the proceedings should be allowed to continue. The Court referred to the case of Deputy Registrar, Co-operative Societies vs. Sachindra Nath Pandey, which highlighted that non-cooperation and procrastination by the employee could justify the delay. In the present case, the Administrative Tribunal found that the delay was due to the respondent leaving the headquarters without permission, which justified the continuation of the proceedings. Conclusion The Supreme Court allowed the appeal, setting aside the High Court's judgment. The disciplinary authority was directed to complete the domestic enquiry proceedings within three months, and the respondent was instructed to participate without seeking unnecessary adjournments. Each party was directed to bear their own costs.
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2009 (5) TMI 960
Violation of parameters set u/s 166A CrPC - Murdered of Canadian citizen of the Indian origin - Want of Proper medical and forensic investigation - neither the application has been made by the prosecution nor any letter of request had been issued by competent court of law - approach the Government of Canada for seeking assistance from appropriate agencies of the said Government to investigate the offences in so far as they relate to DNA testing of the articles recovered from the accused - as there is no such facility available in India.
HELD THAT:- It is well settled that the accused has no right to be heard at the stage of investigation. The prosecution will however have to prove its case at the trial when the accused will have full opportunity to rebut/question the validity and authenticity of the prosecution case. In Sri Bhagwan Samardha Sreepada Vallabha Venkata Vishwanandha Maharaj v. State of A.P. [1999 (7) TMI 671 - SUPREME COURT] this Court observed, “There is nothing in Section 173(8) to suggest that the court is obliged to hear the accused before any such direction is made. Casting of any such obligation on the court would only result in encumbering the Court with the burden of searching for all the potential accused to be afforded with the opportunity of being heard.”
The accused can certainly avail himself of an opportunity to cross examine and/or otherwise controvert the authenticity, admissibility or legal significance of material evidence gathered in course of further investigations. Further in light of the views expressed by the investigating officer in his affidavit before the High Court, it is apparent that the investigating authorities would inevitably have conducted further investigation with the aid of CFS u/s 173(8) of the Code.
We are of the view that what is the evidentiary value can be tested during trial. At this juncture it would not be proper to interfere in the matter. It appears from the statement of learned counsel for the State that the lady who was murdered in Bombay was a Canadian citizen of the Indian origin. It is stated that there was a confession by accused persons on the basis of which recoveries were made. The blood stained clothes of the accused (A1) and the deceased were seized.
It is pointed out, that the Canadian citizen was murdered and therefore the Candian police was involved. Dead body was taken to Canada and the genetic material were with the Canadian Coroner. Before the application by respondent No. 2 was filed there was a letter by the Coroner to the Police Commissioner. Whether there is actually illegal recovery, since documents are there they are to be proved. In that view of the matter we are not inclined to interfere and it is for the court to decide whether the evidence is admissible or otherwise. The appeals are accordingly dismissed.
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2009 (5) TMI 959
Issues Involved:
1. Ad hoc appointment vs. regular appointment.
2. Stagnation benefits and regularization.
3. Application of recruitment rules.
4. Interpretation of relevant government orders and notifications.
5. Seniority and promotion criteria.
Detailed Analysis:
Ad hoc Appointment vs. Regular Appointment:
The core issue in these cases was whether ad hoc appointments or appointments on a daily wage or work charge basis are considered appointments made to the cadre/service in accordance with the provisions contained in the recruitment rules as contemplated by the Government Orders dated 25.1.1992 and 17.2.1998. The appellants argued that such appointments are not regular appointments, while the respondents contended otherwise. The Supreme Court observed that ad hoc appointments are temporary and not made according to the statutory recruitment rules, thus not qualifying as regular appointments.
Stagnation Benefits and Regularization:
The appellants maintained that stagnation benefits are given from the date of regularization, as decided in State of Haryana v. Haryana Veterinary & AHTS Association and Anr. The Court noted that the stagnation benefits are provided due to the lack of promotion opportunities and are applicable only after regularization. The Court emphasized that ad hoc employees do not have the right to regularization unless they pass the proficiency test and meet other criteria specified in the recruitment rules.
