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2013 (4) TMI 539 - MADRAS HIGH COURT
Maintainability of orders under section 11C of the SEBI Act - as according to the petitioners orders impugned in the writ petitions which have been issued under section 11C of the SEBI Act are not sustainable as the said provision is only prospective in nature and the same is not applicable to the petitioners since the transactions, which are said to have been done by the petitioners, were prior to the Amendment Act 59 of 2002 - whether section 11C is purely procedural in nature or it is a substantive provision creating rights and liabilities - The petitioners were in the business of buying, selling or dealing in shares of NEPC group of companies & SEBI by impugned order required the petitioner to furnish details/information relating to the transactions, which were done during the relevant period, for the purpose of completing the investigation under section 11C -
Held that:- If a provision is held to be, pure and simple, procedural, it is always retrospective unless a different intention is shown in the statute itself. On the contrary, if the provision is substantive in nature, creating either rights or liabilities, unless a different intention is shown in the Act itself, the said provision shall, undoubtedly, be prospective in nature.
Undoubtedly, as guaranteed under article 20(1) of the Constitution of India, no person shall be convicted for any offence except for violation of a law in force at the time of commission of the Act, nor be subjected to penalty greater than which might have been inflicted under the law in force at the time of commission of the offence.
In the instant cases, if the petitioners fail to comply with the orders made under section 11C(1), for the said non-compliance or disobedience, they are liable to be punished as provided in section 11C(6). Such punishment is not for any violation or disobedience of any provision, then in force, i.e., prior to the introduction of section 11C(6). It is for non-compliance of the orders made under section 11C(1), that they are liable to be punished as the non-compliance which constitutes offence takes place after the introduction of section 11C(1). Thus, section 11C(6) is not attempted to be applied retrospectively in the instant cases as it is projected by the petitioners. Section 11C(6), which creates criminal liability, is substantive in nature and thus, it is prospective.
As the investigation itself does not directly result in either penalty or punishment or any other civil consequences & after the investigation, the investigating authority has to submit a report to the Board under section 11C(1). On receipt of such report, the Board will consider the same and after affording sufficient opportunity to the persons concerned, the Board will have three options before it to do. The first option is to go in for prosecution under section 24; the second option is to impose a penalty under section 15A; and the third option is to issue any suitable direction under section 11B. Penalty under Chapter VI-A or any conviction under section 24 will be by means of appropriate adjudication by the competent authority/court after affording sufficient opportunity to the persons concerned. Thus, investigation is only a means to collect evidences by the investigating authority by following the prescribed procedure and such investigation by itself does not result in penal or civil consequences. Therefore, the investigation, as provided in section 11C(1), by itself is not substantive in nature. Per contra, it is purely procedural. Therefore, as per the settled law, section 11C(1) is retrospective in nature.
The language used in section 11C(1)(b ) is not similar to the language used in section 11C(1)(a). In section 11C(1)(a), the language used is 'transaction in securities are being dealt', whereas the language in section 11C(1)(b ) is 'has violated any of the provisions of the Act or Rules or Regulations, etc.,'. This clearly shows that section 11C(1)(b) covers the past transactions. In other words, section 11C(1)(a) deals with the transactions, which are in progress, whereas, section 11C(1)(b) deals with the past transactions as well. Thus, section 11C(1)(a) and 11C(1)(b) are to be read disjunctively as they deal with different aspects. That is the reason why, Parliament has aptly used the word 'or' in between these two provisions. Therefore, the word 'or' as employed in between these two provisions should not be read as 'and' as it is contended by the petitioners. In other words, these two provisions should be read disjunctively and not conjunctively.
No merit in the writ petitions and the same are to be dismissed. [Para 28]
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2013 (4) TMI 538 - GUJARAT HIGH COURT
Officer in default – whether when the company had a managing director, whole-time director and manager as mentioned in clauses (a) to (c) of section 5 of the Act there cannot be any prosecution against the petitioner who was an ordinary director of original accused No. 1-company as he cannot be said to be "officer who is in default” - Criminal proceedings were instituted against company, its managing director and directors for breach of section 150 as pursuant to inspection, it was found that the company had not maintained the register of members and index of members - The petitioner contested that he only the director of accused No. 1-company at the relevant time and there was already a managing director appointed by accused No. 1-company and, therefore, considering section 5, the petitioner could not be said to be 'Officer in default' and, it could not be said that the petitioner had committed any offence as alleged - Whether petitioner who was an ordinary director of the company could be said to be 'officer who is in default'?
