TMI Tax Updates - e-Newsletter
October 26, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Whether sale of assessee’s OHB to Colgate Palmolive is a slump sale as contended by the assessee or an itemized sale as contended by the Revenue – Held as slump sale - AT
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Income Tax:
Low Tax Effect - Notional tax effect - loss return / negative income - Whether the appellate tribunal is right in dismissing the appeal filed by the revenue that in the appeal, tax effect was below Rs.2 lakh - Held No - HC
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Income Tax:
Loss of sale of shares (long term loss) - In the teeth of the aforesaid findings made by the Tribunal on the basis of evidence, it is difficult, if not impossible, to hold that the transaction of buying and selling of shares of Hindustan Development Corporation Ltd. was a colourable transaction or was resorted to with any ulterior motive of reducing the tax payable for long term capital gain - HC
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Income Tax:
Whether service charges received from the Heavy Water Board of Department of Atomic Energy could not be considered as profit derived from the industrial undertaking to qualify for deduction under Section 80-I - held yes - HC
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Income Tax:
Agriculture land - capital asset u/s 2(14) - land is situated within the municipal limits of Municipal Council, Sujanpur – Therefore, the asset is ‘Capital Asset’ – Liable to be taxed as capital gains - HC
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Income Tax:
Authority u/s 131 – Camping of the officer in the premises of the petitioner for recording statements u/s 131(1)(a) - Whether trespass into the house of the petitioner - AO has no such authority - relief granted to assessee - HC
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Income Tax:
Whether amount advanced to a contractor for execution of work for the purpose of business becomes irrecoverable, the same is not allowable as bad debt - if the assessee sustains business loss during the enlargement of the business, the same should be treated as capital investment - HC
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Income Tax:
Estimated the possible profit out of purchases made through non-genuine parties -The estimation of rate of profit return must necessarily vary with the nature of business and no uniform yardstick can be adopted - Disallowance to the extent of 12.5 percent is allowed - HC
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Income Tax:
Offence under sections 276B read with section 278B - failure to remit income-tax deducted at source - Condonation of delay - a complete trial is absolutely necessary - HC
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Income Tax:
Rejection of books of account is not a precondition for enquiring into the valuation of an investment for the purpose of reassessment under section 142A(1) - HC
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Income Tax:
Interest u/s 234A - late filing of return - tax was paid before the due date - assessee must be held to be liable to pay interest under section 234A of the Act on the difference of amount between the tax assessed and the amount which he had paid before the due date - HC
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Income Tax:
When the capital gain is assessed on notional basis, whatever amount invested in new residential house within the prescribed period, under section 54F of Income-tax Act the entire amount invested, should get the benefit of deduction - HC
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Income Tax:
The income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under section 132 or requisition under section 132A - HC
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Income Tax:
Whether penalty under section 271(1)(c) of the Income-tax Act cannot be levied in a case where the assessed income is a loss – Held yes - HC
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Customs:
Import of crude oil - Concessional rate of duty under Notification No. 81/202-Cus - Forged manufacturing of soap - there was no purchase of caustic soda. There was no manufacture at all - no relief to the assessee - AT
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Customs:
Order of suspension of the appellant's CHA license - where immediate suspension is called for, the Commissioner has to take swift action and cannot wait and if he does so suspension can be made only after the full inquiry is held as provided by Regulation 22. - HC
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Customs:
Imposition of 50% duty on wheat by issuing notification u/s 8A of Customs Tariff Act, 1975 - Validity of Notification No.127/99-Customs - the Central Government has power under Section 8A of the Customs Tariff Act to increase the rate of duty - HC
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Customs:
Condonation of delay - delay of 309 days - The Court cannot be oblivious to the fact that departmental appeals involve unavoidable procedural delays by reason of pushing of files from one authority to the other, obtaining of the requisite clearances and the like, and a month’s time for preparation of the appeal and connected ground work for filing the appeal is not unreasonable - HC
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Customs:
Benefit of Notification NO. 25/99-Cus - Import of CD Pick up lens unit - It is necessary to examine the description of the goods in all the bills of entry individually - matter remanded back - AT
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Indian Laws:
Scope of the Definition of Public Authority u/s 2(h) RTI Act - The burden to show that a body is owned, controlled or substantially financed or that a non-government organization is substantially financed directly or indirectly by the funds provided by the appropriate Government is on the applicant who seeks information or the appropriate Government - SC
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Service Tax:
Service for providing the “cash van“ Provided to Bank and Financial Institution - Scope of 'service' u/s 65 (105) (105) (W) of Finance Act - CESTAT direction to make entire demand as pre-deposit modified - HC
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Service Tax:
First appellate authority should direct appellant to reconstruct the appeal if the same is not traced in his office, which observation is due to the fact that the appellant has been able to show us copies of the ST-4 appeals which were signed by their authorised signatory - AT
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Service Tax:
Mandap Keeper Services – According to the department such a room rent can be bifurcated into room rent, and food charges can be covered under mandap keeper service - the issue is arguable one - AT
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Service Tax:
Right to use Software – The sample invoices provides which shows that the software was sold in the form of CD only and they were back-to-back orders and the software were purchased and the same was sold - vat was paid - stay granted - AT
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Central Excise:
The merit of the order of the Committee of Commissioner of Central Excise granting approval may not be subjected to challenge, as the appeal in any case has to be considered and decided on merit by the Appellate Authority on merits under Section 35B of the Act – Matter remanded back to CESTAT to decide the appeal - HC
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Central Excise:
Valuation - inclusion of Freight Charges in the Assessable Value - for the purpose of VAT freight was included in the value - Tribunal directed to hear the appellant's appeal on merits without insisting on any pre-deposit - HC
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Central Excise:
Blending of MS/HSD with MFA to make branded MS/HSD which sell at a premium only improves the quality of the product, and this process, would not amount to manufacture - stay granted - AT
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Central Excise:
Benefit of SSI Exemption Notification No.8/2003 – Clubbing of clearance - allegation of creation of another dummy company - stay granted partly - AT
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Central Excise:
Scope of Notification No. 28/2010 exempting eduction cess to the goods falling in Tenth Schedule of Finance Act, 2010 – Exemption post levy of Clean Energy Cess - prim facie case is in favor of assessee - AT
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VAT:
Sales tax liability - Whether the cutting tool i.e. “drill bits“ is exigible to tax under Entry No. 52 of Schedule-I of the Karnataka Tax on Entry of Goods Act, 1979 - High Court ought not to have entertained the petitions and expressed its opinion. - SC
News
Case Laws:
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Income Tax
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2013 (10) TMI 1039
