TMI Tax Updates - e-Newsletter
April 1, 2014

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax

Highlights / Catch Notes

• Income Tax:

  So long as the ingredients of section 147 are fulfilled, the AO is free to initiate proceeding u/s 147 and failure to take steps u/s 143(3) will not render the AO powerless to initiate reassessment proceedings even when intimation u/s 143(1) had been issued - HC
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• Income Tax:

  Allowability of deduction – Delayed payment of PF & ESIC - By deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub-section (1) of section 36 is deleted, which is with respect to employees' contribution - HC
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• Income Tax:

  Taxability pertaining to retention money - Whether income did accrue or not would depend on the fact whether the right to receive said amount had accrued or not - Merely whether tax was deductible or not would not decide the taxability of certain receipts - HC
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• Income Tax:

  Reassessment - If a particular issue is brought to the notice of the AO by the audit party and the AO of his/her application of mind finds that the ground is valid, reopening of assessment cannot be quashed- HC
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• Income Tax:

  Depreciation u/s 32(1)- assessee got into possession of the unit/industrial undertaking from Wipro by virtue of the Agreement to sale and since then, is in possession thereof in its own right - depreciation allowed - HC
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• Income Tax:

  The issue did not form part of the show cause notice and the assessee was not even confronted with it, even before the CIT, it cannot for the basis for revision of the assessment order under section 263 - AT
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• Income Tax:

  Regular Assessment - The time gap between the date of filing of return and the date of service of notice is more than 12 months - the notice is barred by limitation in terms of the time limit prescribed u/s 143(2) - AT
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• Income Tax:

  Condonation of delay – Delay of 39 days – The delay cannot be condoned simply because the assessee’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief - AT
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• Income Tax:

  In the absence of source and nature of expenditure, the receipt is to be considered as trading receipt and income on this is to be estimated, as the assessee estimated on other receipts, at 25% - AT
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• Customs:

  100% EOU - failure to achieve pro-rata export obligation - it would be in the interest of justice to give some more time to the appellants to produce the decision of the DGFT - AT
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• Customs:

  Redemption fine - theoretically redemption fine could be enhanced but it is essential to determine the market price of the confiscated goods adjudicated upon - AT
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• Corporate Law:

  Winding up petition - time limit - The petition is based entirely on the decretal debt, not the underlying cause of action. Limitation would be governed not by Article 137 but by Article 136, and that provides a period of 12 years from the date when the decree is enforceable. - HC
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• Service Tax:

  Period of limitation for filing an appeal before Commissioner (Appeals) - When an affidavit has been filed by the appellant and same has not been contravened by the department, affidavit is having an evidential value. - AT
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• Service Tax:

  When there was lack of clarity about the scope of the rent-a-cab operator’s service and assessee being individual, it cannot be said that the respondent was aware of the service tax liability and had deliberately evaded the payment of tax. - AT
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• Service Tax:

  Refund of cenvat credit - time limit prescribed under Section 11B of the Central Excise Act, 1944 will not be applicable to the refund claims filed under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 - AT
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• Central Excise:

  Denial of refund claim - Unjust enrichment - When the payment of differential excise duty was made by the respondent under protest and the M.R.P. has not been raised by the respondent, refund to be allowed - HC
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• Central Excise:

  CENVAT Credit - Though there is no express inclusion of cargo handling service in definition of input service; however, in light of precedents, it can be held that in case of export of final product, place of removal would be port of shipment and not factory gate - HC
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• Central Excise:

  CENVAT Credit - inputs contained in the WIP material lost/damaged - prima facie credit cannot be dined when Inputs destroyed during process of manufacture - AT
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• Central Excise:

  Maintainability of miscellaneous application as Appeal - Condonation of delay - Miscellaneous application is not a substitute for an appeal as provided in law - AT
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• Central Excise:

  Valuation - Rule 5 of the Central Excise (Valuation) Rules, 2000 specifically provides for exclusion of the cost of freight from the place of removal - AT
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• Central Excise:

  Denial of CENVAT Credit - As such admittedly the supplier (100% EOU) of the goods has paid Central Excise duty. - the appellants is admittedly entitled to the benefit of Cenvat credit of the same - AT
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• Central Excise:

  Classification of goods - printed paper boards (wrappers) - classifiable as ‘products of printing industry’ under SH 4901.90 - AT
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• VAT:

  Recovery of tax dues – Company has a separate juristic personality and there is no provision in the U.P. Trade Tax Act under which the dues of the dealer Company could be recovered from the personal assets of a Director - HC
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• VAT:

