TMI Tax Updates - e-Newsletter
November 5, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
TMI SMS
Highlights / Catch Notes
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Customs:
Misdeclaration of value of goods - personal penalty - To the extent that the role of the appellant in non-compliance has not been established, he is clearly beyond the pale of penal action under that statute. The imposition of penalty on the appellant is without authority of law and is set aside - AT
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Customs:
Benefit of Duty Drawback - All Industry Rates - conversion of 24 free shipping bills to the drawback shipping bills - there was no reason for denying the benefit only on the ground that at the time when the appellant had sought the duty drawback, the goods could not be physically examined. - AT
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Customs:
Levy of Penalty - Valuation - It is only inadvertent mistake occurred on the part of the appellant in not including cost of transportation, insurance and other expenses for the voyage of the Tug from China to Singapore - penalty waived - AT
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Customs:
100% EOU - warehousing of goods - mismatch in the description of goods between the shipping bill and the procurement certificate - the only reason for mismatch can be a clerical error - demand set aside - AT
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Wealth-tax:
Addition of taxable wealth of the assessee because of surrender of the cash found in locker during the course of search confirmed - AT
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Service Tax:
Rejection of VCES declaration - Misdeclaration of value - withdrawal of immunity from penalty and prosecution - there is no violation of principles of natural justice committed by the respondents - HC
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Service Tax:
The appellant is entitled to cenvat credit on ‘input construction services’ - AT
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Service Tax:
Except mere allegation of suppression, the Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of tax - No penalty - AT
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Central Excise:
Process of separating valuable mineral sands from ordinary sea sand - whether the process amounts to manufacture or not? - Was not amount to manufacture before introduction of new chapter note in 2011 - AT
Articles
Notifications
News
Case Laws:
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Income Tax
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2016 (11) TMI 162
Review and rectification of order - Held that:- In view of the observations made by the Honourable Apex Court in Assistant Commissioner of Income-Tax v. Saurashtra Kutch Stock Exchange Ltd. (2008 (9) TMI 11 - SUPREME COURT ), in our opinion, the Tribunal has the power to review its own order and rectify the error committed by it. We, therefore, set aside the impugned order passed by the Tribunal and remit the matter back to the Tribunal to hear the Miscellaneous Application afresh and decide the same on its own merits and in accordance with law. Accordingly, this appeal is allowed. The question posed for our consideration is answered in favour of the assessee and against the revenue.
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2016 (11) TMI 161
Investment Allowance - ITAT held that by crediting the Partners’ capital account by the amount standing to the credit of the investment allowance reserves account does not result in distribution by way of profit of such reserves - Held that:- It appears that the amount representing Investment Allowance reserve had been, in fact, utilized before the expiry of 10 years for the purchase of new plant and machinery but, the cost of the new plant and machinery had been debited to plant and machinery account and not to Investment Allowance reserve account because of the accounting practice and hence, the Investment Allowance reserve account was debited and Partners’ account was credited. In our opinion, making entry in this manner would not mean that the reserve account had been utilized for distributing profits or for any non-business purpose and had not been utilized for purchase of plant and machinery. Thus it is not possible to accept the contention of Revenue that the Tribunal committed any error in law. Thus, we are of the view that no substantial question of law arises in these references.
