TMI Tax Updates - e-Newsletter
March 15, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Unexplained investment in land - the appellant had entered into a deal to purchase this land and subsequent gone to get it registered; the eventual seller to her had registered it earlier as a purchaser; she was purported to be clearly 50% owner; no one can believe that she was entitled to such a benefit without spending a single rupee. - AT
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Income Tax:
Bogus purchases addition - The only valid argument is that there could be no sales without purchases. But the price at which the goods were purchased remained a grey colour when admittedly the payment was made in cash. As the undisputed fact that the payments were made in cash under section 40A(3) is attracted - AT
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Income Tax:
Addition u/s 37(1) - processing fees - the payment has not been made for acquiring a brand name, but for facilitating for acquisition of the brand name - by applying positive and negative tests, it is found that the expenditure is revenue in Nature - AT
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Income Tax:
Disallowance of job work expenses - payment of expenditure in cash - no specific instance of cash payment has been highlighted which has violated the provisions of Section 40A(3) - addition on purely an adhoc basis cannot be made - AT
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Income Tax:
Addition of deemed dividend under Section 2(22)(e) - quantum of accumulated profits - inclusion of share premium - The share premium account cannot partake the nature of commercial profit and, therefore, it cannot be called as accumulated profits - AT
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Income Tax:
Re-assessment - the information was restricted to cash deposits in bank account but there was no material much less tangible, credible, cogent and relevant material to form a reason to believe that cash deposits represented income of the assessee; that the proceedings initiated are based on surmises, conjectures and suspicion - Notice quashed - AT
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Customs:
Penalty u/s 112(a) of the CA, 1962 - Mis-declaration of goods - The goods stand absolutely confiscated without giving an option for redemption - The importer seems to have accepted this and forfeited this consignment. - However for the offence of misdeclaration, the importer will be liable for penalty u/s 112(a) of the CA, 1962. - AT
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Customs:
Refund of SAD - time limitation - there is no error in the order of the Commissioner (Appeals), wherein he has directed to exclude the time for calculation of limitation, when the documents were lying in the custody of DRI - AT
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Service Tax:
CENVAT credit - capital goods - dumpers and tippers falling under chapter 87 are not eligible for credit - However, dumpers and tippers where supplier has classified them under Chapter 84 may be considered - AT
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Service Tax:
Refund claim - N/N. 41/2007-ST dated 06/10/2007 - GTA services - the export invoice itself contains various details like nature of cargo, lorry and container details alongwith the date of receipt for transport - they have connected documents to link up payment of service tax to such transport - refund allowed - AT
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Service Tax:
Entitlement to interest on delayed refund - refund claim has not arisen consequential to any appellate order. The appellate order only decides the correctness of the claim already filed and rejected by the Original Authority - claim of interest allowed - AT
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Service Tax:
CENVAT credit - input services - investment cannot be classified as an activity and therefore separate accounts need not be maintained for such activities indulged by the respondent - AT
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Service Tax:
GTA - the appellant who is financing the purchase of fertilizer by the primary cooperative societies is also bearing the cost of transportation on behalf of the consignees - being neither a consignor nor the consignee, no service tax liability - AT
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Service Tax:
CENVAT credit - input services written off - Rule 3(5B) of CENVAT Credit Rules, 2004 reveals that it is directed against the input or capital goods and not applicable to the input services, therefore, recovery proceeding initiated by Revenue on the credit attributable to the written off of value of the input service from the books of accounts, being bad debt cannot be sustained - AT
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Service Tax:
Charitable trust - Validity of subsequent SCN invoking the extended period - deliberate defiance and the intention to avoid and evade the taxes were noticed - extended period has been rightly invoked - demand confirmed with penalty - AT
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Service Tax:
Classification of services - services to ICICI Bank in relation to disbursal of loans to various customers - the said activities are covered under the tax entry of “Business Auxiliary Service” - AT
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Central Excise:
100% EOU - breach of principles of natural justice - In one single notice, a choice of three dates of hearing has been given - It is not permissible for the adjudicating authority to issue one consolidated notice fixing three dates of hearing, whether or not the party asks for time, as has been done in the present case - HC
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Central Excise:
CENVAT credit - the provider of output service had accumulated Cenvat Credit, which has been transferred to a manufacturer of final products for utilisation in their factory, which is beyond the scope of Rule 10 of the CCR, 2004 - demand confirmed - AT
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Central Excise:
Valuation - paints - specifically packed for exclusive use of any industry - Rule 34 ibid being a special provision, will then override the other general provisions of the said Rules - the valuation of the impugned goods would then not be u/s 4A of the Central Excise Act but u/s 4 only. - AT
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Central Excise:
Valuation - job-work - The reduction from such costing of higher burning loss to the extent of 11% and treating the same as assessable value for discharge of duty liability is then without any basis by the appellant and has resulted in short payment of duty - AT
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Central Excise:
CENVAT credit - The availment of dual benefit of CENVAT Credit as well as income tax benefit on the inputs could be a critera for determination of income tax liability, however, the CENVAT Credit in absence of any stipulation under CCR 2004, cannot be denied to the Appellant - AT
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Central Excise:
Reversal of cenvat credit - spent sulphuric acid is cleared with end-use requirement of N/N. 6/2002-CE - spent sulphuric acid not being final product, the appellant cannot be denied of the CENVAT credit available to it on the input used to manufacture LABSA. Mere emergence of spent sulphuric acid does not debar the appellant to this benefit - appeal allowed - AT
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Central Excise:
CENVAT credit - change of name of manufacturer - all the five (5) disputed invoices have been issued within 05.03.2008 which is prior to change in name since the change in name had taken place on 15.05.2008 - credit allowed - AT
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Central Excise:
Job-work - benefit of N/N. 214/96 and N/N. 84/95-CE cannot be extended to the appellant as the requisite undertakings have not been given by the appellant - These undertakings are not merely procedural undertaking but substantive undertaking in so far as by virtue of this undertaking, the principal manufacturer takes the responsibility of duty liability in case it arose - AT
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Central Excise:
