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2007 (4) TMI 706
Issues involved: Determination of annual capacity of production for Central Excise duty payment, provisional capacity determination, imposition of penalty, finalization of capacity determination, entitlement to abatement of duty.
Determination of annual capacity of production: The appellants, engaged in manufacturing M.S. Ingots, were required to pay Central Excise duty based on their annual production capacity u/s 3A of Central Excise Act, 1944. The Commissioner provisionally determined their capacity as 9,600 MTs, which was challenged by the appellants due to inadequate power supply affecting their production capacity. The matter was referred back by the Bombay High Court for re-determination considering the power supply issue. However, the Commissioner held that he did not have the power to re-determine the capacity while the matter was pending before the Supreme Court, directing no coercive action until a final order was passed.
Imposition of penalty: The Additional Commissioner demanded duty from the appellants based on the provisional capacity determination, along with interest and penalty for non-payment within the prescribed time limit. This demand and penalty were confirmed by the Commissioner (Appeals).
Finalization of capacity determination: The appellants argued that until the capacity was finally determined, no duty payment or penalty imposition should occur. They highlighted that the show cause notices did not refer to subsequent orders of the Commissioner, and the capacity determination remained pending even after the High Court's direction. They requested finalization of the capacity determination before any duty demand or penalty imposition.
Entitlement to abatement of duty: The appellants also raised concerns about their entitlement to abatement of duty for the period when their factory was closed.
In conclusion, the Tribunal acknowledged that the capacity determination was provisional and pending finalization, making the confirmation of duty demand premature. They set aside the Commissioner (Appeals) order, emphasizing the need for the final determination of annual production capacity before adjudicating any demands. The appeal was allowed in favor of the appellants.
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2007 (4) TMI 705
Issues involved:
The issues involved in this case are the identification of the accused, the reliability of the test identification parade, and the admissibility of evidence based on newspaper publications.
Identification of the Accused:
The appellant and another individual were accused of a murder based on eyewitness testimonies. The witnesses claimed to have identified the accused during a test identification parade held after their photographs were published in a newspaper. However, discrepancies arose in the identification process, with some witnesses failing to accurately identify the accused. The court noted the importance of a reliable identification process and raised doubts about the accuracy of the identification in this case.
Reliability of Test Identification Parade:
The court emphasized the significance of conducting a test identification parade promptly to ensure the credibility of witness identifications. In this case, the test identification parade was held ten days after the incident, following the publication of the accused's photographs in a newspaper. The court criticized the delayed parade and highlighted the risk of witnesses identifying the accused based on external influences rather than genuine recognition. The judgment underscored the need for a clear and timely identification process to avoid vague identifications leading to convictions.
Admissibility of Evidence from Newspaper Publications:
The court addressed the admissibility of evidence derived from newspaper publications, specifically photographs of the accused with accompanying names in a local daily. The defense presented a witness who confirmed the publication of the accused's photographs, which were acknowledged by prosecution witnesses. The court found the evidence from the newspaper cutting to be credible and noted that the witness was not challenged during cross-examination. The judgment emphasized that the authenticity of such publications was not disputed and did not require further verification by the accused. Ultimately, the court ruled in favor of the appellant, highlighting the lack of conclusive evidence in the case and granting the appellant the benefit of the doubt.
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2007 (4) TMI 704
Addition made on the basis of statement during survey - return filled at "nil income" - assessment getting time-barred - reasonable opportunity not granted - sale consideration at the higher amount fixed solely relying upon the statement of this seller and without conducting any independent enquiry relating to the value of the property - HELD THAT:- From the records of this case show that the assessee was afforded reasonable opportunity and was also given opportunity that he can ask for documents, if any, but in spite of that the assessee did not ask for any documents for cross-examination till 22-3-2000 which goes to show that the assessee had nothing to explain and he was not interested to cross-examine Smt. Pushpa Seth. A number of opportunities were provided by the Assessing Officer to the assessee-company but the assessee-company was indulging in delaying tactics and only when the assessment was getting time-barred on 31-3-2000, it responded for the first time on 23-3-2000 when the documents furnished by Smt. Pushpa Seth were sought for the first time. Naturally, at that stage the Assessing Officer could not give any further opportunity because the assessment was getting time-barred on 31-3-2000. It is also apparent from the record that, the assessee-company was not a party before the Settlement Commission and, therefore, the proceedings could not be kept in abeyance by the Assessing Officer when the same were getting time-barred.
