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2007 (7) TMI 641
Issues involved:
The issue involves the entitlement of the Respondent to exemption from countervailing duty on imported copper under Exemption Notification No. 4/1997 dated 1st March, 1997, and the compliance with Condition No. 22 of the notification.
Entitlement to Exemption:
The Revenue contested the Respondent's claim for exemption from countervailing duty on imported copper, alleging that the copper was not unrefined as required by the Notification. The show cause notice specifically mentioned that the goods were of high purity and refined, making them ineligible for the exemption under Entry 74.02 of the Notification. The Respondent's objections were overruled, leading to a demand confirmation by the adjudicating authority.
Compliance with Condition No. 22:
The Commissioner of Customs (Appeal) held that the Respondent did not fulfill Condition No. 22 of the exemption Notification, thereby disqualifying them from the benefit. The Respondent argued that the show cause notice only addressed the issue of whether the imported copper was unrefined, not the compliance with Condition No. 22. They contended that introducing a new allegation of non-compliance with the condition at the appellate stage was impermissible as it was not part of the original notice.
Tribunal's Decision:
The Tribunal sided with the Respondent, emphasizing that the show cause notice did not mention non-compliance with Condition No. 22. They deemed it unfair to hold the Respondent liable based on a new ground introduced after the initial proceedings. The Tribunal's decision was upheld, stating that the Revenue had abandoned the argument regarding the nature of the imported copper and focused on the alleged non-compliance with Condition No. 22.
Conclusion:
The High Court dismissed the appeal, affirming the Tribunal's decision. It was noted that the Respondent was not informed of the alleged non-compliance with Condition No. 22, and introducing a new case against them at a later stage was unjust. The Court found no legal issue warranting further consideration in the case.
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2007 (7) TMI 640
Issues Involved:
1. Validity of the notice issued u/s 148 of the Income Tax Act, 1961.
2. Requirement of prior sanction from the Joint Commissioner u/s 151 of the Act.
3. Applicability of Section 292-B of the Act.
4. Timeliness of the writ petition.
Summary:
1. Validity of the Notice Issued u/s 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 08.03.1999 issued u/s 148 of the Income Tax Act, 1961, for the assessment year 1996-97. The petitioner argued that the notice was issued without obtaining the necessary prior sanction from the Joint Commissioner, as required by Section 151 of the Act, making it illegal and without authority of law.
2. Requirement of Prior Sanction from the Joint Commissioner u/s 151 of the Act:
The court examined Section 151 of the Act, which mandates that no notice shall be issued u/s 148 by an Assessing Officer below the rank of Assistant Commissioner without the satisfaction of the Joint Commissioner. The court found that the notice was issued by an Income Tax Officer, Hathras, who is below the rank of Assistant Commissioner, and there was no sanction from the Joint Commissioner. This lack of sanction rendered the notice without authority of law. The court referred to the case of Dr. Shashi Kant Garg Versus Commissioner of Income Tax, which supported the requirement of prior sanction from the Joint Commissioner.
3. Applicability of Section 292-B of the Act:
The Revenue argued that the notice should be considered valid under Section 292-B of the Act, which states that a notice shall not be invalid merely due to any mistake, defect, or omission. However, the court held that Section 292-B does not apply in this case as the issue was not a mere defect or omission but a lack of jurisdiction due to the absence of the required sanction from the Joint Commissioner. The court cited the case of Sri Nath Suresh Chand Ram Naresh versus Commissioner of Income Tax, which held that such defects could not be cured by Section 292-B.
4. Timeliness of the Writ Petition:
The Revenue contended that the writ petition was filed after a delay of more than one year. The court noted that the reasons for reopening the assessment were supplied on 28.04.2000, and the writ petition was filed within 90 days of this communication. The court held that the petitioner was entitled to challenge the notice on the ground of lack of jurisdiction after receiving the reasons, and thus, the writ petition was not barred by delay.
