TMI Tax Updates - e-Newsletter
October 26, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Whatever may be the reason for confirming part of the amount in assessment, the same does not automatically lead of levy of penalty u/s. 271(1)(c). Assessee can question the addition itself in penalty proceedings so as to justify non-levy of penalty. - AT
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Income Tax:
Addition u/s 68 - The loan was also repaid back before the initiation of assessment proceedings - Mere non compliance of summon cannot be the basis to make addition. - AT
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Income Tax:
Demand of the differential TDS @20% - in case the PAN is invalid or does not belong to the said person by virtue of deeming fiction, it has been stated that he has not furnished his PAN to the deductor - AT
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Income Tax:
Registration u/s 12AA and exemption u/s 80G denied - non charitable activities - The service charges were mainly from big companies and, therefore, when these companies have contributed towards the programme carried out by assessee, it cannot be said that activities of assessee-society were not genuine. - AT
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Income Tax:
Penalty u/s 271(1)(c) - price charged by the assessee in international transactions have not been computed in accordance with the provisions contained in section 92C - levy of penalty confirmed - AT
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Customs:
Deemed export - the electric power (electricity) is a "consumable" as per para 9.15 of FTP - the petitioner is entitled to have deemed export benefit for its supply from DTA Unit to 100% EOU unit - HC
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Customs:
Imposition of Fiscal; penalty - SEZ - achieving of minimum value addition which was a part of the condition contained under the letter of permission - authorities ought to have considered well recognized doctrine of proportionality - matter remanded back - HC
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Service Tax:
If at all, the service tax paid by a sub-contractor which becomes part of service further provided by the main contractor, the scheme of credit as envisaged by the Cenvat Credit Rules, 2004 will come into play subject to fulfillment of conditions therein. It is nobody s case that the sub-contractors per-se are not liable to service tax even if they rendered taxable service. - AT
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Service Tax:
Works contract service - unless it is proved that the work has not commenced etc., before 07.07.2009, the appellants will be entitled to the benefit of unamended provisions. - AT
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Central Excise:
Levy of education cess and secondary and higher education cess - powers of the central government - business of exploration, development and production of crude oil and natural gas - production sharing contract - production of crude oil - levy of cess upheld - HC
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Central Excise:
MRP based valuation or Transaction value - supply of Cement - industrial/ institution consumers - the sale being direct without any intermediary involved, the criteria for retail sale has not been fulfilled. - AT
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VAT:
Whether tax credit paid on purchases of Oxygen Gas and LPG used in cutting hull of the ship during ship breaking/scrapping process is admissible - Held Yes - HC
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VAT:
Levy of Penalty - Best judgment assessment - Period of limitation - When a specific contention is raised regarding limitation, it is for the respondents to justify the same by producing all necessary materials - penalty set aside - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (10) TMI 852
Levy of penalty u/s. 271(1)(c) - unexplained investment - Held that:- Whatever may be the reason for confirming part of the amount in assessment, the same does not automatically lead of levy of penalty u/s. 271(1)(c). Assessee can question the addition itself in penalty proceedings so as to justify non-levy of penalty. Considering the fact that these assets are acquired much earlier and assessee has shown them as opening balance only, in our opinion the mere addition of part of the amount does not attract penalty for concealment. Considering these facts of the case the penalty u/s. 271(1)(c) is not warranted. Accordingly, the same is set aside. - Decided in favour of assessee
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2016 (10) TMI 851
Addition u/s 68 - Addition on loan and advances - Held that:- As during the course of assessment proceedings, the assessee filed Confirmation, ITR, Computation of income, Bank statement, and Balance Sheet as on 31.03.2008 of the lender and the payment were made through the loan was also repaid back before the initiation of banking channels. The loan was also repaid back before the initiation of assessment proceedings. It was noted that the AO did not make any specific enquiries in the assessment proceedings as well as in the remand proceedings to discredit the documents produced by the aforesaid aspects and no efforts were made to pursue the lender to determine their credit worthiness. Moreover, there was no adverse material in the hands of AO which casts aspersions on the genuineness of transaction. Mere non compliance of summon cannot be the basis to make addition. - No additions - Decided against revenue Addition on loan and advances - Held that:- since the amount advanced was in the nature of loan which was repayable in future and hence the provision of section 56(2)(vi) of the Income Tax Act cannot be invoked against the assessee and therefore the assessing officer was rightly directed to delete the impugned addition. In the background, CIT(A) has passed a well reasoned order which does not need any interference hence uphold the same
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2016 (10) TMI 850
Short deduction of tds - Demand of the differential TDS @20% - incorrect pan number furnished - Held that:- Primary onus is on the person entitled to receive income on which tax is deductible at source to furnish his PAN and in case such PAN is invalid or does not belong to the said person by virtue of deeming fiction, it has been stated that he has not furnished his PAN to the deductor. In such a scenario, the onus shifts on the person responsible for deducting the tax that he shall deduct the tax at the rate specified in the relevant provisions of the Act or at the rate of 20% whichever is higher. In the instant case the PAN number of Shri Lala Ram was found to be incorrect by the AO hence the AO applied the rate of 20% as against rate of 2% provided under section 194C of the IT Act. The assessee has mentioned that they have tried to contact Shri Lala Ram but he could not provide his correct PAN No. and that’s why the assessee could not file the correction statement. In our view even though the primary onus is on Shri Lala Ram to furnish his correct PAN number to the assessee, what is equally important is that the assessee should verify at the time of making payments or at the time of credit in his books of accounts where Shri Lala Ram has submitted his correct PAN number. In the instant case, the assessee has failed to discharge its obligation to verify the correct PAN and it is only at the time of processing of the TDS return that the department has noticed the submission of incorrect PAN number and thereafter raised the impunged demand. What is important is that the exercise to file TDS returns should be such that it contains correct and accurate data and it is only then that the processing of such data has can happen properly and credit can be given to the income recipient. Given the non-obstante nature of provisions as contained in section 206AA(1) of the Act which overrides section 194C of the Act, we do not see any infirmity in the order of the AO in raising demand of the differential tax that the assessee should have deducted by virtue of submission of incorrect PAN by Shri Lala Ram. At the same time, the assessee shall be at liberty to recover the said amount from Shri Lala Ram. With the above observations the ground taken by the assessee is disposed off. - Decided against assessee
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2016 (10) TMI 849