Held that:- As decided in Ravindra Narayan Versus Registrar of Companies [1994 (1) TMI 208 - HIGH COURT OF RAJASTHAN] and considering section 5 of the Act it is held that the Directors are Officer in default only where company does not have managing director, whole-time director or manager. Department of Company Affairs have also issued Circular No. 6/1994 [F. No. 3/41/93-CL-V] dated 24th June, 1994 that where penal provisions provide for punishment of ‘officers in default' prosecution be filed against the managing director(s); whole-time director(s) and manager, apart from the secretary, if any, and the company and only in those cases where there is no such managerial personnel, i.e., managing director/whole-time director/manager, prosecution be filed against all ordinary directors, apart from the secretary, if any, and the company. Considering the aforesaid, to continue the criminal proceedings against original accused No. 6, who was at the relevant time only ordinary director, would not be maintainable and the same would be abuse of process of law and the court and, therefore, this is a fit case to exercise the powers under section 482 of the Code and to quash and set aside the criminal proceedings against the petitioner-original accused No. 6. However, the same would be without prejudice to the rights and contentions of respondent No. 2 and prosecution against rest of the accused persons, who may be tried in 'accordance with law and on its own merits, without, in any way, being influenced by the present order.
In view of the above and for the reasons stated hereinabove, the present petition succeeds. The impugned complaint, being Criminal Case No. 610/ 1999 filed by respondent No. 2 herein-original complainant pending in the Court of learned Additional Chief Metropolitan Magistrate, Ahmedabad is hereby quashed and set aside so far as the petitioner-original accused No. 6 is concerned. However the same shall be without prejudice to the rights and contentions of respondent No. 2-original complainant as well as the prosecution against other accused persons, who shall be dealt with and tried by the concerned learned Magistrate in accordance with law and on its own merits, without, in any way being, influenced by the present order, which would be qua the petitioner-original accused No. 6 only. Rule is made absolute accordingly.
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2013 (4) TMI 537 - HIGH COURT OF DELHI
SEBI function - Power to issue directions by SEBI - Whether SEBI functions in an inquisitorial capacity while examining issue, whether reasonable grounds exist to believe that transactions in securities are being dealt with in a manner detrimental to investors or securities market or, whether any intermediary or any person associated with securities market has violated any of provisions of SEBI Act or Rules & Regulations made thereunder, or directions issued by Board? - When can SEBI direct an investigation by an investigating authority under section 11C?
Respondent No. 2 i.e. complainant had entered into business transactions with respondent No. 3, SEPL in the year 2006 as controlled by two promoters, namely, DHDL and DREDL, both of whom were wholly owned subsidiaries of DLF, the petitioner. In connection with its proposed public issue, the petitioner filed a Draft Red Herring Prospectus (DRHP) with the SEBI with the said DRHP, indicated that SEPL was one of the joint ventures of DLF which was, subsequently, withdrawn by the merchant bankers of the petitioner and a fresh DRHP was submitted, in which SEPL was not mentioned as being associated with DLF.
Held that:- The instant petition, is to be dismissed as petitioner did not have a right to hear the submissions of respondent No. 2 complainant, and it had only the right of making its own submissions before SEBI, i.e., respondent No. 1 in terms. One of the reasons for the Court not exercising jurisdiction under article 226 of the Constitution is that the matter involves technicalities, which are best left to be dealt with by experts in the field. This is one of the reasons given by the Court for its decision in Rose Valley Real Estates & Construction Ltd. (2011 (3) TMI 1476 - HIGH COURT OF CALCUTTA). But the issues raised by the petitioner in the instant case are purely legal & not factual, and do not involve any technicality.
