TMI Tax Updates - e-Newsletter
March 9, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Non deduction of TDS from transport payments u/s. 194C - Once there is a verbal contract the provision of section 194C will apply and once provisions of section 194C apply the provisions of 40(a)(ia) of the Act will apply. - AT
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Income Tax:
Excessive payment made to persons specified in section 13(3) - charitable society - AO was not justified in disallowing 2/3rd of the expenditure incurred in the remuneration of the four persons u/s 40A(ii)(b) of the Act. - AT
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Income Tax:
Deduction under Section 80-IB(10) - deduction is allowed to a housing project (subject to fulfilling all other conditions) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not. - AT
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Income Tax:
Non-deduction of TDS on the agency commission paid to non-resident agents u/s 195 - commission payments to the non-resident agents are not taxable in India as the services are rendered abroad and the agents have no PE in India. - AT
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Income Tax:
Exemption under section 54 - residential house was habitable or not - At this point of time i.e. 5 years after the construction in 2009, it would not be possible to verify the condition of the building or whether it was inhabitable at that point in time - AT
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Income Tax:
Penalty levied u/s 158BFA(2) - Tribunal has sustained the addition on estimate basis and the Tribunal could not come a conclusion from the seized material that there was undisclosed income in incurring interior decoration works - No Penalty - AT
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Income Tax:
TDS u/s 194J - payments made to hospitals by TPA - when the said payment has not been claimed as expenditure incurred for earning the income by the assessee then the provisions of section 40(a)(ia) is not attracted for non deduction of tax at source in respect of the said payment - AT
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Income Tax:
Payment of expenditures in cash - payment to the Government undertaking for supply of electricity are not covered by the provisions of section 40A(3) - addition made by AO deleted - AT
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Customs:
Rejection of refund claim - 100% EOU - Export of bonded goods - Had authorities realized, the difficulty would not have arisen and the appellant would have got refund of Customs duty paid by them. Thus I find the appellant has not followed the procedure correctly - refund allowed without interest - AT
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Central Excise:
Exemption under Notification No. 67/95-CE - Manufacture of clinker - Captive consumption - The clinker is not eligible for exemption under Notification No. 50/03-CE as it is in the negative list of the exemption - AT
TMI Short Notes
Articles
Notifications
News
Case Laws:
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Income Tax
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2015 (3) TMI 193
Non deduction of TDS from transport payments u/s. 194C - CIT(A) deleted disallowances - whether there is a contract for hiring of carriers of goods from the transport company, who are having goods carriage? - Held that:- Admittedly, the assessee has debited carriage inward expenses paid to six transport contractors, who are transport companies having in the carriage business for the purpose of hiring towards carriage of goods. Definitely, once the hiring is made, the contract exists, as to whether verbal or written. Once there is a verbal contract the provision of section 194C will apply and once provisions of section 194C apply the provisions of 40(a)(ia) of the Act will apply. See ITO Vs. MGB Transport [2013 (11) TMI 1321 - ITAT KOLKATA] - Decided in favour of revenue.
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2015 (3) TMI 192
Disallowance u/s 14A read with Rule 8D - CIT(A) deleted the disallowance holding that assessee has not received any exempt income - Held that:- We are of the view, Section 14A of the Act cannot be invoked. In this appeal, the revenue has not dispelled the findings of the CIT(A), nor the statement of the assessee before AO that assessee is not in receipt of any dividend income and hence according to us, the Assessing Officer has erred in invoking Section 14A of the Act, to disallow various interest payments on capital account, security deposits and unsecured loans. See JCIT v. Holland Equipment Co. B.V. [2005 (4) TMI 514 - ITAT MUMBAI]. Also in the case of CIT Vs. Winsome Textiles Industries Ltd. (2009 (8) TMI 220 - PUNJAB AND HARYANA HIGH COURT) the Hon’ble Punjab & Haryana High Court held that when there is no claim for exemption of income in such situation section 14A has no application. - Decided in favour of assessee.
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2015 (3) TMI 191
Excessive payment made to persons specified in section 13(3) - AO also disallowed 2/3rd of the expenditure amounting to ₹ 14,64,000 incurred on the remuneration of four persons u/s 40A(2b) - CIT(A) allowed the claim - Held that:- We clearly observe that the CIT(A) granted relief for the assessee pertaining to the disallowance of ₹ 14,64,000 by observing that the AO did not make any disallowance in AY 2007-08 in the assessment order passed u/s 143(3) of the Act dated 30.12.2009. The CIT(A) further observed that keeping in view the fact that the entire salary paid to the three office bearers was allowed by the AO in AY 2007-08, the CIT(A) did not uphold the disallowance made by the AO in AY 2008-09 on this issue. In this situation, we are in agreement with the conclusion of the CIT(A) that the AO was not justified in disallowing 2/3rd of the expenditure incurred in the remuneration of the four persons u/s 40A(ii)(b) of the Act. On this issue, we are unable to see any infirmity or perversity in the impugned order and conclusion of the CIT(A) is upheld. - Decided against revenue. Eligibility to claim of exemption u/s 11(1) - Held that:- Once the status of the appellant trust is held to be that of charitable society eligible for claim of exemption u/s 11(1)(a) of the Act, then the CIT(A) rightly directed the AO to allow the claim of the assessee for exemption u/s 11(1) of the Act. On the basis of foregoing discussion and observation, we reach to a conclusion that the CIT(A) granted relief for the assessee on cogent and justified reasons and the CIT(A) was also justified in allowing the claim of the assessee for exemption u/s 11(1) of the Act. - Decided against revenue.