There are concurrent findings of three statutory authorities with regard to this fact that sufficient opportunities have been granted to the assessee to cross-examine the vendor Smt. Pushpa Seth but the assessee did not avail of the opportunity granted to it. So, we do not find any infirmity in the order passed by the authorities below and there is no reason to disagree with the finding given by the Tribunal on this regard.
Thus, no fault can be found with the view taken by the Tribunal. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of section 260A of the Act, which is confined to entertaining only such appeals against the order which involves a substantial question of law.
Accordingly, the present appeal filed by the assessee is, hereby dismissed.
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2007 (4) TMI 703
Issues Involved:
1. Whether the assessee acquired title to the disputed lands by adverse possession.
2. Whether the cost of acquisition of the disputed lands could be determined.
3. Applicability of the judgment in B.C. Srinivasa Setty's case to tangible assets.
4. Whether the litigation expenses incurred by the assessee constitute the cost of acquisition.
5. Whether the provisions of Section 55(2) and 55(3) of the IT Act apply.
6. Whether the sale consideration received by the assessee is taxable under Section 10(3) as casual and non-recurring receipts.
Detailed Analysis:
1. Acquisition of Title by Adverse Possession:
The Tribunal found no reason to doubt that the assessee acquired ownership rights through adverse possession. The assessee provided detailed historical records and a memorandum on title from M/s Little & Co., which showed continuous possession and use of the lands without interruption. The Tribunal noted that the Revenue failed to provide any evidence or material to counter the assessee's claims of adverse possession.
2. Determination of Cost of Acquisition:
The Tribunal held that the assessee's consistent stand since 1994 was that no cost was incurred for acquiring the lands. The Revenue's argument that the assessee did not furnish necessary details was not supported by evidence. The Tribunal emphasized that the issue was not the quality of the title but whether any cost of acquisition was incurred. The Tribunal concluded that there was no effective case against the assessee's claim of having acquired the lands without any cost of acquisition.
3. Applicability of B.C. Srinivasa Setty's Judgment:
The Tribunal rejected the Revenue's contention that the judgment in B.C. Srinivasa Setty's case applied only to intangible assets. The Tribunal relied on the judgment of the Andhra Pradesh High Court in CIT vs. Markapakula Agamma and the Gujarat High Court in CIT vs. Manoharsinghji P. Jadeja, which supported the application of the principle to tangible assets like land.
4. Litigation Expenses as Cost of Acquisition:
The Tribunal held that litigation expenses incurred by the assessee to defend its title did not constitute the cost of acquisition. The Tribunal relied on several judgments, including CIT vs. Smt. Leela Ghosh, which stated that expenses incurred for securing justice or vindicating legal rights could not be considered as the cost of acquisition of such rights.
5. Applicability of Section 55(2) and 55(3):
The Tribunal found that the provisions of Section 55(2) as applicable to the assessment years in question did not cover immovable property acquired by adverse possession. The Tribunal also rejected the applicability of Section 55(3), as there was no cost of acquisition incurred by the assessee or its predecessors for the disputed lands.
6. Taxability under Section 10(3):
The Tribunal held that Section 10(3) is not a charging provision and could not be used to bring to tax what are capital receipts in the eyes of the law. The Tribunal cited judgments from the Calcutta High Court and the Supreme Court to support the view that capital receipts that cannot be taxed under Section 45(1) cannot be brought to tax under Section 10(3).
Conclusion:
The Tribunal allowed the assessee's appeal for the assessment year 1994-95 and dismissed the Revenue's appeal for the assessment year 1995-96. The amounts received by the assessee for the disputed lands were not brought to assessment for want of cost of acquisition.
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2007 (4) TMI 702
Valuation - includibility - cost of advertisement/publicity expenses borne by the dealers and franchisee shops of M/s Kinetic and M/s Raymond on account of advertisement through press and other means and supply of calendar etc. - amendment to section 4 of CEA - Held that: - advertisement cost and pre-delivery inspection and after sales service charges which are sharable between the manufacturer and the dealer cannot be included in the assessable value even after 01.04.2000 as the advertisement promoted the sale of the dealers also and therefore his expenses cannot be included in the expenses of the manufacturer - appeal allowed - decided in favor of appellant.