Conclusion:
The court concluded that the notice issued u/s 148 of the Act was without jurisdiction due to the lack of sanction from the Joint Commissioner as required by Section 151 of the Act. Consequently, the notice dated 08.03.1999 and the proceedings pursuant thereto were quashed. The writ petition was allowed, and no order as to costs was made.
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2007 (7) TMI 639
Issues Involved:
1. Deduction of service charges paid to M/s Universe Trading Company under Sec.40A(2).
2. Allowability of loss shown by the assessee in the film business amounting to Rs. 31,48,670.
3. Deduction under Sec. 35(2A) in respect of donation to Aparna Ashram.
Detailed Analysis:
1. Deduction of Service Charges Paid to M/s Universe Trading Company:
Issue: Whether the Income Tax Appellate Tribunal was right in deleting the disallowance of service charges paid to M/s Universe Trading Company made under Sec.40A(2).
Analysis:
- The assessee claimed deduction for service charges paid to M/s Universal Trading Company under Sec.37(1) of the Act.
- The Assessing Officer disallowed the deduction, noting the lack of documentary evidence proving the services rendered and the relationship between the assessee and M/s Universal Trading Company.
- The I Appellate Authority reversed the Assessing Officer's decision, accepting the deduction based on previous assessment years.
- The Tribunal upheld the I Appellate Authority's decision without thorough examination.
- The High Court restored the Assessing Officer's order, emphasizing the failure of the assessee to produce proof of services and the dubious nature of the transactions aimed at reducing tax liability.
Conclusion: The High Court answered the question in the negative, disallowing the deduction of service charges.
2. Allowability of Loss in Film Business:
Issue: Whether the Tribunal was justified in allowing the loss shown by the assessee in the film business amounting to Rs. 31,48,670.
Analysis:
- The assessee claimed a loss of Rs. 31,48,670 in the film business.
- The Assessing Officer disallowed the loss, citing the lack of commercial substance and the dubious nature of the transactions, referencing the Supreme Court's decision in McDowell & Co. Ltd. Vs. CTO.
- The I Appellate Authority upheld the Assessing Officer's decision, agreeing that the transactions were colorable devices to avoid tax.
- The Tribunal reversed this finding, relying on a similar case (Murugan Enterprises) without considering the specific facts and legal principles.
- The High Court found that the Tribunal did not adequately address the reasons given by the Assessing Officer and the I Appellate Authority, and that the transactions lacked commercial significance.
Conclusion: The High Court restored the disallowance of the loss and answered the question in the negative.
3. Deduction for Donation to Aparna Ashram:
Issue: Whether the Tribunal was justified in allowing the assessee's claim for deduction under Sec. 35(2A) in respect of donation to Aparna Ashram.
Analysis:
- The assessee claimed a deduction of Rs. 2,10,000 for a donation to Aparna Ashram, invoking a government notification under Sec.35(2A).
- The Assessing Officer disallowed the deduction due to the assessee's failure to produce a certificate of compliance with the conditions stipulated in the notification.
- The I Appellate Authority upheld the Assessing Officer's decision.
- The Tribunal allowed the deduction, misinterpreting the conditions in the notification as mere guidelines.
- The High Court clarified that the conditions were mandatory and the assessee's failure to comply warranted the disallowance of the deduction.
Conclusion: The High Court restored the disallowance and answered the question in the negative.
Final Disposition:
The High Court disposed of the references by answering all questions in the negative and restoring the orders of the Assessing Officer and the I Appellate Authority. The Tribunal's decisions were overturned due to the lack of proper consideration of the facts and legal principles involved.
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2007 (7) TMI 638
Undisclosed income - Search and seizure u/s 132 - seizure of incriminating documents - Addition on the basis of statement made by assessee’s partner - Difference of opinion between the two learned Members - Third Member Order - Whether, the Tribunal delete whole of the undisclosed income of ₹ 10 lakhs or should restrict the addition on account of ‘on-money’ to ₹ 1,50,000? - statement retracted from the original statement.