  Initiation of proceeding and issuance of notice u/s 21 (2) of the U.P. Trade Tax Act, 1948 – Re-opening of assessment order – Notice to the assessee follows the authorisation by the CST - A fiscal statute can have retrospective operation - HC
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Articles

• INPUT SERVICES, PLACE OF REMOVAL AND CENVAT CREDIT FOR EXPORTS
• REVISION OF FINANCIAL STATEMENTS UNDER NEW COMPANIES ACT, 2013

Notifications

• Companies Law

• File No. 1/8/2013-CL-V - dated 31-3-2014 - Co. Law
  Chapter V - The Companies (Acceptance of Deposits) Rules, 2014

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• File No. 1/33/2013-CL-V - dated 31-3-2014 - Co. Law
  Chapter X - The Companies (Audit and Auditors) Rules, 2014.

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• F. No. 1/24/2013-CL-V - dated 31-3-2014 - Co. Law
  Chapter XXVI - Nidhi Rules, 2014.

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• F. No. 1/25/2013-CL-V - dated 28-3-2014 - Co. Law
  Chapter XXIX - The Companies (Adjudication of Penalties) Rules, 2014.

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• F. No. 5/29/2013-IEPF - dated 27-3-2014 - Co. Law
  Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Amendment Rules, 2014

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• F. No. 5/29/2013-IEPF - dated 27-3-2014 - Co. Law
  Investor Education and Protection Fund (awareness and protection of investors) Amendment Rules 2014

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• Customs

• 25/2014 - dated 31-3-2014 - Cus (NT)
  Amends Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001

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• F.No.437/78/2013-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F.No.437/28/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F.No.437/25/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F.No.437/09/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F. No. 437/45/2013-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F. No. 437/35/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F. No. 437/33/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• F. No. 437/11/2014-Cus-IV - dated 28-3-2014 - Cus (NT)
  Appointment of Common Adjudicating Authority

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• Indian Laws

• ADVT. III/4/Exty./187-M/13 - dated 28-3-2014 - Indian Law
  The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2014

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• VAT - Delhi

• F.7(400)/Policy/VAT/2014/1387-1398 - dated 28-3-2014 - DVAT
  Appropriate Government Treasury for collection of tax, interest, penalty or any other amount due under the Act or Central Sales Tax Act, 1956 from the dealers registered or liable to be registered under the Act, casual traders and contractees (TAN holders)

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• F.3(21)/Fin(Rev-I)/2013-14/dsvi/347 - dated 26-3-2014 - DVAT
  Online filling of information/return by using Digital Signature

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News

• Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified

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• Calendar for Auction of Government of India Treasury Bills for The Quarter Ending June 2014 Issued

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• Calendar for Marketable Dated Securities for the First Half of the Current Fiscal 2014-15 From April to September 2014 Issued

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Case Laws:

• Income Tax

• 2014 (3) TMI 943
  Validity of Notice u/s 148 of the Act - Reassessment of proceedings - Whether the reasons supplied by the AO to the assessee were tangible materials to proceed with the re-assessment proceedings or re-assessment proceedings have been initiated only on mere change of opinion – Held that:- One of the purposes of Section 147, appears to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say "you accepted my lie, now your hands are tied and you can do nothing". It would be travesty of justice to allow the assessee that latitude. The decision in Krishna Pvt. Ltd. Etc. V. Income-tax Officer and others [1996 (7) TMI 2 - SUPREME Court] followed – if it is found that either on account of an omission of failure of the assessee to fail the return or on account of his omission or failure to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year the Income Tax Officer is entitled to re-open the assessment in accordance with the procedure prescribed by the Act - he can issue the notice u/s 148 proposing to re-open the assessment only where he has reason to believe that on account of either the omission or failure on the part of the assessee to file the return or on account of the omission or failure on the part of the assessee to file the return or on account of the omission of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year, income has escaped assessment. In Assistant Commissioner of Income-tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd. [2007 (5) TMI 197 - SUPREME Court] it has been held that if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment - both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147 - So long as the ingredients of section 147 are fulfilled, the AO is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the AO powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued - Issuance of notice u/s 148 for the Assessment Year 2009-10 cannot be said to be without jurisdiction - at this stage, the notice issued u/s 148 cannot be interfered by the Court in exercise of writ jurisdiction – the observations are confined only to issuance of notice u/s 148 and be not treated any expression of opinion on merits of the claim of the assessee – Decided against Assessee.

