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2010 (5) TMI 885
The Delhi High Court dismissed the appeal against the Income Tax Appellate Tribunal's order regarding the addition of Rs. 19.5 lakhs on account of alleged accommodation entries for the assessment year 1999-2000. The court found that the share application money received from various companies was legitimate, as the identities of the share applicants were established with supporting documents and payments were made through normal banking channels. No substantial question of law arose for consideration.
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2010 (5) TMI 884
Issues involved: Appeal against order u/s 147 of Income Tax Act, 1961 regarding addition of share application money.
Summary:
The appeal was filed against the order passed by the Income Tax Appellate Tribunal related to the assessment year 2002-2003. The Assessing Officer had made an addition of &8377; 11 lakhs on account of alleged share application money received by the assessee company from three parties: M/s Chintpurni Credit and Leasing P. Ltd., M/s. Sober Associates P.Ltd., and M/s. Rahul Fin-lease P Ltd.
The Income Tax Appellate Tribunal found that the identities of the three share applicants were established as they were private limited companies, regular income-tax assesses, and had submitted various supporting documents such as affidavits of their Directors, certificates of confirmation, Bank Statements, balance sheets, and Income-tax returns for the assessment year 2000-2001. The Tribunal referred to the decision of the Supreme Court in the case of CIT vs. Lovely Exports Pvt. Ltd and based on the information and particulars available on record, deleted the addition. The order of the Commissioner of Income-tax (Appeals) was upheld in this regard.
No substantial question of law was found to arise for the consideration of the court, as no infirmity in the decision was pointed out by the appellant's counsel. Consequently, the appeal was dismissed.
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2010 (5) TMI 883
Issues involved: Appeal by revenue against cancellation of order u/s 201(1) for failure to deduct TDS on interest accrued on fixed deposit.
Summary:
The appeal was filed by the revenue against the order of the CIT(A) cancelling the order u/s 201(1) for failure to deduct TDS on interest accrued on a fixed deposit. The revenue contended that it was mandatory for the Manager to deduct tax u/s 194A on the interest. The assessee, however, argued that they were covered by a notification issued by the Central Government u/s 194A(3)(iii)(f), exempting them from TDS. The Assessing Officer raised a demand for not deducting tax on FDRs made by a university, claiming the income was exempt u/s 10(23C)(iiiab). The university's income was found to be exempt as it existed solely for educational purposes and was substantially financed by the Government. The CIT(A) considered relevant notifications and circulars, concluding that since the income was exempt, there was no requirement for TDS. The appeal of the revenue was dismissed, upholding the CIT(A)'s decision.
The judgment highlighted the importance of relevant sections such as 194A, 197A(1B), and 10(23C)(iiiab) of the Act in determining the applicability of TDS. It emphasized that when income is exempt, the obligation to deduct tax at source does not arise. The decision was based on a thorough consideration of the facts and legal provisions, ultimately leading to the dismissal of the revenue's appeal.
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2010 (5) TMI 882
CENVAT credit - Employee's Medical Insurance - Employee's Personal Accident Insurance - Held that: - this issue stands settled in favor of the assessees in their own case CCE, Chennai II Versus M/s. Sundaram Clayton Ltd [2009 (10) TMI 893 - CESTAT CHENNAI] which decision in turn relies upon Millipore India Ltd. vs. CCE, Bangalore [2008 (11) TMI 97 - CESTAT, BANGALORE], where it was held that on above services, the credit remains allowed - credit allowed - decided against Revenue.
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2010 (5) TMI 881
Issues involved: Appeal against deletion of insurance claim received.
Summary:
The appeal was filed by the Revenue against the deletion of an insurance claim received by the assessee. The case involved the assessment of a trading company that suffered a loss due to the burning of cars during riots. The insurance claim of Rs. 66,35,770 was initially rejected but later approved as exgratia. The Assessing Officer added this amount as income earned by the company for the relevant year. The assessee argued that the insurance claim was compensatory in nature and should not be treated as income. The CIT(A) agreed with the assessee's contention and deleted the addition. The Tribunal upheld the CIT(A)'s decision, stating that the claim was settled in a subsequent financial year and no adjustment was required for the year under consideration.