Order ld JM - HELD THAT:- learned Judicial Member took note of the specific findings/observations of the CIT(A) to the effect that (a) the statement of Shri Kamal Shah was taken on record based on mere suspicion, (b) the same cannot be treated as an admission and cannot be treated as material for framing the assessment and (c) the Assessing Officer has not brought on record any cogent material or evidence in respect of on-money receipts
The learned JM observed that the revenue has not disputed the correctness of this finding and hence the conclusion reached by the CIT(A) has to be accepted. The alternative contention of the revenue, on the basis of the order of the Tribunal in the case of Adinath Construction that at least 15 per cent of the receipts should be treated as undisclosed income was also rejected on the ground that in the case of Adinath Construction, a diary was found in which the details relating to the receipt of on-money were found to be recorded. Moreover, in that case, the assessee itself has accepted a receipt of ₹ 14,22,000, but in the present case, there was no such diary nor was there such admission.
Order Ld AM - The learned AM took note of the conduct of the assessee in so far as that the disclosure was made by the managing partner of the assessee-firm, he had explained the modus operandi of charging on-money, explained the investment of such money and absence of duress while recording the statement. The learned AM held that these facts confirmed the factum and practice of charging on-money. Finally, though he did not much agree with the alternate contention to treat only 15 per cent of the gross on-money as the assessee’s income, yet, he sustained the addition to that extent only, i.e., at ₹ 1,50,000.
Third Member Order - The main reasons given by the learned AM for his conclusion. The first reason which he considers to be a crucial pointer is that Shri Kamal Shah is the managing partner of the assessee-firm and in fact, is one of the main persons who is in the know of the affairs of the business. This fact is undisputable. However, having retracted from the original statement, the latter does not lead us to anywhere. The search was on the group as a whole consisting of several entities. The statements that he may have given during the search are for the group as a whole and though in the statement he has given the break-up of disclosure, it is not corroborated by anything that might have been unearthed during the search. There may have been hundreds of reasons and thoughts crossing in the mind of the deponent during the search and it is not expected that whatever is reeled out during the search is only after proper application of mind. He may have explained the modus operandi of charging on-money, or the avenues and the destination of such money. Again, this may be true for the group as a whole but the retracted statement does not lead to the conclusion that the particular assessee before us had an undisclosed income of ₹ 10 lakhs.
The second reason given by the learned AM is that enhancing the figure of disclosure two months later shows proper application of mind and also absence of any duress while giving the statement. Well, there may not be any evidence of coercion being exercised by the search party, there may not be any duress also, but existence of confusion cannot be ruled out. Duress has to be distinguished from confusion. Duress is a constraint illegally exercised to force a person to perform some act.
It is highly philosophical to say that restricting the addition only in the entity where material is found, betrays the thinking and the machination employed by the assessee, using it as a ploy to make travesty of the entire judicial process of the search and seizure proceedings. All said and done where is the evidence to show that assessee had any undisclosed income barring the statement given by Shri Kamal Shah while under utter state of confusion.
As a matter of fact, what has been stated about the so called machination of the assessee is an ill-founded and unwarranted allegation against the assessee. Further, it is interesting to note that though the learned AM has observed that the alternate argument of treating 15 per cent of the gross on-money as income defects the assessee’s case in this regard. Despite this observation, ultimately, he sustains the addition to that extent only. Therefore, I am convinced that there being no spectre of evidence regarding undisclosed income, no addition can be sustained. I am in agreement with the view taken by the learned JM.
In view of majority decision, the addition of ₹ 10 lakhs on account of undisclosed income having been sustained by the CIT(A) stands deleted and assessee’s appeal allowed on this point.
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2007 (7) TMI 637
Issues involved: Appeal against Order-in-Revision u/s 2/ST/07 dated 27-3-2007 passed by CCE, C & ST Mysore regarding refund erroneously sanctioned to the appellant.
