TMI Tax Updates - e-Newsletter
January 11, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Wealth tax
Highlights / Catch Notes
Income Tax
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Employees' contribution to PF and ESI - failure to deposit before due date - applicability of section 43B read with section 2(24)(x) - Decision in Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT), distinguished - additions confirmed - HC
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Whether the arm’s length price applying the TNMM method was contrary to the transfer pricing provisions – The TPO’s arbitrary exercise of adjusting the cost plus mark up of 5% on the FOB value of exports finds no mention in the IT Act nor the Rules - HC
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Disallowance of short term capital loss - creation of artificial loss - assessee appellants failed to discharge the onus, to prove the genuineness of the transactions of purchase and sales of such shares - HC
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Penalty u/s 271(1)(c) - Where an assesse has exercised a bona fide right but the deductions or exemptions so claimed are found to be incorrect, penalty would follow only if the claim is raised with intent to furnish incorrect particulars and to evade tax - HC
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Line trading in shares - speculative transaction - The period of three months reckoned from the date of purchase of the units on 26.12.2003, would expire on 26.3.2004 - provisions of Section 94(7)(b) were fully applicable - HC
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Valuation of property - The difference in the valuation which has been claimed by the revenue as per the valuation report of the DVO amounting to Rs. 2,35,933/- on estimate basis cannot be said to be unexplained investment - HC
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Power of CIT u/s 264 - Revision in favor of assessee - Power under Section 264 of the Act, is wide enough, to include rectification of a “bonafide” error committed by an assessee, while claiming exemptions, under the Act - HC
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Undisclosed investment - The assessee failed to maintain quantitative details of major building material used in the construction of the building - In view of the cost of construction disclosed by the assessee in the regular books of account vis-a-vis the cost of construction determined by the DVO, the variance was not within the range of 15% - The Tribunal was right in sustaining addition - HC
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A capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced values motivated the investment - HC
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Royalty & lump sum fee – The payment of lump sum fees for the technical know-how and the royalty is allowable as revenue expenditure - AT
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Deduction u/s 80P(2)(a)(i) - agricultural credit society - Whether interest income on short term bank deposits and securities would be qualified as business income u/s 80P(2)(a)(i) - held yes - AT
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Deduction u/s 80IB - Private terrace area should be included in the built-up area of the flats for the purpose of working out statutory extent of the built-up area - AT
Corporate Law
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The appellant had pursued his remedy in a bonafide manner and if it was filed in a wrong court and if he has pursued his remedy wrongly by filing it in Delhi High Court, instead of Madras High Court, principles enshrined in Section 14 of the Limitations Act clearly get attracted - SC
Service Tax
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Valuation - Whether the value of the goods used by the appellant while carrying out repair activities is required to be added in the value of the services - separate billing was done - Held no - AT
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Commercial training or coaching service - The applicant had not affiliated to any university till today. The courses are not recognized by any university or by the UGC. Therefore the activity undertaken by applicant comes under the scope of commercial training and coaching service - AT
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Export of service - appellants are liable to pay service tax for the period 1.3.2003 to 19.11.2003 in respect of services which are claimed to be exported service - AT
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Revenue sharing - Online information and data base access and/or retrievable services - appellant herein has not provided any data or information to M/s. GIPL and has only given the infrastructure of broadband for the use - stay grnated - AT
Central Excise
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Cenvat Credit - Retrospective amendment in Rule 16 is aimed at facilitating ‘wire drawing units’ - The sum paid by the wire drawing unit in such cases will be treated as duty and shall be allowed as credit to the buyer of drawn wire, in terms of the amendment. This amendment would not create any additional liability on any wire drawing unit which did not pay duty on drawn wire during the period of amendment - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (1) TMI 503
Order passed without giving reasonable opportunity of being heard - Held that:- It is well settled position in law that a reasonable opportunity of being heard shall be furnished to the assessee - Decided in favour of assessee.
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2014 (1) TMI 502
Employees' contribution to PF and ESI - failure to deposit before due date - applicability of section 43B read with section 2(24)(x) - Held that:- The assessee did not deposit the amount of contribution with the PF Department / DSI Department within due date under the PF Act and/or ESI Act - There is no amendment in Section section 36(1)(va) of the Income Tax Act and considering section 36(1)(va) of the Income Tax Act as it stands, with respect to any sum received by the assessee from any of his employees to which the provisions of clause (x) of sub-section (24) of section 2 applies, assessee shall not be entitled to deduction of such amount in computing the income referred to in section 28 if such sum is not credited by the assessee to the employees' account in the relevant fund or funds on or before the due date as per explanation to section 36(1)(va) of the Act - By deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub-section (1) of section 36 is deleted, which is with respect to employees' contribution - Decision in Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT ), distinguished - additions confirmed - Decided in favour of Revenue.
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2014 (1) TMI 501
Whether the arm’s length price applying the TNMM method was contrary to the transfer pricing provisions – Held that:- The tax authorities – i.e. the TPO, and the AO (as well as the DRP) and the Tribunal accepted the application of TNMM by LFIL as “the most appropriate” one - They did not consider the cost plus compensation at 5% at arm’s length as the assessee was performing all critical functions, assuming significant risks and and also developed significant supply chain intangibles in India and Li & Fung HK, the AE did not have either any technical expertise or manpower to carry out the sourcing activities in Hong Kong - Having determined that (TNMM) to be the most appropriate method, the only rules and norms prescribed in that regard could have been applied to determine whether the exercise indicated by the assessee yielded an ALP. The approach of the TPO and the tax authorities in essence imputes notional adjustment/income in the assessee’s hands on the basis of a fixed percentage of the free on board value of export made by unrelated party venders. Lower authorities, including the Tribunal, misdirected themselves in holding that LFIL assumed substantial risk - LFIL has neither made investment in the plant, inventory, working capital, etc., nor does it claim to have any expertise in the manufacture of garments - LFIL does not bear the enterprise risk for manufacture and export of garments - LFIL’s functional and risk profile thus is entirely different and has nothing to do with the manufacture and export of garments by unrelated third party vendors - LFIL renders support services in relation to the exports, which are manufactured independently - Attributing the costs of such third party manufacture, when LFIL does not engage in that activity, and more importantly, when those costs are clearly not LFIL’s costs, but those of third parties, is clearly impermissible - LFIL has developed experience and expertise which the Tribunal has held to be human capital and supply chain intangibles – But this does not reveal how the assessee borne the risk – either enterprise or economic. LFIL’s remuneration on a cost plus mark-up of 5 per cent represents the functions performed, assets utilized and risks assumed by it - The TPO’s determination that LFIL borne significant risks is not borne out from the records - Its remuneration was based entirely on the costs borne by it - It is a low risk contract service provider exclusively rendering sourcing support to the AE. It does not bear any significant operational risks for its functions, rendered to the third party vendor/customers - Rather, it is the AE that undertakes substantial functions and in fact assumes enterprise risks, such as market risk, credit risk etc. It also bears the letter of credit associated charges and other expenses. The profit margin, as well as the cost plus model adopted by LFIL, was not shown to be distorted or of such magnitude as to persuade the tax authorities into discarding the exercise altogether - Having not contradicted this comparison, the Revenue proceeded to its own determination and calculations - The assessment carried out by the assessee must first be rejected, for any further alterations to take place - Once the TNMM was deemed most appropriate method, the distortions, if any, had to be addressed within its framework - The unrelated transactions which were compared by LFIL have not been adversely commented upon, and neither has the choice of the TNMM - The TPO ignored the relevant and crucial material, and straightaway proceeded to broaden the base for arriving at the profit margin, for attributed income of the assessee - No such adjustment was made in the earlier assessment years, for which assessment orders of previous four years were submitted, wherein the TNMM with operating profit over total cost (OP/TC) as a profit level indicator was accepted previously – Consistency should be followed in the assessment unless different facts circumstances are warranted. The TPO is required to scrutinize the various methods that may be employed to evaluate their appropriateness, the correctness of the data, consideration of surrounding factors, etc - The selection of the most appropriate method will depend upon the facts of the case and factors mentioned in rules contained in Rule 10C - The TPO after taking into account all relevant facts and data available to him has to determine arm’s length price and pass a speaking order after obtaining the approval of the Department of Income Tax (Transfer Pricing) - The order should contain details of data used, reasons for arriving at a certain price and applicability of methods, subject to judicial scrutiny. The order of the TPO has not provided any substantive reasons for disregarding the TNM method as applied by LFIL - The TPO’s arbitrary exercise of adjusting the cost plus mark up of 5% on the FOB value of exports finds no mention in the IT Act nor the Rules - Such an exercise of discretion by the TPO, disregarding the LFIL’s lawful tax planning measures with its group companies, is not in compliance with the IT Act and Rules of Income Tax – Decided in favour of assessee.
