TMI Tax Updates - e-Newsletter
March 27, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
Income Tax
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Claim of exemption u/s 11(1) of the Act exemption not originally claimed AO cannot hide under the shelter of a technicalities to tax a person in respect of an amount which is otherwise not taxable in law but has been so shown erroneously in the return - exemption allowed - AT
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Registration u/s 12AA - DIT(E), selected some of the terms of the agreement so as to consider that assessee is a contract service provider, ignoring the overall object of the agreement and the activities of the assessee - registration to be granted - AT
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Exemption u/s 54F Determination of due date - When Legislature specifically refers only section 139(1) and omitted to refer section 139(4), making a reference to section 139(4) cannot be proper - AT
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Compliance of Rule 46A of IT Rules, 1962 Admission of additioinal evidence - such exceptional circumstances the requirement of Sub-rule (3) may be dispensed with thus, there is no merit in the grounds raised by the Revenue - AT
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Disallowance of interest expenses partners are entitled to hold the properties belonging to the partnership firm in their individual name, provided it is explicitly made clear - deduction allowed - AT
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Revision u/s 263 - Having proceeded to pass such erroneous order with incomplete material particulars, giving deduction as claimed by the assessee is prejudicial to the interest of the revenue. - HC
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Denial of the exemption u/s 11 on the ground that by advancing monies to Charanjiv Educational Society the assessee committed a violation of Section 13(1)(c)(ii) r.w.s 13(2) and Section 13(3) cannot be accepted - HC
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Power of reopening of assessment u/s 147 Explanation 1 r.w section 143(1) - reasons for the notice u/s 147 nowhere mentioned that the revenue came up with any other fresh material warranting reopening of assessment except the notes to the accounts already disclosed - assessment quashed - HC
Service Tax
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The laying of pipelines undertaken by the appellant for M/s GIDC comes squarely and clearly within the definition of Commercial or Industrial Construction service' - Demand and penalty confirmed - AT
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Classification - Post construction completion and finishing services - Interior Decorator Service or Commercial or Industrial Construction Service - Extended period of limitation - demand and penalty confirmed invoking extended period of limitation - AT
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Waiver of pre-deposit - Management, maintenance or repair service or supply of man power service - the works are in relation to maintenance work - prima facie case is against the assessee - AT
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Refund - Unjust enrichment - No service tax invoice was issued - appellant has produced certificate from the buyers that they have not paid service tax. - refund allowed - AT
Central Excise
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Interest of refund - Delay in refund - interest on the refund amount has to be paid from the date immediately after three months from the date of receipt of the application to the original authority till the refund of such duty - HC
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Refund - Unjust enrichment - duty was paid after clearance of the excisable goods. Moreover, this payment of duty was on insistence of Anti Evasion Branch of the Central Excise Department - refund allowed - HC
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Denial of Cenvat Credit - credit can be availed on the strength of endorsed bill of entry also - AT
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Supply of good under ICB for mega power project - In the annexure to the certificate, the appellant's name figures as a sub-contractor for supply of EOT Cranes - exemption allowed - AT
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CENVAT Credit of SAD - removal of inputs as such without reversing SAD instead of claiming refund - This is case of choosing wrong course of action rather than attempt at evasion of duty - AT
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For demanding interest also limitation u/s 11A will be applicable and therefore, if the suppression, fraud, mis-declaration, etc., are not proved, interest also cannot be demanded - AT
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Duty demand - Cash discount policy - cash discount whether availed of or not are to be granted as abatement. - stay granted - AT
VAT
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Opting out of scheme of compound levy / composite method of taxation on ground of closure of business - scheme once opted can be withdrawn only within the framework of statutory provisions - SC
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Industrial Incentive Policy of the State of Bihar, 2006 - Whether assessee is eligible for concession when revenue already collected CST at the rate of 4% before the notification reduced the same to 1% - held No - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (3) TMI 774
Penalty u/s 271(1)(c) of the Act Applicability of section 43(1) of the Act Held that:- In order to invoke the penalty proceedings under Section 271(1)(c) of the Act, the Revenue should prove that the claim made was not sustainable in law and if the assessee had made a concealment of the particular income Relying upon CIT vs. Reliance Petroproducts Pvt., Ltd. [2010 (3) TMI 80 - SUPREME COURT] - in order to expose the assessee to penalty, the Revenue should show that there was contumacious conduct on the part of the assessee in suppressing the income in the return - in order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked - Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract the penalty u/s 271(1)(c) of the Act. The facts clearly disclose that the contention raised by the assessee was not held to be not according to truth or inaccurate particulars furnished or with a view to conceal the actual income - The AO while completing the assessment proceedings, chose to adopt the WDV - by itself would not amount to furnishing inaccurate particulars or with a view to conceal the actual income the order of the Tribunal upheld Decided against Revenue.
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2014 (3) TMI 773
Validity of notice u/s 148 of the Act Reopening of assessment Held that:- The notice has been issued on 22 March 2013 seeking to reopen the assessment for assessment year 2006-07 - The reasons for reopening as well as the order dated 12 January 2014 proceed on the basis that the petitioner ought to have known that the company was contemplating buyback of its shares at Rs.251/per share and that this not sharing of information amount to suppression - This is merely an opinion/inference drawn not from any tangible material such as notice etc. but merely on the suspicion that the petitioner ought to have known - There is no tangible material to indicate that the petitioner had knowledge on the date when it sold 291 lacs shares to PSPL ESOP Management Trust at Rs.143/per share that there was to be a scheme of buyback of share at Rs.251/per share in the future - The allegation of suppression is made without any factual basis in support of the same. The present proceeding seeking to reopen an assessment for assessment year 2006-07 is without jurisdiction as there has been true and full disclosure of all material particulars necessary for assessment by the petitioner during the assessment proceeding leading to the assessment order dated 20 February 2008 for assessment year 2006-07 thus, there is no reason to consider the petition's submission on merits that in view of Section 148 of the Act and the notice dated 26 March 2013 is exfacie unsustainable thus, the notice u/s 148 of the Act set aside Decided in favour of Assessee.
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2014 (3) TMI 772
Validity of order u/s 127 of the Act transfer of case - Reassessment - Time-barred notice u/s 148 of the Act Held that:- These notices dated 23 July 2013 for re-opening would have been issued after the Assessing Officer at Hyderabad had come to a reasonable belief that Income chargeable to tax has escaped assessments and recorded reasons for the same - Thus, the jurisdiction has already been exercised by the DCIT at Hyderabad after the passing of impugned order dated 31 August 2012 under Section 127 of the Act. The petitioner is not challenging the order dated 31 August 2012 at the earliest and letting all believe particularly, the Assessing Officer i.e. Deputy Commissioner of Income Tax at Hyderabad that the order of transfer dated 31 August 2012 under Section 127 of the Act from Mumbai to Hyderabad was acceptable to the petitioner - This led the Assessing Officer to exercise his jurisdiction - the delay in filing a petition in the Court of over two months and the neglect in moving the Court to seek a stay on the impugned order dated 31 August 2012 is unexplained. There is no reason to entertain the present petition - The petitioner's conduct is indicative of it having accepted the order of transfer dated 31 August 2012 - This is as the petition was filed only in February 2013 and thereafter not moving the Court for any interim relief. It is only when the Assessing Officer at Hyderabad issued four impugned notices dated 23 July 2013 under Section 148 of the Act, seeking to re-open the earlier Assessments that this petition was mentioned on 12 August 2013 and placed on board on 20 August 2013 for urgent interim relief and amendment - This is a clear case of laches on the part of the petitioner Decided against Assessee.