Registration u/s 12AA and exemption u/s 80G denied - non charitable activities - To Promote safety and the prevention of accidents in all areas of life at work at leisure on the road, in the home and through safety education in schools, institutions work places and all other locations - Held that:- DIT(E) has to satisfy himself about the object of the trust and the genuineness of its activities. From the order passed by ld. DIT(E) it is evident that she is not disputing that objects of the society are charitable in nature as she herself has said that the activities carried out by assessee were covered under fourth limb of section 2(15) viz. advancement of any other object of general public utility. At this juncture we may observe that we are not recording any findings as to under which limb of section 2(15) the assessee’s activities fell, because at this juncture we have only to examine whether the activities carried on by assessee are charitable in nature or not. This is not disputed by ld. DIT(Exemption). We may also clarify that as far as ld. DIT(E)’s finding regarding applicability of proviso to section 2(15) is concerned, we are not inclined to accept the same for the simple reason that assessee had received service charges from various organizations for conducting the programme and this cannot par take the character of business by any stretch of reasoning. Be that as it may, this cannot be basis for denying registration as it is nowhere so contemplated in the Act. Aassessee has filed copy of ledger account of service charges received. These service charges were mainly from big companies and, therefore, when these companies have contributed towards the programme carried out by assessee, it cannot be said that activities of assessee-society were not genuine. These companies must have sponsored only after considering their social responsibilities towards public at large. Further, we find that in paper book, assessee has also annexed various reports on its activities, which have not adversely been commented by ld. DIT(E). Photographs annexed in paper book show that various programmes were being conducted and people were listening to various speakers. Therefore, the assessee-society was carrying out the activities for which it was incorporated. Hence, genuineness of activities stands established. Thus, twin ingredients of section 12AA being satisfied, we do not find any basis for denying registration to the society and, therefore, we direct ld. DIT(E) to grant registration as the assessee fulfills the basic requirements for grant of registration u/s 12AA of the Act. As we have directed for grant of exemption u/s 12AA, we also direct for grant of registration u/s 80G as the sole basis for denying the exemption u/s 80G was not granting of registration u/s 12AA - Decided in favour of assessee
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2016 (10) TMI 848
Penalty u/s 271(1)(c) - price charged by the assessee in international transactions have not been computed in accordance with the provisions contained in section 92C - Held that:- A reading of the provisions of Explanation-7 to section 271(1)(c) of the Act (supra), provide that where in the case of an assessee who has entered into an international transaction, defined in section 92B, any amount added or disallowed in computing the total income under section 92C(4), then for the purposes of section 271(1)(c) of the Act, such addition or disallowance is deemed to represent income in respect of which particulars have been concealed or inaccurate particulars have been furnished. In our view the facts of the case on hand would clearly attract the application of Explanation-7 for levy of penalty under section 271(1)(c) of the Act for furnishing of inaccurate particulars by the assessee leading to concealment of income. Explanatoin-7 to section 271(1)(c) further provides that the penalty thereunder is to be levied, unless the assessee proves to the satisfaction of the authorities below that the price charged in such transactions was computed in the manner prescribed, in good faith and with due diligence. In the case on hand, we concur with the finding rendered by the learned CIT(A) in the impugned order, that the price charged by the assessee in international transactions referred to in this order have not been computed in accordance with the provisions contained in section 92C of the Act, nor in the manner provided thereunder or in good faith and with due diligence. Thus we uphold the levy of penalty under section 271(1)(c) of the Act by the learned CIT(A). - Decided against assessee
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2016 (10) TMI 847
Validity of assessment u/s 153A - follow of procedures - Held that:- Assessing Officer has not followed the procedure while following the incorrect provisions of law under Section 153A of the Act which is not applicable in the assessee’s case as the assessee was not in existence at the relevant time. As per Section 153A of the Act, assessment u/s 153A of the Act can be completed only in the case of such person where the warrant u/s 132 of the Act has been executed as held by Hon’ble Punjab and Haryana High Court in case of CIT vs. Ram Singh (2013 (3) TMI 177 - PUNJAB & HARYANA HIGH COURT). The Hon’ble High Court held that An illegal is no search and as necessary corollary in such a case, Chapter XIV-B would have no application. As regards the mention of the individual in the notice cannot be taken as mistake and the mistake is not curable u/s 292BB or 292B as Section 292BB of the Act is applicable from A.Y. 2008-09. The participation in the assessment will not be treated as estoppel against the law established. As held in case of CIT Vs. Spice Infotainment Ltd. (2011 (8) TMI 544 - DELHI HIGH COURT ) consent cannot confer jurisdiction. It is pertinent to note that CIT(A) has taken into account all the aspects about the proceedings conducted u/s 153A of the Act. Then he has also given the finding in respect of how the proceedings were conducted in assessee’s case. The CIT(A) allowed all the five grounds of the assessee company while holding that no valid notice u/s 153A of the Act was issued. Thus, the CIT(A) is right in allowing the appeals of the assessee.
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2016 (10) TMI 846
Treatment to amount on account of interest on FDRs to be 'income from other sources' - nature of income - Held that:- As decided in Jaypee DSC Ventures [2011 (3) TMI 309 - Delhi High Court ] the bank guarantee was furnished as a condition precedent to entering into the contract and further it was to be kept alive to fulfil the obligations - interest earned by the assessee on the FDRs has intrinsic and inseggregable nexus with the work undertaken and, therefore, the interest earned by the assessee is capital in nature and shall go towards adjustment against the project expenditure and the same cannot be assessed as income from other sources - Decided in favour of the assessee
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2016 (10) TMI 845
Addition u/s 40A(3) - making expenditure in cash - Held that:- The payment made by the assessee retail vendor to the Principal, Government of West Bengal through its wholesale agent. The relationship between the assessee (authorized retailer) and Government of West Bengal (the supplier) acting under West Bengal Excise Rules through its Authorised Wholesaler Licensee (Agent), both defacto and dejure, is one of 'Principal' and 'Agent'. We hold that the assessee retail vendor had made payment to the said agent (wholesale licensee) would fall under the exception provided in Rule 6DD(k) of the Rules - Decided in favour of assessee
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2016 (10) TMI 844
Addition u/s 68 - peak credit theory - Held that:- It is not in dispute that the assessee’s income either in the earlier year or in subsequent years has never crossed the threshold of ₹ 2 lakhs in which event the Assessing Officer could have kept the same in mind while making the addition. Even while computing the assessment to the best of his judgment, under section 144 of the Act, it is the duty of the Assessing Officer to make an addition on the basis of the available material and circumstances of each case. Judgement is a faculty to decide the matters with wisdom, truly and legally and it should not depend on the arbitrary caprice of an officer. In otherwords, though an element of guess work is involved in best judgement it should not be a wild one, as held by the Hon’ble Supreme Court in the case of State of Kerala vs. Velukutti [1965 (12) TMI 32 - SUPREME Court]. In the instant case, the Assessing Officer ought to have taken into consideration the normal turnover of the assessee, the expected profit in each year, based on the earlier year’s income declared and accepted in order to estimate the income of the current year; while holding that there was some undisclosed income assessable to tax under section 68 of the Act. The assessee having furnished the bank statement Assessing Officer could have verified and noticed that there were credits and corresponding debits which would give an indication that some amount has been recycled and it is a settled principle that in such cases ordinarily, peak credit is taken into consideration for the purpose of making an addition. On a conspectus of the matter, we are of the view that an addition of peak credit would meet the ends of justice. We, therefore, direct the Assessing Officer accordingly.
