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2012 (9) TMI 902
... ... ... ... ..... lable, it is seen that the petitioner, while requesting for a clarification, in respect of its product, had also submitted that an opportunity of personal hearing may be given to it, by its letter, dated July 4, 2012. However, no such opportunity had been given to the petitioner before the impugned proceedings had been passed by the first respondent, on July 23, 2012. Therefore, this court finds it appropriate to set aside the impugned proceedings of the first respondent, dated July 23, 2012. The matter is remitted back to the first respondent, for passing an appropriate order on the clarification sought by the petitioner, by its letter, dated July 4, 2012, after issuing a notice to the petitioner and by providing an opportunity of personal hearing to the petitioner. The first respondent shall pass such an order as directed by this court, as expeditiously as possible. The writ petition is ordered accordingly. No cost. Consequently, connected miscellaneous petition is closed.
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2012 (9) TMI 901
... ... ... ... ..... In some occasions, there may not be sale at all. So, the method adopted by the Revenue cannot be accepted. Therefore, both the authorities below correctly took a view and held that it is not a reasonable method for making addition. Further, the Tribunal also has given a factual finding that even restoring 50 per cent of the addition deleted by the Appellate Assistant Commissioner, the assessee's turnover would not cross the minimum of taxable limit of ₹ 10 lakhs. Under these circumstances, we do not find any error, illegality or infirmity in the order of the Tribunal so as to warrant our interference. The order passed by the Tribunal is based on valid materials and evidence. It is a question of fact and it is not a perverse order. The order passed by the Tribunal is in conformity with law and no questions of law arise for our consideration. Hence, the order of the Tribunal is confirmed. The tax case revision is devoid of merits and the same is dismissed. No costs.
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2012 (9) TMI 900
... ... ... ... ..... er cent, under the Tamil Nadu Value Added Tax Act, 2006. Therefore, the impugned order of the respondent is liable to be set aside. 4. The learned counsel appearing on behalf of the respondent had not refuted the said submissions made by the learned counsel for the petitioner. 5. In view of the above, the impugned order of the respondent, dated July 27, 2012, is set aside. The matter is remitted back to the respondent to consider all the issues raised by the petitioner in its application, dated June 13, 2012, and to pass a speaking order giving reasons for the conclusions arrived at by the respondent. The respondent shall pass such an order, on merits an in accordance with law, as directed by this court, within a period of four weeks from the date of receipt of a copy of this order, after giving an opportunity of personal hearing to the petitioner. This writ petition is disposed of with the above directions. No costs. Consequently, connected miscellaneous petition is closed.
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2012 (9) TMI 899
Applicability of the rate of tax on execution of civil works contract under the KVAT Act - Whether the Revisional Authority is justified in reviewing the order of the ACAR, which has only clarified the queries made by the appellant?
Whether the finding of the revisional authority that the goods used in the works contract cannot be treated on par with the normal sale of goods for the purpose of arriving at the rate of tax for the period prior to 1-4-2006?
Held that:- Neither Section 3 nor Section 4 of the Act seeks or intend to levy or prescribe different rate of tax for the goods involved in the normal sale and for the goods involved in the deemed sale. Both normal sale as well as the deemed sale should be treated as one and the same with respect to levy of tax on sale of goods. The Commissioner opined that the rate of tax is on the value of goods involved in the execution of works contract and not on separate value of each goods. Thus, even when there is no schedule of works contract under the Act prescribing the rate of tax on different type of contract, the tax liability exists upto 31-3-2006. It falls under Section 4(i)(b). Hence, levy of tax has to be under Section 4(i)(b). The finding of the ACAR is contrary to law.
The tax has to be levied on the price of the goods and material used in the works contract as if there was a sale of goods and materials. The property in the goods used in the work contract will be deemed to have been passed over to the buyer as soon as the goods or material used are incorporated to the moveable property by principle of accretion to the moveable property. Hence, we are of the view that the order passed by the Commissioner is contrary to law. For the period prior to 1-4-2006, tax has to be levied as per Section 3(1) of the Act and for the period subsequent to 1-4-2006, tax has to be levied as per Section 4(1)(c) of the Act. Hence, the substantial questions of law are held in favour of the appellant.