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Customs
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2016 (11) TMI 139
Misdeclaration of value of goods - duty drawback - personal penalty - role of the appellant (third party) - moral responsibility - Held that: - There is no evidence on record to show that appellant was the beneficiary of the drawback amounts remitted into the account of the exporter in Bank of Maharashtra. Appellant has not admitted to participation in the offence either. In these circumstances, statements of others connected with the impugned exports cannot, of themselves, establish anything other than the outline of the transactions and the persons connected with the commercial aspect of the transaction. Without either handling the goods between the entry for export and its departure from India or being a signatory to any of the declarations in connection with the export, we are unable to agree with the adjudicating authority that all, and any, persons connected with a business transaction at a value higher than its actual worth at the time of export should be penalised under section 114 which is applicable for any act of omission or commission in relation to the contravention by the goods. Whatever may be the extent of tutelage in deviancy by the appellant, to allow such influencers to be brought within the jurisdiction of the Customs Act, 1962 has the ramification of intrusiveness into areas that go beyond the objects and purposes of customs legislation. The boundaries of action under the Customs Act, 1962 is limited to declaration (or failure to declare) vis-a-vis the compliance required thereof under the customs law. To the extent that the role of the appellant in non-compliance has not been established, he is clearly beyond the pale of penal action under that statute. The imposition of penalty on the appellant is without authority of law and is set aside - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 138
Benefit of Duty Drawback - All Industry Rates - conversion of 24 free shipping bills to the drawback shipping bills - para 4 of Circular No. 36/2010-Cus. dated 23.9.2010 - principles of natural justice - Held that: - the decision in the case of Cargill India Pvt. Ltd. Vs. CC & CE, Visakhapatnam-II [2015 (11) TMI 378 - SUPREME COURT] relied upon where it was held that there was no reason for denying the benefit only on the ground that at the time when the appellant had sought the duty drawback, the goods could not be physically examined. Matter remanded back to the original adjudicating authority, who is directed to decide the matter afresh within one month of receipt of this order in terms of para 4 of Circular No. 36/2010-Cus. dated 23.9.2010 and Rule 12 of Customs, Central Excise Duty and Service Tax Rules, 1994 after giving sufficient opportunity of personal hearing and production of evidence to the appellant - appeal disposed off.
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2016 (11) TMI 137
Demand of differential duty - Penalty - Valuation - Notification No. 21/2002-Cus DATED 1/3/2002 - Rule 10(2(a)(i) of Customs Valuation (determination of price of imported goods)Rules, 2007 - Held that: - the details given which is supported by relevant invoices, the actual cost of transportation expenses was ascertained, therefore Ld. Adjudicating authority should not have resorted to proviso (i) of Rule 10(2)(a) accordingly there was no need to add 20% of FOB value - On the basis of actual expenses shown by the appellant the actual cost of transportation stands established therefore 20% as provided under proviso (i) of Rule 10(2)(a) of Customs Valuation Rules, 2007 cannot be applied. As regard insurance the Adjudicating authority straight way picked up premium amount mentioned in the Hull Marine Policy and added in the value, whereas appellant has shown on the basis of the documentary evidence of insurance company M/s. HDFC Ergo, General Insurance that the total premium of Rs, 2,63,962/- was paid in respect of Tug, however Ld. Adjudicating authority added entire premium of ₹ 8,51,175/-, actual insurance premium born by the appellant can only be added in the FOB value to arrive at assessable value - From the documents submitted by the appellant there is no dispute that actual premium paid by the appellant is ₹ 2,63,962/- and not ₹ 8,51,175/-. As regard the penalties imposed on the appellant company, as well as Director and employee of the appellant company, we find that from the overall facts and circumstances of the case, we do not see any malafide intention of the appellant to evade Custom duty of ₹ 12 lacs where they had discharged huge amount of customs duty amounting to ₹ 3.67 crores - It is only inadvertent mistake occurred on the part of the appellant in not including cost of transportation, insurance and other expenses for the voyage of the Tug from China to Singapore - Appeal allowed
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2016 (11) TMI 136
Demand of differential duty - 100% EOU - warehousing of goods - mismatch in the description of goods between the shipping bill and the procurement certificate - Held that: - the procurement certificate, commercial invoices, packing list and Bill of Entry for warehousing contain the identical description. The shipping bill has been issued Bill of Entry wise and contain the Bill of Entry No. and date. The total quantity imported and the packages on the Bill of Entry are matching. The only mismatch between the shipping bill and the Bill of Entry is that instead of giving description and quantity of each item of imports, only the description appearing at first Sr. No. has been mentioned and total quantity has been shown against it. The shipping bills have been countersigned and examined by the officers of Customs. The containers have been sealed and sent to the appellant premises. In these circumstances, the only reason for mismatch can be a clerical error. Revenue has not conducted any investigation at the factory to establish that the different goods or different quantity of goods have been received at the factory - demand of duty not sustainable - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 135
Scope of Regulation 20(1) and 22(1) of Customs House Agents Licensing Regulations 2004 - suspension of CHA licence - whether the order of suspension passed under Regulation 22 of Customs House Agents Licensing Regulations 2004, the time limit is to be complied with or not? - Held that: - the Customs House Agent Licensing Regulation having statutory force and it is also reiterated in the Circular No.9/2010- Cus., dated 08.04.2010, this Court is of the view that 90 days prescribed under Regulation 22(1) is mandatory in nature and cannot be treated as directory. The impugned show cause notice has been issued beyond the period of ninety days from the receipt of offence report and since the relevant statutory regulation as well as Circular issued by them had been violated with impunity, the respondent / Writ Petitioner need not be driven to avail the alternative remedy - This Court, on an independent application of mind, is of the view that there is no irregularity or error apparent on the face of the record, which warrants interference and finds no merits, in this Writ Appeal and therefore, it is dismissed.
