TMI Tax Updates - e-Newsletter
November 23, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Clubbing of income - salary paid to the assessee’s wife - the payment made by the assessee to his wife would not qualify for the benefit of proviso to Section 64 (1)(ii) - HC
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Income Tax:
Attachment orders - recovery of dues - Time limit for sale of attached immovable property - When the provision is very clear which covered the field, the continuation of the order of attachment Annexure-E till date is not proper - HC
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Income Tax:
Penalty u/s.271AAA - Once the income is surrendered during the course of search under section 132(4) it can be safely assumed that during discussion the assessee must have disclosed the manner - No penalty - AT
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Income Tax:
TDS u/s 194C or 192 - non deduction of TDS on payment of wages to the labourers - the wages in the instant case are covered under section 192 of the Act. Therefore the provisions of section 194C are not applicable - AT
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Customs:
SEZ unit - power / jurisdiction to confiscate - import gold and export manufactured gold jewellery and are a net foreign exchange earner under SEZ scheme - The customs did not have jurisdiction within Special Economic Zone established under SEZ scheme - AT
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Customs:
Benefit of exemption in import of crude palm oil - there is no evidence that appellant did not have to carry out the refining process before using it in the manufacture of their baked products - exemption cannot be denied - AT
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Customs:
Classification of Import of external hard disks - The imports of the appellants are liable to be classified under 84717030 and not 84717020 - Benefit of exemption from CVD not allowed - AT
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Central Excise:
Service tax paid on the expenses incurred for providing warranty service were entitled for input service credit. CENVAT credit allowed - AT
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Central Excise:
CENVAT credit - it is not correct to deny the service tax credit on the basis of the above mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service tax registration no. in the invoices - AT
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VAT:
Central sale - the claim made in Form-D declaration was unavailable - If the material is supplied in response to the tender invited in the name of President of India, whether it has to be considered under the Central Government or not? - Held Yes - HC
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VAT:
Valuation - UPTT - There was thus no transfer of property in goods at the time of they being put into transit - The obligation to transport the goods was an essential element, an integral component of the transaction of sale - to be included - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (11) TMI 894
Entitlement for depreciation under Section 44A(2) - Held that:- Admittedly, the proviso to Section 44AD of the Income Tax Act, 1961, is applicable to the appellant-assesse in view of the fact that its income for the assessment year in question, i.e. 2009-2010, is above ₹ 40,00,000/- (Rupees forty lakhs only). If that is so, the bar to the entitlement for depreciation under Section 44A(2) of the Act will not apply. Grant of depreciation under Section 32 of the Act would, therefore, become mandatory. The above facts have been over looked by the High Court in holding that Section 44AD is applicable to the case of the appellant-assessee. We, therefore, set aside the order of the High Court as well as the order of the assessment and direct that necessary steps be taken in accordance with law so far as the assessment year 2009-2010 is concerned.
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2016 (11) TMI 893
Addition u/s 68 - Held that:- In the present case, in the face of the clear findings that the loan applications were processed by the Officers of the Assessee and the loan transactions in question of the aforesaid 37 persons were also handled really by the Assessee and further in view of the categorical finding that the loan amounts were not reflected in the returns of the 37 persons in question, we do not see how the High Court could have taken the above view and remanded the matter to the Assessing Officer. It has been pointed out before us that pursuant to the impugned order passed by the Division Bench of the High Court fresh assessment proceedings have been finalized by the Assessing Officer. The said exercise has been done in the absence of any interim order of this Court. However, merely because fresh assessment proceedings has been carried out in the meantime it would certainly not preclude the Court from judging the validity and correctness of the order of the Division Bench of the High Court. For the reasons stated, we cannot uphold the order of the Division Bench passed in the Writ Appeal in question. Consequently, we allow this appeal and set aside the order of the Division Bench and consequently all further orders passed pursuant thereto.
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2016 (11) TMI 892
Unexplained income - Held that:- Certain notings in hand. The appellant contends that one of the entries therein in the sum of ₹ 96 lacs remained to be explained and that the amount was therefore, rightly added to the assessee's income. The CIT(Appeals) upheld the assessment order. The Tribunal, however, found that certain other documents especially a balance-sheet of 31.03.2005 ought to be considered and a fresh order ought to be passed thereafter. The Tribunal noted that the balance-sheet was already a part of the record of the revenue as it pertained to the earlier assessment year. There is no ground for interfering with the discretion exercised by the Tribunal in remanding the matter. The impugned order rightly notes that the balance-sheet would be a relevant consideration and therefore, ought taken into account while considering the assessee's explanation for the said entry.
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2016 (11) TMI 891
Validity of reopening of assessment - Held that:- The "reasons to believe" as recorded by the Assessing Officer does not aver that the assessee had failed to fully and truly disclose all material facts necessary for the assessment, which is a condition precedent for reopening the assessment after four years. The reason to believe only indicates that the reasons for reopening is based on the assessment records and the balance sheet. In our view, the foundational requirement for reopening an assessment beyond four years had not been fulfilled, as per the proviso to Section 147, which is a condition precedent. Consequently, we are of the opinion that the notice issued for reopening the assessment was contrary to law since it did not meet with the foundational requirement of the proviso to Section 147 - Decided in favour of the assessee
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2016 (11) TMI 890
Disallowance of expenditure claimed on the use of cars and telephone - Held that:- 8 cars were maintained by the assessee as his personal fad. It was also found that the assessee has not maintained any log register or other materials to establish that all these 8 cars were used by the assessee exclusively for the purpose of carrying on his business. Insofar as the telephone bills, the expenses of which were also claimed by the assessee are concerned, the Assessing Officer has disallowed 50%. The 1st Appellate Authority has reduced it to 5% and the Tribunal has restored the order of the Assessing Officer. On this issue also, the Tribunal has held that the findings in respect of the disallowance of the car expenditure equally applied. Here also, the Tribunal has found that the assessee has not maintained proper data base to verify whether all the phones were used for the purpose of his business. The aforesaid conclusions of the Tribunal regarding the cars and the telephone bills show that these are factual conclusions and do not give rise to any question of law for the consideration of this court. Disallowance of salary paid to the assessee’s wife - Held that:- If the income earned by the wife of the assessee was on account of her technical or professional knowledge or experience, such income cannot be reckoned in computing the total income of the assessee. Reading of paragraph 6 of the assessment order shows that the very contention of the Authorized Representative of the assessee was “that the assessee had imparted secret formula of his medicine to her”. In other words, apart from imparting the secret formula to his wife, even the assessee did not have a case that the wife was earning her salary on account of her technical or professional knowledge or experience. In such a case, the payment made by the assessee to his wife would not qualify for the benefit of proviso to Section 64 (1)(ii). - Decided against the assessee Expenditure incurred for the Research and Development - Held that:- The expenditure in question was incurred during the previous assessment year and that the assessee who is following the mercantile system of accounting could not have claimed it during the assessment year in question. It was this finding which was ultimately sustained by the Tribunal. Since the assessee is admittedly following the mercantile system of accounting, the expenditure in question could have been claimed only in the year in which it was incurred. - Decided against the assessee Disallowance of advertisement expenditure - Held that:- Since the expenditure in question was incurred in connection with launching of the assessee's new product, respectfully following the dictum laid down by the decision of this court in Aluminium Industries Ltd. (1994 (11) TMI 63 - KERALA High Court ), we answer the 4th question of law raised in favour of the assessee and against the Revenue.
