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2013 (8) TMI 702 - KARNATAKA HIGH COURT
Rectification or order - Revision of order by Tribunal - Block assessment proceedings - Assesse through settlement commission paid excess tax - Settlement commission accepted only partial amount - A.O. and ITAT disallowed rectification of order - Held that:- settlement commission has also given its reasons as to why it is accepting only a part of the amount offered. The settlement commission has also positively declined to give a direction to exclude the assessment of a sum of Rs.20.00 lakhs each in the case of the respondents/assesses on the premise that the applicant M/s MSL was making an offer of Rs.4,84,88,500/- as its undisclosed income for the reason that it cannot issue such directions in respect of persons not before the Commission and insofar as limiting the offer to a sum of Rs.2,65,04,626/- the settlement commission noticed that such alone could have been the undisclosed income of the assesses in the earlier period and it had no income generated beyond this.
It is not as contended by Mr Parthasarthy that because the commission was satisfied the other part of the investment in M/s MSIL had been explained, the offer made by M/s MSL before seeking settlement before the commission was accepted only to the extent of unexplained investment in the other company. On the other hand, that was not considered by the settlement commission but the settlement commission only examined the capacity and ability of the applicant before it for generating the income which was not disclosed and later making an offer before a commission for the settlement. For this purpose the settlement commission had examined the past conduct and transactions of the applicant M/s MSL. In the absence of any such discussion regarding the source of investment in M/s MSIL, only offer being made by M/s MSL - a remand for such purpose will be in our considered opinion a futile exercise and more over such an exercise if at all could have been in the case of very company M/s MSIL and not by either the present respondents/assesses or M/s MSL - an applicant and declarant before the settlement commission - Decided in favour of Revenue.
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2013 (8) TMI 701 - ITAT MUMBAI
Disallowance u/s 36(1)(ii) - Interest expenses on borrowed funds - loan/ advances to subsidiary companies - Held that:- AO made disallowance of interest of Rs.5,74,25,564/- in assessment year 2002-03 for similar reasons as stated in the assessment year under consideration. We observe that the ld. CIT(A) confirmed the action of AO. But the Tribunal in further appeal after considering the submissions of the assessee vide para 11 at page 9 of the order allowed the claim of the assessee. It is relevant to state that the Tribunal has stated that ld. CIT(A) in the next assessment year viz assessment year 2003-04 himself allowed the relief to the assessee. Tribunal allowed the claim of the assessee in AY 2002-03 after observing that in case business of subsidiary is collapsed it will have severe repercussions on the assessee company. That the synergies of the business operation of the assessee company and its subsidiaries were re-aligned and the functions of the various companies were made complimentary and supplementary to each other, so as to avoid duplication of interest and deriving maximum value in its operation. That each company is inter dependent on the other. That the survival of assessee is also at stake, if the subsidiaries fail.
The Tribunal also observed that section 14A of the Act would also not come in the way for the reasons that the majority of the subsidiaries are foreign subsidiaries and the question of section 14A being applied for dividend received from them does not arise. The Tribunal also held that section 14A and section 36(1) (iii) operate in different fields - investment in shares in e-Capital Solution were through Share Swap and not shares investment were made in cash.
That the assessee acquired shares in e-Capital Solution not by payment of cash but by issue of its own shares to the sellers of the said shares after taking approval from Reserve Bank of India. Thus, question of using of borrowed funds for acquiring shares in e-Capital Solution does not arise - there is no infirmity in the order of ld. CIT(A) in deleting the disallowance of interest expenditure made by AO - Decided against Revenue.
Transfer Pricing adjustment - CIT deleted addition - Held that:- issue requires reconsideration by TPO and therefore matter be restored to AO to determine ALP including applicability of method to be adopted. Hence, the orders of authorities below is set aside and the matter is restored to the file of AO to determine ALP of transactions of the assessee with Associated Enterprises afresh after giving due opportunity of hearing to the assessee by a reasoned order and in accordance with law - Decided in favour of Revenue.
