TMI Tax Updates - e-Newsletter
February 8, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Chargeable income - Once the assessee has himself stated that the average rate of the surgery be reduced to Rs.6000/- per surgery, then now it is not open to the appellant to dispute that that the flat rate applied by the Tribunal is arbitrary. - HC
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Income Tax:
Deduction u/s 54 - Date of transfer - Thus the date of agreement to sell can not be treated as date of transfer of immovable property. - With the execution of the agreement, it cannot be said that the appellant transferred any right in favour of the purchaser - HC
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Income Tax:
Short deduction of TDS - Merely because the assessee has got separate TAN for Bahadurgarh unit and for Mumbai unit, will not render the certificate issued under Section 197(2) as redundant. - HC
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Income Tax:
Addition u/s 40(A)(3) - payment was made otherwise then by account payee cheque - assessee failed to prove - addition confirmed - HC
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Income Tax:
Revision application u/s 264 to get refund - application by amalgamated company - order of CIT rejecting the application is erroneous - refund allowed u/s 237 - Tri
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Service Tax:
Search warrant under service tax - when the petitioners have not been in a position to show that the respondents had acted in a mala fide manner, this Court is not inclined to accept the contention that the search and seizure operations, are arbitrary, illegal and void - HC
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Service Tax:
Commercial training and coaching services - training institute for hotel management - applicants are entitled for exemption notification - AT
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Service Tax:
Application for registration – Department was directed to treat the respondent-company’s registration as the provisional registration in the category of business auxiliary and, accordingly, all the statutory obligations shall be discharged by the company - HC
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Service Tax:
Courier Agencies Services – cash received at one place and handed over at another place - A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all - HC
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Central Excise:
MODVAT/ Cenvat credit - assessee had availed deemed credit - if the Department felt that the statement of the supplier was not reliable, nothing prevented it from going in for a further enquiry into the matter. - HC
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Central Excise:
Service tax paid on 'Fumigation Charges' and 'Testing and Inspection Agency Charges' – Services used in relation with export of goods - exporter would be compensated either by utilization of such credit for payment of other taxes or by taking refund when such utilization is not possible. - AT
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Central Excise:
Rebate Claim – Cenvat credit on chassis part is already availed by the job workers which, in case of rebate, will amount to double benefit. - CGOVT
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VAT:
Non filing of monthly returns - KVAT Act - petitioner was not entitled to the benefit of the proviso to Section 95 and in any case the absence of such a hearing has not caused any prejudice to the petitioner - HC
Articles
Notifications
News
Case Laws:
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Income Tax
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2013 (2) TMI 154
Chargeable income - interpretation for the provisions of Section 29 & 145 - undisclosed surgery operations - in appeal Tribunal reduced the quantum of addition @ Rs.8000/- per surgery form Rs.10,174 - Held that:- Once the assessee has himself stated before the Tribunal that the average rate of the surgery be reduced to Rs.6000/- per surgery, then now it is not open to the appellant to dispute that that the flat rate applied by the Tribunal is arbitrary. In fact, the average rate of surgery @ Rs.10,147/- was based upon the number of surgeries performed by the appellant in one year and the income earned therefrom. The addition made by the Assessing Officer were based upon reasonable grounds, which may not be said to be arbitrary. In fact, the Tribunal was indulgent to the appellant in reducing the average rate to Rs.8000/- per surgery. Appellant has further argued that a specific ground was raised before the Tribunal that the rejection of books of accounts is wholly unjustified and that the Tribunal has wrongly recorded in the order that the rejections of books of account was not disputed by the assessee. Thus no merit in the said argument as well. Mere fact that in the grounds of appeal, the appellant has raised a ground to assert that rejection of books of account is incorrect, is not sufficient to accept the argument of the appellant. The Tribunal has recorded the concession on the basis of argument raised during the course of hearing. Therefore, the finding has been recorded by the Tribunal on the basis of proceedings at the time of hearing. The concession recorded during the course of hearing cannot be permitted to be disputed in appeal - no substantial question of law arises.
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2013 (2) TMI 153
Deduction u/s 54 denied - Profit on sale of property used for residence - date of transfer v/s date of registration of the sale deed - on what day, the assessee has transferred rights in property? - Held that:- A finding of fact has been recorded by the Tribunal that there was no delivery of possession prior to 24.09.2004 nor the entire sale consideration received prior to execution of the sale deed.The appellant has received only Rs.15 lacs as the amount of earnest money out of total sale consideration of Rs.1.32 lacs. The balance payment was received only on 24.09.2004 Thus the date of agreement to sell can not be treated as date of transfer of immovable property. Even in terms of Section 54 of Transfer of Property Act, 1882, an agreement to sell does not create any interest in the immovable property. With the execution of the agreement, it cannot be said that the appellant transferred any right in favour of the purchaser - against assessee - no substantial question of law arises in the present appeal appeal.