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2007 (4) TMI 701
The Supreme Court granted leave to consider the effect of Section 80 of The Narcotic Drugs and Psychotropic Substances Act, 1985 and directed the matter to be placed before a 3-Judge Bench. (Case citation: 2007 (4) TMI 701 - SC)
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2007 (4) TMI 700
Issues Involved:
1. Liability of the insurance company under the Motor Vehicles Act, 1988.
2. Whether the deceased was driving the vehicle at the time of the accident.
3. Applicability of the Swaran Singh case to the present case.
4. Requirement of proving negligence in claims under Section 166 of the Motor Vehicles Act, 1988.
5. Coverage of employees under the insurance policy.
Detailed Analysis:
1. Liability of the Insurance Company:
The insurance policy in question was in terms of the Motor Vehicles Act, 1988, and did not cover the employee of the owner who was driving the vehicle while attending to the business of the employer company. The deceased was not a "third party" under the policy or the Act. The insurance company argued that the policy did not cover the employee of the owner driving the vehicle, and the High Court erred in directing the insurance company to pay the compensation decreed by the Tribunal. The Supreme Court agreed, stating that the insurance company was not liable to indemnify the insured in this case.
2. Whether the Deceased was Driving the Vehicle:
The Tribunal found that the deceased was driving the vehicle at the time of the accident and did not hold a valid driving license. This finding was not reversed by the High Court. The Supreme Court noted that the High Court should have applied its mind better to the question arising and specifically answered the question of who was driving the vehicle at the time of the accident. The insurance company argued that without impleading Mahmood Hasan, who was allegedly driving the car, the claim should not have been entertained.
3. Applicability of the Swaran Singh Case:
The claimants argued that the insurance company was liable to pay the compensation even if there was a breach of a policy condition, citing the Swaran Singh case. However, the Supreme Court found that the Swaran Singh case related to third-party claims and was not applicable to the present case, which did not involve a third party. The Court stated that the whole protection provided by Chapter XI of the Act is against third-party risk, and the insurance company cannot be made automatically liable merely by resorting to the Swaran Singh ratio.
4. Requirement of Proving Negligence:
The Supreme Court reiterated that proof of negligence is necessary before the owner or the insurance company can be held liable for the payment of compensation in a motor accident claim case under Section 166 of the Act. The Court referred to the Minu B. Mehta case, which held that proof of negligence remained the lynchpin to recover compensation. The Court also noted that the Gujarat State Road Transport Corporation case did not jettison the requirement of proving negligence in claims under Section 166.
5. Coverage of Employees under the Insurance Policy:
The Supreme Court examined the provisions of Section 147 of the Motor Vehicles Act, 1988, and concluded that the insurance policy need not cover the liability in respect of death or injury arising out of and in the course of the employment of an employee of the insured, unless it is a liability arising under the Workmen's Compensation Act, 1923. The Court found that the deceased, being an employee not covered by the Workmen's Compensation Act, was not covered compulsorily under the Act, and only a special contract could bring such a person under coverage. There was no special contract in this case.
Conclusion:
The Supreme Court allowed the appeal, reversing the decision of the High Court, and restored the award of the Tribunal exonerating the insurance company from liability. The Court emphasized that the insurance company was not liable to indemnify the insured and was not obliged to satisfy the award of the Tribunal/Court and then have recourse to the insured, the owner of the vehicle. The claimants had to establish the negligence of the driver, and the deceased was not covered under the insurance policy as an employee of the insured.
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2007 (4) TMI 699
Penalty u/s 76 - payment of tax before issuance of SCN - Invocation of section 80 - Held that: - Ld. Commissioner (Appeals) has correctly invoked the provisions of section 80, as in this case it is on record that the respondent was not aware of the levy of service tax on services rendered by him - penalty not warranted - appeal dismissed - decided against Revenue.