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2014 (3) TMI 771
Addition made u/s 68 of the Act Unaccounted transaction - Whether the money seized from Shri S Sabeer is income of the assessee or not Held that:- It is not forthcoming from the order of the assessing authority whether the equivalent amount of Saudi Rials as per the exchange rate was available with the assessee or not on that day - If the equivalent amount of Saudi Rials is not available with the assessee, then the entire transaction would be bogus and the claim of Shri S Sabeer that he received money from Smt. N Radhabai in exchange of Saudi Rials is also false a proper enquiry was not conducted by the lower authorities to find out whether the transaction was made in exchange of Saudi Rials and if so what is the amount of Saudi Rials handed over to the assessee - In the absence of any material, the matter needs to be reexamined by the assessing officer thus, the order set aside and the matter is remitted back to the AO for fresh adjudication. Estimation of profit Held that:- Estimation of profit at 1% is very reasonable - It is normal that in foreign currency exchange commission is charged at 3% to 4% by similarly placed traders as found by the assessing officer - the assessing officer has estimated the net profit at 1% very reasonably, therefore, the same is confirmed Decided against Assessee. Claim of loss Held that:- The assessee could not produce any details as to how the loss was occurred - the assessee is also engaged in lending of money on pledge of gold jewelleries / ornaments - In the absence of details, the matter is remitted back to the AO for examination as to what exactly the claim of the assessee and from which transaction the loss occurred Decided in favour of Assessee.
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2014 (3) TMI 770
Disallowance u/s 14A of the Act r.w. rule 8D of the Rules Held that:- The initial and the primary onus to show that r. 8D, which is only a manner of estimation which will apply in default, is on the assessee once the assessee exhibits the expenditure claimed as bearing no relation with the income not forming part of the total income, or has allocated the expenditure related, as the common administrative expenditure, it would have to be necessarily verified by the AO in terms of sections 14A(2) and 14A(3) of the Act, and he cannot proceed to mechanically apply r.8D relying upon GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - It is not clear on the perusal of the record if the said initial onus has been discharged in the facts and circumstances of the case thus, the matter is remitted back to the AO for fresh consideration Decided in favour of assessee.
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2014 (3) TMI 769
Entitlement for deduction u/s 11 of the Act - Deletion of addition of surplus taxed income Held that:- Whether the CIT(A) was justified in deleting the addition on account of surplus taxed as income in the Assessment Year Held that:- The assessee has obtained the certificate of registration u/s.12A as a Charitable Trust - The assessee trust has got the certificate of exemption u/s 80G - The registration granted u/s 12A is in force for the assessment year and the same has not been cancelled - merely because the application filed before the Chief Commissioner u/s 10(23C) was rejected the AO in our opinion cannot deny the benefit of deduction u/s 11 r.w.s. 12AA as long as the registration granted earlier to the trust u/s 12A is in force - there is no dispute to the fact that the assessee trust is imparting education, and the registration granted earlier u/s12A is continuing, and in force for the assessment year, and the assessee has also been granted exemption u/s.80G thus, the AO is not justified in rejecting the claim of deduction u/s 11 of the Act the order of the CIT(A) upheld and there is no reason to interfere in the findings of the CIT(A) Decided against Revenue.
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2014 (3) TMI 768
Claim of exemption u/s 11(1) of the Act exemption not originally claimed Revised return not filed - Whether the CIT(A) is justified in allowing the claim of the assessee trust u/s 11(1) of the Act Held that:- The decision in CIT Vs. Pruthvi Brokers and Shareholders (P) Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] followed - the AO was satisfied about the claim of the appellant that the income declared in the return u/s.11(1B) was done erroneously, as on this claim made by the appellant during assessment, no adverse finding has been made - the claim of the appellant is not a claim for deduction of a benefit but was for exclusion of an amount which was not an income under the Income tax Act - what was more important to be considered was the concept of real income, which is the duty and the responsibility of the Assessing Officer to arrive at in any assessment proceeding. The AO was engaged in the process of making a scrutiny assessment and if he was satisfied, as the record shows, then he cannot hide under the shelter of a technicalities to tax a person in respect of an amount which is otherwise not taxable in law but has been so shown erroneously in the return - if the appellant has made the claim during the scrutiny assessment, the AO was not entertaining a claim for deduction but was to appreciate whether the receipt is an income or not - If an amount is not a taxable income, the same can become so only because it was included erroneously in the return - thus, the AO has erred in not accepting the claim of the appellant thus, there is no infirmity in the order of the CIT(A) Decided against Revenue.
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2014 (3) TMI 767
Rejection of application for registration u/s 12AA of the Act Assessee incorporated for charitable purposes - Held that:- A perusal of the object clause of the company shows that it has been incurred with the aim of providing emergency medical transport services - Similar objects of the GVKEMRI has already been approved as charitable and registration u/s 12AA was already granted the DIT(E), ignored the provisions of section 2(15) and the Board Circular issued on this subject, considered that assessee is involved in commercial activities, just because assessee is getting some fixed remuneration for operating ambulance, ignoring the fact that the services to the general public is free of cost by the assessee company. The assessee was incorporated for charitable purpose of providing medical relief - assessee even though incorporated as a private limited company originally, has converted itself into a non-profit company and has been incorporated u/s 25 of the Companies Act, 1956 - There is no doubt with reference to the objects which are charitable in nature - Relying upon Social Pedia Knowledge Foundation Versus Director of Income-tax (Exemptions) [2013 (12) TMI 357 - ITAT CHENNAI] - where the object of assessee-company was providing education etc., it is entitled to registration u/s 12AA, particularly when the assessee has been incorporated u/s 25 of the Companies Act, 1956 - The DIT(E), merely on certain assumptions has rejected the application of the assessee for registration under section 12AA - the DIT(E), selected some of the terms of the agreement so as to consider that assessee is a contract service provider, ignoring the overall object of the agreement and the activities of the assessee - The order of the DIT(E) is set aside and the DIT(E) is directed to grant registration to the assessee u/s 12AA Decided in favour of Assessee.