The submission of the petitioner that it ought to have been granted a full-fledged hearing by the board cannot be accepted as if accepted, it would lead to a piquant situation where the board shall, only on the basis of a prima facie assessment return its findings which would, in turn, impinge upon the functions to be discharged by the investigating authority to be appointed to investigate into the matter.
There is no merit in the submission of the petitioner that the impugned order has been passed without jurisdiction inasmuch as, the jurisdictional facts were lacking, to cause the board to have reasonable grounds to believe that an investigation is called for into the affairs of the petitioner-company, either on account of the transactions in securities are being dealt with in a manner detrimental to the investors or the securities market or any intermediary or any person associated with the securities market has violated any of the provisions of the Act or the rules or the regulations made or directions issued by the board thereunder.
A perusal of the impugned order shows that the board has taken note of the submissions of respondent No. 2, he complainant as well as those of the petitioner-DLF, and of SEPL (though SEPL did not appear at the stage of hearing)& noted that the FIR was registered against SEPL and others. The board also notes that SEPL did not take the plea that it was not aware of the FIR. The board also takes note of the fact that the closure report filed by the police stated that they had interrogated the aforesaid individuals in connection with the FIR. The board, therefore, observes that in all probabilities, SEPL was aware of the FIR registered against it. In relation to the ignorance feigned by the petitioner-DLF about the filing of the FIR, the board observes that it is unable to be convinced with the submission of the petitioner-company that it was not aware of the registration of the FIR against SEPL.
While observing that the original complaints dated 4-6-2007, 19-7-2007 did not contain allegations of the petitioner funding SEPL indirectly through a series of transactions involving its subsidiaries/associates and the manner of purchasing lands and creating development rights on the land acquired by the companies subsidiaries by indirect funding of such purchases, the board observes that in the interest of the securities market, the investors, as also the interest of justice, it would not be proper on the part of SEBI to dispose of the complaint by holding that those additional submissions are extraneous to the original complaint filed by the complainant/respondent No. 2.
There is no bar or impediment cast on the board by the SEBI Act, to say that it would not entertain or look into evidence that the complainant may rely upon in support of his complaint earlier made, while considering whether, or not, to direct an investigation. There is no reason to put any such fetters on the powers of the board or to read such restrictions into the statute, which are clearly not there.
The petitioner's submission that the Division Bench in its judgment had precluded the board from looking into any additional information/documents that respondent No. 2/complainant may produce in support of his complaints cannot be agreed with. A perusal of the order of the Division Bench in the three LPAs shows that the Division Bench set aside the judgment of the Single Judge because the Single Judge had himself directed investigation into the complaints of respondent No. 2, rather than requiring SEBI to examine the two complaints of respondent No. 2, and discharge its statutory duty under section 11C. This is clear from reading of the order of the Division Bench. Therefore, the submission of the petitioner that the board has taken into consideration the extraneous or irrelevant material while passing the impugned order is to be rejected.
A perusal of the impugned order shows that it certainly cannot be said that it has been passed arbitrarily or irrational. The impugned order was clearly based on reasons which were relevant and material. The adequacy or sufficiency of the reasons which weighed with the board in entertaining the reasonable belief with regard to the possible existence of circumstances mentioned in clauses (a ) and (b) of section 11C(1) cannot be gone into.
The submission of SEPL that SEBI has no jurisdiction over SEPL for the reason that it is a privately held company and is not traded in the Securities Market, and therefore, no investigation could have been ordered by SEBI against SEPL, also has no merit. The SEBI by the impugned order has directed investigation into the allegations levelled by the complainant-respondent No. 2 against the petitioner about the breach of the SEBI (Disclosure of Investor Protection Guidelines), 2000, read with the relevant provisions of the Companies Act, and in relation to the disclosure of information required to be made in the red herring prospectus by the petitioner-DLF. The involvement of SEPL in the said investigation is only to ascertain whether, or not, at the relevant time, the petitioner was liable to make a disclosure with regard to SEPL in the DRHP which, admittedly, was not made. It is not that SEBI has directed investigation against SEPL. However, since the allegations against the petitioner-DLF pertain to the disclosure of information about the registration of FIR against SEPL, which, the complainant alleges, to be a subsidiary and an associate company of the petitioner-DLF, at the relevant time, the investigation in that respect can and should be made in relation to SEPL.