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2012 (9) TMI 898
... ... ... ... ..... be excluded from the meaning of entry 3 of the Third Schedule to the Karnataka Value Added Tax Act, 2003 is untenable argument. What is required to be seen in a matter like this would be that in the given items are paste in question what is the dominant ingredient. It may be that there would be composition of other ingredients in making the paste, but the dominant ingredient would be the decisive criteria. In that view, the paste in question would come within the purview of entry 3 of the Third Schedule. 7. With regard to the kids exercise books is concerned, they are in nature of exercise books containing cartoons. The young children are expected to colour cartoons with appropriate colour crayons. The purpose of the said exercise books is to inculcate the basic art of painting. Therefore, the said exercise books do constitute printed books to be exempted from the tax. In that view, the questions of law are answered in favour of the appellant. Hence, the appeals are allowed.
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2012 (9) TMI 897
... ... ... ... ..... concerned, going by the fact available and the finding of the Tribunal, we do not have any hesitation in rejecting the revision. It is seen from the order an ad hoc addition of ₹ 17,000 was made to the assessment on the ground of the non-maintaining of separate stock account on purchase of old jewellery and the new jewellery manufactured. The Tribunal pointed out that the assessee had not maintained any separate stock account for new and old gold jewellery, the bought notes maintained by them also did not contain correct and complete address of the sellers and hence, the bought notes were not verifiable. In the circumstances, addition was made. Even though the assessee submitted that ad hoc addition was not called for, considering the defects pointed out, the Tribunal confirmed the assessment. Being pure question of fact, we do not find any justifiable ground to interfere with the order of the Tribunal. Accordingly, the tax case (revision) stands dismissed. No costs.
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2012 (9) TMI 896
... ... ... ... ..... damage is caused to articles, the assessee should issue a separate bill. The bill also does not disclose that the part of service charges is payable towards the tips. The payment of tip is normally optional, but the assessee should not compulsorily enforce on the customers. On considering the submission made at the Bar, the order of the Appellate Tribunal is set aside and the matter is remanded to the AO for fresh scrutiny as to whether the said amount is part of sale price of the food and beverages sold and whether the assessee would be legally entitled to claim tips on behalf of his serving staff and set off against the damage to the articles. The Appellate Authority shall also consider whether the amount collected is a disguised collection of Service Tax by mis- representation from the customers. The Appellate Authority shall make a fresh assessment by affording opportunity to the respondent- assessee in accordance with law. Accordingly, the revision petitions are allowed
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2012 (9) TMI 895
Tax on diesel - Held that:- In the instant case, the assessee caused entry of diesel into local area, which is the scheduled goods as per entry 67 of the First Schedule to the Act. The assessee is manufacturing cement. The assessee has caused entry of diesel for generating electrical energy and for running the earthmovers for shifting the limestone to the respondent's factory from the adjoining quarries.
In the instant case, as per the Notification No. FD 34 CET 98(1) dated March 31, 1998 and No. FD 79 CET 98(1) dated May 14, 1998 notwithstanding the goods which are brought into the local area as raw materials, component parts or input, the assessee is liable to pay tax at the rate of four per cent. Hence, the judgments relied upon by the respondent are not applicable for the present case and the order passed by the Appellate Tribunal cannot be sustained. The substantial questions of law framed in this revision petition are held in favour of the Revenue. Accordingly, Appeal is allowed. The order passed by the Karnataka Appellate Tribunal is set aside insofar as deduction of entry tax in respect of diesel is concerned.
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2012 (9) TMI 894
Whether Appellate Tribunal was legally justified in restoring levy of entry tax on diesel brought into local area for use as raw material/input in the generation of electrical energy which is exempted from tax levy under entry Sl. No. 15 of the Second Schedule to the Karnataka Entry Tax Act?
Whether levy of entry tax at two per cent in respect of hexane which is an input used in the extraction of solvent oil is legally justified as against the rate of tax at one per cent applicable under entry 80 of the First Schedule to the Karnataka Tax on Entry of Goods Act, 1979 read with Sl. No. 3 of Government Notification No. FD CET 98 (2) dated March 31, 1998?