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2014 (1) TMI 500
Tax effect - Held that:- The tax effect involved in this appeal is less than Rs.4,00,000 - As per Instruction No.2/2005 dated 24.10.2005 prescribing the limit for preferring appeal/reference before the appellate authority, the appeal preferred by the Revenue is not maintainable - Decided against Revenue.
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2014 (1) TMI 499
Validity of block assessment on non-issue of warrant - Held that:- If any person other than the one named in the warrant is searched and such incriminating material is seized, which belongs to his person and not the person in respect of whom the warrant is issued, if that person is to be assessed for the Block period, there should be a warrant issued in his name and in respect of the premises because, search and seizure is a condition precedent for passing a Block Assessment Order. A person, who is searched and from whom the incriminating material is seized relates to that person, if there is no warrant issued for search and seizure, that cannot be made the basis for a Block Assessment Order - The warrant was issued in the name of Sri. D.T.S. Rao – Assessee (son of Shri D.T.S. Rao) was residing in the same premises. Therefore, it was open for the authorities to search and seize incriminating materials from him pertaining to his father Sri.D.T.S. Rao - If any incriminating material is found in the possession of Sri.D.T.S. Rao, relating to his son, then they could have proceeded u/s 158BD - After search and seizure of the assessee, they found materials pertaining to the assessee - The Authorities have rightly held that the Block Assessment Order passed in relation to the assessee and search is one without jurisdiction – Decided against Revenue.
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2014 (1) TMI 498
Disallowance of short term capital loss - assessee appellants purchased shares, on 8.11.2007, @ Rs. 100/- per share and sold the same on 31.3.2008 @ Rs. 10/- per share - book value was Rs. 56 - Held that:- The revenue cannot take or accept such make-believe transactions, as presented by the appellants - Truth or genuineness of such transactions must prevail over the smoke screen, created by way of pre-meditated series of steps taken by the appellants, with a view to imparting a colour of genuineness and character of commercial nature, to such share transactions - One has to look at the whole transactions and a series of steps taken to accomplish such share transactions, in an integrated manner, with a view to ascertaining the true nature and character of such purchase and sale of shares - The shares were purchased and sold in these cases, cannot be treated as regular business transactions - Following CIT v. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] - The revenue is entitled to look into the surrounding circumstances, to find out the reality of the recitals made in the documents. In the present case, there is an obvious and plain transaction of tax evasion which has been clothed with the smoke-screen of subterfuges, by the assessee appellants - The facts of the present case clearly reveal that such trading transactions of purchase and sale of shares, had not been effected, for commercial purpose but to create artificial loss, with a view to reducing tax liability – Such transactions are not genuine and natural transactions but preconceived transactions, demonstrating creation of such short term capital loss – The appellants restored to a preconceived scheme, to procure short term capital loss, for the purpose of neutralizing the short term capital gains by way of price differential, in the said share transactions not supported by market factors – The findings of the CIT(Appeals) are not based on relevant, cogent and credible material or evidence - Such share transactions were not quoted and consequently, were not traded through stock exchange - When all the facts and circumstances of the case are viewed, in totality, it is evident that the assessee appellants failed to discharge the onus, to prove the genuineness of the transactions of purchase and sales of such shares - Decided against assessee.
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2014 (1) TMI 497
Whether claim of depreciation is allowed when income is estimated - Held that:- A statutory impediment was introduced by way of amendment on 1.4.1994 in Section 44AD(2) of the Income Tax Act, 1961 - The assessment in the present reference pertains to 1989-90 thereby clearly proving that in the assessment in dispute, there was no impediment on the right of the assesse to claim depreciation even if his income has been calculated on net profit of 8% - Decided in favour of assessee.
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2014 (1) TMI 496
Applicability of provisions of section 80I(8) & 80I(9) - Held that:- Following assessee's own case for A.Y. 1992-93 [1996 (7) TMI 178 - ITAT CHANDIGARH] wherein it was held that, If section 80-I(9) was read to include the transactions and arrangements between one unit of the assessee and another unit of the same assessee, as the ld. D. R. would like us to read, then section 80-I(8) would be rendered superfluous. It is well-settled that superfluity or absurdity cannot be attributed to Legislature. On a plain and fair reading of section 80-I(9), we hold that that section is not applicable in the assessee's case because no goods have been purchased from outside and the goods have gone from one unit of the assessee to another unit of the same assessee. We, therefore, hold that provisions of section 80-I(9) are not applicable to the instant case - Decided in favour of assessee.