CENVAT credit - entire boiler which is undoubtedly capital goods - Even goods such as angles, channels, sections, etc. which are classifiable under chapter 73 and are used for fabrication in the factory for manufacture of supporting structures which ultimately become part of the boiler would also be eligible for Cenvat Credit - AT
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Central Excise:
SSI Exemption - N/N. 8/2003-CE dated 01.03.2003 - brand name/trade name - It cannot be stated that the mark “TDPL” is a brand name owned by M/s TDPL - Benefit of SSI exemption allowed - AT
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VAT:
Rate of tax - 4% or 12% - taking the “common parlance test”, the ballasts, boulders or chips are nothing but “mineral” under Sales Tax Act exigible to tax at the rate of 4% as per Entry 117 of the taxable list. - HC
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VAT:
Applicable rate of tax - Whether such fresh plea can be raised in the second appeal without the same being raised in the forums below? - the contention of the State that such plea of exigibility to tax at the rate of 4% of the taxable list before the Tribunal is barred by limitation is not acceptable - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (3) TMI 533
Penalty u/s 271(1)(b) - non-compliance of notice u/s. 142(1) - Held that:- Penalty will not be imposed on the assessee if he proves that there was reasonable cause for the said failure. Now coming to the case on hand, it is not in doubt that the wife of assessee was suffering from cancer as evident from the order of Hon'ble ITAT in assessee’s own case for AYs 2004-05 to 2009-10 [2014 (12) TMI 217 - ITAT KOLKATA] As there was sufficient reasonable cause which prevented the assessee to comply with the notice issued u/s 142(1) by AO. Accordingly, we, therefore, set aside the order of Ld. CIT(A) and direct the AO to cancel the penalty u/s 271(1)(b) - Decided in favour of assessee
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2017 (3) TMI 532
Addition u/s 14A - Held that:- It is noted that Ld. CIT(A) recorded categorical finding in his order that no exempt income has been received by the assessee in A.Y. 2010-11 & 2011-12. It has been mentioned by Ld. CIT(A) that dividend income of ₹ 37,83,000/- was received during A.Y. 2008-09, accordingly disallowance made under sect ion 14A was restricted to the extent attributable to said amount. However, in the remaining two years since no income was received, disallowance was deleted fully. It is noted that Ld. CIT(A) has followed various judgments wherein it was held that in case no exempt has been received by the assessee during year) then no disallowance u/s 14A read with Rule 8D (2) (iii) shall be required to be made. It is further noted that Ld. counsel has also cited various judgment s as reproduced in earlier part of order . No contrary judgments have been cited by the Ld. D.R. on this issue. Thus, taking facts and circumstances of the case and well settled legal position into account as has been submitted by the Ld. Counsel of the assessee, we find that no interference is called for in the order of the Ld. CIT(A). Thus, his orders are upheld for all the 3 years. - Decided against revenue
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2017 (3) TMI 531
Unexplained investment in land - assessee now is claiming that it had only 1/3rd interest in the property intended to be purchased - Held that:- In view of the overwhelming evidences that the appellant had entered into a deal to purchase this land and subsequent gone to get it registered; the eventual seller to her had registered it earlier as a purchaser; she was purported to be clearly 50% owner; no one can believe that she was entitled to such a benefit without spending a single rupee. We do not find any reason to deviate from the findings of the CIT. Hence, we would like to observe that once a registered statement is made before a Lawful authority it should normally be taken to be true. No one should be allowed to blow hot and cold in the same breathe to suit its personal interest before different authorities. Therefore, the addition confirmed by the Ld. CIT(A) of ₹ 25,50,000/- as undisclosed income, not reflected in the return of income is confirmed. - Decided against assessee
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2017 (3) TMI 530
Addition u/s 14A r.w.r 8D - Held that:- CIT(A) verified the books before giving a finding that investments were made in the earlier years out of own funds. No material was placed by Revenue to contradict the findings of CIT(A). Therefore, we hold that disallowance on that count is not warranted. Referring to subsidiary issue i.e., administrative expenditure. In the case of M/s. Daga Global Chemicals Pvt. Ltd., (2015 (1) TMI 1204 - ITAT MUMBAI) observed that disallowance under section 14A read with Rule 8D cannot exceed the exempt income. No other case law was placed before me wherein a different view was taken. Even if there is a different view, the one which is in favour of the assessee deserves to be accepted. Therefore, we hold that the disallowance if any, should not exceed ₹ 2,86,655. Learned Counsel for the Assessee, fairly admitted that if the disallowance is restricted to the exempt income he would not seriously press other grounds. The appeal is accordingly disposed of by restricting the disallowance to ₹ 2,86,655. - Decided partly in favour of assessee.
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2017 (3) TMI 529
Withdrawal of the registration granted to the assessee u/s 12A - basis for the withdrawal of the registration u/s 12A as DIT (E) rejected the application for approval u/s 80G - Held that:- The registration u/s 80G was rejected on the ground that the assessee is not able to establish that the fees charged by it is in accordance with the rules and regulations of the Govt. of Andhra Pradesh and also the rules and regulations framed by the All India Council for Technical Education (AICTE). It was observed by the DIT (E) that the assessee was given adequate time to establish that the fee charged by the assessee is in accordance with the rules and regulations framed by the competent authority and in the absence of the evidence that the fee paid by the students is in accordance with the rules and regulations, the registration was denied to the assessee. We find that the DIT (E) had, issued a show cause notice u/s 12A(3) of the Act for withdrawal of the registration u/s 12A of the Act. In such circumstances, the duty was cast upon the assessee to furnish all the relevant material before the DIT (E) both during the proceedings u/s 80G and section 12AA(3) of the Act. The assessee has now filed the details before us and on perusal of the said details, we find that they consists of the copy of the letter issued by the AICTE granting registration to the assessee, financial statements for the assessee as on 31.3.2009 and such other documents. We find that these documents are very essential for adjudicating the issue thus we deem it fit and proper to admit the additional evidence and remand the issue to the file of the DIT (E) for reconsideration - Decided in favour of assessee by way of remand.
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2017 (3) TMI 528
Review petition - ITAT sustained the addition made being transfer of machinery by the Individual to his HUF appellant, allegedly assessable under section 56 (2) - Held that:- Considering the submissions of the ld. AR, we are of the opinion that it leads to review of our order, which is not permitted u/s 254(2) of the Act. We have already considered the issue on merits and adjudicated. There is no mistake apparent on the record. The Hon’ble Calcutta High Court in the case of CIT Vs. Suman Tea and Plywood Industries (P) Ltd. [1997 (3) TMI 81 - CALCUTTA High Court] held that “by section 254(4) of the IT Act, an order which has been passed by the Tribunal reaches finality the moment the same is passed: it cannot be touched thereafter. By section 254(2) of the act, the Tribunal, however, has been authorized to rectify mistakes in its orders, which are apparent on the face of the records. The expression “mistake apparent on the record” means a mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any necessity to reargue the matter or to reappraise the facts as appearing from the records.” Thus it is clear that section 254(2) cannot be applied to seek review of the ITAT order. Once it is pronounced, it becomes final and can rectify only the mistakes apparent on the record. - Decided against assessee.