Whether sale of assessee’s OHB to Colgate Palmolive is a slump sale as contended by the assessee or an itemized sale as contended by the Revenue – Held that:- A perusal of the sale agreement shows that the business sold included: (a) Goodwill (b) all tangible assets including the enhance packing , machinery and equipments (c) all rights, title , interest , benefit and advantages in under all agreements or arrangements pertaining and relating to or concluded with the business, authorized dealers, manufacturers (d) Distributors and customers (e) all rights , title, interest and benefits in relation to copy rights, trades, design and trade marks connected with the business (f) all rights , title , interest and benefits in respect of process know how technology (h) all other immovables , including tangible and intangible assets right and interest of any nature. The sale agreement further stated that in consideration of the sale of OHB to Colgate Palmolive (I) Limited India as going concern , CPL shall pay to assessee a sum of Rs. 99.54 crores – Reliance has to be placed upon the judgment in the case of CIT Vs. Artex Manufacturing Company [1997 (7) TMI 7 - SUPREME Court] - Transaction has to be taken a slump sale and the capital gains have to be computed accordingly as per the provisions of Section 45 to 50 – Decided in favor of assessee. Whether the amount received by the assessee as non-compete fee is a revenue or capital in nature for the purpose of taxability – Held that:- This issue to be decided on the basis of the facts and circumstances of each case as per the pre-amendment provisions of the Act. It is settled proposition on the point that if the compensation/receipt for refrain from carrying on business which effects the profit making structure of the assessee than such restriction will lead to loss of enduring trading asset by depriving the assessee from the future income and the receipt would be capital in nature. If the profit making structure is not affected as no loss of source of income resulted by putting such restrictions under the negative covenant then the receipt for agreeing such restrictive covenant would be revenue. Therefore, the principle is based on the test whether agreeing to the negative covenant, the assessee is deprived of a source of future earnings being the structure of the whole business or not. In the present case, assessee has refrained from competing same business which has been sold to CPL for which it has received this compensation. By doing this the assessee has given up one of its source of income and therefore it has to be treated as a capital receipt – Decided in favor of Assessee. Addition of freight in Closing stock – Held that:- Addition is being deleted following the reasoning given for the deletion of the addition on account of modvat – Reliance has also been placed upon the judgment in the case of Indo Nippon Chemical Co. Ltd.[ 2000 (8) TMI 69 - BOMBAY High Court] – Decided in favor of Assessee. Exclusion of sales tax and excise duty from the total turnover from the computation of deduction u/s 80HHC of the Act – Held that:- Deduction u/s 80HHC to be computed by excluding the amount of sales tax and excise duty from the total turnover – Reliance has been placed upon the judgment in the case of in the case of M/s Sudarshan Chemical Industries ltd. [2000 (8) TMI 73 - BOMBAY High Court], which is decided in favor of Assessee. Nature of expenditure, whether ‘Capital’ or ‘Revenue’ – Expenditure on production of advertisement films, On production of TV films, On production of cinema slides etc. – Held that:- expenditure is revenue in nature – Decided in favor of Assessee.
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2013 (10) TMI 1038
Low Tax Effect - Notional tax effect - loss return / negative income - Whether the appellate tribunal is right in dismissing the appeal filed by the revenue that in the appeal, tax effect was below Rs.2 lakh, the revenue could not have preferred the same in view of the instructions of the CBDT, thereby entitling the appellate tribunal not to decide the same on merits – Held that:- Following Commissioner of Income Tax-II Versus Good Luck Marketing Ltd. [2013 (10) TMI 641 - GUJARAT HIGH COURT] the Tax Appeal is required to be allowed and the order passed by the tribunal is to be quashed and set aside and the appeal is required to be remanded to the tribunal to decide the same on merits – Decided in favour of Revenue.
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2013 (10) TMI 1037
Loss of sale of shares (long term loss) - set off with the long term capital gains - genuineness of transaction - As per AO sale was a colourable transaction considering the fact that the assessee purchased the selfsame scrip after some time and the sale to the group company was financed by the assessee himself - Strong suspicion to replace the evidence – Held that:- On the basis of a suspicion howsoever strong it is not possible to record any finding of fact. As a matter of fact, suspicion can never take the place of proof - The finding arrived at by the Tribunal was not even alleged by Mr. Dutta to have not been based on evidence. In the teeth of the aforesaid findings made by the Tribunal on the basis of evidence, it is difficult, if not impossible, to hold that the transaction of buying and selling of shares of Hindustan Development Corporation Ltd. was a colourable transaction or was resorted to with any ulterior motive of reducing the tax payable for long term capital gain – Decided against the Revenue. Decision in the case of CIT vs. Shekhawati Rajputana Trading Co. (P) Ltd. [1998 (4) TMI 106 - CALCUTTA High Court] distinguished.
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2013 (10) TMI 1036
Deduction u/s 80-I - Service charges received – Whether service charges received from the Heavy Water Board of Department of Atomic Energy could not be considered as profit derived from the industrial undertaking to qualify for deduction under Section 80-I of the Act – Held that:- Reliance has been placed upon the judgment in the case of Krishak Bharti Cooperative Limited versus Deputy Commissioner of Income Tax and Another [2013 (7) TMI 632 - DELHI HIGH COURT], wherein it has been held that after examining the nature and character of the service charges, the agreement between the appellant and Heavy Water Board, Department of Atomic Energy, Government of India, a Division Bench has opined that the appellant-assessee would be entitled to benefit under Section 80-I in respect of service charges received and the same were profits and gains derived from an industrial undertaking – Decided in favor of Assessee. Whether equipment hire charges; crane hire charges; Ammonia Tanker hire charges are eligible for deduction u/s 80-I of the Income Tax Act – Held that:- To examine whether the income was derived from an industrial undertaking, it is imperative to trace the source of profit or income to manufacture/production. Transportation, is post-manufacture and takes place after the goods or articles have been manufactured in the industrial undertaking. They relate to activity of transportation of the said articles or goods from the factory to the place of the consumer/customer. It is a service and does not partake character and is not a part of manufacture – Decided against the Assessee.
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2013 (10) TMI 1035
Whether land sold falls under the definition of capital assets u/s 2(14) of the Income Tax Act – Held that:- Reliance has been placed upon the judgment of the Hon’ble High Court in the case of CIT v. Smt. Anjana Sehgal reported in [2011 (3) TMI 695 - PUNJAB AND HARYANA HIGH COURT], wherein it has been observed land is urban land for the purpose of definition of 'capital asset' under section 2(14). The concept of municipality as a unit of State or the fact that a State has no jurisdiction to make law beyond its territory have no relevance for the purpose of determining whether particular land was 'capital asset' or not for the purpose of taxing capital gain. If the land is adjacent to a municipality and is urban land covered under section 2(14), even if municipality and the land fall in different States, the land will conti- nue to be urban land. If such land is excluded from the definition of 'capital asset', the purpose of statutory scheme will not be achieved – In the present case, land is situated within the municipal limits of Municipal Council, Sujanpur – Therefore, the asset is ‘Capital Asset’ – Liable to be taxed as capital gains - Decided in favor of Revenue.
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2013 (10) TMI 1034
Reasons to believe u/s 148 for the assessment u/s 147 of the Income tax Act – Held that:- Reliance has been placed upon the Rajesh Jhaveri's case [ 2007 (5) TMI 197 - SUPREME Court], wherein it has been held that The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152 are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied : firstly the Assessing Officer must have reason to believe that income, profits or gains chargeable to income-tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. In the present case, it is explicitly clear that the reasons given for effecting reassessment were not the matters considered by the assessing authority while passing assessment order and no opinion was formed in this regard. This being the position, the version of the petitioner that no new materials have been brought to light to invoke the power and proceedings under section 147 or that it is proposed by way of "change of opinion", does not contain any pith or substance – Decided against the Assessee.