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2014 (3) TMI 766
Assessment of income under proper head Sale of shares - Whether the income declared by the assessee under the head Capital Gains is to be assessed as such or as Business Income Held that:- Prima facie, the CIT(A) did not examine the facts correctly in arriving at the conclusions the CIT(A) order is based on certain wrong facts which are admittedly not correct, there is no option other than to reexamination - Purchase of shares during the year and selling them frequently in short period do indicate that the assessee has purchased the shares with a motive to earn profit in short period all the facts indicate that the intention of the assessee is to gain profits by dealing in short term period only - the AO also discussed about borrowing of funds, small amount of dividend when compared to the gain in sales and also the fact that assessee group companies are involved in share trading thus, the conclusion of the Revenue authorities that the income from sale of shares declared by the assessee during the year as short term gain is income from business activity is correct and calls for no interference. Relying upon PVS Raju and Others vs. Addl. CIT [2011 (7) TMI 818 - Andhra Pradesh High Court] The character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case - Ultimately, it is a matter of first impression with the Court whether a particular transaction is in the nature of trade or not the findings of the AO are approved that assessee has indulged in share trading during the year thus, the order of the CIT(A) set aside Decided in favour of Revenue.
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2014 (3) TMI 765
Exemption u/s 54F of the Act Determination of due date - Whether the due date mentioned in section 54F(4) is the due date for filing the return u/s 139(1) or the due date for filing the return of income u/s 139(4) of the Act - Held that:- The decision in Prakash Nath Khanna And Another vs CIT [2004 (2) TMI 3 - SUPREME Court] followed - due date means the due date for filing the return u/s 139(1) and not 139(4) the intentions of the Legislature was to permit the assessee to file the return u/s 139(4) also, the use of the expression section 139 alone would have been sufficed - The Legislature would not have said that it should be filed u/s 139(1) - When the Legislature specifically refers to section 139(1), it cannot be the intention to permit the assessee to file the return u/s 139(4) also - it cannot be said that the Legislature without any purpose or intent specified only the sub-sections (1) and (2) and the conspicuous omission of sub-section (4) has no meaning or purpose behind it - Sub-section (4) of section 139 cannot by any stretch of imagination control the operation of sub-section (1) wherein a fixed period for furnishing the return is stipulated. The judgment of the Apex Court was not considered by the CIT(A) - The assessee also had no occasion to bring this judgment to the notice of the CIT(A) - When Legislature specifically refers only section 139(1) and omitted to refer section 139(4), making a reference to section 139(4) cannot be proper the matter needs to be reconsidered by the AO in the light of the judgment of Prakash Nath Khanna And Another Vs CIT thus, the matter is remitted back to the AO for reconsideration Decided in favour of Revenue.
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2014 (3) TMI 764
Compliance of Rule 46A of IT Rules, 1962 Admission of Information/ evidence omitted to furnish at assessment stage without seeking the opinion of AO Deletion of disallowance of claim of expenditure on ad-hoc basis Requisite information not furnished - Held that:- The assessee on his own cannot produce any additional evidence not furnished before the assessing officer without meeting he various conditions provided under rule 46A for which satisfaction is to be recorded by the appellate authority in writing and with which the appellate authority is further required to confront the assessing officer and allow him reasonable opportunity to have his say in the matter Relying upon Rajkumar Srimal v. CIT [1974 (12) TMI 31 - CALCUTTA High Court] - where the CIT is not acting suo motu in admitting additional evidence, there must be some ground for admitting new evidence. The entire additional evidence has come on the record of the first appellate authority because the first appellate authority decided to examine the facts of the case in depth and adjudicate upon the matter on the basis of evidence and material thus gathered - CIT(A) was empowered to do so under the provisions of Section 250(4) - The results of enquiry conducted by him could either go to further cement the case made out by the assessing officer or to help out the assessee against the findings of the assessing officer - The mere fact that the results of the enquiries thus conducted supported the case of the assessee and not that of Revenue has no bearing on the jurisdiction and powers of the CIT(A). But no such requirement in law is present that the first appellate authority should invariably consult or confront the assessing officer every time additional evidence that was not before the assessing officer comes on the record of the first appellate authority - Where the additional evidence is obtained by the first appellate authority on its own motion, there is no requirement in law to consult / confront the assessing officer with such additional evidence - There may be cases where additional evidence is admitted by the first appellate authority on a request or application being made by the assessee - In such cases Sub-rule (2) of rule 46A requires the first appellate authority to allow the assessing officer a further opportunity to rebut the fresh evidence filed by the assessee - Even that requirement cannot be said to be a rule of universal application - If the additional evidence furnished by the assessee before the appellate authority is in the nature of clinching evidence leaving no further room for any doubt or controversy in such a case no useful purpose would be served on performing the ritual of forwarding the evidence / material to the assessing officer and obtain his report - In such exceptional circumstances the requirement of Sub-rule (3) may be dispensed with thus, there is no merit in the grounds raised by the Revenue Decided against Revenue.
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2014 (3) TMI 763
Disallowance of interest expenses property purchased in the name of partners - Held that:- The contentions of the assessee is accepted - Under the Partnership Act, the partners are individually known as Partners and collectively known as Firm - Hence, the partners are entitled to hold the properties belonging to the partnership firm in their individual name, provided it is explicitly made clear that the partner is so holding the asset - the assets of M/s Venkiteswara Hospital were purchased in the name of three persons, who are also partners of the assessee firm - The intention to transfer the assets and liabilities purchased from M/s Venkiteswara Hospital to the assessee firm were made clear by the agreement dated 28.5.2005 entered between the three persons (in whose name the assets of M/s Venkiteswara Hospital was purchased) and all the partners of the assessee firm. The value of assets brought in by the partners need not always be credited to their respective capital account - It is only one of the methods of accounting for bringing the assets and liabilities into the books of the firm - the assessee has paid the net value assets of Rs.35.00 lakhs directly to the concerned partners - Thus it amounts to crediting the partners account with their respective share and immediately making payment of the same to them - the submissions made by the assessee require verification at the end of the assessing officer thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of depreciation Held that:- The AO had disallowed the claim of depreciation on the reasoning that the assessee firm cannot be considered as the beneficial owner of the assets purchased from M/s Venkiteswara Hospital - while dealing with the issue relating to the disallowance of interest claim, the matter of verification of submissions made by the assessee is remitted to the assessing officer thus, this matter is also required to be remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of depreciation on assets purchased from old welcare hospital Held that:- It is not necessary that the assets of a partnership firm should be distributed only upon the dissolution of the firm, i.e., even during the currency of the partnership firm, the partners may take over the assets with the concurrence of the all other partners - according to the assessee the two partners of the assessee firm have taken over the assets and have also introduced them in the books of the assessee firm - When the partners bring the assets and introduce the same as the assets of the assessee firm, then the assessee firm shall become owner of those assets - the conditions prescribed u/s 32 of the Act have been satisfied there is no reason to disallow the claim of depreciation - all the assets have been brought into the books of the assessee firm at the WDV value it is not clear as to whether this fact was examined by CIT(A) - this aspect requires verification at the end of the AO thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue. Disallowance of repairs and maintenance expenses Held that:- The decision in assessees own case for the earlier assessment year has been followed, the expenditure incurred by the assessee is for the purpose of expansion of profit making apparatus - the expenditure has to fall within the capital field the Tribunal has already given a finding that the expenditure incurred on renovation of the building is a capital expenditure thus, the order of the CIT(A) set aside and the matter is remitted back to the AO for adjudication Decided in favour of Revenue. Unexplained sundry creditors balances Differences in closing balances Held that:- All the creditors are trade creditors, i.e., they are not cash credits though the CIT(A) may not be empowered to set aside the matter, yet in the absence of any other details relating to this creditor requires fresh consideration - the closing balance shown in the accounts of the assessee and the statement furnished by the parties did not tally - the decision taken by the CIT(A) is reasonable - Since the assessee did not prefer appeal against the said direction, the assessee is not aggrieved by the decision of CIT(A) - the outstanding balance to the extent shown in the statements of accounts furnished by the parties have to be considered as proved thus, there is no reason to interfere in the order of the CIT(A) - Decided partly in favour of Revenue. Disallowance u/s 40(a)(ia) of the Act Interest u/s 234B of the Act - Held that:- The assessee has furnished copy of letter furnished by Dr. Pradeep and also copy of return of income filed by him to show that Dr. Pradeep had disclosed the receipts from the hospital of the assessee - The documents were filed to show that the responsibility to declare the OP & IP collections noticed in the seized records lie upon the concerned doctors - these documents were not considered by the AO the matter requires adjudication as to the applicability of section 40(a)(ia) of the Act thus, the matter remitted back to the AO for fresh adjudication Decided in favour of Revenue.