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2017 (3) TMI 527
Bogus purchases addition - revision u/s 263 - cash payments - Held that:- As payments are made in cash, the Assessing Officer as well as the ld. CIT(Appeals) have rightly suspected the genuineness of the same. The assessee has not been able to lead any third party evidence in support of its claim. The only valid argument is that there could be no sales without purchases. But the price at which the goods were purchased remained a grey colour when admittedly the payment was made in cash. As the undisputed fact that the payments were made in cash under section 40A(3) is attracted as pointed out by the ld. CIT(Appeals) in his order passed under section 263 of the Act. In view of the above discussion, it of the view that section 40A(3) has to be applied and the disallowance restricted to this amount. - Decided partly in favour of assessee
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2017 (3) TMI 526
Addition u/s 37(1) - processing fees paid to bank in relation to acquiring brand name - Held that:- In the instant case, the payment has not been made for acquiring a brand name, but for facilitating for acquisition of the brand name, which in turn made substantial improvement in earning capacity of the appellant’s business. The payment is in the form of a brokerage or commission or service charges. (not-withstanding its liability for TDS). Therefore on the facts and in the circumstances of the case in my view the expenditure incurred by the appellant company for the payment made to M/s. Shalini Properties & Developers Pvt. Ltd is a revenue expenditure. One of the positive tests must be attracted and none of the negative tests should be satisfied in order to claim deduction under section 37(1) of the Act. In this case, ,the expenditure has been incurred with a view to bring profits or monetary advantage either today or tomorrow; the expenditure incurred is such as a wise, prudent, pragmatic and ethical man of the world of business would conscientiously incur with an eye on promoting his business prospects, subject to the expenditure being genuine and within reasonable limits. Therefore, more than one of the positive tests have been proved. Therefore, more than one of the positive tests have been proved. Coming to the negative tests, it may be mentioned again that the Assessing Officer has not brought any material evidence on record that it is a bogus fictitious or sham transaction; it is unreasonable and out of proportion; and that it is an expenditure merely with a view to avoid tax liability without any genuine purpose or reason in good faith. Therefore, none of the conditions of the negative tests has been satisfied in this case. In Sasson J.David & Co.(P)Ltd. Vs. CIT [1979 (5) TMI 3 - SUPREME Court] has been held that the assessee can claim deduction under section 37(1) even though there is no compelling necessity to incur such expenditure. In Goodyear India ltd. Vs. ITO[2000] 73 ITD 189/68TTJ(Delhi)TM 330, it has been held that expenditure incurred to get right to use licence for limited period (where the assessee company, manufacturing tyres, entered into an agreement with a foreign company for technical know-how for manufacture of radial tyres and the assessee got the right to use the licence for a fixed period of 8 years) is deductible. Thus expenditure incurred by the appellant company in making payment under the head SBLC charges to Shalini Properties and Developers Pvt. Ltd. Is consideration of commercial expediency of the business of the appellant company and is allowable as deduction under section 37(1) - Decided in favour of assessee
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2017 (3) TMI 525
Disallowance of job work expenses - payment of expenditure in cash - Held that:- All the bills contains the description of work done, though in short form, as per the trade practice and custom of the assessee trade. So far as the payment in cash is concerned, the same was made within the permissible limits of Section 40A(3) of the Act. We have given a careful consideration to the matter and we are of the view that the assessee’s contention deserves to be accepted. Firstly, the addition has been made on purely an adhoc basis without highlighting any specific instance where the payment is not verifiable or the expenses claimed by the assessee are bogus or have not been incurred for the purpose of business. Further, no specific instance of cash payment has been highlighted which has violated the provisions of Section 40A(3) of the Act. Thus we hereby delete the disallowance - Decided in favour of assessee Excess interest paid disallowance - Held that:- The rate of interest on borrowing need to be benchmarked with the third party transaction in the similar facts & circumstances of the case. In the instant case, what is being compared is a rate of interest on an unsecured borrowing vis-à-vis a secured borrowing. In absence of a comparable case being highlighted by the Assessing Officer, we are unable to accept the stand of the revenue that the interest paid is on a higher side. In light of above, the ground No.2 of the assessee is allowed. - Decided in favour of assessee
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2017 (3) TMI 524
Disallowance, u/s 14A - Held that:- Identically, Hon'ble Gujarat High Court in CIT vs Corretech Energy (Pvt.) Ltd. (2014 (3) TMI 856 - GUJARAT HIGH COURT) held that, where the assessee did not make any claim for exemption of any income from payment of tax disallowance, u/s 14A could not be made. Section 14A cannot be invoked where the assessee has not received any dividend income during the relevant year. Thus we decide this issue in favour of the assessee as no exempt income was earned by the assessee during the relevant Assessment Year. - decided against revenue Disallowance of provision for warranty - Held that:- This issue is covered against the assessee by the decision of the Tribunal for Assessment Year 2005-06 [2013 (9) TMI 4 - ITAT MUMBAI ] as held for claiming the allowance one has to furnish a fair, scientific and reasonable basis to the AO - company has not scrutinised the ‘historical trend’ of warranty provisions made and compared it with the actual expenses incurred. Appellant has failed to prove that figures furnished by it are based on a ‘sensible estimate’ - appellant has not ‘maintained data systematically’.assessee has claimed that gross sales had increased over the years. It was further held that if estimate was made on a scientific basis, same could be allowed. In the matter before us, scientific data is not available.- decided against assessee Recomputation of disallowance u/s 14A of the Act r.w.r. 8D of the Rules after excluding the long term capital investment in subsidiary/group concerns - Held that:- We have considered the rival submissions and perused the material available on record. We find that while coming to a conclusion, the Ld. Commissioner of Income Tax (Appeal) has deliberated upon the factual matrix and various case laws including from Hon'ble jurisdictional High Court and the Tribunal. We find no infirmity in the same. So far as, the contention of the ld. DR that the order of the Tribunal is under challenge before the Hon'ble High Court, is concerned, we are of the view that order of the Hon'ble High Court will be binding upon both the parties but as on date the issue is in favour of the assessee, therefore, we dismiss the appeal of the Revenue.
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2017 (3) TMI 523
Addition of deemed dividend under Section 2(22)(e) - quantum of accumulated profits - inclusion of share premium - loan given to firm in which assessee has 20% holding - Held that:- we reject the contention of the learned counsel for direction to the authorities below for following the CBDT Circula ( Circular No. 495, dated 29th September, 1987) and we uphold the order of the Commissioner of Income Tax (Appeals) that the said loan or advance is liable to be taxed as deemed dividend in the hands of the assessee. Exclusion of share premium from the accumulated profit for the purpose of deemed dividend - Held that:- The share premium account cannot partake the nature of commercial profit and, therefore, it cannot be called as accumulated profits. Respectfully following the above decision of the Tribunal Deputy Commissioner of Income Tax Vs. Radhe Sham Jain [2013 (1) TMI 42 - ITAT CHANDIGARH] we uphold that the share premium amount appearing in the financial statement of the assessee cannot be included while computing the accumulated profit of the assessee company as on the date of loan or advance to the concerned firm. Since the learned Commissioner of Income Tax (Appeals) has already directed the Assessing Officer to restrict the deemed dividend to the extent of accumulated profit, we feel it appropriate to direct the Assessing Officer to compute the accumulated profit keeping in view our finding above. Needless to mention that the assessee shall be afforded sufficient opportunity of hearing. Accordingly, the ground is allowed for statistical purposes
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2017 (3) TMI 522
Rejection of application U/S 12-A - Held that:- The appellant is an autonomous society under the administrative control of the office of the development Commissioner, Ministry of micro small and medium enterprises, government of India. The annual accounts and the annual report of the Centre are approved by the governing Council adopted by the society in its annual general meeting. In view of this respectfully following the decision in case of Orissa trust of technical education and training vs CIT (2012 (8) TMI 645 - ORISSA HIGH COURT ) wherein held that amount received from horticultural had been utilised in educational activities of the institution and for infrastructure development. Therefore, it could not be treated that the profit was on for non-educational activities. We do not find any plausible reason why assessee should be deprived of registration under section 12 AA of the income tax act from availing such benefit when if in any of the year the assessee is found to have violated the provisions of section 11, 12 and 13 of the income tax act, such registration cane be withdrawn. Further, if similar institutions established by central government in other states having similar objects have been granted registration under section 12 AA of the income tax act as stated by the Ld. authorized representative and submitted the respective such registration certificate, We are also of the view that there is no reason to single out the assessee for not granting such registration. Therefore we set aside the impugned order of Ld. CIT, Meerut and remit the issue back to him to verify the above facts and if it is found that the institutions in other places having similar objects have been granted registration under section 12 AA he may consider granting registration under this act to the assessee under the respective section applied for. That the assessee may be granted reasonable of Portugal due being heard and to adduce any further evidence which it would like to place before him. In the result appeal of the assessee is allowed for statistical purposes.