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2015 (3) TMI 190
Deduction under Section 80-IB(10) - disallowance on the ground, that the assessee has obtained 6 planning permits for construction of 6 blocks (treated as 6 projects by Revenue) on a land measuring little over one acre - Held that:- The Hon'ble Bombay High Court in the case of Vandana Properties (2012 (4) TMI 54 - BOMBAY HIGH COURT ) while dealing with similar controversy has held that all the approved housing projects on the same land are eligible for claiming deduction under Section 80-IB(10), if otherwise they fulfill the conditions set out under Section 80-IB(10). plain reading of Section 80IB (10) does not even remotely suggest that the plot of land having minimum area of one acre must be vacant. The said Section allows deduction to a housing project (subject to fulfilling all other conditions) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not. In these circumstances, construing the provisions of Section 80IB (10) by adding words to the statute is wholly unwarranted and such a construction which defeats the object with which the Section was enacted must be rejected. Thus we hold that the assessee is eligible to claim deduction under Section 80-IB(10) in respect of its project "Voora Prithvi" situated at Kamaraj Salai, Kottivakkam. - Decided in favour of assessee.
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2015 (3) TMI 189
Non-deduction of TDS on the agency commission paid to non-resident agents - CIT(A) deleted the disallowance u/s 40(a)(i) - Held that:- TDS is required to be deducted on all payments to non-residents if the said payments are liable for tax in India. In the instant case, the commission payments to the non-resident agents are not taxable in India as the services are rendered abroad and the agents have no PE in India. Therefore, there is no requirement to deduct TDS on these payments. See GE India Technology Cen. P Ltd. v. CIT 2010 (9) TMI 7 - SUPREME COURT OF INDIA ) - Decided in favour of assessee.
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2015 (3) TMI 188
Exemption under section 54 - residential house was habitable or not - Held that:- The claim of the assessee is that the house was habitable and there is no material evidence brought on record by the lower authorities to controvert the averments of the assessee or to disbelieve the assessee's claim. At this point of time i.e. 5 years after the construction in 2009, it would not be possible to verify the condition of the building or whether it was inhabitable at that point in time. On the basis of the material on record, we are satisfied that the assessee has fulfilled the conditions for grant of exemption under section 54 of the Act. Incoming to this finding, we draw support from the decision of the co-ordinate bench of this Tribunal in the case of M.A. Patel (2012 (9) TMI 360 - ITAT, BANGALORE) which has been followed by another co-ordinate bench of this Tribunal in the case of Dr. R. Balaji (2015 (2) TMI 149 - ITAT BANGALORE) relied on by the learned Authorised Representative wherein on similar facts the Tribunal held that the assessee would be entitled to exemption under section 54 of the Act. Following the aforesaid decision of the co-ordinate benches of this Tribunal (supra), we direct the Assessing Officer to allow the assessee exemption claimed under section 54 of the Act. - Decided in favour of assessee.
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2015 (3) TMI 187
Penalty levied u/s 158BFA(2) - Difference in remuneration received - ₹ 9.00 lakhs - CIT(A) deleted penalty levy - Held that:- Tribunal has considered all the submissions made by the assessee, the seized material, surrounding circumstances, conduct of the assessee’s father who maintained the record and finally has given a finding that the remuneration was ₹ 36.00 lakhs. Under these set of facts, we are unable to agree with the contention of the Ld A.R as well as with the view expressed by Ld CIT(A) that the addition of ₹ 9.00 lakhs has been sustained on estimate basis. In our view, the above said addition has been sustained on the basis of seized material only. Hence, we are of the view that the assessing officer was justified in levying penalty on the above said addition u/s 158BFA(2) of the Act. - Decided in favour of revenue. Unaccounted expenditure on renovation of flat of ₹ 5.00 lakhs - Held that:- Tribunal has given a finding that there were overlapping in the seized materials wherein the items of work were found noted. Under these circumstances, the Tribunal has estimated the amount spent on interior works of three flats at ₹ 40.00 lakhs and thus sustained the addition to the extent of ₹ 5.00 lakhs. Hence, we agree with the view expressed by Ld CIT(A) on this addition that the Tribunal has sustained the addition on estimate basis and the Tribunal could not come a conclusion from the seized material that there was undisclosed income in incurring interior decoration works. Hence, in respect of this issue, we agree with the Ld CIT(A) and accordingly hold that the first appellate authority was justified in directing the assessing officer to delete the penalty. - Decided in favour of assessee.