Writ petition is to be dismissed with costs to be shared between the respondent Nos. 1 and 2 equally.
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2013 (4) TMI 536 - CESTAT CHENNAI
Interest payable on wrong credit taken - Held that:- As decided in UOI Vs. Ind-Swift Laboratories Ltd.[2011 (2) TMI 6 - Supreme Court] that interest is payable also in cases where credit is wrongly taken but not utilized. This is a case of interest due as per the above said decision of the Apex Court which dues was adjusted from rebate sanctioned.
Commissioner (Appeal) has gone beyond the issue for which SCN was issued and has granted refunds without due regard to provisions in section 11B of the Central Excise Act and without filing of any refund claim. Thus the order of the Commissioner (Appeals) is not proper and therefore set aside the same and restore the adjudication order. The appeal filed by Revenue is allowed.
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2013 (4) TMI 535 - CESTAT AHMEDABAD
Relevant date applicable to the refund claim - Held that:- It is a settled law that once an issue is being agitated by an assessee before the Appellate Channels, it has to be considered that any payments made by the assessee during contesting the case is deemed to be paid under protest. The amended provision with respect to the relevant date also came into operation with effect from 11/12/2007 whereas the refund claim was filed by the appellant on 28/12/2007.
However, by virtue of duty paid deemed to be under protest, time bar as prescribed under Section 11B of the Central Excise Act, 1944 will not be applicable to the present case. Accordingly appeal filed by the appellant is allowed with consequential relief.
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2013 (4) TMI 534 - KARNATAKA HIGH COURT
Default in payment of Central excise duty - period from December 2010 to May 2011 - show cause notice requiring the payment of excise duty on each consignment in cash, without utilizing Cenvat Credit until payment of outstanding amount together with interest - Held that:- As under Sub-Rule (1) of Rule 8 of Central Excise Rules, 2002 if an assessee, failed to pay the duty within the time stipulated i.e. on the 6th day of following month if it is paid electronically through internet banking or on the 5th day of following month in any other case, and a further period of 30 days under Sub-Rule (3A) is disentitled to make use of the Cenvat Credit.
In the admitted facts, petitioner defaulted in the payment of duty for the months of December 2010 to May 2011, but did so with interest on 21.5.2011 in a sum of ₹ 20,45,600/- towards duty and ₹ 84,324/- towards interest and also payment of ₹ 10,45,749/- towards duty by utilizing the Cenvat Credit, without disclosing the particulars against which it was paid nor the date of payment. Hence, it is not possible for this Court, at this stage to accept the plea of the petitioner.
The order impugned does not suffer from serious infirmities occasioning grave injustice to the petitioner calling for interference in exercise of extraordinary writ jurisdiction under Article 226 of the Constitution of India.
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2013 (4) TMI 533 - ITAT AHMEDABAD
Liability to deduct TDS u/s 194C - addition u/s 40(a)(ia) - CIT(A) deleted the addition - Held that:- Circular No.715 dt 8-8-1995 issued by the CBDT states that the at source has to be deducted from the payments made to clearing and forwarding agents for carriage of goods if the payments are made under contract. The said circular also clarifies that each GR can be said to be a separate contract, if the goods are transported at one time. If the goods are transported continuously pursuance of a contract for a specific period or quantity, each GR will not be a separate contract and all GRs relating to that period or quantity will be aggregated for the purposes of TDS.
In the instant case, there is no continuous contract, oral or written between the Appellant and Rupal Roadways as regards quantity period and rate. Hence each GR is a separate contract. As per assessee the payment for each trip is less than Rs.20,000/- and the aggregate payment in a year to a single truck owner/driver is less than Rs.50,000/-. Hence the provisions of section 194C(3) are not applicable in this case & consequently section 40(a)(ia) will also not come into play. The presumption of the AO that there is an open and continuous contract between he Appellant and Rupal Roadways is contrary to the facts.
No infirmity in the order passed by CIT(A) holding that provision of Section 194C(3) are not applicable in this case and consequently no addition u/s 40(a)(ia) can be made. In favour of assessee.
