TMI Tax Updates - e-Newsletter
October 25, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
-
Income Tax:
Transfer of cases at Central place for co-ordinated and effective investigation - The Department for internal convenience and efficient functioning, it has created a special branch for dealing with search cases and has decided to conduct assessments of such cases under such wing, surely the assessee cannot have any objection to the same - HC
-
Income Tax:
Rebate u/s 88E - adjustment with MAT u/s 115JB - rebate as exigible under law u/s.88E would have to be allowed irrespective of whether the tax is payable under the regular provisions of the Act or under the book profit - AT
-
Income Tax:
Prior period expenses even if this expenses are allowed in the earlier years i.e. A.Y. 2000-2001, it will ultimately be adjusted in the present year, by way of set off of brought forward loss, and therefore, it will make no difference even if deduction is allowed in the present year - claim allowed - AT
-
Income Tax:
Allowability of registration u/s 12AA - Under section 11 (5)(iii), deposit of the moneys in a scheduled bank is substantial compliance with the law Therefore, agricultural marketing committee is entitled to be registered under section 12A/12AA - AT
-
Income Tax:
Eligibility of exemption u/s 11 and 12 - Assessee has entered transactions with the related concerns - Assessee is not an educational institution or a hospital or medical institution as it is not engaged in dispensing medical facility though it is engaged in running a blood bank - exemption denied - AT
-
Income Tax:
Allowance of interest - The land on which the assessee is constructing the building is to be treated as business asset of the assessee company - Allowed the claim of the assessee towards the interest and processing charges incurred on loan. - interest allowed u/s 37(1) - AT
-
Customs:
Penaltry u/s 112(a) - The appellant is being punished as an abettor. The gravity of the role of the abettor and a well informed principal offender cannot be different. - HC
-
Customs:
Export of mis-declared goods for obtaining undue DEPB credit - Fraud and justice do not dwell together for which penal provisions are enacted to eradicate evils of defrauding Revenue which is anti-social activity adversely affecting public revenue. - AT
-
Customs:
Suspension of license of CHA - Contravention of Regulation 13 (a), (d) and (m) for CHALR - No persons right to carry on his profession can be stopped for a prolonged period through the means of a suspension order. - AT
-
Customs:
Valuation - Related party transaction - Revenue appears to have made out a prima facie case for rejecting the declared value on the ground that such value was substantially influenced by direct and indirect flow-backs between the importer and the supplier being related Sun entities. - AT
-
Customs:
Benefit of Notification No.21/2002 Concessional Rate of Duty - allegation of misdeclaration of goods - when samples have been drawn and have not sent for testing, in that case, inference cannot be drawn on the basis of mere research - AT
-
Service Tax:
Provision of services to SEZ - when only during the gap of 2 months the appellant did not pay the Service Tax and it was available as refund to the recipient, the question of having any intention to evade duty does not arise - stay granted - AT
-
Service Tax:
Vocational traning or not - commercial training on interior design - Commercial Training or Coaching Services - prima facie not eligible to the exemption of Notification 9/2003-ST and 24/2004-ST - AT
-
Service Tax:
Taxable services or manufacturing activity - as far as the fabrication or erection of tank at site is concerned, the activity brings into existence an immovable property - prima facie liable to service tax. - AT
-
Service Tax:
Cenvat Credit - Duty paying documents - defect in Invoices for input services - It appears that they have availed credit on the basis of documents which are disputed in the present - stay granted partly - AT
-
Central Excise:
CENVAT Credit Sales Commission as input service Revenue was of the view that what is paid is nothing but sales commission and therefore, credit may not be available - prima facie credit to be allowed - stay granted - AT
-
Central Excise:
Interest on Duty - The amendment does not wipe out the existing liability to pay interest in respect of cases involving fraud, collusion, any wilful mis-statement of facts with intent to evade payment of duty - the amended sub-section 2 of Section 11AB from 11.05.01 only mandates that interest liability cannot be fastened under the amended Section 11AB prior to 11.05.01 - AT
-
Central Excise:
Valuation - Undervaluation of vehicles - The value of chassis for the purpose of arriving at the assessable value of the complete motor vehicle shall be the assessable value of the chassis worked out by Eicher under Rule 8 of the Excise Valuation Rules, and not its actual cost - AT
-
Central Excise:
SSI Exemption there were different views during the period prior to that date - Prima facie extended period could not have been invoked - AT
-
VAT:
Rate of central sales tax (CST) in interstate sale of Iron & Steel - 4% or 2% - So long as a notification under Section 8 (1) is not issued, the proviso to Section 8(1) would continue to hold the field. The proviso prescribes the rate of tax to be 4% of the turn over - HC
-
VAT:
Transfer of right to use the goods - the assessee(s) have not produced any document/agreement to show that the assessee(s) retained possession and control over the Cinematographic equipments leased out - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2013 (10) TMI 1001
Adjustment to be made u/s 14A for computation of book profit u/s 115JB of the Income Tax Act Held that:- Following the decision of the Honble Apex Court in the case of Apollo Tyres Ltd.vs. CIT reported at [2002 (5) TMI 5 - SUPREME Court], directed the Assessing Officer not to make any adjustment in respect of disallowance made u/s.14A of the I.T.Act while computing the book profit u/s.115JB of the I.T.Act Decided in favor of Assessee.
-
2013 (10) TMI 986
Long term capital gain from sale of shares - bogus transaction or not - Reasons to be recorded for issuance of notice u/s 148 of the Income Tax Act Income escaping assessment u/s 147 of the Act Held that:- Assessing Officer recorded the reasons and that as per the information gathered, the assessee has entered into transaction with M/s. Mahasagar Securities Pvt. Ltd., Bombay and the said company was engaged in the business of providing fraudulent bills for bogus speculation profit/loss, short term capital gain and long term capital gain, commodity profit/loss on commodity trading. On, the contrary, the assessee had not entered into any transaction with M/s. Mahasagar Securities Pvt. Ltd. and in the original return of income, the assessee had enclosed the purchase and sale bills of M/s. Goldstar Finvest Pvt. Ltd. with whom the assessee entered into transaction and earned the long term capital gain, those bills were available with the Assessing Officer for scrutiny. However, the Assessing Officer recorded the reasons that assessee entered into transaction through M/s. Mahasagar Securities Pvt. Ltd. Bombay. Therefore, the very basis of reasons recorded by the Assessing Officer for reopening of the assessment was wrong because the assessee did not enter into any transaction to get the profit on account of long term capital gain with M/s. Mahasagar Securities Pvt. Ltd. Bombay rather the transaction was entered through M/s. Goldstar Finvest Pvt. Ltd, therefore, the belief of the Assessing Officer that income had escaped assessment which was earned by the assessee on the transactions entered into with M/s. Mahasagar Securities Pvt. Ltd. Bombay was incorrect - notice issued by the Assessing Officer under section 148 of the Act on the basis of the aforesaid reasons recorded under section 147 of the Act was not sustainable and the assessment proceedings on the basis of such notice were rightly set aside and quashed Decided against the Revenue.
-
2013 (10) TMI 985
Petition before High Court in case the matter is pending before Settlement commission and which has not applied its mind yet Held that:- Settlement Commission is yet to apply its mind and an enquiry under Section 245D(3) yet to be ordered The court is not inclined to entertain the proceedings at this stage, save and except to clarify that the Settlement Commission shall during the course of its proceedings specifically bring to bear its consideration on whether an enquiry under Section 245D(3) should be ordered particularly having regard to the circumstances which have been set out in the letter of the Commissioner of Income Tax dated 3 October 2013. Since the proceedings are pending before the Settlement Commission, it would not be appropriate for this Court to entertain the proceedings any further Decided against the Revenue.
-
2013 (10) TMI 984
Monetary limits for filing an appeal before High court by the department - Whether penalty can be imposed on the assessee under section 271B of the Income-tax Act, 1961, when it was mandatory to get the accounts audited under section 44AB of the said Act, even if the books of account have not been properly maintained Held that:- There is no dispute that Instruction No. 5 of 2008, dated May 15, 2008, imposes a monetary limit of Rs. 4,00,000 for preferring an appeal under section 260A of the Act nor is it in dispute before us that the net tax effect in the case at hand, is less than Rs. 4,00,000 - Instructions issued by the Central Board of Direct Taxes, are binding on the Revenue except where (a) the constitutional validity of the provisions of an Act or Rule is under challenge ; (b) the Board's order, notification, instruction or circular has been held to be illegal or ultra vires ; and (c) a Revenue audit objection in the case has been accepted by the Department. The Memorandum Explaining the Provisions of the Finance Bill, 2008, while highlighting the underlying object of section 268A, clearly reflected the anxiety of Parliament to reduce the litigation in small cases and regulate the right of the Revenue to file or not to file an appeal under section 260A. Consequently, there is an inherent limitation on the Revenue's right to file appeal under section 260A inasmuch as the condition precedent for preferring an appeal is existence of a substantial question of law. Section 260A does not, however, contemplate any monetary limit. This monetary limit has been imposed a indicated above by the Central Board of Direct Taxes in exercise of its power under section 268A - Parliament has nevertheless deemed it necessary to vest in the Central Board of Direct Taxes, by enacting section 268A, the power to regulate appeal by prescribing the monetary limit Decided against the revenue.