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2013 (2) TMI 152
Short deduction of tax from the payment made for contract work - ITAT deleted the demand - Held that:- Assessing Officer of the contractors have furnished certificate under Section 197 to the Principal Officer of the Parle Biscuits Pvt Ltd, Mumbai. Such certificate is in terms of clause (iii) of Section 204. Such certificate mandates the persons to whom such certificate is issued to deduct tax at a rate lower than the prescribed rate under Section 194C. Merely because the assessee has got separate TAN for Bahadurgarh unit and for Mumbai unit, will not render the certificate issued under Section 197(2) as redundant. Such certificate is to be issued to the Principal Officer of the Company as the person responsible for deduction of tax and not to any other person or unit of the assessee. Therefore, the order passed by the CIT (A) Rohtak and affirmed by the Tribunal cannot be said to be suffering from any illegality in any manner. No merit in the present appeal - in favour of assessee.
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2013 (2) TMI 151
Addition u/s 40(A)(3) - the appellant is said to have purchased wheat from Shri Sai Baba Rice Traders & the payment of Rs.30,80,746/- was made by assessee otherwise by account payee cheque - Held that:- Perusal of the documents produced by the appellant does not prove the payments as alleged. Certificate given by Shri Sai Baba Rice Traders in respect of receipts of six cheques from M/s Shri Ganesh Trading Co. However, the statement of account from the ledger of assessee shows that the account produced is of Ram Nath Ramesh Chand of whom the appellant is the proprietor. There is no endorsement in the said account that the cheques in the sum of Rs.30,80,746/- has been issued to Shri Sai Baba Rice Traders for and on behalf of the appellant or that the said cheques were ever issued to Shri Sai Baba Rice Traders. In view of the said fact, no substantial question of law arises for consideration - additions confirmed. Additions being hypothetical interest on the purchase advance - Held that:- Even if the agreement to sell was oral, the account books of the appellant should have contain an entry of payment of Rs.6 lacs for the purchase of petrol pump. Since, there is no such entry, the findings of fact recorded by the authorities under the Act cannot be said to be unjustified - additions confirmed. Addition of higher rate of interest - 18.5% paid by the appellant to his mother as against the market rate of 15% - Held that:- Tribunal has returned a finding that the AO has considered the rate of interest paid by the appellant as higher in comparison to prevalent market rate of interest. The transaction in question is not a genuine and bona fide transaction is again the finding of fact. No substantial question of law arises for consideration - appeal rejected.
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2013 (2) TMI 150
Reopening of assessment - deduction under Section 80HHC allowed by ITAT - Held that:- The contention of the Revenue is governed by the decision of Gem Granites vs. Commissioner of Income Tax [2004 (11) TMI 13 - SUPREME COURT] wherein held that the cut and polished granite would also be a mineral and export thereof would not qualify for the special deduction under the un-amended Section 80HHC (2)(b). And that every statute is prima facie prospective, unless it is expressly or by necessary implication made to have retrospective operation - against assessee. Invalid deduction u/s 80I granted by ITAT - Held that:- Considering the ratio of decision of n Aspinwall and Co. Ltd., v. CIT [2001 (9) TMI 3 - SUPREME COURT] and considering the order passed by the ITAT there is no evidence to come to a definite conclusion as to whether the assessee is doing manufacturing activity or not, thus it is appropriate to remand the matter to the AO for the purpose of eliciting and proving the same.