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2016 (10) TMI 843
Unexplained investment - acceptance of revised return offering the total income - Survey operations - Held that:- Even though statements were recorded from assessee enquiring about various investments, assessee has voluntarily offered higher income for AY. 2005-06 at ₹ 10,55,100/- and filing of revised income is within the time limits permitted. - AO directed to accept the total income for the impugned assessment year as declared in the revised return which should justify the higher income offered by assessee and also cover the investments made in various other assets, including money lending activity considered by AO. - Decided partly in favour of assessee
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2016 (10) TMI 842
Loss from trading in commodities - whether is a speculative transaction within the meaning of Explanation (2) to Section 28 r.w.s. 43(5)(d)? - Held that:- As seen from the transactions and from the provisions of the Act, we are of the opinion that the transactions involved are certainly speculative in nature as per the mandate of Section 43(5). Since nothing was brought on record that the said transactions do not come within the exceptions provided in the section, even though, the same are business transactions, they have to be considered as a separate speculative business and the loss so arrived at is to be considered as speculative loss. However, we are unable to appreciate the order of the CIT(A) in directing the AO to treat the profit from business of income again as total income when AO himself has treated an amount of ₹ 18,16,952/- as speculative loss. Even the AO in our opinion has wrongly considered the amount. The gain on trading in stock futures is also from the speculative transactions. Therefore, the net loss of ₹ 13,57,130/- only can be considered as loss from the speculative transactions. Therefore, we modify the orders of the AO and CIT(A) to the extent of computation of loss. AO is directed to treat only an amount of ₹ 13,57,130/- as speculative loss and the balance loss claimed by assessee should be treated as business loss. AO is directed to modify the orders accordingly.
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2016 (10) TMI 841
Depreciation allowability - operational connectivity to the article or thing - AO disallowed the depreciation holding that clause (iia) of section 32(1) is applicable only on the new plant and machinery acquired by the assessee and engaged in the business of manufacture or production - Held that:- The Hon’ble Madras High Court in VTM Ltd (2009 (9) TMI 35 - MADRAS HIGH COURT ) in almost of identical facts held that the provision does not restrict that the new plant and machinery should have any operational connectivity to the article or thing that was already manufactured by the assessee. Also in Hi Tech Arai ltd (2009 (9) TMI 60 - MADRAS HIGH COURT ) held that sec 32(1) (iia) does not state that the setting up of a new machinery or plant, which was acquired and installed, should have any operational connectivity to the article or thing that was already being manufactured by the assessee. It could be said that setting up of a windmill will not for within the expression setting up of a new machinery or plant. Thus, we respectfully following the decisions of Madras High Court allowed the depreciation claimed by the assessee. In the result this ground of appeal raised by the assessee in the present appeal is allowed. Disallowance under section 14 A - Held that:- During the course of assessment proceeding the assessee submitted that amount of ₹ 4,21,908/-can be taken for disallowance under section 14 A. The voluntary disallowance was not accepted by AO, and AO worked out the disallowance as per the procedure prescribed in Rule 8D (2)(iii) of ₹ 35,32,795/-and added to the total income of assessee. The coordinate bench of this tribunal in assessee’s own case, restricted the disallowance under section 14A at ₹ 10,000/- only as referred above. Thus, keeping in view the order of the Tribunal for AY 2009-10 the disallowance made by AO for ₹ 35,32,795/- under section 14A is deleted. In the year under consideration the exempt income of assessee consist of income from the tax free bonds of ₹ 2,24,91,102/-, dividend income of ₹ 1,47,24,682/-, interest on PPF ₹ 2,28,190/- and LTCG of ₹ 2,93,35,787/-. Major investments were made in earlier years and exempt income is from Government securities. The payments of interest of tax free bonds were credited by way of ECS. Before the lower authority the assessee offered disallowance under section 14A of ₹ 4,21,908/- which was not accepted. This fact is an additional fact in the year under consideration. No such fact is discernable from the order of Tribunal for AY 2009-10. Thus we accept the voluntarily disallowance of ₹ 421,908/- offered by assessee u/s 14A of the Act, before the authorities below. We order accordingly.- Decided in favour of assessee
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2016 (10) TMI 840
Addition u/s 14A - Held that:- Assessee had not earned any exempt income during the year and therefore, following the above order of Hon'ble Delhi High Court in the case of CIT vs. Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT) disallowance u/s 14A was not warranted. - Decided in favour of assessee
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2016 (10) TMI 839
Unexplained share application money - Held that:- Assessee had furnished confirmation of only M/s Maneesha Finlease Ltd. With respect to the other two parties i.e. Hilridge Investment Ltd. and Sunny Cost & Forge Ltd., the assessee did not furnish confirmation and PAN etc. of these parties despite a number of opportunities allowed by the Assessing Officer. These details were filed during the appellate proceedings under Rule 46A and remand report was sought from the Assessing Officer. In the remand report the Assessing Officer did not examine these documents and asked the assessee to produce the Principal Officers of these applicants. On this the assessee told the Assessing Officer that they may be called directly, but he never issued any summon u/s. 131. It is of the view that Ld. CIT(A) has rightly observed that the Assessing Officer should have examined the documents and after that if needed should have summoned the share applicants and on this account the Assessee cannot force any one to appear before the AO. Therefore, the assessee has discharged his responsibility in giving the details. In view of this, Ld. CIT(A) has rightly deleted the addition - Decided in favour of assessee Disallowance towards interest on the ICD - Held that:- AO asked the assessee to explain that why this interest should not be disallowed. The assessee submitted the details of ICD, but did not give any explanation and AO observed that as to why it should not be disallowed. But even if it is so, the conclusion is wrong that the assessee has nothing to say in this regard when he has debited it in the profit and loss account. After all the interest on ICD is an allowable expense of the business and the AO asking such a question that why it should not be disallowed, appears to be out of the way. Also further find force in the finding of the Ld. CIT(A) that it is for the AO to prove that any expenditure in profit and loss account has to be bogus if he is disallowing the same. Hence, CIT(A) rightly deleted the addition in dispute, which does not need any interference on my part - Decided in favour of assessee Addition on account of static creditor - Held that:- M/s Shar Opticals, USA has been outstanding of since many years in books of accounts of the assessee. Further find Ld. CIT(A) by respectfully follow the decision of the Hon’ble Delhi High Court in the case of CIT vs. Hotline Electronics Ltd.[2011 (12) TMI 90 - DELHI HIGH COURT] has deleted the addition. Hence, there is no question to interfere in the finding of the Ld. CIT(A) - Decided in favour of assessee