Application of Recruitment Rules:
The recruitment rules, including the Rajasthan Subordinate Offices Ministerial Staff Rules, 1957, and others, were central to the judgment. The Court highlighted that regular appointments must be made in accordance with these rules, which specify the procedures for recruitment, including the necessity of passing proficiency tests and the conditions for regularization. The Court clarified that executive instructions cannot override these statutory rules.
Interpretation of Relevant Government Orders and Notifications:
The Court examined various government orders and notifications, particularly the Notification dated 29.3.1995 and subsequent ones. It was noted that these notifications stressed the need for regular appointments made in accordance with recruitment rules. The Court pointed out that the High Court had misinterpreted these notifications by confusing regular appointments to the cadre/service with appointments to specific posts.
Seniority and Promotion Criteria:
The Court reiterated that ad hoc appointments do not count towards seniority and promotion. It referred to Rule 25(4), which relates to prospective appointments and emphasized that seniority starts when an employee is born in the cadre/service. The Court cited previous judgments, including Dr. Chanchal Goyal (Mrs.) v. State of Rajasthan and others, to support this view. The Court also noted that the High Court had erred in equating ad hoc appointments with regular appointments for the purpose of seniority and promotion.
Conclusion:
The Supreme Court concluded that the High Court had erred in its interpretation of the relevant rules and notifications. It held that ad hoc appointments do not qualify as regular appointments and do not count towards seniority or promotion. The appeals were allowed, and the State was directed to reconsider the specific case where the respondent's regularization and benefits were in question. The Court emphasized the need for adherence to statutory recruitment rules and clarified that executive instructions cannot override these rules.
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2009 (5) TMI 958
Issues involved: Duty liability on captively consumed polyester chips, determination of duty liability, imposition of penalty, time limitation for filing refund claim.
The case involved the non-discharge of duty liability on polyester chips captively consumed in the manufacture of polyester stable fibre during specific months. The duty amount was paid later, but a higher duty liability was confirmed along with a penalty. The lower appellate authority remanded the case for re-consideration due to incorrect determination of the value of polyester chips. The Additional Commissioner re-determined the duty liability, which was rejected by the Assistant Commissioner and upheld by the Commissioner (Appeals) citing time limitation as the claim was not filed within the statutory period of six months from the date of payment.
The Appellate Tribunal considered the absence of a formal protest letter as per Rule 233B of the Central Excise Rules. However, based on precedents like Nice Foto Lab Vs. CC, Chennai, CCE, Aurangabad Vs. BCL Forgings Ltd, and Overseas Trading Corporation Vs. CCE, New Delhi, the Tribunal treated the appeal against duty confirmation as a protest. Relying on the case laws cited by the appellants' counsel, the Tribunal concluded that the refund claim was not time-barred. Consequently, the impugned order was set aside, and the appeal was allowed.
This judgment highlights the importance of timely filing refund claims in excise duty matters and the applicability of legal precedents in determining the admissibility of such claims despite procedural formalities.
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2009 (5) TMI 957
Whether the input credit taken, when the final product was dutiable need not to be reversed on final product becoming exempt from the payment of duty?
Held that: After referring to the decision of the Apex Court in Collector vs. Dai Ichi Karkaria Ltd., [1999 (8) TMI 920 - SUPREME COURT OF INDIA] the larger Bench ruled thatwhen the input credit legally taken and utilized on the dutiable final product need not to be reversed on the final product becoming exempt subsequently w.e.f. 9.7.2004. Undisputedly, the facts of the case in hand clearly attracts the said ruling and therefore do not warrant detailed discussion and analysis of the materials - appeal dismissed - decided against Revenue.
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2009 (5) TMI 956
Validity of Appointment of the arbitrator by the HC exercising jurisdiction u/s 11 (6) of the Arbitration and Conciliation Act, 1996 - Heading of arbitration clause is replaced by another clause - Applicability of replaced clause on an agreement, entered into between the appellant and the respondents, one of whom is a private party - Rule of Interpretation of the section heading or marginal note - There is a clause No. 14 with the caption "Settlement of Disputes/Arbitration". The aforesaid clause 14 in the Agreement, however, was scored out and the same was replaced by another clause No. 14 the caption "Arbitration with regard to the commercial disputes between the Public Sector Enterprises inter se and Public Sector Enterprises and Government Departments."