-
2013 (10) TMI 983
Penalty ou/s 271D - The appellant-company could not disburse the bonus due on Diwali to its workers and promised to make the payment of bonus in the first week of March, 1991. - Acceptance of cash loan in violation of section 269SS of the Income-tax Act, 1961. - Held that:- The question arises as to why the assessee issued cheques on November 16, 1990,. and November 17, 1990 to the Excise Department, when the assessee did not have sufficient balance in its bank account. Even if it was so then why it waited till December 5, 1990, and not arranged the amount immediately after the issue of the cheques. Had the assessee done so then it could have done it by taking this amount of Rs. 92,000 from the promoters of the company, through account payee cheques or draft which could have enabled the assessee to genuinely avoid penal action of the Excise Department, as well as penalty of the Income-tax Department, which had now to suffer on account of violation of section 269SS of the Income-tax Act, 1961 Decided against the Assessee.
-
2013 (10) TMI 982
Transfer of cases at Central place for co-ordinated and effective investigation - Petitioners belonged to the same family or group. They were subjected to common search operation. Their assessments were, therefore, under proposal for transfer Commissioner transferred the case to Ahmedabad Held that:- Commissioner not committed any error either in law or in facts. Reason for transfer was clearly indicated in the show-cause notice, namely, for centralisation of cases and for effective and co-ordinated investigation. Such reasons were further elaborated while dealing with and disposing of the objections of the petitioners in the final order of the transfer - Authorised representative of the petitioners was offered three other alternatives-Rajkot, Baroda and Surat where the Department had centralized wing. Several places of the company were subjected to common search operation, it is but natural that it would be in the interests of the Revenue and perhaps also in the interests of the assessees that cases be consolidated and be placed before one single Assessing Officer. This would avoid duplication of collection of evidence and assessment of evidence. This would also avoid conflict of opinions. The reason that being search cases they had to be placed before a centralised circle office also cannot be stated to be irrelevant. The Department for internal convenience and efficient functioning, it has created a special branch for dealing with search cases and has decided to conduct assessments of such cases under such wing, surely the assessee cannot have any objection to the same. The assessee has no right in law to insist that his case be kept out of consideration of such branch Petition dismissed Decided against the Assessee.
-
2013 (10) TMI 981
Allowance of deduction u/s 80IB of the Income Tax Act construction of housing and other projects - asssessee was not the owner of land - Held that:- Reliance has been placed on the decision in the case of M/s. Radhe Developers, wherein it has been held that assessee developer is having dominant control over the land in question Also, assessee developer was bearing entire risk and entitled to the entire reward Assessee in the past has been allowed the benefit of deduction u/s. 80IB(10) and the benefit has not been withdrawn by the court . Further, since the facts of the case in the year under appeal are identical to that of earlier years, respectfully following the aforesaid order of the Co-ordinate Bench of earlier years, deduction allowed Decided against the Revenue.
-
2013 (10) TMI 980
Deduction under section 80IB Held that:- In Commissioner of Income Tax Central-I, Chennai. Versus M/s. Jain Housing & Constructions Ltd., [2012 (11) TMI 588 - MADRAS HIGH COURT], it was observed that From the substitution of Section 801B(10)(1) of the Act, prior to the amendment, there was no such requirement as regards furnishing of completion certificate and the deduction provision pointed out to the grant of 100% deduction on the profits derived from a housing project, if the undertaking had commenced development and construction of the housing project on or after 1st October, 1998 - till 2005, there was no clause dealing with completion, in which event, one cannot read into the provision as a condition, which is not specifically provided. In the present case the approval by the Hyderabad Urban Development Authority has been obtained on 26.06.2004 only for which the relevant assessment year is 2005-2006 and hence the decision in the case of Jain Housing & Constructions Ltd. (supra) goes against the assessee Decided against Assessee.
-
2013 (10) TMI 979
Income to be assessed in the hands of Others Whether legal ground can be admitted, if no new facts are to be brought on record Held that:- As per Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. Vs. CIT, reported in [1996 (12) TMI 7 - SUPREME Court], the legal ground can be admitted, if no new facts are to be brought on record - The decision of the Hon'ble Apex Court is law of land, which has to be followed by every authority. Therefore no direction is to be required to be given to the AO in this respect because if the Hon'ble Apex Court decides that all the income belongs to Shri Harshad S. Mehta, then the income has to be assessed in the hands of Shri Harshad S. Mehta, not in the hands of any other person. Levy of interest u/s 234A, 234B & 234C of the Income Tax Act Held that:- As per Hon'ble High Court in the case of CIT vs. Divine Holdings Pvt. Ltd.[ 2012 (4) TMI 100 - BOMBAY HIGH COURT]. Accordingly, it was held that levy of interest u/s. 234A, 234B and 234C is mandatory Decided in favor of Revenue.
-
2013 (10) TMI 978
Accrual of income - Whether enhancement of its income by Rs.4,90,512/- by making an addition in respect of mark to market profit of Rs.7,92,365/- in respect of derivative transactions outstanding as at the year-end, is correct Held that:- Without doubt, the loss of Rs.3.02 lacs on the unsettled derivative contracts has not crystallized - Prudence is a fundamental accounting assumption, duly recognized by law per Accounting Standard (AS I) issued by the CBDT u/s.145(2) of the Act. The same prescribes booking of all known liabilities and losses, while at the same time not booking, similarly, unrealized profits or income - The closing rate in respect of the security transactions for which loss has been booked/accounted for is substituted for the cost price, so that it is only the price, plus or minus, with reference to the said rate, that would be/is considered while booking the profit and loss on the settlement of the transaction. As such, the matter has to be regarded not with reference to inconsistency, but with regard to the prudence, which, as aforesaid, is a fundamental accounting assumption/principle and, therefore, is to inform all accounting statements. Directed the deletion of the addition of Rs.7.92 lacs made by the ld. CIT(A). Needless to add, the said income would stand to be deleted, and the loss of Rs.3.02 lacs claimed and allowed to the assessee, adjusted against the income, speculative or non-speculative, as the case may be, under which the income from derivatives stands classified for the year of settlement Decided in favor of Assessee. Rebate u/s 88E to be adjusted in computation of MAT profit u/s 115JB of the Income Tax Act Held that:- Reliance has been placed on the decision in the case of CIT vs. Horizon Capital Ltd. [2011 (10) TMI 489 - KARNATAKA HIGH COURT] - Rebate u/s.88E could not be confined to the tax under regular provisions of the Act, and would, therefore, extend also to that payable on the book profit u/s.115JB. Accordingly, once a comparison between the higher of the two tax payables, i.e., on the income assessed on the regular provisions as well as on the basis of the book-profit, is made to determine the tax exigible, the rebate as exigible under law u/s.88E would have to be allowed irrespective of whether the tax is payable under the regular provisions of the Act or under the book profit Decided in favor of Assessee.
-
2013 (10) TMI 977
Review u/s 263 after income escaping assessment done u/s 147 of the Income Tax Act Held that:- Action u/s 263 is justified as the action the AO in droppings the proceedings initiated u/s 147 and accepting the returned income during the year under consideration is erroneous and prejudicial to the interest of the Revenue AO has been directed to make a fresh assessment u/s 143(3) read with section 263 on the impugned additions/disallowances made/enhanced by the Ld.CIT(A) keeping in view of the scope of reassessment proceedings and after giving a reasonable opportunity of being heard to the assessee.
-
2013 (10) TMI 976
Mistake apparent from record in the order of Tribunal within the scope u/s 254(2) Held that:- From the order of the Tribunal dated 20th December, 2012, it is evident that the Tribunal considered the arguments of the assessee's counsel as well as the ratio of the decisions of the Supreme Court elaborately discussing the same in the order. Hence, it cannot be said that the Tribunal has not considered the case-law cited by the learned AR for the assessee as alleged in the Miscellaneous Application. On the contrary, the Tribunal in the order, after taking note of the case-law relied upon by the learned AR for the assessee, gave reasoning why it was not relevant to consider the same. The averment of the assessee is that the decision of the Apex Court relied on by him has not been applied by the Tribunal while coming to the conclusion in the Tribunal order, is not a mistake apparent on record falling within the scope of section 254(2) of the IT Act Miscellaneous Application filed by the assessee is dismissed Decided against the Assessee.