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2014 (1) TMI 495
Penalty u/s 271(1)(c) - Held that:- The respondent had disclosed the assets under consideration, and the interest income accruing on fixed deposit receipts, in its books of accounts - The Tribunal has held that explanation proferred by the assessee that they were advised to directly credit interest in the name of the partners, which was later found to be legally impermissible, is logical and, therefore, does not attract penalty under Section 271(1)(c) of the Act or fall within the mischief of furnishing incorrect particulars or concealment of income, so as to invite a penalty - Following CIT versus Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - It is not every infraction or denial of claim for deduction or exemption that invites penalty - A penalty would follow only where inaccurate particulars have been furnished with mens rea to evade tax - An assessee is entitled, by provisions of the Act, to claim deductions or exemptions and to present his income in such a manner as he may deem beneficial to his business/interest - Where an assesse has exercised a bona fide right but the deductions or exemptions so claimed are found to be incorrect, penalty would follow only if the claim is raised with intent to furnish incorrect particulars and to evade tax – Decided against Revenue.
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2014 (1) TMI 494
Whether transaction of shares on line trading is speculative transaction as specified under Section 43(5) - Held that:- Section 43(5)(d) of the Act was introduced by Finance Act 2005 w.e.f 1.4.2006. The said provision would thus be applicable from assessment year 2006-07 - The assessee's claim that it was entitled to set off short term capital loss, has been rightly declined by the authorities below - Decided against assessee. Whether the date on which the units were sold would fall outside the ambit of three months from the record date - Held that:- According to Halsbury's Laws of England third Edition Volume 37, the word 'month' has been described as - When the period prescribed is a calendar month running from any arbitrary date the period expires with the day in the succeeding month immediately preceding the day corresponding to the date upon which the period starts; save that, if the period starts at the end of a calendar month which contains more days than the next succeeding month, the period expires at the end of the latter month - In common parlance, the 'month' is hardly understood as a calendar month according to the Gregorian calendar, but it by and large means “space of time from a day in one month to the corresponding day in the next - Both the general tenor of the term as well as the clear meaning that could be derived from the interpretation of the term occurring in S. 12(2) of the Rent Act clearly point to only one conclusion, namely, that the month referred to there is a span of time between two dates of two Contiguous months and not a calendar month - The period of three months reckoned from the date of purchase of the units on 26.12.2003, would expire on 26.3.2004 - The Assessing Officer, CIT(A) and the Tribunal were right in holding that the provisions of Section 94(7) (b) of the Act were fully applicable - Decided against assessee.
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2014 (1) TMI 493
Valuation of property - Held that:- Following Sargam Cinema Versus. Commissioner of Income-tax [2009 (10) TMI 569 - Supreme Court of India] - Without there being rejection of the valuation of the property constructed as shown in the books of account, the reference under section 142A of the Act was not justified - The difference in the valuation which has been claimed by the revenue as per the valuation report of the DVO amounting to Rs. 2,35,933/- on estimate basis cannot be said to be unexplained investment - Decided against Revenue.
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2014 (1) TMI 492
Power of CIT u/s 264 - Revision in favor of assessee - Held that:- Following Parekh Brothers v. Commissioner of Income Tax, Kerala-II Ernakulam and others, [1983 (8) TMI 17 - KERALA High Court] - Mere fact that the assessee had not raised a plea before the Assessing Officer, does not prohibit the assessee from claiming relief under Section 264 of the Act - The Commissioner of Income-tax committed an error of law in holding that it is not open to him for the first time to entertain a relief of the kind pleaded by the assessee and in denying jurisdiction - Even though a mistake was committed by the assessee and it was detected by him after the order of assessment, and the order of assessment is not erroneous, none the less it is open to the assessee to file a revision before the Commissioner under Section 264 of the Act and claim appropriate relief - The power to be exercised under Section 264 is a revisionary one - The jurisdiction is discretionary - Whether in a particular case, on the basis of facts disclosed, the Commissioner will exercise his jurisdiction and interfere in the matter, is a matter of discretion. It is certainly a judicial discretion vested in the Commissioner, to be exercised in accordance with law. Power under Section 264 of the Act, is wide enough, to include rectification of a “bonafide” error committed by an assessee, while claiming exemptions, under the Act - The Commissioner should have in the exercise of his revisional power under Section 264 of the Act, decided the petition, filed by the petitioner, on merits - Decided in favour of petitioner.
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2014 (1) TMI 491
Undisclosed investment - Held that:- As per section 142A(1) inserted by Finance (No.2) Act, 2004 with retrospective effect from 15.11.1972 - Assessing Officer wherever considers fit to estimate the value of any investment referred to in Section 69 or Section 69B or the value of any bullion, jewellery or other valuable article referred to in Section 69A or Section 69B may require the Valuation Officer to make an estimate of such value and report the same to him - Section 142A of the Act, cannot be invoked where valuation of the cost of construction is bonafide and based on books of account which has not been rejected - The report of the DVO would be dealt with by the Assessing Officer under sub section (3) of Section 142A of the Act - There is logic and reasoning for adopting the aforesaid view - There appears to be no occasion for the revenue not to accept the valuation of the cost of construction of an asset without rejecting the books of account maintained by the assessee. In the present case, it was only during the search when the assessee had no other option that the amount was surrendered on account of unaccounted amount of Rs. 22 lacs utilised by him - The only inference in such circumstances would be that the cost of construction shown in the books of account was due to the fact that they were not properly maintained - The reference by the Assessing Officer to the DVO was justified and cannot be faulted - The aggregate difference, duly accredited to A.Y.2007-08 comes to Rs.32,01,325/-, against Rs.22,00,000/- which has been disclosed - The balance of Rs.10,01,325/- is assessee's unexplained investment in construction of building which is added to his total income - The assessee failed to maintain quantitative details of major building material used in the construction of the building - In view of the cost of construction disclosed by the assessee in the regular books of account vis-a-vis the cost of construction determined by the DVO, the variance was not within the range of 15% - The Tribunal was right in sustaining addition - Decided against assessee.
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2014 (1) TMI 490
Sale of shares - Capital gain or income from business activity - Held that:- Following Venkataswami Naidu & Co. v. CIT [1958 (11) TMI 5 - SUPREME Court] - The character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case - Where a purchase is made with the intention of resale, it depends upon the conduct of the assessee and the circumstances of the case whether the venture is on capital account or in the nature of trade. A transaction is not necessarily in the nature of trade because the purchase was made with the intention of resale - A capital investment and resale do not lose their capital nature merely because the resale was foreseen and contemplated when the investment was made and the possibility of enhanced values motivated the investment - Decided against Revenue.
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2014 (1) TMI 489
Penalty u/s 271(1)(c) – Renovation expenses – Capital or Revenue in nature - Held that:- Following Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT] - A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee - Such a claim made in the return cannot amount to furnishing inaccurate particulars - The assessee's bona fide belief about treating the expenditure as allowable revenue expenditure cannot be held unreasonable or without any consideration – Decided against Revenue.
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2014 (1) TMI 488
Addition on account of cash deposits in bank account – Held that:- Though, there is a gap between withdrawal of money and deposit of the same in the bank, it can not be said that amount deposited in the bank remained unexplained - The deduction allowed by Ld. CIT(A) u/s 80C for an amount of Rs.1,00,000/- was based upon form no-16 issued by employer of assessee – Decided against Revenue.