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2007 (4) TMI 698
Maintainability of application seeking leave to defend - barred by limitation - Loan advanced acknowledged in books of account, balance sheets and profit and loss accounts - Parties signed a Memorandum of Understanding - cheque issued in terms of the Memorandum, dishonoured on account of insufficiency of funds - HELD THAT:- I find that the plaintiff has placed complete details of the cheques which have been issued towards the loan advanced to the defendant. The amounts received from the defendant have also been detailed and statements of account have also been filed as Annexure 'A' to the amended suit. The amount which was advanced by the plaintiff is acknowledged in the balance sheet of the defendant. The plaintiff has asserted that it has paid an amount of ₹ 64.30 lakhs and additionally, ₹ 3.50 lakhs on 21st April, 2001.
The plaintiff has further advanced an amount of ₹ 5 lakhs on 24th April, 2001. Against this, the defendant has repaid an amount of ₹ 18.00 lakhs on 12th April, 2004 and ₹ 11.00 lakhs on 15th April, 2004 leaving a balance amount due and payable by the defendant of ₹ 43,80,000/-. The payments made by the defendant stand duly stated before this court. The cheques which were issued and dishonoured have been placed on record.
The defendant has not urged that it has made any other payment to the plaintiff. In these circumstances, even the amount which the defendant is liable to pay to the plaintiff is clearly established on record.
I therefore, find force in the submission on behalf of the plaintiff that the suit based on the balance sheets of the defendant company would by itself be maintainable and covered under clause 2 (b) (i) of Rule 1 of Order 37 of the Code of Civil Procedure, 1908.
There can be no dispute that the reliance by the plaintiff on the Memorandum of Understanding dated 1st April, 2004 would also be covered under the same clause of Order 37 in as much as such Memorandum of Understanding would constitute a written contract. Undoubtedly, in the instant case, the defendant has failed to abide by the Memorandum of Understanding resulting in the plaintiff being entitled to submit that the same was not binding on its very terms.
In the instant case, the entries in the books of account are duly corroborated in the balance sheets as well as in the admissions of the defendant in its correspondence with the plaintiff as also the afore noticed Memorandum of Understanding dated 1st April, 2004. Therefore, such corroboration as is envisaged u/s 34 of the Indian Evidence Act is also available
It is well settled that the power to grant pendente lite and future interest vests in the court u/s 34 of the Code of Civil Procedure and certainly there can be no prohibition to the maintainability of the present suit on the ground that the plaintiff has incorporated a prayer for pendente lite and future interest.
Thus, it has to be held that the objections of the defendant are wholly without merit and the defence disclosed in support of the leave to defend do not require adjudication.
These principles clearly apply to the defence raised by the defendant which consequently deserves to be rejected.
I therefore, find no merit in the case by the defendant in this application and consequently, the present application is hereby dismissed.
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2007 (4) TMI 697
Issues involved: Refund claim rejection, unjust enrichment, service tax exemption for small scale industries.
Refund Claim Rejection: The appeal challenged the order setting aside the rejection of a refund claim for Service Tax paid by the respondent to goods transport operators. The respondent, a small scale industry, argued exemption under Notification No. 43/97-ST. The lower authorities accepted this contention, leading to the refund claim rejection on unjust enrichment grounds. The Commissioner (Appeals) found in favor of the respondent based on evidence, including a Chartered Accountant Certificate confirming non-passing of the tax burden to customers.
Unjust Enrichment: The Commissioner (Appeals) noted that the Service Tax amount was paid "under protest" and not passed on to customers. Citing relevant case law, including Sunbeam Auto Ltd. v. CCE, Delhi-III, it was established that the refund claim was valid as the tax burden was not shifted to customers. The Chartered Accountant Certificate further supported this position, indicating the respondent bore the tax incidence.
Service Tax Exemption for Small Scale Industries: The issue of exemption for small scale industries from Service Tax as recipients of goods transport services was crucial in this case. The respondent's eligibility for this exemption was upheld, leading to the rejection of the refund claim on unjust enrichment grounds. The evidence presented, including the Chartered Accountant Certificate, confirmed the non-passing of the tax burden, supporting the exemption claim.
In conclusion, the appeal by the Revenue was dismissed as the impugned order was found to be correct and legally sound, with no evidence presented to challenge the findings supporting the respondent's refund claim.