-
2013 (10) TMI 975
Allowability of rate of interest in case of loan from related party Held that:- There is no thumb rule of allowability of interest rate. It depends upon case to case and business expediency. Therefore, 20% rate reasonable for A.Y 09-10 for the related parties - Decided the issue in the light of peculiar facts and circumstances of the case and it shall not became Precedent for all cases. In this case, since company and the depositors were assessed at highest tax rate and no loss of revenue. Deposit from outside parties is very meager as compared to related party and also business turn over and profit have increased substantially and there is no finding of lower authorities that the amount of loan received from loan creditors were not used for business purposes Decided in favor of Assessee. Addition on account of late payment of Provident fund account Held that:- assessee had paid this amount on 25.06.2007 relevant to month of May, 2007 before due date of return file on 30.09.2008. As various Courts held if the payment is made before due date of return filed, is allowable expenditure Decided in favor of Assessee. CENVAT Credit to be included in the closing stock u/s 145A of the Act Held that:- As per Apex Court judgment in the case of ACIT vs. Torrent Cables Ltd.[ 2012 (11) TMI 190 - SUPREME COURT], wherein it was held that assessee had been following the net method of valuing the closing stock Following the judgment, CENVAT not to be included in the closing stock. Allowability of excise duty as deduction u/s 43B of the Act in the year under consideration Held that:- Assessee had paid excise duty on closing stock at the time of removal of goods from the factory before due date of filing of return. Accordingly, such excise duty is allowable as deduction u/s. 43B of the IT Act.
-
2013 (10) TMI 974
Addition made on account of debit entries because of investment in bunglows and set-off allowed out of this addition - Set-off allowed of the amount of Rs.10,56,530/- representing the addition made on account of loan amounts to be recovered from various parties as also certain unexplained expenses against the addition of Rs.40 lakhs Held that:- Addition was made by the AO and confirmed by ld.CIT(A) on this basis that these amounts were mostly in the form of credits and, therefore, the addition is sustained, but set off is allowed against the addition of Rs.40 lakhs on account of investment in bungalow - Addition is already confirmed by ld.CIT(A) and set off allowed by him of this addition against addition sustained by him in respect of investment in bungalow cannot be faulted because this addition is on account of credit entries and addition in respect of bungalow is on account of debit entries and, therefore, the set off allowed by the ld.CIT(A) cannot be faulted without showing that this amount was used elsewhere and not in the bungalow Decided against the Revenue. Addition on the basis of loose papers Held that:- Addition made by the AO are without any particulars or date or name etc. and, therefore, these are dump-papers and cannot be made the basis for addition. This finding of the ld.CIT(A) could not be controverted by the ld.DR of the Revenue by bringing any evidence on record to show that this essential information such as date, name or particulars are available on the seized paper on the basis of which the addition was made by the AO and, hence, the ground of revenue is rejected Decided against the Revenue. Addition on account of cheque received from Mr. Bakshi - A cheque of Rs.50 lacs was given by Shri K.I.Bakshi of Bombay to the assessee for a loan @ 15%. The said cheque should never be encashed Held that:- As per newspaper report, Shri K.I.Bakshi has already died during earthquake in Bhuj. Under these facts, in our considered opinion, no such addition is justified because the AO could not establish that any amount was received by the assessee from Shri K.I.Bhakshi or any amount was given by the assessee to Shri Bhakshi.
-
2013 (10) TMI 973
Allowability of expense of prior period Held that:- Expense, related to prior period, should be either allowed in the present year or if it is not allowed in the present year, then the same should be allowed in the earlier year, to which such expenses are related to - The assessee has disclosed a loss of Rs.6,92,700/- in the present year, and in A.Y.2000-2001, the assessee has filed return of income disclosing NIL income after setting off of brought forward loss of earlier years to the extent of Rs.303.11 lakhs. Hence, even if this expenses are allowed in the earlier years i.e. A.Y. 2000-2001, it will ultimately be adjusted in the present year, by way of set off of brought forward loss, and therefore, it will make no difference even if deduction is allowed in the present year Decided against the Revenue. ALP in an international transaction to be decided by Appellate authorities Held that:- Adjustments made on account of ALP by tax authorities can he deleted in appeal al only if the appellate authorities are satisfied and record finding that ALP submitted by the assessee is fair and reasonable. Merely finding faults with the transfer price determined by the revenue authorities (AO/TPO) addition on account of 'adjustments' cannot he deleted. This is because the mandate of section 92(1) is that in every case of international transaction, income has to be determined having regard to ALP. Therefore, unless ALP furnished by the taxpayer is specifically accepted, the appellate authorities on the basis of material available on record have to determine ALP themselves. Subject to statutory Provisions, appellate authorities can direct lower revenue authorities to carne this exercise in accordance with law. The matter cannot he left hanging in between. ALP of international transaction has to he determined in every case. Excess payment of royalty - Payment of royalty at the rate of 3.75% to the AE by the assessee, as against the royalty at the rate of 3% by other group entities Held that:- Explained by the assessee before the AO that the royalty at 3.75% was applied after reducing various expenses from ex-factory sale value of the concerned products. It was also explained before the learned CIT(A) that if the effective rate is considered, then the effective rate of royalty is less than the royalty paid by other AEs to Hitachi Limited i.e. parent company - Only stated rate is not decisive and effective rate has to be considered, and when the amount of royalty paid by the assessee is considered with ex-factory sale value, without deducting various expenses, such as dealer commission, special commission, warranty etc., as has been noted by the learned CIT(A), then the effective rate worked out is only 2.3% on sale, as against 3% paid by other group entities - This finding of the fact given by learned CIT(A) could not be controverted by the learned DR of the Revenue Decided against the Revenue. Refund of excess TDS deducted Held that:- Appellant had made a wrong calculation of royalty for the period from 1.4.2003 to 30.6.2003 and deducted excess TDS and had paid the same. Therefore, the excess TDS to be recovered from the Income tax Department was worked to be Rs.16,25,243/- and the same was shown on the asset side of the balance sheet. This amount was not debited to P & L account but the appellant had wrongly disallowed the same in the statement of total income and it was claimed as deduction before the A.O. but the A.O. has not discussed the same in the assessment order and had not allowed the deduction. The A.O. is directed to allow the same as deduction Decided against the Revenue.
-
2013 (10) TMI 972
Validity of search u/s 132(1) of the Income Tax Act Validity of assessment order passed on the basis of invalid search Held that:- Search was conducted only on the basis of the information received from S.P. C.B.I. that undisclosed cash being carried out by the assessee, but no such cash or any other incriminating documents, books of accounts, money, bullion, jewellery or other valuable article or thing were found in the possession of the assessee. Therefore, the authorization to conduct search based on reason under section 132(1) of the Act did not exist and the search became invalid. Therefore, the assessment order based on the said search cannot stand and to be set aside - Assessment orders passed by the Assessing Officer on the basis of invalid search deserve to be set aside and quashed Decided in favor of Assessee.
-
2013 (10) TMI 971
Allowability of registration u/s 12AA of the income tax act Held that:- Relying upon the judgment of the Honble High Court in the case of Agricultural Market Committee [2011 (3) TMI 1265 - Andhra Pradesh High Court], held that the assessees have to be granted registration In the abovementioned case it was held that Agricultural Marketing Acts provide for establishment of notified market areas/yards for purchase and sale of agricultural produce and livestock and for better regulation of such markets. The purpose of marketing legislation is to enable purchasers to get a fair price for the commodities by eliminating middlemen and provide a regulating market with facilities for correct weighments, storage, accommodation and equal powers of bargain for reasonable price to the growers and the consumers. Agricultural marketing committees discharge an important duty and function of protecting the interest of a large body of persons, namely, agriculturists, farmers and growers of agricultural produce and livestock. Further, in the said judgment it was held that Agricultural marketing committees were entitled to seek exemption under section 10(20) read with section 10(29) till March 31,2003 but by reason of amendment to section 10(20) and deletion of section 10(29) with effect from April 1, 2003, they, for the purpose of the Act, ceased to be "local authorities". This itself would not disqualify them from claiming exemption under sections 11(1) and 12 provided they are considered as institutions established for advancement of objects of general public utility, because the Parliamentary benefit under section 10(20) is altogether different from the benefit granted By the tax machinery subject to statutory conditions contained in sections 11 to 13. An agricultural marketing committee is constituted under the State Act for the sole purpose of protecting the interest of agriculturists, farmers and growers. Secondly, the agricultural marketing committee is under legal obligation to provide all necessary infrastructure and market facilities within the market place/yard in a notified market area, including water, electricity, auction/trading platforms, facilities for receiving, paying and depositing money, and resolving disputes. Thirdly, the income of the agricultural marketing committee from different sources- licence fees, market fees, loans, etc., which is derived without any profit motive is to be used to meet the expenditure for providing market facilities. Fourthly, all the income has to be deposited in the market committee fund, out of which ten per cent. shall be, contributed to the Central Market Fund which shall vest in the Government, which exercises power of supervision and superintendence over the market committees. The Government administers and applies the Central Market Fund, inter alia, for providing grants to needy agricultural marketing committees. Fifthly, agricultural marketing committees serve an important aspect of rural economy, i.e., providing facilities for marketing agricultural produce and products of livestock. Section 14(1) of the Agricultural Marketing Committee Act read with rule 8 of the Rules mandate that "all moneys received by an agricultural marketing committee shall be deposited in a single banking account with the nearest Government treasury, or with the sanction of the Government in a bank" out of which all the expenditure of the agricultural marketing committee shall be defrayed. Under section 11 (5)(iii), deposit of the moneys in a scheduled bank is substantial compliance with the law Therefore, agricultural marketing committee is entitled to be registered under section 12A/12AA Decided in favor of Assessee.