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2015 (3) TMI 186
Exemption u/s 54B disallowed - Held that:- The contention of the Assessing Officer is that the assessee failed to produce the evidence indicating the user of the land. On the other hand the assessee has submitted copy of the Revenue record maintained by the Revenue Officers of the State Govt. On due consideration of the remand report vis-à-vis the evidence submitted by the assessee, we are of the view that the learned Assessing Officer failed to make an analytical investigation on this issue.The learned Assessing Officer ought to have collected revenue record from the Revenue Officer, which could indicate the status of land in the past. Therefore, we are of the view that ends of justice would meet, if we set aside this issue to the file of the Assessing Officer for fresh inquiry. - Decided in favour of assessee for statical purposes. Addition u/s 69 - unexplained investment in the purchase of land - Held that:- cording to the assessee, M/s Exora Business Park (P) Ltd had paid a sum of ₹ 32,41,981/- vide cheque dated 24.04.2007. The contention of the assessee is that this concern is the power of attorney holder of the assessee. The assessee raised this plea before the learned CIT (A). In the remand proceedings, the learned Assessing Officer had written a letter to this concern and sought its explanation. The letter was returned back with the Postal Departmental remark “no such office on this address”. Thus the Assessing Officer did not accept the contention of the assessee. The assessee has sought to file copy of the cheque which was received from this concern. On an analysis of the evidence produced before us, we are of the view that it is to be investigated as to why this concern has paid this much of amount to the assessee. A complete investigation is required on this issue. - Decided in favour of assessee for statical purposes.
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2015 (3) TMI 185
Non deduction of TDS u/s 194J - payments made to hospitals - disallowance u/s 40(a)(ia) - proceedings under section 201 initiated - Held that:- Provisions of section 40(a)(ia) cannot be invoked for non deduction of tax by TPA service provided being a conduit between the insurer and hospital/ the insured. Though the assessee is under the obligation to deduct tax at source under section 194J however, the consequential liability is only under section 201 and 201(1A) and the disallowance under section 40(a)(ia) cannot be automatic when the assessee has not claimed this payment as expenditure against the income. The assessee has shown the income, only the service charges receivable from insurance companies for rendering services as 3rd party administrator and not having any margin or profit element in the payment received from the insurers for the purpose of remitting to the hospitals to settle medical claim of the insured. Therefore, when the said payment has not been claimed as expenditure incurred for earning the income by the assessee then the provisions of section 40(a)(ia) is not attracted for non deduction of tax at source in respect of the said payment. Thus we hold that no disallowance can be made under section 40(a)(ia) in respect of the payment in question. - Decided in favour of assessee.
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2015 (3) TMI 184
Unexplained sundry creditors - addition of 5% of trade creditors deleted by CIT(A) - Held that:- With respect to the addition of 10% of the cultivated creditors the assessee had already disclosed ₹ 25 lakhs in the earlier assessment year, it was restricted to 5% of the trade creditors. The table given shows that the assessee had disclosed ₹ 25 lakhs in the hands of the firm and a further sum of ₹ 25 lakhs was disclosed in the hands of the partners. AO had not disputed the purchases made, the turn over achieved, consumption, closing stock, trade results, etc. The assessee submitted that it never recorded the full address of the agriculturists and it was the general practice of the assessee over the years. As per list submitted by the assessee before authorities in respect of trade creditors, there are trade creditors running into hundreds. The Assessing Officer did not dispute all these facts and only proceeded to disallow 5% of the trade creditors, after considering that the assessee had disclosed ₹ 25 lakhs in the earlier year. Under these circumstances, the CIT(A) held that the addition made by the Assessing Officer does not have legs to stand. We do not find any infirmity in the order of the CIT(A) and uphold the same. - Decided against revenue. Payments to APNPDCL violating the provisions of rule 6DD - CIT(A) allowed the claim - Held that:- transactions have been recorded in the books and are genuine payments in the course of business. By Rule 6DD(b) the payments are exempted as the payment is to Government undertaking. Rule 6DD(b) reads as 'where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender. The assessee placed reliance on the order of ITAT Delhi Bench in the case of MR Soap Pvt. Ltd. vs. Inspecting ACIT, (1988 (9) TMI 95 - ITAT DELHI-D ) wherein it was held that cash payments made to Government Undertaking do not attract the provisions of Section 40A(3) of the Act. Since the facts of the present case are similar, the payment to the Government undertaking for supply of electricity are not covered by the provisions of section 40A(3), this addition is deleted. We do not find any infirmity in the order of the CIT(A) and the ground raised by the Revenue on this issue is dismissed. - Decided against revenue.
