TMI Tax Updates - e-Newsletter
December 7, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
-
Income Tax:
Addition on unaccounted cash balance - the Department cannot blow hot and cold and take a divergent decision qua addition in wealth-tax and income-tax proceedings - AT
-
Income Tax:
Depreciation on electrical fittings - "electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc. - AT
-
Income Tax:
Addition u/s. 69 - the lower authorities should not have disbelieved the gift received by the assessee from his wife for purchase of the agricultural land in question - AT
-
Service Tax:
The fees collected by the police department is in the nature of fee prescribed for performing statutory function, which has been deposited into the Govt. treasury - there can be no levy of service tax on such activities carried out by the police department - AT
-
Service Tax:
Levy of service tax - activity of bill discounting - The benefit of the exemption will be available whether the consideration is described as interest or discount - AT
-
Service Tax:
Levy of tax - availing the services of foreign commission agent - reverse charge mechanism - appellant was available to them as Cenvat credit and as such the entire situation was revenue neutral - extended period of limitation cannot be invoked - AT
-
Service Tax:
Levy of service tax - benefit of exemption Notification No.12/2003, dated 26.06.2003 will be allowable to the cost of the study materials - AT
-
Central Excise:
Transfer of CENVAT credit - physical transfer of inputs and raw material nor services are required, for transfer of cenvat credit accumulated and available in the books of sister concern on the date of amalgamation - AT
-
Central Excise:
Adjudicating authority should be more cautious and apply mind reasonably while conduct of adjudication and not blanketly confirm the demand in the show cause notice. - AT
-
Central Excise:
ITC - non registration of office as input service distributor - appellant cannot be denied Cenvat Credit availed by them in the absence of registration as input service distributor by the Head Office - AT
-
Central Excise:
CENVAT credit - input services - outstanding debtors - not making full payment of the billed amount and retaining with them a part of the amount billed by the service providers as performance guarantee - full credit allowed - AT
Articles
News
Case Laws:
-
Income Tax
-
2016 (12) TMI 305
Addition on unaccounted cash balance - Held that:- While deciding the appeal of CIMS Hospital Pvt Ltd, ld. CIT(A) was not authorized to add that amount in the case of Director who was not a party to the CIMS Hospital Pvt Ltd appeal proceedings. The subject matter before him was whether the amount was liable for addition in the case of CIMS Hospital Pvt Ltd or not. Since the ld. CIT(A) exceeded his jurisdiction in giving this direction which does not fall within the four corners of his powers enshrined in this behalf CIT(A) confirmed the addition not applying his independent mind and discretion; and merely upholding the addition on the ground that the CIT(A) in the case of CIMS Hospital Pvt Ltd has directed to make the additions, the same is confirmed. In our view, the confirmation of the addition cannot be upheld. Besides, the assessee discharged his burden by providing necessary cash flow statements and demonstrated that the transaction in question was reflected in the wealthtax return which was accepted by the Department. Therefore, in our view, this amounts to discharge of burden cast upon the assessee in this behalf. Further, the Department cannot blow hot and cold and take a divergent decision qua addition in wealth-tax and income-tax proceedings. Thus, the grounds of the assessee(s) are allowed on both the counts.
-
2016 (12) TMI 304
Penalty u/s 271(1)(c) - deemed addition made u/s 50C - Held that:- The impugned addition was merely based on the calculation made by ld. Assessing Officer taking jantri price as against sale price shown by the assessee. At any point of time Revenue has not placed on record any material evidence to show that the assessee has received consideration over and above the agreement value. Assessing Officer has not doubted the genuineness of the document or the details furnished by the assessee and assessee agreed to the addition because of the deeming provisions of section 50C of the Act which cannot be construed to filing inaccurate particulars of income or concealment of income on the part of assessee. Thus we direct the Assessing Officer to delete the penalty - Decided in favour of assessee
-
2016 (12) TMI 303
Rebate u/s 88E - Held that:- Assessee is also having a positive income from sale of shares and the net speculation loss was merely because of notional adjustment on diminishing value of rate of shares held in stock in trade treated as speculation loss. Therefore, in our view assessee is eligible for rebate u/s 88E - Decided in favour of assessee
-
2016 (12) TMI 302
Treatment as business income instead of dividend income - Held that:- The assessee is dealing in shares and securities, which means that it is buying and selling shares for its customers. The shares purchased, often, are kept by the assessee and such shares may have been purchased as cum dividend. The assessee is duty bound to remit the dividend as and when received to the purchasers of the shares. Therefore, there are credit and debit entries in the ledger account. At times, due to the ignorance of the buyers who may not be aware that they have purchased shares as cum dividend and therefore, did not claim the dividend amount from the broker. Because of such ignorance, the amount remained with the assessee. This is nothing but a benefit derived by the assessee from the transactions done in its ordinary course of business. Therefore, such surplus has a direct nexus with the business of the assessee and therefore, an income of the assessee. The Revenue Authorities have rightly taxed the surplus as income of the assessee Disallowance of interest expenses invoking provisions of Section 40A(2)(b) - Held that:- A perusal of the returned income of the payees shows that all the payees are assessed at the highest rate of tax. Since both, the payer and payees, are assessed at the same rate of tax, in our considered opinion, there is no basis of any Revenue leakage. As decided in case of PWS Engineers Limited [2016 (6) TMI 596 - GUJARAT HIGH COURT ] a certain income has already been taxed in the hands of the Directors. Permitting the Revenue to tax the same income again at the same rate in the hands of the principal payer would amount to double taxation. Only on this count, we answer question in favour of the appellant-assessee and against Revenue TDS u/s 194J - Non deduction of tds on turnover charges (transaction charges) paid to the stock exchange - Held that:- The transaction charges paid to the Bombay Stock Exchange by its members are for 'technical services' rendered is not an appropriate view. Such charges, really, are in the nature of payments made for facilities provided by the Stock Exchange. No TDS on such payments would, therefore, be deductible under Section 194J of the Act. - Decided in favour of the appellant-assessee Disallowance of depreciation on electrical fittings - Held that:- We find that under Rule 5 of the Income-tax Rules, which contains the depreciation table for various block of assets and under Part A(II) depreciation on furniture and fittings is @ 10%. It has been further explained that "electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc. In the light of the depreciation table provided under the Income-tax Rules, we do not find any error or infirmity in the findings of the CIT(A).
-
2016 (12) TMI 301
Denial of 15% deduction out of total fund available with the assessee for application under section 11(1) - Held that:- In the case of Karnal Improvement Trust [2011 (10) TMI 193 - ITAT DELHI], the Tribunal has not emphased that 85% of the total income should be applied on the objects of the trust only, then 15% will be available. The proposition laid down by the Tribunal is that if no income was applied by the trust for its objects under section 11(1) and no amount was applied for accumulation under section 11(2), then 15% deduction cannot be claimed as standard deduction. Similarly, if one looks into the proposition no.2 laid down by the Hon’ble Supreme Court in the case of ACIT Vs. ALN Rao Charitable Trust [1995 (10) TMI 2 - SUPREME Court], then it would be clear that the assessee will be entitled for exemption qua the income which has been applied for its objects, plus 15% of the total income. The ld.CIT(A) has failed to construe these two proposition while denying the exemption to the assessee. Therefore, I allow the appeal of the assessee and set aside the impugned order of the ld.CIT(A) and direct the AO to grant deduction of ₹ 1,75,804/- being 15% of ₹ 11,11,185/- i.e. income derived by the assessee form the trust-property. - Decided in favour of assessee
-
2016 (12) TMI 300
Unexplained investment in Saving Bank Account - Held that:- AIR wing of the Department transmitted information to the AO that a sum of ₹ 21,76,820/- was deposited in the saving bank account by way of cash. The assessee failed to give any plausible explanation of the source of deposits. Accordingly, the ld.AO has made addition with the aid of section 69 of the Income Tax Act. Appeal to the ld.CIT(A) did not bring any relief to the assessee. On due consideration of the record, find that first notice under section 143(2) was issued upon the assessee on 27.8.2010. Thereafter, the AO was transferred and new incumbent took seat of the AO. He initiated assessment proceedings effectively from the month of October, 2011. He passed assessment order on 14.12.2011. Time gap given to the assessee in this process was very short. Similarly, before the ld.CIT(A), the assessee did not prosecute the appeal properly as alleged by the assessee. Taking into consideration all these aspects, we deem it proper that ends of justice will be met if I set aside the impugned order and restore this issue to the file of the ld.AO for re-adjudication. The assessee is directed cooperate with the AO and not act negligently as acted in erstwhile proceedings. The ld.AO shall grant due opportunity of hearing to the assessee and pass fresh assessment in accordance with law - Decided in favour of assessee for statistical purpose.