HELD THAT:- The aforesaid clause No. 14 relates to disputes of commercial nature arising between the Public Sector Enterprises inter se and between the Public Sector Enterprises and Government Departments. The text that follows also makes the said position clear which provides that after the award is given by the arbitrator in the department of public sector enterprises, reference for setting aside or revision of the award is to be made to the Law Secretary, Department of Legal Affairs, Ministry of Law & Justice, Government of India.
The said clause, therefore, concerns the commercial disputes arising between the Public Sector Enterprises inter se and between such enterprises and Government Departments. The said clause will have no application to an agreement which is entered into between the appellant and the respondents, one of whom is a private party. Since that arbitration clause is not applicable to the case in hand, therefore, the appointment of the arbitrator by the Calcutta High Court exercising jurisdiction under Section 11 (6) of the Act was improper.
Rule of Interpretation of the section heading or marginal note - It is well settled rule of interpretation that the section heading or marginal note can be relied upon to clear any doubt or ambiguity in the interpretation of any provision and to discern the legislative intent. The section heading constitutes an important part of the Act itself, and may be read not only as explaining the provisions of the section, but it also affords a better key to the constructions of the provisions of the section which follows than might be afforded by a mere preamble.
We, accordingly, set aside the said order.
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2009 (5) TMI 955
Issues involved: Classification of remaining fuel and oil (bunkers) & food-stuff available as ship store in the ship imported for breaking.
Classification of fuel and oil in ship for breaking:
The appellant argued that fuel oil and fuel in bunker used for running the ship should not be classified separately as the ship was purchased for breaking, not for fuel. They contended that the fuel system is critical for ship operation and safety, and the fuel is permanently connected to the ship's machinery. The appellant also challenged the retrospective effect of a circular and the levy of interest on differential duty. However, the Jt. CDR cited various Tribunal decisions supporting the separate classification of fuel and oil in ship tanks connected to the engine. The Tribunal held that the matter is settled by precedent decisions, rejecting the appellant's arguments and upholding the classification of fuel and oil separately. The Tribunal also granted the benefit of interest liability introduced in 2006 and remanded one case for reassessment based on corrected quantity information.
Decisions cited by Jt. CDR:
The Jt. CDR referred to several Tribunal decisions, including M/s. Bhikkamal Chhotelal, M/s. Saibaba Ship Breaking Corporation, M/s. Shiv Marine Industries P. Ltd., M/s. Alang Ship Breaking Ltd., M/s. Bhikkamal Chhotelal v. C.CE, Ahmedabad, and CESTAT AHD's Final Order in the case of CC (P), Jamnagar v. M/s. Mercury Marine Industries Pvt. Ltd., to support the classification of fuel and oil in ship tanks connected to the engine.
Conclusion:
The Tribunal, after considering arguments from both sides, upheld the separate classification of fuel and oil in ship tanks connected to the engine based on precedent decisions. The Tribunal rejected the appellant's contentions and granted the benefit of interest liability introduced in 2006. In one case, the matter was remanded for reassessment based on corrected quantity information.
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2009 (5) TMI 954
Issues involved: Petitioner filed Writ Petition for Mandamus, Certiorari, and compensation/damages for non-release of incentives.
Issue 1 - Replenishment Licences: Petitioner's claims for 12 applications were rejected due to failure to respond and furnish documents. No appeal was filed against the rejection. Lack of evidence supporting the petitioner's claim led the court to deny issuing any Writ or direction in favor of the petitioner.
Issue 2 - Claim Rejection: Claim at serial no.1 was rejected, and despite filing a first appeal and review application, no evidence of protest against non-adjudication was provided by the petitioner.
Issue 3 - First Appeal: The file of the First Appeal for application at serial no.9 was not traceable. The petitioner claimed to have filed a Second Appeal in 1994, but no correspondence or details were submitted.
Issue 4 - CCS Claims: CCS claims were rejected as per the Export Import Policy, citing time-barred applications. First Appeals for CCS claims were rejected, and no evidence of further action was presented by the petitioner.