The Tribunal found that the assessee did not claim any trading loss in the year of the incident and the insurance claim was approved as exgratia in a later year. The entire cost of the damaged cars was adjusted against the exgratia and waiver granted by the financiers. The Tribunal noted that no claim for damage was debited to the profit and loss account for the relevant year, as the claim was settled in a subsequent financial year. The Tribunal dismissed the appeal, as there was no material to support a different view on the matter. Grounds 2 and 3 of the appeal were also dismissed as they were of a general nature.
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2010 (5) TMI 880
Issues involved: Appeal against CIT(A) order regarding deletion of addition made by A.O. against capital contribution by partners as firm's income.
Deletion of addition by CIT(A):
- A.O. added &8377; 87,00,000 in firm's hands as capital contribution by partners.
- Assessee explained partners invested from agricultural income with affidavits.
- CIT(A) deleted addition, stating partners' capital contribution reasonably explained.
- Revenue contended onus on assessee to prove cash credit, no evidence on sources of investment.
- CIT(A) accepted explanation without evidence, no opportunity for cross-examination.
- Tribunal cited case law stating no addition in firm's hands for partner deposits made before business commencement.
Case law references:
- India Rice Mill vs. CIT, 218 ITR 508 (Alld)
- Surendra Mahan Seth vs. CIT, 221 ITR 239 (Alld)
- CIT vs. Jaiswal Motor Finance, 141 ITR 706 (Alld.)
Decision based on case law:
- Tribunal held no addition in firm's hands for partner capital contribution.
- Burden on partner to explain source of investment.
- A.O. incorrect in adding amount in firm's hands, should act on individual partners.
- Appeal by Revenue dismissed, decision pronounced on 25.05.2010.
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2010 (5) TMI 879
Issues involved: Disallowance of depreciation on fixed assets and allowing carry forward of brought forward losses of earlier years.
Disallowance of Depreciation on Fixed Assets:
The revenue appealed against the deletion of the addition of Rs. 5,46,831/- made on account of disallowance of depreciation on fixed assets. The revenue argued that the assessee did not maintain proper records of fixed assets and failed to provide quantitative details and usage information. The revenue contended that since it was unclear whether the fixed assets were put to use during the relevant previous year, depreciation was rightfully denied. On the other hand, the assessee's counsel defended the order, stating that depreciation was disallowed based solely on the auditor's notes. It was emphasized that depreciation had been regularly allowed on these assets since their inclusion in the balance-sheet, and disallowing it based on the auditor's remark was unjustified. The Tribunal noted that the assessee had utilized the assets for business purposes, had previously claimed depreciation, and no adhoc disallowance could be made in this case. Consequently, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals).
Allowing Carry Forward of Brought Forward Losses of Earlier Years:
The Senior Departmental Representative argued that the disallowance of carrying forward losses of earlier years was justified due to the lack of proof provided by the assessee. However, the assessee's counsel defended the order. Upon review and considering the submissions, the Tribunal found that the Assessing Officer had disallowed carrying forward losses of earlier years citing lack of proof. The assessee maintained that the losses had been assessed in previous years and were on record with the Assessing Officer, hence, the disallowance was unwarranted. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to allow the carry forward of brought forward losses of earlier years after verifying the records. Section 72 allows for the carry forward of losses when they are not set off against income under any other head. The Tribunal upheld the Commissioner's decision, stating that unabsorbed losses must be assessed each year to determine if they can be set off against profits. Losses can be set off against income from any business, and the Assessing Officer is required to allow set off even if not claimed, hence, the direction to allow carry forward was deemed appropriate. The appeal of the revenue was ultimately dismissed.
Separate Judgement: No separate judgment was delivered by the judges.