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Customs
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2015 (3) TMI 201
Denial of refund claim - Unjust enrichment - Held that:- even when Section 27 had provisions relating to provisional assessment prior to when Section 18 was not amended prior to 2006 to incorporate the provisions of the bar of unjust enrichment, the provisions of the bar of unjust enrichment would not apply. The bar of unjust enrichment arises after process of finalization of adjustment of duty and assessment is completed, and thereafter the Larger Bench of the tribunal arrived at the decision that in case of security deposit made provisionally and the assessment was finalized, the bar of unjust enrichment is not applicable. The same view was taken by the Larger Bench of the Tribunal in the case of Panasonic Battery India Co. Ltd. (2013 (9) TMI 652 - CESTAT AHMEDABAD). bar of unjust enrichment is not applicable - Decided in favour of assessee.
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2015 (3) TMI 200
Rejection of refund claim - 100% EOU - Export of bonded goods - Duty free clearance of imported capital goods - Payment of duty without physical clearance of goods - After few weeks they located a customer abroad and decided to export the said machine. Accordingly they exported the machine on 22.1.2004 after obtaining due permission. While exporting the machine, they followed ARE1 procedure i.e. they filed ARE-1, the goods were examined by the jurisdictional Inspector and Superintendent prior to its clearance from the EOU and thereafter goods were allowed for export - The refund claim was rejected by the original authority on the ground that the machine was exported after de-bonding and the provisions of Section 27 of the Customs Act, 1962 was not applicable for sanctioning the said claim. Held that:- It is observed that the goods were initially imported without payment of duty. The goods were taken to a 100% EOU which is the Customs bonded area under Section 58 of the Customs Act, 1962. The goods continued to be in the Customs bonded area. They filed the ex-bond Bill of Entry and paid the duty. Even though they paid the duty the goods were not physically removed from the bonded area. When the goods were exported the appellants did not follow the procedure prescribed under Section 69 of the Customs Act, 1962 but filed ARE1. ARE1 procedure is for the excisable goods domestically produced and is with reference to the excise duty and not with reference to Customs duty. Unfortunately even the jurisdictional Inspector and Superintendent did not realize this procedural irregularity and examined the goods and allowed the export under AREI. It appears that neither jurisdictional Superintendent and Inspector nor the appellant have realized that they are required to follow the procedure as stipulated under Section 69 of the Customs Act, 1962, as the goods were still bonded under Section 58 of the Customs Act, 1962 and ARE-1 procedure is applicable to excisable goods produced in India, which is not the case here. Had any one of them realized, this difficulty would not have arisen and the appellant would have got refund of Customs duty paid by them. Thus I find the appellant has not followed the procedure correctly. Even the Central Excise officials have not dealt with the correct procedure. On a query from the Bench, the learned advocate on the instructions from his clients stated that they would be willing to forgo the interest in view of the peculiar circumstances of the case if the refund is sanctioned. In the interest of justice, keeping in view the fact that they have been paid the said duty which was chargeable only if the goods were physically cleared for home consumption. The goods were not physically cleared for home consumption but were exported. For export of the goods no such duty was chargeable but the appellant was required to follow Section 69 procedure, I allow the appeal. The appellant would be entitled for the said refund claim subject to other requirements being satisfied. However, as undertaken by the appellant, no interest would be payable. - Decided in favour of assessee.
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2015 (3) TMI 199
Validity of review order - bar of limitation - Power of Commissioner to remand the matter - Held that:- In the appeal filed by the department, the date of receipt of the order is mentioned as 26.8.2011 and the review order has been passed by the Commissioner on 25.11.11 which is within the three months period prescribed under the law. In view of this position, we do not find that the contention of the appellants is correct and hold that the appeal has been filed within the time limit. - Commissioner (Appeals) has not remanded the matter back to the original authority but has set aside the order of the original authority as not proper. In view of this position, the contention of the appellants also holds no water. As far as the appellants' submission on merits are concerned, we find that the original authority has not discussed implications of various expenditure incurred by the appellants in relation to technical assistance and management service fee, IT Infrastructure fee, Brand Sharing cost, Business Promotion Expenses and Training Expenses as also certain other remittance made to their principals. The original authority must discuss each of these expenses and come to his finding whether any of these expenses have affected invoice value of the goods being imported after going through various agreements relating to such remittance as also examining various agreements relating to such remittance as also examining various invoices against which the payments have been made. The last contention of the appellants is that they are paying service tax on some of these activities and therefore, no customs duty can be charged. - Matter remanded back - Decided in favour of assessee.
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2015 (3) TMI 198
Waiver of pre deposit - Benefit of Exemption Notification No.21/2002-Cus., dated 01.03.2002 - Classification of goods - Classification under CTH 90229090 or CTH 370110 - Held that:- there is dispute in the facts of the classification of the goods. Prima facie , we find that these goods are used as X-ray plates as evident from the literature of the CDM 4.0 General Plate and General Cassettee. On a query from the Bench, the learned Authorised Representative submits that the supplier also classified the imported goods under Chapter 37 of the CETA, 1985. In view of that the applicant failed to make a out a strong prima facie case for waiver of the entire amount of duty along with interest. Accordingly, we direct the applicant to pre-deposit a sum of ₹ 4,00,000 within a period of six weeks. Upon deposit of the said amount balance amount of duty along with interest would be waived till disposal of the appeal. - Partial stay granted.