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2014 (1) TMI 487
Royalty & lump sum fee – Held that:- Following assessee’s own case for A.Y. 2003-04 - The assessee obtained only the right to use, during the currency of the agreement, the technical knowhow and information and the intellectual property right relating to the manufacture of Honda cars and did not secure any ownership right over them - The payment of lump sum fees for the technical know-how and the royalty is allowable as revenue expenditure – Decided against Revenue. Disallowance of provision of warranty and sales services – Held that:- Following assessee’s own case for earlier years and Jay Bee Industries v. DCIT [1997 (12) TMI 136 - ITAT AMRITSAR] - The liability to carry out repairs/replacements accrues on the date when the sale agreement is executed with warranty clause and such in-built liability cannot be ignored - Such liabilities are to be treated as trading expense and must be allowed - The expenses were allowed for the reason it was not a contingent liability and such liability arose as soon as assessee made the sale – Decided against Revenue. Disallowance of airfare of technicians, entry tax u/s 43B, software Expenses – Held that:- Following assessee’s own case for earlier years – Decided against Revenue.
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2014 (1) TMI 486
Penalty u/s 271(1)(c) – Held that:- The assessee claimed to have past savings in the form of cash which were introduced in the business – The assessee failed to explain the source of such cash – No evidence of having accumulated such amount has been established - Decided against assessee.
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2014 (1) TMI 485
Exemption u/s 11 – Property purchased in the name of President of society – The property is reflecting as assets in the books of society - Held that:- There was nothing on record to prove that the legal title over the land has been transferred to the assessee - The CIT(A) on considering the deed dt. 10/06/2004 evidencing the donation of land by the assessee to M/s Divine Charitable Trust and the gift deed executed by the President came to the conclusion that the assessee after paying the sums to its President has become owner of the property - Facts are not clear whether the aforesaid evidences were produced before the AO during the assessment proceeding for his consideration – Also these documents have not been placed before us – The matter was restored for fresh examination of documents.
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2014 (1) TMI 484
Write-off of work-in-progress – Held that:- Those projects which were discontinued or cancelled by the customer and work-in-progress recognised against the same was not invoiced ultimately, resulted in write off - The assessee has submitted the details of the customers who had placed orders but the order was discontinued - Neither any correspondence nor any evidence was produced by the assessee with regard to discontinuance or cancellation of the order to substantiate the claim – The issue was restored for fresh decision.
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2014 (1) TMI 483
Depreciation on assets – Held that:- merely because entire value of asset is allowable as expenditure under S.11, it is not sufficient to deny claim for depreciation unless the value of asset has been actually allowed as expenditure – Following Mahila Sidh Nirman Yojna V/s. IAC [1994 (7) TMI 117 - ITAT DELHI-A] - if the value of the asset was not allowed as expenditure under S.11, the Assessing Officer is required to allow depreciation as per the rate applicable to those assets – The issue was restored to the file of AO for examining the fact in respect of each asset on which depreciation claimed, whether the value of such asset was in fact allowed under S.11, and if it was so allowed, the depreciation would not be allowed in respect of such asset.
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2014 (1) TMI 482
Restriction of claim u/s 54EC of the Act – Held that:- Both the purchases made by the assessee were within the six months' period - the exemption provision has to be construed not transaction-wise but, financial year-wise - if the assessee is able to keep the six months' limit from the date of transfer of capital asset, but, still able to place investment of Rs. 50 lakhs each in two different financial years, the restrictive proviso will limit the claim to Rs. 50 lakhs only - the assessee here had placed Rs. 50 lakhs in two different financial years but within six months period from the date of transfer of capital asset, assessee was definitely eligible to claim exemption upto Rs. 1 Crore – Following Aspi Ginwala Shree Ram Engg. & Mfg. Industries v. Asstt. CIT [2012 (4) TMI 195 - ITAT AHMEDABAD] - Claim of the assessee for exemption upto Rs. 1 Crore has to be allowed in accordance with Section 54EC of the Act – Decided in favour of Assessee.
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2014 (1) TMI 481
Deduction u/s 80P(2)(a)(i) - Held that:- Section 80P(2) provides deduction to co-operative societies engaged in carrying on the business of banking providing credit facilities to its members - Section 80P(4) only takes out co-operative banks from the ambit of deduction u/s 80 P of the Act but further grants exemption to co-operative bank which is primarily an agricultural credit society or co-operative agricultural and rural development bank - As per clarification No. 133/06/2007-TPL dated 9th May 2007 issued by Central Board of Direct Taxes - Deduction is available to co-operative bank which is primarily an agricultural credit society - The assessee is entitled to the benefit of deduction u/s 80P(2)(a)(i) of the Act - Decided against Revenue. Whether interest income on short term bank deposits and securities would be qualified as business income u/s 80P(2)(a)(i) – Held that:- Following CIT v. Manekbaug Co-op Housing Society Ltd [2012 (6) TMI 292 - GUJARAT HIGH COURT] – Decided in favour of assessee.
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2014 (1) TMI 480
Deduction u/s 80IB - Works contractor - Whether the assessees are builders/developers and therefore eligible for deduction under section 80-IB(10)? - Held that:- Assessees were builders/developers and therefore eligible for deduction under section 80-IB(10). Even where the purchasers of the flats combined two flats together thereby exceeding the limit of the built-up area of 1500 sq. ft., it could still be considered as proper compliance of the stipulation provided in section 80-IB(10) that the built-up area should not exceed 1500 sq. ft. and therefore, assessees are eligible for deduction under section 80-IB(10). Even though assessees had furnished project completion certificates which are dated before 31st March, 2008, these certificates related back to date on which the applications for such certificates were made by the assessees and therefore, assessees are entitled for deduction under section 80-IB(10). - Decided in favor of assessee. Insofar as the issue whether built-up area of certain flats measuring more than 1500 sq. ft. is concerned, it is restored to the files of the Assessing Officer with a direction to measure a flat in the presence of DVO as well as Registered Valuation Officer appointed by the assessee. Private terrace area should be included in the built-up area of the flats for the purpose of working out statutory extent of the built-up area - Decided against the assessee. Based on majority view, deduction should be allowed to the assessees under section 80-IB(10) in respect of flat having built-up area not exceeding 1500 sq. ft. are not entitled for deduction in respect of these flats having built-up area exceeding 1500 sq. ft. - Decided against the assessee. There need not be any cap of 10 per cent for flats having built-up area exceeding 1500 sq. ft., with regard to a claim for deduction under section 80-IB(10) of the Act - Decision in the case of CIT v. Brahma Associates [2009 (4) TMI 215 - ITAT PUNE] followed. - Decided partly in favor of assessee.