-
2013 (10) TMI 970
Validity of re-opening u/s 147 of the Income Tax Act Held that:- Assessing Officer had considered the aspect of the difference between the amounts shown in the TDS certificates issued by M/s. Deutsche Bank and what was accounted by the assessee. Explanation in this regard was furnished by the assessee. Once a query was raised and a reply was given and the extract of such reply was stated in the assessment order, therefore, it cannot be said that the Assessing Officer had not applied his mind. He had indeed applied his mind and came to a conclusion that the difference stood reconciled. There is no new tangible material available with the Assessing Officer for coming to a conclusion that reconciliation given by the assessee was wrong or incorrect. Based on the very same set of records, AO had formed a different opinion for initiating a reassessment. Change of opinion cannot be a basis for reopening as held by the Hon'ble Full Bench of the Delhi High Court in the case of CIT Vs. Kelvinator of India Ltd. [2002 (4) TMI 37 - DELHI High Court] which was affirmed later by the Hon'ble Supreme Court in CIT VS. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA]. Especially so, where four years had elapsed from the end of the assessment year. There is no case for the Revenue that the assessee had failed to furnish full and true information as required under the Act Re-opening of assessment has rightly been quashed Decided against the Revenue.
-
2013 (10) TMI 969
Deduction of 1/5 of expenditure in the present year - assessee company had spent major amount and the benefit of which was expected to be derived for next five years and, therefore, in the books of account, the same expenditure was debited to miscellaneous expenses and l/5th of the same i.e. Rs.116.64 lacs is written off every year Held that:- There is nothing on record in this regard as to whether in the assessment year 2003-04, full deduction was allowed or only l/5th deduction was allowed in that year. It may be there that in the books of account, the assessee has debited only l/5th of the amount in that year but in the computation of income, the entire amount can be claimed as deduction and the same might have been allowed in that year to the extent of 100%. Without examining this aspect, allowing any further deduction in the present year will result into allowing the double deduction - Restored back this matter to the file of the A.O. for a fresh decision. Computation of deduction u/s 80IA of the Income Tax Act Held that:- A.O. has to consider the interest income as well as interest expenditure which is connected with the same and rework the deduction u/s 80IA as may be necessary. It goes to show that to the extent the assessee is eligible to establish the nexus of interest expenditure with interest income by showing that the interest expenditure was incurred for earning interest income, netting has to be allowed and only such net interest income has to be excluded from business profits for the purpose of computation of deduction allowable u/s 80IA - Revenue could not bring on record any contrary facts to the above observation Decided against the Revenue. Disallowance u/s 40(a)(ia) of the Income Tax Act - Rebate given is in the nature of discount or interest Held that:- Entire sales of the Assessee is to GUVNL and the payments received by the Assessee from it are towards sales from the customer. Nothing has been brought on record by the Revenue to demonstrate that the rebate given is not in the nature of discount but is in the nature of interest - Rebate is in the nature of discount no TDS u/s 194A is deductible on the same, as has been held by the Commissioner(A) Decided against the Revenue.
-
2013 (10) TMI 968
Benefit to the concern falling u/s 13(3)(c) is right or not - Eligibility of exemption u/s 11 and 12 of the Income Tax Act - Assessee is a company registered u/s 25 of the Companies Act 1956 and also registered u/s 12AA of the Act - Held that:- As per sub-section (6) a trust running an educational institution or a medical institution or a hospital shall not lose the benefit of exemption of any income other than the value of benefits of educational or medical facilities provided to the specified persons, solely on the ground that such benefits have been provided to specified persons. It should be noted that the sub-section covers,-(i) only those trusts running an educational institution or a medical institution or a hospital; (ii) the benefit extends only in respect of educational or medical facilities and not any other facility. In the present case, Assessee has entered transactions with the related concerns - Assessee is not an educational institution or a hospital or medical institution as it is not engaged in dispensing medical facility though it is engaged in running a blood bank - Assessee cannot be considered to be engaged in medical facilities so as to be entitled to exemption of income Decided against the Assessee.
-
2013 (10) TMI 967
Allowance of interest u/s 36(1)(iii) and processing charges Held that:- Seen from the sanction letter, the loan has been availed by the assessee for the purpose of construction of the project. In other words, it is for working of the assessee company and it cannot be said that the loan was availed for the purpose of acquisition of land. Even otherwise, if the loan amount used for the purpose of its project, it cannot be said that the assessee used the fund for acquisition of fixed asset. The land on which the assessee is constructing the building is to be treated as business asset of the assessee company - Allowed the claim of the assessee towards the interest and processing charges incurred on loan. The proviso to section 36(1)(iii) cannot be applied to the facts of the present case Decided against the Revenue.
-
Customs
-
2013 (10) TMI 1005
Penaltry u/s 112(a) - Whether the Tribunal was right in holding that the appellant had abetted and was liable to pay penalty under Section 112(a) of the Customs Act, 1962 and the quantum of penalty is justified - Misdeclaration of goods - Abatement for misdeclaration - Held that:- quantum of penalty imposed on the appellant M/s. J. Mitra & Bros. is not justified and is disproportionate. No doubt that the appellant M/s. J. Mitra & Bros. has abetted the offence of misdeclaration and is liable to pay penalty under Section 112(a). The statements recorded of the Secretary and the Chairman during the investigation clearly show that the Secretary and Chairman were well aware of the fact that the goods were sought to be misdeclared. It is not that the Secretary and Chairman were driven up the garden path unknowingly by the appellant M/s. J. Mitra & Bros. by the brochure. From the statements recorded, as extracted by the Commissioner of Customs, it is apparent that the Secretary and Chairman were well aware of the reason why the said system was being wrongly declared as an endoscopic system. They were fully aware that the system would only qualify for an exemption in case it was declared in a particular manner and words. They acted being fully aware of all the facts and it was a conscious and well informed decision. The actus reus was present and was motivated by a common goal and with a common purpose. All of them were aware as to why the system was being declared as an endoscopic system and the role played by each one was more or less similar and as culpable. It cannot be said that the Secretary played any lesser role than the appellant M/s. J. Mitra & Bros. Even if the appellant M/s. J. Mitra & Bros. had suggested misdeclaration of the equipment to save duty, the Secretary and the Chairman could have easily declined. The fact that the Secretary and the Chairman of M/s. CARE accepted the suggestion of the appellant M/s. J. Mitra & Bros. makes their role equal. The appellant is being punished as an abettor. The gravity of the role of the abettor and a well informed principal offender cannot be different. Where the degree of offence is same the scale of punishment should also be equal. Applying principle of parity of consequence, as all are ascribed the same role and responsibility, the scale of punishment/ penalty should also be the same - penalty imposed on the appellant M/s. J. Mitra & Bros. of Rs.25 lakhs is not justified. Applying the principle of parity, we are of the view that the appellant M/s. J. Mitra & Bros. should also be imposed the same penalty as that of the Chairman. Accordingly, we reduce the penalty under Section 112(a) from Rs.25 lakhs to Rs.5 lakhs - Decided partly in favour of assessee.