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Corporate Laws
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2015 (3) TMI 197
Jurisdiction to levy penalty by Competition Commission of India (CCI) - Sections 3 and 4 of the Competition Act, 2002 - Principles of natural justice - Held that:- This Court is of the opinion that the petitioner's argument of lack of jurisdiction is misplaced as neither CCI nor Competition Appellate Tribunal (COMPAT) lack inherent jurisdiction to decide the petitioner's first submission as to whether Act, 2002 applies to the proceedings or not. This Court is of the view that issues of applicability of Act, 2002 or Monopolies and Restrictive Trade Practices Act, 1969 and levy of penalty are not equivalent to lack of inherent jurisdiction to decide the case. Consequently, in the opinion of this Court, it is only the CCI and COMPAT which have the jurisdiction to decide the issue of applicability of Act, 2002 as well as the issue of levy of penalty thereunder. As far as the issue of principles of natural justice is concerned, this Court is of the opinion that both COMPAT and CCI have adhered to it and parties have been given not only liberal, but a full hearing even at the interlocutory stage. The issue as to whether two reports prepared by the Director General, namely, Case No.29/2010 and RTPE 52/2006 are practically identical, would be examined by the COMPAT at the final hearing stage. This Court is also in agreement with the prima facie conclusions arrived at by COMPAT in its impugned order. Moreover, this Court is of the view that COMPAT has also passed similar orders requiring other cement manufacturers to pre-deposit ten per cent of the penalty imposed on them by CCI. In the light of said orders, this Court is of the view that the impugned order is fair and reasonable and requires no interference at this interlocutory stage in writ proceedings. - Decided against the appellant.
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2015 (3) TMI 196
Winding up application under Section 433(e) and 434 of the Companies Act, 1956 - Where the company is solvent and claim raised by the creditor is disputed by the respondent company, then a proceeding for winding up is not maintainable. Held that:- In the present case, it is not disputed that the materials were supplied by the petitioners to the respondent. In Co. Pet. No.373/2012, the petitioner has raised a claim for an amount of ₹ 1,03,18,917/- and in Co. Pet. No.375/2012, the petitioner has claimed an amount of ₹ 1,18,11,927/- towards the supplies made to the respondent. The respondent, however, disputes the claim of the petitioners on the ground that the petitioners supplied inferior quality material due to which the respondent alleged that it had suffered huge losses which the petitioners were liable to make good. It is pertinent to note that the dispute with regard to inferior quality of the goods supplied by the petitioner was raised by the respondent in its reply to the notice issued under Section 138 of the NI Act and the respondent had also raised debit notes on that account. Therefore, the dispute existed even before issuance of the statutory notice under Section 434(1)(a) of the Act and filing of the present petitions. The respondent by its similar replies dated 20.03.2012, 30.03.2012 and 30.04.2012 replied to various notices issued by the petitioner under Section 138 of the NI Act. Although, there appears to be some disputes with regard to the quality of goods, however, substantial parts of the amount claimed by the petitioner is undisputedly payable by the respondent. And, the respondent not only tendered the amount as admitted by it but also tendered the amount disputed by the respondent for which debit notes were issued. This itself indicates that the respondent company is able to pay its debts and could not be considered as commercially insolvent. In view of the above, I am unable to accept that the respondent company is unable to pay its debts and is liable to be wound up by virtue of Section 433(e) of the Act. - Winding up application dismissed.
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Service Tax
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2015 (3) TMI 215
Waiver of pre deposit - gross errors committed by the Department in the computation of service tax demand - Held that:- Even as per appellant's own version in respect of the services provided to two of the entities viz. M/s. Singareni Colleries Company Ltd. and M/s. ONGC Ltd., the service tax liability amounted to ₹ 6 crores. There is no evidence placed before us with regard to the contention that the service tax demand confirmed in the impugned order is incorrect or what is the correct amount of service tax demand that the appellant is liable to pay. In the absence of any such evidence, we are unable to agree with the contention of the appellant that the service tax demand confirmed in the impugned order is incorrect. In the absence of a prima facie case, the financial hardship pleaded by the appellant cannot be accepted for waiver of predeposit of the service tax dues adjudged the appellant - Partial stay granted.
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2015 (3) TMI 214
Maintenance and repair service - Imposition of interest and penalty - Held that:- vide Section 99 of the Finance Act, 2013, retrospective amendment was made to the effect that no service tax shall be levied or collected in respect of taxable service provided by Indian Railway during the period prior to 1.10.2012. In view of the retrospective amendment, the impugned order is set aside - Decided in favour of assessee.