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2016 (11) TMI 134
Misdeclaration - Confiscation - The petitioner has challenged issuance of show-cause notice dated 20th March, 2010 under section 124 read with section 28 of the Customs Act, 1962 as in excess of the power and jurisdiction of the issuing authority - Final assessment not having been made, there cannot be issuance of a show-cause notice under the said section within the period prescribed from the relevant date, since there is no relevant date in the present case as final assessment and adjustment has not been made - Held that: - The discovery made by Customs recording mis-declaration might give rise to issuance of a show-cause notice to that effect but the present show-cause notice cannot be sustained - Decided in favor of the assessee.
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2016 (11) TMI 133
Misdeclaration of country of origin - Recovery of differential duty - imposition of penalty u/s 114A/112 of Customs Act, 1962 - N/N. 73/2005-Cus, dt.22.07.2005 - concessional rate of duty - country of origin of goods - whether the Appellant's approach was bonafide in declaring the country of origin as Singapore and availing the benefit of Notification No.73/2005-Cus.? - reliance placed on the decision of case [2012 (1) TMI 157 - CESTAT AHMEDABAD] - Held that: - on the imports made by other Appellants, in Jesons Industries Ltd.'s case this Tribunal has already confirmed the demand and imposed penalty involving the same overseas supplier, wherein the country of origin was mis-declared as Singapore. Broadly, we do not find any difference between the facts stated in the said case and the present one. In the circumstances, the penalty under Section 114A of Customs Act, 1962 against the Appellant is unsustainable. Accordingly, we confirm the penalty imposed by the learned Commissioner on the Appellant under Section 114A of Customs Act, 1962. However, the Appellants are entitled to discharge 25% of the penalty, which option has not been allowed to them in the impugned order. Accordingly, Appellants are allowed to discharge 25% of the penalty, subject to fulfillment of conditions laid down under Section 114A of Customs Act, 1962. The impugned order is modified accordingly and the appeal is partly allowed to the above extent.
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2016 (11) TMI 132
Sunset review - Notification No. 35/2014 - CUS (ADD) dated 24/7/2014 - there are six rubber chemicals which are subjected to AD duties - When there was an investigation and imposition of safeguard duty on one of the subject goods then provisions of para (v) of Annexure II of AD Rules should been carefully examined and applied by the DA - Held that: - there is no legal bar to have both AD duty and safeguard duty on a particular product at the same time. The only bar is that the DI should not be granted dual protection for the same injury. The AD duty imposed clearly stated that the quantum of AD duty shall be reduced from quantum of SG duty and only the difference shall be charged as SG duty - DA has recorded that the growth of the domestic industry in terms of sales, production and capacity utilization was positive whereas growth in respect of profits, return on investment, cash profits and inventories was negative - the subject countries have surplus disposable capacities for production of subject goods and in the event of withdrawal of AD duties there is likelihood of the surplus capacities being utilized to enhance exports at dumped prices. AD duty imposed therein is to be effective for a period of five years from that date. We find that the original notification extension and the impugned notifications are issued in exercise of specific powers vested under Section 9A of the Customs Tariff Act readwith AD Rules 18 and 23 - Appeal dismissed.