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2013 (8) TMI 700 - ITAT MUMBAI
Business income or capital gain - Investment portfolio - Whether the profit from the shares is a capital gain or business income - Held that:- It is seen that the assessee has shown all the purchases under the investment portfolio. It is further seen that the long term capital gain shown by the assessee has been accepted by the AO himself. Under the provision of law, it is clearly provided that if the holding of share is more than one year then the gain on account of sale of shares has to be treated as long term capital gain and if holding period of shares are less than one year then the gain on account of sale of shares has to be treated as short term capital gain. No where it is provided that if the transactions are frequent and voluminous then the claim of the assessee is not allowable as short term capital gain or long term capital gain as the case may be. The only question which is to be examined and seen by the AO as to what treatment has been given by the assessee in respect to purchase of shares. Whether the purchase of shares are shown under the head stock-in-trade or under the head investments. If purchases have been shown under the head stock-in-trade then the sale transactions has to be treated as business transactions and if the sales have been effected from investment account then the gain has to be treated as long term capital gain or short term capital gain, as the case may be. In the present case, the assessee has shown all the purchases under the head investment portfolio - Decided in favour of assessee.
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2013 (8) TMI 699 - ITAT BANGALORE
Deduction u/s 80IB - Deduction in SSI industry - withdrawal of benefit - value of plant and machinery had exceeded Rs.1 crore in subsequent years - Held that:- the condition that is not complied with by the assessee is a condition which is to be fulfilled on an year to year basis and not merely in the initial/formative year alone. To elaborate further, the industrial undertaking, to be eligible for the benefit of the claim u/s 80IB of the Act, four conditions mentioned in section 80IB(2) has to be fulfilled. The first condition is that the industrial undertaking must not have been formed by splitting up or reconstruction of a business already in existence with an exception that in case of units specified u/s 33B of the I T Act, this condition will not apply. The second condition is that such undertaking must not have been formed by transfer of machinery and plant previously used must not exceed 20% of the value of the total cost of the plant and machinery of such industrial undertaking. The third condition is that the industrial undertaking must produce or manufacture any article or thing other than any article or thing specified in the Eleventh Schedule. Exception to this third condition is that a SSIU can avail the 80IB benefit even if manufactures or produces articles or things specified in Eleventh Schedule. The fourth condition is that the industrial undertaking running with the aid of power must not have less than 10 employees and if it is run without power, the number of employees must be more than 20 employees.
Thus all the four conditions narrated above must be fulfilled if the industrial undertaking desires to avail benefit u/s 80IB of I T Act.
For a SSIU, there is also an extra condition i.e. it must be an SSI unit as per explanation (g) given in 80IB(14) of I T Act which refers to Section 11B of the IDR Act, 1951 which in turn prescribes a limit for investment in plant and machinery to designate the industrial undertaking as SSI unit. Thus, out of these give conditions; the first two conditions may be called formative or unchangeable. In other words, if in the initial year of manufacture or production, it is substantiated that it has fulfilled these two conditions, the Assessing Officer cannot on this ground in subsequent eligible years of the block period deny the benefit u/s 80IB.
The rest of the three conditions are to be fulfilled on year to year basis. The industrial undertaking must show in each subsequent year of claim that these three conditions have not been violated. Such claims of the assessee have to face the analysis and scrutiny of the Assessing Officer. Thus, since each assessment year is separate and independent, the revenue authorities had every power to examine and analyse the facts and figures as well as relevant law points of each year to find out whether all these three conditions are fulfilled or not - the value of plant and machinery had exceeded Rs.1 crore during the year under consideration which incidentally deprive the assessee to call itself as a Small Scale Industry - Decided against assessee.