Summary:
Issue 1: Refund erroneously sanctioned
The appellant filed a refund claim for the amount paid during a specific period, which was erroneously paid under a mistaken notion of law. The Original Authority sanctioned the entire refund, but the Commissioner of Customs ordered recovery of a part of the amount on grounds of time-bar. The appellant's counsel cited various decisions supporting the refund of amounts collected by the department not authorized by law. The Tribunal, after considering the facts and legal precedents, found justification for waiver of deposit of the demanded amount and stayed the recovery proceedings pending appeal.
Significant Legal References:
- Mafatlal Industries - 1997 (89) E.L.T. 241
- National Tobacco Corporation of India - 1978 (2) E.L.T. J416 (S.C.)
- Hexacom (I) Ltd. v. CCE - 2006 (3) S.T.R. 131 (Tribunal) = 2003 (156) E.L.T. 357 (Tribunal)
- CCE v. M.A. Financial Services - 2006 (2) S.T.R. 350 (Tri.-Kol)
- Karnik Maritime Pvt Ltd. v. CCE - 2007 (6) S.T.R. 314 (Tri. - Mum)
- CCE v. Jai Laxmi Finance Co. - 2006 (3) S.T.R. 25 (Tribunal)
- CCE v. Indian Ispat Works (P) Ltd. - 2006 (3) S.T.R. 161 (Tri.-Del)
Conclusion:
The Tribunal granted waiver of the deposit of the demanded amount and stayed the recovery proceedings, considering the appellant's strong case on merits pending appeal.
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2007 (7) TMI 636
Issues Involved:
1. Whether the Management of the College is under any constitutional or legal obligation to provide legal education irrespective of its inability to manage the Law College.
2. Whether the provisions of the A.P. Education Act, 1982, mandate any prior permission to closedown the educational institution.
3. Whether there is any requirement in law to seek permission from the Bar Council of India to closedown a Law College.
4. Whether the principles of natural justice were violated by the Bar Council of India in granting approval to the Management of the College to closedown the Law College.
5. Scope of writ of mandamus in this context.
Summary:
1. Constitutional or Legal Obligation to Provide Legal Education:
The court examined whether the Management of the College is under any constitutional or legal obligation to provide legal education despite its inability to manage the Law College. It was noted that the Management of the College had undertaken to run the 5-year LL.B. degree course until the present batch of students completed their studies, despite financial burdens. The court concluded that there is no right vested in the appellants/petitioners to insist on the continuance of the Law College, nor is the Management of the College under any legal or constitutional obligation to run the Law College irrespective of financial viability.
2. Prior Permission u/s A.P. Education Act, 1982:
The court analyzed whether the A.P. Education Act, 1982 mandates any prior permission to closedown the educational institution. Section 26 of the Act mandates that no private institution shall be closed down unless a notice of not less than one academic year is given. The court found that the Management of the College issued the required notice, and the contention that the College cannot be closed down without prior approval or permission of the competent authority is not well-founded.
3. Requirement of Permission from Bar Council of India:
The court considered whether there is any requirement in law to seek permission from the Bar Council of India to closedown a Law College. It was noted that the Bar Council of India's role is to ensure the maintenance of standards in legal education, and there is no provision or procedure obligating an institution to obtain prior permission to closedown. The request made by the Management of the College was in the nature of information furnished to the Bar Council of India not to extend its approval of affiliation.
4. Principles of Natural Justice:
The court examined whether the principles of natural justice were violated by the Bar Council of India in granting approval to the Management of the College to closedown the Law College. It concluded that since there is no requirement in law to apply for and obtain any permission from the Bar Council of India to closedown any Law College, the appellants/petitioners are not entitled to any prior notice or hearing from the Bar Council of India.
5. Scope of Writ of Mandamus:
The court discussed the scope of writ of mandamus and concluded that under the guise of challenging the orders passed by the Bar Council of India, the appellants/petitioners are virtually asking for a writ of mandamus directing the Management of the College to continuously run the Law College irrespective of the inconvenience and financial implications involved. The court cannot issue any such mandamus compelling any private management to perform an impossible act.