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2007 (4) TMI 696
Issues involved: Appeal arising from dismissal under proviso to Section 35F of the CE Act for non-compliance of Interim Order regarding delayed payment of Service Tax.
Comprehensive details:
(1) Delayed payment of Service Tax: The appellants contended that the delay in payment was due to the Revenue not providing the account number on time. They were filing monthly statements and crediting the amounts under the appropriate head to the Office of the Principal Chief Controller of Accounts. The delay in transferring the funds to the Central Board of Excise and Customs was attributed to inter-departmental delays. The Tribunal had previously ruled that demands cannot be raised for such delays (Final Order No. 04/2003 -NB(A) dated 02.06.2003).
(2) Appeal and Remand: The learned Counsel referred to the previous order and requested a remand of the matter to the original authority to apply the same judgment.
(3) Departmental View: The learned JDR reiterated the departmental view.
Upon careful consideration, the Tribunal noted that the issue had already been decided by the Hon'ble President in a previous Final Order. Therefore, the dismissal of the appeal under Section 35F was deemed unjustified. The impugned order was set aside, and the matter was remanded to the Commissioner (Appeals) for fresh consideration within four months, applying the Tribunal's previous ruling. The appeal was allowed by way of remand.
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2007 (4) TMI 695
Issues Involved:
1. Suppression of fact by non-disclosure and its effect on access to justice.
2. Termination of employment without complying with principles of natural justice.
3. Forum shopping and abuse of the process of court.
4. Discretionary jurisdiction of writ courts and the requirement of clean hands.
5. Materiality of facts suppressed in legal proceedings.
6. Availability and exhaustion of alternative remedies.
7. Res judicata and the possibility of filing a fresh writ petition.
Issue-wise Detailed Analysis:
1. Suppression of fact by non-disclosure and its effect on access to justice:
The core issue in this appeal is the extent to which suppression of fact by non-disclosure affects a person's right to access justice. The appellant did not disclose the pendency of a civil suit when filing a writ petition, which led to the dismissal of the writ petition by the High Court on grounds of material concealment.
2. Termination of employment without complying with principles of natural justice:
The appellant's services were terminated allegedly without adhering to the principles of natural justice, despite her confirmation in service. This prompted her to seek legal recourse initially through a civil suit and subsequently through a writ petition.
3. Forum shopping and abuse of the process of court:
The High Court dismissed the writ petition, noting that the appellant was engaging in forum shopping by filing a writ petition after failing to obtain an interim injunction in the civil suit. The court held that this amounted to an abuse of the process of court.
4. Discretionary jurisdiction of writ courts and the requirement of clean hands:
The court emphasized that while judicial review is a basic feature of the Constitution, it is also a discretionary remedy. The principle that a person invoking the court's discretionary jurisdiction must come with clean hands was reiterated. The court cited various precedents, including Moody v. Cox and Halsbury's Laws of England, to underline that equity demands propriety of conduct.
5. Materiality of facts suppressed in legal proceedings:
The court analyzed whether the suppressed fact (pendency of the civil suit) was material for the determination of the writ petition. It concluded that suppression of material facts, which are crucial for the determination of the lis, can lead to the denial of equitable relief. However, it also noted that if the suppressed fact is not material, the court may still exercise its jurisdiction.
6. Availability and exhaustion of alternative remedies:
The existence of an alternative remedy, such as a civil suit, does not bar the High Court from exercising its jurisdiction under Article 226. The court referred to S.J.S. Business Enterprises (P) Ltd. v. State of Bihar, noting that the availability of an alternative remedy is a factor for the court's discretion but does not impinge on its jurisdiction.
7. Res judicata and the possibility of filing a fresh writ petition:
The court held that the dismissal of the writ petition on grounds of suppression of facts does not preclude the appellant from filing a fresh writ petition with full disclosure of facts. The judgment of the High Court in this context would not operate as res judicata, allowing the appellant to seek redressal afresh.
Conclusion:
The Supreme Court upheld the High Court's judgment but allowed the appellant the opportunity to file a fresh writ petition with all relevant facts disclosed. The appeal was dismissed with the observation that the new writ petition should be considered on its merits, emphasizing the appellant's human right to access justice and the basic feature of judicial review in the Constitution. No costs were awarded.