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2013 (8) TMI 698 - ITAT CHANDIGARH
Admission of additional evidence u/s 46A - CIT rejected additional evidence - Held that:- The reliance placed by the the assessee on the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT V Mukta Metal Works (2011 (2) TMI 250 - PUNJAB AND HARYANA HIGH COURT) is misplaced in view of the facts being at variance. In the facts of the case before the Hon'ble High Court, the additional evidence was in the form of the report of Forensic Science Laboratory and an affidavit dated 27.12.2004 of the searched person. However, in the facts of the present case, additional evidence is by way of books of account being re-written including certain entries relating to sundry creditors, closing stock and even VAT in the provisional balance sheet, which as per the assessee were prepared on the basis of the books of account now written and permission for producing the same was sought from CIT(Appeals) as additional evidence under Rule 46A of IT Rules. - Decided against the assessee.
Addition u/s 68 - difference in the account of parties and further addition made by rejecting the books of account and also disallowance of expenses. - Held that:- The AO during the course of assessment proceedings noted that there was a difference in the balance shown in the account of M/s Diwan Steel Industries of Rs.699,980/- and of M/s Regent Steel Industries of Rs.30 lacs, when compared with the copy of account of the assessee in the books of account of the respective parties. The assessee having failed to reconcile the difference except by way of additional evidence, which has not been admitted by us in the paras herein above, the addition made by the AO merits to be upheld in the hands of the assessee.
Rejection of books of accounts - application of net profit rate of the earlier year - Held that:- The assessee had failed to produce the books of account before the authorities below and the revised books of account produced by way of additional evidence have been rejected by CIT(Appeals) - there was no alternative left but to estimate the trading income in the hands of the assessee and application of net profit rate to the sales receipts shown by the assessee - Decided against the assessee.
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2013 (8) TMI 697 - ITAT CHENNAI
Transfer pricing - Order of Dispute Resolution Panel (DRP) - Non-speaking order not stating the objections raised by the assessee and the reasons have also not been given, simply the order of TPO and Assessing Officer are referred - Held that:- The matter was referred to the DRP u/s 144C of the IT Act. Under sub-section (1) of Section 144C, the Assessing Officer is under an obligation to forward a draft of the proposed order of assessment to the assessee if he proposes to make on or after the first day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee. Under sub-section (2) of Section 144, the assessee within 30 days of the receipt of such draft order can accept the variation made by the Assessing Officer or he can file objections either to Dispute Resolution Panel or to the Assessing Officer. Since the assessee had filed his objections with DRP, then, under sub-section (5) the DRP, upon receipt of objection is under obligation to issue directions as it thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and under sub-section (6) such directions which are put up under sub-section (5) would be further considering the following documents: (a) draft order; (b) the objection filed by the assessee; (c) the evidence furnished by the assessee; (d) report, if any, of the Assessing Officer, valuation officer, or TPO or any other authority; (e) records relating to the draft order; (f) evidence collected by, or caused to be colleted by, it; and (g) result of any inquiry made by, or caused to be made by, it. Under sub-section (7), DRP is also authorized before issuing of direction under sub-section (5) to make such further inquiry, as it think fit or cause any further inquiry to be made by any income-tax authority and report the result of the same to it. Under sub-section (8) the DRP has power to confirm, reduce or enhance the variations proposed in the draft order so, however, that it shall not set aside any proposed variation or issue any direction under sub-section (5) for further inquiry and passing of the assessment order. Under sub-section (11) no direction u/s sub-section (5) shall be issued unless an opportunity of being heard is given to the assessee and the Assessing Officer on such directions which are prejudicial to the interest of the assessee or the interest of the revenue respectively. Under sub-section (12) directions under sub-section (5) cannot be passed after nine months from the end of the month in which draft order is forwarded to the eligible assessee. Under sub-section (13), on receipt of directions issued under subsection (5), the Assessing Officer has to pass the assessment order in conformity with the directions without providing any further opportunity of being heard to the assessee within one month from the end of the month in which such directions are received.