-
2013 (10) TMI 1004
100% EOU - violation of conditions - Suspension of license - Import of fabrics under duty free licence for 100% EOU - The appellant has imported duty free polyester fabric and disposed it off in the open market. Notice No. 1 exported Ready made garments procured from the open market without undertaking any manufacturing activity in the factory. - Duty demand - Liability u/s 112 of Customs Act - Held that:- The seized polyester dyed embossed fabrics has been found to be actually knitted fabrics classifiable under Chapter 60 of CTA as is evident from the test report and the said fabrics do not correspond to the material imported i.e. polyester fabrics 58/60 and 100% polyester dyed fabrics 58/60 of chapter 54 of Customs B=601007 dated 15.01.2002 filed by Noticee-1 under Section 46 of the said Act and claimed to have been sent to Noticee-2 by Noticee-1 under ARE-3 No.1&2, both dated 11.6.2002, therefore, the seized fabric held is held liable to confiscation under Section 113 (i) of the said Act. It is further held that the seized fabrics, are also liable to confiscation under Section 113 (d) of the said Act as the same were attempted to be exported through another EOU contrary to the provisions under said Act and the Notification No. 53/97-Customs dated 3.6.1997, as amended, I hold that the Customs duty of ₹ 24,37,818/- on the imported polyester fabrics measuring 52829.92 meters and valued at ₹ 22,45,759/- vide Bill of Entry No. 539120 dated 22.01.2002 and IMP-B-B-601007 dated 15.02.2002, so diverted in the local market, and not utilized for intended purpose is recoverable from Notiee-1 under proviso to Section 28(1) of the said Act read with Notification No. 53/97-Cus dated 3.6.1997, as amended Noticee-1 is also hold liable to penal action under Section 114 as well as under Section 112 of the Said Act. The license granted to noticee-1 under Section 58(1) of the said act is also held liable to be cancelled under Section 58(2) of the said Act for contravention of the provisions of the said Act. Commissioner (Appeals) has rightly held that Shri Karamveer Singh, Proprietor M/s Singh Overseas is liable for action under section 112 of Customs Act, 1962 for the contraventions of the provisions of Customs Act, 1962. Accordingly the demand of Customs duty of ₹ 24,37,818/- on polyester fabric imported duty free and diverted in open market and not utilized for intended purpose is upheld by us for no rebuttal to appellate findings. Interest on duty amount of ₹ 24,37,818 is also confirmed - Imposition of penalty of ₹ 25 lakhs on Shri Karamveer Singh, Proprietor does not appear to be unreasonable. Therefore the appellant does not deserve any leniency who has also committed fraud against Revenue by his ill design - Decided against assessee.
-
2013 (10) TMI 1003
Export of mis-declared goods for obtaining undue DEPB credit - Confiscation of goods - Misdeclaration of description of the goods - Violation of Section 113(d) and 113(i) of the Customs Act, 1962 - Held that:- If a party makes representations which he knows to be false and injury ensues therefrom although the motive from which the representations proceeded may not have been bad is considered to be fraud in the eyes of law. It is also well settled that misrepresentation itself amounts to fraud when that results in deceiving and leading a man into damage by willfully or recklessly causing him to believe on falsehood. Of course, innocent misrepresentation may give reason to claim relief against fraud. Fraud and justice do not dwell together for which penal provisions are enacted to eradicate evils of defrauding Revenue which is anti-social activity adversely affecting public revenue. Such provisions are construed in the manner which curbs the mischief, promote their object, prevent their subtle evasion and foil their artful circumvention. Thus construed, the term fraud within the meaning of these penal provisions is wide enough to take in its fold any one or series of unlawful acts committed or omissions made. An act of fraud on Revenue is always viewed seriously. Fraud and collusion vitiate even the most solemn proceedings in any civilized system of jurisprudence. It is a concept descriptive of human conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. When material evidence gathered by Revenue remains uncontroverted, adjudication findings sustain. Accordingly appellants fail to succeeded on merit and on the fact and circumstances of the cases. It can unambiguously be held that there was deliberate misdeclaration of the description of goods exported and DEPB scrips were fraudulently obtained. Use of such non est scrips to discharge import duty against subsequent imports covered by the five appeals of the appellant company is recoverable with penal consequences of law - Following decision of COMMISSIONER OF CUSTOMS, KANDLA Versus ESSAR OIL LTD. [2004 (10) TMI 90 - SUPREME COURT OF INDIA] - Decided partly against assessee.
-
2013 (10) TMI 1002
Suspension of license of CHA - Contravention of Regulation 13 (a), (d) and (m) for CHALR - License suspended without any notice to Assessee - Held that:- Regulation 22(1) is applicable for issuing both suspension order and revocation order. However Regulation 20(2) authorizes the Commissioner of Customs to suspend the licence of a CHA in emergent situations without following the procedure under Regulation 22(1). It is very obvious that immediate suspension of license is permitted only when an enquiry is pending is contemplated. The non obstante clause Regulation 20(2) makes an exception only in the matter of suspension and not in the matter of revocation. So, it is implied that such inquiry has to be completed, within the time frame prescribed in various sub-regulations of Regulation 22 and a final view in the matter of revocation of license is to be taken. After two years from the date of suspension not even the show cause notice, is issued for initiation of enquiry which should have been followed in the case of an inquiry pending or contemplated on passing of the suspension order dated 02.09.2011, as required under Regulation 22 (1). At this stage, we cannot accept that such a step is still being contemplated. No persons right to carry on his profession can be stopped for a prolonged period through the means of a suspension order. Such an approach is against provisions in Regulations 20 and 22 of CHLAR. So we are of the view that the impugned order suspending the license of the appellant is no longer sustainable in view of the decision of Hon. Madras High Court in the case of CC Vs. Ganesh Shipping Agency [2008 (7) TMI 437 - HIGH COURT OF JUDICATURE AT MADRAS] - Decided in favour of appellant.
-
2013 (10) TMI 1000
Valuation - Related party transaction - Relationship with supplier - Influence on price - Held that:- relationship of the appellant to the supplier influence the price of the imported spares. The refurbishable spares were found to have been exported through courier from January to May 2006. The courier who handled the export shipments confirmed that there was no foreign exchange involved in the shipments. The appellants bankers also confirmed this. The officials of the appellant, who were incharge of bank-related works also stated that they had not received any remittance towards export of re-furbishable spares. Though some FIRCs were produced by the appellant during the course of DRI investigations, no connection was found between the FIRCs and the export of refurbishable spares. The values shown in the invoices produced by the appellant at the time of export were found to be very minimal. As against these invoices, the appellant claimed before the adjudicating authority that these were not correct invoices and that there were other invoices available which carried the actual values of the exported spares. However, such other invoices were not submitted to the Customs authorities at the time of exports. They were not even produced before the DRI. The learned Commissioner also found that the set of invoices filed with Bills of Entry in Singapore for clearance of the spares was the same as those produced by the appellant before the Indian Customs authorities at the time of export. It was also found that, in the financial statements of the appellant, the sale of refurbishable spares was not mentioned towards foreign exchange income. On the basis of all these findings, it was concluded that the defective spares were exported free-of-cost by the appellant. Prima facie, there is no reason to doubt the correctness of the learned Commissioner s finding that such exports were made as a contractual obligation amounting to a condition of sale of the spares by Sun (Sing.) to the appellant. The monetary benefit of the export of refurbishable spares apparently accrued to Sun (Sing.) thereby constituting a flow-back. We have also examined the findings recorded by the learned Commissioner with regard to ALC charges, AEC charges, unbilled/underbilled amounts, professional charges etc. and have found such findings to be, prima facie, cogent. The declared prices of the imported spares have not been shown to be negotiated prices. Indeed, under the so called global pricing policy of the Group Company, there was hardly any scope for negotiations between the Sun entities. Though the PWC reports cited by the learned counsel indicate sale of spares by Sun(Sing.) to independent unrelated buyers in the Asia Pacific Region at similar deeply discounted prices, the learned counsel has not been able to cite any corroborative documentary evidence to support the PWC reports. M/s. PWC are the private accountants/auditors of the appellant and their reports, without independent corroborative evidence, cannot be accepted as conclusive proof of sale of spares at equally discounted prices by Sun(Sing.) to unrelated buyers in the same region. In the result, the Revenue appears to have made out a prima facie case for rejecting the declared value on the ground that such value was substantially influenced by direct and indirect flow-backs between the importer and the supplier being related Sun entities. The grant of discount to the extent of 61-70% on US Price List was also not disclosed to SVB. The learned special consultant submitted that the appellant had obtained SVB order fraudulently by suppressing material facts having a bearing on valuation of the goods. In the circumstances, it was argued, the Department could lawfully invoke Section 28 of the Customs Act as had been done in this case. Prima facie, these arguments of the learned special consultant for the respondent are acceptable on the facts and circumstances of this case and in view of the Honble Supreme Courts ruling in UOI Vs. Jain Sudh Vanaspati [1996 (8) TMI 108 - SUPREME COURT OF INDIA]. - Stay granted partly.