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2013 (4) TMI 532 - GUJARAT HIGH COURT
Remission of duty upon destruction of final product - whether the manufacturer is required to reverse the Cenvat Credit on the inputs used in manufacturing such final product? - Held that:- Cenvat is a scheme under which a manufacturer is allowed to utilize the duty paid on inputs by taking the same from the duty payable on the final product subject to certain procedures prescribed under the Rules. Thus finding substance in the contention of respondent that in a taxing statute one has to look at what is exactly or clearly stated and there is no room for ascertaining any intendment of the legislature. One must look fairly at the language used [Baidyanath Ayurved Bhawan (P) ltd. v Excise Commissioner, UP [1970 (10) TMI 28 - SUPREME COURT OF INDIA]
Going through the provisions of the Rules relating to Cenvat as it stood in the Cenvat Credit Rules prior to September 7, 2007, there is no scope of application of equitable doctrine against the assesse and in favour of the Revenue on the ground that it will amount to conferring of double benefit. The moment sub-rule (5C) was introduced, the Legislature made its intention clear that from the date of coming into force of the said amended rule, in case of future remission on the ground mentioned in the said sub- rule, there will be reversal of the credit.
As the amendment has been effected from a particular date and at the same time, prior to such amendment, there was no provision of reversal as introduced in the Rules by way of amendment under the circumstances stated therein. Thus, it is creation of a new right in favour of the Revenue and in such circumstance, in the absence of any contrary intention reflected from any of the provisions of the Statute, the amendment must be held to be prospective.
Such being the position, sub-rule (5C) of the Rules is effective from September 7, 2007 and for input credited earlier, there is no scope of reversal of the credit if the finished product becomes unfit for human consumption unless any condition has been imposed for remission of duty in terms of Rule 21 of the Central Excise Rules, 2002 making it clear that the credit already taken is to be reversed.
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2013 (4) TMI 531 - BOMBAY HIGH COURT
Stay of recovery of the dues seeked - Writ jurisdiction - petitioners contested that in the proceedings before the Tribunal submissions were made only in the stay application seeking waiver of pre-deposit of duties, interests and penalties & no indication was furnished by the Tribunal at the stage of the hearing that the appeals would be taken up for hearing and final disposal and that it was inclined to grant a waiver of pre-deposit - Held that:- Order of Tribunal was breach of principles of natural justice as Tribunal has itself observed in Paragraph 8 of its order that while allowing the said petition, it was of the view that the appeal could be disposed of at that stage. If the Tribunal was inclined to dispose of the appeal, parties ought to have been placed on notice of this in order to enable them to make submissions on the merits of the appeals. That evidently has not been done. The impugned order of the Tribunal therefore suffers from a fundamental breach of the principles of natural justice.
As during the course of the hearing, in response to a query of the Court, Counsel appearing on behalf on the petitioners fairly stated that he would have no objection if the order of the Tribunal is set aside in its entirety and the proceedings are remitted back to the Tribunal for consideration afresh. Accordingly the impugned decision of the Tribunal purely on the ground that there was a breach of the principles of natural justice set aside and restore both the stay application and the appeals to the file of the Tribunal.
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2013 (4) TMI 530 - ALLAHABAD HIGH COURT
Determination of tax liability - power supply devices - trade tax paid by the petitioner on the sale of Inverters, UPSSs and batteries at the rate of 4%. For the Assessment Year 2003-04, the A.O assessed the tax liability on these goods at the rate of 10%. Commissioner of Trade Tax U.P. has issued a Circular dated 02.09.2000 in which it has been held that Inverters, and UPSSs work as 'power supply devices' and trade tax at the rate of 4% was payable on it.
Held that - The Circular of the Commissioner Trade Tax dated 02.09.2000 has been superseded by the Circular dated 03.09.2003. A bare perusal of the Circular dated 03.09.2003 does not show that the Commissioner Trade Tax U.P. has considered the various factors before deciding that Inverter and UPSS are electrical goods. Following the judgement of Apex Court in State of Goa and others Vs. Leukoplast (India) Ltd.,[1997 (2) TMI 124 (SC)] the matter is remanded back to the A.O. Writ petition is disposed off.