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2015 (3) TMI 213
Waiver of pre deposit - Repair & Maintenance service - Held that:- Court have heard such cases of maintenance and repair and cleaning service and directed the appellant to deposit 40% service tax demand. Accordingly, we direct all these four appellants to deposit 40% of service tax demand against each such appellant - Subject to deposit of above amount in cash appeal, there shall be waiver of pre-deposit of balance amount during the pendency of appeals. - Partial stay granted.
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Central Excise
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2015 (3) TMI 209
Waiver of pre deposit - Duty demand under Rule 8 of the Central Excise (Valuation) Rules, 2000 - Held that:-Provision of Rule 8 will not get attracted. Following decision of Advance Surfactants India Ltd. Vs. CCE, Mangalore [2011 (3) TMI 1380 - CESTAT, BANGALORE] - applicants have made out a strong prima facie case for waiver of entire amount of duty along with interest and penalty. Accordingly, we grant waiver of predeposit of duty along with interest and penalty and stay its recovery during the pendency of the appeals - Stay granted.
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2015 (3) TMI 208
Waiver of pre deposit - CENVAT Credit - Imposition of interest & penalty - Held that:- Authority has clearly recorded that the total Cenvat Credit in respect of common inputs services taken by them was not reversed and only an amount of ₹ 80,006/- was reversed by them. Further, the adjudicating authority has also observed that the reversal of Cenvat credit subsequently in this manner does not absolve them from the obligation under Rule 6(3) of the Cenvat Credit Rules, more so when the period involved in this case is outside the period for which a retrospective amendment was made to give relief to the assessee in such situation where for relatively small amount of Cenvat credit on common input/common inputs services, relatively large liabilities arose due to the operation of Rule 6(3) ibid. While detailed analysis of the appellants contentions is not warranted at the stage of deciding their stay application, prima facie, it is evident that the appellants had indeed taken Cenvat Credit of common input services. Therefore prima facie the impugned order does not seem to suffer from any legal infirmity. Thus, while the appellants have not been able to make out a good prima facie case to justify full waiver of pre-deposit, having regard to the appellants contention regarding non-invocability of the extended period, we are of the view that a pre-deposit of ₹ 75 lacs would meet the requirements of Section 35F of Central Excise Act, 1944. - Partial stay granted.
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2015 (3) TMI 207
Penalty under Rule 26 - Whether penalty can be imposed under Rule 26 of the Central Excise Rules, 2002 on high-seas seller who has not dealt with the excisable goods - Held that:- Prima facie, the said Rule 26 of the Central Excise Rules, 2002, as it stood in 2003, did not provide for imposition of such penalty. Therefore, the appellant has made out a prima facie case for waiver. Accordingly, we grant waiver from pre-deposit of the penalty adjudged against the appellant and stay recovery thereof during the pendency of the appeal. - Stay granted.
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2015 (3) TMI 206
Benefit of Notification No.24/2012-CE, dt.08.05.2012 - Levy of duty on the product TOW - TOW arises during the course of manufacture of Polyester Staple Fibre (PSF) and Polyester Staple Yarn (PSY) - Held that:- by Clause 103 of Finance (No.2) Bill 2014, it proposed by a retrospective amendment for exemption to TOW which comes into existence during the period 29.06.2010 to 07.05.2012 - Gazetted copy of the Finance Bill which has been produced and note the fact that by said Clause No.103 of the Bill it is rightly stated by ld.Counsel. We are informed Honble President of India was pleased to assent the Finance Act, 2014 and there is no change in said Clause No.102 and 103 of the Finance Bill, 2014. - As there is legislative intent to exempt TOW by a retrospective amendment and that the period involved in this case is covered by the retrospective amendment, we are of the view that the impugned order is liable to be set aside - Decided in favour of assessee.
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2015 (3) TMI 205
Waiver of pre deposit - CENVAT Credit - Held that:- Prima facie, ongoing through the invoices enclosed with the Appeal Memorandum, it is found that basic requirement of availing the CENVAT Credit has been complied with. I do not see any discrepancy at this stage, in the said invoices. In the result, the Applicant could able to make out a prima facie case for total waiver of the dues adjudged against them. Accordingly, predeposit of the dues adjudged is waived and its recovery stayed during the pendency of the Appeal - Stay granted
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2015 (3) TMI 204
Exemption under Notification No. 67/95-CE - Manufacture of clinker - Captive consumption - Held that:- Both the sides agreed that the issue involved in this case stands decided against the appellant by the Tribunal judgment in the case of Associated Cement Co. Ltd. vs. CCE, Chandigarh reported in [2006 (3) TMI 615 - CESTAT, NEW DELHI], wherein the Tribunal has held that when the cement unit is availing of area based exemption Notification No. 50/03-CE and clinker is captively used for manufacture of cement, the same would not be eligible for exemption under Notification No. 67/95-CE. The clinker is not eligible for exemption under Notification No. 50/03-CE as it is in the negative list of the exemption. In view of this, there is no infirmity in the impugned order - Decided against assessee.