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2017 (3) TMI 521
Validity of reopening of assessment - Held that:- There is no nexus between the prima facie inference arrived in the reasons recorded and information; the information was restricted to cash deposits in bank account but there was no material much less tangible, credible, cogent and relevant material to form a reason to believe that cash deposits represented income of the assessee; that the proceedings initiated are based on surmises, conjectures and suspicion and therefore, the same are without jurisdiction; that the reasons recorded are highly vague, far-fetched and cannot by any stretch of imagination lead to conclusion of escapement of income and there are merely presumption in nature; that it is a case of mechanical action on the part of the AO as there is non-application of mind much less independent application of mind so as to show that he formed an opinion based on any material that such deposits represented income. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - Decided in favour of assessee
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Customs
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2017 (3) TMI 542
Misdeclaration of goods - DEPB benefit - appellants attempted export by misdeclaring the export product as Non-Alloy Steel Forgings (Rough) where as goods are of the description Hot Rolled Low Carbon Steel Billets with the malafide intention of availing undue DEPB benefit - redemption fine - penalty - Held that: - the Revenue has attempted to make the case of missdeclaration without there being enough evidences to support the said missdeclaration on the part of the appellants - the contents of the test reports in respect of description of the goods, where there are rival claims by both the sides, do not have sufficient credibility and cannot be made conclusively applicable to the subject goods. Therefore, the Revenue's case on misdeclaration of the description of goods cannot be sustained - Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 541
Refund of SAD - time limitation - whether the claim of refund of SAD which regard to 22 Bills of Entry which have been filed during the period 29.01.2010 to 20.09.2010 is barred by limitation or not? - Held that: - respondent-assessee had filed the refund claim, first of all on 20.10.2010, when it had informed the ADC/ICD in writing that they are entitled to refund claim of SAD but the formal claim cannot be filed immediately, as the documents are lying in the custody of DRI, pursuant to search and seizure which took place on 30.09.2010. Accordingly, the refund claim had been made on 20.10.2010, which was well within time - there is no error in the order of the Commissioner (Appeals), wherein he has directed to exclude the time for calculation of limitation, when the documents were lying in the custody of DRI. The same is in agreement with the legal principles and the provisions of the Limitation Act - respondent-assessee is entitled to refund of their SAD - appeal dismissed - decided against Revenue.
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2017 (3) TMI 540
Redemption fine - Penalty - appellant claim that he has paid differential duty along with 25% amount of duty as penalty before issuance of the SCN, thus, the demand not sustainable - Held that: - in the said case the SCN were issued for confiscation and redemption fine under section 125 of the Act whereas, in this case duty has been demanded against the appellant u/s 28 of the Act, further, as per Section 28(5) of the Act, if the assesee pays duty alognwith 25% duty as penalty, in that circumstances, the proceedings comes to an end, therefore, the proceedings against the appellant were not warranted - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 539
Penalty u/s 112(a) of the CA, 1962 - in the Bill of Entry filed by the importer, the goods have been misdeclared - The importer filed Bill of Entry declaring various types of Screws as well as Cotton Gloves as imported goods. On an open examination of the goods, it was found that Cotton Gloves were received. However, in place of various types of Screws, steel measuring tapes were found - Held that: - the measuring tapes, which have not been declared but were found in the consignment become prohibited goods and liable for confiscation u/s 111(d), (n) (m) of the CA, 1962. The goods stand absolutely confiscated without giving an option for redemption - The importer seems to have accepted this and forfeited this consignment. - However for the offence of misdeclaration, the importer will be liable for penalty u/s 112(a) of the CA, 1962. Cotton Gloves for industrial use, have been confiscated u/s 119 by taking a view that these were used to conceal the smuggled goods viz. the steel measuring tapes - this view is farfetched. The cotton gloves for industrial use were declared in the Bill of Entry and hence there is no justification for ordering confiscation of this item - penalty also set aside. Appeal disposed off - decided partly in favor of importer.
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2017 (3) TMI 538
Benefit of N/N. 6/2002-CE dated 1st March 2002 - the impugned order demonstrates non-application of mind and is a non-speaking order - Held that: - the order impugned before the first appellate authority disposed off refund application dated 8th May 2006 without complying with the prescription in section 27 of the CA, 1962 - appeal rejected - decided against appellant.
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2017 (3) TMI 537
Import against advance license - violation of conditions by availing MODVAT credit - suppression of facts - Held that: - the allegation and finding that appellant suppressed this vital fact at the time of import is without any basis. Further, from the records it was found that no effort has been taken to ascertain if the manufacturer of the export goods had, indeed, availed such credit. There is no statement of manufacturer or evidence of statutory register maintained by the manufacturing unit that has been placed on record. It would appear that the notice has been issued on surmises and assumptions that such credit had been availed on the inputs - appeal allowed - decided against appellant.
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Service Tax
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2017 (3) TMI 568
CENVAT credit - capital goods - dumpers and tippers to provide output services - eligibility of credit on dumpers and tippers where supplier has classified under Chapter 84 - Held that: - the main appellant herein is ineligible to CENVAT credit of the Central Excise duty paid on dumpers and tippers. At this juncture, it is relevant to record that learned Counsel brought to our notice that few invoices indicate that dumpers and tippers were classified manufacturers under Chapter 84. If that be so, CENVAT credit on those goods needs to be considered that they would fall under the definition of capital goods; to that extent we remit the matter for consideration of adjudicating authority to arrive at eligible CENVAT credit. Imposition of penalties u/s 77(2) of the FA, 1994 - Held that: - penalty u/s 77(2) is not attracted in this case as there may be a genuine error in calculating the tax liability by the employees. Appeal allowed - decided partly in favor of appellant.