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2013 (2) TMI 149
Revision application u/s 264 to get refund - amalgamated company viz. Torrent Power Limited, got merged with the assessee company has declared interim dividend on which Corporate Dividend Tax (CDT) has been duly paid under the provisions of Section 115-O - claiming refund of CDT as companies paying dividend and receiving dividend have already got amalgamated, there is, in effect, no distribution of dividend - petitioner presented revision petition under section 264 before the CIT - Held that:- the Commissioner committed a serious error in, on one hand, holding that the revision petition was not maintainable and thereafter proceeding to decide the issues on merits and coming to the conclusion that even on merits, the claim of the petitioner was not tenable. If an authority under the Act comes to the conclusion that certain proceedings were not maintainable before him, the only course open would be to dismiss the same as being not competent. Once he concludes that he does not have the competence to allow a revision petition, he is equally not competent to reject the same on merits. In other words, the Commissioner could not have examined the merits of the petitioner’s claim unless he himself was convinced that the revision petition was maintainable. His dual stand that the revision petition was not maintainable and further that on merits also, the petitioner had no arguable case, in law is self-contradictory. Only an authority competent to entertain certain proceedings, be it in original, appellate or revisional nature, can hand down a decision on merits. Unable to understand as why the Commissioner felt that the revision was not maintainable. We may recall that the petitioner had moved an application to the Assessing Officer seeking refund of the dividend distribution tax already paid. Such application was rejected by the Assessing Officer by a detailed speaking order. Merely because such application was not in a formal format, the same would not change the character of the application being one seeking refund under the Act. Likewise, the Assessing Officer, after hearing the petitioner made a detailed speaking order dealing with the petitioner’s claim for refund. Such order also cannot be simply brushed aside as one being correspondence between the assessee and the Assessing Officer. Essentially, the Assessing Officer on 24th May 2002, passed an order rejecting the petitioner’s claim for refund. Such order was certainly amenable to revision at the hands of the Commissioner under section 264. Certain dividend was declared and paid by one of the companies which ultimately merged with the assessee company along with other companies. Before the date of declaration and payment of dividend, scheme for amalgamation was framed. By virtue of the decision of the High Court, such scheme was sanctioned with no variation in the effective date. Thus, the date of amalgamation which actually took effect was prior to the date on which dividend was declared and paid. In that view of the matter,no hesitation in holding that by virtue of such subsequent developments, the payment of dividend could no longer retain the character of dividend paid by Torrent Power Ltd since there cannot be payment of dividend by one company to its own self. See Marshall Sons and Co. (India) Ltd. v. ITO [1996 (11) TMI 6 - SUPREME COURT] wherein held such transfers would cease to be sales between two independent entities but would be treated as branch transfers. In the return of income filed by the transferee company, a detailed note amalgamation was filed pointing out that distribution dividend tax was already paid which, by virtue of such merger of companies, was required to be refunded. Section 237 however, provides that if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, he shall be entitled to a refund of the excess amount - refund granted - in favour of assessee.
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2013 (2) TMI 148
Addition of voluntary contribution u/s 12(1) – Voluntary contribution received from Government without direction as referred to in Section 11(1)(d) - Held that:- As decided in assessee's own case [2010 (12) TMI 1057 - GUJARAT HIGH COURT] Voluntary contribution received by assessee was not shown in the books of account as forming part of the corpus donations. Assessee had pointed out a resolution of the Government containing a specific direction that voluntary contribution made to the society would form part of corpus of the trust - Decided against the revenue.
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Customs
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2013 (2) TMI 147
Refund claim of SAD - Additional duty of customs (CVD) – Imported goods were cleared under invoices of credit paying VAT - Notification No. 102/07-Customs dated 14.09.07 – Period of limitation - Notification No. 93/08-Customs dated 01.08.08 – Unjust enrichment Period of limitation – Held that:- Following the decision in case of AUDIOPLUS (2010 (11) TMI 361 - CESTAT, MUMBAI) that there is no bar of time limit as per the Notification No. 102/07- Customs. The only bar has come with effect from Notification No, 93/08- Customs. Therefore, any import prior to 01.08.08, there is no bar of time limit as applicable – In favour of assessee Unjust Enrichment – Held that:- Appellants did not produce the required documents for their satisfaction that the appellants have not passed the burden of unjust enrichment – Remand back to A.O.
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2013 (2) TMI 146
Stay Petition - Appeal against order passed under regulations 21 of the CHALR 2004 - Held that:- The appeal before this Tribunal is maintainable against the order passed by the Commissioner under Regulation 20 or 22. Therefore, the appeal against the order passed under Regulation 21 of CHALR, 2004, is not maintainable. In favour of revenue
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2013 (2) TMI 145
Encashing the bank guarantee - Furnish by applicant - to complied with the condition of the stay order dated 18.12.2006 - The bank guarantee is alive till 2015 - Obtained extension of stay vide order dated 01.08.2012 - Meanwhile department encash bank guarantee - Held that:- As the applicant has complied with the condition of the stay order dated 18.12.2006 by executing bank guarantee of Rs.50 lakhs and the same is alive till 2015 and also obtained extension of stay vide order dated 01.08.2012, we direct the respondent to refund the amount of Rs.50 lakhs within seven days - In the favour of assessee
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Corporate Laws
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2013 (2) TMI 144
Entitlement for fresh auction or to give sanctity to the proceedings initiated by this Court? - Held that:- As after the company petition is allowed, Official Liquidator was directed to take process and initiate auctions as per law. On filing necessary OLR, the OL was permitted to take public Notification inviting the public to participate in the public auction. On two occasions, notifications were issued and on considering the same there were four persons participated and again they were directed to quote highest bid and bid sheet was made and available before this Court to consider. When an order passed by this Court it is to be considered by the public at large and the same concluded at the instance of this Court. Then it is the duty of this Court to give respect to its order by giving sanctity more than, over and above the highest bid. The cases cannot be concluded if for One or the other reasons as stated in these applications, the orders are recalled there in no end and this Court cannot put an end to the legal proceedings. This Court feels, by considering all these applications it may reduce to real estate business. Money is not the criteria sanctity of the order is the criteria. In the application filed by the State Finance Corporation, the reasons assigned are examined. Since, from the day one i.e., in pursuance to first valuation report the learned counsel appearing on behalf of the KFSC was present before this Court. It is one year the proceedings have taken place. On hearing all the learned counsels, directuion for the second report and thereafter the auction was considered in the open Court itself. The sanctity of the order of this court matters rather than higher value or the bid offered at a later stage after the bid was accepted.