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2010 (5) TMI 878
Issues Involved:
1. Sustaining the addition of Rs. 1,21,67,320/- of Gross Profit on an estimate basis.
2. Ignoring the reply made to ITO in response to notice in remand report proceedings.
3. Upholding the rejection of books u/s 145.
Summary:
Issue 1: Sustaining the addition of Rs. 1,21,67,320/- of Gross Profit on an estimate basis
The Assessing Officer (AO) observed a significant reduction in net profit despite an increase in turnover. The AO compared the financial results with other entities and found discrepancies. Due to the assessee's failure to provide satisfactory explanations and produce books of accounts, the AO invoked provisions of section 145 of the Act and estimated the gross profit at 15%, resulting in an addition of Rs. 1,11,77,787/- to the total income. The CIT (A) upheld this estimation, noting the lack of supporting documents and the non-comparability of the cases cited by the assessee.
Issue 2: Ignoring the reply made to ITO in response to notice in remand report proceedings
The assessee argued that it had submitted the necessary documents and that the parties had complied with notices u/s 133(6). However, the AO reported that the assessee did not attend the hearings and filed submissions in Tapal. The CIT (A) observed that the assessee did not produce regular books of accounts or supporting documents, justifying the AO's rejection of the book results and estimation of income.
Issue 3: Upholding the rejection of books u/s 145
The assessee contended that it was a 100% export trader, not a manufacturer, and that the AO's comparison with manufacturers was incorrect. The Tribunal noted that the AO wrongly presumed the assessee as a manufacturer. Despite this, the assessee failed to produce full details and supporting documents. The Tribunal found that the comparative cases cited by both the AO and the assessee were not comparable due to differences in turnover and assessment years. Considering the facts, the Tribunal deemed the adoption of a 15% GP rate excessive and directed a GP rate of 8% for the assessment year 2005-06, partly allowing the appeal.
Conclusion:
The Tribunal partly allowed the appeal, directing the adoption of an 8% GP rate for the assessment year 2005-06, considering the non-comparability of cited cases and the assessee's failure to produce full details.
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2010 (5) TMI 877
Valuation - includibility - 'Child Parts' supplied are returned to the revisionist by the suppliers with the parent parts - manufacture of cars - whether the 'Child Parts' are included in the assessable value? - Held that: - The Tribunal without assigning and commenting on the merits of the claim of the revisionist simply observed that the facts of the case does not make out a case for grant of complete or full stay. The basis of recording such a finding is not available in the order. The Tribunal does not even say that no prima facie case has been made out in favour of the revisionist and that he would not suffer any loss or further that the balance of convenience is not in its favor - matter remanded to the Additional Commissioner, (Appeals) NOIDA before whom the revisionist's appeal No. 75 of 2010 is pending consideration to consider and decide the same expeditiously - revision allowed by way of remand.
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2010 (5) TMI 876
Issues involved: Cross-appeals by Assessee and Revenue regarding disallowance of "Carting Expenses," shortage of goods, accident expenses, vehicle expenses, depreciation, and telephone expenses.
Disallowance of "Carting Expenses": The dispute arose from the disallowance of a portion of the claimed Carting Expenses. The Assessing Officer disallowed 2.5%, which was reduced to 1% by the CIT(Appeals). The Tribunal, considering past cases, upheld the CIT(Appeals' decision, citing lack of objectionable evidence from the Revenue's side.
Shortage of Goods Disallowance: The Assessing Officer disallowed a sum due to unverifiable shortage of goods. The CIT(Appeals) upheld the disallowance at a reduced amount of Rs. 8,000, following past cases where similar disallowances were made. The Tribunal affirmed this decision due to lack of corroborative evidence from the assessee.
Accident Expenses Disallowance: A portion of accident expenses was debited without proper explanation, leading to disallowance by the Assessing Officer and CIT(Appeals). The Tribunal upheld this decision, as the assessee failed to provide supporting evidence for the liability claimed.