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2013 (10) TMI 1033
Condonation of delay in filing returns of Income – Application of Circular no. 670 dt. October 26, 1993 – Held that:- On a perusal of the above circular quoted above, when the Commissioner of Income-tax is satisfied that the returns were not filed due to reasons beyond the control of the assessee, he may refer the matter to the Board for reconsideration. In the instant case, for one year the Commissioner of Income-tax was satisfied that the delay in filing the return were not attributable to the petitioners. Therefore, he is not justified in extending the same to other years - Remitted the matter to the Commissioner of Income-tax to decide whether he will condone the delay or refer the matter to the Board for consideration – Decided in favor of Assessee.
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2013 (10) TMI 1032
Authority u/s 131 – Camping of the officer in the premises of the petitioner for recording statements u/s 131(1)(a) - Whether trespass into the house of the petitioner - Held that:- decision of Rajendran Chingaravelu's case [2009 (11) TMI 341 - SUPREME COURT], is not application in the present case - first respondent did neither have the authority nor the jurisdiction to enter into the house of the petitioner on January 19, 2012, and set up a camp office therein for recording the statement of the petitioner by invoking section 131(1) of the Income-tax Act - Relief granted to assessee. Authority to effect search u/s 132 – Search not preceded by warrant – Held that:- There is force in the submission of the learned counsel for the respondent - Revenue that it was only after surveillance that a detection was made of the unaccounted cash in possession of the petitioner and, therefore, proceedings under the Income-tax Act was initiated. The question is, whether such proceedings did have the authority of law. A perusal of section 131 indicates that a notice must be issued calling upon the petitioner to furnish all relevant material particulars and documents in the matter of allegation of being in possession of unaccounted cash and if the petitioner fails to respond to that notice, then section 132(1) comes into play by which the Commissioner, Director General or Director or the Chief Commissioner or the Commissioner or Additional Director or Deputy Commissioner or Joint Director or Joint Commissioner may issue warrant for search and seizure. The record made available by the respondent-Revenue discloses the Director of Income-tax (Investigation) on a perusal of the information received approved the issue of warrant for search and seizure on January 19, 2012, though the time is not mentioned therein. It is not known as to what time of the day that order was issued. Indeed, the first respondent armed with a warrant for search and seizure, entered the house of the petitioner on January 19, 2012, at 6.25 p.m. along with panchas and conducted a search, whence, documents and cash of Rs. 40,00,000 were seized from the premises of the petitioner, as indicated in the panchnama, annexure B. Therefore, the submission of the learned counsel for the petitioner that the search and seizure was not preceded by a warrant under section 132 of the Income-tax Act is prima facie unacceptable. - It may be that the petitioner had time up to March 15, 2012, to pay the advance tax and, thereafter, time to file his return for the previous year 2011-12 assessment year 2012-13, but that by itself does not mean that the respondent authorities did not have the jurisdiction to issue a warrant and effect search and seizure under section 132 of the Income-tax Act - Decided against the assessee.
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2013 (10) TMI 1031
Writ of Mandamus to implement the decision in Alappat Jewels v. Asst. CIT [2013 (1) TMI 373 - KERALA HIGH COURT] wherein the petition was dismissed with the liberty the petitioner to file objections against re-opining of assessment u/s 147 and notice u/s 148 – After the decision, revenue issued a notice (exhibit P10) asking the petitioner to appear before the AO with documents for finalization of reassessment - petition prays for stay of notice - Held that:- the grievance of the petitioner against exhibit P10 notice, asking the petitioner to appear on the specific date with the documents/clarifications for finalizing the assessment is not liable to be entertained by this court, in view of the sequence of events as mentioned hereinbefore. Exhibit P10, as such, is not sought to be set aside in the writ petition and there is no prayer in this regard while the prayer is only to stay exhibit P10 pending writ petition. The main relief sought for in the writ petition is to issue a writ of mandamus to implement the decision in Alappat Jewels v. Asst. CIT [2013 (1) TMI 373 - KERALA HIGH COURT]. This court holds that no such writ can be issued. There is absolutely no merit or bona fides in the writ petition.
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2013 (10) TMI 1030
Depreciation on securities - Whether depreciation claim of ₹ 39,21,52,485 on 'held on maturity' investments by treating it as stock-in-trade despite the same not being traded on a regular basis by the assessee in accordance with the RBI and the Central Board of Direct Taxes Circulars Held that:- Relying upon the judgment in the case of Karnataka Bank v. CIT reported in [2013 (7) TMI 656 - KARNATAKA HIGH COURT], decided in favor of assessee.
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2013 (10) TMI 1029
Whether amount advanced to a contractor for execution of work for the purpose of business becomes irrecoverable, the same is not allowable as bad debt – Held that:- Assessee is an ice cream manufacturing concern. On February 3, 1996, the assessee concern placed an order with M/s. Alps Engineering Services Pvt. Ltd., for construction of a cold storage plant at its factory at Coimbatore and advanced a sum of Rs. 7,89,500. The said Alps Engineering Services Pvt. Ltd., did not commence the work due to their financial strain. A sum of Rs.2 lakhs was recovered from the advance already paid and the balance was claimed as deduction from the total income under the heading "Business loss", as the amount was not recovered – Reliance has been placed upon the judgment in the case of Hasimara Industries Ltd. v. CIT [1998 (5) TMI 7 - SUPREME Court], wherein it was held that if the assessee sustains business loss during the enlargement of the business, the same should be treated as capital investment – Decided against the Assessee.
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2013 (10) TMI 1028
Estimated the possible profit out of purchases made through non-genuine parties - Addition on account of bogus purchases – Entire purchase amount to be added or the profit element embedded in such purchase be added – Held that:- Commissioner adopted the ratio of 30 percent of such total sales. The Tribunal, however, scaled down to 12.5 percent We may notice that in the immediately preceding year to the assessment year under consideration the assessee had declared the gross profit at 3.56 percent of the total turnover. If the yardstick of 30 percent., as adopted by the Commissioner (Appeals), is accepted the gross profit rate will be much higher. In essence, the Tribunal only estimated the possible profit out of purchases made through non-genuine parties. No question of law in such estimation would arise. The estimation of rate of profit return must necessarily vary with the nature of business and no uniform yardstick can be adopted - Disallowance to the extent of 12.5 percent is allowed – Decided against the Revenue.