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2016 (11) TMI 889
Attachment orders - recovery of dues - Time limit for sale of attached immovable property. - Held that:- When the reference made by the Revenue was disposed of on 10.08.2010, the sale of immovable property should have been made within a period of three years from the end of the financial year as mandated under Rule 68B to Second Schedule to the Act, which provides no sale of immovable property under this part after the expiry of three years from the end of financial year in which the order giving rise to demand of any tax, interest, fine/penalty or any other sum, has become final. Sub rule (4) of Rule 68B of II Schedule further clarifies that where the sale of immovable property has not been made within three years as required under Rule 68B to Second Schedule to the Act, the effect would be the attachment order of the said property deemed to be vacated. When the provision is very clear which covered the field, the continuation of the order of attachment Annexure-E till date is not proper. For the purpose of calculating three years it would be from the end of financial year on which the order was passed i.e. 10.08.2010, the end of the financial year would be 31.03.2011. Hence, the Demand Notice and Order of Attachment Annexure-E dated 28.02.2013 were no doubt issued within time, by virtue of Rule 68B (4) to Second Schedule to the Act has expired by 31.03.2014. In view of the above, Annexure-E order of attachment of immovable properties stands vacated.
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2016 (11) TMI 888
Disallowance of Labour Charges - Held that:- we concur with and uphold the finding of the learned CIT(A) that in the absence of any material evidence being brought on record by the AO to prove that the payments made to these three related parties as bogus, the said payment of labour charges to him cannot be termed as bogus and the action of the so to discover the entire payment of labour expenditure, since they were incurred through related parties, is unjustified and unsustainable in the facts and circumstances of the case. - Decided in favour of assessee Adhoc disallowance of 25% of the expenditure incurred on labour charges paid to the three related parties - Held that:- Learned CIT(A) has failed to point out any particular expenditure in respect of labour charges which according to him is excessive or unreasonable but has proceeded to uphold an adhoc disallowance of 25% thereof, which is, in our view, unsustainable. In this view of the matter, we are of the opinion that the adhoc disallowance of 25% of expenditure incurred on labour charges paid to related parties under section 40A(2) of the Act was not warranted in the facts and circumstances of the case on hand as discussed above and therefore direct the AO to delete the same.- Decided against revenue Bogus purchases under section 69C - Held that:- Without causing any enquiries to be made to establish his suspicions, the AO cannot make the addition under section 69C of the Act by merely relying on information obtained from the Sales Tax Department. In the case on hand, the AO failed to make any enquiry to establish his suspicions. Further, the corresponding sales have not been questioned. We find that the assessee has brought on record documentary evidences to establish the genuineness of the purchase transactions, the action of the AO in ignoring these evidences cannot be accepted. When the copies of purchase bills of these parties, delivery challans, proof of payment through banking channels, etc., and there is no evidence brought on record by the AO to establish that the said payments were routed back to the assessee, the addition made by the AO under section 69C of the Act is unsustainable - Decided against revenue Disallowance of Motor car expenses - Held that:- In the order of assessment, the AO has made an adhoc disallowance of 20% of motor car expenses and depreciation thereof (i.e. ₹ 79,063/-). On appeal, the learned CIT(A) sustained this disallowance to the extent of 5%. Before us, except for raising this ground, Revenue has not brought on record any material evidence to controvert the finding of the learned CIT(A) and warrant our interference therein on this issue. In this view of the matter, we uphold the order of the learned CIT(A) on this issue - Decided against revenue Disallowance of Telephone Expenses - Held that:- AO has made an adhoc disallowance of ₹ 36,663/-; being 15% of telephone expenses amounting to ₹ 2,44,423/-. On appeal, the learned CIT(A) has sustained the disallowance to the extent of 5%. Except for raising the ground before us, Revenue has not brought on record any material evidence to controvert the impugned order of the CIT(A) and warrant our interference therein on this issue. In this view of the matter, we uphold the order of the learned CIT(A) on this issue. - Decided against revenue
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2016 (11) TMI 887
Penalty u/s 271(1)(c) - Held that:- Evidence possessed by the AO is an information transmitted by the Department from the assessment proceedings of M/s.Prakash Marbles and Engineering Company. There is no independent affidavit collected from the proprietor of Girnar Sales Corporation and M/s.Shiv Metal Corporation. The assessee was not provided material collected in the assessment proceedings of different entities. The assessee has given complete details as to how it had made payment through account payee cheque and how it has procured material. If both these set of evidences are weighed together, then, scale would tilt in favour of the assessee, because there is no crossverification at the end of the AO by confronting the material to the assessee which was collected from the proceedings of a third concern. The AO failed to prove that bills and other evidences submitted by the assessee are factually false. The addition has been made on an estimate basis, thus penalty need not to be imposed - Decided in favour of assessee.
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2016 (11) TMI 886
Exemption under section 54F - claim of LTCG denied - assessee had not given any details of purchase and sale of shares of Buniyad Chemicals Ltd. - Held that:- AO appears to have approached this issue with preconceived notions and a closed mind. When the AO has based his decision on the statement of Shri Mukesh Choksi, it was incumbent on him to have provided a copy of the same to the assessee and also to have provided him with opportunity for cross examination, before coming to a conclusion in the matter. The AO’s failure to do so in the case on hand goes against the principles of natural justice and an addition/ finding rendered in this manner, as has been done in the case on hand, is not sustainable. By virtue of the details/documents, etc. filed by the assessee before the authorities below (as laid out in submissions in the paper book referred to earlier in this order), the assessee has proved the genuineness of the share transactions on sale/purchase of 7500 shares of Buniyad Chemicals Ltd. We, therefore, are of the view that there was no justification on the part of the AO to disallow the assessee’s claim of LTCG arising on sale of the aforesaid shares merely on the basis of the uncorroborated statement of Mukesh Choksi dated 11.12.2009 in respect of which no enquiry was carried out by the AO to establish the veracity thereof and without giving the assessee an opportunity to cross examine Shri Mukesh Choksi thereon. In this view of the matter and keeping in mind the principles of judicial consistency, we reverse the findings of the learned CIT(A) and AO and direct the AO to assess the LTCG declared by the assessee on sale of 7500 shares of Buniyad Chemicals Ltd. as declared at ₹ 7,78,861/- and allow the assessee exemption under section 54F of the Act. - Decided in favour of assessee
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2016 (11) TMI 885
Addition as profit on purchases - Held that:- Assessee actually made the purchases from third parties and the invoices being inflated was the conclusion of the learned CIT(A) and accordingly addition was sustained by the learned CIT(A). It has not been brought on record that the Revenue has filed any appeal with the tribunal against the decision of learned CIT(A). The Revenue has accepted the profit rate of 10.43% earned by the assessee in the preceding year, while in the instant year the net profit rate was 9.22%. The turnover in the instant year is ₹ 90,70,063/- . Hence in our considered view , interest of justice will be best served keeping in view factual matrix of the case if the additions to the extent are made to the income of the assessee to make the profit comparable with that of the preceding year of 10.43%. We order accordingly.