-
2016 (12) TMI 299
Addition u/s.69 - assessee has not proved the source of investment satisfactorily - assessee failure to prove with cogent evidence that amount of cash has been gifted by her wife - Held that:- It is an undisputed fact that the wife of the assessee Smt. Kavita D. Gupta is an income-tax assessee from 2000-01 onwards. The copies of the returns of income filed by her for different assessment years have been filed in the paper book. The cumulative capital of Smt. Kavita D. Gupta is more than ₹ 9 lakhs. The various documents filed by the assessee substantiating the credit worthiness of Smt. Kavita D. Gupta cannot be disbelieved under the facts and circumstances of the case. When Smt. Kavita D. Gupta had filed the details of her income-tax returns along with PAN and confirmation letter, the Assessing Officer should have summoned her. Since the assessee is a lady with a mentally challenged child and is doing seasonal business and has produced the purchase and sale bills etc. the Assessing Officer under the facts of the present case should not have doubted the business of the wife of the assessee merely on the ground that she has not produce the shop license. So far as the objection of the Assessing Officer that money has not routed through banking channel although the wife of the assessee is maintaining a bank account is concerned, this in my opinion should not be a ground under the facts and circumstances of the case to disbelieve the gift. Since the assessee in the instant case has substantiated the identity and credit worthiness of the donor and the genuineness of the transaction, therefore, the CIT(A) in my opinion should not have confirmed the addition made by the Assessing Officer u/s.69 of the I.T. Act to the extent of ₹ 3 lakhs. Thus the lower authorities should not have disbelieved the gift received by the assessee from his wife for purchase of the agricultural land in question
-
2016 (12) TMI 298
G.P. rate determination - Held that:- As find some force in the argument of the Ld. Counsel for the assessee that if the huge addition as made by the Assessing Officer and upheld by the CIT(A) is considered, then the GP rate comes to 23.34% which is much more than the GP shown in the immediately preceding assessment year, i.e. A.Y. 2009-10 at 19.39%. Considering the totality of the facts of the case and in the interest of justice, I am of the considered opinion that adoption of 21% of GP under the facts and circumstances of the case will meet the ends of justice. I hold and direct accordingly. Accordingly, the Assessing Officer is directed to recompute the GP and make suitable addition.- Decided partly in favour of assessee
-
2016 (12) TMI 297
Qualification for exemption under section 80P(2)(vi) - Held that:- Since the Assessing Officer while passing the order has basically relied on the order of his predecessor for A.Y. 2005-06 and since the Ld.CIT(A) while adjudicating the issue has given an observation that the assessee has not discharged the onus cast on it by proving that the interest income is related to the business activity and the relation between FDs kept and corresponding benefit from the bank, therefore, considering the totality of the facts of the case and in the interest of justice of justice, I deem it proper to restore the issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh in the light of the decision of the Tribunal in assessee s own case for A.Y. 2005-06.
-
2016 (12) TMI 296
Claim on account of depreciation on the merged bank losses treated as Intangible Assets - Held that:- The impugned goodwill cost of the merged banks, has been held to result in the acquisition of an asset in the nature of 'business or commercial rights' and therefore amounts to intangible asset, the action of the Assessing Officer in not allowing depreciation on the goodwill cost cannot be sustained. The business advantages detailed earlier, are liable to be considered as an intangible asset, being ‘business or commercial rights of similar nature’ contemplated u/s 32(1)(ii) of the Act. In our considered opinion, the plea of the assessee for allowance of depreciation in terms of section 32(1)(ii) of the Act cannot be faulted either in law or on facts. Disallowance under section 43D - Held that:- As decided in assessee’s own case for assessment year 2009-10 we find no reason to interfere with the order of CIT(A) and thus the ground of assessee is dismissed. Disallowance of provision for standard assets - Held that:- AR has fairly conceded that on an identical issue in the case of Sindhudurg Dist. Central Co-op. Bank Ltd. [2012 (3) TMI 492 - ITAT PUNE] the Co-ordinate Bench has decided the issue against the assessee pointed out that claim for deduction of an expenditure is liable to be governed by the provisions of the Act and not merely on account of the RBI guidelines. In our view, the ratio of the judgment of the Hon’ble Supreme Court the case of Southern Technologies Ltd. (2010 (1) TMI 5 - SUPREME COURT OF INDIA) clearly applies to the present case and the claim of the assessee has been rightly rejected by the lower authorities.
-
2016 (12) TMI 295
Addition u/s.69 - unexplained deposits in loan a/c of Bank - Held that:- It is an undisputed fact that it has been assessee’s consistent stand before the lower authorities that the source of cash deposits in the loan account were the repayment of loans by the husband of the assessee to the assessee when he was alive and her husband was looking after all the transactions. It is also an undisputed fact that the Assessee lost her husband in car accident in 2004. Though it is a fact that Assessee has not been able to demonstrate her contentions with any tangible evidence but at the same time it is also a fact, that there is nothing on record placed by the Revenue to prove that the submissions made by the Assessee are wrong or incorrect. As it is seen that Ld CIT(A) has also confirmed the addition on the basis of presumption like as to why the assessee kept the cash with her for long and did not deposit the sum in her loan account immediately to liquidate the loan. Before us, Assessee in person has submitted that due to the death of her husband and domestic issues at her end, she could not furnish the required details. The aforesaid contentions of the Assessee have not been controverted by the Revenue. Before us, Assessee has also placed on record the copy of the bank statements which also supports her contention of financial crisis. Considering the totality of the aforesaid facts and in the peculiar facts of the case, we are of the view that in the absence of any material on record to demonstrate that the contentions of the assessee are wrong, no addition is called for in the present case. We therefore direct its deletion. - Decided in favour of assessee
-
2016 (12) TMI 294
Penalty u/s. 271(1)(c) - depreciation u/s. 32(l)(ii) on leasehold rights in industrial land belonging to MIDC as an intangible asset - Held that:- The provisions of the Act cannot be interpreted to mean that leasehold rights granting such type of ownership over land, etc. would also qualify as intangible assets for the purpose of depreciation under the Act. According to the Tribunal in assessment year 2006-07, this would lead to a conflicting situation where land acquired on freehold basis would not be eligible for depreciation but similar land acquired on leasehold basis would be eligible for depreciation that too at a higher rate. In the facts and the circumstances of the case, the Tribunal confirmed the action of the AO in disallowing the claim of depreciation on leasehold rights over the land treating the same as intangible asset u/s 32(1)(ii) of the Act. Thus as claim of the assessee in any case, was not sustainable in law and in view of the above, where the explanation of the assessee is not found to be bonafide, the assessee is liable to levy of penalty under section 271(1)(c) of the Act. Accordingly, we uphold the order of CIT(A) in confirming the levy of penalty under section 271(1)(c) of the Act. - Decided against assessee
-
2016 (12) TMI 293