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2017 (3) TMI 567
Refund claim - N/N. 41/2007-ST dated 06/10/2007 - GTA services - denial on the ground of non-production of certain documents in support of service tax paid on GTA service availed for export of goods - Held that: - The service tax paid on GTA service for transport of empty containers in connection with the export of cargo was held to be eligible for refund by the Tribunal in various cases - a perusal of the invoice submitted by the appellant indicates that the export invoice itself contains various details like nature of cargo, lorry and container details alongwith the date of receipt for transport. The appellants submit that they have connected documents to link up payment of service tax to such transport. Accordingly, on submission of the relevant documents, the entitlements of the appellants for refund are to be settled - refund allowed - appeal allowed - decided in favor of appellants.
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2017 (3) TMI 566
Entitlement to interest u/s 11BB of the CEA, 1944 - delayed disbursement of refund - Held that: - reminder letter has no relevance to determine the time limit u/s 11B - Further, the learned Commissioner (Appeals) referred to the provision of Clause (ec) under Explanation B to Section 11B. The said provision is relating to consequential refund arising out of an appellate order. In the present case, I note that the refund claim has not arisen consequential to any appellate order. The appellate order only decides the correctness of the claim already filed and rejected by the Original Authority. This cannot be considered as a refund consequent on an appellate order - the refund amount paid is with reference to the original application for refund filed by the appellant - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 565
CENVAT credit - input services or not - advertisement services - broadcasting, banking and financial services - Chartered Accountant Services - Club or membership - Construction Services - Erection and Commissioning service - Held that: - the period involved is prior to 01.04.2011 when the definition of input services had a wide ambit as it included the words 'activities relating to business. The raising of funds and lending the same for interest is only for the purpose of investment which is turn used in the business of the respondent. Such activities would be included in the words ‘activities relating to business.' - investment cannot be classified as an activity and therefore separate accounts need not be maintained for such activities indulged by the respondent - appeal dismissed - decided against appellant.
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2017 (3) TMI 564
Liability of tax - demand on the ground that as the payment of freight to the transporters has been made by the appellant they are liable to pay service tax on such goods transport in terms of Rule 2 (1) (d) (v) of the Service Tax Rules, 1994 - Held that: - the appellants are neither the consignor nor consignee of the goods transported. Further, the appellant who is financing the purchase of fertilizer by the primary cooperative societies is also bearing the cost of transportation on behalf of the consignees (primary cooperative societies) as per the arrangement evolved by the Government. In such situation, it is clear that the appellant being neither a consignor nor the consignee cannot be put to the liability in terms of the above said rule for payment of service tax - appeal allowed - decided in favor of appellants.
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2017 (3) TMI 563
Penalty u/s 77 and 78 of FA, 1994 - cable operator service or not? - waiver of penalty by invocation of section 80 - Held that: - The appellant’s role is as an intermediatory and apparently there could be a bonafide belief on their part regarding the tax liability under the said category - they are not acting as a local cable TV operator in transmitting signals to the clients, neither they are involved in receiving satellite signals as a MSO - The Finance Act, 1994 borrows the definitions of ‘Cable operator’ and ‘Cable service’ from Cable Television Network (Regulation) Act, 1995. Considering scope of definition u/s 2 (aa) of the said Act there is a possibility of bonafide belief for non-tax liability - it is a fit case for invoking the provision of Section 80 for waiver of penalties imposed on the appellant - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 562
CENVAT credit - input services written off - out of pocket expenses, later written off as bed debt - whether the appellants are eligible to CENVAT credit of the service tax paid on the value of service, namely, out of pocket expenses shown in their bill along with professional fees, but not reimbursed by the receiver of the service and later written off from their books of account being bad debt? - Held that: - Rule 3(5B) of CENVAT Credit Rules, 2004 reveals that it is directed against the input or capital goods and not applicable to the input services, therefore, recovery proceeding initiated by Revenue on the credit attributable to the written off of value of the input service from the books of accounts, being bad debt cannot be sustained - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 561
Charitable trust - Validity of subsequent SCN - whether it is open to Revenue to issue SC for the second time invoking the extended period, especially for the period 1.4.2006 to 20.12.2007 i.e. the period falling after the period covered in the earlier SCN and the date of issue of the said SCN? - Held that: - deliberate defiance and the intention to avoid and evade the taxes were noticed - extended period has been rightly invoked The appellant did not reply to various communications from more than one and half years and did not file the Service Tax return also - section 80 could not be invoked - penalty u/s 78 upheld - appeal dismissed - decided against appellant.
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2017 (3) TMI 560
Condonation of delay - pre-deposit - Section 35F of the CEA - the appellant had filed a letter dated 02.09.2014 requesting for further time to make pre-deposit - Held that: - the appeal has been filed before Commissioner (Appeals) during the period when the mandatory deposit was introduced. The Commissioner (Appeals) ought to have granted a further opportunity to make the pre-deposit as requested by the appellant. As the appeal has been already filed, further adjournment for complying with the mandatory pre-deposit would not make the appeal time barred - as the appellant was not given reasonable time to comply with the mandatory pre-deposit, during the transitional period when the amendment was introduced, the appeal can be remanded to the Commissioner (Appeals) - appeal allowed by way of remand.
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2017 (3) TMI 559
Classification of services - services to ICICI Bank in relation to disbursal of loans to various customers - whether classified under Business Auxiliary Service or not? - Held that: - the appellants were acting as Direct Selling Agents for the banks and were engaged in promoting loans for the vehicles to be disbursed to various customers. Their activities included promotion of loan disbursal, facilitation of the buyer of vehicles in documentation and getting the loan amount from the bank. For this, the banks are paying certain commissions - the said activities are covered under the tax entry of “Business Auxiliary Service” in terms of Section 65(105)(zzb) of Finance Act, 1994 inasmuch as they are promoting and marketing the services provided by the client banks - appellants did not elaborate the background of their bona fide belief - demand upheld - appeal dismissed - decided against appellant.
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2017 (3) TMI 558
CUM tax benefit - the amount of mobilisation advances where tax twiced by the department while arriving at the demand - appellant claim that the department has stated that the demand is arrived after granting the CUM tax benefit, the details of calculation would show that the appellant has not been given such CUM tax benefit - Held that: - the appellant has received an amount of ₹ 1,68,35,716/- during the period 2006-07 to 2010-11. The department has taken this whole amount as taxable value and calculated the service tax demand on this amount. Therefore it is clear that the appellant has not been extended the benefit of CUM tax - mobilisation advances which had been taxed twice is maintained - there is a denial of CUM tax benefit even though it is stated to be given to the appellant, the matter requires to be remanded to the adjudicating authority to the limited extent of considering the CUM tax benefit - appeal allowed by way of remand.