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2015 (3) TMI 203
Waiver of pre deposit - Black Sand (Dross) cleared by the appellant without payment of duty - Held that:- Appellant is a manufacture of Iron and Aluminium Castings. It is a fact that for manufacture of moulds, natural sand is used for preparation of sand-moulds which is mixed with resin or other materials to hold the sand mould together. After the castings are manufactured, the sand, which is burnt become black which is cleared as a waste. The Burnt Sand is sold for consideration and also is used for various other user industries. It is noticed that this very Bench in the case of Madras Aluminium Co. Ltd. Vs CCE Salem reported in [2005 (4) TMI 233 - CESTAT, CHENNAI] allowed the appeal on similar issue. Therefore, the appellant has prima facie made out a case for total waiver of predeposit and stay of its recovery. Accordingly, we waive the predeposit of duty along with interest and penalty and stay recovery thereof till disposal of the appeals - Stay granted.
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2015 (3) TMI 202
Area based exemption - Refund - Benefits under exemption Notification No. 56/2002-CE dated 14.11.2002 - refund of central excise duty of the said amount remitted, in excess of the duty liability, by including the value of outward freight incurred on fungicides, herbicides, insecticides, PGR etc. manufactured by it - Inclusion of ineligible freight - Additional Commissioner dropped the proceedings by recording the finding that purchase orders do not mention freight separately from the purchase value; these orders were on FOR basis; and in particular, there was no evidence to establish that the value of freight was charged separately from buyers of the final products manufactured by the assessee. Held that:- Following decision of Hard Castle Petrofer Pvt. Ltd. vs. C.C.E. & S.T. [2014 (4) TMI 336 - CESTAT NEW DELHI], Ultimate Flexipack Lted. Vs. C.C.E.& S.T., J & K [2014 (4) TMI 654 - CESTAT NEW DELHI] and First Flexipack Corporation vs. C.C.E. & S.T., J & K [2014 (12) TMI 839 - CESTAT NEW DELHI] - where an assessee was required to pay duty on FOR price which would include the element of freight from the factory gate to the customers premises, the provisions of Section 4(3)(c) would apply, to identify the place of removal as the place of delivery to the customers place on FOR price of the transaction. - Excise duty remitted by the assessee was in accordance with law and legally entitled to refund of such duty remitted, under provisions of Notification No.56/2002-CE. The primary order passed by the Additional Commissioner is therefore impeccable and the impugned order passed by the ld. Commissioner (Appeals) is flawed and unsustainable - Decided in favour of assesse.
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CST, VAT & Sales Tax
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2015 (3) TMI 212
Denial of the benefit under the Amnesty Scheme - Held that:- It is not brought to the notice of this Court from the part of the respondents as to how Ext.P14 came to be finalized. It is also not seen whether the notice was issued by registered post, whether the proceedings were finalized with regard to the revocation of permission granted under the Amnesty proposal after giving an opportunity of hearing and whether the concerned order stated as passed on 13.6.2012 was forwarded to the petitioner by registered post. The counter affidavit is also silent as to the manner in which the service was effected and whether any further proceedings were pursued by the petitioner after service of such order. - This is a fit case where a further opportunity can be given to the petitioner to highlight the factual and legal aspects by setting him at liberty to submit a detail objection in response to Ext.P14. This shall be done at the earliest at any rate within 'two weeks' from the date of receipt of a copy of this judgment, upon which the same shall be considered and appropriate orders shall be passed in accordance with law, also in the light of the verdict passed by this Court in previous order and after giving an opportunity of hearing in this regard. This exercise shall be completed at the earliest at any rate within 'three months' from the date of filing the objection as above. Further coercive steps shall be kept in abeyance till such time. - Petition disposed of.
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2015 (3) TMI 211
Interest on refund claim - Whether the Hon’ble Tribunal has erred in holding that the dealer is entitled to interest under Section 54(1)(aa) on the refund arising from the appellate order - Held that:- Observation made by this Court in the referred decision in case of Gujarat Fluoro Chemicals (2013 (10) TMI 117 - SUPREME COURT) is a complete answer to the contention of the learned A.G.P. that the interest can be awarded even if not expressly barred by the statute or that the taxing statute is silent about the same. - question raised could no more be considered as substantial question of law since such aspect is already covered by the principles of doctrine of merger well settled in the system of administration of justice and also in the referred decision of the Apex Court as well as of this Court. When the Tribunal has taken the view in case of M/s. Saurashtra Chemical inconsonance with the referred view taken by us and thereafter, if the Tribunal has made departure from its earlier view taken in M/s. Gayatri Tiles, we do not find that the later view, which is supported by our view as well as the referred decision of the Apex Court and of this Court, should be deprecated or further examined which is on the mere principles of consistency to be maintained by the Tribunal and we find that no useful purpose would be served in further examination thereto. - no substantial question of law would arise for consideration in the present Tax Appeals, as sought to be canvassed. - Decided against Revenue.