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2013 (4) TMI 529 - MADRAS HIGH COURT
Claim of exemption on consignment sales disallowed - non maintenance of all the records as required under Rule 4(3-A) of Central Sales Tax (Tamil Nadu) Rules - Whether the Tribunal was correct in restoring the order of the assessing authority who has disallowed the claim of exemption on consignment sales & in respect of rate of tax adopted at 10.05% - Held that:- As per the decisions of Tata Engineering and Locomotive Co. Ltd. Versus Assistant Commissioner of Commercial Taxes, Jamshedpur and Another [1970 (3) TMI 104 - SUPREME COURT OF INDIA] AO has not examined individual transactions. Assessing Authority referred to few instances and drew inference that the entire transactions were inter-State sale. It is not known whether the Assessee filed the statutory declaration and whether any enquiry was held in respect of individual transaction. The Assessing Authority came to the conclusion on the basis that the entire goods sent as consignment were sold as one lot within a couple of days which cannot be done unless or otherwise there is a pre-existing order for the goods and that loads have been moved upon specific orders only. Thus without examining the individual transactions, the entire transactions was treated as inter-State sale falling under Rule 4(3-A) of CST (TN) Rules.
Tribunal has referred to number of decisions and extensively extracted the decisions. But the Tribunal has not examined the facts in the light of the principles laid down by the Hon'ble Supreme Court in various decisions. Tribunal being final authority of facts, it ought to have considered the facts in the light of the findings of the Assessing Authority and the contra view taken by the Appellate Authority and therefore, the order of the Tribunal cannot be sustained.
The assessment order shows that Assessing Authority has not held an enquiry as to individual transactions. Applying the ratio of the above decisions of the Hon'ble Supreme Court, the assessment order cannot be sustained and the matter is remitted back to the Assessing Authority for fresh consideration based on decisions of the ASHOK LEYLAND LIMITED V. STATE OF TAMIL NADU AND ANOTHER [(1) TMI 365 - SUPREME COURT OF INDIA].
Tax Case (Revision) is allowed. The order of Tribunal set aside and the matter is remitted back to the Assessing Authority.
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2013 (4) TMI 528 - MADRAS HIGH COURT
Notices of revision of assessment issued u/s 27 of the Tamil Nadu Value Added Tax Act calling upon assessee to file their objections within 15 days of receipt of the notices - The legality of the impugned notices, has been called in question on the ground by the assessee that the Enforcement Wing Officer cannot act as an AO and frame the revision of assessment, and therefore, the D-3 proposals cannot be simply adopted by the respondent without application of mind - Held that:- In the present case, the petitioner-Company has not availed of the opportunity given to them by filing objections to the impugned notices. The grievance of the petitioner is in respect of levying higher rate of tax at 12.5% instead of 4%, which is a matter to be adjudicated before the authority concerned. The approach of the petitioner in rushing to this Court by filing these Writ Petitions, challenging the notices 'simpliciter', without even filing the objections before the respondent, cannot be sustained.
Therefore, the impugned proposal of the respondent for revision of assessment, is subject to the consideration of the objections to be filed by the petitioner, and only after receipt of the objections, the respondent could form any opinion in accordance with law. The claim of the petitioner that the Enforcement Wing Officer's report cannot form the basis for the impugned revision of assessment and he has no role to act as Assessing Officer and the respondent cannot simply adopt the D-3 proposal, which is a matter for concern before the respondent on filing the objections by the petitioner.
Writ Petitions disposed of, with a direction to the petitioner-Company to file their objections to the impugned revision notices, before the respondent, within a period of two weeks from the date of receipt of a copy of this order & the respondent shall consider the same, afford an opportunity of hearing, bear in mind the provision of law and thereafter take a decision uninfluenced by the report of the Enforcement Wing Officer and pass appropriate orders, on merits.