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Customs
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2014 (1) TMI 479
Modification of the Stay Order - Demand of pre deposit - Extension of time period - Held that:- anti-dumping duty could be imposed on CFL without choke and with choke. The Board's clarification in respect of items duty would be levied on two types of CFL such as Complete, ready to use wherein the choke is integrated within the lamp and choke is external - it is appropriate that applicant should be granted extension of time for compliance. Accordingly, the period of compliance of stay order is extended for a further period of 6 weeks - Decided in favour of assessee.
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2014 (1) TMI 478
Valuation of goods - Mis declaration of goods - whether the declared transaction value of the goods imported from M/s. Neworb Corporation Limited, Hong Kong, is acceptable or not - Held that:- The only reason for rejecting the declared value, as mentioned in show cause notice, is that the declared value is less than the price of raw-material - stainless steel, glass, plastic, etc. In our view this ground mentioned in the show cause notice is absurd, as it is not even mentioned as to whether the price of raw-material mentioned is the price in the country of manufacture or the price in India. No contemporaneous imports of identical or similar goods in comparable quantity at higher price have been cited. Just because in respect of two imports of like goods made by the appellant at JNPT, Nava Sheva, the customs authorities there increased the declared value without passing any reasoned and detailed order, the value of the goods in respect of these consignments can not be rejected. Even the basis of determining the value of the goods under Rule 7 of the Valuation Rules, is incorrect, as the wholesale prices of the goods quoted by M/s. Orma Lights are sought to be adopted for determining the assessable value in this case, but as observed by the Commissioner in the finding portion of the impugned order, Sh. Manoj Gupta, Proprietor of M/s. Orma Lights has disowned his signature on the quotation and on verification by forensic expert, Lucknow, the signatures of Sh. Manoj Gupta on the quotations were not found to be his genuine signatures. There is absolutely no justification for rejecting the declared transaction value and as such neither there is any misdeclaration of value nor there is any justification of confiscation of the goods on this account and the duty demand on this basis, confiscation of the goods and imposition of penalty on this basis, is liable to be set aside. As regards the allegation of misdeclaration of description, when except for some un-declared items, other goods are broadly as per declared description, this allegation does not sustain. However, only the items which were not declared at all in the bill of entry, would be liable to confiscation under Section 111(l) - Decided in favour of assessee.
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2014 (1) TMI 477
Penalty u/s 113 - Held that:- There is nothing in the statement of the appellant indicating that he was aware of wrong filing of shipping bills and fraudulently pecuniary benefits being made by the exporters. The appellant was admittedly working as an employee of the forwarding units and under the directions of his employer. Lower authority have relying upon the statement of Sh. Rakesh Dhamir - there is no direct evidence reflecting upon the knowledge of the appellant, by extending of the benefit of any doubt - Decided in favour of assessee.
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2014 (1) TMI 476
Valuation of goods - Confiscation of goods - Imposition of redemption fine - Penalty u/s 114 - Held that:- Investigation revealed that supplier’s representative Shri Ravi Vaswani was in intimate connection with one Shri Ramesh Chander Arora, Proprietor of M/s. Alfa Exports & Imports of New Delhi, who disclosed to the appellant’s representative that only 50% of the actual value is disclosed in the import invoices and rest of the 50% value is paid in cash through one Shri D.P. Singh, who acted as a conduit in the deal. It was also brought to record that one Shri Gautam V. Jain of the appellant’s firm met Shri Ravi Vaswani, supplier’s representative. So also investigation brought out that similar goods imported by M/s. Adarsh Impex and M/s. Asian Impex, disclosed the declared value to the extent of double the value declared by the appellant. On specific verification, it was found that identical goods which were common in nature were imported by both these importers including the appellant. When there was no distinction in the goods found, the authority rejected the plea of second quality with less clarity. Detailed description apparent from the adjudicating order in paras 9, 10 & 11 compelled to enhance the value to the extent adjudicated - misdeclaration in the value of import called for enhancement. The appellant also failed to produce any technical report before authorities below as to inferior quality of the goods. Nothing was proved that supplier of the goods was different from M/s. Ocean Sasaki Glass Co. Ltd. The statement recorded under Section 108 of Customs Act, 1962 remained undisturbed. In absence of contrary evidence led by appellant, there is no scope for interference to the findings and conclusions of the authorities below - Decided against assessee.
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2014 (1) TMI 475
Benefit of Notification No. 174/66, dated 24-9-1966 - Re-imported cabling of gas turbine after repair - Held that:- condition imposed in the Notification in Clause-4 is that the goods are being imported for personal use and not for sale and Clause-3 provides that the benefit of Notification is not available in case at the time of import the ownership of goods has been changed from the family of exporter. Such conditions clearly leads to the conclusion that the Notification is for individuals only - provisions of Notifications are to be strictly construed and in case of any ambiguity, benefit goes to the State - time of re-import of goods, adjudicating authority has allowed the benefit of another Notification No. 94/90 - Following deicison of Nova Pan (India) Pvt. Ltd. v. CCE, Hyderabad [1994 (9) TMI 67 - SUPREME COURT OF INDIA] - Decided in favour of Revenue.
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Corporate Laws
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2014 (1) TMI 474
Winding up of company - Plot allotment - Non fulfillment of agreement - Forfeiture of amount paid and possession of property - Official liquidator wanted to sale property to satisfy debts - High Court held that Appellant has no ownership of subject property - Held that:- ownership right in respect of the plot in question has not been transferred to the Company. It is an admitted fact that the Company, which is now in liquidation, had not paid the entire amount of the consideration and therefore, the ownership right in respect of the plot had not been transferred to the Company. According to the terms and conditions on which the plot was to be sold to the Company, the amount which had been paid by the Company had already been forfeited and the Company had no right of whatsoever type in the plot in question - High Court was not justified in giving any right in respect of the plot in question to the official liquidator or the Company. It is pertinent to note that the ownership of the plot in question had not been transferred to the Company and a permissive possession given by the appellant to the Company for some limited purpose would not create any interest or right in favour of the Company. The plot would remain the property of the appellant-Corporation as the conditions on which the transfer was to take place had not been fulfilled - Decided in favour of appellant.
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2014 (1) TMI 473
Rectification petition - Trademark infringement - Suit filed in wrong Court - Suit dismissed for bar of limitation - Held that:- appellant has been pursuing its remedy with due diligence, without brooking any delay. The appellant claims that he has been using the trade mark KUNDAN/ KUNDAN CAB and the name Kundan Cables India since 1980. In fact he was the supplier of these goods to Respondent No. 2. When the appellant came to know that Respondent No. 1 was using the trade mark Kundan, he immediately filed the suit for injunction against Respondent No. 1 in the District Court of Delhi which shows that in all earnestness, it wanted to protect his interest in the said trade mark. During the pendency of this suit Respondent No. 1 had obtained registration of trade mark 'KUNDAN' in its favour. This happened in the year 1995. The appellant prompltly filed the petition under Section 45 and 46 of the Trade and Merchandise Marks Act for rectification of the said registered trade mark and for cancelling/ expunging the same. This petition was filed on 2.5.1995. Therefore as far as the appellant is concerned, there was not even a slightest delay in challenging the validity of the trade mark obtained by Respondent No. 1. It is a different matter that this petition was returned for want of territorial jurisdiction. However, the moment this petition was returned by the Registrar i.e. on 2.11.2004, it was presented before the IPAB on the same day. Having regard to all these facts we fail to understand as to how the Appellate Board could dismiss the petition on the ground that it was filed after a delay of 10 years. The appellant had pursued his remedy in a bonafide manner and if it was filed in a wrong court and if he has pursued his remedy wrongly by filing it in Delhi High Court, instead of Madras High Court, principles enshrined in Section 14 of the Limitations Act clearly get attracted - impugned order of the IPAB as well as High Court are liable to be set aside - Decided in favour of appellant.