Vehicle Expenses and Depreciation Disallowance: Disallowances at the rate of 10% for vehicle expenses and depreciation, as well as telephone expenses, were made by the Assessing Officer and affirmed by the CIT(Appeals). The Tribunal upheld these disallowances, considering the personal nature of the expenses and lack of log-sheet maintenance by the assessee.
In conclusion, the Tribunal partly allowed the Assessee's appeal and dismissed the Revenue's appeal in the matter. The decision was signed, dated, and pronounced on 21st May, 2010.
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2010 (5) TMI 875
Issues involved: Addition of closing work-in-progress for the assessment year 2004-05.
Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax(Appeals) confirming the addition of closing work-in-progress for the assessment year 2004-05. The assessee, engaged in dyeing and printing of fabrics on a job work basis, contested the addition made by the Assessing Officer. The ld. CIT(A) upheld the addition, prompting the assessee to refer to a previous decision by ITAT in their own case for the assessment year 2003-04, where it was held that since the assessee is not engaged in manufacturing activities of its own, the addition on account of work-in-progress cannot be made. The Revenue did not counter the submissions made by the assessee's counsel. After considering the arguments and the previous decision of ITAT, the Tribunal concluded that the addition of closing work-in-progress should be deleted. It was noted that the assessee follows a regular system of accounting based on accepted principles, and therefore, the addition was not justified. The Tribunal allowed the appeal filed by the assessee, deleting the addition of closing work-in-progress.
The Order was pronounced in the Court on 28.05.2010.
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2010 (5) TMI 874
Issues involved:
The petition involves seeking permission to remove a wreck obstructing the sea channel, challenging an order to file a Bill of Entry, and requesting assessment based on a Memorandum of Understanding (MOU) value.
Permission to Remove Wreck:
The petitioners sought a writ to remove the wreck of D.V. Platinum-II obstructing the sea channel and store pieces at a designated land, emphasizing the urgency due to the approaching monsoon and potential environmental disaster. The court noted the urgency and both parties reached an amicable solution. The petitioners were directed to file a Bill of Entry by a specified date, and provisional assessment would be conducted upon submission of relevant documents. The petitioners agreed to pay duty and furnish security as required by law. The wreck would be permitted to be moved to a landing place after completion of necessary procedures.
Challenge to Order on Bill of Entry:
The petition challenged an order directing the filing of a Bill of Entry based on a canceled Memorandum of Agreement (MOA). The court directed the assessment to be based on the value declared in the MOU dated 23.12.2009, with provisional assessment to be conducted in accordance with customs regulations. The petitioners agreed to pay duty and furnish security as required by law.
Representation for Abatement:
The petition sought a writ directing the authorities to consider the representation for abatement under Section 22 of The Customs Act, 1962, due to the wreck being declared by the Gujarat Maritime Board and Customs Department. The court did not address this prayer as an arrangement had been reached between the parties for provisional assessment and further procedures. The petition was disposed of accordingly without costs.
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2010 (5) TMI 873
Issues involved: Interpretation of Note 2 appended to Rule 43 in Chapter XIV A of Kerala Education Rules, 1959 regarding the relevant date for possessing prescribed qualification for promotion.
Summary:
The Supreme Court considered a case involving the interpretation of Note 2 appended to Rule 43 in Chapter XIV A of Kerala Education Rules, 1959. The question was whether the relevant date for possessing prescribed qualifications for promotion should be at the time of occurrence of vacancy or at the time of appointment. The case revolved around a vacancy for the post of High School Assistant (Hindi) that arose on 1.7.2003 in a school. The appellant applied for the post and was appointed on 11.9.2003, but faced challenges from another candidate, respondent No.1, who was not qualified at the time of the vacancy. The District Education Officer and State Government rejected respondent No.1's claims, leading to a series of legal challenges culminating in a writ appeal before the Division Bench of the High Court.