Penalty under Section 271 (1) ( c) - Bogus purchases - voluntary disclosure by assessee - Held that:- After going through the statement so recorded during survey, the revised return filed by the assessee offering the income to stop the litigation and to purchase piece of mind and the findings given by the AO while framing assessment under Section 143(3) read with Section 147 wherein he has accepted the purchases so made. We found that in present case also assessee explain the genuineness of purchases. But assessee voluntarily offered @50% of purchases as additional income just to buy peace and avoid litigation. The same accepted by AO. It is clear from the above order of the AO that there was neither concealment of income nor furnishing of inaccurate particulars of income. Since, in the instant case the assessee has not concealed any particulars of the income, nor has furnished inaccurate particulars of such income and has even disclosed and submitted all the particulars correctly. Therefore, levy of penalty was not justified in all the years under consideration. - Decided in favour of assessee
-
2016 (12) TMI 292
Loss in subscribing to the chit fund - allowable deduction - Held that:- Considering the Instruction No. 1175 issued by the CBDT, it is obvious that if a subscriber incurs loss in subscribing to the chit fund to raise funds to use them in his business or for the business purpose, such a loss is an allowable deduction. In this view of the matter, set aside the order of the Ld. CIT(A) on this issue and delete the addition - Decided in favour of assessee. Disallowance of various expenses - Held that:- Assessing Officer disallowed on ad hoc basis ₹ 25,000/- out of the expenses claimed by the assessee under the head conveyance and entertainment by assume that there are disproportionate increase section 37 nowhere empower the Assessing Officer to disallow the expenditure in the manner the disallowance has been made by the Assessing Officer. There is no allegation that the expenses have not been incurred wholly and exclusively for the purpose of business even it is not a case of the revenue that the expenses are personal expenses or capital expenditure. Therefore, delete the disallowance of ₹ 25,000/-. Addition u/s 68 - Held that:- So far the sum of ₹ 10,000/- received from Shri Rajiv Maheswari is concerned the said loan has not been received by the assessee during the year. The amount has been received in the earlier year therefore, delete the said addition as the cash credit does not arise in the impugned assessment year. So far the sum of ₹ 10,000/- received from Ms. Vandana noted that the assessee received a sum of ₹ 16,000/- vide Cheque No. 70335 of Central Bank of India during the impugned assessment year. From the copy of the bank statement of Ms. Vandana Lalwani, found that she has deposited a sum of ₹ 20,000/- cash as on 01.03.2004 when it was having bank balance at ₹ 8815.49 and out of that accumulate balance she had issued cheque of ₹ 16,000/- to the assessee. At the most since the lender before depositing a sum of ₹ 20,000/- in cash was having bank balance of ₹ 8,815/-. Only a sum of ₹ 8,000/- out of the ₹ 16,000/-can be proved to be a genuine one. In respect of which we can say assessee has proved the creditworthiness of the lender. Therefore, sustain the addition at ₹ 8000/- out of ₹ 10,000/- sustained by the Ld. CIT(A). Thus, out of the loan taken from Ms. Vandana Lalwani addition of ₹ 8,000/- is sustained. Addition in respect of loan taken from Smt. Sapna Lalwani from the copy of the bank account filed which is available at page no. 7, it is apparent that Smt. Sapna Lalwani was having a sufficient balance in her bank account amounting to ₹ 1,21,910/- when a cheque of ₹ 1,10,000/- was issued in favour of the assessee. The identity has already been proved, this proves the genuineness of the transaction as well as creditworthiness of Smt. Sapna Lalwani. In view of this fact, delete the addition. Coming to the addition of ₹ 7,00,000/- noted that this amount has been received by the assessee from M/s. Mahadev Enterprises, a regular income for assessee having permanent account number. Thus the identity, genuineness of the transaction as payment received through cheque is proved so far creditworthiness of M/s. Mahadev Enterprises, noted that M/s. Mahadev Enterprises was having sufficient balance in his bank account before the advancing the loan to the assessee. In view of this fact, it is of the view that it is a case where the assessee has submitted sufficient evidence to explain the nature and source of the loan. This discharges onus which lie from the assessee. Therefore, set aside the order of the Ld. CIT(A) on this issue and delete the addition of ₹ 7,00,000/-. Thus, the addition of ₹ 8,30,000/- is reduced to ₹ 8,000/-,
-
2016 (12) TMI 291
Revision u/s 263 - estimation of net profit - Held that:- A.O. has not examined the issues pointed out by the CIT in the revision proceedings before rejection of books of accounts and estimation of net profit. We further noticed that the A.O. has simply rejected books of accounts and estimated net profit of 5% without any comparable cases of similar nature to justify the net profit applied by the A.O. The CIT, on the other hand has brought out number of issues wherein he has recorded his categorical finding to the effect that the A.O. has not verified any of the issues which is the reason for revision of assessment order. The CIT questioned number of issues right from additions to capital account to estimation of net profit. The assessee neither appeared before the CIT nor furnished any details to justify his case. Since, the assessee failed to appear before the CIT, we are of the opinion that the CIT cannot presume things which are in the mind of the assessee, as such opined that the CIT has rightly assumed his jurisdiction to revise assessment order on the information available on record. Accordingly, we uphold the CIT order u/s 263 of the Act and dismiss the appeal filed by the assessee. Appeal against the assessment completed as per the directions of the CIT u/s 263 - Held that:- On perusal of the assessment records, we find that the CIT has given an open direction to the A.O. u/s 263 of the Act to re-do the assessment de-novo after duly examining the issues pointed out by the CIT. Therefore, in our considered view, the directions given by the CIT is an open direction and it is open to the assessing officer to examine the issues on merits as per the provisions of the Act. The A.O. has passed fresh assessment order u/s 144 r.w.s. 263 of the Act and accordingly, assessment order passed u/s 143(3) or 144 of the Act, is an appealable order u/s 246A of the Act. Therefore, we are of the view that the CIT(A) was erred in not adjudicating the appeal filed by the assessee on merits. Hence, we set aside the order passed by the CIT(A) and restore the appeal to the file of CIT(A) for fresh adjudication of the issues on merits.
-
Customs
-
2016 (12) TMI 266
Refund of customs duty paid - short shipped goods - time bar - Held that: - decision in the case of Vedanta Ltd. Versus Commissioner of Customs (Port) [2016 (5) TMI 437 - CALCUTTA HIGH COURT] contested - the provision of Section 27 of the Customs Act would clearly not apply to the present case on its plain language - the respondent should refund the excess customs duty paid within a period of four weeks - petition allowed - decided in favor of petitioner-assessee.
-
2016 (12) TMI 265
Refund claim - NPK water soluble fertilizers - goods were exempted from whole of duty by Notification No. 4/2006 CE - whether denial of refund claim on the ground that the refund cannot be claimed without challenging the assessment, justified? - Held that: - the Hon’ble High Court in the case of Yu Televentures Private Limited., Vs UOI [2016 (8) TMI 184 - DELHI HIGH COURT] observed that merely because department has filed review petition against Apex Court's order it is no ground for not following the decision rendered by the Hon’ble Court - rejection of refund claim not justified - appeal dismissed - decided against appellant-Department.