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Service Tax
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2014 (1) TMI 515
Penalty u/s 76 & 77 - Renting of immovable property - Commissioner while imposing penalty had merely observed that the notice failed to discharge Service Tax as applicable and get themselves registered with the proper authority as they did not disclose the matter to the department before the case was booked is sufficient for imposing various penalties - It is evident from the agreements entered between the Applicants and their tenant that the said agreement was entered on 25.11.2005, while as renting of immovable property became taxable w.e.f. 01.06.2007. As such the question of disclosing the activity of renting by the Appellants does not arise - Commissioner has not imposed any separate penalty under Section 76, 77 and 78 of the Finance Act, 1994. Composite penalty under different provisions of the statute is impermissible as held by this Tribunal in the case of Commissioner of Central Excise, Coimbatore vs. Precot Mills Ltd. [2006 (12) TMI 383 - CESTAT, CHENNAI] - there were sufficient cause for not imposing various penalties - Decided in favour of assessee.
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2014 (1) TMI 514
Valuation - Whether the value of the goods used by the appellant while carrying out repair activities is required to be added in the value of the services - Held that:- One part of the contract relates to the scope of repair work and the other part of the contract relates to supply of parts. We have also seen the sample invoices raised by the appellant where the value of the goods / inputs used by them for replacing the old parts have been shown separately - if an assessee, while carrying out of the annual maintenance contract, also used certain goods for the said purpose, the cost of which goods has to be borne by the buyer, it has to be treated as sale of the goods and not part of services - Following decision of CC&CE vs. Balaji Tirupati Enterprises [2014 (1) TMI 404 - ALLAHABAD HIGH COURT] - Decided in favour of assessee.
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2014 (1) TMI 513
Insurance Auxiliary Service - Service of providing insurance policies - Tax liability discharged by Insurance company - Eligibility to CENVAT Credit - Held that:- it is not clear from the sample copies of policy placed before us as to whether the policy was taken in the name of the Applicant or in favour of the beneficiary of the said policies, who, the Applicant claimed to be their members of the club. Regarding the availability of CENVAT Credit, prima facie, we find that the Applicant had not been allowed the CENVAT Credit on the ground the documents on which they had availed credit were not the prescribed ones under Rule 9(1) of the CENVAT Credit Rules, 2004 - Conditional stay granted.
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2014 (1) TMI 512
Waiver of pre-deposit of duty service tax - Commercial training or coaching service - Held that:- expression of "commercial training or coaching centre" occurring under the said sub-clause and also under clauses (26), (27) and (90A) of Section 65 shall include any centre or institution, by whatsoever name called, where training or coaching imparted for consideration, whether or not such centre or institute is registered as a trust or a society or similar other organization in any law for the time being in force and carrying on this activity with or without profit motive and the expression "commercial training or coaching" shall be construed accordingly. In the present case, we find that applicants approach All India Council for Technical Education to start MBA programme vide letter dt. 11.5.2004 is All India Council for Technical Education granted permission to conduct Post-graduate Programme in MBA on the condition that the Institution must have Affiliation to a University for the above courses before making admissions. In the absence of such Affiliation, this Letter of approval shall be treated as withdrawn. The applicant had not affiliated to any university till today. The courses are not recognized by any university or by the UGC. Therefore the activity undertaken by applicant comes under the scope of commercial training and coaching service - prima facie the applicant has not made out a case for total waiver of service tax - Conditional stay granted.
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2014 (1) TMI 511
Export of service during the period 1.3.2003 to 19.11.2003 - Advertising Agency Service - Held that:- Notification 6/1999-ST had exempted all taxable services from the whole of the Service Tax leviable thereon under Section 66 of the Finance Act, 1994 where the services were provided to any person and the consideration therefore was received in India in convertible foreign exchange. This Notification was withdrawn from 1.3.2003. Subsequently Notification 21/2003-ST dated 20.11.2003 has been issued which provides exemption from payment of service tax in respect of taxable services provided to any person in respect of which payment was received in India in convertible foreign exchange. During the period 1.3.2003 to 20.11.2003 there is no exemption in respect of export of service. The applicant relied upon the Board's Circular. We find that Section 93 of the Finance Act, provides that if the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally or subject to such conditions as may be specified in the notification, taxable service of any specified description from the whole or any part of the service tax leviable thereon. Appellant has provided taxable service to the Foreign Service recipient in respect of advertisement which is displayed in India. Therefore the appellants are liable to service tax for the period 1.3.2003 to 19.11.2003 - appellants are liable to pay service tax for the period 1.3.2003 to 19.11.2003 in respect of services which are claimed to be exported service - while confirming the demand of service tax, penalty waived u/s 80.
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2014 (1) TMI 510
Demand of service tax - Order passed for predeposit - Non compliance for said order - Held that:- appeal was dismissed when the matter was pending before this court by the Tribunal even when its attention was brought to the fact inspite of that the appeal was dismissed. We are aware that it is open to the Tribunal to dismiss an appeal for non-compliance. We are also aware of the fact that it is open to the Tribunal in the absence of pre-deposit by the stipulated date to dismiss the appeal. However, when a party brings to the notice of the Tribunal that an appeal is preferred and is pending judicial exercise to avoid multiplicity of proceedings, would be to grant reasonable time to enable the petitioner to produce an order from this court, and on failure to do so proceed with the matter - Decided in favour of assessee.