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2016 (11) TMI 884
Penalty u/s 271(1)(c) - g.p. estimation - Held that:- There is no concrete evidence of concealment of income or furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act and the addition was made based on estimating Gross Profit by rejecting books of accounts hence no penalty is attracted. Thus we reverse the orders of the authorities below and delete the penalty levied under section 271(1)(c) of the Act on estimated addition.- Decided in favour of assessee
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2016 (11) TMI 883
Addition made on account of loss on valuation of slow moving / non-moving items and old stock - Held that:- From the record we found that the inventory in question was neither written off / written down nor shown as slow moving or old inventory in earlier assessment years including the accounts for the period ended on 31/08/2007 prepared by the erstwhile management. Since present management of the assessee-company and the auditors were of the opinion that since the inventory in question was slow / non-moving and old, its value was to be thus written down / the inventory was to be written off in the audited accounts for the period ended 26/09/2007,as it had no realisable value. And such write-off / writing down in the value to Zero on 26/9/2007 itself was strictly in accordance with Paras 20, 21 & 24 of the AS-2 and Para. 20 of AS-20. It is not the case of the AO that the assessee has not submitted any documentary evidence and the reasons for writing off the inventory in question. His case is that loss on inventory had already been incurred by the assessee in the earlier years when the erstwhile management of the assessee-company had shown the inventory in question as old and slow-moving stocks in the audited accounts for the year ended 31/03/2005,31/03/2006, 31/03/2007 and the accounts for the period ended on 31/08/2007. However, this loss was cristalised by valuation of non-moving and slow moving stock during the year under consideration, therefore assessee had correctly claimed the said loss during Assessment year 2008-09 under consideration. No justification for disallowing the loss claimed on account of valuation of obsolete/slow moving inventory - Decided in favour of assessee
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2016 (11) TMI 882
Penalty u/s.271AAA - cash amount surrendered during course of search for which due taxes were deposited with interest - Held that:- The amount of ₹ 4 crore which was surrendered during search has been declared by the assessee in the return and taxes have been paid accordingly. Therefore the assessee is normally entitled for the immunity provided in section 271AAA itself. However, the revenue has raised further dispute that whether the assessee has disclosed the manner in which income has been earned. Once the income is surrendered during the course of search under section 132(4) it can be safely assumed that during discussion the assessee must have disclosed the manner. - Decided in favour of assessee
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2016 (11) TMI 881
Depreciation on stock exchange membership cards - Held that:- As relying on M/s Techno Shares & Stocks Ltd. Versus The Commissioner of Income Tax IV [2010 (9) TMI 6 - SUPREME COURT OF INDIA] stock exchange membership cards are eligible for depreciation under section 32 of the Act being in the nature of intangible asset. Respectfully following the decision from the Coordinate Bench that too in the case of assessee itself for Assessment year 2007-08, we allow the impugned ground raised before us, thus, this ground is decided in favour of the assessee. Disallowance of lease line charges under section 40(a)(ia) - non deduction of tds - Held that:- V-SAT and lease line charges cannot be considered as rendering of technical services, hence, provisions of section 40(a)(ia) are not applicable. See Kotak Mahindra Securities (2008 (8) TMI 592 - ITAT MUMBAI) and Angel Broking (2009 (12) TMI 498 - ITAT MUMBAI ) allowed the claim of the assessee . This issue is also covered by the decision of the Hon'ble A.Y.08-09 M/s.. Angel Commodities Broking P. Ltd. [2013 (7) TMI 1043 - ITAT MUMBAI ] - Decided in favour of the assessee.
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2016 (11) TMI 880
Addition made towards sundry balances written off - Held that:- As find that assessee has initially not produced any details before the Assessing Officer but it was produced only before the CIT(A) and CIT(A) has not entertained these details in the absence of proper explanation. In our considered view, as these details were not there before the Assessing Officer, it should go back to the Assessing Officer for afresh adjudication and the assessee should produce all these details before the Assessing Officer, especially when it was contested that these amounts were already offered as income and by this addition it will be a double taxation. Thus, we restore the matter to the file of Assessing Officer who shall examine the claim of assessee afresh in accordance with law after providing assessee adequate opportunity of being heard. Regarding the amount written off paid to Federal Express India (P) Ltd. towards courier charges, we do not find a valid reason for not allowing such write off when such expenses were incurred for business of the assessee which is not in dispute. Hence, we direct the Assessing Officer to delete the disallowance Disallowance of deposits written off - business loss or bad debts -Held that:- Security deposit which was written off by the assessee should be allowed as business loss. Thus, we direct the Assessing Officer to delete the addition. See case of Fab India Overseas P. Ltd. vs. ACIT [2013 (9) TMI 301 - ITAT DELHI ]wherein held that the above loss is a business loss ;for the reason that the assessee has taken on lease many premises spread over many parts of the country, and this act of taking this show room on lease is in the normal course of business.
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2016 (11) TMI 879
TDS u/s 194C or 192 - non deduction of TDS on payment of wages to the labourers - nature of contract - Held that:- When a person is hired to be an employee, the person enters into a contract of service, which is an employer/employee relationship. Another type of contract between two parties is that of an independent contractor or a contract for service. This type of contract may be defined as a contract by which a person, contractor or service provider makes a commitment to another person, the client, to carry out material or intellectual work or to provide a service for a price or fee. The characteristics of a contract for service are that the contractor is free to choose the means of performing the contract and no relationship of subordination exists between the contractor or the provider of services and the client in respect of such performance. In the instant case before us the ld. DR has not brought anything contrary to the findings of ld. CIT(A). In our considered view the wages in the instant case are covered under section 192 of the Act. Therefore the provisions of section 194C are not applicable. In the instant case the payment has been made to the employees of the assessee. In view of above we do not find any reason to interfere in the order of ld. CIT(A).
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2016 (11) TMI 878
TDS u/s 194J - Non deduction of tds on settlement and custody fees paid- Held that:- As relying on assessee's own case payment made by the assessee cannot be treated as a payment towards technical services and, at any rate, the companies having treated this amount as income and offered to tax the provisions of section 40(a)(ia) do not apply to the facts of the case. - Decided in favour of assessee
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2016 (11) TMI 877
Addition u/s 40(a)(ia) - non deduction of tds - Held that:- The assessee has made the payments by the end of the relevant financial year and therefore, the provisions of section 40(a)(ia) are not applicable. The CIT (A) has given a correct finding that the payment has already been made and therefore, nothing remained payable at the end of the relevant financial year and therefore, the disallowance is not sustained - Decided in favour of assessee Consideration received on cancellation of the development agreement - Held that:- We are satisfied that the individual directors are the actual owners of ₹ 1.35 crores and the sum of ₹ 4.51 crores received by the assessee included the sum of ₹ 1.35 crores belonging to the individual directors. We are of the opinion that the Cit (A) has properly appreciated the contentions of the assessee that the sum of ₹ 1.35 crores does not belong to the assessee, but that it belongs to the individual directors of the company in allowing the assessee’s appeal - Decided in favour of assessee
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2016 (11) TMI 876
Penalty u/s 271E - Held that:- The assessee company has advanced a sum of ₹ 15 lakh in assessment year 2004-2005 in its normal course of business, which could not materialize. Shri R.Bhaskaran repaid this advance, but it was paid in the name of one of the Directors of the company Shri Om Prakash Kanungo through account payee cheque, who in turn returned this amount to the assessee-company through journal voucher entry. Thus the repayment is made by account payee cheque although in the name of one of the Directors of the assessee-company, Shri Om Prakash Kanungo by Shri R.Bhaskaran. We find that there is a reasonable cause rather the payment is through account payee cheque. In our view, there is no violation of provisions of section 269T and consequential penalty u/s 271E is without any basis. We delete the penalty and allow the appeal of the assessee.
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2016 (11) TMI 875
Validity of assessment under Section 153C - non approval from Joint Commissioner of Income Tax as prescribed u/s 153D - Held that:- These appeals were filed on 04/02/2013 and the Bench has asked DR to produce copy of approval from Joint Commissioner of Income Tax as prescribed u/s 153D. The department was also asked to confirm as to whether u/s 153C notice or u/s 143(2) notice was issued. However, nothing came from the department. On 24/02/2016 hearing was adjourned at the request of the CIT DR and it was also mentioned that last opportunity was given to the department and cases were adjourned on 09/03/2016. Again on 09/03/2016 at the request of the CIT DR cases were adjourned to 18/04/2016 as last chance. Again on 09/05/2016 hearing was adjourned at the request of CIT DR. However, none of the evidence as asked by the Bench was supplied. Under these circumstances, we do not find any merit in the order passed under Section 153C without having approval from Joint Commissioner of Income Tax as prescribed u/s 153D. No evidence of any satisfaction have been recorded was brought to our notice. Even it was also not shown whether any notice u/s 143 (2) was issued. Accordingly, we set aside the order passed by the lower authorities and the appeals of the assessee are allowed.