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• 2014 (3) TMI 942
  Allowability of deduction – Delayed payment of PF & ESIC - Whether the Tribunal was right in upholding the payment of PF & ESIC made beyond due dates the filing of ROI are allowable as deduction – Held that:- The decision in Commissioner of Income-Tax vs. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT] followed - Employer’s contribution to such funds is decided in favour of assessee - employee’s contribution is provident fund and ESIC is concerned – the decision in Commissioner of Income-tax vs. Gujarat State Road Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT] followed – By deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that Section 36(1) (va) is amended and/or explanation below clause (va) of sub-section (1) of section 36 is deleted, which is with respect to employees' contribution – Decided partly in favour of Revenue.

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• 2014 (3) TMI 941
  Computation of deduction u/s 80HHC of the Act – Treatment of Receipts – Sale of DEPB scrips – Held that:- The decision in M/s Topman Exports Versus Commissioner of Income Tax, Mumbai [2012 (2) TMI 100 - SUPREME COURT OF INDIA] followed - DEPB has direct nexus with the cost of imports for manufacturing an export product, any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent profit on the transfer of DEPB and while the face value of the DEPB will fall under clause (iiib) of Section 28, difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 – Decided against Revenue.

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• 2014 (3) TMI 940
  Taxability pertaining to retention money - Whether on the facts and in the circumstances of the case and on appreciation of correct position of law read along with documentary evidence on record the Tribunal’s ultimate finding and the conclusion of taxability pertaining to retention money for the year under consideration is contrary to settled position of law and against the documentary evidence on record with the result that the ultimate finding and conclusion is vitiated in the eyes of law – Held that:- The test as to whether the income accrued to the assessee is real or hypothetical and whether there is a corresponding liability of the other party to pass on the benefits of duty free import to the assessee even without any imports having been made and the probability or improbability of realisation of the benefits by the assessee considered from a realistic and practical point of view, it is quite clear that in fact no real income but only hypothetical income had accrued to the assessee and Section 28(iv) of the Act would be inapplicable to the facts and circumstances of the case. Essentially, the Assessing Officer is required to be pragmatic and not pedantic. There was no material change by virtue of the amendment in clause 5.4 to the general conditions in so far as the question of accrual of income is concerned - Right to receive the sum was even before the amendment uncertain and therefore contingent - Upon satisfactory completion of several factors, even after the amendment, the same conditions applied - Same uncertainly and unpredictability prevailed - The assessee had no absolute right to receive the amount - SSNNL had no obligation to release the same before completion of warranty period and even thereafter would release the amount only after making permissible adjustments - Mere fact that in the present case no recoveries were made from the bank guarantee or security deposit is of no consequence. Mere fact that the amount was received by the assessee would not mean that income had accrued - Whether income did accrue or not would depend on the fact whether the right to receive said amount had accrued or not - The fact that tax was deducted at source on said amount also would be of no consequence - Tax was deducted by SSNNL - The assessee had no control over such deduction - Merely whether tax was deductible or not would not decide the taxability of certain receipts - the manner in which the assessee accounted for such receipt in its books of account can also not determine its tax liability – Relying upon Kedarnath Jute Mfg. Company Limited v. Commissioner of Income-tax [Central], Calcutta [1971 (8) TMI 10 - SUPREME Court] - the expenditure incurred by the assessee could not be proportionately divided into that covering the assessee’s ninety per cent of the bill amount and relatable to the rest ten percent - the Tribunal had committed an error in allowing the Revenue’s appeals – the AO is directed to tax the retention money in the assessment year relevant to the ‘previous year’ in which retention money becomes payable to the appellant as per the terms of the contracts ie., after the defect liability is over and after the Engineer-in-Charge certifies that no liability attaches to the appellant – Decided in favour of Assessee.

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• 2014 (3) TMI 939
  Computation of deduction u/s 80HHC of the Act – Treatment of Receipts – Sale of DEPB scrips – Held that:- The decision in M/s Topman Exports Versus Commissioner of Income Tax, Mumbai [2012 (2) TMI 100 - SUPREME COURT OF INDIA] followed - DEPB has direct nexus with the cost of imports for manufacturing an export product, any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent profit on the transfer of DEPB and while the face value of the DEPB will fall under clause (iiib) of Section 28, difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28 – Decided against Revenue.