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Central Excise
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2017 (3) TMI 557
100% EOU - breach of principles of natural justice - notice for personal hearing had not been served upon the petitioners in accordance with the provisions of section 37C of the Act - Held that: - under clause (a) of sub-section (1) of section 37C of the Act, in case of service of notice by speed post, the same has to be with proof of delivery - In the present case, it is an admitted position that the letter of personal hearing was sent to the petitioners through speed post; however, though details of date of despatch, etc. have been produced on record by the learned counsel for the respondents, including tracking number, there is no material by way of proof of delivery to the petitioners; whereas, on the other hand, it is the specific case of the petitioners that they have not received the notice for personal hearing - in the absence of any proof of delivery, it cannot be said that there is effective service of notice, as contemplated u/s 37C of the Act - the impugned order which has been passed ex parte is clearly in breach of principles of natural justice. In one single notice, a choice of three dates of hearing has been given and non-appearance on all the three dates has been considered to amount to three adjournments having been sought in terms of the proviso to section 33A of the Act - the petitioners or their representatives did not remain present on any of the dates, the adjudicating authority has proceeded further with the matter and has passed the order-in-original ex parte - is the order valid? - Held that: - by virtue of the provisions of sub-section (2) of section 33A of the Act, when a personal hearing is fixed, it is open to a party to seek time by showing sufficient cause and in such a case, the adjudicating authority may grant time and adjourn the hearing by recording the reasons in writing. However, in view of the proviso thereto not more than three such adjournments can be granted - It is not permissible for the adjudicating authority to issue one consolidated notice fixing three dates of hearing, whether or not the party asks for time, as has been done in the present case. Sub-section (2) of section 33A of the Act provides for grant of not more than three adjournments, which would envisage four dates of personal hearing and not three dates, as mentioned in the notice for personal hearing. Therefore, even if by virtue of the dates stated in the notice for personal hearing it were assumed that adjournments were granted, it would amount to grant of two adjournments and not three adjournments, as grant of three adjournments would mean, in all four dates of personal hearing. Petition allowed - matter is restored to the file of the adjudicating authority to decide the same in accordance with law - decided in favor of petitioner.
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2017 (3) TMI 556
CENVAT credit - input services - manufacture of Open Top Containers - Held that: - The appellant availed the accumulated Cenvat Credit on input service in relation to the Banking and other Financial Services, which were not directly or indirectly related to the manufacturing of the final products - the provider of output service M/s.Indian Container Leasing Co.Ltd., had accumulated Cenvat Credit, which has been transferred to a manufacturer of final products for utilisation in their factory, which is beyond the scope of Rule 10 of the CCR, 2004. And therefore, the lower authorities rightly denied the Cenvat Credit - It is a case of interpretation of the provisions of the CCR, therefore, the imposition of penalty u/s 11AC of the CEA, 1944, cannot be invoked - denial of Cenvat Credit, along with interest is upheld. Penalty imposed u/s 11AC is set aside - appeal allowed - decided partly in favor of appellant.
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2017 (3) TMI 555
Valuation - SSI unit - clearances exceeding exemption limit - whether the paints supplied by the respondent would require mandatory affixation of MRP or whether they are exempted from such requirement and in consequence, whether their assessment for levy of excise duty will be governed by Section 4A or Section 4 ibid? - Held that: - it clearly emerges that the packages cleared by the respondent were stenciled with the markings BHEL USE ONLY and BHEL APPROVED. In this regard, it is observed that Rule 34 of the said Rules provides exemptions from affixture of MRP on packages which have been specifically packed not only for exclusive use of any industry as a raw material but also a commodity for the purpose of servicing any industry etc. - The said paints are utilized exclusively by BHEL or their ancillary units for use on their final products (boilers etc.) as anti-erosion treatment for use on their original equipment manufactured by them. This being the case, the impugned goods are exempt from affixation of M.R.P in view of the special provisions of Rule 34 of the Standard Weights and Measures (PC) Rules,1977, especially since all conditionalities of the said Rule are satisfied. Rule 34 ibid being a special provision, will then override the other general provisions of the said Rules - When the statute has prescribed any special provisions excluding the application of other general provision therein, that special provision will prevail over the general provision - the valuation of the impugned goods would then not be under Section 4A of the Central Excise Act but under Section 4 only. In view of the discussions, and also keeping in mind that there was some genuine confusion concerning MRP assessment under Section 4A of the Act in the initial stages after its introduction, there shall be no penalty on the respondent-assessee. Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 554
Valuation - job-work - inclusion of various cost in the cost of raw material - job charges - transportation charges - Held that: - the value of goods manufactured by GIL on job work basis will necessarily be the cost of raw materials used in the manufacture of the item (including the cost of raw materials supplied free of cost) for the job work plus the job charges (including the profit of the job worker, if not already included in the job charges) The reduction from such costing of higher burning loss to the extent of 11% and treating the same as assessable value for discharge of duty liability is then without any basis by the appellant and has resulted in short payment of duty. Cost of transporting raw materials/inputs to the premises of job work will also be added to determine the cost of raw material/input. Unaccounted clearances of CTD bars/rounds - validity of quantification - Held that: - Since the discrepancy emerged, based on the declarations/information made/provided by GIL themselves to department, there is no need of further corroborating the same. In the event, here also there is no cause for interfering with the demand of differential duty of ₹ 8,35,693/-. Extended period of limitation - Held that: - investigation has successfully unearthed the questionable modus operandi of the racket who has caused prejudice to Revenue with intent to evade excise duty. Investigation has proved that clandestine removal of goods by the appellant was made following a pre-meditated design. Hence invocation of extended period of limitation in the notice under proviso to Section 11A of the Central Excise Act and its affirmation in the impugned order, are very much in order and does not require interference. Appeal dismissed - decided against appellant.
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2017 (3) TMI 553
Refund claim - unjust enrichment - Held that: - the issue of credit notes is not sufficient to discharge the burden of unjust enrichment - rejection of refund claim upheld. Finalization of provisional assessment - refund claim - Held that: - the amount of bonus discount tallies with the amount shown in sales/production orders - in few cases the credit notes have been issued before the issue of invoices - there can be grounds of allowing the deduction and not of disallowing the deduction. Nevertheless it is a fact that only sample data has been examined and not complete data - matter is remanded to the original adjudicating authority to examine the data of entire period and come to a conclusion regarding finalization of assessment - appeal allowed by way of remand.