The rejection of comparables are based on detailed reasoning and after applying reasonable filters. The denial of working capital adjustment as also capacity adjustment is based on cogent reasoning, use of current data has been found more appropriate and fresh search has been rejected as there is no valid reason. Similarly, the DRP has rejected the other grounds. Therefore, the order passed by the ld. DRP is a non-speaking order not stating the objections raised by the assessee and the reasons have also not been given as simply the order of TPO and Assessing Officer are referred - Order restored back to DRP to pass a speaking order stating all the objections of the assessee and disposing them by giving cogent reasons for adjudication of the objections of the assessee - Following decision of Evalueserve Com (P.) Ltd. v. Ward 11(2) [2011 (11) TMI 111 - ITAT, DELHI] - Decided in favour of assessee.
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2013 (8) TMI 696 - ITAT HYDERABAD
Revisional order u/s 263 - Held that:- Counsel for the appellant filed three paper books in this case which includes the copy of computation of income, copy of Audit Report, A.O’s. query letter dated 12.08.2009, reply of the assessee dated 02.09.2009, 11.09.2009, 18.11.2009 & 18.12.2009. The appellant had not filed any reply against the query raised by the AO on fall of G.P. Further confirmation in case of M/s. Umiya Finlease Pvt. Ltd., Somabhai Narayandas Patel & Soma Bhai Narayandas Patel HUF filed before CIT not before the A.O. The bank account in case of Bhagwati (Pvt.) Ltd., Moti Polymers (Pvt.) Ltd., Ambica Marbles Store Suppliers, Bhavna Sales Agency and Motidas Jivandas Patel had not been examined by the A.O. The order of the A.O. to that extent is erroneous and prejudicial of interest of Revenue. However, on other issues the ld. CIT had passed order under Section 263 of the I.T. Act without specific observations. The remarks of CIT are general. The Assessee had filed the confirmation in case of cash creditors, copy of return & copy of bank accounts. The Ld. A.O. had satisfied himself with evidences filed before him.
Appellant filed three paper books in this case which includes the copy of computation of income, copy of Audit Report, A.O’s. query letter dated 12.08.2009, reply of the assessee dated 02.09.2009, 11.09.2009, 18.11.2009 & 18.12.2009. The appellant had not filed any reply against the query raised by the AO on fall of G.P. Further confirmation in case of M/s. Umiya Finlease Pvt. Ltd., Somabhai Narayandas Patel & Soma Bhai Narayandas Patel HUF filed before CIT not before the A.O. The bank account in case of Bhagwati (Pvt.) Ltd., Moti Polymers (Pvt.) Ltd., Ambica Marbles Store Suppliers, Bhavna Sales Agency and Motidas Jivandas Patel had not been examined by the A.O. The order of the A.O. to that extent is erroneous and prejudicial of interest of Revenue. However, on other issues the ld. CIT had passed order under Section 263 of the I.T. Act without specific observations. The remarks of CIT are general. The Assessee had filed the confirmation in case of cash creditors, copy of return & copy of bank accounts. The Ld. A.O. had satisfied himself with evidences filed before him - Decided partly in favour of assessee.
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2013 (8) TMI 695 - ITAT MUMBAI
Unexplained cash credit - Cash deposit in bank account - Held that:- in view of provisions of section 68 of the Act ,where any sum is found credited in the books of the assessee for any previous year the same may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the AO, not satisfactory. In such a case there is, prima facie, evidence against the assessee, viz., the receipt of money. If he fails to rebut, the said evidence being un-rebutted, can be used against him by holding that it was a receipt of an income nature. While considering the explanation of the assessee AO has act reasonably. The claim of withdrawal of amounts for purchasing plot of land at Surat and re-depositing the same in the bank a/cs.is not been supported by any plausible explanation. After considering the withdrawals made by the assessee, assessee did not have sufficient funds at the end of the AY. 2006-07, which could be deposited in the banks in the year under consideration. It is not correct that assessee had sufficient funds that were carried forward from the earlier AY and were deposited in the bank a/cs during the year under consideration - Following decision of Sumati Dayal Versus Commissioner of Income-Tax [1995 (3) TMI 3 - SUPREME Court] - Decided in favour of Revenue.