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2007 (4) TMI 694
Issues involved: Challenge to forfeiture of Bank Guarantee by Member-Secretary of CMDA without considering petitioner's reply.
The High Court of Madras heard a writ petition challenging the forfeiture of a Bank Guarantee of Rs. 19,60,000 by the Member-Secretary of CMDA. The petitioner sought to quash the decision and prevent further action against their construction project in Chennai. The court noted that the Member-Secretary had issued a show cause notice regarding violations in the construction, to which the petitioner had responded with a detailed reply. However, the subsequent order of forfeiture did not take into account this reply. The court, without delving into the merits of the case, quashed the decision and directed the Member-Secretary to reconsider the petitioner's explanation and issue fresh orders within eight weeks, after providing an opportunity for a personal hearing. The writ petition was allowed with no costs incurred, and the related miscellaneous petition was closed.
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2007 (4) TMI 693
Foreign exchange - Search and seizure - Prosecution and penalty - seeking to quash the order passed by the learned Judge - Violation of Section 9 of the Foreign Exchange Regulation Act, 1973, (FERA) - appellant submits that the standard of proof required to bring home the charge in a criminal case is much higher than in the adjudication proceedings and once the appellant has been exonerated in the adjudication proceedings, his prosecution is an abuse of the process of court - HELD THAT:- It may be noted that relying on different authorities by the Supreme Court and other High Courts, in several cases, this High Court has also taken a view that when in the departmental proceedings the accused was exonerated by the adjudicating authority, the criminal proceedings should not be continued. In Raichand C. Jain v. Surendra Prasad [2006 (2) TMI 668 - BOMBAY HIGH COURT], in a proceeding u/s 56(1)(I) read with 9(1)(d) etc., FERA, this Court had held that when the applicant-accused was exonerated by the adjudicating authority, on the same set of facts, criminal proceeding could not be continued and therefore in the inherent power u/s 482 Cr.P.C., the criminal proceeding should be quashed.
It may be noted that in the present case the applicant was exonerated by the Dy. Director of Enforcement, who was adjudicating authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the adjudicating authority in detail. The adjudicating authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was completely exonerated. When in the departmental proceedings before the adjudicating authority, the department could not establish the charges, it is difficult to imagine how the department could prove the same charges before the criminal Court when the standard of proof may be much higher and stringent than the standard of proof required in departmental proceedings.
Before concluding, it would be necessary to find out whether the retracted statement of M.M. Vaidya could be sufficient to proceed with the criminal proceeding against the present applicant. The statement of M.M. Vaidya, Bhadkamkar and Harshe were recorded by the Officers of Enforcement Directorate u/s 39 or 40 of Foreign Exchange Regulation Act and not Section 108 of the Customs Act. In view of the provisions of Section 138(b) Customs Act, it is settled that the Officers of the Customs Department are not the Police Officers and the statement recorded by the Customs Officers under Section 108 are admissible in evidence.
Statements of Mr. Bhadkamkar and Mr. Haresh, the two Officers from A.T.C., is only hearsay evidence and Mr. Bhadkamkar is no more alive. According to them, Mr. Vaidya had received ₹ 30 Lacs or ₹ 27 Lacs from A.T.C. and from Mr. Vaidya they had come to know that the amount was paid to the present applicant. Therefore, no importance could be given to the statements of those two persons. Mr. Vaidya made a statement implicating himself as well as the present applicant, but later on he retracted from that statement and admittedly there is no documentary or other evidence to provide any corroboration to the said statement of Mr. Vaidya. As such there is no material on the basis of which the prosecution would have any chance of success in criminal case.
As pointed out, in view of the same circumstances, the adjudicating authority under FERA has completely exonerated the present applicant and it is impossible that with the same set of evidence, as pointed out above, the applicant can be convicted in the criminal proceedings. Therefore, in my opinion, it is a fit case to invoke inherent restrictions to avoid abuse of process under Section 482 of Cr.P.C.
In the result, the application is allowed. The criminal proceedings in case No. 3 of 1986 before learned Chief Judicial Magistrate, Pune are hereby quashed.
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2007 (4) TMI 692
Issues involved: Refund claimed by the appellant, unjust enrichment.