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2017 (3) TMI 552
CENVAT credit - reversal on the ground that dual benefit of CENVAT Credit as well as benefit under income tax cannot be claimed simultaneously - whether the Appellants are required to reverse CENVAT Credit availed on the inputs, the value of which is shown as Revenue expenditure in the balance sheet? - Held that: - To be eligible to CENVAT Credit on inputs, nowhere in the CCR, 2004 it is stipulated that benefit of credit as well as benefit under Income Tax Act,1961 cannot be availed; and the credit be recoverable from the assessee on the ground of availing such dual benefit - The availment of dual benefit of CENVAT Credit as well as income tax benefit on the inputs could be a critera for determination of income tax liability, however, the CENVAT Credit in absence of any stipulation under CCR 2004, cannot be denied to the Appellant - the demand has been issued beyond five years from the relevant date as prescribed u/s 11A of CEA,1944, therefore, the demand is also time barred - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 551
CENVAT credit - change of name of manufacturer - Held that: - the machinery on which credit was availed by the appellant was used by them in the process of manufacture - the appellant has submitted copy of Fresh Certificate of Incorporation Consequent upon Change of name issued by the Registrar of Companies, West Bengal which clearly and in unambiguous manner bring out that only the name of M/s.Sitara Metals (P) Ltd., has been changed to M/s.Sitara Conductors & Cables Private Limited. Thus, there is no reason to believe that M/s.Sitara Metals (P) Ltd. and M/s.Sitara Conductors & Cables Private Limited (the appellant herein) are different persons and thus the invoices issued in the name of M/s.Sitara Metals (P) Ltd., prior to the change in name, has to be taken as that issued in favour of M/s.Sitara Conductors & Cables Private Limited - all the five (5) disputed invoices have been issued within 05.03.2008 which is prior to change in name since the change in name had taken place on 15.05.2008 - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 550
Applicability of Rule 6(3) of CCR, 2002/2004 - a byproduct called spent sulphuric acid emerging in the manufacturing process of LABSA - Such bye product whenever sold without end-use necessity of the law, duty was realized and that was paid to the treasury. Whenever this spent sulphuric acid is cleared with end-use requirement of N/N. 6/2002-CE dated 1.3.2002 for use thereof in manufacture of fertilizer, there was no duty realization made since such clearance is exempt as per the notification - appellant claims that clearances made to notified end user under specific notification being exempt, the case of the appellant is beyond the purview of Rule 6(3) of CCR, 2002/2004. Held that: - appellants conduct clearly shows that it has distinguished the clearances to two different buyers. The first category of buyers are duty paying buyers and the second category buyers are notified end users. Therefore, there appears no prejudice caused by appellant to Revenue to be debarred from grant of the CENVAT credit to it nor the prescribed percentage of levy is imposable on it - spent sulphuric acid not being final product, the appellant cannot be denied of the CENVAT credit available to it on the input used to manufacture LABSA. Mere emergence of spent sulphuric acid does not debar the appellant to this benefit - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 549
Job-work - the material is sent to the principal manufacturer of valve in Kanpur where the finished valves are produced - demand on the ground that appellants were not registered under Central Excise - benefit of N/N. 214/96 and N/N. 84/95-CE - Held that: - the principal requirement for availing N/N. 214/86 or N/N. 84/95 is that the principal manufacturer for whom a person is doing the job-work gives the undertaking to discharge the duty liability on the finished goods processed by the person, if the conditions of the notification are not met. These undertakings are not merely procedural undertaking but substantive undertaking in so far as by virtue of this undertaking, the principal manufacturer takes the responsibility of duty liability in case it arose - in the instant case, the benefit of these notifications cannot be extended to the appellant as the said undertakings have not been given by the appellant. The processes result in a substantial advance stage of manufacture of valves. The argument that there is no activity of manufacture, has no merit. Appeal dismissed - decided against appellant.
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2017 (3) TMI 548
Refund claim - time limitation - whether the amount of ₹ 3,03,525/- paid on 15.05.2003 under protest is a not hit by limitation, when the refund was claimed in the year 2008? - Held that: - the learned Commissioner (Appeals) has decided the issue in favor of the Appellant in the year 2004, which enabled the Appellant to file refund claim within the period prescribed u/s 11B of CEA, 1944. It is immaterial whether the Revenue had filed the Appeal against the order of the Ld. Commissioner(Appeals). The Appellant had not filed any claim after the said favorable decision in the year 2004, but it was filed only in the year 2008 - the refund claim is barred by limitation - appeal dismissed - decided against appellant.
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2017 (3) TMI 547
Imposition of penalty u/r 173Q of erstwhile CER, 1944 - shortage of finished goods - Excess quantity of 21569 Kgs of Guar Gum Powder - confiscation - redemption fine - whether the excess quantity of Guar Gum Powder found in the premises is liable for confiscation and penalty imposed for an admitted liability of short quantity of goods involved duty of ₹ 47,969/- is excessive or otherwise? - Held that: - the appellant in the Form-V register maintained by them, accounted the receipt and disposal of defective and returned materials and on the said date there was a stock of 12140 Kgs. of returned material. However, they could not furnish any plausible explanation for the remaining quantity of 9.00 MT with evidences. In these circumstances, in my opinion, imposition of fine is excessive and the same is reduced to ₹ 50,000/- - Similarly, even though shortages were noticed in the finished stock of Guar Gum Powder, but no evidences were brought out by the Revenue that the same were removed clandestinely without payment of duty. In the said circumstances, imposing penalty of equal to the duty on such shortage quantity would be excessive. Hence, to meet the ends of justice, the penalty is reduced to ₹ 5,000/- - appeal disposed off - decided partly in favor of appellant.
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2017 (3) TMI 546
Clandestine removal - M.S. Ingots falling under Chapter 72 of the Central Excise Tariff Act, 1985 - from monthly electricity bills, it was detected that the appellant had consumed electricity on an average of 1232 Units in the month of August, 2005 and 1570 Units in the month of September, 2005 for manufacture of Per M.T. of M.S. Ingots. However, the records recovered by the Department showed that the electricity consumption was between 688 and 691 Units PMT respectively - Held that: - The law is well settled that in case of allegation of clandestine removal, the onus entirely lies on the Revenue to prove with the help of positive and complete evidence that the goods were in fact removed clandestinely by the assessee - in the present case, The Department has not brought any iota of evidence of receipt and utilization of excess raw-material in the clandestine manufacture of finished goods, manufacture of finished goods with reference to installed capacity, labour employed and payment made to them, clandestine removal of M.S. Ingots with reference to the vehicle for transportation of such goods, statement of lorry drivers , amount received from the buyers and their statement regarding receipt of M.S. Ingots without proper and valid invoices. Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 545
Clandestine removal - shortage of stock - Held that: - No instance of any removal of goods, found to be shortage, has been adduced by the authority. No buyer of goods or evidence of removal such as, transportation of goods, receipt of consideration is appearing on record nor there seems to be any investigation on this account. In such case, only on the basis of acceptance of shortages by Shri R.S Tomar, who is employee of Appellant company, the duty demand cannot be upheld. As regard confiscation of seized cash and appropriation thereof against the demand, we find that the Commissioner has confirmed confiscation merely on ground of preponderance of probabilities, stating that the amount is of sale proceeds of short found goods - no investigation has been done to link the said cash with any receipt of clandestine removal - confiscation set aside. As regard imposition of penalties against Shri R.S. Tomar, Shri Deepak Gupta, Shri Anant S. Sheth and Shri T. Rama Rao, since the demand against M/s SKS Ispat does not survive, therefore no case for penalty is made out against the said persons. Appeal allowed - decided in favor of appellant.
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2017 (3) TMI 544
CENVAT credit - manufacturer of boiler, its components, parts and accessories - whether the goods fall under 84029020 or under 7308.90? - Held that: - Cenvat Credit will be available to M/s. Monnet Ispat Ltd. for the entire boiler which is undoubtedly capital goods. The various parts and components cleared in dis-assembled form should be classifiable under 8402 and would be entitled to Cenvat Credit. Even goods such as angles, channels, sections, etc. which are classifiable under chapter 73 and are used for fabrication in the factory for manufacture of supporting structures which ultimately become part of the boiler would also be eligible for Cenvat Credit - appeal allowed - decided in favor of appellant.