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2013 (10) TMI 1027
Offence under sections 276B read with section 278B - failure to remit income-tax deducted at source - Condonation of delay application - Delay in filing the complaint – Held that:- Complainant had listed 22 documents along with the complaint. Those documents were on the file of the Chief Judicial Magistrate, Coimbatore. Therefore, the complainant could not produce the same before the trial court within a reasonable time. Therefore, the delay had not been caused by the complainant since the documents were in judicial custody in some other case. Besides this, the documents are not created ones. Therefore, the character of the prosecution case had not been changed. The complainant had knocked the doors of the judicial forum for their remedy. Hence, their case has to be decided on the merits and justice should be rendered to the parties concerned. Therefore, a complete trial is absolutely necessary – Therefore, restored on the file of the Judicial Magistrate, Mettupalayam, for disposal on the merits
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2013 (10) TMI 1026
Application of section 292B of the Income Tax Act – Applicability of section 50C when no capital gains liable to tax - Reference to valuation officer u/s 142A without rejection of books of accounts - Held that:- As noticed earlier, the conduct of the third respondent in calling for particulars relating to valuation of the plant would show that he did not accept the books of account of the petitioner filed in the initial assessment proceedings and this by implication amounts to rejection. It cannot, therefore, be said that the third respondent or the Revenue was acting according to their whims and fancies. Section 292B of the Act enacts no assessment, notice, summons or other proceedings taken by the authorities under the Act shall be invalid by reason of any mistake, defect or omission if such notice or proceedings or assessment is otherwise valid under the Act. This provision enacts the principle that mere non-mention or mention of a wrong provision of law in a proceeding or order cannot be a ground to invalidate it if that is otherwise permissible and valid under law. Reliance has been placed upon the judgment in the case of CIT v. Bhawani Shankar Vyas [ 2008 (11) TMI 154 - UTTARKHAND HIGH COURT], wherein it was held that rejection of books of account is not a precondition for enquiring into the valuation of an investment for the purpose of reassessment under section 142A(1) - The Division Bench of the Uttarakhand High Court ultimately concluded that full powers have been given by section 142A of the Act to the Assessing Officer and it was not necessary for him to first reject the books of account of the assessee – Decided against the assessee.
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2013 (10) TMI 1025
Chargeability of interest for late filing of return under section 234A - tax was paid before the due date - enhancement of tax during assessment proceedings – Held that:- Reliance has been placed on the judgment in the case of Dr. Prannoy Roy [2001 (12) TMI 68 - DELHI High Court] - There is a minor difference between the case of Dr. Prannoy Roy and the case of the present assessee on hand - In the case of Dr. Prannoy Roy, the assessee had paid up the entire tax before the due date. In the present case, the assessee deposited a sum of Rs. 10 lakhs under section 140A of the Act. In addition thereto, the assessee had also suffered tax deduction at source to the tune of Rs. 25,533. Eventually, the Assessing Officer assessed the tax liability of the assessee at a total of Rs. 15,08,474. Thus, the assessee had short-paid tax to the tune of Rs. 4,82,941. However, ratio of the decision of the Delhi High Court in the case of Dr. Prannoy Roy, such distinction would not be material - What was held by the Delhi High Court was that charging of interest from an assessee for late filing of return though the tax was already paid, would render the provision penal in nature, which the statute did not provide – In the present case, only modification, needed to adopt is that the assessee must be held to be liable to pay interest under section 234A of the Act on the difference of amount between the tax assessed and the amount which he had paid before the due date to which even the assessee has not raised any serious objection - Payment of interest on the entire amount of Rs. 14,82,941 is set aside – Revenue entitled to collect such interest under section 234A of the Act on a sum of Rs. 4,82,941 for the entire period, i.e., September 1, 1996, (after due date of filing of return) till March 27, 1998, (date on which the return was filed) – Decided in favor of Assessee.
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2013 (10) TMI 1024
Application of section 50C to determine sale consideration for computation of ‘Capital Gains’ – Held that:- Section 50C(1) is a deeming provision wherein the registration value fixed by the State Government under the Stamp Act is deemed to be considered as the full value consideration. Section 50C(2), however, permits the assessee to contend before the assessing authority that the registration value fixed by the State under the Stamp Act is excessive and does not correspond with the fair market value of the property as on the date of the transfer and that the assessee should not have challenged the levy of stamp duty under the Stamp Act as being excessive and disproportionate to the fair market value of the property before the authorities under the Stamp Act or file any appeal, revision or reference to any court or High Court against such order - In which event the assessing authority would refer the matter to the Valuation Officer to assess the fair market value of the property, keeping in view all the relevant consideration including the registration value fixed by the State. Sub-section (3) provides that if the fair market value fixed by the Valuation Officer is in excess of the registration value, then the registration value should be considered for levy of the capital gains tax. In the instant case, it is to be noticed that the assessee has not availed of the opportunity to question the correctness of the registration value fixed by the State Government. If he had done so, then the assessing authority would have invoked the power of appointing a Valuation Officer for assessing the fair market value. When the registration value is not the disputed question, now, at this stage, it is not permissible for the assessee to contend that the registration value is excessive and disproportionate to the market value of the property, in the absence of contra material, the deemed full value of consideration as stated in section 50C of the Income-tax Act would come into effect. When the capital gain is assessed on notional basis, whatever amount invested in new residential house within the prescribed period, under section 54F of Income-tax Act the entire amount invested, should get the benefit of deduction irrespective of the fact that the funds from other sources are utilized for new residential house. In that context, whatever the total amount actually invested by the assessee for construction of house at Gangavathi should be deducted irrespective of the fact that part of the funds invested are from different sources and not from the capital gains. In that view of the matter, the amount assessable towards net capital gain should be Rs. 10,06,494. Interest to be levied u/s 234A & 234B of the Income tax act – Held that:- The provisions of section 50C of the Income-tax Act was the latest introduced provision. The assessee was not aware of the said provision it is further submitted that the assessee is a resident of Gangavathi the plot at Bangalore was allotted to him as he was a freedom fighter and he was not aware of the actual market value of the property at Bangalore, he was guided by the real estate agent the plot at Bangalore was unproductive not yielding any income ; he was urgently need of money for construction of the house at Gangavathi and therefore the appellant-assessee sold the plot at Bangalore, bona fidely for a sum of Rs. 24,00,000 and there is no attempt on his part to conceal the income to evade tax. The submissions made at the Bar may be good for avoiding penalty but, however, sections 234A and 234B mandates levy of interest at 12 per cent. per annum which the assessee cannot avoid and the court has no jurisdiction to interfere with the same – Decided against the Assessee.
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2013 (10) TMI 1023
Whether income unearthed or detected during the course of a search cannot be assessed in the block assessment on the ground that the assessee has disclosed the transactions in the regular books of account – Held that:- Reliance has been placed upon the judgment in the case of Asst. CIT v. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA], wherein it was held that The special procedure of Chapter XIV-B is intended to provide a mode of assessment of undisclosed income, which has been detected as a result of search. It is not intended to be substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of account or documents and such other materials or information as are available with the Assessing Officer. Therefore, the income assessable in block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under section 132 or requisition under section 132A of the Act. In the present case, there is a conclusive finding that the information sought to be relied upon by the Assessing Officer was already available in the balance-sheets or the books of account of the assessee. As such, the material obtained during the search did not lead to the unearthing of income - Assessing Officer merely had a change of opinion which led him to conclude that what was discovered during the search was undisclosed income. This change of opinion was neither warranted in law, nor could it form the basis of invoking the provisions of Chapter XIV-B of the Act – Decided against the Revenue.