Refund Claimed by the Appellant: The appellant claimed a refund related to the demand of duty on dies and moulds manufactured for M/s Ashok Leyland Ltd. The dies and moulds were not physically cleared but retained in the appellant's factory for further use. The assessable value of the motor vehicle parts manufactured included the amortized cost of the dies and moulds. The invoices showed that the amount charged from M/s Ashok Leyland did not include the cost of the dies and moulds separately, which were added to the assessable value for duty payment. The appellant argued that since the dies and moulds were never cleared or sold to M/s Ashok Leyland, the duty payment refund should not be considered unjust enrichment.
Decision: The Tribunal found the appellant's submissions convincing but required verification by the original adjudicating authority. The impugned order was set aside, and the matter was remanded for fresh adjudication based on the appellant's submissions.
Conclusion: The appeal was allowed by way of remand for further review and clarification by the Assistant Commissioner.
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2007 (4) TMI 691
Issues involved: Interpretation of Section 70 and Section 73 of the Act, applicability of Supreme Court judgments on liability under Section 71A, time-barred demands, validity of Service tax raised.
Interpretation of Section 70 and Section 73:
The Commissioner (A) set aside the impugned order based on the Hon'ble Supreme Court decision in L. H. Sugar Factory Ltd. case, which held that show cause notice issued under Section 73 was not maintainable for entities not liable to file Service tax returns under Section 70 but u/s 71A. The show cause notice issued to the appellant under Section 70 was deemed invalid in light of this ruling, granting relief to the appellant.
Validity of Service tax raised:
The revenue contended that the Service tax raised should be confirmed as the Apex Court upheld the constitutionally validity of validating provisions of Finance Act. They argued that the subsequent judgment in L. H. Sugar Ltd. v. CCE was ultra vires, as there was no reason to question the levy of Service tax validated for the receiver of the service.
Time-barred demands and applicability of judgments:
The appellant's representative argued that the demands were time-barred, citing the earlier show cause notices and relying on the Larger Bench judgment in Nizam Sugar Factory case. They claimed that the show cause notice dated 10-11-2004 was time-barred and did not allege suppression or intention to evade duty. The Commissioner (A) agreed with this argument, stating that demands are not recoverable if earlier show cause notices have been issued, as per the Nizam Sugar Factory judgment.
Conclusion:
The Tribunal rejected the revenue's appeal, affirming the Commissioner (A)'s decision based on the applicability of the Supreme Court judgments and the time-barred nature of the demands. The Tribunal found no merit in the revenue's arguments and upheld the relief granted to the appellant.
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2007 (4) TMI 690
Issues Involved:
1. Admissibility of retracted statements taken in custody.
2. Consideration of statements recorded u/s 40 of FERA without cross-examination.
3. Sufficiency of evidence for imposing penalties.
Summary:
1. Admissibility of Retracted Statements Taken in Custody:
The appellants contended that the statements of Smt. Gurmit Kaur Dhillon and Shri Saudagar Singh, recorded under coercion and duress while in custody, were subsequently retracted and thus could not form the basis for imposing penalties. The court referenced the judgment of the Hon'ble High Court of Madras in Anil G. Merchant v. Director of Revenue Intelligence, Madras, which emphasized that statements obtained under coercion or duress are inadmissible. The court found that the statements were recorded under duress and subsequently retracted, making them unreliable for imposing penalties.
2. Consideration of Statements Recorded u/s 40 of FERA Without Cross-Examination:
The appellants argued that the statements recorded u/s 40 of FERA were inadmissible as the persons who made these statements were not produced for cross-examination. The court referred to the judgment of the Hon'ble Kerala High Court in Central Govt. v. Alfred James Fernandes, which held that the right to cross-examine witnesses is essential for a fair enquiry. The court concluded that the failure to allow cross-examination rendered the statements inadmissible.
3. Sufficiency of Evidence for Imposing Penalties:
The appellants challenged the sufficiency of evidence, arguing that the case was based solely on retracted confessions without corroborative evidence. The court cited the Hon'ble Supreme Court's judgment in Bhana Khalpa Bhai Patel v. Assistant Collector of Customs, Bulsar, Gujarat, which stated that confessional statements could only be considered if supported by other satisfactory evidence. The court found that the impugned orders were based on no evidence, as the statements recorded under duress and without cross-examination could not be relied upon.