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2014 (3) TMI 762
Penalty u/s 271(2) of the Act Concealment of refundable empty bottle deposit -Whether the Tribunal is justified in upholding the levy of maximum penalty u/s 271(2) of the Act Held that:- The Tribunal recorded a finding that the assessee did not disclose the income on account of refundable empty bottle deposit and servicing and packing charges either in the profit and loss account or in the balance sheet besides not claiming exemption in respect thereof in Part-IV of the Return - there was a deliberate and wanton concealment on the part of the assessee, and this finding is not dislodged in any manner by the assessee - the distinguishing aspect which is sought to be made, has no distinction at all - in the absence of dislodging the finding of the Tribunal to the effect that there was a deliberate concealment of the refundable empty bottle deposits by not disclosing the same either in profit and loss account or in the balance sheet, the levy of penalty as provided under Section 271(c) of the Act on the facts of the case, cannot be found fault with Decided against Assessee. Penalty for unreconciled difference in balance sheet Held that:- The differences in the balance sheet can be the result of various wrong entries - The AO himself noticed some wrong entries like the understatement of purchases and understatement of sundry creditors and no motive of concealment can be attributed to these wrong entries thus, there is no justification for the levy of penalty u/s 271(1)(c) of the Act - there is no contra finding given by the Tribunal Decided in favour of Assessee.
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2014 (3) TMI 761
Power of the Commissioner to invoke jurisdiction u/s 263 of the Act Allowability of claim of deduction u/s 80IB of the Act - Whether the circumstances warrant initiation of proceedings under section 263 of the Act by the Commissioner or not Held that:- The available material was incomplete according to him - This is the subjective satisfaction of the assessing authority - Though not satisfied with the material available, he still proceeded to opine that the claim of deduction has to be allowed - This is nothing short of non-application of mind - Most of the discussion and reasoning was in respect of a particular opinion of the officer but in the last sentence in the assessment order gives go by to that opinion - This is nothing short of erroneous view taken by the authority - there was no subjective satisfaction but still he proceeded to pass the order - Having proceeded to pass such erroneous order with incomplete material particulars, giving deduction as claimed by the assessee is prejudicial to the interest of the revenue. The subjective satisfaction is with regard to material particulars - How one gets these material particulars, could be from the documents produced by the assessee and if a doubt or suspicion arises in the mind of the assessing officer he has to make an enquiry and secure material which dispels his doubt or suspicion - The doubt expressed is a genuine one because of two reasons, that is, 'A' type flat is just 3 sq.ft.less than maximum measurement of the apartment and same family members had purchased adjacent apartments. Unless this is factually verified by spot inspection, it remains a doubt - When deductions are allowed under Section 80-1B several checks and balances are indicated - In order to give concession or benefit of deduction, the officer has to take into account whether there is any attempt to evade payment of tax - This is the primary duty of the department - In order to discharge this duty, the subjective satisfaction of the officer is very relevant thus, the Tribunal was not justified in setting aside the orders of the Commissioner and the Commissioner was justified in initiating proceedings u/s 263 of the Act Decided in favour of Revenue.
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2014 (3) TMI 760
Eligibility for exemption u/s 11 of the Act Violation of section 13(1)(c)(ii) r.w. section 13(3) of the Act - Whether the assessee was ineligible for the exemption u/s 11 on the ground that there was contravention of the provisions of Section 13(1)(c)(ii) read with Section 13(3) of the Act Held that:- It unusual that the assessee would part with 95% of the price of the land without even taking possession of the same and would wait for such a long period without getting the sale registered in its name - it unusual that it was on the last day of the financial year 2004-05 that the assessee claimed to have written to APIL cancelling the deal which was accepted by the letter dated 21.04.2005 - even though APIL agreed on 21.04.2005 to cancel the agreements, the copy of the ledger account of APIL in the books of the assessee did not reveal any corresponding entry made on the date - the entry reflecting the cancellation of the agreement to sell was passed in the accounts only on 31.03.2006 - even after cancellation of the deal two cheques for Rs.80 lakhs and Rs.75 lakhs were given to APIL on 29.11.2005 and 13.12.2005 for which there was no explanation Relying upon Kanahya Lal Punj Charitable Trust Vs. Director of Income Tax (Exemptions) (Delhi) [2007 (5) TMI 166 - HIGH COURT, DELHI] - the findings of the Tribunal on this aspect cannot be upheld - in advancing the amount of Rs.8,60,16,000/- to APIL the assessee committed a violation of the provisions of Section 13(1)(c)(ii) read with Section 13(2) and Section 13(3) of the Act - The trust was accordingly not eligible for the exemption under Section 11 of the Act for both the years - Decided in favour of revenue. Advances made to society - Whether the advance made to Charanjiv Educational Society can be said to be in violation of the provisions Held that:- The relevant documentary evidence is on record and has been noticed and relied upon by the Tribunal - it is not possible to question the correctness of the view taken by the Tribunal - thus, denial of the exemption u/s 11 on the ground that by advancing monies to Charanjiv Educational Society the assessee committed a violation of Section 13(1)(c)(ii) read with Section 13(2) and Section 13(3) cannot be accepted The order of the Tribunal upheld Decided against Revenue. Applicability of section 68 of the Act Donations received Held that:- The Tribunal was of the view that it is not possible to view the transaction with suspicion merely because some other entity, which owes money to Jagjit Singh, had made the donation on behalf of Jagjit Singh in discharge of the debt to Jagjit Singh - the money has actually been given to the trust which has also used it the findings recorded by the Tribunal cannot be said to be perverse - Similarly in respect of the donation received from Piyush Jain, the Tribunal has noticed that the assessee was able to establish the identity of the donor and the source of the payment which was through account payee cheque, and give the PAN number and bank details - These details were not inquired into by the assessing officer and nothing adverse was found thus, the order fo the Tribunal upheld Decided against Revenue. Claim of depreciation Held that:- The Tribunal has overlooked that the cost of the assets has already been allowed as a deduction as application of income, as held by the CIT (Appeals) as well as the assessing officer - allowing depreciation in respect of assets, the cost of which was earlier allowed as deduction as application of income of the trust, would actually amount to double deduction Relying upon Escorts Ltd. vs. UOI [1992 (10) TMI 1 - SUPREME Court] - where the deduction of the cost of the asset was allowed under Section 35(1) as capital expenditure incurred on scientific research and, therefore, no deduction for depreciation on the very same assets was held allowable under general principles of taxation, as it would amount to double deduction thus, the Tribunal was no justified in directing the allowance of depreciation Decided in favour of Revenue.