-
2016 (12) TMI 264
Whether the confiscation of the car which was imported in violation of Transfer of Residence Rules is correct or otherwise and whether Mr. Firoz Nadiadwala who purchased the car is liable to pay redemption fine or otherwise and whether Mr. Aslam Khan penalised by the adjudicating authority has been correctly done or otherwise? - Held that: - There is no rebuttal from the concerned individual as to the fact Various statements which have been recorded by the authorities clearly show that there was some manipulation done on the documents in order to circumvent the provisions of cars of specific nature. We do not find any clearly the manipulation by the importer. Hence we hold hold that that adjudicating authority was correct in ordering the confiscation of the car i.e. Mercedez Benz S 280 car bearing chassis no. WDB 1400282A83147 and engine no. 10494422013118. At the same time, we find that the adjudicating authority has given an option of redeeming the said car to Mr. Firoz Nadiadwala on payment of fine of ₹ 10 lakhs. In our considered view, the fine imposed by the adjudicating authority of ₹ 10 lakhs seems to be excessive considering the fact that Mrs Firoz Nadiadwala was not a party to any of the manipulation and on the contrary was a victim of manipulation done by other individual. Keeping all these things in mind we hold that the ends of justice will be met if the redemption fine is reduced from ₹ 10 lakhs to ₹ 5 lakhs. As regards the penalty on Mr. Asham Khan under the provisions of Section 112(a) and (b) of the Customs Act, 1962, we find that the role attributable to Mr. Aslam Khan is only purchasing of the car and arranging the import through various individual and clearance by customs. It is on record that Mr. Aslam Khan was not in India during the relevant time and purchased the car in Dubai. Keeping in mind the factual position, in our view, the adjudicating authority has erred in Imposing penalty of 6 lakhs under the provisions of section 112 of the Customs Act, 1962. In our view, such penalty is excessive for the role which has been attributed to him. Accordingly, we reduce the penalty from ₹ 6 lakhs to ₹ 25,000/- Appeals disposed off - decided partly in favor of assessee (as regards quantum of fine and penalty).
-
2016 (12) TMI 263
Continuation of appeal proceedings by legal heir of the deceased appellant - whether the appeal continued is valid? - Held that: - Section 129E makes it a condition mandatory for filing an appeal that duty, if any, demanded in the impugned order should, unless waived, be deposited; waiver is at the discretion of the appellate authority and is not a matter of right. The statute does not contemplate reversal of a confirmation of demand except through the appellate mechanism. The appeals do not abate and must be decided. The deceased appellant Shri Inderjit Nagpal, not having filed the bills of entry for the consignment on which differential duty was confirmed, could not have been fastened with the duty liability - Held that: - Nothing would prevent the tax authority from acting against any citizen in the country on the ground that the person was the owner either originally or in due course of imported goods. The limits of action are never left to the balance or rationale of the tax collector; it is the law that has to determine the line that must never be crossed. The jurisdiction arrogated in the impugned order, unwarranted certainly, is not contemplated by law. Fraud may excite moral outrage but to allow such outrage to justify widening the tax jurisdiction beyond the plain reading of the statute is an invitation to regress to the tax regimes of the darker periods of history. The importers are, admittedly, identifiable and have been put on notice. Fastening of tax liability on Shri Inderjit Nagpal is without authority of law. Confiscation of goods - Held that: - Invoking the authority under section 111 and 113 of the Customs Act 1962 and failing to act on behalf of the new owners under section 126 is a breach of agency and a breach of trust. In the alternative, confiscation effected on goods that are not traceable, and have never been traced after its clearance for home consumption, is nothing short of a travesty. Confiscation is attended by the requirement to offer the confiscated goods to the person from whom it was confiscated on payment of redemption fine. Attaching a fine to the act of confiscation without the wherewithal to complete the process is not only futile but detracts from the credibility of government. It would appear that the adjudicating Commissioner has not comprehended the semantically insignificant but substantively major distinction between confiscation and liability to confiscation. The two are distinct and separate; with a finding of liability to confiscate, the lack of goods is admitted, thus foreclosing the possession of goods, but the ingredient necessary for invoking section 112 and section 114 is breathed into existence. Therefore, the confiscation of the goods in the impugned order is not in accordance with the law. Imposition of penalty - Held that: - It appears from the impugned order that this was sought to be justified by a finding that he allowed Shri Inderjit Nagpal to import the goods by mis-declaration and, thereby, abetted in evasion of customs duty. The primary role assigned to Shri Inderjit Nagpal is erroneous in the circumstances referred to above. The case of Shri Sanjay Chauhan, therefore, requires further examination. Section 28 can be invoked only in relation to specific consignments and the corresponding bill of entry. Without enumeration of the bill of entry concerned, the recovery of duty is without authority of law. This is a glaring lack that would render the proceedings to be untenable. This needs to be remedied in the remand proceedings if the outcome is to have a legal sanction - appeal allowed by way of remand.
-
2016 (12) TMI 262
Conversion of shipping bills - 3 duty free shipping bills into duty draw back shipping bills - relaxation of 12(1)(a)(i) read with Circular No 04/2004-CU dt 16th Jan. 2004 - principles of natural justice - Held that: - We find force in the submission of appellant in as much as while rejecting their request for conversion of 3 duty-free shipping bill into duty draw back shipping bills, the Ld Commissioner has not afforded them an opportunity of hearing and explain their case with evidence. Needless to mention such action has resulted in gross violation of principles of natural justice. In the result, the impugned order is set aside and the matter is remanded to the Ld Commissioner for deciding the issue afresh after allowing an opportunity to the appellant to explain their case in person - appeal allowed by way of remand.
-
2016 (12) TMI 261
Imposition of penalty - validity of the reason recorded for not imposing penalty on Shri Affak Motiwala and Shri Afzal Madni Palla, by the Ld Commissioner - Held that: - In the grounds of appeal, the Revenue has not brought out any contrary evidences whereby the aforesaid order could be said to be devoid of merit and bad in law. In the result, we do not see any reason to interfere with the said order. Consequently, the Revenue’s appeal being without merit, is dismissed - decided against Revenue.
-
Corporate Laws
-
2016 (12) TMI 255
Guilty of contravening the provisions of Regulation 22(7) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 - whether the words 'Memorandum of Understanding' are not words of Art conveying a single meaning? - Held that:- In the present case, while Burren was the acquirer, UBL was the person acting in concert. This is evident from the letter of offer (public announcement) dated 15th February, 2005. The embargo under Section 22(7) is both on the acquirer and a person acting in concert. The expression 'person acting in concert' includes a corporate entity [Regulation 2(1)(e)(2)(i) of the Regulations] and also its directors and associates [Regulation 2(1)(e)(2)(iii) of the Regulations]. If this is what is contemplated under the Regulations we do not see how the first argument advanced by Shri Divan on behalf of the respondents can have our acceptance. Insofar as the second argument advanced by Shri Divan is concerned it is correct that in the definition of 'offer period' contained in Regulation 2(1)(f) of the Regulations, relevant for the present case, a concluded agreement is not contemplated to be the starting point of the offer period. But such a consequence must naturally follow once the offer period commences from the date of entering into a Memorandum of Understanding which, in most cases would reflect an agreement in principle falling short of a binding contract. If the offer period can be triggered of by an understanding that is yet to fructify into an agreement, we do not see how the same can be said not to have commenced/started from the date of a concluded agreement i.e. share purchase agreement as in the present case. Thus we will have to hold that the learned Tribunal was incorrect in reaching its impugned conclusions and in reversing the order of the Adjudicating Officer. Consequently the order of the learned Tribunal is set aside and that of the Adjudicating Officer is restored. The penalty awarded by the Adjudicating Officer by order dated 25th August, 2006 shall be deposited in the manner directed within two months from today.