Conclusion:
The court allowed the appeals, setting aside the orders passed by the Enforcement Director and the Appellate Tribunal for Foreign Exchange. It directed the refund of the amount deposited in the fixed deposit to Smt. Gurmit Kaur Dhillon, concluding that the penalties imposed were not supported by admissible evidence.
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2007 (4) TMI 689
Whether a Diploma holder Junior Engineer, who obtains degree while in service becomes eligible for promotion as Assistant Engineer on rendering three years' service would include therein the period of service rendered by him prior to the obtaining of the Degree or he has to render three years' service after obtaining the Degree to become eligible for promotion to the post of Assistant Engineer?
Whether three years service as Junior Engineer has to be after obtaining degree or the earlier service of the Junior Engineer while holding diploma only can also be considered?
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2007 (4) TMI 688
Issues involved: Application for directions to disclose property details and restrain alienation during legal proceedings.
Summary:
The applicants filed an application seeking directions for the opponents to disclose all movable and immovable properties owned by them and to declare any properties transferred or alienated. The opponents were also requested not to dispose of any properties during the legal proceedings. The court noted the substantial duty/penalty liability of the opponents and their actions of notifying plant and machinery for sale. The opponents admitted the discontinuation of manufacturing activities and highlighted substantial reserves in their balance sheet. Considering the circumstances and the opponents' statements, the court decided to restrain the opponents from alienating any properties without permission during the proceedings. The application was partly successful, and the opponents were prohibited from transferring any properties without the court's or Commissioner's approval. No costs were awarded in this matter.
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2007 (4) TMI 687
Issues:
1. Allegations of gross misconduct, negligence, and dereliction of duty against an Inspector in a departmental proceeding.
2. Imposition of punishment of forfeiture of service against the Inspector.
3. Dismissal of the appeal against the punishment by the Commissioner of Police.
4. Denial of relief by the Central Administrative Tribunal and the High Court.
5. Interpretation of the term "misconduct" in the context of a public officer's duties.
Issue 1: Allegations of Gross Misconduct:
The case involves an Inspector working with the Delhi Police who was accused of gross misconduct, negligence, and dereliction of duty during a raid operation. The Inspector failed to seize tainted money, which was considered crucial evidence in a bribery case. The disciplinary authority found the Inspector guilty of these charges, leading to the initiation of a departmental proceeding against him.
Issue 2: Imposition of Punishment:
Following the disciplinary proceedings, the Inspector was punished with the forfeiture of one year's approved service. The Commissioner of Police upheld this punishment, citing the failure to seize the tainted money as a significant lapse on the part of the Inspector. The Commissioner deemed this failure as a serious misconduct, justifying the imposed punishment.
Issue 3: Dismissal of Appeal:
The Inspector appealed against the punishment, arguing that he had not committed any misconduct in the peculiar circumstances of the case. However, the appellate authority, i.e., the Commissioner of Police, rejected the appeal, emphasizing that the failure to seize the tainted money constituted a breach of the Inspector's official duties, leading to the acquittal of the accused in the criminal case.
Issue 4: Denial of Relief by Tribunals:
The Inspector's attempts to challenge the punishment through the Central Administrative Tribunal and subsequently the High Court were unsuccessful. Both tribunals upheld the decision of the disciplinary authority, emphasizing that the failure to seize the currency notes amounted to misconduct, as it was an omission of duty required of a public servant.
Issue 5: Interpretation of "Misconduct":
The legal analysis focused on interpreting the term "misconduct" concerning a public officer's duties. Various definitions of misconduct were cited, emphasizing that misconduct implies wrongful intention and not mere error of judgment. The court highlighted that negligence alone does not constitute misconduct, and disciplinary action should be based on willful and unlawful behavior in relation to official duties.
In conclusion, the Supreme Court set aside the impugned judgment, ruling in favor of the Inspector. The court found that, in the specific circumstances of the case, the Inspector's actions did not amount to misconduct. The court emphasized that the failure to seize the tainted money should be evaluated based on the facts and context of each case, and in this instance, the Inspector's conduct did not justify the imposed punishment.
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