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Customs
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2016 (11) TMI 855
Validity of order passed by Settlement Commission - the Bill of Entry filed before the issuance of the SCN - violation of condition as set out in 1st Proviso to section 127B(1) of the Customs Act, 1962 - Held that: - admittedly the second Bill of Entry was filed before the Petitioner made its Settlement Application before Respondent No.4. In fact, it is the case of the Petitioner that they were not permitted to file this Bill of Entry before the issuance of SCN and were allowed to file the same only after the SCN was issued. This has not been controverted by the Revenue. In these facts, we find that the Settlement Commission was in error in coming to the conclusion that the Settlement Application filed by the Petitioner was not admissible as it had failed to fulfill Condition (iii) set out above viz. that the Petitioner had not filed a Bill of Entry as stipulated in clause (a) of the 1st Proviso to section 127B(1) of the Customs Act, 1962. Principles of natural justice - Held that: - the impugned order is not sustainable on the grounds of breach of the principles of natural justice. On perusal of the record, we find that the Settlement Commission has referred to certain reports dated 1st March 2016, which were admittedly never supplied to the Petitioner. This fact is undisputed by the Revenue. This being the case, the impugned order cannot be sustained on this ground also and has to be quashed and set aside. Petition allowed - matter remanded back.
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2016 (11) TMI 854
Acceptance of Bank Realization Certificate (BRC) as proof of export and realization of export proceeds of the shipment - duty drawback - the claim of the respondent that drawback be recovered by the petitioner, as the petitioner failed to produce evidences for having realized the sale proceeds in foreign exchange exports made within the stipulated period of six months in the form of BRC, justified? - whether the dismissal of the petitioner's appeal as not maintainable by the Commissioner (Appeals) would disentitle the petitioner to the relief sought for? - Held that: - on perusal of the order passed by the Commissioner (Appeals) it is seen that the appeal filed by the petitioner was rejected as time barred. If that is so, the findings rendered by the Commissioner (Appeals) in paragraph 8.3 commenting upon the non-submission/belated submission of the BRC should be held to be without jurisdiction since the Commissioner (Appeals) could not have rendered the findings on merits when the appeal itself is held to be not maintainable. Therefore, the findings rendered in paragraph 8.3 of the order passed by the Commissioner (Appeals) has to be necessarily eschewed. So the first question is decided in favour of the petitioner. Whether the Department could refuse to consider the petitioner's case when admittedly the Original Authority did not examined as to whether the BRC were submitted within the time permitted? - Held that: - since the petitioner failed to respond to the notices issued by the authorities on 07.11.2006 and 15.06.2007, the Original Authority proceeded exparte and concluded that the petitioner has not produced the BRC. Therefore, they have to pay a sum of ₹ 20,69,545/- which they have availed as duty drawback. Thus, it is clear that at no point of time, the petitioner's case was adjudicated by the authority to ascertain as to whether the BRC produced by the petitioner along with their letters dated 23.11.2006 and 27.07.2007 to the Assistant Commissioner, ICD, Tirupur merits consideration. Therefore, merely because the Original Authority has decided exparte cannot operate as estoppel and the Department cannot refuse to consider the factual position, especially when the petitioner has prima facie established before this Court that they have produced the BRC before the concerned authority at Tirupur. Therefore, de hors the finding rendered by the Commissioner (Appeal) as well as the respondent, the petitioner's request for considering their drawback claim should be independently adjudicated by the authority. Petition disposed off - matter on remand to adjudicate the correctness of the claim made by the petitioner pursuant to their letters dated 23.11.2006 and 27.07.2007 and after issuing show cause notice to the petitioner, the proceedings shall be finalized on merits and in accordance with law.
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2016 (11) TMI 853
100% EOU - duty demand on capital goods - validity of order passed by settlement commission - permitted depreciation upto 90% on straight line method - Held that: - this Court is of the view that the Settlement Commission has given cogent reasons as to why the case has to be settled on the terms contained in the impugned order. This Court, exercising jurisdiction under Article 226 of The Constitution of India, will not examine the correctness of the impugned order as if acting as an Appellate Authority over the order of the Settlement Commission - there is no allegation made by the petitioner as to the violation of the principles of natural justice, as the petitioner had been afforded full and effective opportunity. As the reasons given by the Settlement Commission are cogent and proper and the petitioner cannot be permitted to accept a portion of the order i.e. with regard to settlement in respect of the claim for duty on capital goods, immunity from payment of interest, restricting payment of penalty to the extent of ₹ 50,000/- alone and immunity from prosecution under the Act and state that they are entitled to challenge only the portion of the order with regard to the duty demanded on raw material. This piecemeal challenge to the order of the Settlement Commission on the grounds raised by the petitioner is not tenable. With regard to the power of the Settlement Commission to be exercised under Section 127F(1) of the Act, the Settlement Commission has gone through the case and exercised its discretion. That apart, the conduct of the petitioner with regard to the raw materials, which were kept in the bonded warehouse, is to be noted and the petitioner had also admitted the shortage. Therefore, the argument of the learned counsel for the petitioner that the Settlement Commission should have exercised their power as an Assessing Officer does not merit acceptance - petition dismissed.
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2016 (11) TMI 852
Rejection of refund claim - Entitlement to the benefit of exemption from payment of customs duty under Notification No.24/2005-Cus. dated 1.3.2005 - The customs authorities rejected the refund claims for the reason that on the basis of the duty exemption certificate, the bills of entry cannot be reassessed in terms of Section 149 of the Customs Act, since the Section does not allow amendments to bill of entry on the basis of documentary evidence which was not in existence at the time the goods were cleared. Since the duty exemption certificate was obtained subsequent to the dates of clearance, they took the view that the bills of entry cannot be amended and consequently the benefit of the notification cannot be extended - whether the rejection of refund claim justified? Held that: - the substantial benefit cannot be denied to the assessee. Subsequent to the dates of import, all the procedural requirements have been satisfied. Since the requirement of re-assessment has been done away with by amending Section 27, and the imports have been made after this date, we are of the view that the assessee is entitled to the refunds on merits. However, before grant of such refunds, the other requirements of Section 27 needs to be looked into and subject to the satisfaction only the refunds can be paid - We consider it appropriate to remand the case back to the original authorities with a direction to consider the duty concession certificates produced by the assessee without insisting on the requirement for re-assessment under Section 149. The assessee s claim for refund may be validated under Section 27 and paid to them Appeal allowed by way of refund.
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2016 (11) TMI 851
SEZ unit - import gold and export manufactured gold jewellery and are a net foreign exchange earner under SEZ scheme - earrings were rejected by the foreign buyer due to polishing defect; and returned jewellery weighing 2294.840 gms. The defective jewellery weighing 2294.840 gms., imported by the appellant vide Bill of Entry No. 2062 dated 22.04.2009 was exchanged with well polished jewellery weighing 2294.840 gms., which was seized by Customs on 26.04.2009 - Whether the appellant removed duty free imported gold jewellery 2294.840 gm. valued at ₹ 29,44,823/- involving custom duty of ₹ 3,35,795/- without payment of custom duty in a clandestine manner? - Held that: - during the relevant period, the customs did not have necessary jurisdiction within the territory of Special Economic Zone. Hon’ble Gujarat High Court in Morgan Tectronics Ltd. vs. CC, New Delhi [2014 (9) TMI 985 - CESTAT NEW DELHI] make the matter clear, where it was held that the Commissioner of Customs, Air Cargo, New Customs House, New Delhi had no jurisdiction to confiscate these goods and impose penalty on the appellant and it is only the Joint/ Dy. Commissioner/ Asstt. Commissioner of Customs, in Noida SEZ Unit, who had the jurisdiction to take necessary action The customs did not have jurisdiction within Special Economic Zone established under SEZ scheme by the Ministry of Commerce, Government of India and present proceedings initiated by the customs were beyond jurisdiction. Therefore, impugned order is without proper authority of law and is hereby set-aside - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 850
Debarring of CHA from undertaking any customs work in the said Custom House - contravention of Customs Brokers Licensing Regulations - Held that: - the preliminary objection taken by learned D.R. that no appeal lies against the administrative order is incorrect inasmuch as the letter issued by the office of the Principal Commissioner of Customs specifically refers to the show-cause notice issued by DRI and also the inquiry conducted against M/s. DVS under CBLR which would amount that the activity of debarring appellant is in respect of provisions of Customs Act and Rules & Regulations made thereof. In our view this is not an administrative order but an order which is appealable before the Tribunal. Reliance placed on the decision of the case of Krishna Hirlekar [1995 (10) TMI 171 - CEGAT, BOMBAY] where it was held that the proceedings resulting in the passing of the impugned order were mainly against the CHA as per the CHA Regulations. These regulations do not contemplate debarring of the employees under any provisions of the Regulations. The employee of the CH Agents firm are issued with identity passes by the Asst. Collector and cancellation of any identity passes was not the issue before the Collector. Moreover both these appellants were neither party to the proceedings in terms of the Custom House Agents Regulations, nor were they issued notices, proposing revocation of their passes. Hence the order contained in Para 23 adversely affecting these two appellants has been passed in gross violation of the principles of natural justice and is also not falling within the purview of the proceedings under CHA Regulations against the CHA firm. The impugned order is unsustainable and set aside the same with direction to the Principal Commissioner of Customs that the licence of the appellant be restored and he be permitted to conduct the activity as a Customs Broker in the New Customs House, Mumbai - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 849
Denial of advance licence scheme - MODVAT credit - Rule 57 A of the Central Excise Rules, 1944 - violation of condition V(A) of N/N. 203/92-Cus dated 19/5/1992 - Held that: - as per condition V(A), the only condition is that input stage modvat credit should not be availed. In the present case by reversing the modvat credit condition of V(A) of notification stands complied with. Even though certificate was signed by Jurisdictional superintendent that does not alter the status of reversal of modvat credit by the appellant, which has not been disputed by both the lower authorities. In view of the fact that appellant have reversed the modvat credit and the same was endorsed in AR4 as well as on the basis of certificate issued by the Jurisdictional superintendent, we do not find any reason why the benefit of exemption notification no. 203/92-cus should not be allowed. As per our above discussion, we are of the view that appellant has complied with the condition V(A) of the Notification, accordingly they entitle for the exemption notification - appeal allowed.