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2016 (10) TMI 838
Penalty levied u/s 271(1)(c) - unexplained jewellery - Held that:- Except for raising the grounds pleading for cancellation of penalty levied under section 271(1)(c) of the Act in respect of seized diamonds no material evidence has been furnished before us to controvert the findings of the authorities below that the diamonds seized in search action under section 132 of the Act were unexplained. We have respectfully perused the judicial pronouncements cited by the assessee and humbly concur with the averments of the learned D.R. for Revenue that these judgements are clearly distinguishable on facts from the case on hand and pertain to issues of either (a) rejection of assessee’s claim of whether expenditure was capital or revenue in nature (cited case at S. No. (1)) or (b) were cases where estimation of income was made and for both of which the Hon'ble courts had held that penalty under section 271(1)(c) was not leviable. In our view, the case on hand stands on a different footing from the cited cases (supra), as there is neither rejection of the assessee claim of revenue expenditure as being capital in nature nor estimation of income in some cases after rejection of books of account; and therefore, would not come to the rescue of the assessee. In this factual and legal matrix of the case, as discussed above, we uphold the impugned order of the learned CIT(A) in confirming that penalty under section 271(1)(c) of the Act for concealment of income is to be levied in respect of the unexplained diamonds - Decided against assessee
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2016 (10) TMI 837
Reopening of assessment - reasons the believe - Held that:- AO is bound to furnish the reasons recorded for initiation of proceedings under section 147 of the Act within a reasonable period of time so that the assessee could file its objections thereto and the AO was to dispose of the same by passing a speaking order thereon, which the AO has not done. As also noted that even as per the rules of natural justice, the assessee is entitled to know the reasons on the basis of which the AO has formed an opinion that income assessable to tax has escaped assessment. The furnishing of reasons to the assessee is to enable/facilitate it to present its defence and objections to the initiation of proceedings under section 147/148 of the Act. Therefore, there was no justifiable reasons for the AO to deprive the assessee of the recorded reasons by him for initiating proceedings under section 147/148 of the Act. Therefore, the reopening in question is not sustainable in the eyes of law, hence, the same is quashed. - Decided in favour of assessee
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2016 (10) TMI 836
Penalty levied under Section 271(1)(c) - there was search operation in the year 2010 and undisclosed income was assessed under Section 153A - Held that:- This Tribunal is of the considered opinion that the penalty, if any, can be levied only under Section 271AAA of the Act. In other words, the undisclosed income computed by the Assessing Officer squarely falls in subclause (i) of 271AAA of the Act. Therefore, in view of sub-section (3) of Section 271AAA of the Act, there cannot be any levy of penalty under Section 271(1)(c) of the Act. In view of the specific prohibition under Section 271AAA(3) of the Act, this Tribunal is of the considered opinion that the Assessing Officer cannot levy penalty under Section 271(1)(c) of the Act. Therefore, the CIT(Appeals) ought to have deleted the entire penalty levied by the Assessing Officer. In view of the above, this Tribunal is unable to uphold the orders of the lower authority. Accordingly, the orders of the Assessing Officer, as confirmed by the CIT(Appeals), are set aside and the entire penalty levied by the Assessing Officer is deleted. - Decided in favour of assessee.
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Customs
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2016 (10) TMI 819
FTP - 100% EOU - deemed export benefit - DTA unit having a captive power plant supplies electricity to 100% EOU - zinc manufactured in the export oriented unit consumes electricity manufacturing process to obtain zinc - whether electricity is a "consumable" item as defined under para 9.15 of the FTP and as referred in para 6.6.1 of HBP-I and is entitled for exemption? - Held that: - The process of obtaining zinc, clearly indicates that the electrolytic process is necessary to have zinc. For electrolytic process the essential input is electricity. It is not in dispute that the electricity is a goods and that goods, though intangible, is consumed in obtaining the final product. True it is, the electricity is not a part of end product, but it is substantially consumed in the process to manufacture the end product. Para 9.15 of the FTP in specific terms provides that any item, which participates in or is required for manufacturing process, but does not necessarily form part of end product items, but substantially or totally consumed in the process aforesaid, is a "consumable". The electricity, in our considered opinion, not only participates, but is substantially consumed in manufacturing process of zinc, thus, is a "consumable" as per para 9.15 of FTP. Clause (a) of para 6.6.1 of HBP-I mentions raw materials, consumables, intermediates, spares and packing materials. All these terms give a general connotation and each and every term may include several goods. The electricity, as already discussed above, comes within the purview of "consumables" as defined under para 9.15 of the FTP, hence, we are of considered opinion that it is nothing but a goods permitted to be imported/procured from DTA. True it is, in para 6.6.1 of HBP-I, certain electricity equipments including DG sets, Captive Power Plants and transformers are specifically mentioned, but these are the equipments to generate electricity, whereas the electricity is a goods "consumable" for production of zinc. In view of it, it is having its separate identity which is required to be appreciated with its own qualities. The process of electrolytic cannot take place without consuming electricity and, therefore, its consumption in production of zinc is apparent - the electric power being a "consumable" as per para 9.15 of FTP deserves to attract clause 6.6.1 of HBP-I (6.5.1 of HBP) - the petitioner is entitled to have deemed export benefit for its Domestic Tariff Area Unit to hundred percent Export Oriented Unit - petition allowed - decided in favor of petitioner.
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2016 (10) TMI 818
Restoration of appeal - dismissal of CHA appeal on merit behind the back of the said Custom House Agent by an order dated 9th December, 2015 - Held that: - In case the appellant is not present, the appeal could have been dismissed for default. But the appeal could not have been dismissed on merit - appeal restored - matter shall now be heard out by the learned Tribunal on merit - appeal disposed off.