Income from House property - Addition on house rent - notional interest on interest free security deposit - if AO finds that the actual rent received is less than the "fair/market rent" because of the reason that the assessee has received abnormally high interest free security deposit and because of that reason, the actual rent received is less than the rent which the property might fetch, he can undertake necessary exercise in that behalf - High Court in the case of Commissioner of Income Tax Vs. J. K. Investors (Bombay) Ltd., [2000 -TMI - 14566 - BOMBAY High Court] categorically rejected the formula of addition of notional interest while determining the "fair rent" - Decided in favor of the assessee
Income from House property - whether the annual letting value fixed by the Municipal Authorities under the Delhi Municipal Authority Act can be the basis of adopting annual letting value for the purposes of Section 23 of the Act - Calcutta High Court in Satya Co. Ltd. (1985 -TMI - 60423 - ITAT CALCUTTA-C) that in such circumstances, the annual value fixed by the Municipal Authorities can be a rationale yardstick. However, it would be subject to the condition that the annual value fixed bears a close proximity with the assessment year in question in respect of which the assessment is to be made under the Income Tax laws - Held that: If the assessing officer can show that rateable value under municipal laws does not represent the correct fair rent, then he may determine the same on the basis of material/ evidence placed on record - Following decision of COMMISSIONER OF INCOME TAX, Versus MONI KUMAR SUBBA & Miracle Exporters P. Ltd. [2011 (3) TMI 497 - DELHI HIGH COURT] - Appeal is dismissed.
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2013 (8) TMI 694 - ITAT KOLKATA
Notice issued u/s 148 - Transfer of a case - Jurisdiction to issue notice u/s 148 with AO Delhi or AO Kolkata - Validity of reopening of assessment - CIT sustained notice of reassessment - Held that:- After going through the provisions of sections 120, 124 and 127 of the Act, the plenary powers regarding conferment of jurisdiction has been vested, by delegation by the statute, on the Commissioner having jurisdiction in respect of assessment of the case. This power, in the absence of any prohibition or restriction, empowers the Commissioner of Income-tax to effect realignment of jurisdiction. The Commissioner of Income-tax by order or direction, while divesting these authorities of the power in respect of performance of their duties under the Act conferred earlier, may confer such jurisdiction to other authorities under the Act, as he may direct. As soon as such order or direction is made completely divesting the jurisdiction of the authorities so long so empowered, all proceedings including those which might arise thereafter, before them as also proceedings pending before them, come within the jurisdiction of the newly conferred authorities unless any specific provision is made in respect of any pending proceedings.
Such consequence is inevitable when there is withdrawal of jurisdiction, which means automatic extinction of jurisdiction of one authority with simultaneous conferment of jurisdiction on another authority under the Act in respect of all pending and future proceedings. Explanation to section 127 of the Act makes it clear that the word "case" in relation to any person whose name is specified in the order of transfer means all proceedings under the Act in respect of any year which may be pending on the date of the transfer, and also includes all proceedings under the Act which may be commenced after the date of transfer in respect of any year.
The word "case" is thus used in a comprehensive sense of including both pending proceedings and proceedings to be instituted in the future. Consequently, an order of transfer can be validly made even if there be no proceedings pending for assessment of tax and the purpose of the transfer may simply be that all future proceedings are to take place before the officer to whom the case of the assessee is transferred.
The order passed by CIT-1, Delhi, transferring jurisdiction from ITO, Ward-3(3), New Delhi on 04-01-2010, subsequent action of the AO i.e. ITO, Ward-3(3), New Delhi issuing notice u/s. 148 of the Act dated 25-03-2010 is invalid because the jurisdiction from ITO, Ward-3(3), New Delhi by CIT-1, Delhi to ITO, Ward-6(1), Kolkata. - Decided in favour of assessee.