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Corporate Laws
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2016 (11) TMI 163
Scheme of amalgamation - Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and Arrangement and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator having not raising any objection to the proposed Scheme of Amalgamation and Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation and Arrangement. Consequently, sanction is hereby granted to the Scheme of Amalgamation and Arrangement under Sections 391 and 394 of the Companies Act, 1956
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2016 (11) TMI 126
Offenses by directors - officers in default - compound of offence - Held that:- It is not in dispute that the violation in question was made good by appointing a woman director however with a delay. The company was registered on 25.08.2004. The appointment of woman director was introduced in the Companies Act 2013 and, relevant provision came into affect from 01.4.2014. So the delay of 180 days in complying with the said provision is justified on the part of the company. We also accept the delay in appointing the woman director did not cause any prejudice to any creditors of the company or public at large. Moreover, it could not benefit the company in anyway. It is also not in dispute that the company has also informed the Registrar of Companies by filing Form GNL-2 though the Form required is GNL1. Since the offence in question is one committed by the company and all its 4 directors and, we are permitting composition of the offence, we thought fit and proper, to permit compound of offence in respect of other two directors also i.e. Sri Sridhar Chandrasekaran Nivarthi and Sri Sabbineni Surendra. We are of the considered view that the instant case is a fit case to allow. Hence, we have considered the delay of 180 days approximately with direction to all the applicants of the present application and, also other 2 directors, who are not impleaded to the present application, namely Sri Sridhar Chandrasekaran Nivarthi and Sri Sabbineni Surendra to pay ₹ 50,000/- each of them within a period of three weeks from the date of receipt copy of the present order. It is further directed that the company should file form GNL1 immediately. After the receipt of compounding fee, the Registrar of Companies is directed to bring about the compounding of offence to the notice of the learned Special Judge for Economic offences-cum-VIII AMSJ Court, Hyderabad for passing appropriate orders.
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2016 (11) TMI 125
Scheme of arrangement in the nature of Amalgamation - Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Arrangement and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator having not raised any objection to the proposed Scheme of Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement. Consequently, sanction is hereby granted to the Scheme of Arrangement under Sections 391 and 394 of the Companies Act, 1956.
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Service Tax
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2016 (11) TMI 164
Liability of Service tax and exclusion - Provider of 'commercial training or coaching service' taxable under section 65 (105) (zzc) - appeal against the decision in the case of Dewsoft Overseas Pvt Ltd Versus Commissioner of Service Tax, New Delhi [2016 (3) TMI 524 - CESTAT NEW DELHI] - Held that: - Subject to the appellant depositing with the Assessing Authority, the principal amount of tax determined against it together with interest awarded on the same within two months from today, recovery of the penalty amount shall remain stayed pending further orders.
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2016 (11) TMI 159
Refund - 100% EOU - Notification No.5/2006 dated 14.3.2006 under Rule 5 of CENVAT Credit Rules - Business Auxiliary Service (BAS) - Held that: - the impugned order is not sustainable in law denying the refund claim in respect of banking and financial services, BAS, and visa charges, I set aside the impugned order to that extent and hold that these services fall under the definition of input services and it has nexus with the manufacturing activity of the appellant - Appeal allowed by way of remand.
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2016 (11) TMI 158
Rejection of refund claim - Refund claim not filed in prescribed form - Held that: - in the Order-in-Original it has been admitted that the respondent filed the refund claim along with documents. Also, the copy of the letter produced vide which the refund claim was filed and in the letter it is categorically mentioned that refund claim is being filed along with necessary copies of invoices etc - the decision in the case of Collector of C. Ex. Tiruchirapalli Vs. TVS Whirlpool Ltd. [1994 (4) TMI 82 - HIGH COURT OF JUDICATURE AT MADRAS] relied upon - appeal dismissed - decided against Revenue.
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2016 (11) TMI 146
Denial of Refund of CENVAT credit under Rule 5 - export of services under Rule 3(iii) of Export of Services Rules, 2005 - information technology software services - ineligible input service, scientific and technical consultancy service - Held that: - the learned Commissioner (Appeals) has wrongly rejected the CENVAT credit on scientific and technical consultancy services without any basis holding that the said service is not an input service. Whereas in my opinion, this service is very much a part of the input service and it is directly linked with the output service of the company and therefore, I allow the appeal of the appellant and set aside the impugned order with consequential relief if any - appeal allowed - refund allowed - decided in favor of appellant.
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2016 (11) TMI 142
Denial of CENVAT credit - ‘input construction services’ - the decision in the case of Sai Samhita Storages Pvt. Ltd. Vs. CC & CE [2010 (4) TMI 484 - CESTAT, BANGALORE] relied upon where it was held that the cenvat credit on ‘input construction services’ is permissible - Held that: - following the decision of the judgment cited, I am of the considered opinion that the appellant is entitled to cenvat credit on ‘input construction services’ and the impugned order is liable to be set aside and I set aside the impugned order by allowing the appeal of the appellant with consequential relief, if any - CENVAT credit allowed - decided in favor of appellant.