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2014 (1) TMI 509
Appeal u/s 86(1)(1A)(i) - Jurisdiction of Commissioner -Held that:- Board empowerd to constitute the Committee in the name of post and holding such post or who may subsequently be appointed on such post automatically becomes the Member of such Committee and it is not the appointment as persona disgrata. If the interpretation of the rule is made according to the view expressed by the learned counsel for the respondent, then it will be putting restriction on the specific statutory provision of the Act and Rules and under the Act, nowhere it is provided that such power, can be vested in a person and cannot be vested upon a post. Contrary to the above, in fact, the provision specifically provides for vesting of power upon a person by virtue of holding of the post of Chief Commissioner or Commissioner. Therefore, there was no need for publication of the notification by the Board in the name of the persons who were holding the post of Chief Commissioners. In the notification dated 12th May, 2007, the Member of the Committee are two “Chief Commissioners” of the specific areas and Membership is by virtue of holding the post of Chief Commissioner of that area and members are not “the persons” who held the post on 12th May, 2007 alone. The inclusion of the two posts as members in the Committee under Section 86(1)(1A)(i) of the Finance Act, 1994 is in perpetual succession of the Officers holding the post of the Chief Commissioner of that particular area and therefore, immediately on the day on which the Officers demited the posts of the Chief Commissioner of Customs and Central Excise, Ranchi and Bhubaneswar, the other Officers, who have duly been appointed and posted on that posts, automatically become the Member of the Committee by virtue of their being Chief Commissioner. Therefore, from the date when these two Officers, who were duly appointed on the post of Chief Commissioner and were posted on the post for the area of Ranchi and Bhubaneswar, automatically became the Member of the Committee and were competent to take decisions - Since the appeal has not been decided by the Tribunal on merit, the appeal is remanded to the Tribunal for deciding it on its merit - Decided in favour of Revenue.
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2014 (1) TMI 508
Stay application - Authorised Service Station Services - Business Auxiliary Services - Held that:- As per the said agreement apart from selling the vehicles of M/s. Ashok Leyland Ltd. in the areas specified in the agreement, the appellant is also required to undertake “sales promotion activities” for vehicles of M/s. Ashok Leyland Ltd. by way of advertisements and other promotional measures. They are also required to undertake after-sale services in respect of Ashok Leyland vehicles sold by them. The dealer is also required to attend to customer complaints with view to protecting the goodwill of Ashok Leyland - Thus, from the agreement it is evident that the appellant undertakes not only sale of the goods but also undertakes certain services such as sales promotion, after-sale service, advertising, etc. Business Auxiliary Service is defined in Section 65(19) of the Finance Act, 1994 and includes promotion or marketing or sale of goods produced or provided by or belonging to the client or provision of service on behalf of the client. Thus, the activities undertaken by the appellant prima facie comes under the category of “Business Auxiliary Services” and they are liable to discharge Service Tax on the consideration received in respect of this activity - prima facie appellant has not made out any case for complete waiver of the pre-deposit of the dues adjudged - Conditional stay granted.
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2014 (1) TMI 507
Waiver of pre deposit - Online information and data base access and/or retrievable services - Held that:- appellant herein has entered into a joint venture in the agreement with M/s. Gujarat Infotec Petroleum Ltd. who are in the services of rendering of online information and data base access and/or retrievable services. The appellant herein had set up an international internet gateway and hardware which can be used for rendering up internet service providing services. Appellant, the owner of such infrastructure, by virtue of joint agreement had given M/s. GIPL the right to use the same to generate business. It is seen that the appellant herein gets 10% of the gross receipts for providing the infrastructure facilities to M/s. GIPL. Lower authorities are of the view that the appellant herein had given services in relation to online information and data base access and/or retrievable services. On perusal of the definition of “online information and data base access and/or retrievable services”, we find that the appellant herein has not provided any data or information to M/s. GIPL and has only given the infrastructure of broadband for the use of M/s. GIPL and getting a share out of the revenue earned by M/s. GIPL. We find that the prima facie, the appellant may not be covered under category of ‘online information and data base access and/or retrievable services’ - Stay granted.
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2014 (1) TMI 506
Stay application - Availment of CENVAT Credit - Insurance premium paid by a labour contractor for the benefit of labourers employed by the respondent, and reimbursed by the respondent - Whether assessee a service recipient - Held that:- insurance of labourers was essential for smooth functioning of the factory and therefore it constituted input service for the cement manufacturer. Insurance premium which was initially paid by the labour contractor and subsequently reimbursed to them by the cement manufacturer formed part of the cost of production of cement - Stay denied.
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2014 (1) TMI 505
Valuation of service - Inclusion of reimbursable expenses in the taxable value of C&F Agent services - Held that:- Before the introduction of Service Tax (Determination of Value) Rules, 2006 w.e.f. 19-4-2006, C.B.E. & C. vide Circular No. 341/11/98-TRU dated 23-8-1999 had clarified that only remuneration and commission paid to C&F Agent by the principal is chargeable to Service Tax and not expenses reimbursed by the service recipient - in respect of services rendered by C&F Agents only the commission or remuneration paid to C&F Agent is taxable before the introduction of Service Tax (Determination of Value) Rules, 2006 - a prima facie view has taken that reimbursible expenses could be included in the taxable value of C&F Agent services - prima facie appellant has made out a strong case in their favour for waiver of pre-deposit of the dues adjudged - Stay granted.
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2014 (1) TMI 504
Waiver of pre-deposit of duty - Imposition of penalty - Availment of CENVAT Credit - Availment of services from foreign commission agent - Held that:- Period involved in the present appeal is from January, 2008 to March, 2008 and the said rules were brought into existence with effect from 19-4-2006. The judgment of Punjab & Haryana High Court in the case of Nahar Spinning Mills is prior to 19-4-2006, when the service recipient was given an artificial status of service provider by deeming fiction of law. The said deeming provision stands withdrawn from 19-4-2006. As such, I find that the appellants do not have any prima facie case so as to allow the stay petition - Conditional stay granted.
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Central Excise
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2014 (1) TMI 472
Duty demand - Concessional rate of duty under SSI exemption Notification No. 9/2002-CE dated 1.3.2002 and 9/2003 dated 1.3.2003 - Availment of CENVAT Credit - Held that:- benefit of availment of credit of duty on inputs by the ‘wire drawing units’ was withdrawn on 29.5.2003 by a circular issued by the Board. However, certain wire drawing units continued to pay a sum representing duty, and continued to pass on the credit of amount paid as duty to the ultimate buyer of drawn wire for further manufacture. By an amendment in the Budget 2004, Note 10 was inserted in Section XV of the Central Excise Tariff Act, 1985 to declare the said process as amounting to ‘manufacture’. However, as the said Section Note was effective from 9.7.2004, it did not resolve the problem for the said period. Show Cause Notices were issued to wire drawing units for recovery of Cenvat Credit availed on inputs on the grounds that the process of wire drawing did not amount to manufacture for the said period. Show Cause Notices were also issued to the downstream buyers of ‘drawn wires’ who availed Cenvat Credit of amount paid as duty on drawn wire, on the ground that the sum paid on clearance of ‘drawn wire’ by wire drawing unit did not represent central excise duty. Such wire drawing units could also not claim the refund of amount paid as duty on drawn wire, on the ground of unjust enrichment. Retrospective amendment in Rule 16 is aimed at facilitating ‘wire drawing units’, which had paid a sum equal to the duty leviable on ‘drawn wire’ after availing the credit of duty paid on inputs for the said period. It is aimed at regularizing availment of credits at two stages and payment of an amount representing duty at one stage. The purpose of the amendment is to regularize credit taken at the input stage (on wire-rod), credit taken by the downstream user of ‘drawn wire’ and the amount paid as central excise duty on clearance of drawn wire. In other words, wire drawing units, which had paid a sum equal to duty leviable on drawn wire, would be eligible to avail the credit of duty paid on inputs and utilize the same for payment of duty on drawn wire for the period of amendment. The sum paid by the wire drawing unit in such cases will be treated as duty and shall be allowed as credit to the buyer of drawn wire, in terms of the amendment. This amendment would not create any additional liability on any wire drawing unit which did not pay duty on drawn wire during the period of amendment - Decided against Revenue.