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2016 (11) TMI 848
Benefit of exemption notification no. 26/03-Cus dated 1st March 2003 - caroteniod content in the imported ‘crude palm oil’ - benefit of concessional rate of duty in terms of sl. no. 34. of customs notification no. 26/03-Cus dated 1st March 2003 - Held that: - ‘Crude palm oil’ does not find ready use and must be subject to an eponymous process of refining, bleaching and deodorizing as a pre-requirement. This process also eliminates the carotenoid presence in the crude oil. It would appear that the concessional rate is intended to be accorded to the crude form to incentivise value addition in the domestic territory. The caroteniod content is, therefore, a reasonable test for ascertaining the form in which ‘palm oil’ is imported. No evidence has been brought on record to show that it was, indeed, refined bleached deodorized palm oil’ that was imported. The reduction of carotenoid content, such as it is, owing to efflux of time has not altered the form of imported ‘palm oil’ to refined and the process of refining, bleaching and deoderizing after import is unavoidable. To the extent that there is no evidence that appellant did not have to carry out the refining process before using it in the manufacture of their baked products, we see no reason for denial of the concessional rate of duty - Benefit of doubt is accorded to the test results at load port owing to lack of credibility attributable to the report of the Customs laboratory and, accepting that the imports were of ‘crude palm oil’, we allow the benefit of exemption notification no. 26/03-Cus dated 1st March 2003 - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 847
Eligibility for concessional rate of additional duty of customs in accordance with N/N. 6/2006-CE dated 1st March 2006 and N/N. 12/2012-CE dated 17th March 2012 - classification of imported goods - ‘external hard disks’ classified under heading 84717030 or 84717040 of the Schedule of the Central Excise Tariff Act, 1985? - Held that: - Under Customs Act, 1962 each import is assessed on its own merits and upon the contents of the declaration in the bill of entry. An assessee is an assessee merely for the limited period that the goods are with the custodian pending clearance for home consumption. No importer can claim to be a permanent assessee for all the goods imported by them. Most often, declarations of the assesses are accepted and, in the last decade or so, allowed clearance with a cursory examination except in the few cases where it is so warranted otherwise. Therefore, there is neither a bar on querying the declared classification at any time nor can it be a valid defence that acceptance of declaration in a past import is an acknowledgement of declaration having been true and correct. It is not uncommon for importers to align description of imported goods, not with the tariff entries, but with descriptions in exemption notification and continuing with that description until the misdeclaration is unearthed. The differential duty is adequate motive for suppression of facts relevant to assessment. The notice issued to appellant alleges that, in the bills of entry, the description did not bring on record that these drives were portable; no justifiable counter to this allegation has been furnished before the adjudicating authority. The plea of limitation raised before us is, therefore, not tenable. The individuals are equally responsible for the evasion of duty. The imports of the appellants are liable to be classified under 84717030 and not 84717020 of the Schedule to the Central Excise Tariff Act, 1985 - appeal rejected - decided against appellant.
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2016 (11) TMI 846
Valuation - 20% loading was done on the declared CIF value - Rule 8 of the Customs Valuation Rules, 1988 - foreign collaboration agreement - Rule 9 (1) (c) of the Customs Valuation Rules - Held that: - It is seen that the price of imports made by the appellants are roughly the same as price at which they have been procured by the foreign collaborator from other parties. Further, we have been informed that these items are in the nature of plastic granules. It can be seen that plastic granules would not be covered by the technology transfer agreement as the contract product defined in the agreement mean only injection moulded parts sub-assemblies and related items. Out of it a plastic injection moulds. Similarly, in case of stamping foil the price at which the goods have been supplied to the appellant is slightly higher than the price at which the same have been procured by the foreign collaborator. It is apparent that the relationship has not influenced the price on the goods. In so far as addition of royalty under Rule 9 (1) (c) is concerned neither order-in-original nor grounds of appeal filed before the Tribunal have anything to show that the purchase of goods was a condition of transfer of technical know-how fee. In the absence of that assertion and evidence thereof demand under Rule 9 (1) (c) cannot be accepted. The appeal filed by the Revenue is dismissed.
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Service Tax
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2016 (11) TMI 874
Whether the turnover in respect of services provided/exported prior to 1.4.2012 should be deducted from the export turnover as well as total turnover for arriving at the ratio for eligible refund under Rule 5 of the Cenvat Credit Rules 2004? - Held that: - The amended rule is applicable only for the exports taken place on or after 1st April 2012. The Ld. Commissioner has deducted the value of 10 invoices from the export turnover as well as from the total turnover of quarter April 2012 to June 2012, for the reason that exports made before 1.4.2012 is governed by the un amended Rule which shall not apply retrospectively on the export made prior to 1.4.2012. Therefore in my considered view the Ld. Commissioner has rightly deducted the value of 10 invoices pertaining the period prior to 1.4.2012 from export turnover as well as total turnover for the period April - June 2012. Limitation bar - Held that: - when in the Notification issued under Rule 5 it is a condition that the assessee has to file refund only once in a quarter. Accordingly, he is not allowed to file refund before quarter is completed, in that case, the relevant date for computing 1 year for the purpose of Section 11B shall be from 30.6.2012. In the present case, the respondent filed refund claim on 26.4.2012 i.e. within 1 year from 30.6.2012, hence the same is clearly within 1 year as provided under Section 11B. The Ld. Commissioner has rightly held that the refund is within the stipulated time period of 1 year. The Order-in-Original No. R/459/STC/PIII/2013, dated 23.0902013 passed by the Deputy Commissioner, Service Tax Cell, Pune-III Commissionerate is modified and further refund of ₹ 40,13,161/- is allowed with consequential relief. The present appeal is allowed in toto - appeal dismissed - decided against Revenue.