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2016 (11) TMI 141
Imposition of penalty u/s 78 of Finance Act, 1994 - Manpower Recruitment and Supply Agency Service - import of services from the foreign companies - levy of tax on import of service u/r 2(1)(d)(iv) of the Service Tax Rules, 1994 - Sections 73, 76 & 78 of the Finance Act, 1994 - suppression of facts - Held that: - Section 73(3) is very clear as it says that if tax is paid along with interest before issuance of the show-cause notice, then in that case, show-cause notice shall not be issued. In this case, I find that the contention of the appellant that he bonafide believed that he is not liable to pay service tax but during the audit, the audit party informed him that he is liable to pay service tax, then he immediately paid the entire service tax along with interest. Except mere allegation of suppression, the Department did not bring any material on record to prove that there was suppression and concealment of facts to evade payment of tax. Consequently, in my opinion, the imposition of penalty under Section 78 of the Act is not justified and bad in law. Moreover, in the impugned order, the learned Commissioner (Appeals) has not recorded any finding on suppression of facts by the appellant with an intention to evade tax - penalty set aside - appeal allowed - decided in favor of appellant.
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Central Excise
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2016 (11) TMI 157
Redemption fine - Penalty - Seizure of goods and cash - Held that: - the entire case of the Revenue is based upon the fact that 'Paris Special filter' branded cigarettes recovered from the appellants premises who is a trader of various products are non-duty paid Cigarettes, However, investigations made by the Revenue could not find out the manufacturer of Cigarettes in question - in the absence of identification of the manufacturer of the Cigarettes, the allegations of clearance of same without duty payment cannot be upheld thus leading to confiscation of the goods or to imposition of penalty - Appeal allowed.
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2016 (11) TMI 156
Clandestine removal - Evasion of duty - Search - Demand of duty - Held that: - the edifice of the entire case booked by the department rests on the statements obtained from various persons and private records / private diaries recovered from the alleged agent [broker of assessee and PTC Sri. D. Ravinder] - Adjudicating authority himself has taken note of the cross examination of the investigating officer who admitted that except for four parties, no statement from other 102 parties were recorded - In cases alleging clandestine manufacture and clearance, the department is required to prove its case with tangible and cogent evidence. Merely basing all the allegations on statements, that too of miniscule number of buyers /consumers (4 out of 102), is certainly not corroborative evidence - Appeal dismissed.
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2016 (11) TMI 155
Demand - Penalty - SSI exemption - Held that: - The officers having jurisdiction over the respondents factory cannot challenge the fact of payment of duty by the supplier as they have no jurisdiction to reopen the assessment done at the supplier's end. On the applicability of duty on Gypsum, it is claimed by the appellant they would be entitled to SSI exemption benefit - Appeal allowed by way of remand.
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2016 (11) TMI 154
Confiscation of leased out assets - first charge - Held that: - there have been a miscarriage of justice as this Tribunal was misled by Revenue at the time of earlier Final Order as Revenue had stated that the issue of ownership of the assets of Inox Air Product Ltd. lying in RIL, is pending before the Apex Court in Civil Appeal No.2196 of 2012 - it have been clarified by the Revenue that there is no order of any attachment on the assets of Inox Air Product Ltd. lying in the premises of RIL - IAPL is entitled to remove their assets lying in the premises of RIL without any hindrance or restriction under any law - Decided in favor of the assessee.
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2016 (11) TMI 153
Cenvat credit - 100% EOU - Held that: - the appellate authority has granted relief to the respondent on the ground that respondents have availed the credit of duty actually PAID by the supplier 100% EOU - Credit of duty PAID and not of duty payable, is available - The officers having jurisdiction over the respondents factory cannot challenge the fact of payment of duty by the supplier as they have no jurisdiction to reopen the assessment done at the supplier's end - Decided in favor of the assessee.