Conclusion:
The writ appeal fails and the same shall accordingly stand dismissed without costs.
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2007 (7) TMI 635
Disallowance u/s 40A(3) - cash payments/purchases - Job work of stitching of clothes for exporters - HELD THAT:- In this case, the assessee did not claim any deduction with regard to the purchase made by him. So, having considered the nature of business and the assessee's acceptance before the AO and the lack of positive evidence from the AO to make an addition that can be sustained, it is reasonable to accept what has been offered by the assessee voluntarily for the purpose of assessment.
As an addition has been made in this case and also no further deduction claimed in respect of the purchases by the assessee, no further disallowance could be made. When the GP rate is applied, that will take care of everything and there is no need for the AO to make scrutiny of the amount incurred on the purchases by the assessee. Taking note of the fact that the assessee is a tailor and is doing tailoring on job work basis and also he has not maintained the accounts and vouchers properly, the assessee had correctly and voluntarily offered the said amount for assessment.
Applying the principle laid down in the case of CIT vs. Banwarilal Banshidhar [1997 (5) TMI 37 - ALLAHABAD HIGH COURT], the Tribunal is right in its view that no disallowance could be made. So, both the first appellate authority as well as the Tribunal have considered the relevant facts and came to the correct conclusion that no disallowance could be made by the AO.
The Revenue is also unable to bring to the notice of this Court any contra judgment or any compelling reason to take a different view. The concurrent finding given by both the authorities below is based on valid materials and evidence. In the case of CIT vs. P. Mohanakala & Ors.[2007 (5) TMI 192 - SUPREME COURT], held that whenever there is a concurrent finding by the authorities below, no interference should be called for by the High Court. Therefore, we do not find any error or legal infirmity in the order of the Tribunal so as to warrant interference.
Thus, no substantial question of law arises for consideration of this Court and accordingly the tax case is dismissed.
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2007 (7) TMI 634
Issues Involved:
1. Classification of "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" under the Rajasthan Sales Tax Act.
2. Determination of whether these products fall under Entry 60 (Medicines, Drugs, and Pharmaceutical Preparations) or Entry 69 (Perfumery and Cosmetics).
Issue-Wise Detailed Analysis:
1. Classification of "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" under the Rajasthan Sales Tax Act:
The primary issue in the writ petitions was the classification of "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" for sales tax purposes. The respondent claimed these products should be classified under Entry 60 of the notification issued under the Rajasthan Sales Tax Act, 1954, which pertains to "Medicines, Drugs and all kinds of pharmaceutical preparations excluding chroquine." Conversely, the department argued that these products should fall under Entry 69, which includes "Perfumery (excluding 'Agarbatties', 'Dhoop' and 'Loban'), cosmetics, including tooth paste 'Manjan', Comb, brushes, perfumed hair oil, razor and other shaving articles but excluding razor blades."
2. Determination of whether these products fall under Entry 60 (Medicines, Drugs, and Pharmaceutical Preparations) or Entry 69 (Perfumery and Cosmetics):
The court referred to various precedents to determine the classification of these products. Notably, in the case of B.P.L. Pharmaceuticals Limited v. Collector of Central Excise Vadodara, the Supreme Court classified "Selsun" as a medicine based on its anti-fungal and anti-seborrhoeic properties. Similarly, in Commissioner of Central Excise, Calcutta v. Sharma Chemical Works, the Supreme Court held that "Banphool Hair Oil" was an Ayurvedic medicament and not a perfumed hair oil.
The court also considered the composition and usage of the products. "Keo Karpin Hair Vitalizer" contains ingredients like Keratin Hydrolysate, D-Panthenol, Biotin, and Resorcinol, which are typically used in medicinal preparations. The product is marketed as preventing hair fall and treating dandruff, indicating its medicinal properties. Similarly, "Keo Karpin Baby Oil" contains Vitamin A, D3, E, and other medicinal ingredients, and is claimed to protect children from rickets and vitamin deficiencies.