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2013 (8) TMI 693 - CESTAT CHENNAI
Valuation - import of goods - inclusion of value of software in the networking appliance - Application for adducing additional evidence – assessee imported networking appliances which had certain embedded software to enable its use – Revenue contended that the equipment, software and services as a single bundle sold in the trade but the assessee had sold the components separately to avoid payment – Held that:- The department had not given adequate opportunity to the assessee to defend its position on the questions of facts - there had been a denial of natural justice during the adjudication proceedings - Assessee should be allowed to cross-examine the persons whose statements are relied upon for proving the case against them.
Appellant have a contention that some part of the money is towards updation of the software. A typical example is antivirus software. Even after the initial stage the software has to be updated for newer and newer viruses, spams, spywares etc. that is pumped into the network by criminal and anti-social elements in the society. For this purpose, the software need to be updated continuously and this service has to be paid for. It is argued that the cost of such updation of software cannot form part of assessable value of goods when imported. No effort seems to have been made to make distinction between the post-import services and the software that is embedded.
Stay granted - matter remanded back.
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2013 (8) TMI 692 - CESTAT NEW DELHI
Discrepancy in goods - whether after clearance of goods by customs grievance of discrepancy in quantity of goods delivered entertainable - Held that:- there was no discrepancy in the report as alleged by appellant - for the refund to be admissible in respect of short shipped goods, verification report from Customs is necessary the verification report was not there - no complaint was lodged at the time of clearance – decided against the assessee.
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2013 (8) TMI 691 - CESTAT AHMEDABAD
Stay petition – waiver of pre deposit of penalty u/s 112(a) – department contended that assessee had facilitated in clearing the consignments on the basis of forged/ tampered licenses – Held that:- The forged/ tampered licenses were not available even at the time of investigations and hence could not be produced before the bench - forged/ tampered license were not made available by the department – assessee had made a prima facie case in its favour – application for complete waiver of pre deosit allowed – decided in favour of assessee.
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2013 (8) TMI 690 - CESTAT AHMEDABAD
Waiver of pre deposit of penalty u/s 112 – appellant in his statement denied allegations made by the authorities as regards diversion of imported textile material - statements of the appellant herein are exculpatory – Held that:- Application for the waiver of pre-deposit of the amounts involved is allowed and recovery stayed - the appellant has made out a strong prima facie case for the waiver of the pre-deposit - He had denied that he had any role in diversion of the textile of the goods which were imported and sold - It was also seen from the records that the assessee herein was a high seas seller and had accepted the fact that he had sold the goods on high seas sales basis and had received the payments through cheques – court relied upon the judgement of ASHWIN S. MEHTA Versus COMMISSIONER OF CUSTOMS, MUMBAI(2005 (9) TMI 462 - CESTAT, MUMBAI) – decided in favour of assessee.
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2013 (8) TMI 689 - CESTAT MUMBAI
Import without Payment of Duty for export - failure to export - Confiscation of Goods u/s 111(o) – Penalty u/s 114A - Import of capital goods took place without payment of duty in terms of Notifications No. 13/81-Cus., dated 9-2-1981 - Department was of the view that the extension of the period were not in accordance with the provision of Section 61 of Customs Act, 1962 and duty should have been demanded unconditionally - Held that:- The goods had been allowed for export as per the procedure for clearance of the warehoused goods, the goods are not liable for confiscation as per Section 111(o) - Penalty u/s 114A was imposable in case duty had not been levied or had been short-levied, etc., by reason of fraud, collusion or wilful mis-statement or suppression of facts or contravention of Central Excise Act or Rules, 1944 with intent to evade payment of duty - No such ingredients had been brought out by the department - penalty imposed u/s 112 of Customs Act, 1962 and Rule 173Q of Central Excise Rules, 1944 was also not sustainable – the order was sustainable barring the penalty imposed u/s 112 of Customs Act, 1962 and penalty imposed under Rule 173Q.