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2013 (10) TMI 1022
Whether penalty under section 271(1)(c) of the Income-tax Act cannot be levied in a case where the assessed income is a loss – Held that:- Reliance has been placed on Division Bench judgment of the Supreme Court in CIT v. Gold Coin Health Food P. Ltd. [2008 (8) TMI 5 - SUPREME COURT], wherein it was held that Explanation 4(a) to section 271(1)(c) intended to levy the penalty not only in a case where after addition of concealed income, a loss returned, after assessment becomes positive income but also in a case where addition of concealed income reduces the returned loss and finally the assessed income is also a loss or a minus figure. Therefore, even during the period between April 1, 1976 and April 1, 2003, the position was that the penalty was leviable even in a case where addition of concealed income reduces the returned loss - The ratio in Gold Coin Health Food P. Ltd., therefore, would leave no scope for us except to hold that penalty under section 271(1)(c) of the Act would be attracted and can be levied even in a case where the assessed income is a loss – Decided in favor of Revenue.
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2013 (10) TMI 1021
Application for admission of additional evidence without affidavit – Held that:- for effective adjudication of the dispute involved in this appeal, the aforesaid two documents are necessary for consideration. It is needless to mention that those two documents were not in possession of the assessee and as such, they could not produce those documents before the Tribunal below. - an opportunity given to the Revenue to produce evidence for rebutting the genuineness of those documents or the facts contained therein. Since the application for additional evidence has been disposed of without any affidavit being given on behalf of the Revenue, the averments, made in the application, should not be treated to have been admitted by the Revenue – Decided in favor of Assessee.
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2013 (10) TMI 1020
Disallowance u/s. 14A to be adjusted in MAT income computed u/s. 115JB – Held that:- Reliance has been placed upon the judgment in the case of Reliance Petro Products Pvt. Ltd vs. ACIT [2013 (10) TMI 1001 - ITAT AHMEDABAD]., wherein the decision of the Apex Court has been followed in the case of Apollo Tyres Ltd. Vs. CIT [2002 (5) TMI 5 - SUPREME Court] - The Coordinate bench decided the identical issue in case of Reliance Petro Products Pvt. Ltd. in favour of the assessee by following the decision of the Hon. High Court in case of Apollo Tyres Ltd. Respectfully, following the decision of Apex Court on this issue, upheld the order of the CIT (Appeals) and dismissed the appeal of the revenue – Addition is deleted – Decided against the Revenue.
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Customs
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2013 (10) TMI 1056
Import of crude oil - Concessional rate of duty under Notification No. 81/202-Cus - Forged manufacturing of soap - Held that:- DGCI on investigation on 15.2.2005 found that no machine was available for manufacture of soap nor any raw material or finished goods existed. So also, that one Shri Subhash Kumar, partner of the appellant M/s. Kesar Soap Mills was running a soap factory under the name and style of Tripti Soap & Chemicals but that was also found to be non-existent. The Authority tested retirement of Shri Surinder Kumar from the firm M/s. Kesar Soap Mills w.e.f. 9.3.2004 which proved to be false. Statement of Shri Surinder Kumar was recorded on 23.12.2006 who totally denied existence of the factory, carrying out of any manufacture and existence of record which proved that the appellant firm was only a bubble to defraud revenue. There was no certificate of Pollution Control Board to show even any step taken for setting up of the manufacturing concern - Various materials gathered in the cause of investigation proved that there was no purchase of caustic soda. There was no manufacture at all - When there was no basic evidence of existence of the factory nor any operation carried out, it is difficult to grant any relief to the appellants - Decided against assessee.
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2013 (10) TMI 1055
Suspension of license of courier business - Committee constituted for investigation - Held that:- The order of suspension of licence of M/s. Fast & Economic Courier is hereby revoked temporarily subject to the outcome of inquiry report and the party is allowed to resume the work, for the time being. This order will not be taken as a precedence in any other case. This order is issued without prejudice to any other action that may be issued against M/s. Fast & Economic Courier or any other person(s) concerned under the Customs Act, 1962, or any other law for the time being in force - Decided in favour of assessee.
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2013 (10) TMI 1054
Order of suspension of the appellant's CHA license - Held that:- A close reading of the provisions of Regulation 20 (2) of the Customs House Agents Licensing Regulations, 2004 ('CHALR') disclose that the power to direct immediate action is confined to taking it within 15 days from the date of receipt of a report from the investigating authority whereas in this case the report of the investigating agency was received on 09.03.2011 concededly the Commissioner did not seek recourse to the power under Regulation 20 (2). The immediacy or urgency of the situation was allowed to lapse and eventually the Commissioner issued the suspension order on 10.10.2011. The net result is that where immediate suspension is called for, the Commissioner has to take swift action and cannot wait and if he does so suspension can be made only after the full inquiry is held as provided by Regulation 22. In this case the final report of the inquiry was made on 07.05.2012 and the appellant was issued with a show-cause notice on 05.06.2012 - the suspension order impugned in this case cannot be sustained and the authorities are, however, at liberty to proceed with the inquiry and pass any order in accordance with law - Following decision of Schankar Clearing & Forwarding v. C.C. (Import & General) [2012 (8) TMI 760 - DELHI HIGH COURT] - suspension set aside and quashed.
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2013 (10) TMI 1053
Imposition of 50% duty on wheat by issuing notification u/s 8A of Customs Tariff Act, 1975 - Validity of Notification No.127/99-Customs - Import of wheat falling under Customs Tariff Sub-heading 1001.90 of Chapter X of the Customs Tariff Act, 1975 from Australia - Held that:- It is not the case that the increased rate of duty is payable when only there is a "Nil" rate and not when there is Free rate of duty. We may note that under Section 25 of the Customs Act, the Government has the authority to grant exemption from duty only conditionally or in absolute terms and in which event, the power under Section 25 of the Customs Act will only go for exempting generally and in absolute terms, thus making import free of any liability under the Act or permit import, subject to such conditions as it may deem fit in the given circumstances - there could not be much of difference in an item being notified under the Customs Tariff Act as 'Nil" or "Free". As already pointed out, the Central Government has power under Section 8A of the Customs Tariff Act to increase the rate of duty in respect of goods falling under First Schedule. It matters very little whether the same is on "Nil" or "Free" rate of duty - Following decision of Associated Cement Companies Limited. Vs. Commissioner of Customs [2001 (1) TMI 248 - Supreme court of India] - Decided against assessee.
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2013 (10) TMI 1052
Condonation of delay - delay of 309 days - Hed that:- The Court cannot be oblivious to the fact that departmental appeals involve unavoidable procedural delays by reason of pushing of files from one authority to the other, obtaining of the requisite clearances and the like, and a month’s time for preparation of the appeal and connected ground work for filing the appeal is not unreasonable - Tribunal ought to have taken a more liberal approach. The impugned order is, thus set aside and quashed. The appeal shall be taken on file notwithstanding the delay of 309 days. The delay is condoned. It is, however, made clear that this Court expresses no opinion whatsoever on the merit of the appeal or of the maintainability of the appeal otherwise and it will be open to the parties to take all points before the learned Tribunal including the question of maintainability of the appeal - Decided in favour of Revenue.