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2016 (10) TMI 817
Imposition of Fiscal; penalty - SEZ - achieving of minimum value addition which was a part of the condition contained under the letter of permission - doctrine of proportionality - revised value addition formula - the Indian Latex was more expensive as compared to international latex - h respect to clubbing of a period of first block of five years with second block of five years - Held that: - The only point which has impress the court is that while inflicting penalty, the well recognized doctrine of proportionality is not being considered by the authorities below. More particularly, the second appellate authority has not even touched that aspect which warrants this Court to consider the case on the issue of proportionality. In that view of the matter, the contentions, as stated above, being meritless, the only course left open for the Court is to consider and examine the issue with regard to proportionality while inflicting penalty. The only fault appears to be of the petitioner-unit is that it has not met with the condition of letter of permission and has failed to achieve the target and as such authorities ought to have considered well recognized doctrine of proportionality which passing impugned orders.. Order set aside - matter remanded back for reconsideration - Decided in favor of petitioner.
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2016 (10) TMI 816
Withdrawal of the present civil miscellaneous appeal, in view of the instructions issued, in F. No. 390/Misc./163/2010-JC, issued by the Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, Government of India, dated 17-12-2015, as the monetary limit relating to the matter is less than ₹ 15,00,000/- - liberty may be granted to the Appellant/Department to revive the civil miscellaneous appeal, if it is found that it had been withdrawn, inadvertently, even though it falls under the exceptions mentioned in the relevant circular issued by the Central Board of Excise & Customs - Held that: - petition allowed - reference made to the case of SHASUN CHEMICALS & DRUGS LTD. Versus COMMISSIONER OF CUS., CHENNAI [2009 (5) TMI 762 - CESTAT, CHENNAI].
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Service Tax
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2016 (10) TMI 835
Challenge to the SCN - maintainability of writ petition - charges/fees received for and after securitization of future receivables - Held that: - the show cause notice cannot be interdicted at this stage of the matter on the grounds canvassed by the petitioner. This is so because the grounds raised are all pure questions of fact and the impugned show cause notice having been issued under a Taxation Statute, as held by the Division Bench in the case of Nivaram Pharma Pvt. Ltd. Vs. The Customs, Excise and Gold Control Appellate Tribunal [2005 (3) TMI 160 - MADRAS HIGH COURT] following various decisions of the Supreme Court that the Court, exercising jurisdiction under Article 226 of The Constitution, should not interdict proceedings, the party should be directed to avail hierarchy of remedies available under the statute - petition not maintainable - petition dismissed - decided against petitioner.
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2016 (10) TMI 834
Restoration of appeal - condonation of delay - Section 85(3A) of the Finance Act, 1994 - Held that: - it appears that the Order-in-Original No. 17/S./ Tax/Addl.Commr./2015 dated 29th June, 2015 was received by this petitioner on 6th July, 2015 and thereafter appeal was preferred before the Commissioner (Appeals) on 7th September, 2015. It further appears from the facts of the case that this appellant has to prefer an appeal by 6th September, 2015, but, since 6th September, 2015 was a Sunday, appeal was filed on 7th September, 2015. Even 5th September, 2015 was not a working day for the Central Government offices as it was a Saturday. Hence, there is no delay in preferring the appeal by this appellant. The Order-in-Appeal No. 83 JSR/2015-16 dated 19th Jan, 2016 passed by the Commissioner, Central Excise and Service Tax (Appeals) is quashed and set aside - matter remanded - Order-in Appeal No. 83 JSR/2015-16 restored to its original file with the same number and the same will be decided on its merit - petition allowed - decided in favor of petitioner.
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2016 (10) TMI 833
Scope of service - shot hole drilling - seismic job - sub contract work - whether the activities undertaken covered under taxable service of survey and exploration of minerals? - Held that: - the services rendered are liable to service tax under the scope of the above-mentioned tax entry. Sub-contractor - whether demanding service tax from them will amount to double taxation as the main contractor also is rendering similar service to ONGC? - Held that: - The service tax leviable at the hands of each service provider is decided by nature of activities undertaken by them. If the same is covered by scope of the taxable entry under Finance Act, 1994 tax liability arises. The said service becomes part of final service rendered by main contractor is of no consequence to determine the tax liability of each and every service provider. If at all, the service tax paid by a sub-contractor which becomes part of service further provided by the main contractor, the scheme of credit as envisaged by the Cenvat Credit Rules, 2004 will come into play subject to fulfillment of conditions therein. It is nobody s case that the sub-contractors per-se are not liable to service tax even if they rendered taxable service. Extended period of limitation - availability or otherwise of Cenvat credit to the recipient of service by itself cannot decide the bonafideness of the appellant. Reliance placed in the decision of CCE vs. Mahindra & Mahindra 2005 [2004 (9) TMI 115 - SUPREME COURT OF INDIA] where it was held that There can be number of eventualities where extended period of limitation in terms of proviso to Section 11A may be available to the Department despite availability of Modvat credit to an assessee. The availability of Modvat credit to an assessee by itself is not conclusive or decisive consideration. It may be one of the relevant consideration. How much weight is to be attached thereto would depend upon the facts of each case. Appeal dismissed - decided against appellant.
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2016 (10) TMI 832
Taxability - erection of plant and machinery - services received from a foreign service provider - clause 39 read with clause Section 65 of the finance Act, 1994 w.e.f. 01-07-2003 - Section 66A of the Act read with Rule 2(d)(iv) of the Service Tax Rules, 1994 w.e.f. 18-04-2006 - the case of Commissioner, Central Excise & Customs Versus M/s Larsen & Toubro Ltd. and others [2015 (8) TMI 749 - SUPREME COURT] referred - Held that: - there is an EPC contract with an element of turnkey project which is not covered under taxable service prior of 01-06-2007. Since the same is covered in Works Contract Service (WCS). It is seen from para 12 of the Order-in-Original that the gross amounts totalling ₹ 44,98,87,883/- received vide Bill dates 20-07-2006, 21-07-2006, 25-07-2006, 23-08-2006 and 13-10-2006. Thus all the payments been received before the introduction of WCS w.e.f. 01-06-2007. This being the case, the judgment of Hon'ble Apex court in Commissioner, Central Excise & Customs Versus M/s Larsen & Toubro Ltd. and others will apply to the facts and circumstance so of the case and service tax cannot be levied to such contracts executed prior to 01-06-2007 - erection of plant and machinery not taxable - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 831
Royalty against grant of franchisee rights - revenue neutrality - CENVAT credit - procedural fault - Held that: - the appellant indeed have transferred 20% of their Franchisee/ Royalty fees along with service tax liability discharged thereon to M/s Aptech. This has also been certified by the Franchisor. This being so, while procedurally the appellant may have been at fault, it cannot may be alleged that the tax liability on the entire amount of fees received by them have not been discharged, notwithstanding, the fact that the part of the fees has been transferred in the above manner to M/s Aptech. To confirm whether service tax liability has been discharged by the appellant in respect of all such amounts transferred by them to M/s Aptech, to establish the fact or otherwise of revenue neutrality, we are of the considered opinion that the matter will require de novo consideration by adjudicating authority. Appeal allowed - matter remanded.