The court emphasized that the classification should consider the nature of the article, its ingredients, uses, market treatment, and whether it is manufactured under a license from the Drugs Controller. The respondent had obtained necessary permissions and licenses under the Drugs and Cosmetics Act, 1940, to manufacture these products as medicinal preparations.
The court rejected the department's argument that the products should be classified based on their sale across the counter without a doctor's prescription. Citing the Supreme Court's decision in the Banphool Hair Oil case, the court reiterated that the method of sale does not determine whether a product is a medicament.
The court concluded that the Taxation Tribunal's finding that "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" fall under Entry 60 and not Entry 69 was correct. The department failed to provide evidence that these products were cosmetics, and the burden of proof lies with the revenue.
Judgment:
The court dismissed all four writ petitions, upholding the classification of "Keo Karpin Hair Vitalizer" and "Keo Karpin Baby Oil" under Entry 60 (Medicines, Drugs, and Pharmaceutical Preparations) and not Entry 69 (Perfumery and Cosmetics). The petitions were dismissed with no order as to costs.
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2007 (7) TMI 633
Whether an assessee can avail Modvat credit on capital goods namely M.S. Angles, M.S. Sheets, Plates, Channels, Pipes and Tubes under Rule 57Q of the Central Excise Rule, 1944 although these goods are not used in relation to the manufacture of the final products?
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2007 (7) TMI 632
The Supreme Court allowed the withdrawal of a contempt petition as most of the issues raised had been resolved by the department. The Contempt Petition was dismissed as withdrawn. [Case: 2007 (7) TMI 632 - SC]
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2007 (7) TMI 631
The Supreme Court dismissed the appeal in the case with citation 2007 (7) TMI 631 - SC. Justices S.H. Kapadia and B. Sudershan Reddy delivered the order.
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2007 (7) TMI 630
Issues involved: Appeal against demand of duty and penalty on waste and rejects, appeal against non-demand of customs duty, imposition of penalties, and non-demand of interest.
Demand of duty on finished goods:
The Commissioner confirmed excise duty on waste and rejects as finished products and imposed penalties. The department argued that this confirmation was in order, citing a previous Tribunal decision. The Tribunal found this submission acceptable.
Demand of duty on inputs:
The department appealed against the non-demand of customs duty on inputs used in the manufacture of waste and rejects. They claimed the goods were cleared in violation of Customs Act provisions. However, the Tribunal noted that the raw materials were issued for manufacture and the finished goods were cleared with permission. As there was no diversion of duty-free raw materials for another purpose, the Tribunal upheld the Commissioner's decision of non-demand of duty on raw materials and no penal action.
Judicial precedent:
The Tribunal referred to a previous case where appeals in similar circumstances were dismissed. This case supported the decision to dismiss the appeals by both the Department and the respondents.
In conclusion, the appeals by the Department and the respondents were dismissed based on the findings related to the demand of duty on finished goods and the non-demand of duty on inputs. The Tribunal upheld the Commissioner's decision and cited judicial precedent to support their ruling.
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2007 (7) TMI 629
Issues Involved:
1. Interpretation of the word 'made' in sub-section (4) of Section 126 of the Delhi Municipal Corporation Act, 1957.
2. Limitation period for making amendments to the assessment list under Section 126 of the Act.
3. Requirement of communication of the assessment order to the assessee within the limitation period.
Issue-Wise Detailed Analysis:
1. Interpretation of the word 'made' in sub-section (4) of Section 126 of the Delhi Municipal Corporation Act, 1957:
The primary issue in this case was the interpretation of the word 'made' as it appears in sub-section (4) of Section 126 of the Delhi Municipal Corporation Act, 1957. The Supreme Court had to determine whether 'made' referred to the date when the assessment order was signed or when it was communicated to the assessee. The Division Bench of the Delhi High Court had opined that 'made' should be interpreted as the date when the order was communicated to the assessee, but the Supreme Court disagreed, holding that 'made' should be understood as the date when the order was signed.