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• 2014 (3) TMI 938
  Deduction u/s 80HHC of the Act – Receipts arising out of fluctuation of rate of foreign exchange - Whether the Tribunal was justified in holding that the receipt resulting out of exchange rate difference pertaining to the export made by the assessee was not the profit of business within the meaning of section 80HHC of the Act – Held that:- The decision in Commissioner of Income-Tax Versus Amba Impex [2005 (12) TMI 58 - GUJARAT High Court] followed - As a corollary, by the time such sale proceeds are received within the prescribed time, by virtue of exchange rate difference there might be a situation where a larger amount is received that the amount as reflected in the shipping bill - merely because an amount is received in a year subsequent to the year of export by way of exchange rate difference, it does not necessarily always follow that the same is not relatable to the exports made. The foreign exchange gain arising out of the fluctuation in the rate of foreign exchange cannot be divested from the export business of the assessee - once export is made, due to variety of reasons, the remission of the export sale consideration may not be made immediately - Under the accounting principles, the assessee, on the basis of accrual, would record sale consideration at the prevailing exchange rate on the quoted price for the exported goods in the foreign currency rates - The exact remittance in Indian rupees would depend on the precise exchange rate at the time when the amount is remitted. The Tribunal followed the judgement of assessee’s own case in PRIYANKA GEMS. Versus ASSISTANT COMMISSIONER OF INCOME TAX [2004 (12) TMI 288 - ITAT AHMEDABAD-B] was of the view that receipts on account of exchange rate difference is derived from the export sales and is part and parcel of export proceeds only, and by no stretch of imagination it can be given colour of income from other sources to be excluded from profits of the business in terms of Expln. (baa) below s. 80HHC(4A) of the Act - There is no distinction possible on the basis of different situations under which foreign exchange fluctuation may result - law permits hedging of foreign exchange fluctuation risk to an importer or an exporter - The exporter may take steps as found commercially prudent to safeguard himself against drastic foreign exchange rate fluctuations and in the process may also limit the possibility of gain in case of favourable currency rate trends - the resultant gain in foreign exchange rate would still be due to the export made by the assessee – order of the Tribunal upheld - Decided against Revenue.

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• 2014 (3) TMI 937
  Allowability of expenses as per mercantile system - Disallowance of diesel expenses and hire charges/ interest – Held that:- CIT (A) as well as the Tribunal both ruled in favour of the assessee on the ground that eventually there would be no difference in tax rate - the contention of the revenue would have been considered that the expenditure could be allowed only during the year under which liability is crystallized, if the assessee is following the mercantile system of accounting. But,in the present case the amount is very meager – Decided against Revenue. Disallowance of unpaid carting charges – Expenses not verifiable and substantiated – Held that:- The CIT (A) had given reasons for limiting the disallowance including the portion of the GP rates of the previous year - The Tribunal also while confirming the approach adopted by the CIT(A) might have enhanced the admissible enhancement of Rs. 8 lakhs - The entire issue is based on appreciation of evidence – thus, as such no question of law arises for consideration in the appeal – Decided against Revenue. Deletion made on account of difference in receipts – TDS certificate and P&L account not tallying – Held that:- The CIT(A) as well as the Tribunal both accepted the assessees’s explanation that M/s. CFCL would in certain cases, instruct the assessee to deliver the goods at the places of various dealers from the Railway godown - However, CFCL, had deducted at source, on completion of the work of carting up to the last destination i.e. till the point of delivery at the respective places of the dealers by making provision for such payments – they have not committed any error - The assessee had not carried out the transportation work of the goods in toto - In some cases, the principal employer of the truck would instruct the assessee to deliver the goods to the ultimate point of destination, after some time depending on the need of the dealers - CFCL would deduct at source on the entire payment by making the provision for the same - The assessee had counted for such income in the immediately preceding year, thus explained the discrepancies - The deletion of amount confirmed by the Tribunal is upheld – Decided against revenue.

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• 2014 (3) TMI 936
  Validity of Notice u/s 148 of the Act - Reopening of assessment – Income escapement - Held that:- Notice for reopening had been issued within a period of four years from the end of the relevant assessment year - the additional requirement arising out of the proviso to Section 147 of the Act of the income escaping the assessment due to failure on the part of the assessee to disclose truly and fully all material facts would not arise - certain aspects of the matter were brought to the notice of the AO by the audit party. The Assessing Officer was convinced that on third ground recorded in the reasons, income chargeable to tax had escaped assessment - such ground was also brought to her notice by the audit party and that by itself would not mean that she was acting at the instance of the audit party – Relying upon Commissioner of Income Tax v. P.V.S Beedies Private Limited[1997 (10) TMI 5 - SUPREME Court] – if a particular issue is brought to the notice of the AO by the audit party and the AO of his/her application of mind finds that the ground is valid, reopening of assessment cannot be quashed merely because such ground was brought to the notice of the AO by the audit party - thus, the notice cannot be quashed – Decided against Assessee.