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2014 (1) TMI 471
Capital goods waste and scrap generated in the casting foundry cleared without payment of duty - Waiver of pre-deposit – Held that:- The appellant has discharged the duty liability on turning scrap and the scrap which generated in the cast iron foundry - Prima-facie, waste and scrap on which the duty has been sought by the adjudicating authority is nothing but waste, which has generated on dismantling and cutting the capital goods – Following M/s. Grasim Industries Ltd. Versus Union of India [2011 (10) TMI 2 - SUPREME COURT OF INDIA ] - the appellant has made out a strong prima facie case in their favour – Pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 470
Eligibility for envat credit - Additional customs duty paid by EOU u/s 3(5) of the Customs Act, 1962 or not –Waiver of Pre-deposit - Held that:- Following SRI VENKATESHWARA PRECISION COMPONENTS Versus CCE., CHENNAI [2010 (8) TMI 243 - CESTAT, CHENNAI] - The provisions of Rule 3 (1) of the Cenvat Credit Rules, 2004 specifically notes the eligibility to avail cenvat credit of the customs duty paid under Section 3(5) of the Customs Act, 1962 - the appellant has made out a strong prima facie case in their case – Pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 469
Benefit of Notification No. 39/2001-CE – Area based exemption - Undervaluation of goods - Goods cleared from the factory premises to the depot – Duty not discharged – Waiver of Pre-deposit – Held that:- The appellant had deposited the entire amount before the issue of show cause notice - Subsequently they filed a refund claim and out of which Rs. 23.62 Lakhs was granted to them - the Revenue is having approximately Rs. 28.96 Lakhs with them out of the amount deposited by the assessee - the issue is one of interpretation and the appellant need not to have paid the amount, as they are working under the area based exemption notification - the appellant has made out a prima facie case in their favour – Pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 468
Denial of Refund claim - Waiver of Pre-deposit – Held that:- As per the provisions of Rule 16, the appellant is eligible for the entire amount of duty paid by him as credit and, such credit can be allowed to be used by the appellant for discharge of duty liability on the same machines, if cleared subsequently without manufacturing activity - the appellant has made out a prima facie case in their favour – Pre-deposits waived till the disposal – Stay granted.
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2014 (1) TMI 467
Condonation of Delay - Delay of 14 years – Assessee contended that they did not receive the order – Held that:- The appellants have not shown as to what was the address given to Commissioner (Appeals) for making the correspondence - In the absence of the same, it has to be held that the order-in-appeal passed by Commissioner (Appeals) was sent to the address which the appellant had themselves given in their memo of appeal - the appellant cannot take the benefit of its own wrong in not mentioning the correct address in their EA-2 form filed before Commissioner (Appeals) and then not making any inquiries from the office of the Commissioner (Appeals) for a period of more than 12 years so as to know about the status of their appeal - This only reflects upon the casual attitude of the appellant for which no status of reasonable cause can be given to them - the appellant, never intimated the office of Commissioner (Appeals) about their new address - The appellant was duty bound to communicate their correct address to the office of Commissioner (Appeals) and the fact that the original office of Commissioner, which is admittedly different from the office of the appellate authority cannot be held to be the ground so as to fix the responsibility on the office of Commissioner (Appeals) – Application for condonation of delay rejected – Decided against Assessee.
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2014 (1) TMI 466
Recall of Final order - Waste and scrap of capital goods cleared – No reversal of Cenvat credit or payment of duty made – Held that:- The entire dispute in the present appeal relates to the verification of the factual aspect - Once an assessee takes a stand that the capital goods out of which waste and scrap has arisen were not cenvatable, the onus to prove the contrary is upon the Revenue – Following Union of India vs. Hindustan Zinc Ltd. [2007 (3) TMI 198 - HIGH COURT RAJASTHAN ] - Revenue has not advanced any evidence to reflect upon the fact that the assessee had availed the Cenvat credit on the capital goods – order set aside and the Central Excise authorities directed to verify the assessees records to give to a conclusive finding as regards the stand taken by the appellant – Decided in favour of Assessee.
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2014 (1) TMI 465
Classification of Goods – Duty demanded on ‘Whey Platinum Standards’ and ‘X-tra Whey’ Waiver of Pre-deposits – Held that:- There was no test report available on record, one has got to determine the classification of the goods with reference to materials such as HSN notes - This exercise cannot be undertaken at this stage - the issue being contentious, the appellants directed to pre-deposit 50% of the total amount of duty as pre-deposits – upon such submission rest of the amount to be stayed till the disposal – Partial stay granted.
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2014 (1) TMI 464
Cenvat credit on inputs for fabrication of plant and machinery – Waiver of Pre-deposit – Held that:- Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ] - assessee is ineligible to avail cenvat credit of the inputs which are used for the manufacturing/fabrication of structural items as well as the capital goods - the appellant needs to be put to some condition, to hear and dispose the appeal - assessee had already submitted as amount of Rs.3.05 lakhs - the appellant is directed to deposit an amount of Rs.4.25 lakhs as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.
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2014 (1) TMI 463
Mis-declaration of the clearances of the final products – Waiver of Pre-deposit – Held that:- The appellant had already deposited an amount of Rs.66.89 lakhs - the appellants are contesting the issue on merits, the amount already deposited by the appellant is enough deposit to hear and dispose the appeals - waiver of pre-deposit of the balance amount allowed till the disposal – Stay granted.
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Wealth tax
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2014 (1) TMI 516
Liability to wealth tax - whether the grove land situate in urban area on which no construction was permissible would come within the expression of 'urban land' under Section 2 (b) of the Wealth Tax Act 1957 - Held that:- without disclosing the fact that the present appeals have been entertained by the High Court, and a date has been fixed for hearing, the appellant pursued the matter in Tribunal, to rectify the order to his benefit on the question of assessment. He also did not inform the Tribunal that whether the land is included within the meaning of Section 2 (ea) (vi) of the Wealth Tax Act. We strongly deprecate the conduct of the appellant in pursuing the matter of rectification, for his advantage without reference to filing of the appeal - since the appellant had filed rectification application, which was allowed, and the order of the Tribunal has been modified to the effect that the matter is remanded to the CWT (A), we find that these appeals have become infrutuous - Decided against assessee.
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