Extension of Warehousing Period - Whether the Extension of the warehousing period was not proper - Held that:- Extension of warehousing period cannot be found fault with - The Unit was not having any control on the circumstances wherein the technology had undergone changes and new Montreal Protocol and they could not cope up with new protocol in this kind of industry - the circumstances in this case were not exceptional in nature - Further Section 69 of Customs Act, 1962, provided for export of warehousing goods without payment of import duty subject to certain conditions - It was not the case of the department that the Unit had not fulfilled the said condition - The export/removal of the goods had been as per the provision of Chapter IX of the Warehousing and the department could not bring out the condition which were not fulfilled or any provision had been contravened - the goods were not liable for confiscation – Decided against Revenue.
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2013 (8) TMI 688 - CESTAT AHMEDABAD
Correct Classification of Imported Goods - What should be the correct classification of the imported goods declared as ‘Condensate or Crude Petroleum Oil’ or CPO imported by the assesses - Department was of the view that the import of refined petroleum products by declaring them as ‘Crude Petroleum Product’ or ‘Crude Petroleum Oil’ - Revenue declared the consignment as ‘Condensate/Crude Petroleum Oil’ that was imported by the assesses - Held that:- In the absence of establishing the source of origin of gas condensate the classification of the goods imported by the assesses had to be under CTH 2710 and duties were required to be discharged accordingly – Relying upon M/s. Pushpal Exports Pvt. Ltd. v. CC, Kandla [2011 (1) TMI 877 - CESTAT, AHEMDABAD].
Condensate hydrocarbon (C4 to C20 approx.) should be obtained from wet natural gas - No documentary evidence had been produced by the assesses that the goods imported were obtained during the stabilization of wet natural gas, immediately upon its extraction – Decided against assesse.
Mis-declaration of goods – Confiscation Of Goods – Redemption Fine – Penalties u/s 111(a) - Whether there was a mis-declaration on the part of the appellants inviting confiscation, redemption and imposition of penalties upon the assesses under Customs Act, 1962 – Held that:- The penalties imposed upon the appellants under Section 111(a) of Customs Act, 1962 shall be restricted to the differential duty sought to be evaded after re-calculating the differential duty liability - The assesses had the knowledge of imported goods being good quality petroleum oil but the same was blindly accepted to be a crude oil condensate on the basis of statements given - all the assesses had knowledge of good quality petroleum oil which they agreed to be classifiable under CTH 2710 19 90 and accordingly confiscation of imported goods and imposition of penalties had been correctly made by the adjudicating authorities – When samples of imported goods were shown the same to be good quality petroleum oil and that they agree to pay differential duty - All other assesses who purchased the imported goods on high sea sale basis also admitted the wrong classification done and agreed to pay differential duty – Decided against assesses.
Assessable value of Goods - Whether the assessable value of the imported goods was required to be enhanced from USD 240 PMT declared to USA 327.25 PMT - There was no evidence that assesses had repatriated more value in addition to the transaction value paid to the supplier of the goods - The chemical test reports of the relied upon consignments were not made available to the assesses - In the absence of these factors, it cannot be appreciated that the relied upon imports were contemporary imports and will be sufficient to reject the transaction value – Decided in favor of assesses.
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2013 (8) TMI 687 - CALCUTTA HIGH COURT
Alternative Statutory Remedy u/s 13 SARFAESI Act – Appeal For making Representation against the order – appellant contended that its Credit facilities were classified as non-performing asset in violation of the guidelines of the Reserve Bank of India – Held that:- The writ petition was filed even prior to making representation u/s 13 (3A) of the SARFAESI Act to the respondent bank - During pendency of the appeal such representation was made and dealt with elaborately by the respondent bank by passing a speaking order which was communicated vide its letter to the appellants - In Mardia Chemicals Ltd. v. Union of India [2004 (4) TMI 294 - SUPREME COURT OF INDIA] - The internal adjudicatory mechanism to deal with objections raised by a borrower with regard to the demand notice including classification of its accounts as NPA appeared to have been effectively complied – Writ Petition rejected – Decided against appellant.