Issue 5 - Additional CCS Claims: Second application was rejected with an appeal clause, but it's unclear if an appeal was filed. A Second Appeal for the first application was claimed to be filed in 1991, but no subsequent actions or evidence were provided. The court suggested approaching the Director General of Foreign Trade for redressal.
The Writ Petition was disposed of without costs, and the court advised the petitioner to pursue civil suits or other proceedings to establish claims for damages, emphasizing the need for proper evidence and documentation to support the claims.
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2009 (5) TMI 953
Issues Involved:
1. Disbursement of 45% premium and release of Cash Compensatory Support (CCS).
2. Compensation/damages for non-release of incentives.
3. Grant of Export House Eligibility Certificate.
4. Costs and expenses of the writ petition.
Summary:
Issue 1: Disbursement of 45% premium and release of Cash Compensatory Support (CCS)
The petitioner sought a writ of mandamus directing the respondent to disburse 45% premium in lieu of Licences (Additional/Rep) and release CCS against export documents. The court noted that replenishment licences, CCS, Additional CCS, or CCS under SPS Scheme are payable as per the relevant EXIM Policy and other policies/guidelines. The petitioner admitted receiving 20 licences against 36 applications. The respondents stated that some applications were issued for a lower amount, some were rejected due to non-removal of deficiencies, and others were not collected by surrendering tokens. The petitioner did not provide specific averments to justify judicial review of these rejections or part approvals. Regarding balance 5 applications, the respondents stated that one appeal was allowed, and the premium would be released, while others were not traceable. The court found no basis for awarding damages or compensation in a writ petition and suggested the petitioner could file a civil suit or other proceedings if advised.
Issue 2: Compensation/damages for non-release of incentives
The petitioner claimed compensation/damages for non-release of incentives in terms of the EXIM Policy. The court held that it is not possible to adjudicate the petitioner's claim for damages/compensation in a writ petition. The petitioner could file a civil suit or other proceedings to claim damages, if advised, and move an application u/s 14 of the Limitation Act, 1963 for exclusion of the period during which the writ petition remained pending.
Issue 3: Grant of Export House Eligibility Certificate
The petitioner did not claim any relief in the form of Certiorari or Mandamus for the grant of Export House Eligibility Certificate in the prayer clauses. However, the petitioner referred to applications dated 24th September 1988 and 27th June 1991 for the grant of the certificate. The court noted that the petitioner did not provide sufficient evidence to prove entitlement to the certificate and did not challenge the rejection of the application in 1991. The court found it difficult to go into these aspects due to the lapse of time and lack of detailed information.
Issue 4: Costs and expenses of the writ petition
The court held that it could not grant the prayer for costs and expenses of the writ petition and refund of costs imposed by the National Commission unless the petitioner specifically challenged the Order dated 26th September 1993 passed by the National Commission. The petitioner did not challenge this order, and the court found no reason to interfere and grant relief in respect of this prayer.
Conclusion:
The writ petition was disposed of with directions for the petitioner to approach the office of the Director General of Foreign Trade with relevant documents for CCS claims under the SPS Scheme where files are not traceable. The respondents were directed to examine the claim and pass a speaking order within six months. All pleas and contentions, including delay and laches, were to be examined by the respondents.
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2009 (5) TMI 952
Issues involved: Appeal against service tax demand, imposition of penalties, legitimate understanding of service tax liability, willful intention to evade tax.
Service Tax Demand and Penalties: The case involved an appeal against the service tax demand of &8377; 6,80,447/- for the period from 16.10.1998 to 31.6.1999, along with penalties imposed under Section 76 of the Finance Act. An additional order confirmed an amount of &8377; 57,210/- with a penalty of &8377; 100/- per day. The Commissioner (Appeals) set aside the penalties based on the belief that there was no willful intention to evade payment of service tax, considering the respondent's status as a cooperative society and their understanding of service tax liability.