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2013 (10) TMI 1051
Benefit of Notification NO. 25/99-Cus - Import of CD Pick up lens unit - Held that:- According to the respondent the goods when imported are for actual use of the respondent to make CD mechanism those were parts thereof only. - assessee relied upon its own case [2008 (8) TMI 269 - CESTAT NEW DELHI]. It is necessary to examine the description of the goods in all the bills of entry individually as enumerated in annexure ‘A’ to the show cause notice dated 4.6.2004 to reach to the conclusion as to whether the goods so imported by the respective bills of entry were parts of CD deck mechanism or otherwise as well as the motive behind the imports. - Decided in favour of Revenue.
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Corporate Laws
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2013 (10) TMI 1050
Compromise and Arrangement u/s 391 to 394 of Companies Act – Sanction of Scheme – Held that:- No objection had been received to the Scheme of Amalgamation from any other party - Director of the Petitioner/Transferor Company, had filed an affidavit confirming that neither the Petitioner Company nor its Legal Counsel had received any objection pursuant to citations published in the newspapers. In view of the approval accorded by the Shareholders and Creditors of the Petitioner/Transferor Company, representation/reports filed by the Regional Director and the Official Liquidator, attached with this Court to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation - sanction was granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956 - The petitioner/Transferor Company will comply with the statutory requirements in accordance with law. Certified copy of the order will be filed with the Registrar of Companies within 30 days from the date of receipt of the same. In terms of the provisions of Sections 391 and 394 of the Act, and in terms of the Scheme, the whole of the undertaking, the property, rights and powers of the Petitioner/Transferor Company be transferred to and vest in the Transferee Company without any further act or deed - all the liabilities and dues of the Petitioner/Transferor Company will be transferred to the Transferee Company without any further act or deed - the order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law, or permission/compliance with any other department which may be specifically required under any law - The Transferor Company shall stand dissolved without following the process of winding up – Petition was allowed.
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Service Tax
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2013 (10) TMI 1063
Service for providing the "cash van" Provided to Bank and Financial Institution - Scope of 'service' u/s 65 (105) (105) (W) of Finance Act – Waiver of Pre-deposit - Tribunal rejected the stay application - Held that:- The Tribunal was not sure pertaining to the fact that the services provided to the Bank and Financial Institutions is a taxable service or not - Appellant submitted that they are going to close the business of the appellants due to this demand - the tax can be collected like a honeybee but without damaging the flower – Relying upon Assistant Collector, Central Excise vs. Dunlop India Ltd. & Ors. [1984 (11) TMI 63 - SUPREME Court] – Appellant is directed to deposit seventy five lakhs rupees as pre-deposit – Upon such submission rest of the duty to be waived till the disposal – Partial stay granted.
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2013 (10) TMI 1062
Rejection of appeal by the Commissioner (Appeal) as the same is not filed correctly or verified correctly - Non hearing of matter - Commissioner acknowledged receipt of complaint - Held that:- first appellate authority has not considered the entire issue in its correct perspective. In our view, the covering letter dated 27.05.11 wherein an acknowledgment of the office of the Commissioner (Appeals) is indicated is their own person’s signature. The covering letter may not be signed by the authorised signatory of the appellant but the appeal papers which were annexed with such letter, a copy which is placed in our records, indicates that the appeal memoranda and the verification have been signed by the appellant’s authorised signatory. If that be so, the appeal in our view was correctly filed before the first appellate authority. As indicated hereinabove, we are of the view that the first appellate authority is acknowledging the receipt of letter dated 05.60.13 from the appellant; but does not consider to check with his department, as much as the said letter specifically indicates that the copy of the letter was forwarded to the Additional Commissioner, Service Tax, Ahmedabad. Suffice to say that he could have verified the facts, merely writing or informing the appellant that his appeal cannot be heard as his appeal was not received, seems to be incorrect proposition of the law and not in accordance with the provisions of the Finance Act, 1994. In our view, there seems to be some gap in the office of the Commissioner (Appeals) which needs to be rectified by his office - first appellate authority should direct appellant to reconstruct the appeal if the same is not traced in his office, which observation is due to the fact that the appellant has been able to show us copies of the ST-4 appeals which were signed by their authorised signatory - Decided in favour of assessee.
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2013 (10) TMI 1061
Mandap Keeper Services – Waiver of Pre-deposit - Held that:- The issue involved in the case was regarding the differential service tax liability under the category of mandap keeper services - The appellant was offering a package to the corporate for holding conferences in their resort by giving them special tariff rates - According to the department such a room rent can be bifurcated into room rent, and food charges can be covered under mandap keeper service - The issue involved in this case was arguable and debatable one - the amount deposited by the appellant was enough deposit to hear and dispose the appeal on merits - application for the waiver of pre-deposit of the balance amounts involved was allowed and recovery stayed till the disposal of appeal – Stay granted.
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2013 (10) TMI 1060
Right to use Software – Extended Period of Limitation - Waiver of Pre-deposit – Revenue was of the view that the appellant transferred the right to use the software for a limited period through internet and the same is activated through activation keys - Held that:- The sample invoices provides which shows that the software was sold in the form of CD only and they were back-to-back orders and the software were purchased and the same was sold - Further VAT was also discharged on such transactions - the entire demand was barred by limitation since whole amount demanded was by invoking extended period only - Ongoing through the records, we find that the claims that was made what had taken place was the sale of software only and therefore the least that can be said was extended period could not have been invoked appeared to be correct - In view of these observations, we consider that appellant has made out a prima facie case for pre-deposit and stay - Accordingly, there shall be waiver of pre-deposit and stay against recovery during the pendency of appeal – Stay granted.
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2013 (10) TMI 1059
Waiver of Pre-deposit - Overseas Agency - The applicant is an overseas agency and had rendered services - Assessee submitted that during the course of hearing before the Ld. Commissioner (Appeal), they have deposited an amount of Rs.4.00 Lakhs in compliance with the direction of the Ld. Commr. (Appeals) issued under Section 35F of CEA, 1944 as applicable to Service Tax cases - the amount is sufficient for hearing of their appeal - In these circumstances, pre-deposit of the balance dues adjudged is waived and its recovery stayed during the pendency of the appeal – stay granted.
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2013 (10) TMI 1058
Eligibility to CENVAT Credit – Held that:- As regards issue of availability of cenvat credit in respect of invoices received prior to service tax registration – Following M/s. Reliance Ports and Terminals Ltd. vs. CCE, Rajkot [2013 (6) TMI 338 - CESTAT AHMEDABAD ] cenvat credit taken on the invoices received prior to service tax registration, cannot be denied on the ground that the assessee was not registered during the relevant period - The appellant have prima facie a good case in respect of this issue. Housekeeping Service Charges – Held that:- As regard eligibility of cenvat credit in respect of housekeeping services and hotel service charges provided in the residential colony which is outside the office premises, the issue is arguable in nature and will be decided at the time of regular hearing of the appeal - stay granted partly.