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2014 (3) TMI 759
Power of reopening of assessment u/s 147 Explanation 1 r.w section 143(1) of the Act - Advance tax paid and considered it as capital receipt Held that:- The decision in CIT vs. Kelvinator (India) Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] followed - there was no tangible material and that the mere circumstance that advance tax to the tune of Rs.27.6 lakhs was paid did not amount to admission by him - a valid reopening of assessment has to be based only on tangible material to justify the conclusion that there is escapement of income - the note forming part of the return clearly mentioned and described the nature of the receipt under a non-compete agreement - The reasons for the notice u/s 147 nowhere mentioned that the revenue came up with any other fresh material warranting reopening of assessment thus, mere conclusion of the proceedings u/s 143(1) ipso facto does not bring invocation of powers for reopening the assessment the order of the Tribunal upheld Decided against Revenue.
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Customs
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2014 (3) TMI 758
Smuggling - Consideration of Anticipatory bail u/s 438 Cr.P.C. offences alleged u/s 420, 417 & 465 IPC & 135 of Customs Act - Three prior cases of smuggling Red Sander wood No co-operation earlier by accused - Held That:- Petitioner is already involved in three cases of smuggling of red sanders - In two cases, adjudication orders were passed - The department imposed on him a penalty - The present 4th case relates to smuggling of red sanders wood - Interrogation of several persons leads to accused - Accused need to be interrogated - There is no cooperation from him - Already he is involved in similar cases - The Court has to consider the seriousness of the accusations, availability of incriminating materials, its nature, magnitude of the offence alleged, past activities and prior cases as against the accused and the need for his custodial interrogation - When these factors are as against the petitioner then it will not be a fit case for grant of anticipatory bail - In this case, there is strong prima facie case for the department as against the petitioner - Not a fit case for grant of anticipatory bail - Decided against accused.
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2014 (3) TMI 757
Waiver of pre deposit - Valuation - import from parent company (related person) - case of the Revenue is based on a document called "Fragrance Ingredients Business Unit" (FIBU) Price List. - appellant contended that FIBU price list and prices for samples cannot be a basis for deciding the value of regular imports which involve large quantities - Held that:- pre-deposit of Rs.20 lakhs would be sufficient for admission of the appeal and it is ordered accordingly. We direct the applicant to deposit Rs.20 lakhs within a period of eight weeks from today. Subject to such pre-deposit, there shall be stay on collection of balance dues arising from the impugned order till the pendency of the appeal - Conditional stay granted.
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Corporate Laws
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2014 (3) TMI 756
Winding up - intervention by the ICICI Bank as fresh applicant showing ignorance of earlier winding up petition by BNYM as a trustee for some holders of unsecured foreign currency convertible bonds issued in 2007 by GOL Offshore. - Applicant (ICICI bank) sought reliefs inter alia in relation to 352 sq ft jack-up rig known as Rig V-351 or Rig Somnath. - Held that:- In my view, what ICICI Bank seeks is the creation of an additional security in its favour over Rig V-351, although there is no such pre-existing security, and although ICICI Bank is otherwise sufficiently secured for any claim that it might have against GOL Offshore. - ICICI Banks claim is not yet due. There is the matter of the peculiar cast of ICICI Banks prayers, expansive in scope and far-reaching in consequence. They seek nothing less than a complete sequestration of the rig to ICICI Bank to the exclusion of all others. Mr. Dwarkadas and Mr. Madon may not be entirely incorrect in saying, therefore, that the present application is mala fide and mischievous, and is nothing but an attempt to hijack the jack-up rig. In this scenario, where it does not appear that ICICI Banks application has any semblance of bona fides, and is, prima-facie, nothing but an attempt to steal a march on a large body of creditors, both secured and unsecured, I do not see why I should exercise any discretion at all in favour of ICICI Bank. It is not enough, in my view, for an applicant to show that it is a secured creditor and to therefore claim intervention as a matter of right. Were that so, there would be no question of discretion under Section 557 of the Companies Act; every creditor would be instantly legally entitled to intervention. Where an application is found not to bona fide, that discretion cannot be exercised. So it is in this case. The application must, in my view, be dismissed in its entirety. Such an applicant, wholly wanting in bona fides, cannot claim the exercise of discretion in its favour. Application of ICICI Bank dismissed with Cost. - ICICI Bank shall pay to BNYM and GOL Offshore each costs quantified at Rs.2.5 lakhs. - Decided against the petitioner.
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Service Tax
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2014 (3) TMI 778
Commercial or Industrial Construction Services or works contract service - vivisection of contract - Services undertaken for M/s Gujarat Industrial Development Corporation. - Bonafide belief - extended period of limitation - Held that:- it is absolutely clear that the GIDC has been set up to establish and organize industry in industrial areas and industrial estates and for establishing commercial centres. In other words, the activity undertaken by the GIDC relates to commerce or industry. The laying of pipelines undertaken by the appellant for M/s GIDC comes squarely and clearly within the definition of Commercial or Industrial Construction service' as defined under Section 65(25b) of the Finance Act, 1994, and, therefore, the appellants are liable to discharge Service Tax liability on the consideration received in respect of such activities. Hon'ble High Court of Delhi in the case of G.D.Builders & Ors. vs. Union of India [2013 (11) TMI 1004 - DELHI HIGH COURT] has been held that a composite contract can be vivisected and service portion of composite contracts can be subjected to levy of Service tax. Extended period of limitation - Held that:- In none of the Returns filed by them, they have indicated that they are rendering the services to GIDC or the amount of consideration received for such services. Therefore, it has to be concluded that the appellant had suppressed the fact of rendering services to GIDC and receiving consideration for the same. Therefore, invocation of extended period of time is clearly justified. Waiver of penalty u/s 80 - Held that:- appellant has not shown any reasonable cause for failure to discharge of Service Tax liability. The appellant was well aware of the provisions of law inasmuch as they were discharging the Service tax liability in respect of the very same activity undertaken for other entities. - Demand and penalty confirmed - Decided against the assessee.