2. Limitation period for making amendments to the assessment list under Section 126 of the Act:
The limitation period for making amendments to the assessment list was another critical issue. According to sub-section (4) of Section 126, no amendment shall be made after the expiry of three years from the end of the year in which the notice is given. The respondents argued that the assessment order was time-barred as it was not communicated within the three-year period. However, the Supreme Court clarified that the limitation period is satisfied if the order is signed within the stipulated time, regardless of when it is communicated.
3. Requirement of communication of the assessment order to the assessee within the limitation period:
The necessity of communicating the assessment order to the assessee within the limitation period was contested. The respondents contended that for the order to be valid, it must be communicated within the three-year period. The Supreme Court, however, held that while communication is necessary for the assessee to exercise the right of appeal, it is not required for the order to be 'made' within the meaning of the Act. The Court emphasized that the statutory requirement is met once the order is signed and entered into the official records.
Comprehensive Summary:
The Supreme Court, in this judgment, addressed the interpretation of the word 'made' in sub-section (4) of Section 126 of the Delhi Municipal Corporation Act, 1957. The case arose from a dispute over the assessment of property taxes, where the respondents challenged the assessment on the grounds of being time-barred. The Division Bench of the Delhi High Court had previously ruled that the term 'made' should be interpreted as the date when the assessment order was communicated to the assessee. However, the Supreme Court overturned this decision, holding that 'made' refers to the date when the order is signed.
The Court analyzed various statutory provisions and precedents to conclude that the legislative intent was to restrict the period within which the Commissioner could amend the assessment list, not to mandate communication within that period. The Court emphasized that an order is considered 'made' when it is signed and entered into the official records, not when it is communicated to the assessee. This interpretation aligns with the statutory purpose of preventing abuse of power by the Commissioner while ensuring that the limitation period is strictly adhered to.
The Supreme Court further clarified that while communication is necessary for the assessee to appeal the order, it is not a prerequisite for the order to be validly 'made' within the meaning of the Act. The Court underscored the presumption that statutory authorities act bona fide and in regular course of business, and there is no need to infer misuse of power without concrete evidence.
In conclusion, the Supreme Court set aside the judgment of the Division Bench of the Delhi High Court and restored the decision of the learned Single Judge, thereby allowing the appeal. The Court's interpretation ensures that the limitation period is respected while maintaining the integrity of the statutory process.
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2007 (7) TMI 628
Smuggled goods - Burden of proof - the decision in the case of COMMISSIONER OF CUSTOMS (PREVENTIVE) , MUMBAI Versus AAKASH ENTERPRISES [2006 (3) TMI 174 - BOMBAY HIGH COURT] contested - Held that: - In view of the dismissal of SLP (C) CC No. 8594/2006, this Special Leave Petition is dismissed.
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2007 (7) TMI 627
Waiver of pre-deposit - CENVAT credit - commission agent services for promoting the sale of the goods - Held that: - The commission agents prima facie do promote the sale and once the definition of the input service includes services used for advertisement or sale promotion, market research the same shall be squarely covered by the definition of the input service, more so when it forms part of assessable value for which no deduction is permissible. In respect of the balance amount, we find that an amount of ₹ 13,27,497/- has already been deposited and another ₹ 6,59,506/- relates to advertisement services for which the Commissioner has not cited any evidence to show that the advertisement was done both for manufactured goods as well as traded goods.
Pre-deposit waived.
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2007 (7) TMI 626
Income from undisclosed sources - share capital - failed to establish the credit-worthiness and genuineness of the transactions - Whether Tribunal was correct in law in deleting the addition made by the Assessing Officer u/s 68 - HELD THAT:- As per findings of the Tribunal, the CIT(A) did not dispute the Assessee’s contentions that payments have been made by account-payee cheques and addresses of the shareholders had been furnished. However, CIT(A) held that the assessee failed to establish the creditworthiness of the cash creditors and genuineness of the transactions.