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2016 (11) TMI 873
Rejection of Refund claim - export of services - N/N. 41/2007-ST dated 6/10/2007 - drawback availed - Held that: - as regard the rejection of claim on the ground that the appellant have availed drawback, the lower authority have not considered the amendment vide Notification No. 33/2008 dated 7/12/2008 wherby condition as specified under clause (e) of para 1 has been deleted w.e.f. 7/12/2008 therefore even though the appellant have availed the drawback refund cannot be rejected on this ground. Despite availability of the relevant documents, lower authority have rejected their claim with contention that co-relation was not established and documents were not submitted, I therefore allow the appeal by way of remand to the original adjudicating authority to pass a fresh order in respect of claim which was rejected, taking into consideration of my above observations on the facts and merits of the case - Appeals allowed - matter remanded.
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2016 (11) TMI 872
Refund claim of accumulated Cenvat credit unutilised in their Cenvat credit account Under Rule 5 of the Cenvat Credit Rules, 2004 - Time bar - Held that: - I find that under Rule 5 of the Cenvat Credit Rules, 2004, the refund claim is required to filed once in a quarter i.e. during the pendency to the quarterly if export has been completed, in that case also refund claims required to filed within one year of the last date of the quarter. In this case, only one refund claim is required to be filed for the quarter, in that case, the relevant date is the last date of the quarter. In this case, for the quarter January, 2008 to march, 2008 the refund claim has been filed on 30-3-2009, which is within one year of the last date of quarter. Further, for the refund claim pertains to October, 2008 to December, 2008, the refund claim has been filed on 30-11-2009 which is also within one year of the date of end of quarter. In that circumstances the refund claims filed by the appellant are within time, therefore refund claims cannot be rejected as time barred. Appeal allowed - refund allowed - decided in favor of appellant.
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2016 (11) TMI 871
Rectification of Mistakes - threshold exemption - Held that: - the first appellate authority has recorded that he is unable to extend the benefit of Notification 8/08-ST dated 01.03.2008 as the appellant had not produced any documents as to their turn-over in the previous year. Before us also, nothing is produced to come to a concrete conclusion- In our view, principally the appellant should get the benefit of exemption under Notification No.8/08-ST if they are able to produce an evidence that their turn-over service rendered from the previous year falls within the period of exemption. To that extent, we hold that the appellants have made out a case in the ROM application. Levy of tax - direct purchase of products made by the applicants from RMP - Held that: - there is no error apparent on the face of the record on this point Computation of liability to the extent the consideration is received by the applicants to be taken as inclusive of tax - Held that: - duty or tax liability is to be worked out from the amounts/consideration received holding the same as cum-tax consideration. To that extent we hold that the applications for ROM need to be allowed. The tax liability is upheld interest but the same needs to be worked out - applications for Rectification of Mistake are disposed off.
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2016 (11) TMI 870
Eligibility for exemption/refund in terms of N/N. 41/2007-S.T., dated 6-10-2007 - export of excisable goods Soyabean Meal - Technical and Testing Services - Custom House Agent Services - Technical Inspection and Certification Services - Held that: - The services now under dispute were provided by registered service providers under the category of “Technical Testing and Analysis Services”. The tax has been collected under the said heading and no objection has been raised on that account. As such, the Commissioner (Appeals) found that the denial of refund of service tax paid by the respondent for the services for which they have paid service tax under the category of ‘Technical Testing and Analysis’ is not justified. He also observed that it is possible that a service may appear to be classifiable under more than one heading. Proper classification will be guided by the essential character in case of composite services. After due examination, the learned Commissioner (Appeals) held that the respondents are correctly eligible for refund. After careful consideration of the grounds of appeal and the impugned order, we find no merit in the present appeal and accordingly dismiss the same.
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Central Excise
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2016 (11) TMI 869
Interpretation of circular dated 28.08.1995 - reliance placed on the decision of the case of the decision of Madras High Court in the case of Commissioner of C.Ex., Pondicherry Vs. Caterpillar India Pvt. Ltd [2013 (7) TMI 244 - MADRAS HIGH COURT] where it was held that The use of the phrase 'supplied to the projects financed by the said United Nations or an International Organisation and approved by the Government of India' clearly shows that the condition for grant of exemption is supply of the goods towards the project and nothing beyond. Held that: - the decision of Madras High Court which has been confirmed by the Supreme Court, is required to be followed. The letter dated 2.5.2005 has been clarified by Commissioner (Appeals) that the goods were supplied by the assessee. In that view of the matter, while construing the provisions, the authorities have rightly considered the documents. However, a contention has been raised that a certificate ought to have been issued in favour of the assessee. In view of the letter dated 2.5.2005, things are clarified, therefore, in our view, there is no error committed by the authority or Tribunal. No substantial question of law arises for consideration by this Court - appeal dismissed
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2016 (11) TMI 868
SSI exemption - clubbing of clearances - holding-subsidiary relationship - suppression of facts - Held that: - the value of manufacturing and clearances of exempted goods from any unit has to be excluded, when the clearances of both the units are clubbed to determine the eligibility of SSI benefit to the appellants - we are in agreement with this plea of the appellants that there has not been any suppression of material facts by the appellants, when the two appellants viz., PJM and MBC are under the jurisdiction of one Commissionerate of Central Excise, who have granted separate central excise registration to them and from time to time, there has been correspondence between these two appellants and the department. Therefore, based on the facts as well as the ratios laid down by the Hon’ble Supreme Court in the case of CC, Mumbai vs. MMK Jewellers [2008 (3) TMI 5 - SUPREME COURT], the demands issued for the period beyond one year are not sustainable and are, therefore, hereby set aside. In other words, the liability of Central Excise Duty has to be decided for the period of one year preceding the date(s) of the show-cause notice issued to the appellants. The matter requires quantification of liability of duty of Central Excise, if any, and for imposition of penalties, if any, in respect of the impugned periods - April 1997 to March 2003, for which respective show-cause notices were issued to the appellants. This will require detailed verification of figures and documents at the field level. Therefore, the matter for re-quantification of the liability of the appellants and imposition of penalties is being remanded to the original adjudicating authority, Commissioner of Central Excise, Bangalore, who shall decide the matter based on our findings, within four months of receipt of this Order after giving necessary opportunity for personal hearing and for production of documents to the appellants - appeal allowed by way of remand.
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2016 (11) TMI 867
CENVAT credit - input services - after sales service, warranty services - Held that: - reliance placed in the judgment in the case of Commissioner of Central Excise, Nashik Versus Mahindra & Mahindra Ltd. [2012 (8) TMI 530 - CESTAT, MUMBAI] wherein it was held that Service tax paid on the expenses incurred for providing warranty service were entitled for input service credit. CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 866
CENVAT credit - goods namely pre-fabricated building and building structures - user test - reliance placed in the decision in the case of Vandana Global Ltd. Vs. CCE [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] - Held that: - the cenvat credit was denied to the respondent relying on the decision of Vandana Global Ltd. holding that the explanation 2 to Rule 2(k) of the CCR, 2004 is clarificatory in nature and retrospectively applicable. The decision of the Larger Bench of this Tribunal in the case of Vandana Global Ltd. has been examined of the various Hon'ble High Courts and it has been held that it is not a good law. Further, in the case of Singhal Enterprises Pvt. Ltd. [2016 (9) TMI 682 - CESTAT NEW DELHI] this Tribunal held that the user test is to be applied for structural items used in the fabrication of support structures. In this case, the respondent has explained the use of the steel items used for pre-fabricated building and building structures. Therefore, by applying the user test, the respondent is entitled to avail the cenvat credit up to the period 07.07.2009. As the issue of availment of credit was in dispute during the period, therefore, no penalty is imposable in the facts and circumstances of the case. In result, the respondent is entitled to avail cenvat credit on the steel items during the period 01.01.2009 to 07.07.2009 and no penalty Imposable - appeal dismissed - decided against Revenue.
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2016 (11) TMI 865
Demand - denial of benefit of N/N. 214/86CE dated 25.03.1986 - job work - filing of undertaking with the jurisdiction officer of the job worker - Held that: - I find that in this case the principal manufacture has filed declaration before the Assistant Commissioner having jurisdiction of the factory of the job worker and the said declaration have been accepted by the said Assistant Commissioner. In that circumstances, the Condition of the notification has been complied with by the principal manufacture. In that circumstances, the proceedings against the appellant are not warranted. Therefore, I hold that the appellant is entitled to benefit of notification no. 214/86-CE and the duty is not payable by the appellant - appeal allowed.