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2016 (10) TMI 830
Taxability - construction services in relation to Hydro Power Projects - works contract service - Held that: - the amended provisions of the Rules clarify that the new provisions shall not apply to a Works Contract which had commenced or payment made thereof on or before 07.07.2009. In the instant case, Works Order related to para 5(a) of Order-in-Original was obtained by appellant on 15.11.2008, hence unless it is proved that the work has not commenced etc., before 07.07.2009, the appellants will be entitled to the benefit of unamended provisions. With respect to Work orders referred to para 5 (b) and 5 (c), we are of the opinion that the appellant should be given a proper opportunity to file detailed submissions along with documents as reply to SCN, which he omitted to do earlier and also an opportunity of personal hearing. In such circumstances, it is deem fit that the impugned order with regard to demand of WCS be set aside, and matter be remanded to the adjudicating authority for denovo adjudication, which we hereby do. It is however made clear that we do not interfere with the demand of ₹ 1,10,485/- along with interest thereon relating to the Management Consultancy services which is confirmed by the adjudicating authority. Appeal disposed off - matter remanded.
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Central Excise
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2016 (10) TMI 829
Levy of education cess and secondary and higher education cess - powers of the central government - business of exploration, development and production of crude oil and natural gas - production sharing contract - production of crude oil - Scope of Section 91 read with Section 93 of the Finance Act, 2004 and Section 136 read with Section 138 of the Finance Act, 2007, being the cess as per Section 15(1) of the Oil Industries (Development) Act, 1974, is said to be not levied and collected by the Ministry of Finance (Department of Revenue)? - Held that: - Pertinent to notice that under the Act of 1974, as per Section 16, the duty of excise levied shall be first credited to the consolidated fund of India and the Central Government may, if Parliament by appropriation made by law in this behalf, so provides, pay to the Board from time to time, from out of such proceeds, after deducting expenses of commercial and such sums of money as it may think fit for being utilised exclusively for the purpose of this Act. Under Section 16, a broad discretion is available with the Central Government for necessary allocation of excise. On the other hand, under the Sugar Cess Act, the entire duty shall mandatorily go to consolidated fund required to be maintained as per the Sugar Development Fund Act, 1982. Learned Tribunal without examining this aspect of the matter decided the appeal by applying the law laid down in the case of Commissioner v. Sahakari Khand Udyog Mandi Ltd., that is apparently erroneous. As per Section 93 and 138 of the Acts aforesaid, the cess is a duty of excise which is to be levied and collected by the Central Government in the Ministry of Finance under provisions of the Central Excise Act, 1944 or under any other law for time being in force. The scope of the provisions referred above is quite wide and that covers levy and collection of all excisable goods under provisions of the Central Excise Act, 1944 or even under any other law for time being in force. In light of this provision also we do not find any wrong in applying the cess in question upon the excise duty referred under Section 15(1) of the Act of 1974. No reason found to reason to escape the respondent from application of education/secondary and higher education cess under the Act of 2004 and the Act of 2007 respectively - Decided in favor of revenue.
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2016 (10) TMI 828
MRP based valuation or Transaction value - supply of Cement bulk customers like manufacturers, builders, contractors, educational institutions, societies and hospitals etc. - qualification of buyer as industrial/ institution consumers - Held that: - We find that the original authority found that hospitals, co-operative societies, temples cannot be considered under the category of institutional or industrial consumers. We find the reasoning given by the original authority that schools, educational institutions and hospitals are not service industry in terms of Rule 2A of the Packaged Commodities Rules, 1977 is not tenable. The institutional consumer means those consumers who buy cement directly from the manufacturers for service industry like transportation including airway, railway, hotel or any other similar service industry. We find that educational institutions and hospitals are directly buying cement from the assessee-appellant and rightly eligible for concessional rate of duty as service institution - admittedly, the sale being direct without any intermediary involved, the criteria for retail sale has not been fulfilled. As such we find wherever such direct sale is effected the application of Packaged Commodities Rules, 1977 will not be governed by Rule 3 for enforcement - the denial of the concession in terms of the abovesaid notification for the assessee-appellant on these grounds is not justifiable. The reliance placed by the original authority on the decision of the Tribunal in Grasim Industries Ltd. vs. CCE, Trichy [2008 (10) TMI 462 - CESTAT, CHENNAI] is not proper as the department has filed civil appeal before the Hon’ble Supreme Court against the said order. Appeal filed by assessee-appellant allowed - appeal filed by Revenue rejected.
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2016 (10) TMI 827
Modvat credit - common input used in manufacture of excisable as well as exempted product - Rule 57-AD of the Central Excise Rules, 1944 - amendment of rule by Finance Act of 2010 - the substantial questions of law, on which the appeal was admitted, do not survive any longer - appeal dismissed.
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2016 (10) TMI 826
Imposition of duty, interest and penalty - Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 - reliance placed on the decision of M/s. Shree Bhagwati Steel Rolling Mills Versus Commissioner of Central Excise & Another [2015 (11) TMI 1172 - SUPREME COURT] where it was held that the provisions of Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 were struck down. - The claim of the Central Excise Authorities for interest and penalty are on the basis of such rules. Consequent to such rules being struck down, the claim on account of interest and penalty are not sustainable - petition disposed off.
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2016 (10) TMI 825
Discrepancies in stock - reversal of CENVAT credit - Substantial discrepancies in the valuation of inputs as per the stock register and the stock physically found - mere manufacturing loss or not - appeal against the judgement passed in the case M/s Shah Alloys Ltd. Versus The Commissioner C&CE, Ahmedabad III [2014 (11) TMI 116 - CESTAT AHMEDABAD] - Held that: - the assessee was consuming as many as 42 different inputs. The discrepancies in the stock was found only in five of them. As a whole, the shortfall is only 0.42% of the total consumption of inputs by the assessee. It was in this background that the Tribunal opined that such discrepancy can be put down as manufacturing loss - no reversal of CENVAT credit required - appeal dismissed - decided against Revenue.