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2016 (11) TMI 152
Compounded levy scheme - manufacture of chewing tobacco - abatement - refund of duty - limitation bar - section 11 B of the Central Excise Act, 1944 - whether the provisions of section 11B of the Central Excise and Salt Act can be adopted for deciding the refund claim arising in terms of the compounded levy scheme, for the purpose of determining the limitation? - Held that: - reliance placed on the decision of Hans Steel Rolling Mill vs. CCE, Chandigarh [2011 (3) TMI 2 - SUPREME COURT OF INDIA] where it was held that the importing one scheme of tax administration to a different scheme is not appropriate and would disturb the smooth functioning of such unique scheme. Time limit prescribed under one scheme could be unwarranted for another scheme - the compounded levy scheme is a separate scheme from the normal scheme for determination of excise duty of goods manufactured. Rules under compounded levy scheme stipulate method, time and manner of payment of duty, interest and penalty and same being a comprehensive scheme in itself, the general provisions of Central Excise Act and Rules stand excluded. It is not open to the Revenue to reject the refund claim under section 11 B of the Central Excise Act - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 151
Export of goods - benefit of exemption - Rule 19 of Central Excise Rules, 2002 read with N/N. 42/01-CE(NT) - appellant did not file the ARE- 1 within a period of 6 months from the date of exports - Held that: - the sole basis of the orders passed by the authorities below is that four ARE -1 were not filed with the Revenue within a period of six months, otherwise there is no dispute about the fact that the appellant had indeed exported their goods, thus earning the benefit of exemption - ARE-1 produced belated - benefit of export allowed.
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2016 (11) TMI 150
Reversal of credit - Rule 6(3) of the Central Excise Rules - Penalty - Period of limitation- Held that: - that dolochar is a product which emerges during the course of manufacture of sponge iron - that dolochar is a product which emerges during the course of manufacture of sponge iron - Revenue's Appeal rejected.
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2016 (11) TMI 149
Demand of duty with interest - Captive consumption - Rule 7 of Central Excise Rules, 2001 - Rule 8 of the Valuation Rules - Held that: - the issue is no more res integra as the Hon’ble High Court of Bombay in the case of CEAT Ltd. vs. CCE, Nashik [2015 (2) TMI 794 - BOMBAY HIGH COURT], upheld the Tribunal's order that interest liability does not arise when the assessments are finalized and there is no demand of differential duty. The said judgment of the Hon’ble High Court of Bombay was carried in appeal by the Revenue to the Hon’ble Supreme Court and the apex court by an order dated 14.12.2015, after condoning the delay, dismissed the special leave petition filed by the Revenue. It would mean that the apex court has settled the law that the interest liability does not arise when the amount is paid before the finalization of the provisional assessment on its own by an assessee - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 148
Interest on delayed refund - 100% EOU - Held that: - the issue is no more res integra as settled by the Tribunal in the case of M/s Hero Motors Ltd Vs Commissioner, Gaziabad 2014 [ 2014 (7) TMI 482 - CESTAT NEW DELHI] - Clause (c) of Proviso to section 11B(2) refers to the ‘refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued under the Central Excise Act, 1944’, as the refund claim not hit by the principle of unjust enrichment - Decided in favor of the assessee.
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2016 (11) TMI 147
Refund claim in cash - MS pipes for use in irrigation - Rule 5 of the Cenvat Credit Rules - sanction of refund to the appellant and direction to take recredit of the same in the cenvat account and sanctioned partial amount in cash which was paid in PLA - Held that: - reliance placed in the decision of Gauri Plasticulture (P) Ltd. vs. CCE [2006 (8) TMI 225 - CESTAT, MUMBAI] where it was held that if the said refund is granted to the appellants by way of cash, the same would amount to making him unjustifiable enrich. It is well settled principles of law that what cannot be done directly should not be allowed to be done indirectly. On surrendering of their licence, the appellants was not allowed to claim the refund of the unutilized credit in the Modvat account, the same would have lapsed. As such, utilization of the same towards payment of disputed demand of duty, after surrendering of their registration, has not led to a situation where the assessee was compelled not to use the credit for regular clearances and had to make payment from PLA. As such, in this case we find that the refund in cash is not to be allowed. The appellant had paid more amount through PLA then the utilization of cenvat credit - appellant eligible to get the amount of refund in cash - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 145
Demand of duty u/s 11D - dealer - allegation that the appellants have collected the enhanced duties on the sale of duty paid stocks of MS/HSD - Held that: - The appellants are registered with department as Dealers and they only store the duty paid goods. Further, that appellants have not collected any excess amount representing as excise duty in their invoices when the goods were cleared from their Warangal depot - demand set aside - Decided in favor of the assessee.