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2016 (11) TMI 864
CENVAT Credit - outdoor catering services - input service - Held that: - I do not find any substantial evidence produced by the Appellants before the authorities below, in support of their submission that the amounts have not been recovered from their employees. I am of the view that in the interest of justice, the Appellants be given fair chance to produce evidence before the Department to establish that the amounts paid for providing such service have not been recovered from the employees on which they have availed CENVAT Credit. In the result, the matters are remanded to the original adjudicating authority so as to enable the Appellants to produce sufficient evidence to establish that the amounts spent on outdoor catering services in providing canteen services to the employees, have not been recovered from the employees. Needless to mention that reasonable opportunity of hearing be given to the Appellants - appeal allowed by way of remand.
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2016 (11) TMI 863
Eligibility of exemption under N/N. 5/98-CE, dt.3.6.1998 - Air Mingled Polyester Yarn - Air Mingled Polyester Yarn were exempted prior to 01.03.1999 by virtue of Notification No.5/98-CE, dt.3.6.1998. However, the said product became remove from the exemption list w.e.f. 1.3.1999 - whether benefit of exemption will be available for the clearance of the goods during the period January 1999 to March 1999? - the Appellant did not dispute about the duty, but assailed the impugned order for imposing penalty equal to the duty confirmed - Held that: - The contention of the learned Advocate is that in absence of suppression, mis-declaration etc, penalty equal to duty cannot be imposed; also it is his contention is that due to the budgetary changes, immediately they could not come to know about the change of notification, and removal of the product manufactured by the Appellant from the list of exempted goods. In these circumstances, I am of the view that imposing penalty equal to the duty confirmed would be too harsh. However, it cannot be denied that there was violation of the provisions of the Central Excise Act and the Rules made thereunder while clearing the goods availing the exemption Notification. Therefore, imposing of nominal penalty would meet the ends of justice. Keeping in view the circumstances, in my opinion, imposition of penalty of ₹ 5,000/- would suffice the purpose. Accordingly, the penalty is reduced from ₹ 44,021/- to ₹ 5,000/- (Rupees Five Thousands only). On the issue of levy of interest, I find force in the contention of the learned Advocate, in view of the judgment of the tribunal National Fertilizers Ltd [2003 (11) TMI 397 - CESTAT, NEW DELHI]. Therefore, the interest confirmed under Section 11AB is set aside. Appeal allowed - decided partly in favor of appellant.
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2016 (11) TMI 862
Clandestine removal - one vehicles carrying SS patta patties weighing 4480 Kgs. which was removed against delivery challans, without payment of duty - Held that: - I find that the Commissioner (Appeals), after analysing the evidences on record came to the conclusion that the goods loaded on the vehicle and removed by the appellant on 23.09.2011, was without payment of duty, being seized, hence liable for confiscation. Also, on the basis of statements and other evidences, he arrived at the conclusion that the appellants, in the past also had cleared the goods clandestinely without payment of duty. But, since the said goods were neither seized nor available for confiscation, accordingly, set aside the confiscation of the said goods. I do not see any infirmity in the above findings of the ld. Commissioner (Appeals). Accordingly, the present appeal being devoid of merits is accordingly dismissed - Appeal dismissed.
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2016 (11) TMI 861
Clandestine removal of manufactured goods - Plastic Lay Flat Tubes, Plastic Films etc. falling under Chapter 39 of Central Excise Tariff Act, 1985 - Held that: - I find that the appellant M/s. Vardhman Polypacks had paid the entire amount of duty, interest and penalty within 30 days from the date of order, accordingly, they are eligible to the benefit to discharge 25% of penalty as observed in the Order-in-Original. Since, they had complied the condition laid down in the said Order, accordingly, the appeal is infructuous and dismissed as withdrawn. In the case of the Appellant, Shri Haresh D. Shah, partner, the penalty is unsustainable as penalty on partnership firm has already been imposed and confirmed by the authorities below, in view of the decision of the Hon'ble Gujarat High Court in the case of Pravin N. Shah vs. CESTAT [2012 (7) TMI 850 - GUJARAT HIGH COURT]. As regards the personal penalty on Shri Satyendra R. Yadav, employee of the, keeping in view the role played by him and his position in the Firm, and in the interest of justice, the penalty is reduced from ₹ 25,000/- to ₹ 10,000/- Appeal disposed off - decided partly in favor of appellant.
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2016 (11) TMI 860
CENVAT credit - inputs and input services - LPG cylinders - telecom services - marketing services - maintenance/repair services - whether the LPG cylinders used for transporting finished goods from factory to store room in forklifts is eligible for credit is decided in the case of Bajaj Auto Ltd. [2010 (12) TMI 979 - CESTAT, MUMBAI] - Held that: - it was held in the case that the credit on LPG cylinders used for running canteen, which was maintained for workers under the Factory Act, 1948 was held to be eligible. In the present case, the LPG cylinders were used to function the forklifts in order to facilitate movement of goods within the factory. Following the judgment I hold that credit on LPG cylinders is admissible. Telecom services - marketing services - maintenance/repair services - Held that: - these services fall within the inclusive part of the definition. The original authority has denied the credit stating that, maintenance and repair services were availed in respect of vendors premises. On perusal of the definition of input service it can be seen that the marketing/sales promotion services fall within the inclusive part of the definition. The same has been considered and analysed in the judgment referred in M/s Hindustan Coca Cola Beverages (P) Ltd., [2010 (4) TMI 323 - CESTAT, BANGALORE]. Disallowance of credit on inputs as well as input services is unjustified - appeal allowed.
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2016 (11) TMI 859
CENVAT credit - non-registration of supplier at the time of issue of invoices - whether the availment of Cenvat credit by the appellant on the basis of supplementary invoices issued by the service provider, justified? - Held that: - Cenvat credits stand allowed by the Tribunal in the case laws cited by the appellant under identical circumstances. In the case of Secure Meters Ltd. Vs. CCE [2010 (1) TMI 284 - CESTAT, NEW DELHI] which is on identical facts to the one in present appeals Tribunal has held that it is not correct to deny the service tax credit on the basis of the above mentioned supplementary invoices, just because at the time of receipt of the input services, the input service providers were not registered and had not mentioned Service tax registration no. in the invoices. I find no reason to take a different view in the present appeals - CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 858
Denial of CENVAT credit - various input services - Held that: - accommodation services, convention service, design services, mandap keeper services, works contract services, interior decorator services, restaurant services, public relations services and general insurance service were allowed by the adjudicating authority vide Order-in-original dt. 30/06/2016 for the subsequent period. Further in respect of air travel services and other services in the appellant's own case, the Commissioner(Appeals) vide order No. 124&125/2013 dt. 15/11/2013 has allowed the credit. The learned counsel has also relied upon the judgment rendered in the case of M/s. Reliance Industries Ltd. Vs. CCE&ST, LTU, Mumbai [2016 (8) TMI 123 - CESTAT MUMBAI] wherein the co-ordinate Bench of the Tribunal has allowed the credit on all the services which are in dispute in the present case. It has also to be mentioned that the Department has no case that the services were used for personal consumption of any employee of the appellant. In view thereof following the view taking in the above decisions, I hold that the denial of credit is unsustainable.