-
2013 (10) TMI 999
Waiver of Pre-deposit - Differential Duty - Benefit of Notification No.21/02 - The appellant described the goods as "Transparent Skin Barrier Microporous Surgical Tapes" in some of the Bills of Entry and "Skin Barrier Microporous Surgical Tapes" in other Bills of Entry - Prima facie , the tenor of the statement given by the Managing Director of the company had to be gathered by a reading of the entire text of the statement, which we have done - Relying upon KMS Medisurgi Pvt. Ltd. vs CC (Import), Mumbai [2008 (2) TMI 807 - CESTAT, MUMBAI] - Prima facie, we cannot take a view that the Managing Director of the company conceded duty liability by agreeing that the description of the goods was misdeclared in material particulars - The Notification, at Sl. No.363 thereof read with List 37 appended thereto, specifically exempted "Skin Barrier Microporous Surgical Tapes" from payment of duty. The goods were so declared/described by the assessee in the relevant Bills of Entry. The department ought to have at least sought expert opinion on the technical aspects involved in the case - If is against this background that we are looking at the stay orders produced by the learned counsel for the appellant - Goods which were declared as "Skin Barrier Microporous Surgical Tapes" were the subject-matter of those cases also. Waiver and stay were granted in those cases - there was no option but to grant waiver of predeposit and stay of recovery against the adjudged dues - a Bank Guarantee furnished by the importer stands enforced and this amount stands appropriated too - Hence there will be waiver of predeposit and stay of recovery in respect of the balance amount of duty, interest thereon and penalty - Stay granted.
-
2013 (10) TMI 998
Benefit of Notification No.21/2002 Concessional Rate of Duty - import of Hypoallergenic Surgical Adhesive Tapes as Skin Barrier Microporous Surgical Tapes - sale as General Purpose Surgical Tape - Extended Period of Limitation Waiver of Pre-deposit Assessee contended that the Samples were drawn and on the basis of those samples, benefit of Notification No.21/2002 was extended - As there was no test report on record on the goods, the benefit of Notification cannot be denied to the applicants - the extended period of limitation cannot be invoked in the absence of any test report - Held that:- Prima facie we are of the view that when samples have been drawn and have not sent for testing, in that case, inference cannot be drawn on the basis of mere research - In that view, the extended period of limitation was not invocable - the applicants have made out a prima facie case for waiver of pre-deposit - Accordingly, we waive the requirement of pre-deposit of the entire amount of differential duties, interest and penalties and stay recovery thereof during the pendency of the appeals.
-
Corporate Laws
-
2013 (10) TMI 997
Winding up petition - Inability to pay debts - Held that:- dispute, sought to be raised by the company, is sham and bogus and is only with an intent to avoid the company to be liable for being wound up and, therefore, this Court finds that the company has not made out any bona fide defence warranting the court to relegate the parties to regular civil proceedings - This Court, therefore, finds that the company has unreasonably and illegally withheld the legitimate dues of the petitioning creditor and has unable to pay its debt - Decided against petitioner.
-
2013 (10) TMI 996
Proceedings for Realization of Payment under SARFAESI Act Held that:- The right, title, interest over a flat conveyed is a species of property, whether that right had been accrued under the provisions of the Articles of Association of a Company or through the bye-laws of a Cooperative Society - The people in this country, especially in urban cities and towns are now accustomed to flat culture, especially due to paucity of land - Multi-storeyed flats are being constructed and sold by Companies registered under the Companies Act as well as the Cooperative Societies registered under the Registration of Cooperative Societies Act, etc. Flats are being purchased by people by either becoming members of the Cooperative Society or shareholders of the Company and the flat owners have an independent right as well as the collective right over the flat complex - Flat owners right to dispose of its flat is also well recognized, and one can sell, donate, leave by will or let out or hypothecate his right - These rights are even statutorily recognized by many State Legislatures by enacting Apartment Ownership Acts - Such a legislation exists in the State of Maharashtra as well. Neither the Companies Act nor any other statute make any provision prohibiting the transfer of species of interest to third parties or to avail of loan for the flat owners benefit - A legal bar on the saleability or transferability of such a species of interest will create chaos and confusion - The right or interest to occupy any such flat is a species of property and hence has a stamp of transferability and consequently we find no error with the warrant of attachment issued by the DRT on the flat in question - the appellant will certainly have the right of pre-emption, but not at any value lesser than the market value of the suit flat at the time of the sale - Various directions already given by the High Court will stand - The appeal was dismissed and the amount, if any, deposited by the Appellant be refunded to him.
-
FEMA
-
2013 (10) TMI 1006
Application for compounding - Right to appeal - Held that:- if the interim stay of the order dated 7 August 2013 is not granted and if the petitioner does not file an Appeal under Section 17/19 of the Act, the petitioners will loose its right of appeal. If the petitioners file an appeal they will loose the right to have their application for compounding considered. In view of the above, till the respondents file the affidavit in reply and the matter is finally heard, the petitioners rights cannot be foreclosed on both fronts. In view of the above, there shall be interim stay of the impugned order dated 7 August 2013 till further orders.
-
Service Tax
-
2013 (10) TMI 1017
Provision of services to SEZ - exemption by way of refund mechanism - non payment of service tax - Notification no. 9/2009-ST dated 3-3-2009 - Held that:- when only during the gap of 2 months the appellant did not pay the Service Tax and it was available as refund to the recipient, the question of having any intention to evade duty does not arise and therefore the Show Cause Notice issued on 19-10-2010 to recover the Service Tax from 3-3-2009 to 20-5-2009 was time-barred. Under these circumstances, the extended period could not have been invoked and penalty could not have been imposed and further legally also, it can be argued that the intention of the Government was to provide exemption and tax could not have been demanded during the relevant period. - stay granted.
-
2013 (10) TMI 1016
Reverse charge on Service' received during the period 16/07/1997 to 31/08/1999 - Clearing and Forwarding Agency Service - Held that:- In the first place if the appellant has received certain services from the CHA, we do not understand, how the said services can be construed as Clearing and Forwarding Agency Services'. There is a separate entry for Custom House Agent Service' which is distinct and different from 'Clearing and Forwarding Service'. Secondly, the appellant is a recipient of the service. During the impugned period the appellant was not liable to file service tax return under Section 70 of the Finance Act, 1994 and the provisions of Finance Act, were amended vide Finance Act, 2003 when a separate Section 71A was inserted and the appellant became liable to file return only under Section 71A. In respect of the assesses who were required to file returns under Section 71A, Section 73 was amended under Finance Act, 2004 providing the demand of service tax from assessees who were required to file returns under Section 71A - Impugned order is not sustainable - Decided in favour of assessee.
-
2013 (10) TMI 1015
Vocational traning or not - commercial training on interior design - Commercial Training or Coaching Services - Waiver of pre deposit - Held that:- Prima-facie, we find that the ld. Commissioner has taken into consideration the submissions of the assessee that the services rendered by them is not in the nature of vocational training and accordingly, they are not eligible to the exemption of Notification 9/2003-ST dated 20.06.2003 and also Notification 24/2004-ST dated 10.09.2004. The ld. Commissioner after narrating the facts and evidences on record, had come to a finding that the applicant had provided the commercial training and coaching services during the material period and they are not eligible for exemption for payment of service tax in terms of the aforesaid Notifications. Prima-facie, we do not find any contrary evidence is placed in their memo of appeal. We also find that the applicant is not serious in prosecuting their stay petition as well as the appeal. - stay granted partly.
-
2013 (10) TMI 1014
Stay application - Interest liability - Short payment of the service tax - Held that:- appellant has not contested the service tax liability before the adjudicating authority. It is also seen from the records that the appellant has paid of the entire service tax liability after almost two years. In our view, as the appellant has not contested the service tax liability before the adjudicating authority, they should be directed to deposit the amount of interest which is due to the government on such delayed payment of service tax. On a specific query from the Bench, both sides are unable to say what would be the exact amount of interest liability on such amount. Taking rough calculation of 13% of interest on the amount per annum on short payment, we direct the appellant to deposit an amount of Rs.10 lakhs within four weeks from today and report compliance before the Deputy Registrar on 20.08.13. Deputy Registrar after ascertaining the compliance, will place the files for passing appropriate order on 27.08.13. Subject to such compliance being reported, application for the waiver of pre-deposit of the balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal.