-
2016 (12) TMI 254
Scheme of Arrangement in the nature of amalgamation - Held that:- Petitioners complied with the order of publication and service. The affidavit for publication and service of notices came to be filed. The notices of the petitions came to be served on the Regional Director on 18th August, 2016 and the Official Liquidator on 17th August, 2016. Notices of the petitions came to be published in the English Daily newspaper, “Business Standard” and the Gujarati Daily newspaper, “Jai Hind”, both Ahmedabad Editions on 06.08.2016. The affidavit of compliance dated 10.10.2016, came to be filed. Upon service of notice, the Regional Director filed a common affidavit dated 25.10.2016. The Official Liquidator filed separate reports dated 16.11.2016, in the petitions of the Transferor companies. In respect of the compliance of Accounting Standard 14, as observed in the affidavit of Regional Director at paragraph 2(d), the petitioner of Transferee Company has filed an affidavit dated 24.11.2016, undertaking to comply with the Accounting Standard 14 and has submitted that, the excess of assets over liabilities, if any, shall be credited to the Amalgamation Reserve Account being of Capital Reserve nature and the shortfall, if any, shall be debited to the Goodwill Account. It is also undertaken that, the reserve so created, if any, shall not be available for distribution of dividend and the petitioner will comply with the Accounting Standard 14. Further the petitioners also undertake to comply with the Income Tax Act and Rules. Also as in the same affidavit at paragraph 2 clarified that, there are no Secured and Unsecured Creditors in the respective companies and the Petitioners have produced the certificates of the Chartered Accountant with the respective applications and upon considering the averments and submissions, the order came to be passed, dispensing with the meeting of the Equity Shareholders. There is no requirement for convening and holding the meetings of the Creditors, as there are none. There are neither Secured nor Unsecured Creditors in either of the companies and hence, there is no requirement of either obtaining consent letters or convening the meetings. The petitioners also undertake to maintain the books, accounts, registers and shall comply with the law and shall not dispose of the books and accounts without the prior approval of the Central Government. 8. Considering the explanation in the affidavit, there is no requirement for convening and holding of the meetings of the Secured and Unsecured Creditors or obtaining consent letters, as there are no creditors in either of the Companies. It is, however, directed that, the petitioner company shall preserve its books of accounts, papers and records and not dispose of the records without the prior permission of the Central Government, as per the provisions of Section 396(A) of the Companies Act, 1956 and shall not be absolved from any statutory liability. Considering the above, it is ordered that, the Scheme at Exhibit “C” to the petitions, is hereby sanctioned and the prayers made in the Company Petitions are granted.
-
Service Tax
-
2016 (12) TMI 290
Levy of service tax - activity of bill discounting undertaken by the appellant for which they have received consideration in the form of discount - denial of benefit of the N/N. 29/2004-ST dated 22.9.2004 - Held that: - The case of the appellant is that service tax becomes payable on this activity only when the service is rendered by banking company or financial institution including NBFC or any other body corporate or commercial concern. Their submission is that though they are a body corporate, still they will not be liable for service tax inasmuch as they cannot be classified under the category of banking company or other financial institutions. We are not in agreement with this view. The definition of banking and other financial services makes it applicable to any of the following:(a) Banking company (b) Financial institution including NBFC. (c) Any other body corporate (d) Or commercial concern - Since the various categories are separated by 'Or'it is clear that the service tax will be applicable to all. It is not disputed that the appellant is a body corporate, since they are a limited company. Hence we are of the view that levy of service tax will be applicable to the appellant. Benefit of N/N. 29/2004-ST dated 22.9.2004 - Held that: - the invoices clearly indicate the amount of the bill of exchange, discounting charges and the net amount paid to the seller. In some cases, it has been shown as interest. The benefit of the exemption will be available whether the consideration is described as interest or discount. This has been specifically held by the Tribunal in the case of UCO Bank [2014 (9) TMI 820 - CESTAT KOLKATA]. The documents submitted would require verification before allowing the benefit of exemption No. 29/2004-ST dated 22.9.2004. For this purpose, we remand the matter to the original adjudicating authority, who shall allow the benefit of the scrutiny of the documents. The appellant is directed to produce all relevant documents to establish their claim for the benefit of the notification. Appeal allowed by way of remand.
-
2016 (12) TMI 289
Levy of tax on state police - Security Agency Service - Section 65(105)(w) read with Section 65(94) of the Finance Act, 1994 - agency of state government - whether the state police represented by the Superintendents of Police of various districts, would be covered within the definition of security agency services and service tax will be liable to be paid by them on the amounts recovered by them for providing security personnel to various organizations? - Held that: - police department, which is an agency of the State Govt., cannot be considered to be a person engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act. We also find that in terms of CBEC circular on this subject, the fees collected by the police department is in the nature of fee prescribed for performing statutory function, which has been deposited into the Govt. treasury. In the light of the CBEC circular also, there can be no levy of service tax on such activities carried out by the police department. In line with the above discussions, the appeals filed by the police department succeed - appeal allowed - decided in favor of Department.
-
2016 (12) TMI 288
Levy of service tax - amounts received by the respondent by sale of study material on the counter or through post - Held that: - In the case of Cerebral Learning Solutions Pvt. Ltd. Vs. CCE, Indore [2013 (4) TMI 527 - CESTAT NEW DELHI], it has been categorically held that the benefit of exemption Notification No.12/2003, dated 26.06.2003 will be allowable to the cost of the study materials - We find that in the impugned order, the demand has been set aside and detailed reasons have been furnished for the same. Appeal dismissed - decided against Revenue.
-
2016 (12) TMI 287
Levy of tax - revenue neutral exercise - availing the services of foreign commission agent - reverse charge mechanism - whether as a recipient of services, appellant was required to pay service tax on reverse charge basis? - Held that: - the Tribunal in the case of Kansara Modler Ltd. Vs. CCE, Jaipur-II [2014 (1) TMI 1095 - CESTAT NEW DELHI] has held that wherever the service recipient discharges service tax liability on reverse charge basis, he has to be considered as output service provider, thus entitling utilizing the payment of such service tax. It was found that during the period 2008-09 to 2009-10, the appellant did not discharge the service tax liability. On being pointed out, it paid the same from its Cenvat account to the extent of ₹ 61,11,826/-. As regards the balance amount, it contested that it has not paid the commission to its foreign agents and as such the question of payment of service tax does not arise - Held that: - As the fact of subsequent payment of service tax is required to be ascertained from records, we deem it fit to set aside that portion of the impugned order for examining and verifying the documents. As regards, penalty, we agree with ld. advocate that the issue was under litigation and was finally settled by Honble Bombay High Court in the case of Indian National Shipowners Assn Vs. Union of India [2008 (12) TMI 41 - BOMBAY HIGH COURT]. Otherwise also, we note that whatever the commission was required to be paid by the appellant was available to them as Cenvat credit and as such the entire situation was revenue neutral. In this scenario, any mala fide or suppression of facts with an intention to evade payment of duty cannot be attributed to the assessee so as to invite penal action against them. Appeal disposed off.
-
2016 (12) TMI 286
Demand - valuation - photographic service - the value of the material used by him, while providing the said services, are required to be added in the assessable value of the services - Held that: - the issue on merits stand decided against the appellant by Larger Bench decision of the Tribunal in the case of Aggarwal Colour Advance Photo System Vs. CCE [2011 (8) TMI 291 - CESTAT, NEW DELHI (LB)], where it was held that The value of other goods and material, if sold separately would be excluded under exemption Notification No. 12/2003 and the term 'sold' appearing thereunder has to be interpreted using the definition of 'sale' in the Central Excise Act, 1944 and not as per the meaning of deemed sale under Article 366(29A)(b) of the Constitution. Period of limitation - Held that: - reliance placed on the decision of the case of CCE Vs. Centre Point Colour Lab [2011 (9) TMI 269 - CESTAT, NEW DELHI], where it was held that longer period of limitation would not be available to the Revenue. Demand set aside - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 285
Demand of Service Tax - Manpower Recruitment and Supply Agency Services - whether the demand on the ground that the appellants have entered into an agreement with the Sugar factory for harvesting of sugar cane, loading and unloading along with transportation to the sugar factory, justified? - Held that: - the issue involved in this case is now squarely covered by the judgment of Hon'ble High Court of Bombay in the case of Commissioner of Central Excise Vs. Samarth Sevabhavi Trust & Ors.[2015 (3) TMI 1170 - BOMBAY HIGH COURT], where it was held that there is no supply of labour to the sugar factory concerned. The respondents have undertaken the activities of harvesting of sugarcane and transporting the same to the sugar factory for which labour is employed. Having regard to the nature of contract between the respondents and sugar factory and the scope of definitions, it appears that the Appellate Tribunal has rightly come to the conclusion that the respondent's work, though provided services to the sugar factory, did not come within the mischief of the term “Manpower Recruitment or Supply Agency”. Therefore, it is clear that no manpower has been supplied by the respondents to the sugar factory to constitute supply of manpower. Appeal allowed - no taxability - decided in favor of assessee.