The Division Bench of the High Court set aside the order of the learned Single Judge and directed the appointment of respondent No.1 as High School Assistant (Hindi) from 16.9.2003. However, the Supreme Court disagreed with this decision, emphasizing that the relevant date for possessing prescribed qualifications is the date when the vacancy occurred, i.e., 1.7.2003. The Court highlighted that subsequent events, such as the appellant's actual joining date, should not alter this interpretation. By applying a literal meaning to Note 2, the Court concluded that the order of the Division Bench was incorrect and restored the decision of the learned Single Judge, thereby dismissing respondent No.1's writ petition.
In conclusion, the Supreme Court allowed the appeal, with each party bearing their respective costs.
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2010 (5) TMI 872
Issues involved: Interpretation of Rule 60(b) Part-I Kerala Service Rules for entitlement to government service up to 60 years of age based on service in an aided school as on 07.04.1970.
Summary:
The respondent, who worked as a full-time menial in an aided school, claimed entitlement to continue in government service until 60 years of age under Rule 60(b) Part-I KSR. The Kerala High Court allowed the claim, but the State of Kerala appealed, arguing that aided school service did not qualify for the benefit. The key question was whether the respondent met the criteria for Rule 60(b) entitlement.
The Kerala Service Rules (KSR) consist of three parts, with Part-I covering general service conditions. Rule 60 deals with retirement, with clause (b) providing an exception for officers in the Last Grade Service as of 07.04.1970 to retire at 60 years if they remain in that service. The respondent needed to satisfy conditions related to last grade service as defined in Rule 12(16A) to qualify for this benefit.
The benefit under Rule 60(b) was introduced to protect certain government servants who were in last grade service pre-1970, allowing them to continue until 60 years of age. The exception clause must be strictly interpreted and proven by the claimant to apply. The respondent failed to demonstrate inclusion in the last grade service as per the special rules or continued eligibility as of 07.04.1970.
The respondent's service in an aided school was not automatically considered part of the last grade service for Rule 60(b) purposes. While aided school service counted towards pension, it did not guarantee service continuation until 60 years of age. The respondent's claim for Rule 60(b) benefit was not substantiated, leading to the appeal's allowance and the High Court's judgment being set aside.
In conclusion, the appeal was upheld, and the respondent's claim for service continuation until 60 years of age under Rule 60(b) Part-I KSR was denied.
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2010 (5) TMI 871
Issues involved: Assessment of assessable value of physician samples distributed free of cost, invocation of longer period for demand, applicability of Board Circular, imposition of penalty.
Assessment of assessable value: The appellants, engaged in manufacturing pharmaceutical products, contested the demand on the ground of limitation, citing a Tribunal decision in a similar case. The issue on merits was already decided against them by a Larger Bench decision. The period involved was from April 2005 to March 2007, with the show cause notice issued on 01.5.2008. The advocate argued that the demand was beyond the period of limitation and should be allowed on the ground of time-bar.
Invocation of longer period: The Tribunal considered the submission that the matter was referred to the Larger Bench in April 2008, despite a Board Circular clarifying the issue. The Tribunal noted that even after the circular was issued, contradictory views persisted, indicating unsettled matters. The Tribunal held that since different interpretations were possible due to modifications in the circulars, the extended period could not be invoked, and penalty could not be levied. The appeal was allowed for the demand beyond one year, and the penalty imposed was set aside. The matter was remanded for working out the duty demand within the limitation period under Section 11A of the Central Excise Act, 1944.
Applicability of Board Circular: The Tribunal observed that the extended period would not be invoked when the matter is referred to the Larger Bench. It was emphasized that circulars issued by the Board were not binding on the assessee or the Tribunal, especially when different interpretations were possible. The Tribunal held that the demand in the present case was also barred by limitation, as per the precedent set in a similar case.
Imposition of penalty: The Tribunal set aside the penalty imposed on the appellants, following the principle that extended period and penalty cannot be levied when different interpretations are possible. The impugned order was overturned, and the appeal was allowed, with the stay petition and appeal being disposed of accordingly.