-
2013 (10) TMI 1013
Modification of stay order [2013 (6) TMI 539 - CESTAT AHMEDABAD] - Works contract - benefit of Notification No.12/2003-ST - Held that:- Various accounting system and pattern followed by the appellant is confusing and is not bringing out any details for us to consider the issue at the prima facie stage. We have also recorded that the issue is highly debatable and needs considerable time to come to a conclusion on merits. Though ld. counsel tried to submit that the entire issue has to be broken down into different demands, we are of the view that at the stay stage, we could not have gone into any further details. Accordingly, we are of the view that our order of directing the appellant to deposit Rs.15 lakhs out of the total demand of approximately Rs.94 lakhs is correct and does not require any reconsideration or modification. The application filed by the appellant for the modification of our stay order is dismissed.
-
2013 (10) TMI 1012
Taxable services or manufacturing activity - Waiver of pre deposit - Cleaning services, commercial construction services, manpower recruitment and supply services, repair and maintenance services, erection, commissioning and installation services and supply of tangible goods for use services - Non registration with department - Held that:- as far as the fabrication or erection of tank at site is concerned, the activity brings into existence an immovable property. Therefore, it cannot be said that the appellant has undertaken any manufacturing activity defined under Section 2(f) of the Central Excise Act, 1944. Therefore, the activity undertaken by the appellant would qualify as erection, commissioning and installation services. According to the appellant, the liability would come to ₹ 10 lakhs. As regards other activities, we notice that the matter needs to be gone into detail which can be done at the time of final hearing of the appeal. At the interim stage, we find that the appellant had not made out a case for complete waiver of pre-deposit of the dues adjudged. Accordingly, we direct the appellant to make a pre-deposit ₹ 10 lakhs within a period of six weeks and report compliance on 2.9.2013. On such compliance, pre-deposit of balance of the dues adjudged against the appellant shall stand waived and recovery thereof stayed during the pendency of the appeal - Decided against assessee.
-
2013 (10) TMI 1011
Valuation - inclusion of value of reimbursement of expenses - Rule 5(1) - Waiver of pre deposit - Business Auxiliary Services - Held that:- Prima face, we find that the said provision has been struck down by the Honble Delhi High Court in Inter-continentals case (2012 (12) TMI 150 - DELHI HIGH COURT) as ultra vires to Section 66 and 67 of the Finance Act, 1994. Thus, the applicant could able to make out a prima facie case for total waiver of dues adjudged. Accordingly, all dues adjudged is waived and its recovery stayed during the pendency of the appeal - Decided in favour of assessee.
-
2013 (10) TMI 1010
Condonation of delay - Held that:- The filing of the rectification application without a signature should have resulted in summary rejection. However, the Commissioner took time to reflect on the defective rectification application and passed orders on its merits on 8.5.2013. In the above circumstances, we find a contributory conduct on the part of the Commissioner as well, which contributed to certain extent to the delay in filing of the appeal. Since the reason offered for the delay is not wholly satisfactory but the petitioner would suffer irreparable injury if the delay is not condoned, we consider it appropriate to condone the delay on condition that the petitioners /appellants remit Rs.10,000/- to the credit of Revenue, within two weeks from today towards costs for condonation of the delay. In default of such deposit within the time stipulated, COD application Nos.55910, 55912 and 55914/2013 shall stand rejected - delay condoned.
-
2013 (10) TMI 1009
Cenvat Credit - Duty paying documents - Invoices for input services - Commercial or industrial construction service - Held that:- invoices were issued by M/s. Jaichitra & Co., the unit is no longer in existence. Further, in respect of invoices issued by M/s. Penguin Diesel and M/s. Navie teknokem which do not contain registration number. I find that the documents furnished by the applicant do not contain the details as required under Rule 4A of Service Tax Rules. It is noted that some of the invoices issued were prior to registration. It appears that they have availed credit on the basis of documents which are disputed in the present appeal. Hence the applicant failed to make out prima facie case for waiver of pre-deposit of entire amount of tax and penalty along with interest - stay granted partly.
-
2013 (10) TMI 1008
CENVAT credit - Business Auxiliary Services and Business Exhibition Service - Held that:- appellant being service recipient discharging the service tax liability as service provider, he is to be treated as service provider and he can discharge the service tax liability by utilising the credit available. Prima-facie, we find that the issue seems to be covered by the judgment of the Hon'ble High Court of Karnataka [2011 (9) TMI 852 - KARNATAKA HIGH COURT]. Accordingly, we are of the view that appellant has made out a prima-facie case for the waiver of pre-deposit of the amounts involved. Applications for the waiver of pre-deposit of amounts involved are allowed and recovery thereof stayed till the disposal of appeals - stay granted.
-
Central Excise
-
2013 (10) TMI 995
CENVAT credit Waiver of Pre-deposit - The issue relates to interpretation of eligibility of cenvat credit on angles, channels, beams etc. as capital goods/inputs Held that:- Following vandana Global Ltd. Vs. CCEx., Raipur [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - the Tribunal has been taking a consistant view by allowing the stay petition of the assessee where extended period of limitation is involved but directed pre-deposit wherever the demand is for normal period of limitation - the applicants are able to make out a prima-facie case for total waiver of duty and penalty, pre-deposit of all dues waived and its recovery stayed during pendency of the appeal - Stay granted.
-
2013 (10) TMI 994
CENVAT Credit inputs - Waiver of Pre-deposit of Duty and Penalty under Rule 15 (2) of CC Rules r.w Section 11AC of the CE Act - The issue relates to interpretation of eligibility of cenvat credit on angles, channels, beams etc. as capital goods/inputs and the applicability of the Larger Bench decision in the case of Vandana Global Ltd. Vs. CC Ex., Raipur [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] Held that:- This Tribunal has been taking a consistent view by allowing the stay petition of the assessee where extended period of limitation is involved but directed pre-deposit wherever the demand is for normal period of limitation - the entire demand is issued involving extended period of limitation and also the applicant has already deposited an amount - pre-deposit of remaining dues waived and its recovery stayed during pendency of the appeal Stay granted.
-
2013 (10) TMI 993
CENVAT Credit Sales Commission as input service Waiver of Pre-deposit - Revenue was of the view that what is paid is nothing but sales commission and therefore, credit may not be available since it is nothing to do with the manufacturing activity of the appellant and the CENVAT credit is not admissible beyond the place of removal Held that:- There was no dispute that what was paid to the appellant is only sale commission the agreement clearly provides that both IOCL and BPCL are promoting sale of the appellants products among the consumers of the OMC - the OMC would specifically recommend to the customers in the publicity materials - quality control and specifications are mentioned in the agreement itself - the appellant has made out prima facie case for waiver of pre-deposit - the requirement of pre-deposit of the dues waived and stay against recovery of the same is granted during pendency of the appeal Stay granted.
-
2013 (10) TMI 992
Interest on Duty - Whether interest on duty/ cenvat credit demanded by applying proviso to Section 11A or Section 11AA with Cenvat Credit Rules or under Rule 57(I), is payable under Section 11AB prior to 11.05.01 - Held that:- Following EXOTIC ASSOCIATES Versus COMMISSIONER OF CENTRAL EXCISE [2009 (11) TMI 293 - GUJARAT HIGH COURT] - the demand relates to the period subsequent to 28-9-1996 and the earlier provision of Section 115 was not considered by the Tribunal, the order of the Tribunal is set aside on this point and remand the matter to the Adjudicating Authority to decide the whole issue with regard to charging of interest keeping in mind the provisions contained in unamended Section 11AB of the Act - the interest liability arises on the appellants under the provisions of Section 11AB of Central Excise Act, 1944, and even prior to 11.05.2001. The provisions for charging of interest under the Central Excise Act was brought in for the first time from 28.09.96 by introduction of Section 11AB to the Central Excise Act, 1944 - The provision mandated levy of interest on duty not paid, or short paid or erroneously refunded from the first day of the succeeding the month in which the duty ought to have been paid - These provisions of Section 11AB as introduced from 28.09.96, were, however limited to cases of demand arising due to reason of fraud, collusion or any wilful mis -statement or suppression of facts with intent to evade payment of duty - prior to introduction of Section 11AB in the Statute, interest was liable to be paid by introduction of provisions of Section 11AA in the statute which came into effect from 26.05.95, which provided for interest on the demand of the duty which were confirmed under the provisions of sub-section 2 of Section 11AB of the Central Excise Act, 1944 - Noting the lacuna which failed to enable levy of interest in cases wherein there was an element of fraud, collusion or any wilful mis -statement or suppression of facts with intent to evade payment of duty, provisions of Section 11AB was introduced w.e.f . 28.09.96 - On a holistic reading of the amendment w.e.f . 11.05.01, the amendment has enlarged the scope of the coverage of recovery of interest to all cases wherein the demand has been confirmed by the authorities or has been voluntarily paid by an assessee - The amendment does not wipe out the existing liability to pay interest in respect of cases involving fraud, collusion, any wilful mis-statement of facts with intent to evade payment of duty - the amended sub-section 2 of Section 11AB from 11.05.01 only mandates that interest liability cannot be fastened under the amended Section 11AB prior to 11.05.01 Decided against Assessee.