-
2016 (12) TMI 284
Demand of service tax - period April, 2005 to October, 2009 - Erection, Installation and Commissioning Services - principles of natural justice - Held that: - the issue needs appreciation of factual matrix before arriving at the conclusion. In view of the above, we hold that the matter needs reconsideration by the lower authorities. Accordingly, without expressing any opinion on the merits of this case, this Court sets aside the impugned order and remand the matter back to the adjudicating authority for reconsideration of the issue after following the principles of natural justice - all issues kept open.
-
2016 (12) TMI 283
Demand - commercial and industrial construction services - period 10.9.2004 to 31.3.2008 - period of limitation - Held that: - the longer period of limitation of five years is available to the Revenue when the assessee indulges in mala fide case of suppresses or misstatement with an intention to evade payment of tax. A belief which emerges on the basis of the circumstances available, leading the assessee not to pay the tax, is required to be held as bona fide belief. When viewed from this angle, we find that the Board's circular 80/2004 dated 17.9.2004 vide para 13.2, referred and relied upon by the ld. Advocate read with the certificate given by BSNL are sufficient to constitute a bona fide belief on the part of the assessee so as to entertain a view that inasmuch as the construction activities are being done for the office a Government of India Enterprises, the same would not get covered by the definition of commercial or industrial construction service. When asked, ld. DR has not been bring to our notice any positive evidence or fact to establish that the appellant made any suppression or misstatement of facts, with a mala fide intention to evade payment of duty. As such, we are of the view that the demand having been raised beyond the limitation period is hopelessly barred and is required to be set aside on this ground itself - demand set aside - appeal allowed - decided in favor of appellant-assessee.
-
Central Excise
-
2016 (12) TMI 282
Demand - Clandestine removal - suppression of facts - sponge iron - Held that: - M/s PDIPL, the appellant admits the shortage of ₹ 103.815 MT of sponge iron in the form of admission statement dated 25.08.2008 given by Sh. A.R. Rao, General Manager (Commercial); the incriminating records/documents were also recovered from the factory of M/s P. D. Industries Pvt. Ltd., which corroborate the fact of clandestine removal of the subject goods found short during physical verification. The impugned order in para 10.2 gives the findings in this regard. There is no evidence produced by M/s PDIPL, the appellant, to counter the same. Therefore, there is no scope to interfere with the impugned order in this regard. In case of other part of the demand, which is of ₹ 18,39,809 against the suppressed production and clandestine removal of 549.660 MT of sponge iron, there are sufficient evidences available in the form of loose papers, log sheets, outgoing and incoming goods details and statement of GM (Commercial), Sh. A.N.Rao. M/s PDIPL also deposited the major part of this demand which was appropriated by the impugned order - Based on the evidences available on record we agree with the findings given in this regard by the impugned order. Thus there is no scope to interfere with the impugned order confirming above demand of ₹ 18,39,809 against the appellant. We have held that there is no scope to interfere with the impugned order confirming the demand of ₹ 3,06,902 and of ₹ 18,39,809 (i.e total of ₹ 21,46,711), and once above demands have been found sustainable there is no scope to interfere with the imposition of equivalent penalty of ₹ 21,46,711, where benefit of reduced penalty of 25 per cent of the duty confirmed and interest thereon has also been given under section 11 AC of Central Excise Act, 1994 by the impugned order. The part of the order concerning the demand of ₹ 52,31,280 on suppressed production and clandestine clearance of 5140.709 sponge iron is remanded for denovo decision to the adjudicating authority, who will provide reasonable opportunity of personal hearing and additional evidence, if need be to the Noticee-appellant M/s P.D. Industries Pvt Ltd. Consequently, the Revenue's appeal is allowed by way of remand to the adjudicating authority. Appeal disposed off by way of remand.
-
2016 (12) TMI 281
Cement - valuation - wholesale package or retail package - benefit of concessional rate of duty - Held that: - Admittedly, the cement without marking of RSP has been sold by the assessee-appellant directly to these consumers and as such these transactions do not qualify as retail sale in view of the statutory definition which requires sale, distribution or delivery of such commodity through retail sale agency or other instrumentality for consumption by an individual. In the present case, admittedly, the sale being direct without any intermediary involved, the criteria for retail sale has not been fulfilled. As such, we find wherever such direct sale is effected the application of Packaged Commodities Rules, 197 will not be governed by Rule 3 for enforcement - the denial of the concession for the assessee-appellant on these grounds is not justifiable - appeal allowed - decided in favor of appellant-assessee.
-
2016 (12) TMI 280
Eligibility of exemption under N/N. 101/94-CE dated 04.05.1994 - manufacture of vapour corrosion inhibitor coated papers falling under subheading no. 4811.80 and VCI coated paper cartons falling under sub heading no. 4819.90 of Central Excise Tariff - Held that: - in the case of converted paperboard, clause four applies as both the lower authorities have not controverted the submissions of the appellants that the converted paper is to be used by the buyers for the intended purpose. As regards the demands raised on the ground that appellant had manufactured bags out of the converted papers hence not eligible for the benefit of notification, we find that the lower authorities have again misdirected themselves. It is seen from the samples produced before us that the said samples indicate that they are in the form of collapsible boxes or cases in which materials/items can be used as packing. In our view, the final product which is in form of collapsible boxes and cases will be covered under the notification number 101/94 - we hold that the appellant is eligible to avail the benefit of notification 101/94 CE for the products manufactured and cleared by them - appeal allowed - decided in favor of appellant-assessee.
-
2016 (12) TMI 279
Valuation - job-work - manufacturing TV cabinets for Weston Electronics - value of the moulded components supplied to them by Weston Electronics to be included in assessable value or not? - the challans were in the name of M/s Celak & Co., while actual manufacturing was being done by M/s Super Cabinet. Admittedly during the period of dispute , M/s Super Cabinet had no SSI Registration - Held that: - it is only a procedural lapse that the challans are not in the name of actual manufacturer - It may be mentioned that any amount of duty should always be based on necessary quantitative details with mathematical precision. Hence, we are of the view that the value of component material supplied by M/s Weston Electronics Ltd. has to be included in the assessable value which has been done by the assessee. When it is so, then we find no merit in the impugned order passed by the Collector of Central Excise, Delhi II. The same is hereby set aside - appeal allowed by way of remand.