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2013 (2) TMI 143
Challenge CLB in accepting application and directed DDIL a closely held company to call an EGM for holding election to the BOD within 15 days - BOD of DDIL contained an equal number of representatives of the Appellant group (‘A group’) and of Respondents 2 to 4 (‘B group’) - Respondent No.4 averred that board meetings of DDIL were held by the B group, including an Extraordinary General Meeting (‘EGM’) without notice to the A group - challenging the action of the BOD in seeking to take control of the management of DDIL by ousting the A group - contended by the B group that the A Group was in a minority even with the shareholding of 33% whereas the B group was in the majority with a shareholding of 66% - Held that:- A perusal of the minutes of the BOD meeting held on 28th March 2012 read with the notes accompanying the agenda for the meeting reveals that the factum of the exposure of DDIL to the loans advanced to DDPPL was disclosed. It was in the above circumstances that the B group filed Company Application seeking an order for convening an EGM of the shareholders of DDIL under the supervision of an Observer. It is not possible to accept the submission of the Appellants that the requirement of a group of shareholders desiring the convening of an EGM having to first make a requisition to the BOD is mandatory and in circumstance can be dispensed with, even by the CLB while making an order under Section 403 of the Act. That interpretation would in fact be contrary to the legislative intent behind Sections 402 and 403 and dilute the power of the CLB to pass orders which it thinks to be just and equitable in the facts of a case, particularly when an impasse has been created by one group of shareholders making it pointless for the other group to even make such requisition. In Bengal and Assam Investors Limited v. J.K. Eastern Industries Private Limited [1956 (7) TMI 24 - HIGH COURT OF CALCUTTA] it was acknowledged that when a Court directs a meeting to be held under Section 186 “it must necessarily modify or supplement the Articles or the Act.” Also see Shailesh Harilal Shah v. Matushree Textiles Ltd. (1993 (4) TMI 239 - HIGH COURT OF BOMBAY) that the requiremnent of 21 days’ advance notice for holding an AGM was not mandatory notwithstanding the use of the word “shall” in that provision. As regards Section 186 the Supreme Court in R. Rangachari v. S. Suppiah [1975 (9) TMI 75 - SUPREME COURT OF INDIA] has explained that before ordering the convening of a meeting the CLB must be satisfied that it is not practicable to (a) call for, (b) hold and (c) conduct such meeting. Therefore it will have to be examined in the facts of each case, whether the three requirements were cumulatively met to justify an order by the CLB. Thus the requirement under Section 186 that it must be impracticable to call, hold and conduct a meeting of a company, other than an AGM, can be said to be fulfilled in. As rightly observed by the CLB, it was pointless for the B group to send a notice under Section 169 to the BOD comprised entirely of directors of the A group for convening an EGM. In all probability that request could have been rejected. In the face of the unilateral acts of Mr. Karan Gambhir, the B group was not acting unreasonably in anticipating rejection of their request by the BOD constituted only by the directors of the A group. The CLB in the impugned order has rightly distinguished the decisions relied upon by the Appellants, which were pressed into service in these proceedings as well. As far as the question of the CLB building in safeguards into its decision is concerned, the minutes of the meeting of the EGM held under the supervision of the Observer shows Mr. Karan Gambhir continues as MD of DDIL. Thus the interests of the A group who continue as minority shareholders of DDIL and who are represented by Mr. Karan Gambhir on the BOD are accounted for. Consequently, this Court is satisfied that no ground has been made out for interference with the impugned order dated 22nd November 2012 of the CLB - appeal dismissed with costs of Rs. 20,000 which will be paid by the Appellants to Respondents 2 to 4 within four weeks from today.