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2013 (8) TMI 686 - CESTAT NEW DELHI
Eligiblity of Cenvat credit in respect of shapes and sections, Joists, Channels, MS Girders, Tropozodial Sheets, Channels, H.R. Coils etc - Items were used by them in the factory for fabrication of various components of the sugar mill machinery and also the pipeline and only some quantity had been used in making of supporting structures – Held that:- To the extent, the use of the steel is for fabrication of sugar mill machinery or its parts or pipes and tubes, the Cenvat credit would be admissible. The Cenvat credit would be inadmissible only in respect of that quantity of steel which has been used for supporting structures - Matters are remanded to the original Adjudicating Authority for denovo decision. The original Adjudicating Authority in course of denovo decision must examine the evidence produced by the appellant in support of their claim that major quantity of the steel items have been used in fabrication of pipes and tubes and equipment and parts of the sugar mill machinery.
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2013 (8) TMI 685 - CESTAT NEW DELHI
Determination of weight - Benefit of exemption notification No.6/2001-CE dt.1.3.01 - first clearance upto 3500 MT of paper and paper board or article made therefrom - whether the weight of wrapper (packing paper and paper board) shall be taken into account to determine the quantity cleared in a financial year - Held that:- appellants have not disclosed gross weight and net weight in respect of each packet of the paper in any of the documents occasioning clearance during material period. Normally when a container contains contents, the gross weight and net weight are exhibited on the container. In the present reference weight of contents and container was not exhibited conspicuously. Weights and Measures Act has adopted the rationale of gross weight and net weight for consumer protection and declaration of MRP. This is to save the consumer from exploitation.
It is strange how Ld. Commissioner (A) ignored the fact that wrappers cleared were excisable goods and material for the purpose of grant of notification. But he based his decision on irrelevant considerations. If the weight of wrapper in question was also material that needed thorough scrutiny. Ignoring such aspect learned Commissioner buried interest of Revenue.
When the appellants did not challenge manufacture of the wrapper by them and those were cleared and were excisable and to be accounted for, appellant should have come out with clean hands to prove the weight of wrappers cleared. But they have chosen a way to avoid such disclosure. - Matter remanded for re-adjudication.
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2013 (8) TMI 684 - CESTAT NEW DELHI
Benefit of Notification No. 6/02-CE - Refund of duty paid at the time of clearance of the motor vehicle - Authorities denied the refund claim - Held that:- extended period of three months, as mentioned in the notification, is for registration of the vehicle and not merely for submission of the registration certificate - Following decision of Tata Motors Ltd. vs. CCE, Lucknow [2011 (5) TMI 233 - CESTAT, NEW DELHI] - Decided in favour of assessee.
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2013 (8) TMI 683 - CESTAT MADRAS
Rule 6(3) of the Cenvat Credit Rules read with Rule 57CC of the earlier Rules - Applicant is engaged in the manufacture of sugar, availing CENVAT credit benefit - During the process of manufacture of sugar, a by-product "bagasse" (a non-dutiable product) emerges, which was used in the generation of electricity – Held that:- Relying upon the decision in the case of India Potash Ltd. Vs. Commissioner of Central Excise, Allahabad reported in [ 2012 (12) TMI 347 - CESTAT, NEW DELHI] held that the assessee is not required to pay an amount equal to 8% on sale value of bagasse under Rule 6(3) of CENVAT Credit Rule, 2004 - Waiver of pre-deposit of dues allowed and recovery thereof stayed during the pendency of the appeal – Decided in favor of Assessee.
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