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2013 (4) TMI 527 - CESTAT NEW DELHI
Valuation - exclusion of cost of goods – Board’s circular dated 20.06.2003 – Notification No. 12/2003-ST - question in this appeal is whether the entire value of the services provided by the appellant herein (including the value of course material supplied) is to be included in the gross value of the service provided by the appellant and also whether the Government has exempted the whole of the value of goods and material sold, from the gross value of taxable service, vide the Notification issued under Section 93(1). - Held that: - The exemption notification is clear and admits of no restrictive clauses. Consequently, the assessee is entitled to relief. - Decided in favor of assessee.
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2013 (4) TMI 526 - CESTAT NEW DELHI
Refund claim of Cenvat Credit in respect of unutilized Cenvat Credit of duty/service tax paid on input/input service used in export of final product - period 01.10.2009 to 31.03.2010 denied - The respondent claimed refund of accumulated CENVAT Credit Rule 5 of the CENVAT Credit Rules, 2004 - whether such supply of goods to SEZ units was an export - Held that:- The definition of export given under the Customs Act has been traditionally adopted for purposes for the Central Excise Act and the Rules thereunder. Therefore, in the absence of a definition of export under the Central Excise Act, the Central Excise Rules or the CENVAT Credit Rules, 2004, thus for purposes of the CENVAT Credit Rules, 2004, one should look for its definition given under the Customs Act. The fictionalized definition of export under Section 2 (m) (ii) of the SEZ Act cannot be looked for as it purports only to make the SEZ unit an exporter. The term export used in Rule 5 of the CENVAT Credit Rules, 2004 stands for export, which is physical export out of the country, envisaged under the Customs Act. Thus taking this view because, as already indicated, anybody other than SEZ unit cannot be allowed to claim any benefit under the SEZ Act/Rules. Viewed from this angle, the respondent cannot be held to be entitled to refund of accumulated CENVET Credit on the inputs used in our in relation to the manufacture of the Pre-fabricated buildings supplied by them to the SEZ units.
Thus the supplies made to SEZ cannot be treated as export for the purpose of Rule 5 of the Cenvat Credit Rules and accordingly appellant is not entitled to refund of Cenvat Credit in respect of inputs/inputs services used in the manufacture of final products supplied to SEZ unit.
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2013 (4) TMI 525 - CESTAT NEW DELHI
Goods Transport Agency - under-disclosure of service tax liability on GTA services - demand of service tax, education cess, interest and penalty u/s 75,78 and penalty under section u/s 76 waived, under Section 80 - Held that:- Once the conditions enumerated in Section 11AC and failure to remit the amount of duty under the first proviso and the amount of penalty determined under the second proviso to the said provision are established, the liability to remit 100% of the penalty is statutorily enjoined and no discretion inheres in any authority to avoid the legislative mandate as to the quantum of penalty.
In the light of the judgment of Castrol India Limited [2012 (6) TMI 697 - BOMBAY HIGH COURT] the contention of the assessee does not commend acceptance by this Tribunal. The appeal is dismissed in the above circumstances, but without costs.
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2013 (4) TMI 524 - CESTAT NEW DELHI
Short payment of service tax - Held that:- This is undisputed fact that in ST-3 Return receipt of Rs. 3,79,04,175 is shown by the respondent & the Commissioner (Appeal) in the impugned order has not made any observation on this figure of 3,79,04,175/- shown in ST-3 Returns and allowed the respondent’s appeal relying on Chartered Accountant’s certificate, Income Tax provisions and principles of accounting in preparing balance sheet. Therefore set aside the impugned order and remand the case back to Commissioner (Appeal) for deciding the matter afresh after considering the figures shown in ST-3 Returns for the year 2007-2008 and after giving an opportunity of hearing to both sides.
Appeal is allowed by way of remand.
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2013 (4) TMI 523 - CESTAT NEW DELHI
Refund claim in terms of notification No. 17/09-ST dated 07.07.2009 claim for the quarter April 2010 to June 2010 denied on the ground of non-mentioning of I.E.C code on Courier Agency Invoice - Held that:- Refund is claimed by the appellant under provisions of Notification No. 17/09-ST. Courier Agency service is specified at Sl. No. 10 of the table provided in the Notification. Exemption is available subject to the condition that receipt issued by Courier Agency shall specify the import-export number of exporter. As this condition is not fulfilled by the appellant Commissioner (Appeal) has rightly rejected their appeal.