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Service Tax
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2013 (2) TMI 160
Search warrant - search and seizure - violation of the laws relating to the payment of service tax - assessee contested against jurisdiction of Coimbatore commissionerate for issuing warrant - Held that:- The authority concerned, who issues the warrant for search and seizure, ought to have the necessary materials before him to have a reason to believe that an order for search and seizure is warranted. However, it is clear that if certain materials are available before the authority concerned to arrive at his conclusion, then it is not for this Court to examine as to whether there were sufficient materials or grounds to arrive at such a conclusion. Further, this court cannot go into the question as to whether the materials available before the authority concerned were adequate to prompt him to believe that a search was necessary. There is no doubt that the satisfaction of the authority concerned is a subjective satisfaction. Therefore, this Court could only see whether the satisfaction of the authority is due to mala fide reasons or based on extraneous factors or mere rumours. If there are some materials available for a reasonable and prudent man to believe that a search is warranted, then it is not for this Court to delve deeper into the subtle and complex intricacies involved in the process of the formation of the opinion in the mind of the authority concerned. However, in the present case before this Court, the respondents have been in a position to show that certain transactions relating to the services rendered by the petitioner companies have taken place within the jurisdiction of the Coimbatore Commissionerate. It is found that the acceptance of certain contractual obligations, billing, accounting and other such processes had further place within the jurisdiction of the Coimbatore Commissionerate. Based on the bona fide belief that certain transactions were being made through the offices of the petitioner' companies at Coimbatore, the first respondent had issued to the impugned warrants to search the premises in question. Especially, when the petitioners have not been in a position to show that the respondents had acted in a mala fide manner, this Court is not inclined to accept the contention raised on behalf of the petitioners that the search and seizure operations, conducted by the authorities, of the Coimbatore Commissionerate are arbitrary, illegal and void. Based on the specific directions issued to the respondents, they had placed before this Court the original records, based on which the first respondent had a reason to believe that there was a necessity to issue a warrant to search the premises in question. On a perusal of the said records this Court is inclined to hold that the opinion formed by the first respondent that there was a necessity to issue a warrant of search, in respect of the official premises of the petitioner companies and the residential premises of one of its directors cannot be held to be arbitrary and void, as prayed for by the petitioners, in the present writ petitions. Thus as the petitioners have not been in a position to show that the authority concerned had issued the warrant of search, arbitrarily, without following the procedures established by law or with a mala fide motive this Court is of the considered view that the contentions raised on behalf of the petitioners cannot be countenanced - writ petitions are liable to be dismissed - the petitioners are entitled to the copies of the documents and records seized from the premises in question before further proceedings are initiated against them, by the respondents, pursuant to the search conducted on 1.3.2002.
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2013 (2) TMI 159
Waiver of Pre-deposit - Information Technology services - Erection and Commissioning - Management, Maintenance or Repair - Rule 15(4) of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 - Appellant is a manufacturer/trader of laptops and supply different software – Held that:- Out of total demand of Rs. 25.77 crores, about Rs.13.14 crores stands appropriated in the impugned order. The appellants have paid service tax while importing Information Technology Software services and while rendering the said services to the customers in India, they have paid service tax under the same category. Similarly, it is claimed that the appellants have taken credit of service tax paid by the subcontractors under the category of 'Management, Maintenance or Repair service' and utilised the credit while executing their annual maintenance contract the their customers. Learned CA submits that they have paid more service tax on these categories than what they have taken as credit. Therefore, we prima facie, agree that substantial part of the balance of the demand may not be sustainable. Direct the appellants to deposit a sum of Rs. 62 Lakhs.