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2010 (5) TMI 870
Issues involved:
The issue involves whether the income-tax authorities were correct in not allowing the set off of unabsorbed speculation loss of Rs. 4,55,30,494/- from the assessment year 2001-02 against the speculation income for the current year.
Judgment Details:
Issue 1: Set off of speculation loss
- The assessee claimed the right to set off speculation loss from 2001-02 against profits for 2006-07.
- The Assessing Officer refused, citing section 73(4) limiting loss carry forward to four years.
- Assessee argued for an eight-year carry forward period pre-amendment.
- Citing legal precedents, the Tribunal held that vested rights can only be taken away by express language or implication.
- Referring to previous cases, the Tribunal emphasized that accrued rights must be preserved unless expressly revoked.
- The Tribunal found no provision in section 73(4) or elsewhere expressly removing the assessee's right to carry forward speculation loss for eight years.
- The Tribunal noted the distinction between loss brought forward and loss to be carried forward, emphasizing that section 73(4) pertains to the latter.
- The Tribunal rejected the argument that a procedural provision applied, emphasizing the vested substantive right of the assessee.
- Consequently, the Tribunal upheld the assessee's claim to set off the speculation loss from 2001-02 against profits for 2006-07.
Conclusion:
The Tribunal ruled in favor of the assessee, directing the Assessing Officer to allow the set off of the speculation loss brought forward from the assessment year 2001-02 against the speculation profits for the year under appeal.
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2010 (5) TMI 869
Bogus Share application money - genuineness of transaction not proved - onus to prove on assessee or revenue - HELD THAT:- Since the assessee has discharged its onus by proving the identity of subscribers and even otherwise had any suspicion still remained in his mind, nothing prevented him to initiate action as per the provisions of the Act. The existence of subscribers to share application is not in doubt as the assessee duly furnished their names.
Age, address, date of filing the application, number of shares for which respective applications were made, amount given and the source of income of the applicant.
There is no justification for making the impugned addition because once the existence of the investor/share subscribers is proved, onus shifts on the revenue to establish that either the share applicants are bogus or the impugned money belongs to the assessee company itself.
Once the confirmation letters are filed, no addition can be made on account of share application money in the hands of the company. Our view finds support from the decision in Shri Barkha Synthetics Limited v. ACIT.[2005 (8) TMI 67 - RAJASTHAN HIGH COURT] The case like CIT v. GP International Limited [2009 (12) TMI 33 - PUNJAB AND HARYANA HIGH COURT],CIT v. Steller Investment Limited [1991 (4) TMI 100 - DELHI HIGH COURT] supports the case of the assessee.
charging of interest u/s 234B - HELD THAT:- We have found that no specific section has been mentioned for charging of interest and merely it has been mentioned that charge interest if any, as per law.
Since the issue of share application has been decided in favour of the assessee and the addition made u/s 68 has been deleted, therefore, charging of interest is consequential in nature, meaning thereby that it is not leviable/chargeable.
In view of these facts and judicial pronouncements both these appeals of the assessee are allowed.
Finally, the appeals of the assessee are allowed.
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2010 (5) TMI 868
Issues Involved: Determination of the status of the assessee as a local authority u/s 10(20) of the Income Tax Act and imposition of interest u/s 234A and 234B without proper justification.
Status of the Assessee as a Local Authority:
The appeals by the assessee were against orders of CIT(A) relating to assessment years 2007-08 & 2008-09 under section 143(3)/147 of the I.T. Act. The primary contention was the treatment of the appellant as an Association of Persons (AOP) instead of a local authority. The appellant claimed to be a local authority based on control and management of local funds, seeking exemption u/s 10(20) of the Act. However, the Tribunal held that the appellant, an Agriculture Market Committee, did not fall within the categories defined as local authorities under the amended provisions of section 10(20) of the Act. The Tribunal emphasized that the appellant's activities did not align with the criteria specified in the explanation to section 10(20) of the Act, thus not qualifying for the exemption. The decision was based on the interpretation of the law and the specific provisions governing local authorities.