It is apparent from the order of the Tribunal that it has not gone into the question of credit worthiness of creditors and genuineness of the transaction. Since, in the present case, the Tribunal has not gone into credit worthiness of the creditors and genuineness of the transaction, it is a fit case which ought to be remanded to the Tribunal give its finding on these two issues.
Learned counsel for the revenue has also stated during the course of argument that she has no objection if the matter is remanded on these issues. Thus, we remand the matter back to the Tribunal with directions to give its finding on creditworthiness of the creditors and genuineness of the transaction.
Accordingly, the present appeal stands disposed of.
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2007 (7) TMI 625
... ...
... ... ..... condoned. Heard. The Civil Appeal is dismissed.
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2007 (7) TMI 624
The High Court dismissed the appeal regarding the confiscation and penalty imposed for violating the EXIM Policy 2004-2009 under the Customs Act. The appellant had produced a pre-inspection certificate, and no objectionable material was imported. The appeal was dismissed.
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2007 (7) TMI 623
Issues Involved: Accusations under Sections 132 and 135 of the Customs Act, Bail Application, Non-cooperation of main accused, Statements under Section 108, Grant of bail, Conditions of bail
In this case, the applicant was accused of offenses under Sections 132 and 135 of the Customs Act for facilitating the clandestine removal of goods valued at a significant amount. The Customs Department alleged that the applicant was involved in the removal of RAMs and Memory Cards worth &8377; 68,97,500. The value of the goods was claimed to be in crores with an approximate Customs duty of &8377; 5 crore.
The applicant's counsel argued that the main accused and the courier involved in the case had not been proceeded against, and the applicant had cooperated with the investigation by appearing before the authorities multiple times. It was also highlighted that other co-accused had been released due to the statutory period ending.
The respondent opposed the bail application, emphasizing the seriousness of the offense and pointing to statements made under Section 108 by the applicant. It was noted that the investigation was incomplete as the main culprits, the importers, were absconding. The applicant had previously been granted interim anticipatory bail, which was later set aside by the Court.
After considering the materials on record, the Court observed that the principal accused involved in clearing the goods had been named, although they were not cooperating with the investigation. The applicant had given a statement under Section 108, which he later retracted in a bail application. The Court acknowledged the gravity of the economic offense but also considered other factors as per Section 437 of the Cr. P.C.
Despite the seriousness of the offense, the Court found that the applicant had cooperated in the investigation and had not been interrogated by the authorities even after being taken into custody. The Court granted bail to the applicant, directing him to furnish a personal bond and surety, surrender his passport, and not leave the country without the trial court's permission.
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2007 (7) TMI 622
Issues involved: Interpretation of the term "equipment leasing services" u/s 65(11) of the Finance Act 1994 for the levy of service tax on ATM leasing services.
Summary:
1. The Commissioner demanded over &8377; 59 lakhs from the appellants for service tax, education cess, interest, and penalties related to ATM leasing services provided to banks between 1-4-2005 to 15-6-2005, categorized as "Banking and other Financial Services" u/s 65(11) of the Finance Act 1994.
2. The appellants contended that ATM services became taxable only from 1-5-2006 with the insertion of clause 9(a) & (b) u/s 65. The Revenue argued that leasing ATMs to banks falls under "financial leasing services" u/s 65(11). The appellants argued that there was no financial element in the leasing activity, hence not classified as "banking and other financial services."
3. The Tribunal found merit in the appellants' arguments, stating that no financial service was involved in the ATM leasing, and the term "equipment leasing services" should be construed ejusdem generis with "financial leasing services."
4. Consequently, the Tribunal ordered a waiver of pre-deposit and a stay of recovery for the tax, cess, and penalties involved in the case.
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9911796707