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2016 (11) TMI 857
Levy of duty - delivery charges - delivery charges collected from the buyers whether shall be liable to duty? - Held that: - The retail distribution system of petroleum company has not been disputed by Revenue. It is the policy of the Government that the duty-paid goods are delivered at the place of buyers charging uniform freight. Once there was clearance of duty-paid goods, any further charges for delivery thereof under separate contract shall not form part of the assessable value. This being the basic principle for levy of excise duty, following the decision of Kolkata Bench of the Tribunal in IOCL Vs CCE Kolkata [2007 (5) TMI 476 - CESTAT, KOLKATA], there shall be no levy on this count. The second count of demand is that when duty-paid goods are cleared from terminal to the Company-Owned Company-Outlets (COCO), that was not the place of removal when no further levy of duty is made. Since 'place of removal' was terminal and duty prevalent at that point of time has been charged on the value at that place, there cannot be adoption of price at COCO for levy of duty on the duty-paid goods - Held that: - it is noticed that duty-paid goods had moved to the COCO and meaning of "place of removal" before 14.5.2003 did not cover such transaction within its ambit. Therefore, appellant is correct to place reliance on the Bangalore Bench decision in the case of CCE Visakhapatnam Vs BPCL [2012 (12) TMI 471 - CESTAT, Bangalore]. Levy of duty not justified - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 856
SSI exemption - use of brand name of others - reliance placed on the decision of the case of Kali Aerated Water Works Vs. CCE, Madurai [2015 (6) TMI 226 - SUPREME COURT] where it was held that appellant has been using its own brand name 'Kalimark' and it belongs to the appellant - Held that: - Keeping in view of the principles of law laid down by the Apex Court in the above said judgement, the matter is remanded back to the adjudicating authority to re-examine the issue afresh, since the impugned order was passed in the year 2004 and the Apex Court judgement came up on 13.05.2015. In between, 11 years have been passed and the right title and ownership of the trade mark has been settled by the Apex Court - The authority is directed to issue notice to the appellant within three months of receipt of this order and granting reasonable opportunity of hearing to the appellant and shall consider the defence plea and pass a reasoned and speaking order. It is expected that the authority shall pass order within one month from the late date of hearing of the matter - appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2016 (11) TMI 845
Refund of excess VAT amounts - the petitioner is entitled to refund in the first instance but that sometime in January 2016, further liabilities arose on account of the later period. This, according to the VAT authorities, entitled them to adjust the amounts payable - Held that: - a direction is issued to the respondents to process the petitioner’s claim for refund and pass appropriate orders and ensure that the amounts together with up-to-date interest (till date of payment) are released to its account within a week from today. In case of any discrepancy or shortfall of interest, it is open to the petitioner to move an application in that regard. The same shall be decided within one month of its receipt by the concerned VATO - appeal allowed.
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2016 (11) TMI 844
Validity of assessment order - opportunity to file objections - the reply submitted by the petitioner dated 29.01.2016 along with annexures were available on the file of the respondent. However, the petitioner's grievance is that unless and until full details are furnished, they would not be in a position to submit effective objections - Held that: - The stand taken by the petitioner appears to be fully justified, since to submit an effective objections, particulars have to be furnished by the Department. Therefore, the petitioner has now sought for furnishing the Bill Nos. and other details in respect of the transactions which have been referred to in the impugned orders. This having not been furnished, this is a fit case where the assessment could be redone, after giving the necessary particulars - petition allowed - matter on remand.
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2016 (11) TMI 843
Eligibility of exemption from tax - central sale - the claim made in Form-D declaration was unavailable - If the material is supplied in response to the tender invited in the name of President of India, whether it has to be considered under the Central Government or not? - Held that: - if the goods are supplied or procured in the name of the President of India or supplied in response to the tender published in the name of the President of India, it has to be treated as goods sold to the Government (Union Government) and the benefit of Section 8(4) of the CST Act would be available to the petitioner. The point of law is decided accordingly. Verification of facts - Held that:- If the Tribunal finds as prima facie observed by us earlier that it was a case of goods sold to the President of India, then also, the matter will have to be remanded by the Tribunal to the Assessing Authority instead that if the matter is remanded by us to the Assessing Authority, that could be a better course since the Assessing Authority would be in a position to examine and may also call for other documents, if required for verification or otherwise. Hence, we find that the matter should be relegated to the first Assessing Authority - the impugned orders passed by the Assessing Authority and confirmed thereof by the first appellate authority as well as by the Tribunal are quashed and set aside - matter remanded back with directions.
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2016 (11) TMI 842
Levy of penalty u/s 15A(1)(o) of the 1948 Act - alleged contravention of the provisions of Section 28A of the U.P. Trade Tax Act, 1948 - detention of goods - goods not accompanied with the documents required in terms of the provisions of Section 28A - Held that: - While it is true that the proceedings for levy of penalty were instituted with reference to clause (o) of Section 15-A (1) alone, the case of the revisionist may be tested even on the pedestal of Section 28-B. It becomes pertinent to note that for violation of Section 28-B or its provisions a like penalty is provisioned for in clause (q) of Section 15-A(1). The vehicle in question commenced its journey in the State of Rajasthan and is stated to have been apprehended just before the check post at Saiyan - Now it needs to be borne in mind that section 28B lays down the requirement of obtaining what may be called a transit pass. This is a document which the person in charge of the vehicle must obtain at the time of entry into the State and surrender upon exiting the State. The time at which this transit pass is to be obtained and surrendered is prescribed to be "the first check-post or barrier after his entry into the State and deliver it to the officer-in-charge of the last check-post or barrier before his exit from the State". The statutory presumption of a sale having occurred within the State or a violation of section 28-B would come about only upon the failure on the part of the person to obtain the requisite form and declaration upon crossing the first check post or barrier which fell after his entry into the State. Here, the vehicle was apprehended before the first check post which fell upon entry into the State. It was not the case of the Department that the vehicle of the revisionist had crossed the Saiyan check post and was exiting the State of U.P. at which stage the goods were apprehended. The provisions of section 28B were therefore not infringed. Consequently, the question of a levy of penalty in terms of section 15A (1)(q) would also not arise. The Court therefore finds that the orders of the authorized officer, first appellate authority as well as the Tribunal are clearly unsustainable and arbitrary. Revision allowed.
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2016 (11) TMI 841
Valuation - 'turnover' as defined under the U.P. Trade Tax 1948 - whether the freight charges which are stated to have been levied and recovered by the revisionist from the purchaser of goods was liable to be included in its taxable turnover? - Held that: - the Tribunal found that in terms of clause 10 of the contract, the supply was to be effected at the railway siding. In terms of clause 11, the responsibility and ownership of the stone ballast remained that of the supplying contractor. In terms of clause of 12 of the contract, the measurement of stone ballast was to be carried out and effected at the railway siding. A further condition stood imposed to the effect that in a case of the stone ballast being found within 60 days from the date of deposit as not being as per the quality prescribed the same would be liable to be removed by the supplying contractor. As the Tribunal records on the basis of the terms of the contract, the contract of sale was not complete till the ballast was transported to and measured at the railway siding. It records that the responsibility and ownership of the ballast while in transit remained with the assessee. There was thus no transfer of property in goods at the time of they being put into transit. The freight charges were therefore charges which clearly came to be incurred by the revisionist in order to complete the bargain and a charge which was incurred "at the time of or before the delivery thereof" of the goods. The cost of freight which was incurred was not a special condition imposed by the purchaser thereof. The obligation to transport the goods was an essential element, an integral component of the transaction of sale - revision disposed off - decided in favor of Revenue.
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Indian Laws
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2016 (11) TMI 840
Remedy of appeal under section 17 of the SARFAESI Act - Held that:- It is trite principal to be followed stead-fast in commercial matters that rather than straightway invoking the jurisdiction of the high court under Article 226 of the of the Constitution, an aggrieved party avails and exhausts the alternative remedy. The aforesaid principle unequivocally stem from the decisions of the apex court and of this court referred to hereinabove. In the aforesaid circumstances, the Court is not inclined to exercise writ jurisdiction against the present challenge. The petitioner is required to be relegated to the remedy of Appeal before Debts Recovery Tribunal and he is being so relegated hereby. Petition is dismissed only on the ground that the petitioner has alternative remedy of filling of an appeal before the Debt Recovery Tribunal under section 17 of the Act. The petitioners are hereby relegated to the said remedy. It is open to the petitioners to raise all the contentions before the Tribunal in the appeal which they may now file.
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