Held that:- The assessee has caused entry of diesel into local area, which is a scheduled goods under entry 67 of the First Schedule under the KTEG Act. The assessee is manufacturing and selling solvent oil from the oil-cake from its plant. The assessee has caused entry of diesel for generating the electric energy for running its machine. The assessee has never sold electrical energy. Hence, diesel cannot be treated as raw material or component part or an input used in the manufacture of some other goods. Hence, we find that there is no infirmity or irregularity in the order passed by the Karnataka Appellate Tribunal confirming the order passed by the assessing authority.
With regard to the second question, the assessing authority has not noticed the notification dated March 31, 1998 wherein it was specifically mentioned that the raw materials, component parts and input which are used in the manufacturing of intermediate and finished products other than those specified in the Second Schedule is at the rate of one per cent. The assessing authority as well as the Karnataka Appellate Tribunal has not considered the said notification. Hence, the order passed by the assessing authority is required to be modified and the tax has to be levied on hexane at the rate of one per cent. Revision partly allowed.
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2012 (9) TMI 893
Whether the SIM cards, recharge cards are liable to tax? - Held that:- In view of the finding of the honourable Supreme Court in Bharat Sanchar Nigam Ltd. case [2006 (3) TMI 1 - Supreme court] the substantial questions of the law are to be held in favour of the assessee and the order passed by the revisional authority is liable to be set aside and the order passed by the first appellate authority is to be upheld.
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2012 (9) TMI 892
Seizure orders - Inquiry procedure - Bogus documents - Held that:- At this stage, cannot make any observations with regard to the validity of the documents. While it is true that when the documents accompany the goods with a duly filled in transit declaration form, there is presumption of the validity of the movement and that such presumption cannot be easily rebutted by the trade tax authorities; at this stage, however, only a show-cause notice has been issued to the petitioner. It is always open to the petitioner to satisfy the Assistant Commissioner, and the competent authority about the validity of the documents and genuineness of transaction and movement.
Do not find that the nature of goods are such that they can be levelled as perishable goods. In any case the Assistant Commissioner (Incharge), Commercial Tax, Mobile Squad, Unit-III, Mathura-respondent No. 3 will, if the petitioner puts in appearance before him and file sufficient proofs, decide the matter as expeditiously as possible and preferably within a week provided the petitioners cooperates.
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2012 (9) TMI 891
Whether the commodity dealt with by the assessee, viz., "the woven labels" or printed cloth labels are entitled to be classified under entry 11, Part A of the Third Schedule to the TNGST Act, 1959 or not?
Held that:- A combined reading of the decision of Metagraphs Pvt. Ltd. v. Collector of Central Excise, Bombay [1996 (11) TMI 68 - SUPREME COURT OF INDIA] along with entries 5806 and 5807 of the Central Excise Tariff Act, no hesitation in rejecting the case of the assessee seeking exemption under entry 11 of Part A of the Third Schedule. Further, no justifiable ground to accept the clarification of the Special Commissioner and Commissioner of Commercial Taxes relied on by the assessee to argue that their product falls under entry 11 of Part A of the Third Schedule in the context of the specific reference to the heading 5806 of the Central Excise Tariff Act. Needless to say that a clarification cannot go beyond the scope and ambit of the provision of law.
Considering the nature of dispute raised by the assessee claiming exemption and by applying the decision in Appollo Saline Pharmaceuticals (P) Ltd. v. Commercial Tax Officer (Fac) [2001 (10) TMI 1100 - MADRAS HIGH COURT] we do not find any good ground to restore penalty. Appeal partly allowed.
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2012 (9) TMI 890
Condonation of delay - inordinate delay of 1066 days - Tribunal condoned delay - Held that:- The chronology of events leading to the delay may succinctly be set out. On 26-7-2004 the assessee approached the Settlement Commissioner (even before final order was passed by the Commissioner on 30-7-2004). The Settlement Commissioner admitted the application of the assessee on 31-5-2005. Against the order dated 31-5-2005, the Revenue filed a writ petition before the Delhi High Court, which was dismissed in limini. Undaunted the Revenue carried the matter to the Supreme Court by way of a Special Leave Petition which also ended in dismissal on 10-7-2006. By the order dated 17-1-2007 the Settlement Commissioner rejected the assessee’s application for settlement. It is not clear from the record as to when the order of the Settlement Commissioner dated 17-1-2007 rejecting the assessee’s application for settlement, was communicated to the assessee. Be that as it may, in the aforesaid circumstances the CESTAT was correct to exercise its discretion in condoning the delay. Decided against Revenue.