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2014 (3) TMI 777
Classification of service - Post construction completion and finishing services - Interior Decorator Service or Commercial or Industrial Construction Service - Extended period of limitation - bonafide belief - The main contention of the learned Advocate is based upon bona fide belief, interpretation of the statute, knowledge of the department and revenue neutrality. - imposition of penalties - Held that:- The activities undertaken by the appellant in the present case are almost identical to those in the case of Spandrel [2010 (5) TMI 299 - CESTAT, BANGALORE]. Therefore, the ratio of the said decision would squarely apply. - The activity undertaken by the appellant falls under both clauses (c) and (d) of Section 65 (25b). Both these clauses do not specify that they should be undertaken in respect of a new building only and even if they are undertaken in relation to an old building, the provisions of these sections would apply. From 2005 onwards, after the introduction of commercial or industrial construction service', the activities of the appellant are very specifically covered under the said provision and there can be no two opinions about the coverage of the same after 2005 whatever the difference of opinion or anything can be is for the period prior to 2005. Regarding knowledge of the department - held that:- The appellant has not shown any evidence whatsoever that the jurisdictional Service Tax officials were informed about the activities of the appellant and, therefore, they were fully aware about them. The jurisdictional Central Excise officials may be aware of the ongoing litigation but there is no evidence to indicate that the Service Tax officials were aware of appellant's activities. Regarding revenue neutral situation - Held that:- If such a theory is accepted, it will lead to a situation wherein the final consumer of goods or services only should be taxed or charged and all other irregularities by various manufacturers or service providers would become non-taxable. It is also noted that service tax authorities issued summons in February 2006 but appellant did not co-operate. Extended period of limitation is sustainable in the facts and circumstances of this case. Regarding levy of penalty simultaneously u.s 76 and 78 - Held that:- Undoubtedly, the appellant has failed to pay the tax chargeable on the services provided by them. Therefore, the ingredients of Section 76 are satisfied - in view of the Hon'ble Kerala High Court judgment in Krishna Poduval [2005 (10) TMI 279 - Kerala High Court], till 2008 when the law was amended, penalty under Section 76 will also be imposable. The appellant has not been able to bring out any reason or proof that there was reasonable cause for failure to take registration and make payment of duty etc. Under the circumstances, penalties under Sections 76, 77 and 78 of the Finance Act, 1994 are imposable. Demand and penalty confirmed - Decided against the assessee.
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2014 (3) TMI 776
Waiver of pre-deposit - Management, maintenance or repair service or supply of man power service - services being provided to Madras Atomic Power Station. - Held that:- the works are in relation to maintenance work. Hence prima facie we find that applicant failed to make out a case for waiver of predeposit of entire amount of tax along with interest and penalty. - stay granted partly.
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2014 (3) TMI 775
Denial of refund claim - Unjust enrichment - Held that:- These facts are on record that service tax amount has been calculated on the sale price on the flats on which service tax was not payable by the appellant, but they paid their own. The appellant has produced certificate from the buyers that they have not paid service tax. Further, it is fact on record that no service tax invoice has been issued pertaining to these transactions. In the absence of these, it cannot be held that service tax has been passed on the buyer of the flat. Therefore, the appellant has passed the bar of unjust enrichment. Accordingly, they are entitled to refund claim. As the service tax is not liable to be payable, therefore provisions of Section 11B of Central Excise Act is not applicable to this case - Decided in favour of assessee.
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Central Excise
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2014 (3) TMI 755
Interest of refund - Delay in refund - Whether in view of the aforesaid legal position CESTAT is correct in law in allowing the interest on delayed refund u/s.11BB of the Central Excise Act, 1944 - Held that:- Explanation to Section 11BB of the Act provides that where any order of refund is made by the Commissioner (Appeals) or the Appellate Tribunal or any Court, the order passed by such Appellate Authority or Court shall be deemed to be an order passed under subsection 2 of Section 11B of the Act for the purpose of this Section. It is, therefore, clear that the appellate order allowing the refund of duty relates back to the order of the original authority and therefore by virtue of substantive Section 11BB of the Act, interest on the refund amount has to be paid from the date immediately after three months from the date of receipt of the application to the original authority till the refund of such duty - No substantial question of law arises - Decided against Revenue.
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2014 (3) TMI 754
Denial of refund claim - Unjust enrichment - Whether the refund of duty deposited during investigation is hit by the doctrine of unjust enrichment - Held that:- there are concurrent findings of fact by the Commissioner (Appeals) & the Tribunal that that the respondent assessee has paid the Central Excise Duty of ₹ 54,339/and ₹ 39,483/, after clearance of the excisable goods. Moreover, this payment of duty was on insistence of Anti Evasion Branch of the Central Excise Department. Thus, it was held that the burden of duty was not passed on to its customers - no substantial question of law arises from the impugned order of the Tribunal - Decided against Revenue.
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2014 (3) TMI 753
Condonation of delay - Held that:- matter of litigation where certain proceedings are going on before different authorities, it was required to keep the relevant records in a manner to locate them without loss of any time. Moreover, once the appellant came to know on 23rd September, 2012 from the Superintendent that their appeal has been dismissed, they were at liberty to approach the Department and ask for a copy of the records available if any, with the Department so as to enable them to file the appeal as early as possible but I do not find any such attempt made by the appellant. They had not addressed even any letter to the Department to hand over a copy of the order-in-Appeal. I do not find that the reasons given for the delay in this case are the sufficient cause. Though delay is stated to be due to unavoidable circumstances and genuine difficulties, the appellant did not show a diligence and commitment in prosecuting the matter in time. - Condonation denied.
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2014 (3) TMI 752
Extension of Stay order - Jurisdictional Superintendent has issued a letter dated 11.11.2013 directing the appellant to make payment of the interest and penalty on the ground that in view of the amended provisions of section 35C of the Central Excise Act, 1944, the total period of stay can be only 365 days and not beyond - Held that:- appellant has already paid the duty amount and stay is in respect of only interest and penal liability. In these circumstances, the department is restrained from proceeding with any coercive measures for recovery of the dues adjudged against the appellant - Decided in favour of assessee.
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2014 (3) TMI 751
Denial of Cenvat Credit - Bill of entry was endorsed in favour of the Thane unit by the Pitampur unit - Validity of endorsed of bill of entry - Held that:- there is no dispute that the imported consignments has not suffered CVD or the said consignment has not been received at the appellant's premises at Thane. The only dispute is that the bill of entry was endorsed by the Pitampur unit to the Thane unit, since the foreign supplier had indicated the addressed of the Pitampur unit in the relevant documents. Since bill of entry is a specified document, on the strength of which the Cenvat Credit can be availed, an endorsed bill of entry is also an equally valid document for availing credit. By endorsement only the name of the consignee is changed - credit can be availed on the strength of endorsed bill of entry also - Following the decision of Eupec-Welspun Pipe Coatings India Ltd. case [2009 (12) TMI 561 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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2014 (3) TMI 750
Supply of good under ICB for mega power project - Sub-contractor - Project authority certificate - Denial of benefit of Notification No. 06/2006-CE dated 01/03/2006 - Penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002 - Held that:- In the annexure to the certificate, the appellant's name figures as a sub-contractor for supply of EOT Cranes. Therefore, the condition that the goods should be supplied against International Competitive Bidding procedure is clearly satisfied. Vide Notification No. 12/2012-Cus, goods falling under CTH 9801 is exempt if the same is supplied for any Mega Power Project of capacity of 1000 MW or more subject to a certification by the Joint Secretary to the Government of India in the Ministry of Power. The said certificate is available on record and it is clearly stated that BARH Super Thermal Power Project has a capacity of 1000 MW or more and satisfies all other requirements for grant of exemption. Therefore, we are satisfied that the appellant has complied with the terms and conditions of the exemption notification - Decided in favour of assessee.