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2013 (2) TMI 158
Commercial training and coaching services - Appellants are a trust which runs a training institute for hotel management - Notification No.24/2004-ST dt. 10.9.2004 - Vocational training institute - Held that:- Following the decision in the case of Ashu Export Promoters (P) Ltd. (2011 (11) TMI 387 - CESTAT, NEW DELHI), the applicants are entitled for this exemption notification, as they can be treated as "vocational training institute". Waive of pre-deposit
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2013 (2) TMI 157
Application for registration not decided within the stipulated time – Assessee claims to have been carrying on business of business auxiliary - applied for registration but application was not decided within the stipulated time – Therefore, they claimed that in view of non-disposal of the application by fiction of law, they are deemed to have been registered under the heading business auxiliary – Department issued a registration under the category of clearing and forwarding agent for which never applied for – Held that: - The provision of law is clear that in the event there is no rejection within certain point of time, the registration is deemed to have been granted. In this case application was kept pending for some time and after expiry of the stipulated time the order was passed and unilaterally the registration was granted under the category of clearing and forwarding agent for which no application was made - Application was made for registration under the category of business auxiliary, and no application was made for clearing and forwarding agent. Therefore, either the application ought to have been allowed or ought to have been rejected on its own merit without making any third party’s case. Order set aside. Department was directed to treat the respondent-company’s registration as the provisional registration in the category of business auxiliary and, accordingly, all the statutory obligations shall be discharged by the company – In favour of assessee
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2013 (2) TMI 156
Courier Agencies Services – whether the service provided by couriers/angadias for delivery of cash received at one place and handed over at another place is a taxable service under “courier agency” - Assessees are members of All India Angadia Association and are engaged in providing services for transport of valuable documents like diamond packets and other articles of gold and silver from various branches to their Head Office and from the Head Office to branches, accordingly inter branch transports are effected – Held that:- Section 66, which is a charging Section, provides that a tax shall be levied at the rate of twelve per cent of the value of taxable services referred to in Section 65. Section 65 provides that “taxable service” means any service provided or to be provided to any person, by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles - Thus, for the purpose of being chargeable to Service tax under Section 66 of the Act, taxable services of the nature provided under Section 65 would be required to be provided by such person. – Taxable services should be provided to any person by a courier agency in relation to door-to-door transportation of time sensitive documents, goods or articles. On a conjoint reading of the definition of “courier agency” as defined under Section 65, it is apparent that it is only if a courier agency provides services in relation to door-to-door transportation of time-sensitive documents, goods or articles that the taxable event would take place – In the present case, the service receiver hands over cash in Indian currency at a recipient branch, which transfers instructions to the delivery branch, where payment is made from the corpus available at the delivery branch. Thus, there is no movement of the cash from the recipient branch to the delivery branch. There is no transportation of such cash as contemplated under Section 65 of the Act. In the aforesaid premises, the transfer of cash by the assessees in the manner aforesaid, does not fall within the ambit of “courier agency”. As held by the Supreme Court in Murarilal Mahabir Prasad v. B.R. Vad (supra)[1975 (9) TMI 155 - SUPREME COURT OF INDIA], there is no equity about a tax in the sense that a provision by which a tax is imposed has to be construed strictly, regardless of the hardship that such a construction may cause either to the treasury or to the taxpayer. A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all – In the present case, insofar as the facility for transfer of money as provided by the assessees is concerned, the same has not been brought within the ambit of charging section by clear words and as such, the assessees cannot be taxed in respect of the same – Tender of Indian currencies and its transmission and compensatory payment would not be covered by the levy of Service tax under heading “courier agency” – Against the revenue.
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Central Excise
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2013 (2) TMI 142
Notification No.10/2008 CE (NT) dated 1st March 2008 brought the amendment to Rule 6 of the CENVAT Credit Rules, 2004 with effect from 1st April 2008 - whether the said amendment has the retrospective effect ? - Whether the inference drawn by the Tribunal that the respondent need not pay the amount at 10% of the price at which the DBM was cleared during the months of January and February, 2008 on the ground that the respondent had not availed CENVAT credit during the said months is correct? - Held that:- When the assessee had consistently taken the stand that it had not made any credit entry for the period January and February 2008, the question of any reversal of entry does not arise and only for the month of March 2008, where there was a reversal of entry, the claim has to be verified on the basis of the formula provided under Rule 6(3A) of the CENVAT Credit Rules. Hence, no exception could be taken to the order of the Tribunal. Respectfully agreeing with the decision of the Gujarat High Court in Shree Rama Multi Tech Ltd Vs. Union of India (2011 (2) TMI 575 - GUJARAT HIGH COURT) it is held that as on the date of the adjudication order and on the date of filing the appeal too, Section 73(2) itself was not available and that it was amended under the Finance Act, 2010 only during the pendency of the appeal. Thus, with the bona fide prosecution of the appeal no justifiable ground to accept the stand taken by the Revenue that in the absence of compliance of the conditions in Section 73(2) of the Finance Act, 2010 within the six months' period, the claim of the assessee has to fail. The question of such a compliance as on the date of adjudication or filing of the appeal not being there, when the Tribunal felt, on facts, that it was necessary to remand the matter back to the Adjudicating Authority. Thus, we have no hesitation in confirming the order of remand restoring the matter back to the Adjudicating Authority to consider the claim of the assessee. Direct the assessee to produce necessary evidence in the form of certificate from a Chartered Accountant or a Cost Accountant for the relevant period, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of final product, which are exempt from the duty, along with documents on the reversal of entry made before the Adjudicating Authority.