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2012 (9) TMI 889
Waiver of pre deposit - Valuation of goods - Whether the value of scrap retained by the appellant assessee/job worker is liable to be included in computing the assessable value of the job work done by the assessee - Held that:- On appeal, the Commissioner (A) directed the assessee to make pre-deposit for entertaining the appeal. On further appeal, the Tribunal by the impugned order insisted on pre-deposit. Challenging the said order, the present appeals are filed - This Court in the case of Automotive Stampings and Assemblies Ltd. v. Commissioner of Central Excise in [2011 (6) TMI 270 - Bombay High Court] on consideration of similar issue has directed that the appeals be heard on merits without insisting on any pre-deposit. For the reasons stated in the aforesaid order, we quash and set aside the common order of CESTAT dated 15th November, 2011 and direct the Commissioner (Appeals) to hear the appeals on merits and in accordance with Law without insisting any pre-deposit. - Decided in favour of assessee.
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2012 (9) TMI 888
Revision petition - Condonation of delay - Burden of proof - Whether the application under clause 5A of the 1989 Scheme for review of order dated October 21, 2000 passed by the SLSC was indeed filed by the petitioner-company on December 13, 2000 - Held that:- There is no material before this court to come to the conclusion that the order dated October 24, 2011, is a perverse order or vitiated by a misdirection in law entailing a question of law to be determined in the present revision petition. The issue of condonation of delay in filing appeal beyond limitation and finding of sufficient cause is a question of fact, which needed to be established from the evidence led by the petitioner-company as the appellant before the Tax Board to draw on its discretion for condoning delay of about 11 years in filing an appeal against SLSC's order dated October 21, 2000. This was the burden of the petitioner-company, Binani Cement
Petitioner-company did not produce any proof of filing of the application dated December 13, 2000, before the SLSC at any time or even on March 17, 2011 when the matter was considered. The reliance of the petitioner-company on reply filed by the State Reported as Binani Cement Limited. v. State of Rajasthan [2001 (7) TMI 1260 - RAJASTHAN HIGH COURT]. is also of no avail. It is trite that an admission has to be unequivocal to be relied upon. A perusal of the reply filed by the State shows that the State had completely and unambiguously denied the receipt of the application for review dated December 13, 2000 by the SLSC or the Industries Department.
The order of this court Reported as Binani Cement Limited. v. State of Rajasthan [2001 (7) TMI 1260 - RAJASTHAN HIGH COURT] contained no direction to the Tax Board to condone the delay for the whole period of 11 years, but was confined to the petitioner-company's entitlement for condonation of delay from May 21, 2008 to September 5, 2011. For the remainder period from October 21, 2000 to May 21, 2008, the burden was on the petitioner-company to satisfy the Tax Board that it had sufficient cause for filing an inordinately delayed appeal against the SLSC's order dated October 21, 2000 on September 16, 2011, and for hearing the appeal on the merits. The findings of the Tax Board are findings of fact. The scope of revisional jurisdiction in interfering with findings of fact entailing a decision by the concerned court on an application for condonation of delay is extremely narrow as would be evident from the judgment of the honourable apex court in the case of Manindra Land and Building Corporation Ltd. [1963 (5) TMI 61 - SUPREME COURT] - Decided against assessee.
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2012 (9) TMI 887
Refund of excess interest paid by the appellant - Mis calculation of interest - Unjust enrichment - Held that:- Revenue has failed to produce any evidence that the appellant has recovered the amount of interest paid by them on supplementary invoices from their customers. While raising the supplementary invoices, the appellant only recovered duty from their customers and no interest has been recovered from the customers. Section 12(b) (sic) of the Central Excise Act, 1944 provides that every person, who has paid the duty of excise on the goods under this Act, shall unless the contrary is proved by him be deemed to have passed full incidence of such duty to the buyers of such goods. From the said provision, it is very much clear that the bar of unjust enrichment is applicable to the duty only and not for the interest. As in this case, both the lower authorities have held that bar of unjust enrichment has not been proved by the appellant, the same is not sustainable as Central Excise Act, 1944, does not provide any presumption of passing the incidence of interest on the buyers - Decided in favour of assessee.