-
2016 (12) TMI 278
Levy of duty - manufacture of lime mixed chewing tobacco falling under Tariff Item 24039910 - Section 3A of the Central Excise Act, 1944, Compounded Levy Scheme or Section 3 of the Central Excise Act, 1944 - Held that: - in the instant case, all goods falling under Tariff Item 24039910 of the First Schedule to CETA are notified for MRP based assessment in terms of Serial No. 27 of MRP based Notification. Thus, filter khaini manufactured by the appellants are notified for MRP based assessment. Now, it needs to be analyzed as to whether there is requirement to declare MRP on the packages. As per Rule 26(a) of Legal Metrology (Packaged Commodity) Rules, there is no requirement to make declaration on the package provided the net weight of the commodity is 10 grams or less. This issue has come up to this Tribunal in the case of CCE, Chandigarh Vs. Tej Ram Dharam Paul [2013 (8) TMI 607 - CESTAT NEW DELHI], where it was held that, we agree with the lower authorities that the packing machine used for packing of filter khaini pouches/pillows/sachets cannot be considered to be notified item and the goods manufactured with the aid of packing machine would not be covered under the Compounded Levy Rules. They are required to discharge duty not in terms of the said Rules but in terms of the normal provisions of law. Section 3 of the Central Excise Act, 1944 applicable - Appeal allowed - decided in favor of appellant-assessee.
-
2016 (12) TMI 277
Maintainability of appeal - Held that: - After hearing the Appeal for some time on a query from the Bench to ascertain certain facts mentioned in the Annexure to the Show Cause Notice, it is found that relevant annexures to the show cause notice are not enclosed. As the matter has been pending for more than eight years and the Appeals earlier have been listed on several occasions, we do not see any reason to adjourn the matter. Therefore, the appeal is dismissed as non-maintainable. The Appellant is at liberty to approach this Tribunal for appropriate Order on completion of the record.
-
2016 (12) TMI 276
CENVAT credit - transfer of credit - whether the Respondents are eligible for the transfer of the CENVAT credit of Service Tax and raw materials availed by the sister concern, which was amalgamated with the respondents? - Held that: - We find that it has been held in the plethora of decisions that physical transfer of inputs and raw material nor services are required, for transfer of cenvat credit accumulated and available in the books of sister concern on the date of amalgamation. We find no infirmity in the decision of the Commissioner (Appeals), which is upheld - CENVAT credit not allowed - appeal dismissed - decided against respondent-assessee.
-
2016 (12) TMI 275
Cement - benefit of concessional rate of duty in terms of Sl. No. 1C in Notification No. 4/2007-CE dated 01.03.2007 - benefit denied on the ground that certain clearances made to institutional consumers - individuals, schools, educational institutions, hospitals, co-operative societies, malls, government department, public sector undertaking, industrial consumers etc - Held that: - First of all, the Revenue has not produced any evidence regarding the decision of Hon’ble High Court or Hon’ble Supreme Court overruling the Tribunal decision in Grasim Industries [2008 (10) TMI 462 - CESTAT, CHENNAI]. Further, it is not correct for the Revenue to say that the circular will be applicable only to some portion of the country and should not be relied upon by others. Even otherwise, we find that the original order as far as it relates to extending benefit to the respondent-assessee with reference to the clearance of cement to institutional buyers, we find no merit in the present appeal to interfere with the same. It may be noted here that in terms of Rule 2(q) of Packaged Commodity Rules, 1977 to qualify as a “retail sale” such sale of any commodity should be through an intermediary to an ultimate consumer. In the present case, the sales made directly to various actual users will not be covered by the category of “retail sale”. On this ground also we find the appeal by Revenue has no merit. Accordingly, the same is rejected - decided against Revenue.
-
2016 (12) TMI 274
CENVAT credit - various structural materials such as angles, channels, beams, etc. as well as welding electrodes - structural items used in the erection and maintenance of support structure of the capital goods such as induction furnace, power plant, etc. in the manufacturing plant for sponge iron. Input such as oxygen gas, welding electrodes, etc/ were used for repair and maintenance purpose - Held that: - reliance placed on the decision of the case of Singhal Enterprises Vs. CCE [2016 (9) TMI 682 - CESTAT NEW DELHI] where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit - CENVAT credit allowed - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 273
Benefit of N/N. 14/2002-CE dated 01.03.2002 - concessional rate of duty - Man made Processed Knitted Fabrics classifiable under Tariff sub Heading No. 6002.93 of Central Excise Tariff Act, 1985 - Held that: - in this case benefit of exemption Notification have been denied on the premises that as per Notification No. 14/2002-CE, the exemption is available on production of documents evidencing payment of duty thereon, but as per explanation to the exemption notifications creates a legal fiction, specifying that for the purpose of conditions of this notification, textile yarn or fabrics shall be deemed to have been duty paid even in the absence of production of documents evidencing payment of duty thereon, as no duty is payable on Textile Fabric. Therefore, the appellant is not required to produce duty paying documents - reliance placed on the decision of the case of M/s Sports & Leisure Apparel Ltd. [2016 (8) TMI 128 - SUPREME COURT] where it was held that when Explanation II states that the duty shall be deemed to have been paid even without production of documents evidencing payment of duty thereon, it was clearly meant that no duty was required to be paid by the manufacturers of knitted garments. Such an intention is clearly reflected in the Government's own Budgetary Notes extracted above. We, thus, hold that Explanation II to the said exemption Notification Nos. 14/2002 and 15/2002 create legal fiction and that was the precise purpose for which this explanation was added. It is trite law that a fiction created by a provision of law is to be given its due play and it must be taken to its logical conclusion. The appellant is not required to produce the evidence payment of duty on Textile Fabrication and benefit of Notification No. 14/2002-CE is available to the appellants. - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 272
Levy of duty - soap stock, During the course of processing cotton seed into refined cotton seed oil, waste emerges which is called as soap stock - Held that: - The facts of this case present an interesting as well as pathetic situation faced by the assessee/appellant. The appellant stopped paying duty on the letter issued by department in 2011 directing the appellant not to pay duty on the waste/soap stock and also informing that he is liable to reverse the CENVAT Credit availed on inputs. Thereafter, department has issued show cause notice not only demanding payment of duty from 2011-2012 but also alleging suppression of facts with intent to evade payment of duty. The facts by itself make it candid that there was no suppression of facts with intent to evade payment of duty on the part of the appellant. Before I part, I cannot refrain from stating that adjudication officers of the department should bear in mind that after 06.08.2014 the assessee is required to make mandatory pre-deposit for filing appeal before the Commissioner (Appeals) and Tribunal. Therefore, they should be more cautious and apply mind reasonably while conduct of adjudication and not blanketly confirm the demand in the show cause notice. The appellant has been able to establish a case in their favour and the show cause notice issued invoking the extended period of limitation cannot sustain on the evidence presented by the case - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 271
CENVAT Credit for the period from April 2007 to December 2011 - authorized service station service - outdoor catering service - mandap keeper service - convention service - Held that: - the subject services were not availed for personal consumption of an employee but for the appellant organization. It is also not disputed that the invoices were raised in the name of appellant and not in the name of any employee. Further, the department has not adduced any evidence to establish that the subject services were availed for the personal consumption of any employee of the appellant organization. The issue whether after 01.04.2011 credit is admissible on outdoor catering service/ mandap keeper service and convention service was analysed by the Tribunal and has been held in favour of the assessee in the case of M/S Reliance Industries Ltd., Vs CCE & ST, LTU, Mumbai [2016 (8) TMI 123 - CESTAT MUMBAI]. The appellants are eligible for credit - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 270
ITC - non registration of office as input service distributor - Held that: - The appellants have availed credit of service tax paid on banking and financial service and also on service on inward transportation. The issue whether the non-registration of the main unit/appellant is fatal for availing credit is no longer resintegra. The Co-operative Bench of the Tribunal in the case of M/s National Engineering Industries Ltd., [2015 (9) TMI 1076 - CESTAT NEW DELHI] has held that appellant cannot be denied Cenvat Credit availed by them in the absence of registration as input service distributor by the Head Office - CENVAT credit allowed - appeal allowed - decided in favor of appellant.