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2016 (10) TMI 824
CENVAT credit - structural steel items, namely, Plates used in fabrication/laying foundation of supporting structures of the plant and machineries - Held that: - the period involved for the demand is from August, 2009 to June, 2010. I find that that with effect from 07.07.2009, Explanation 2 to Rule 2(k) defining input excludes cement, angles, channels, CTD bars, TMT bars and other items used for construction of factory shed or laying of foundation or making of structures for support of capital goods from the definition of input. Here, there is no evidence on record to prove that the item steel plates have been used for construction of factory sheds or for laying foundation for support of capital goods, etc. Actually, the appellant has claimed that the subject goods, namely, MS plates have been used for repair and maintenance of chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. It is also evident from the facts that there is no evidence to disclaim or counter the appellant s claim that these goods were used for repair and maintenance of above machinery, namely, chimney of dusting system of RMP hopper, coal circuit, Kiln at sponge iron division and boiler duct at power plant. Therefore, subject item is certainly covered within the Explanation 2 of definition of input given in Rule 2(k) of Cenvat Credit Rules, 2004. Reliance placed on the decision of case Jaipur Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] and Monnet Ispat & Energy Ltd. Vs. CCE, Raipur [2016 (1) TMI 917 - CESTAT NEW DELHI]. Subject item entitled to CENVAT credit - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 823
Clandestine removal of goods - MS ingots - MS runners and riser - Held that: - the appellant had taken the credit on the basis of invoices and in respect of the goods received in their factory. To confirm the demand on the basis of difference in figures in balance sheet and RG 1, without their being any further evidence either in the shape of statements of any of the employees of the appellant or in the shape of identifying the buyers, the transporters etc., the finding of clandestine activities cannot be upheld. It is well established principle of law that onus to discharge the burden in case of clandestine activities is upon the Revenue. In the present case, I find that sole basis of Revenue to raise the demand is a difference in the figures, as detected by the Audit, without their being any difference in the opening and closing balance. As such, I find no justification for upholding the impugned orders - appeal allowed - decided against Revenue.
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2016 (10) TMI 822
CENVAT credit - fake invoices - suppliers found to be non-existing - Extended period of limitation - suppression of facts - Held that: - reliance placed on the decision of M/s Vrindavan Dyeing Mills (P) Ltd, Shri Shyam Sunder Dhanawat Versus Commissioners of Central Excise, Customs and Service Tax-Surat-I [2015 (10) TMI 2199 - CESTAT AHMEDABAD] where it was held that Goods were supplied by various merchant manufacturers for processing, on job charge basis and the goods were supplied to them accompanied with Central Excise invoice. They processed the goods and which were taken by the merchant manufacturers. He also stated that they received job charges for the processing of the grey fabrics. It is categorically stated that they received job charges by cheque from the various merchant manufacturers. It is seen that in 2005, the Central Excise Officers found that the suppliers of the Grey fabrics were not in existence. We find that the Dy Commissioner, C&CE Div IV, Surat by his letter dtd 4.12.2008 in response to query under RTI application had forwarded to copy of the CE Registration Certificate of the suppliers. Thus, it is clearly evident that the suppliers were in existence during the material period. Following the decision the extended period of limitation cannot be invoked - appeal allowed - decided against Revenue.
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2016 (10) TMI 821
Clandestine removal of goods - non inclusion of packing charges in the value - non-payment of duty in respect of goods cleared by declaring value as 'NIL' - wrong availment of CENVAT Credit to the tune of in respect of goods meant for 'installation & commissioning - removal of capital goods in contravention of CENVAT Credit Rules, 2004 - clearing certain goods under a document "to whom so ever it may concern" and Delivery Note (Way Bill) mentioning the purpose as 'testing', without mentioning any value or by mentioning very low values, without raising Central Excise Invoice and without payment of Central Excise duty - Held that: - we find merit in the contentions of the learned counsel that the adjudicating authority has not taken full cognizance of the submissions and documents produced by them. In the circumstances, we are of the considered Opinion that the matter requires to be considered de novo by original authority after giving an opportunity to the appellant to submit all documents and materials in their defence, which should be properly analysed and correlated to arrive at well reasoned findings with regard to the veracity or otherwise of the contentions of the appellant. All the issues are kept open - Appeal allowed - matter remanded.
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2016 (10) TMI 820
Input credit - LSHF-HSD - whether the appellants are eligible to avail CENVAT Credit on Low Sulphur High Flash - High Speed Diesel Oil keeping on view that LSHF HSD is nothing but HSD with a different flash point and specific content of sulphur and hence the same is nothing but HSD, which is excluded from the definition of “input”? - classification of goods - interpretation of law - Held that: - the definition of input in 2 (k) of CENVAT Credit Rules, 2004 excludes interalia, High Speed Diesel Oil (HSD) from the meaning of input. It is further seen that in the Central Excise Tariff Act, 1985 the classification of HSD is 2710 19 30. There is no separate sub-classification for LSHF-HSD. This implies that HSD and all its variations will necessarily be classified under the said heading only. The input invoices of LSHF-HSD from Indian Oil Corporation Ltd., also clearly classify the said items under CTH classification 2710 19 30 only. The use of the word High Speed Diesel in the definition of input will therefore necessarily have to harmonize with the tariff entry and heading of the same item in the said Central Excise Tariff Act. This being so, HSD and all its variations including LSHF-HSD, will be in the same footing, for the purposes of Rule 2(k) of CENVAT Credit Rules 2004. Consequently, HSD and all its variations including LSHF-HSD, will be excluded from the ambit of input defined in the said Rule 2(k). Extended period of limitation - It is not the case that the appellant had not submitted statutory returns disclosing the necessary details. In fact, on going through copies of RT-12 submitted by the appellant we find that product LSHF-HSD or LS/HF HSD, has been mentioned in the input credit statements. However, as indicated in the SCN, and as conceded by the Ld. Counsel, the appellant had described the product as ST 6733 in the input credit statements for the latter part of the impugned period. This being so, we are of the considered opinion that for the periods during which the appellant had indicated the description of the product/input as LSHF-HSD or LS/HF HSD, the department cannot allege suppression and hence any demand of duty for the said irregular availment of credit will be barred by limitation. Whereas, during the period in which the appellant had merely described the product/input as ST 6733, in our view would amount to suppression/and mis-declaration of vital facts and the department is well within its rights to demand duty for said period. Credit not allowed - however, the demand for the period during which appellant has declared the input goods as LSHF-HSD or LS/HF HSD is not sustainable. The demand for the period during which the appellant has declared the input goods as ST 6733 is sustained - matter remanded to adjudicating authority for the limited purpose of calculating the demand sustained for the said period along with interest and consequential revision of penalty as applicable - decided in favor of Revenue.