Imposition of Interest u/s 234A and 234B:
The second ground raised by the assessee related to the charging of interest u/s 234A and 234B of the Act. The Tribunal dismissed this ground as consequential, indicating that the imposition of interest was a result of the overall decision on the status of the assessee as a local authority. The dismissal was based on the understanding that once the assessee was not considered a local authority, the interest charges were deemed appropriate under the relevant sections of the Act. The Tribunal's decision highlighted the interconnection between the status determination and the consequential aspects such as interest charges.
In conclusion, the Tribunal upheld the order of CIT(A) and dismissed both grounds raised by the assessee, confirming that the appellant was not a local authority under the amended provisions of section 10(20) of the Act. The appeals of the assessee were consequently dismissed, with the decision pronounced in an open court on May 14, 2010.
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2010 (5) TMI 867
Writ Petition Challenging the acquisition of lands for formation of Arkavathi layout on the outskirts of Bangalore by the Bangalore Development Authority [Bda] Under The Bangalore Development Authority Act, 1976 (BDA Act' or Act') - A corrigendum was issued showing the extent as 3889A.12G. A copy of the notification was forwarded to the Bangalore City Corporation and notices were also issued to the persons registered as the owners of the lands proposed to be acquired requiring them to show cause why such acquisition should not be made. After consideration of the representations the authority modified the scheme by deleting 1089.12 acres and submitted the modified scheme for acquisition of 2750 acres in 16 villages to the Government for its sanction. The Government sanctioned the scheme for formation of Arkavathi layout vide Government Order No. UDD 193 MNX 204 dated 21.2.2004. Thereafter a final notification dated 23.2.2004 was issued by the Government of Karnataka u/s 19(1) and published in the Gazette on the same day. The said notification stated that the Government has sanctioned the layout and the lands stated in the Schedule therein were required for the public purpose for formation of the Arkavathi layout. We have repeated the reference to the events in detail to show that there has been due compliance with the provisions of Sections 15 to 19. In fact deletion of some items of land or reducing the extent proposed to be acquired in some items of land, when issuing final declaration is made is quite common and is indeed a result of the process prescribed under any Act providing for acquisitions. The changes and modifications are infact contemplated in the process of making the scheme u/s 15 to 19 of BDA Act.
HELD THAT:- The complaint by appellants is that in the proposed Arkavathi layout, rich and powerful with "connections" and "money power" were able to get their lands, (even vacant lands) released, by showing some imaginary structure or by putting up some unauthorised structure overnight. While we may not comment on policy, it is obvious that deletion from proposed acquisition should be only in regard to areas which are already well developed in a planned manner. Sporadic small unauthorised constructions in unauthorised colonies/layouts, are not to be deleted as the very purpose of acquisition for planned development is to avoid such unauthorised development. If hardship is the reason for such deletion, the appropriate course is to give preference to the land/plot owners in making allotments and help them to resettle and not to continue the illegal and haphazard pockets merely on the ground that some temporary structure or a dilapidated structure existed therein. A development authority should either provide orderly development or should stay away from development. It cannot act like unscrupulous private developers//colonisers attempting development of small bits of land with only profit motive.