-
2013 (10) TMI 991
Valuation - Undervaluation of vehicles - Rule 8 of valuation rules - Manufacture of chassis and sale of complete motor vehicle Waiver of Pre-deposit Held that:- Following - The questions framed in the order of reference are accordingly answered in favour of the Revenue and against the assessee appeal. Following Eicher Motors Vs. CCE, Indore [2008 (6) TMI 19 - CESTAT NEW DELHI] - We are not able to appreciate as to how having taken credit of the duty paid on chassis on the basis of 110% of the cost of production/manufacture, would not include the additional 10% of cost in the assessable value of the vehicle, particularly when in respect of other goods procured directly by them on the account of Eicher, used as raw material, their transaction value is taken into account and credit is taken of the duty paid on those goods. The value of chassis for the purpose of arriving at the assessable value of the complete motor vehicle shall be the assessable value of the chassis worked out by Eicher under Rule 8 of the Excise Valuation Rules, and not its actual cost - the applicant has not been able to make out a case for full waiver of pre-deposit. the applicant No. (1) directed to make deposit of 25% of duty upon such submission balance dues would stand waived and its recovery stayed during the pendency of the appeal Partial stay granted.
-
2013 (10) TMI 990
CENVAT Credit on input and input services Rule 6(3) of CE Rules - Waiver of Pre-deposit - Whether the applicant is liable to pay an amount equal to 5% / 10% of the value of the exempted goods under Rule 6(3) of the CENVAT Credit Rules, 2004 Held that:- On this issue the Honble High Courts and the Tribunal in various decisions held that bagassee, press-mud etc. are not excisable goods and therefore Rule 6(3) of the CENVAT Credit Rules, 2004 would not apply - Following Gularia Chini Mills Vs. Union of India & Ors. [2013 (7) TMI 159 - ALLAHABAD HIGH COURT] - demand of 5% / 10% on electricity cleared from the factory under Rule 6(3) of the CENVAT Credit Rules, 2004 - and CCE, Pondicherry Vs. EID Parry (I) Ltd. [2013 (3) TMI 366 - MADRAS HIGH COURT] - in respect of bagassee, press-mud etc. Respectfully following the decisions of the Honble High Courts, as above, we grant waiver of pre-deposit of entire amount of duty along with interest and penalty and stay its recovery during the pendency of the appeal - Stay granted.
-
2013 (10) TMI 989
Input Service Waiver of pre-deposit - The applicant being manufacturer of motor vehicles availed credit of the service tax paid by the dealers on the ground that the same is input service for the manufacture of motor vehicles Held that:- As per Annexure II Schedule I of the agreement the obligation on the dealer is to establish and maintain at its cost the adequate and satisfactory sales and service facilities as recommended by the company from time to time, with proper personnel and equipment for sales and servicing, at its cost - The terms and conditions of the dealer agreement entered into between the applicant and the dealer shows that the sale and service is at the cost of the dealer - the taxable service provided by the dealer after the sale of the motor vehicles manufactured by the applicant prima facie the same cannot be considered as input service for the manufacture of motor vehicles - the applicants failed to make out a case for total waiver of pre-deposit - applicants are directed to deposit an amount equal to 50% of the duty upon such submission rest of the duty to be waived till the disposal Partial stay granted.
-
2013 (10) TMI 988
SSI Exemption Extended Period - Waiver of Pre-deposit - Whether the appellant who was using the brand name of a foreign company and selling the goods under that brand in India is eligible for SSI exemption or not Held that:- Following Namtech System Ltd. Vs. CCE [1999 (12) TMI 145 - CEGAT, NEW DELHI] - there were different views during the period prior to that date - Prima facie extended period could not have been invoked - the appellant has made out a case for waiver of predeposit and stay on limitation itself - there shall be waiver of pre-deposit and stay against recovery during the pendency of appeal Stay granted.
-
2013 (10) TMI 987
Waiver of pre-deposit Consignment wise payment of duty in cash - Rule 25 of Central Excise Rules, 2002 Revenue was of the view that Appellant did not pay the duty payable by cash, as per their ER-1 return by the due date - Neither did they pay it with interest Held that:- Following Baba Viswakarma Engg. Co. (P) Ltd. Vs. CCEx., Ghaziabad [2012 (9) TMI 814 - CESTAT, NEW DELHI] - Department has not taken the initiative to make use of the provisions regarding confiscation since no seizure has been effected - So the only consequence will be penalty - there is no case for demanding the duty paid through Cenvat credit to be paid again through cash/PLA - there is no case for imposing penalty equal to duty defaulted - Pre-deposit of all dues waived and its recovery stayed during the pendency of the appeal - Stay granted.
-
CST, VAT & Sales Tax
-
2013 (10) TMI 1019
Rate of sales tax - Inter state sale of Iron & Steel - Section 8 (1) - Governor's notification - Whether in view of the said notification the rate of tax on inter state sale of goods manufactured by the assessee would be 2 % in view of Section 8 (1) of the Central Sales Tax Act or would it be covered by the proviso to Section 8 (1) and, therefore, attract tax @ 4 % - Held that:- the rate payable on the sales affected to a government or registered dealer by the selling dealer in the State of U.P during course of inter State sales, would attract tax @ 2 % with effect from said date, as may be notified by the Central Government in the Official Gazette for this purpose. Further power has been conferred upon the Central Government to provide for the lower rate in respect of said goods at par with the rate applicable to the sale or puchase of said goods inside appropriate State under the State tax law. To attract the said clause 8 (1) it is but necessary that there is a notification by the Central Government declaring that the rate of tax on turn over of a selling dealer would be 2 % during course of inter State trade covered by Section 8 (1) or the lower rate as applicable on the sale of the same goods within the State under the State law. So long as a notification under Section 8 (1) is not issued, the proviso to Section 8(1) would continue to hold the field. The proviso prescribes the rate of tax to be 4 % of the turn over - under the order of the Tribunal and even otherwise, no notification issued by the Central Government in exercise of powers under Section 8 (1) has been brought on record nor has been referred to the findings of the Tribunal that the rate of tax under the Central Sales Tax Act for the assessee would be 2 %, cannot be legally sustained as it is based on ignorance of the proviso to Section 8 (1) of the Central Sales Tax Act as noticed above. The same cannot be legally sustained - Decided in favour of Revenue.
-
2013 (10) TMI 1018
Transfer of right to use the goods - Exigible to sales tax - Whether hiring of cinematographic equipments would amount to "transfer of right to use the goods" for cash, exigible to sales tax under Section 3-A of the Tamil Nadu General Sales Tax Act, (in short, TNGST Act")? Held that - Whether a transaction is a transfer of right to use goods or a service is essentially a question of fact, which has to be determined in each case, having regard to the terms of the contract. As pointed out earlier, in the present case, the assessee(s) have not produced any document/agreement to show that the assessee(s) retained possession and control over the Cinematographic equipments leased out. In the absence of any material evidence, we find no sufficient reasons to upset the concurrent findings recorded by the authorities and the Tribunal and questions of law are answered accordingly - Following decision of M/s. Anand Cine Services Versus The State of Tamil Nadu [2013 (5) TMI 540 - MADRAS HIGH COURT] - Decided against assessee.
-
Indian Laws
-
2013 (10) TMI 1007
Title of property - Whether the learned court below misread the evidence of PW4 in concluding that the defendant was a trespasser on the suit land and that the plaintiff had right, title and interest therein, thus vitiating the impugned judgment and order by an error on a substantial question of law - Held that:- father of the defendant was a worker of the Tea Estate. The defendant, while examining himself as DW1, had stated that his father had constructed the house in the year 1955 but he never lived there. DW1 had also stated that he was born in the disputed house. He has further stated that he used to live in the house with his wife and other family members. From his own evidence, it appears that he was born sometime in 1946 as he had stated that in cross-examination recorded on 03.08.1991, he was about 45 years old. Therefore, his plea that he was born in that house cannot be accepted. It is on record that father of the defendant retired in the year 1973 and expired in the year 1984 - Evidence of witnesses of plaintiff discloses that father of the defendant was allotted the quarter which is the disputed house. Subsequently, the quarter was allotted to Rajesh, who is husband of PW2. After he had resigned from the services of the Tea Estate, the quarter was allotted to PW2. DW1 had also deposed that Rajesh and Nandi had separated after about 3 years of marriage. There is also evidence that all of them used to reside together in that disputed house and that the defendant forcefully evicted PW2 from the quarter - Decided against appellant.
|