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CST, VAT & Sales Tax
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2016 (10) TMI 815
Whether tax credit paid on purchases of Oxygen Gas and LPG used in cutting hull of the ship during ship breaking/scrapping process is admissible - The main thrust of the contention of the opponent was that the activity of ship breaking is a manufacturing activity and in that process since the Oxygen gas and LPG gas are being consumed, is entitled to have a tax credit - Held that: - the sales tax department since about 20 years by now has continued to assess the opponent as a manufacturer, there was no justifiable reason for determining authority to treat the activity not as a manufacturing activity - In case of Ship Scrap Traders 2001 (5) TMI 43 - BOMBAY High Court held that ship breaking activity gives rise to manufacture and production of altogether new commercial article or thing which is commercially indentifiable in the commercial world as other than ship and therefore, in that case, the assessee was entitled to claim deduction under Sections 80 HHA and 80-I of the Income Tax Act - opponent is engaged in ship breaking activity, which is nothing but a manufacturing process under the provisions of the VAT Act and the petroleum gases (LPG) and Oxygen gases are forming part of the said process, being raw material covered within the swip of Section 2(19) of the VAT Act, and since the same are the processing material and consumable stores in the activity, the tax credit of tax paid on purchases of these commodities is admissible under the Act - Decided in favor of the assessee.
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2016 (10) TMI 814
Levy of Penalty - Best judgment assessment - Period of limitation - Whether the initiation of proceedings and completion of assessment is within 5 years from last date of the return period or that there is an automatic extension of time as per the third proviso inserted from time to time - Held that: - Section 25(1) has to be taken only after issuing a notice on the dealer which apparently has to be done within five years from the last date of the year to which the return relates. The first proviso relates to a dealer being heard before making assessment under Section 25(1). The third proviso which was subsequently incorporated provides extended time for completion of assessments. It could only mean that time is extended only for completing assessment which have already been initiated after issuing notice under Section 25(1) within five years from the last date of the year to which the return relates - When a procedure under Section 25(1) is invoked, it has to be within the period of limitation and no exclusion can be claimed by the department merely for the reason that the assessee had opted for compounding and a procedure under Section 22(10) is being followed - Assessment proceedings are barred by limitation. Every dealer, either registered or liable to be registered under the Act, is bound to file a return under Section 20 of the KVAT Act. The VAT regime had contemplated a self assessment which indicates that once the return had been submitted under Section 20(1) in the prescribed manner and accompanied by the prescribed documents, the assessment relating to the return period is deemed to have been completed on receipt of such return subject of course to the provisions of Sections 22, 24 and 25 - In view of the non obstante clause under section 25B, the Deputy Commissioner has the power to extend the time for taking steps under Section 25(1) in an instance where an investigation or enquiry is pending under the KVAT Act or any other law, or in instances where the assessment cannot be completed It is clear from the statutory provisions aforestated that the penalty proceedings had to be completed within a specified time, i.e., within one year under Section 67 from the date of detection of offence mentioned under this section except where the extension of time is granted by the Deputy Commissioner. One year period aforementioned has been amended as three years with effect from 1/04/2005 - Held that: - But no materials are produced to support the stand that even after 25/4/2008, there was difficulty in taking penalty proceedings against the petitioners. When a specific contention is raised regarding limitation, it is for the respondents to justify the same by producing all necessary materials. In the absence of any material other than Ext.P7, it has to be assumed that the department was aware of the alleged offence as early as on 25/4/2008 - Petition allowed in favor of the assessee.
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2016 (10) TMI 813
Taxability - procurement of Fly Ash - exemption on clearance to SEZ - manufacture of PPC and OPC cement - service charges paid on procurement of Fly Ash - whether payment to Thermal Power Station is in the nature of royalty? - Held that: - the decision of the Hon'ble Supreme Court in the case of State of H.P. and others Vs Gujarat Ambuja Cement Ltd. and another [2005 (7) TMI 353 - SUPREME COURT OF INDIA] relied upon. Therefore, the finding to the said effect and the stand taken in that regard in the counter affidavit at paragraph No.7, deserves to be set aside. Whether the respondent could have given different interpretation to the agreement which was entered into between the TNEB and the petitioner. The specific case of the petitioner is that if the agreement is treated to be as one of the agreement for sale, it would violate the notification issued by the Central Government of India as clearance of fly ash is a part of environmental protection exercise. However, this aspect has not been gone into in a proper prospective by the respondent. Disallowance of exemption on clearance effected to SEZ - the respondent appears to have put the matter in cold storage for nearly ten months after the personal hearing and all of a sudden, has passed the impugned order that certain certificates produced by the petitioner are defective. However, it is seen that before doing so, no opportunity was granted to the petitioner. This Court had an occasion to consider the aspect, as regards the zero rated sale and exempted sale with regard to the sales effected to the units located in SEZ and a decision was rendered in the case of Tulsyan NEC Limited Vs Assistant Commissioner [CT] Harbour-[III], Assessment Circle, Chennai [2015 (2) TMI 564 - MADRAS HIGH COURT]. This decision also should have been borne in mind by the Assessing Officer, since the impugned assessment order was passed, much after the order in the case of Tulsyan. Thus, for all the above reasons, the impugned assessment under these two heads alone require to be reconsidered. Writ Petition allowed - impugned order set aside insofar as the findings rendered by the Assessing Officer on the aforesaid two heads and the assessment shall be re-done, after affording an opportunity of personal hearing by clearly appreciating the scope of the agreement between the petitioner and the TNEB and the legal position which is prevailing as on date.
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2016 (10) TMI 812
Liability of petitioner in respect of a firm M/s. Industrial Engineering Corporation,Railway Station Road, Thrissur - petitioner stated that he was a partner of the said firm and later on denied to have any connection with the firm - Amendment to the affidavit to admit the liability - Held that:- The affidavit even admittedly filed in the year 2014. It is immediately after filing of the affidavit answer to the interrogatories that the present application for amendment has been filed by the petitioner when he came to know about the liability in respect of which he has been proceed with. It is true that the affidavit in connection with the interrogatories was submitted on 16.6.2014 but the amendment was filed in December, 2014. It cannot be said that there was undue delay in fling the application for amendment. Further the amendment sought for is only clarificatory in nature and it cannot be said that new cause of action has been arisen for that purpose or new case has been introduced. By virtue of adding of the relief also that is not going to affect the structure of the suit as such as his case as a whole was that he was not liable to pay any amount to the department. Further, the amendment will only help the court to decide the case in a right manner and that is required for proper adjudication of the case as well. - Amendment allowed subject to the payment of ₹ 5000/- to the Kerala Station Mediation Centre.
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