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2015 (3) TMI 210
Nature of the works contract - indivisible and composite works contract or not - Rejection of the application for grant of exemption under Rule 10A and 10B - laying, jointing etc. of pipes and commissioning of pipelines etc. - Held that:- On the declaration of law of the Hon'ble Supreme Court in Larsen and Toubro Limited and Anr. Vs. State of Karnataka and Anr., [2013 (9) TMI 853 - SUPREME COURT], and considering the reference made in Raheja Development's case(2005 (5) TMI 7 - Supreme Court), no interference is required to be made with the order of the Appellate Authority, dated 24.05.1997 under Section 84 of the Act of 1994. The Appellate Authority has, considering the entire case law on the subject, upheld the order passed by the Assessing Authority, that the works contract executed by the appellant-Company is a divisible contract, which is established by the work orders i.e. Annexures A-2 and A-3. The Assessing Authority had examined the work orders in holding that the works contract was divisible and had also rejected the application for exemption on the ground that the sale of prestressed cement concrete pipes falls within the definition of sale of goods under the Act. - In view of the alternative remedy available to the petitioner-Company, we are not inclined to reconsider and review the findings, based upon the terms of the agreement read along with the work orders. The legal proposition with regard to definition of 'works contract' in Article 366(29A)(b) of the Constitution of India, has been explained in the recent judgment in Larsen and Toubro Limited and Anr. Vs. State of Karnataka and Anr. For sustaining levy of tax on goods, deemed to have been sold in execution of a works contract, three conditions namely (i) there must be a works contract; (ii) goods should have been involved in execution of a works contract; and (iii) property in those goods must be transferred to a third party, either as goods or in some other form, have been amply clarified. A contract may involve both, a contract of work and labour, and a contract for sale. A transfer of property in goods under clause 29A(b) of Article 366, is deemed to be sale of goods involved in execution of a works contract by a person making transfer and purchase of those goods to a person, to whim such transfer is made. A single and indivisible contract has been brought on par with a contract containing two separate agreements, empowering the State to levy sales tax on value of material in execution of works contract. So far as the exemption is concerned, we do not find any error in the finding recorded by learned Single Judge, that the exemption Notification having been issued on 29.03.2001, will only apply prospectively from the year 2001-2002, and that the benefit of exemption can be availed by a firm only after issuance of the Notification dated 29.03.2001. The petitioner has challenged the Assessment Year 1999-2000, and therefore, the Notification was not applicable to the dispute involved in the matter. - No error of law in the judgment of learned Single Judge, dated 25.02.2002, dismissing all the writ petitions filed by the petitioner - Decided against assessee.
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Indian Laws
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2015 (3) TMI 195
Refund of the amount - Failed to deliver the possession of the auctioned assets - Sale in on “AS IS WHERE IS BASIS AND WHATEVER THERE IS BASIS” - Held that:- In my view, the stand of IFCI is patently erroneous and Clause 2.6 has to be read in conjunction with Clause 2.4 of the said terms and conditions which provided for inspection of the assets to the interested parties. In another words, IFCI had made it clear that parties would physically inspect the assets at site and submit their bids. Clause 2.6 only absolved IFCI from any variance between description of the goods and those offered at site. This would certainly not absolve IFCI from delivering the assets as were inspected by the petitioner. In the given circumstances, the writ petition is allowed to the extent that the petitioner is directed to be refunded the amount paid by the petitioner for the said assets and the sale certificate issued by IFCI is cancelled. As IFCI has deposited the entire consideration paid by the petitioner with the Registry of this Court, the Registry is directed to release the said sum alongwith accrued interest, if any, to the petitioner within two weeks from date. - Decided in favour of appellant.
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2015 (3) TMI 194
Refund of amount deposited in compliance with Section 18(1) of SARFAESI Act - Debt recovery tribunal reduced the penalty 50% to 25% - Held that:- Having heard the learned counsel for the parties, we note that the order dated December 27, 2012 clearly reveals that the petitioner through his counsel had, keeping in view the fact that all the petitioner and its associate companies/firms, belong to one family and the counsel desired to deposit in total 25% of the total claimed amount; the Appellate Tribunal had passed the order on December 27, 2012. We note that the counsel for the petitioner had pleaded financial hardships as a reason to enable to deposit 50% of the claimed amount and requested the Appellate Tribunal to reduce the pre-deposit from 50% to 25%. A statement/concession made/given by the counsel for the petitioner to predeposit 25% of the claimed amount as one consolidated amount with regard to all the appeals/accounts, which has been accepted by the Appellate Tribunal, the petitioner cannot now resile out of the statement/concession. In other words, there was no segregation of the amount claimed against the four accounts. Further, we note, the Appellate Tribunal in the impugned order has given three reasons for dismissing the applications filed by the petitioner for refund. The cumulative effect of all three reasons having weighed with the Tribunal to dismiss the said applications keeping in view the peculiar facts of the present case, more particularly, when liability against two Accounts has been decided against associate companies/firms of the petitioner, we are of the view that this Court, in exercise of its power under Article 226 of the Constitution would not like to interfere with the impugned order. -Decided against the appellant.
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