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2016 (11) TMI 140
Process of separating valuable mineral sands from ordinary sea sand - whether the process amounts to manufacture or not? - Held that: - at the end of this process the chemical structure of the one remained the same; there was no crystallographic transformation and hence the process will not amount to manufacture - reliance placed on the decision of India Rare Earth Ltd. Vs. Commissioner [2001 (9) TMI 167 - CEGAT, KOLKATA] where it was held that similar process does not amount to manufacture. CENVAT - whether CENVAT Credit already utilized for payment of duty on final products can be denied or required to be reversed? - Held that: - there are a plethora of judgements which have ruled that once duty on final product is accepted by Department, CENVAT credit cannot be reversed even if said activity does not amount to manufacture. Lapse of unutilised credit - Held that: - The provision of Rule 11 (3) would meet situations in which there is different periods of exigibility to excise duty and non-exigibility to duty. The law is thus very clear on this point, hence unutilised credit in the appellant's case cannot be allowed for any further payment of duty and will necessarily lapse. So the claim of the appellant that the CENVAT credit lying in their balance, which was taken when the process was not manufacture, cannot be allowed to pay duty for finished products after 2011 when the process is treated as manufacture as per new Chapter Notes. Levy of penalty u/r 15 of CENVAT Credit Rules 2004 - Held that: - penalty set aside. Appeal disposed off - CENVAT credit of Re availed and utilised for payment of duty on domestic and export clearances is non-recoverable - CENVAT Credit of ₹ 1,41,58,285/- lying in balance is CENVAT Credit account as on 31-03-2011 shall lapse - Penalty of ₹ 2000/- imposed by adjudicating authority is set aside - appeal partly allowed in favor of appellant.
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CST, VAT & Sales Tax
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2016 (11) TMI 160
Validity of assessment order - levy of additional amount of tax - quantum of purchase of material from the unregistered as well as registered dealers enhanced - Held that: - The A.O. in the assessment order referred to the notice issued to the petitioner specifically indicating that based on the work order and `G' Schedule, the purchase of 'Gitty', 'Boulder', 'Morram' and other construction material from unregistered dealers be enhanced by ₹ 3 lacs, to which no reply was filed and consequently the assessment order was passed. The Deputy Commissioner (Appeals) by merely observing that no casual connection between the nature of work and the imposed tax has been indicated, set aside the imposition, however, the Tax Board before whom the petitioner chose not to appear, restored the order passed by the A.O., after considering in detail the reasons given by the A.O. and which were further fortified by way of submissions based on record available before the Tax Board essentially on account of the fact that the amount of purchase from the unregistered dealers indicated were too low looking to the total amount of work undertaken by the petitioner - The findings recorded by the A.O. as well as the Tax Board, even after rectification of the amount as sought by the petitioner, essentially, do not give rise to any question of law in the present case as the same are findings of fact, which do not require any interference - revision petition dismissed.
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2016 (11) TMI 131
Quantification of escaped assessment - rejection of the books of accounts - excessive electricity consumption and the same did not appear to be commensurate with the declared quantity of production - Held that: - it is apparent that the rejection of books of accounts of the assessee on this solitary ground cannot be sustained. More importantly this court notices that a reasonable and plausible explanation had been duly proffered by the assessee to explain the irregular electricity consumption. The Court notices that neither the assessing authority nor the Tribunal disputed or doubted the disclosures made by the assessee in respect of the accident which had taken place in its business premises. The order of the Tribunal as also that of the assessing authority cannot be sustained even on this score - revision allowed - decided in favor of revisionist.
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2016 (11) TMI 130
Pre-revision notice - Held that: - Since the dates are very clear from the records, there can be no doubt that the respondent has passed the impugned order in violation of principles of natural justice - the petitioner is directed to treat the impugned orders as show cause notices, submit their replies within a period of fifteen days from the date of receipt of a copy of this order and produce Form-C and Form-H statements along with explanations - It is needless to mention that since this Court directed the petitioner to treat the impugned assessment orders as show cause notice, the respondent shall not initiate any coercive action to recovery of tax and penalty - Petitions are disposed of.