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2013 (2) TMI 141
MODVAT credit on aluminium ingots denied - assessee had availed deemed credit - they had received the ignots from the supplier who has not availed the benefit of any exemption - Held that:- Notification in question No.100/88 dated 1.3.1988 is a conditional Notification, wherein the exemption is only subject to the satisfaction of the conditions stated therein on duty paid materials, falling under Chapter 76 or Chapter 83, being used in the manufacture of unwrought aluminium, whether or not alloyed. After the remand by the Tribunal, in the first instance, admittedly, the suppliers were examined by the Department and a right to cross-examination was given to the appellant. As seen in question No.18, the appellant herein cross-examined the supplier, which asked about availing any exemptions under the Central Excise during the relevant period to which he replied No thus in the face of such categorical statement made by the supplier and in the absence of any material produced by the Revenue to hold that such a statement could not be accepted on its face value and further, in the absence of any letters from the supplier alleged to have been written and which were relied upon by the Appellate Authority to disallow the claim, no justifiable ground to uphold the finding of the Tribunal that the assessee was not entitled to the benefit of exemption. As rightly pointed out by appellant, when the very basis of the Adjudicating Authority's order is not there, the Tribunal's order thereby suffers a serious infirmity in law, which calls for an interference by this Court. The Tribunal, in its order clearly pointed out that in the cross examination, no doubt Mr.Anser Basha of M/s.B.S.Metal Mart stated that they had not availed any exemption. Commenting on the reliance placed by the assessee on this answer given by the supplier, the Tribunal pointed out that the Adjudicating Authority had given a very well reasoned order. As already pointed out, if the Department felt that the statement of the supplier was not reliable, nothing prevented it from going in for a further enquiry into the matter. In fact, as pointed out by appellant, the registers pertaining to the suppliers were very much available before the Revenue and no efforts were taken to discredit any of those registers belonging to the suppliers. In the circumstances, no logic arises in the Tribunal raising a question as to why the supplier did not pay the duty and the answer given towards the end to such a question raised, seems to be a vague one, not supported by any material - set aside the order of the Tribunal, allow the civil miscellaneous appeal and hold that the appellant is entitled to the benefit of exemption.
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2013 (2) TMI 140
Modvat Credit - Tribunal decided the issue in favour of assessee after relying upon the judgement CCE Chandigarh Vs. A.B.Tools Ltd.[1994 (2) TMI 78 - CEGAT, NEW DELHI] which is based on Calcutta High Court's judgement of Singh Alloys & Steel ltd. Vs. ACCE [1993 (1) TMI 97 - HIGH COURT AT CALCUTTA] - revenue questioned on High court decision as it was under challenge before the Divisions Bench - Held that:- As after several efforts and after seeking instruction from the Department revenue could not bring to notice that the judgement of the Calcutta High Court of Singh Alloys & Steel ltd. has been reversed or the order of the Larger Bench of the Tribunal in the case of A.B.Tools Ltd. has been reversed. Thus no fault can be found out in the judgement rendered by the Tribunal and, therefore, this Tax Case is decided accordingly and it is held that if the Tribunal decides the issue following Larger Bench decision based upon the High Court decision, then the Tribunal has not only done it rightly but was bound to do accordingly - in favour of assessee.
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2013 (2) TMI 139
Waiver of pre-deposit - Stay of recovery - CENVAT Credit - Input Service credit - Construction of commercial complex - Credit denied on the basis that the service of construction of commercial complex is outside the factory premises - Held that:- commercial complex is constructed within the factory premises as per layout submitted with the department for granting excise registration. If that be the situation, the applicants are entitled for input service credit. Therefore, prima facie applicant has made out a case for 100% waiver of pre-deposit. In favour of assessee
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2013 (2) TMI 138
Waiver of pre-deposit - Manufacture - Processes of grinding, sizing and packing of Silico Manganese - CENVAT Credit denied on input on ground that activity does not amounts to manufacture - Appellants are engaged in the manufacture of Silico Manganese - under chapter sub-heading 72023000 - received Silico Manganese in un-processed form and carried out the activity of grinding, sizing and packing - Revenue argued that since it does not amount to manufacture therefore CENVAT Credit availed on the said input is incorrect - Penalty under rule 15(2) of CENVAT Credit Rules, read with section 11AC of the Central Excise Act, 1944 - Held that:- After carrying out the said processes, the resultant finished goods were cleared on payment of duty. Following the decision in case of CREATIVE ENTERPRISES (2008 (7) TMI 311 - GUJARAT HIGH COURT) allowed stay application in identical circumstances. Stay granted
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2013 (2) TMI 137