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2017 (3) TMI 543
SSI Exemption - N/N. 8/2003-CE dated 01.03.2003 - brand name/trade name - Department was of the view that the mark “TDPL” affixed by the appellant on the insulators supplied to M/s TDPL for further supply to State Electricity Board was the brand name or trade name of M/s TDPL and hence the appellant would not be eligible for SSI exemption in respect of the insulators supplied which were affixed with the brand name TDPL which did not belong to them - Held that: - Shri M. N. Mittal, Director of M/s TDPL in his statement dated 25.02.2010 has confirmed that such marks are required to be affixed on the insulators to facilitate the electricity boards to identify the supplier of insulator in case of rejection of the insulators by the Electricity Board. He has further clarified that these are not in the nature of brand name, but “TDPL” is only a mark required to be affixed on the insulator - It cannot be stated that the mark “TDPL” is a brand name owned by M/s TDPL - An identical issue already stands decided in favor of the appellant in the case of Avinash Prefabs vs. Commissioner of Central Excise, Bangalore [1999 (9) TMI 549 - CEGAT, CHENNAI], where it was held that the words ‘KEB’ which stand for Karnataka Electricity Board affixed on the goods cleared by M/s Avinash Prefabs cannot be treated as brand name or trade name and the SSI exemption cannot be denied to the goods affixed with the words ‘KEB’ - the appellant will be entitled to the benefit of SSI N/N. 8/2003-CE dated 01.03.2003 - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (3) TMI 536
Reversal of ITC - the assessment are sought to be re-opened and the ITC availed by the dealers are directed to be reversed, when a mismatch occurs, when either the purchaser or the seller fails to report the transaction in their annexure I or II returns respectively. Therefore, the first aspect to be looked into is, how this process of verification could be done by the Assessing Officer - The revenue objects to the maintainability of the Writ Petitions on the ground that the Act provides for an effective and efficacious alternate remedy and they seek for a direction upon the dealers to avail the alternate remedy and dismiss the Writ Petitions as not maintainable. Held that: - The Commissioner took note of the fact that mismatch reports have been generated by the Business Intelligent Unit, Interstate Investigation Cell, Enforcement Division and also by the Assessing Officers in the circles as a part of returns scrutiny or revision of assessment and that while such mismatch reports have been communicated in the form of notice to the dealer, the dealer wise mismatch projections alone are being enclosed and no detailed information provided. It was further observed that unless invoice wise data of mismatches are provided for each dealer, the dealer under analysis will not be able to come to a conclusion as to specific transactions for which, the tax is being demanded. Not providing invoice wise data of mismatch would tantamount to violation of principles of natural justice rendering the notices to be struck down by Appellate Forums and the High Courts. The problems on account of the mismatch is a Pan India problem and to my mind, the procedure adopted under the Delhi VAT Act regime and the circulars issued under the said Act, appear to be a more transparent system and assessee friendly. This can be borne in mind by the Revenue for necessary follow up action. In the instant case, there is no challenge to the statutory provisions and the complaint of all the dealer is largely on the procedure adopted by the respective Assessing Officers. The Principal Secretary and Commissioner of Commercial Taxes was conscious of the problems faced by the dealers as complaints were received which had lead to issuance of a circular as early as on 01.04.2015. The directions contained in the said circular are very pointed direction, but it is sad to note that the circular remains only on paper and seldom Assessing Officers follow the circular resulting in several assessments being set aside by the Court and remanded for denova consideration. Thus, this Court is fully convinced that the procedure adopted by the respondent, Assessing Officers in all these cases are half baked attempts, which have not yielded results and these cases are before this Court or before the Appellate Authorities and all that the Assessing Officers can record is that they have issued show cause notices or passed orders reversing the Input Tax Credit with no appreciable impact on the revenue collection. Matters are remanded to the respective Assessing Officers, to undertake a fresh exercise by conducting a thorough enquiry in consultation with the Assessing Officers of the other end dealer - petition allowed by way of remand.
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2017 (3) TMI 535
Works Contract - the supply of machine crushed track ballast would come within the fold of works contract or not? - deduction of 85% towards labour and service charges - Whether the ballast or boulder or chips is exigible to tax at the rate of 4% or 12% of the taxable list? - Held that: - although the ballasts supplied at Serial No.1 are also required to be loaded to the Railway wagons. It is needless to opine that the loading of ballasts supplied is a labour charge and the same cannot be termed as a sale after going through the contents of the deed of contract. On the other hand, the supply and delivery of stacks including all other nature of works as agreed to between the parties as per Serial No.1 is a sale. The order of the Tribunal is correct for deducting the loading charges while computing the sales tax. Whether the sale of ballasts or boulders or chips including all incidental charges as per Serial No.1 of the tender schedule stated above “mineral” or not? - Held that: - the word “mineral” is a word of common parlance used in various way but cannot be used in narrow sense. Similarly, it appears from the aforesaid decision that entries in the schedules of sales tax and excise statutes draws colour from the other words therein because of the principle of noscitur a sociis. Thus depending on the aforesaid doctrine in the present context, we have to see whether the ballast is a mineral even if it is not to be defined as mineral under the Act, 1957 or Rules made thereunder. Since the facts are clear in this case to show that the ballast has been prepared from the spalls which are extracted from the quarry taken by the opposite parties on payment of royalty and it has not been defined separately in the tax list, it is to be understood with common parlance - taking the “common parlance test” without going to the reasons by the Tribunal, the result is same to the effect that the ballasts, boulders or chips are nothing but “mineral” under Sales Tax Act exigible to tax at the rate of 4% as per Entry 117 of the taxable list. Whether such fresh plea can be raised in the second appeal without the same being raised in the forums below? - applicable rate of tax - Held that: - there it is question of law as interpreted by parties - It is trite in law that the question of law can be raised at any stage. Moreover, the contention of the State that such plea of exigibility to tax at the rate of 4% of the taxable list before the Tribunal is barred by limitation is not acceptable as the said being question of law can be raised at any stage. Revision dismissed - decided against revisionist.
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2017 (3) TMI 534
Condonation of delay - delay in filing appeal - Held that: - the appeals have been filed within six weeks as has been directed by the Hon'ble Supreme Court. Once the appeals have been entertained now the only limitation left is three month outer time limit as given in the order dated 18.12.2015, within which the appeals shall be disposed of by the appellate authority. That is the reason why the appellate authority, as informed by the learned Senior Counsel appearing for the petitioner, has fixed the date of hearing on 20.02.2017. Therefore, within the three months time stipulated in the said order of the Division Bench, the appeals would be expeditiously considered and decided. In view of the time stipulation, it has to be scrupulously followed by the petitioner as well the appellate authority are concerned - petition allowed - decided in favor of appellant.
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