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2016 (11) TMI 129
Detention notice - Online Form-JJ and Form-MM have not been submitted and the genuineness of the transaction has to be verified in order to safeguard the interests of the Revenue - Held that: - a bill of sale or delivery note in Form JJ generated from the website of the Commercial Taxes Department along with the transporter's way bill in Form MM generated from the website of the said Department and goods vehicle record or trip sheet or log book have to be produced - the petitioner has produced the Invoice and Lorry receipt and these can very well be verified by the fourth respondent and merely because the computerised online Forms JJ / MM have not been produced that cannot be a sole reason for detaining the goods - Decided in favor of assessee.
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2016 (11) TMI 128
Delay in challenging the order of demand of tax - violation of principles of natural justice - Demand of tax and penalty - attachment of bank property - intra-state sales or inter-state sales - treating of intra-state sale as an inter-state sale is a clear attempt on the part of the petitioner to evade actual tax due on its turnover and amounts to an offence under Section 59 of the PVAT Act - Held that: - this Court is of the view that since there is no explanation for the inordinate delay in challenging the impugned order, this Court would have been well justified to dismiss the writ petition at this stage. However, considering the fact that interests of the Revenue are also involved and that the petitioner should not be left without any remedy, especially in the light of the fact that the petitioner alleges that they have not been heard in person, this Court directs the petitioner to pay 15% of tax within six weeks and if tax paid within the stipulated time the petitioner will be entitled to treat the impugned proceedings as a show cause notice and submit their objections within a period of two weeks therefrom. On such payment, the demand of remaining amount towards penalty, etc., shall remain stayed and the attachment on the bank accounts of the petitioner shall stand lifted. Thereafter, the second respondent shall hear the petitioner and redo the entire assessment in accordance with law.
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2016 (11) TMI 127
Validity of order of assessment - identical issue pending before the Hon'ble Supreme Court - should the proceedings before the respondent await the decision of the Apex Court? - Held that: - it is not in dispute that validity to Section 19(11) of the Tamil Nadu VAT Act is put to challenge before the Hon'le the Supreme Court by the petitioner themselves. Therefore, the question is as to whether the petitioner would be eligible to claim tax credits in terms of Section 19(11) of the Act. Therefore, the decision to be taken by the Hon'ble Supreme Court would have a direct bearing on the issue involved. Therefore, necessarily, the proceedings before the respondent should await the decision of the Hon'ble Supreme Court. However, for that reason, this Court is not inclined to quash the impugned proceedings suffice it to keep it in abeyance, pending decision by the Hon'ble Supreme Court - petition disposed off - assessment order kept in abeyance till the decision of Supreme court.
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Wealth tax
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2016 (11) TMI 143
Addition of taxable wealth of the assessee because of surrender of the cash found in locker during the course of search - Held that:- The undisputed fact is that that assessee tried to explain the amount of cash seized from the locker with syndicate bank which was in the name of the assessee and the amount of ₹ 30 lakhs was found there from. Further, the explanation of the assessee was also not found to be correct that money belongs to the parents of the assessee as they gave this sum prior to year 2000 to the assessee because of the slips of the bank, which were bearing the dates of the year 2002 and 2003 and for which assessee did not offer any explanation. Further, the assessee in his statement has also disclosed the above sum as additional income and also paid due tax thereon. In view of these overwhelming evidence against the assessee, we are of the view that the the above sum of ₹ 30 lakhs belonged to the assessee. According to the provisions of section 3 of the wealth tax act every individual shall be charged tax on the “net wealth” as at the valuation date. Further, the “net wealth” has been defined under section 2 (m) of the wealth tax act to mean all the assets belonging to the assessee in excess of the debt owed as on the valuation date. According to the provisions of section 2(ea) of the act “assets” in case of individual includes cash in excess of ₹ 50,000/-. Therefore, as the above sum was belonging to the assessee as accepted by him as his income in income tax proceedings, now he cannot say that the above sum is not includible into the net wealth of the assessee. In view of this we confirm the order of the Ld. Commissioner of wealth tax confirming the addition of ₹ 30 lakhs on account of cash found in the locker belonging to the assessee and which was also added under section 69A of the income tax act in the hands of the assessee.
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