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2013 (4) TMI 522 - DELHI HIGH COURT
RTI application - writ of mandamus sought directing the respondents to supply the copy of CBDT circular/ instruction dated 19.06.2009 - whether the information with regard to scrutiny guidelines has all along been in public domain? - Held that:- The expression, economic interest, takes within its sweep matters which operate at a macro level and not at an individual, i.e., micro level. Thus by no stretch of imagination can scrutiny guidelines impact economic interest of the country. These guidelines are issued to prevent harassment to assessees generally. It is not as if, de hors the scrutiny guidelines, the I.T. Department cannot take up a case for scrutiny, if otherwise, invested with jurisdiction, in that behalf.
This is an information which has always been in public realm, and therefore, there is no reason, why the respondents should keep it away from the public at large. Thus, provisions of Section 8(1)(a) of the RTI Act would have no applicability in the instant case.
There is nothing stated in the operative part which would seem to indicate that the CIC has come to the conclusion which it has, is based on the fact that, the economic interest of the country, will get effected. The CIC, in the operative part has merely recorded what has been conveyed to it vis-a-vis the procedure for selection of cases for scrutiny. In view of the above, the impugned order is set aside. The respondents shall supply the relevant scrutiny guidelines to the petitioner for the financial year 2009-10. The respondents shall hereafter upload the guidelines with regard to scrutiny on their website.
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2013 (4) TMI 521 - ITAT HYDERABAD
Rectification/recall of the order of this Tribunal allowed as there was a mistake in noting the appearance for the assessee at the time of hearing on the appeals, inasmuch the name of one 'P.V.Ramachandra Rao' was mentioned whereas the name 'Shri N.Purnachandra Rao' should have been mentioned - in favour of assessee.
Rectification/recall of the order of this Tribunal - as per the assessee the letter issued by the Andhra Bank reflecting the property bearing No.8-2-293/82/NL/61A, included in the list of properties against which credit limits were sanctioned, was submitted as per the directions of the Tribunal for substantial cause under Rule 29 of the ITAT Rules and not as an additional evidence thus there is mistake in the order of the Tribunal - Held that:- Tribunal has decided the issue on various counts and non-admission of the evidence in the form of bank's letter filed by the the assessee, did not clinch the issue against the assessee. That being the case, even admission of the said letter, would not have made any change to the conclusion arrived at by the Tribunal.
Therefore, there is no mistake apparent from record in the order of the Tribunal in its decision on this issue. In any event, the decisions/observations of the Tribunal to treat the letter of the Andhra Bank filed by the assessee as additional evidence, not to admit the said additional evidence and the consequential findings even if the said additional evidence is admitted and considered are conscious ones, and all that the assessee is seeking by the present applications is a mere review of those decisions/ observations, which is not permissible in these proceedings under S.254(2), the scope of which is confined to mere rectification of mistakes apparent from record. Against assessee.
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2013 (4) TMI 520 - ALLAHABAD HIGH COURT
Interpretation of section 153C – block assessment - search was conducted at various business premises of the assessees. Books of accounts were handed-over to the AO to pass assessment orders. The assessment orders were passed u/s 153 C /143 (3) of the Act. - Aggrieved with the assessment orders, the assessees have filed appeals before the CIT (A) who quashed the orders. Revenue filed these appeals.
Held that - In the case of Manish Maheshwari vs. Assistant Commissioner of Income Tax and another [2007 (2) TMI 148 SC] he Hon'ble Supreme Court observed that in case of block assessment, the A.O. had to (i) record his satisfaction that any undisclosed income belonged to the company; and (ii) hand over the books of account other documents and assets seized to the Assessing Officer having jurisdiction against the company. In the instant case, the A.O. has recorded his satisfaction and after recording the satisfaction, handed over the books of accounts and seized material. Thus, the facts of both the cases are quite different. In the light of above discussion and by considering the totality of the facts and circumstances of the case, we find no reason to sustain the order passed by the Tribunal. Hence, we set aside the impugned order passed and remanded the matter back. The answer to the Substantial Question of law , which are interlinked, is against the assessee and in favour of the revenue
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