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2014 (3) TMI 749
Clearance of goods at concessional rate of duty - SSI Exemption - Notification No. 09/2003-C.E. dated 01.3.2003 - Held that:- appellants when they received the order for implementation of turn key projects had intimated the department and submitted the cost structure to the department. The assessable value of the transformers was determined as per CAS-4 by a qualified Chartered Accountant and this was submitted on 31.7.2004 to the officer in respect of his letter dated 22.4.2004. Nevertheless, show-cause notice was issued on 12.8.2005 invoking suppression and mis-declaration and proposing to revise the assessable value and demand of differential duty with interest and imposition of penalty as above. We find that what the department has done is to add the freight element from the factory gate to the sites in respect of transformers by invoking Rule 7 read with Rule 11 of the Central Excise Valuation Rules and also calculate the assessable value on the basis of transformer oil requirement indicated in the contract and adopt the one whichever is higher. There is no finding or evidence to show that actual quantum of oil used was higher than what was indicated in the CAS-4 and why the Chartered Accountants certificate cannot be accepted. Important statutory aspects regarding limitation as well as reasons for inclusion of elements of cost have not been given and hence cannot be sustained. In these circumstances, we find that the Revenue has not made out a case for increasing the assessable value on the ground of suppression, mis-declaration or on merits - Decided in favour of assessee.
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2014 (3) TMI 748
Reversal of CENVAT Credit availed on service tax when inputs are removed as such - Whether the appellant is required to reverse CENVAT credit of service tax paid on CHA service and commission agent service attributable to the imported products which were sold as such by the appellant as replacement for worn out parts in the market - Held that:- when the Cenvat availed inputs or capital goods are removed from the factory of the assessee as such, sub rule 3(5) provides for recovery of the amount of the Cenvat credit availed in respect of such inputs or capital goods and there is no provision to reverse the credit of service tax availed in respect of such goods or capital goods. Following the judgment of the Tribunal in the case of Chitrakoot Steel & Power Ltd. Vs. CCE, Chennai [2007 (11) TMI 135 - CESTAT, CHENNAI], I hold that the impugned order is not sustainable - Decided in favour of assessee.
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2014 (3) TMI 747
Denial of refund claim - Bar of limitation - The consignee viz., PWD, Government of Karnataka was not aware of, nor they indicated in the purchase order that they would be eligible for the duty exemption benefit in terms of Notification No.108/95-CE dated 20.8.1995. - Whether they can claim the refund of Central Excise duty remitted by them but not paid by PWD though the bill was raised including Central Excise duty - If the refund of duty is to be claimed, can it be claimed by them or it has to be claimed by the consignee. - Held that:- appellant failed to show anywhere in the correspondences made by the appellant to the department that there was a specific request to sanction refund of the amount paid. It has to be noted that as early as 3.3.2006, PWD had written to Deputy Commissioner stating that they would not be paying the amount to the appellant and there was a delay in producing the certificate. The proper course for the appellant to follow was to file an appeal against the decision communicated to them by the Assistant Commissioner on 24.11.2005 stating that since they have not fulfilled the conditions under Notification No.108/95 they are not eligible for the refund. This was a decision communicated to the appellant, which could have been challenged and they did not do so. As early as 3.3.2006 PWD made it clear that they would not be paying the amount. A request by the third party or a customer to the department requiring the department to reimburse the amount of duty paid cannot be considered as refund claim at all - there is not even a single line stating that I may please be granted refund of Central Excise duty. Under these circumstances the rejection of refund on the ground of limitation by the lower authorities cannot be faulted with - Decided against assessee.
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2014 (3) TMI 746
Duty demand - Contravention of provisions of Rule 8(3A) of Central Excise Rules, 2002 - Utilization of Cenvat credit during 8/06 to 2/07 without clearing outstanding amount including interest - Held that:- Wordings in the Rule such as duty for each consignment at the time of removal without utilising the Cenvat credit refers to clearances of goods to be made during suspension period and not to the clearances already made in the past. Therefore I find that restriction imposed in the rule not to utilise Cenvat credit is applicable to clearances to be made during suspension period and it is not applicable to payment of outstanding amount of duty relating to past clearances - As rightly observed by the Commissioner (A), the provisions of Section 8(3)(A) are not attracted in respect of the amounts payable during the default period but the consignment-wise payment of duty and non-utilisation of CENVAT credit are applicable only in respect of clearances which are made during the period default continues - Decided against Revenue.
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2014 (3) TMI 745
Denial of CENVAT Credit of SAD - removal of inputs as such without reversing SAD - Mala fide intention of assessee.- Held that:- When goods are imported SAD has to be paid except in some special cases. Where SAD is paid the importer can take credit of such duty under Cenvat Credit Scheme if he is a manufacturer, consuming the imported goods in his manufacturing process. There is also a provision that if the importer sells the goods on payment of VAT, he can claim refund of such SAD paid, from Customs Authorities by producing evidence of VAT paid. In this case goods were sold and not consumed in manufacture. So the latter course of action should have been taken for getting relief from the incidence of duty which need not be borne by the respondents. This is case of choosing wrong course of action rather than attempt at evasion of duty - Decided against Revenue.
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2014 (3) TMI 744
Waiver of pre deposit - Reversal of CENVAT Credit - Held that:- Appellant had made out a prima facie case in their favour since before the decision of the Honble Supreme Court having the view that interest is payable from the date of availment of cenvat credit and even it was not utilized interest is not payable was not available - Following decision of UOI v. Ind-Swift Laboratories Ltd. [2011 (2) TMI 6 - Supreme Court] - Stay granted.
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2014 (3) TMI 743
Waiver of pre deposit - Payment of differential duty - Held that:- Appellants have been paying the differential duty from time to time and showing the details thereof in the returns filed by them and therefore extended period could not have been invoked. When the extended period could not have been invoked for recovery of the demand, the question of demanding interest also does not arise - wherein a view was taken that for demanding interest also limitation under Section 11A will be applicable and therefore, if the suppression, fraud, mis-declaration, etc., are not proved, interest also cannot be demanded - appellant has made out a prima facie case for stay - Stay granted.
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2014 (3) TMI 742
Duty demand - Cash discount policy - While assessee were paying differential duty on the sale at the factory gate, no duty was paid on the cash discount not availed by the buyers at depot, resulting in short payment of duty - Held that:- The difference price has to be considered as representing an element of interest on account of delay in payment and unless it is established that such difference in price is so vast that in actually amounts to charging part of the price in the form of interest, the same cannot be rejected, and shall be the price applicable even in respect of those cases where cash discount is not availed of - Following decision of CCE, Ahmedabad v. Arvind Mills Limited [2006 (11) TMI 230 - CESTAT, MUMBAI] - Stay granted.