Legitimate Understanding of Service Tax Liability: The respondents, an Ex-servicemen Resettlement and Coordinate Cooperative Society, believed they were not liable for service tax during the relevant period due to their status as a cooperative society. They argued that they had a legitimate understanding that their services were not taxable, especially based on advice from M/s. ONGC. The Commissioner (Appeals) acknowledged this belief and set aside the penalties imposed, noting the lack of willful intention to evade tax.
Willful Intention to Evade Tax: The revenue contended that the respondents' delay in discharging the service tax liability was not due to lack of knowledge but willful avoidance of tax. They argued that the respondents only paid the tax after receiving payment from M/s. ONGC, which was not legally justifiable. However, the Tribunal found that the respondents had a bonafide belief, as a cooperative society, that they were not required to pay service tax during the period in question. The Tribunal upheld the Commissioner's decision to set aside the penalties, emphasizing the lack of willful intention to evade tax.
Conclusion: The Tribunal upheld the Commissioner's decision to set aside the penalties imposed on the respondents, considering their legitimate understanding of service tax liability as a cooperative society and the absence of willful intention to evade tax. The appeal against the service tax demand and penalties was rejected, affirming the Commissioner's order.
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2009 (5) TMI 951
Issues Involved:
1. Addition of undisclosed income based on statements and diaries found during survey u/s 133A.
2. Ad hoc additions out of telephone expenses, motor-car expenses, and office expenses.
3. Interest computation u/s 234-B and 234-C.
Summary:
1. Addition of undisclosed income based on statements and diaries found during survey u/s 133A:
The assessee, a manufacturer and exporter of pharmaceutical medicines, was subjected to a survey u/s 133A on 05.12.2002. During the survey, two small diaries indicating unrecorded cash receipts were found and impounded. The main partner, under alleged coercion, declared an undisclosed income of Rs. 1,00,31,181/-. The assessee retracted this statement within ten days, claiming it was made under duress. The Assessing Officer (AO) rejected the affidavits of retraction and added Rs. 39,54,600/- to the income u/s 68, based on the diaries. The CIT(A) upheld this addition, emphasizing the evidential value of the diaries and the improbability of the partners acting against their interest. However, the ITAT found that the AO did not discharge the burden of proving the income, as no further verification or evidence was provided to substantiate the entries in the diaries. The ITAT directed the deletion of the addition, noting the lack of supporting material and the retraction of the statement.
2. Ad hoc additions out of telephone expenses, motor-car expenses, and office expenses:
The assessee challenged the ad hoc additions made by the AO out of telephone, motor-car, and office expenses. The ITAT upheld the findings of the CIT(A) on these issues, finding no reason to deviate from the conclusions drawn.
3. Interest computation u/s 234-B and 234-C:
The assessee sought consequential relief regarding the interest charged u/s 234-B and 234-C. The ITAT directed the AO to re-compute the interest chargeable under these sections.
Conclusion:
The appeal filed by the assessee was partly allowed, with the ITAT directing the deletion of the addition of Rs. 39,54,600/- and upholding the ad hoc additions and interest computation as per the CIT(A)'s findings.
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2009 (5) TMI 950
Issues involved: Condonation of delay in filing the appeal and waiver of pre-deposit in the stay application.
Condonation of delay in filing the appeal:
The appellant filed the appeal with a delay of 105 days, attributing it to an employee misplacing the impugned order without informing the management out of fear. The appellant's counsel argued that the delay was not due to malafide intent or defiance of law. The Departmental Representative (DR) opposed condonation, citing abnormal delay and referring to a Supreme Court judgment. The Tribunal, guided by a Supreme Court decision, emphasized that the cause of delay is crucial for consideration, regardless of its length. The Tribunal acknowledged the Revenue's submission and treated them as an equal litigant. It was noted that the appellant would suffer if the delay was not condoned, especially in the absence of malafide or deliberate breach of law. Consequently, the delay was condoned, and the appeal was admitted.
Waiver of pre-deposit in the stay application:
In the stay application, a tax demand of &8377; 56,514/- was noted. The appellant had already deposited the tax demand. The Tribunal, considering this, directed the waiver of pre-deposit of the balance demand until the appeal's disposal. As a result, both the Miscellaneous Application (COD) and the stay application were allowed in the mentioned terms.
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