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Central Excise
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2013 (10) TMI 1049
Condonation of Delay – Delay of 11 years and 227 days – Held that:- The Central Excise Department has been grossly negligent in pursuing the matter - The order of CEGAT allowing the appeal of the assessee and dismissing the appeal of the department was passed on 28.5.1999, against which a Special Leave to Appeal was filed before the Supreme Court, which was dismissed as withdrawn to file writ petition in the High Court - The department was well aware that the writ petition was not maintainable against the order and that a reference could be made for which an application had to be filed before the Tribunal - Instead of filing an application for reference, the department filed a writ petition in the High Court, which was admitted on 2.1.2002 - The writ petition was dismissed for want of prosecution on 11.10.2006 - A restoration application was filed with delay of 3 ˝ years in July, 2009 - When the matter came up for hearing, the Court found that the writ petition of the Central Excise Department against the order of the CEGAT was not maintainable - The Court dismissed the writ petition on 3.5.2010 on the ground of alternative remedy to file reference under the Central Excise Act - The department instead of approaching the Tribunal for making reference under Section 35 G (1) filed a reference directly in the High Court with delay - In the process more than 11 years time was consumed in challenging the order of CEGAT. The Central Excise Department has been grossly negligent in pursuing the matter - It filed appeal in the Supreme Court, which was not maintainable and thereafter a misconceived writ petition, which was dismissed on the ground of alternative remedy - In the process the department has consumed 11 years and 227 days within which the assessee must have arranged his financial affairs, which need not be disturbed at such distance of time - the delay condonation application rejected – Decided against Petitioner.
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2013 (10) TMI 1048
Appeal u/s 35-B – authorisation by the Committee of Commissioners - CESTAT dismissed the appeal filed by revenue observing that, this is another occasion that has come to notice where review order appearing at pages 4 to 10 of appeal folder indicates that while that order was authenticated by one of member Commissioner of the committee on 23.06.2005, the other member authenticated on 24.06.2005. There was no ad idem on the same date either on 23.06.2005 or 24.06.2005 - Held that:- The opinion of the Board of Commissioner of the Central Excise under Section 35B is not justiceable on merits in Court - The opinion to be formed by the Board of Commissioners is a prima facie opinion and is not conclusive in nature which may be subject to challenge by the assessee on merits - If such an order is subjected to judicial review, it may give rise to taking ground to be agitated in almost every case and will cause unnecessary delay in disposal of the appeals under Section 35B of the Act. The orders passed by the designated authorities, by which the department authorises an appeal to be filed, is to avoid the filing of frivolous and unnecessary appeals - Such an order may be challenged, like a sanction in a criminal case only on the ground of non-application of mind, absence of material on which the mind has been applied by the authority, and lack of bonafides - The merit of the order of the Committee of Commissioner of Central Excise granting approval may not be subjected to challenge, as the appeal in any case has to be considered and decided on merit by the Appellate Authority on merits under Section 35B of the Act – Matter remanded back to CESTAT to decide the appeal. - Decided in favor of revenue.
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2013 (10) TMI 1047
Valuation - inclusion of Freight Charges in the Assessable Value - for the purpose of VAT freight was included in the value - Whether freight charges which are shown separately in the invoices and reimbursed by the Customer are to be included in the assessable value of the goods or not – Held that:- Following Commissioner of Central Excise v/s. Bharat Conductors [2009 (11) TMI 711 - CESTAT NEW DELHI ] - the Commissioner(Appeals) allowed the assessee's appeal and held that where the goods are sold at the factory gate and the freight is incurred for carriage of the goods, which is subsequently reimbursed by the customer under a separate contract is not includable in the assessable value of the goods sold by the assessee to its customers. The order holds that as the freight is included in the value of goods for payment of VAT, it must be included also for arriving at the value of the goods for purposes of the Act is not appropriate - Both the levies are different and the assessable value for purpose of excise must be only in terms of the Act alone and not on the basis of VAT Act - The regime under the Act is transaction value and each transaction is to be separately assessed depending upon the terms of the contract and the time the ownership in goods is passed - the Tribunal ought to have heard the appellant without insisting on any pre-deposit of duty - the order modified and the requirement to pre-deposit deleted - The Tribunal is directed to hear the appellant's appeal on merits without insisting on any pre-deposit – stay granted.
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2013 (10) TMI 1046
100% EOU – Cenvat credit as per Rule 3(7)(a) of CE Rules – Waiver of Pre-deposit - Revenue was of the view that the appellant was required to take credit calculated in terms of Rule 3(7)(a) of the Credit Rules as prevalent during the period – Held that:- The contentions raised by the appellant prima facie raise an inference that there is an arguable point, particularly, when the account books and documents were audited and checked in 2008 by the respondent-Department and no discrepancy was detected - The question whether the respondents are justified in invoking the extended period of limitation, is a matter to be determined in appeal - the question whether the appellant has suppressed facts from the Department or evaded payment of duty, are other factors that would require consideration by the Tribunal - the appellant directed to deposit 50% of the amount of duty as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.
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2013 (10) TMI 1045
Coercion While Initiation of Recovery Proceedings – Validity of Circular dated 1-1-2013 – Held that:- Relying upon LARSEN & TOUBRO LTD & OTHERS V/s UNION OF INDIA AND OTHERS [2013 (2) TMI 188 - BOMBAY HIGH COURT] - If the remedy of appeal has been provided to the assessee with the application of interim relief in the form of stay application either u/s. 35F of the Central Excise Act or relevant provisions of the cognate Act, if any, and the appellate authorities if failed to decide the stay application only after affording opportunity of hearing to the parties - recovery proceedings could not be permitted to be initiated by adopting coercive methods by the Department under the guise of Circular dated 1-1-2013 - it is high time where the respondents are expected to adopt the procedure so that the grievance of such of the assessee is redressed and coercive methods could be deferred - The appellate authorities/CESTAT directed to hear and decide the stay application filed along with the appeal as early as possible and till then the Department should be restrained from adopting any coercive method for recovery in pursuant to the order from the assessee petitioners – Decided in favour of Petitioner.
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2013 (10) TMI 1044
Activity Manufacture OR Not – Waiver of Pre-deposit - Appellant prepared branded Motor spirit and branded HSD in their depots by blending duty paid Motor spirit and duty paid HSD with Multifunctional additives (MFAs) –Held that:- Following Hindustan Petroleum Corporation Ltd. Vs. CCEx., Delhi & Rohtak [2008 (9) TMI 154 - CESTAT, NEW DELHI] - Blending of MS/HSD with MFA to make branded MS/HSD which sell at a premium only improves the quality of the product, and this process, would not amount to manufacture – Prima facie the applicants are able to make out a 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.