-
2016 (12) TMI 269
Evasion of duty - suppression of facts - defects in documents - job-work - Held that: - there is nothing to show that the supplementary invoices were obtained in a surreptitious manner with intend to avail credit wrongly, which the appellants were otherwise not eligible for. Apart from the technical defects, the department does not allege any discrepancy in these documents. This Bench raised a question to Department whether the rectified supplementary invoices are in order. The Ld. AR was fair enough to concede this aspect. In such circumstances, as the defects are proved to be procedural lapses, the denial of credit is unjustifiable especially when after rectification, the invoices are in order. Extended period of limitation - Held that: - there is nothing to establish that there is any positive act of fraud, suppression or willful misrepresentation on the part of appellants with intent to evade payment of duty. There being no evidence to establish fraud, suppression of facts, the demand raised invoking the extended period of limitation is unsustainable. Appeal allowed - demand not sustainable - decided in favor of appellant.
-
2016 (12) TMI 268
CENVAT credit - input services - outstanding debtors - not making full payment of the billed amount and retaining with them a part of the amount billed by the service providers as performance guarantee - Held that: - cenvat credit will be eligible to the respondent even though the part of the payment due to the service provider has been held by the respondent - appeal disposed off - decided against Revenue.
-
2016 (12) TMI 267
Restoration of appeal - 100% EOU - appeal filed by the appellants dismissed on the ground that the appellants had failed to comply with the condition of the stay order - Held that: - It is observed that the grounds on which the appellants had filed this appeal are that the first appellate authority has not considered their contention that the demand is barred by limitation as also the merits of the case. It is observed that the first appellate authority has dismissed the appeal filed by the appellants before him mainly on the ground that they have not complied with the condition of the stay order. He has also not gone into the merits of the issue and contentions of the Appellants in detail and has only made a passing reference and has concluded that the contentions are not acceptable. We find force in the submissions of the appellant and are therefore, constrained to remand the matter to the first appellate authority for deciding the matter afresh. Needless to say that the appellants should be given a reasonable opportunity to be heard - appeal allowed by way of remand.
-
CST, VAT & Sales Tax
-
2016 (12) TMI 260
Decision in the case of Mahyco Monsanto Biotech (India) Pvt. Ltd., (formerly known as Mahyco Monsanto Biotech (India) Ltd) , Subway Systems India Pvt Ltd Versus Union of India & Others [2016 (8) TMI 717 - BOMBAY HIGH COURT] contested - Held that: - Notice may now be issued to the Union of India - In the meanwhile, there will be a stay against the recovery of sales tax.
-
2016 (12) TMI 259
Validity of assessment order - TNVAT Act, 2006 - objections given to the pre-revision notice, not considered - Held that: - This Court has time and again pointed out that it is high time that the Commercial Taxes Department shall dispense with the procedure of giving acknowledgment in 'Letter Delivery Book' as there is always room for complaints and grievances. It is not known as to why the Commercial Taxes Department, which is insisting upon filing 'E-Returns' by the dealers, is adopting a procedure of giving acknowledgment in 'Letter Delivery Book', which is an archaic and an old practice and it is high time, the Department shall abandon the same and give proper electronically generated acknowledgment. The petitioner was issued with notice dated 18.5.2016 and in the affidavit filed in support of the Writ Petition, in paragraph No.8, it is submitted that the petitioner's representatives appeared before the respondent and represented that they have submitted their reply to the earlier notices and the respondent stated that he would revert after reviewing the entire set of documents. However, the respondent passed the impugned order on the ground that the petitioner has not submitted any objections - this Court is inclined to believe the stand taken by the petitioner that the reply dated 20.02.2015 was received by the respondent on 26.2.2015 in terms of the endorsement made in the 'Letter Delivery Book' and therefore holds that the impugned order is in violation of principles of natural justice. Therefore, the impugned order has to be held to be illegal - the petitioner is directed to treat the impugned proceedings as a show cause notice and submit further objections within a period of fifteen days from the date of receipt of a copy of this order - petition disposed off - matter on remand.
-
2016 (12) TMI 258
Benefit of Sales Tax Incentive Scheme 1989 - manufacturers of Oil - jurisdiction of AO - Held that: - the benefit is only available upto 4.4.1994 and not later- on, and since in the instant cases, admittedly the assessment years involved are of 1995-96 on-wards, therefore, no benefit was available to the respondent assessees. Once the apex court has held that benefits are available upto 4.4.1994, no other authority could have taken any other view. Levy of interest u/s 58 of the RST Act - Held that: - the interest is leviable, if the dealer or a person commits default in making payment of any amount of tax leviable or payable, and admittedly the tax has not paid on or after 4.4.1994 by the assessees and, therefore, in my view the tax having not been paid the interest was certainly leviable and has rightly been levied by the AO. The revision petitions are required to be allowed and accordingly allowed - The orders passed by the Tax Board and DC(A), are hereby quashed and set aside and the order passed by the AO is sustained - decided in favor of AO.
-
2016 (12) TMI 257
Validity of assessment order - the petitioner did not respond to the pre-revision notice and did not file any objections, assessment order passed by respondent - Held that: - As pointed out there were four issues arise for consideration. With regard to the first issue i.e., The Tax Deduction at Source, the respondent can very well verify the statements given by the Corporation of Chennai and take a fresh decision. So far issue No.2, Deemed Sales, the petitioner has given an explanation, which has not been specifically dealt with in the impugned order. With regard to the remaining two issues, i.e., Difference in the purchase turnover and Disallowance of ITC claimed on the purchases made from the unregistered dealers, the respondent has not furnished any particulars to enable the petitioner to submit an effective reply. The invoice details, name of the dealers and name of the registered dealers etc., have to be furnished, since these details have been culled out by the respondent from the official records / website. The impugned orders call for interference. Accordingly, these Writ Petitions are allowed and the impugned orders are set-aside and the matters are remanded to the respondent for fresh consideration - appeal allowed by way of remand.
-
2016 (12) TMI 256
Imposition of penalty u/s 78(5) - incomplete declaration form - Held that: - there is a finding of fact recorded by all the three Authorities that the declaration form ST-18A was found blank in all respect, not filled-in and, therefore, the mandate of R.53 of the Act to carry a declaration form filled-in, in all respect has not been complied with and, therefore, the AO was well justified in coming to the said conclusion of imposing the penalty - the judgments of Guljag Industries v. CTO [2007 (8) TMI 344 - SUPREME Court] is squarely applicable on the facts of instant case where it was held that Section 78(5) of the RST Act 1994 (section 22A(7)(a) of the RST Act, 1954) is the section enacted to provide remedy for loss of revenue and it is not enacted to punish the offender for committing economic offence and, therefore, mens rea is not an essential ingredient for contravention of section 78(2) of the RST Act 1994. That, the breach of section 78(2) would attract the levy of penalty under section 78(5) in cases where the goods in movement have travelled with an incomplete Form No. 18A/18C. Penalty rightly imposed - petition dismissed - decided against petitioner.
-
Indian Laws
-
2016 (12) TMI 253
Issuance of the notices under section 13(2) of the SARFAESI Act seeked to be set aside - present petition invoking writ jurisdiction of this Court under Article 226 - Held that:- It is trite that in all the area of matters involving commercial disputes, the rule of alternative remedy has to be adhered to steadfast, instead of allowing the petitioners to straightway approach the High Court in a writ jurisdiction. In this view of the matter, the petitioners are required to be relegated to the said remedy and the present petition is not liable to be entertained. All the contentions on merits are open to be raised by both the parties before the Tribunal. In the aforesaid view, this petition is dismissed, relating the petitioners to avail the remedy under Section 17 of the SARFAESI Act, 2002. It is clarified that this Court has not gone into the merits of the case. The petition stands dismissed of as not entertained subject to above.
|