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2014 (3) TMI 741
100% EOU - Quantum of clearance of the goods in DTA - Held that:- appellant before Commissioner (Appeals), had restricted their arguments only in respect of penalty and interest and have nowhere raised any ground challenging the confirmation of demand against them, but in view of the clear facts available in the present case and the legal issue having been decided till Apex Court, we deem it fit, in the interest of justice, to allow the appeal last to raise the ground challenging confirmation of duty - Following decision of AMITEX SILK MILLS PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, SURAT-I [2005 (10) TMI 128 - CESTAT, NEW DELHI] - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2014 (3) TMI 782
Opting out of scheme of compound levy / composite method of taxation on ground of closure of business - Whether a fortiori can be taken in the lean season when the assessee voluntarily and with full knowledge of features of alternate method of taxation has opted to be governed by it - Correctness of the order passed by the High Court - Kerala General Sales Tax Act, 1963 Held that:- The compounding of the tax by way of contract of payment of tax is a lump sum on the value of contract on an agreed rate. The contract of compounding is a statutory contract under a scheme, in which the State Government can increase or decrease the rate of compounding of tax. It is an invitation to offer for compounding for each financial year resulting in an agreement qua such financial year. Therefore, the contract between the assessee and the assessing authority can be then annulled by the parties only under the circumstances which are provided under the provisions of the Contract Act. The composition of tax is nothing but an alternative route to assessment regulated by the terms of a contract between the assessee and the assessing authority to arrive at the same destination - the dealer who had voluntarily and with full knowledge of features of alternate method of taxation has opted to be governed by it, a fortiori cannot in the lean season, claim for his assessment to be made under the regular assessment in the same assessment year - This has been taken note by the assessing authority and the First Appellate Authority and by the High Court - High Court has not committed any error. Decision in the case of Venus Castings (P) Ltd [2000 (4) TMI 37 - SUPREME COURT OF INDIA] and Supreme Steels & General Mills and Ors [1996 (11) TMI 355 - SUPREME COURT OF INDIA] followed Appeal dismissed Decided against assessee.
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2014 (3) TMI 781
Accrual of Benefit or concession of tax u/s Clause 2(xiii) of the Industrial Incentive Policy of the State of Bihar, 2006 notification Whether assessee is eligible for concession when revenue already collected CST at the rate of 4 per cent before the notification reduced the same to 1 per cent Held that:- There would be no occasion for any seller of goods to collect tax at any other rate contrary to the prevalent notified rate which is in place, because any under collection on behalf of seller would create a liability upon him, to make good the difference in the rate collected and what is required to be paid to the State exchequer - Since there is evidence that this was not done but is an effort now to show that it has been done, which cannot be established from the records, the concession and the benefit of the Industrial Policy cannot accrue to the assessee when he had already collected CST at the rate of 4 per cent till the notification reducing the same to 1 per cent was issued by the State Government on 12.10.2006. There is no occasion to interfere, with the assessment orders - The present dispute is only a camouflage under the garb of the Industrial policy with the object of negating the assessment order Petition dismissed - Decided against assessee.
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2014 (3) TMI 780
Exemption of tax for inter-state sale No proof of inter-state sale Whether second writ petition for the same relief maintainable - Held that:- The petitioner is not entitled for the exemption from the Sales Tax pursuant to the exemption certificate issued by the CTO on the earlier occasion for Overseas Sale - No document has been produced by the assessee to comply with the statutory formalities that the turnover has been fulfilled the ingredients of interstate sale - Since Assessee is liable to pay the sales tax since he has sold sandalwoods within the State - Even though on the earliest occasion, the 1st respondent have released the amount to the petitioner, it will not mean that the 2nd respondent cannot retain the present impugned Demand Draft since already the writ petition filed by the petitioner for the same relief for the same turnover, it has been dismissed for the same reason - similar writ petition has been filed in W.P.No.579 of 2004 for the same relief and the same was dismissed by this Court by order dated 21.1.2004 The Assessee also closed down his business - Since the petitioner has not filed any writ appeal as against the said order, it has become final - Thus, second writ Petition for the same relief is not maintainable in law - Writ Petition dismissed Decided against assessee.
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2014 (3) TMI 779
Evasion of tax liability Entertainment tax by T.V. Cable Operator - determination of number of subscribers - Requirement of further notice after publication in the newspaper and T.V. Channel - Opportunity of being heard Held that:- There is no requirement of any further notice being issued to individual subscriber - Once the list of subscribers attached to the petitioner cable network had been furnished to him after fresh survey, he had ample opportunity to dispute the same - But instead of taking recourse to the said procedure the petitioner has only been harping on the ground that the survey had not been done in his presence - He has not disputed the list of subscribers attached to his cable network as per the order of the District Magistrate and that of the State Government - The findings recorded in the orders impugned are based on true and correct appreciation of evidence - No interference is warranted against the impugned order Decided against Assessee.
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Indian Laws
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2014 (3) TMI 740
Whether the Courts below including High Court were justified in staying the on-going disciplinary proceedings pending conclusion of the trial in the criminal case registered and filed against the respondents - Held That:- While there is no legal bar to the holding of the disciplinary proceedings and the criminal trial simultaneously, stay of disciplinary proceedings may be an advisable course in cases where the criminal charge against the employee is grave and continuance of the disciplinary proceedings is likely to prejudice their defense before the criminal Court - Gravity of the charge is not by itself enough to determine the question unless the charge involves complicated question of law and fact - That requirement does not appear to be satisfied in an adequate measure to call for an unconditional and complete stay of the disciplinary proceedings pending conclusion of the trial - The incident as reported in the FIR or as projected by the respondents in the suits filed by them does not suggest any complication or complexity either on facts or law - the respondents have already disclosed the defense in the explanation submitted by them before the commencement of the departmental enquiry in which one witness has been examined by each of the Enquiry Officers. It is not fit to vacate the said order straightaway - Interests of justice would be sufficiently served if we direct the Court dealing with the criminal charges against the respondents to conclude the proceedings as expeditiously as possible but in any case within a period of one year from the date of this order - We hope and trust that the Trial Court will take effective steps to ensure that the witnesses are served, appear and are examined - The Court may for that purpose adjourn the case for no more than a fortnight every time an adjournment is necessary - We also expect the accused in the criminal case to co-operate with the trial Court for an early completion of the proceedings - We say so because experience has shown that trials often linger on for a long time on account of non-availability of the defense lawyers to cross-examine the witnesses or on account of adjournments sought by them on the flimsiest of the grounds , all that needs to be avoided - In case the trial is not completed within the period of one year from the date of this order, despite the steps which the Trial Court has been directed to take the disciplinary proceedings initiated against the respondents shall be resumed and concluded by the IO concerned - The impugned orders shall in that case stand vacated upon expiry of the period of one year from the date of the order - These appeals allowed in part and to the extent indicated above - The parties are left to bear their own costs Decided against appellant.
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