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2013 (10) TMI 1043
Eligibility of Cenvat Credit – Waiver of Pre-deposit of Penalty under Rule 15 (2) of CC Rules, r.w Section 11AC of CEA - Held that:- Following Vandana Global Ltd. Versus CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - The Tribunal has been taking a consistent view allowing the stay application of the assesses where extended period of limitation is invoked and directed pre-deposit where normal period is involved – thus the applicant is directed to deposit 25% of the demand involved for normal period – upon such submission balance dues would stand waived and its recovery stayed during the pendency of the appeal – Partial stay granted.
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2013 (10) TMI 1042
Benefit of SSI Exemption Notification No.8/2003 – Clubbing of clearance - allegation of creation of another dummy company - Waiver of Pre-deposit - Held that:- The Commissioner has already confiscated the Indian Currency on the ground that the same are related to sale proceed of goods manufactured and cleared by the applicant for the period from 2003 to 2007 - Prima-facie, the Department could not produce sufficient evidences to link the said currency found in the premises of the appellant to the sale proceeds of goods manufactured and cleared by the applicant, for a long period of four year and spreading from 2003 to 2007 - keeping in view that the total demand of duty lying with the Department, the Applicant is directed to deposit Rs.20.00 lakhs as pre-deposit – upon such submission the balance dues against all the applicants would stand waived and its recovery stayed during pendency of the appeals – Partial stay granted.
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2013 (10) TMI 1041
Exemption claim on specially designed transformers which was avaialable - Exemption under Notification No.6//06 – Waiver of Pre-deposit - Held that:- The statement of Shri Balakrishnan that applicant in some cases claimed the benefit of exemption and in other cases, they have paid duty - Thus there is factual dispute on this issue which will be examined at the time of appeal hearing – we are not impressed by the submission of learned consultant in respect of time-bar - It is not clear as to whether applicant has informed the department about availment of benefit of exemption and payment of duty in both the cases - We have also noticed the submission of Ld. counsel that since March 11 they are paying duty on all consignments of transformers – the applicant failed to make out prima facie case for waiver of pre-deposit of entire amount of duty along with interest and penalty - the applicant is directed to deposit amount as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted.
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2013 (10) TMI 1040
Scope of Notification No. 28/2010 exempting eduction cess to the goods falling in Tenth Schedule of Finance Act, 2010 – Exemption post levy of Clean Energy Cess - Waiver of Pre-deposit - Revenue was of the view that Cess is leviable as a percentage of Excise duty and the exemption notifications issued are not applicable to the Cess leviable as a percentage of Central Excise duty – Held that:- Education Cess is leviable under Sections 91 & 93 of the Finance Act, 1994 - All the goods specified in the Tenth Schedule are exempted from Education Cess under the Notification Nos. 28/2010 and 29/2010 and this exemption cannot be applicable only to the cess leviable as a percentage of C.E.C. since no such differentiation has been made - even after Excise duty was introduced on Coal in the Finance Act, 1994, this notification has been left un-amended - Following Commissioner of Cus. & C. Ex., Shillong vs. Dharampal Satypal Ltd. [2011 (8) TMI 99 - GAUHATI HIGH COURT ] - the levy and calculation of Education Cess is independent of levy of Excise duty - it is not necessary that when Excise duty is levied, Cess is consequently leviable and vice versa - the appellant has made out prima facie case in their favour for eligibility of exemption from Education Cess - there shall be waiver of pre-deposit and stay against recovery of dues during pendency of the appeal – Stay granted.
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CST, VAT & Sales Tax
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2013 (10) TMI 1064
Sales tax liability - Whether the cutting tool i.e. "drill bits" is exigible to tax under Entry No. 52 of Schedule-I of the Karnataka Tax on Entry of Goods Act, 1979 - Held that:- High Court ought not to have entertained the petitions and expressed its opinion. We say so, for the reason that under the Act, a dealer is given an opportunity to move before the Commissioner of Commercial Taxes and seek for a clarification. The clarification that may be sought is with regard to the exigibility of the goods in question under the Act. Instead of resorting to this mode and the method, the petitioner had chosen to approach the High Court for a declaration - petitioner has paid the entry tax on "drilling bits" for the assessment years 2005-2006 to 2009-2010. Insofar as those assessment years are concerned, he is not seeking any relief. Now, he only seeks permission of this Court to raise the contention for the subsequent years of assessment that the "drilling bits" are not exigible to the entry tax for the reason that they are 'consumables' before the AO - permission granted - Decided in favour of assessee.
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Indian Laws
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2013 (10) TMI 1057
Scope of the Definition of Public Authority u/s 2(h) RTI Act - Whether a co-operative society registered under the Kerala Co-operative Societies Act, 1969 will fall within the definition of “public authority” under Section 2(h) of the Right to Information Act, 2005 and be bound by the obligations to provide information sought for by a citizen under the RTI Act – Held that:- The Cooperative Societies registered under the Kerala Co-operative Societies Act will not fall within the definition of “public authority” as defined under Section 2(h) of the RTI Act and the State Government letter dated 5.5.2006 and the circular dated 01.06.2006 issued by the Registrar of Co-operative Societies, Kerala, to the extent, made applicable to societies registered under the Kerala Co-operative Societies Act would stand quashed in the absence of materials to show that they are owned, controlled or substantially financed by the appropriate Government Co-operative Societies and Article 12 of the Constitution - Whether the Co-operative Societies will fall within the expression “State” within the meaning of Article 12 of the Constitution of India – Held that:- Societies are, of course, subject to the control of the statutory authorities but cannot be said that the State exercises any direct or indirect control over the affairs of the society which is deep and all pervasive - Supervisory or general regulation under the statute over the co-operative societies, which are body corporate does not render activities of the body so regulated as subject to such control of the State so as to bring it within the meaning of the “State” or instrumentality of the State - General regulations under an Act, like the Companies Act or the Cooperative Societies Act, would not render the activities of a company or a society as subject to control of the State - the Co-operative Societies will not fall within the expression “State” or “instrumentalities of the State” within the meaning of Article 12 of the Constitution and hence not subject to all constitutional limitations as enshrined in Part III of the Constitution. Constitutional provisions and Co-operative autonomy - Rights of the citizens to form co-operative societies voluntarily, is now raised to the level of a fundamental right and State shall endeavour to promote their autonomous functioning - Co-operative society is a state subject under Entry 32 List I Seventh Schedule to the Constitution of India - Co-operative society is essentially an association or an association of persons who have come together for a common purpose of economic development or for mutual help. BURDEN TO SHOW - The burden to show that a body is owned, controlled or substantially financed or that a non-government organization is substantially financed directly or indirectly by the funds provided by the appropriate Government is on the applicant who seeks information or the appropriate Government - the categories mentioned in Section 2(h) of the Act exhaust themselves, there is no question of adopting a liberal construction to the expression “public authority” to bring in other categories into its fold, which do not satisfy the tests - Court cannot, when language is clear and unambiguous, adopt such a construction which, according to the Court, would only advance the objective of the Act - the opening part of the definition clause which states “unless the context otherwise requires” - No materials have been made available to show that the cooperative societies, with which we are concerned, in the context of the Act, would fall within the definition of Section 2(h) of the Act – Decided in favour of Petitioner.
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