Where arbitrary and unexplained deletions and exclusions from acquisition, of large extents of notified lands, render the acquisitions meaningless, or totally unworkable, the court will have no alternative but to quash the entire acquisition. But where many landlosers have accepted the acquisition and received the compensation, and where possession of considerable portions of acquired lands has already been taken, and development activities have been carried out by laying plots and even making provisional or actual allotments. To salvage the acquisition and to avoid hardships to BDA and its allottees and to avoid prolonged further round litigations emanating from the directions of the High Court, a more equitable way would be to uphold the decision of the division bench, but subject BDA's actions to certain corrective measures by requiring it to re-examine certain aspects and provide an option to the landlosers to secure some additional benefit, as an incentive to accept the acquisition. A direction to provide an option to the land-losers to seek allotment of developed plots in lieu of compensation or to provide for preferential allotment of some plots at the prevailing market price in addition to compensation will meet the ends of justice. Such directions will not be in conflict with the BDA (Allotment of sites) Rules, as they are intended to save the acquisitions. If the acquisitions are to be quashed in entirety by accepting the challenges to the acquisition on the ground of arbitrary deletions and exclusions, there may be no development scheme at all, thereby putting BDA to enormous loss. The directions of the High Court and this Court are warranted by the peculiar facts of the case and are not intended to be general directions applicable to regular acquisitions in accordance with law, without any irregularities.
In view of the foregoing, we affirm the directions of the Division Bench subject to the following further directions and clarifications.
The appeals are disposed of accordingly. All pending applications also stand disposed of.
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2010 (5) TMI 866
Issues Involved:
1. Applicability of Sec.11D(1) of the Central Excise Act to imported, customs duty-paid goods.
2. Interpretation of Sec.11D(1) of the Central Excise Act and Sec.28B of the Customs Act.
3. Liability of the appellant to pay duty on non-excisable goods.
4. Collection and crediting of excise duty amounts by the appellant.
Summary:
1. Applicability of Sec.11D(1) of the Central Excise Act to imported, customs duty-paid goods:
The central issue is whether imported, customs duty-paid goods fall under the definition of "excisable goods" u/s 11D(1) of the Central Excise Act. The Tribunal noted that the definition of "excisable goods" u/s 2(d) of the Central Excise Act includes goods specified in the schedules to the Central Excise Tariff Act (CETA) as being subject to a duty of excise. The Tribunal observed that the goods in question, despite being imported and customs duty-paid, are still listed in the CETA schedules and thus qualify as "excisable goods." This interpretation aligns with the judgments in Wallace Flour Mills Company Ltd. vs Collector of Central Excise and Hind Rubber Factory vs. Union of India.
2. Interpretation of Sec.11D(1) of the Central Excise Act and Sec.28B of the Customs Act:
The appellant argued that the show-cause notices only invoked Sec.11D of the Central Excise Act, but the Commissioner, in de novo adjudication, also invoked Sec.28B of the Customs Act, which was beyond the scope of the notices. The Tribunal noted that Sec.11D(1) requires any person who collects an amount representing duty of excise from the buyer to pay it to the Central Government, regardless of whether the goods are excisable or not. The Tribunal found that the Commissioner's invocation of Sec.28B was not justified as it was not part of the original show-cause notices.
3. Liability of the appellant to pay duty on non-excisable goods:
The appellant contended that the goods cleared were not excisable as they were not subjected to any manufacturing process and thus Sec.11D(1) was not applicable. The Tribunal, however, held that the goods, being listed in the CETA schedules, are considered excisable goods regardless of whether they underwent manufacturing. The Tribunal emphasized that the definition of "excisable goods" does not necessitate actual levy of duty but includes goods liable to duty.
4. Collection and crediting of excise duty amounts by the appellant:
The appellant argued that no amount representing duty of excise was collected from their dealers, even though such amounts were mentioned in the invoices. They also claimed that any duty collected was deposited into the Oil Pool Account under the APM scheme. The Tribunal noted that mentioning duty amounts in invoices implies collection of such amounts, and under Sec.11D(1), these amounts must be credited to the Central Government. The Tribunal rejected the appellant's argument that the duty collected was deposited into the Oil Pool Account, stating that this does not exempt them from the obligation u/s 11D(1).
Conclusion:
The Tribunal directed the Registry to place the records before the Hon'ble President to constitute a Larger Bench to resolve the conflict regarding the applicability of Sec.11D(1) to imported, customs duty-paid goods falling under the CETA schedules.
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