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2012 (9) TMI 886
Denial of rebate claim - Whether the first appellate authority was correct in setting aside the adjustment of the sanctioned rebate to the dues from the respondent should not have been done as the dispute was before the higher forum i.e. Tribunal - Held that:- there is an appeal against order in appeal No. 313/09 and Tribunal had granted an unconditional stay. The invocation of provisions to Section 11 of the Central Excise Act, 1944 to such an amount which is unconditionally stayed by the Tribunal and adjusting the said amount from the rebate claim sanctioned to the respondent is incorrect as there is no government dues as on date against the respondent. I find that the first appellate authority was correct in coming to the conclusion while setting aside the impugned order which did the adjustment of the dues against the rebate claim filed and sanctioned by the assessee. I find that the ratio of the decision of the Tribunal in the case of Girdharilal Sugar Alled Industries Ltd. (2004 (1) TMI 205 - CESTAT, NEW DELHI) is also in favour of such a proposition - Decided against Revenue.
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2012 (9) TMI 885
Eligibility of CENVAT Credit - Whether during the period from January, 2008 to August, 2008, they were eligible for credit of Central Excise duty paid on welding electrodes used for repair and maintenance of plant and machinery - Held that:- Definition of ‘input’ as given in Rule 2(k) of Cenvat Credit Rules, 2004 covers the goods used “in or in relation to manufacture” of final products, whether directly or indirectly which is a much wider than the expression “used in manufacture”. While repair or maintenance by itself is not a process of manufacture, this activity certainly has nexus with manufacture of final product and would be covered by the expression - “used in or in relation to manufacture of final product” as no manufacturing activity is possible with malfunctioning machinery - Decided in favour of assessee.
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2012 (9) TMI 884
CENVAT Credit - Whether the appellant would be eligible for cenvat credit in respect of “Sari Guard” and “Mirror Assembly” cleared along with motor cycles - Held that:- “Sari Guard” is an essential safety component of a motor cycles. As regards the “Mirror Assembly” we are of the view of that the same is also a safety component of a motor cycle. As such, prima facie the said items are covered under the definition of ‘Accessories’ to the motorcycles and, therefore, they fall within the definition of ‘input’. That being the case, prima facie the appellant has rightly availed cenvat credit in respect of the excise duty paid on “Sari Guard” and “Mirror Assembly”. Thus we are of the opinion that appellant has been able to make out a prima facie case for waiver of the condition of pre-deposit of duty demand, interest and penalty - Stay granted.
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2012 (9) TMI 883
Duty demand - Abatement of duty - Held that:- In case of Pan Masala/Gutkha manufacturing units, the duty liability is required to be discharged under the provisions of Section 3A of the Central Excise Act, 1944 read with PMPM Rules, 2008. According to the provisions of Rule 7 of the PMPM Rules, duty payable by a unit for a particular month shall be calculated by application of the appropriate rate of duty specified in the Notification No. 42/2008-C.E., dated 1-7-2008 to the number of operating packing machine in the factory during the month. In terms of Rule 8 of the PMPM Rules, the number of operating packing machines during a month for the purpose of Rule 7 is to be taken as the maximum number of packing machines installed on any day during the month. However, under Rule 10 of the PMPM Rules, proportionate abatement of duty can be allowed for the period when the entire factory was closed and had not produced or cleared any goods, during a continuous period of 15 days or more, subject to the conditions as specified in this rule.
when during first period of closure, the unit was closed from 10-3-2010 to 1-4-2010 and during second period when it was closed from 8-4-2010 to 1-5-2010, the abatement for the entire period including for 1st April 2010 and 1st May 2010 has been correctly allowed. There is nothing in Rule 10 from which it can be concluded that the period of closure should be apportioned calendar monthwise and then it should be considered for abatement under Rule 10. In our view, the department’s interpretation of Rule 10 is totally incorrect - Decided against Revenue.
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