Denial of CENVAT Credit - Service tax paid on 'Fumigation Charges' and 'Testing and Inspection Agency Charges' – Services used in relation with export of goods - under Notification No.17/2009-ST, dated 07.07.2009 – Held that:- Following the decision in case of AMALGAMATIONS REPCO LTD (2011 (10) TMI 508 - CESTAT, CHENNAI) it is the undisputed policy of the Government not to burden the export goods with domestic taxes. The only way freeing export goods from domestic taxes can be ensured for the period relevant to these appeals is to allow credit of the service tax paid on the CHA and other services in respect of the export consignments so that the exporter would be compensated either by utilization of such credit for payment of other taxes or by taking refund when such utilization is not possible. Therefore, set aside the impugned order and allow the present appeal in favour of assessee
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2013 (2) TMI 136
Rebate Claim – Exporter filed rebate claim on duty paid goods manufactured by M/s. Tata Motors Ltd., Jamshedpur - Filed the necessary mandatory export documents - certain discrepancies were found in these documents - Assessee’s contention is that since the said vehicles were duty paid nature hence they are eligible for rebate benefit under Rule 18 of Central Excise Rules read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 - Department’s contention is that the applicant had only produced the sale-cum delivery challan issued in their name by the Regional Sales Office of M/s. Tata Motors which did not give any details of duty paid either on the chassis or the vehicles and that cannot be considered as issued under Rule 11 of Central Excise Rules, 2002. Held that:- chassis was cleared from factory of manufacture on payment of duty to the body builders/job workers who availed the input stage credit and performed some manufacturing activities on the said chassis resulting to fully fabricated vehicles (FBV) which was transferred to Regional Sales Office (RSO) of Tata Motors. - Assessee had himself admitted that they have claimed the rebate only on the duty paid by M/s. Tata Motors Limited at the time of clearance of the chassis. As per para 1.5(iii) Chapter 8 Part V of the C.B.E. & C. Manual the rebate cannot be claimed on duty paid excisable material (input) (here chassis) used in the manufacture of export goods where facility of input stage credit is availed under Cenvat Credit Rules, 2002. In the instant case the Cenvat credit on chassis part is already availed by the job workers which, in case of rebate, will amount to double benefit. Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 – sale-cum-delivery Challan submitted by applicant cannot be treated as Invoice issued under Rule 11 of Central Excise Rules, 2002. Moreover, the said Sale-cum-Delivery Challan issued by Tata Motor Sales Office does not contain the details of duty payment either on chassis or vehicle. As such the duty paid character of exported goods is not proved. Therefore, rebate claim is not admissible under Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004-C.E. (N.T.), dated 6-9-2004 – Revision application rejected – Against the assessee.
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CST, VAT & Sales Tax
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2013 (2) TMI 161
Non filing of monthly returns - KVAT Act - the officer who issued Ext.P1 notice was transferred and his successor took charge - assessee contested against assessment completed by successor without affording the petitioner an opportunity of hearing - invoking benefit of Section 95 of the KVAT Act - Held that:- This is a case where the petitioner was issued Ext.P1 notice & allegations in Ext.P1 were not contradicted by the petitioner by filing any reply or producing any documents. Petitioner did not seek any hearing and also did not appear before the assessing officer on 24/4/2012 & in this background that Ext.P2 order was passed. The only option that was available to the AO was to finalize the assessment based on the material available before him as the petitioner having not filed any reply or produced any documents, had no contention to urge before the assessing officer - petitioner was not entitled to the benefit of the proviso to Section 95 and in any case the absence of such a hearing has not caused any prejudice to the petitioner - wit dismissed.
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Indian Laws
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2013 (2) TMI 155
Direction to the employer for reinstatement with continuity of service and 25 per cent back wages - workman had worked for only eight months as daily wager and his termination has been held to be in contravention of Section 25-F of the Industrial Disputes Act, 1947 - Held that:- As decided in Bharat Sanchar Nigam Limited v. Man Singh [2013 (2) TMI 107 - SUPREME COURT] wherein the workmen, who were daily wagers during the year 1984-85 were terminated without following Section 25-F. The industrial dispute was raised after five years and although the Labour Court had awarded reinstatement of the workmen which was not interfered by the High Court, this Court set aside the award of reinstatement and ordered payment of compensation. As the respondent workmen were engaged as “daily wagers” and they had merely worked for more than 240 days, relief of reinstatement cannot be said to be justified. In light of the above legal position and having regard to the facts of the present case, namely, the workman was engaged as daily wager on 01.03.1991 and he worked hardly for eight months from 01.03.1991 to 31.10.1991, the Labour Court failed to exercise its judicial discretion appropriately. The Single Judge as well as the Division Bench of the High Court also erred in not considering the above aspect at all. The award dated 28.06.2001 directing reinstatement of the respondent with continuity of service and 25% back wages in the facts and circumstances of the case cannot be sustained and has to be set aside and is set aside. And compensation of ₹ 50,000/- by the appellant to the respondent shall meet the ends of justice to be made within six weeks from today failing which the same will carry interest @ 9 per cent per annum.
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