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• 2014 (3) TMI 935
  Deduction u/s 80IB of the Act – Held that:- Section 80IB(2) is applicable only in the case, where there is an Amalgamation or demerger - That does not mean that a transferor of industrial undertaking by any other mode is not entitled to claim deduction u/s 80IB - it would not be correct to say that deduction u/s 80IB is available only where transfer of the unit/industrial undertaking is under the scheme of amalgamation or demerger - the unit/industrial undertaking enjoyed the deduction u/s 80IB from 01.04.1993 till 30.08.2000 i.e., till the unit/industrial undertaking was transferred to the assessee – thus, there is no reason to interfere with the findings of the Tribunal allowing the claim of the assessee – Decided against Revenue. Entitlement for depreciation u/s 32(1) of the Act - Whether the Tribunal was justified in holding that the land and factory building, agreed to be purchased from M/s. Wipro Ltd., which had a right under a lease cum sale agreement, would be entitled to depreciation u/s 32(1) of the Act – Held that:- The assessee got into possession of the unit/industrial undertaking from Wipro by virtue of the Agreement to sale and since then, is in possession thereof in its own right exercising such dominion over the same and have right to use, occupy and to enjoy its usufruct in its own right – the decision in [2000 (12) TMI 4 - SUPREME Court] followed - the Tribunal has rightly allowed the depreciation - it was not possible to reach the conclusion that the assessee had acquired domain over the Mill in question - there is lot of materials placed on record, which indicate that the assessee had acquired dominion over the unit/industrial undertaking on 30.08.2000 – thus, there is no merit in the appeal – Decided against Revenue.

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• 2014 (3) TMI 934
  Computation of deduction 80HHC of the Act – Exclusion of Excises duty - Whether the Tribunal is right in holding that excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC of the Act – Held that:- The decision in Commissioner of Income-Tax Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME Court] followed - The tax under the Act is upon income, profits and gains. It is not a tax on gross receipts - Under Section 2(24) of the Act the word "income" includes profits and gains - The charge is not on gross receipts but on profits and gains - Where a deduction is necessary in order to ascertain the profits and gains, such deductions should be allowed - Profits should be computed after deducting the expenses incurred for business though such expenses may not be admissible expressly under the Act, unless such expenses are expressly disallowed by the Act. Sales tax and excise duty also do not have any element of "turnover" which is the position even in the case of rent, commission, interest etc. - excise duty and sales tax are indirect taxes - They are recovered by the assessee on behalf of the Government - if they are made relatable to exports, the formula under Section 80HHC would become unworkable – thus, the Tribunal has not committed any error in holding that the excise duty is excise duty is to be excluded for the purpose of computation of deduction u/s. 80HHC – Decided against Revenue.

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• 2014 (3) TMI 933
  Disallowance on account of presenting up expenses – Held that:- The Assessing Officer went wrong in making addition and in holding that the claim of the assessee cannot be allowed being preset up expenses - the CIT(A) rightly observed that when similar kind of expenditure was incurred in the earlier assessment year which was allowed, then the stand cannot change without any basis and the addition was deleted - the addition made by the AO on wrong assumption was rightly deleted by the CIT(A) - the order of the CIT(A) upheld – Decided against Revenue.

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• 2014 (3) TMI 932
  Revision u/s 263 of the Act – Validity of taking up of closed matters by the successor CIT - Loss incurred in Sterling Exports – Held that:- An error which is not raised in the 263 notice cannot be raised by the CIT – The decision in COMMISSIONER OF INCOME TAX, DELHI (CENTRAL) – I Versus CONTIMETERS ELECTRICALS PVT. LTD. [2008 (12) TMI 4 - HIGH COURT DELHI] followed - the department cannot travel beyond the show cause notice - it would be against the principles of natural justice that a person who has not been confronted with any ground be saddled with the liability - the issue did not form part of the show cause notice and the assessee was not even confronted with it, even before the CIT, it cannot for the basis for revision of the assessment order under section 263 – thus, the issue of SE loss having not been mentioned u/s 263 show cause notice, the setting aside order by CIT in this behalf cannot be sustained - Successor CIT cannot take up the closed 263 proceedings on the same issues and review the order of her predecessor on same issues. FDR Interest u/s 10AA of the Act – Held that:- The show cause notice was to verify whether interest income was included in the books or not – Assessee had demonstrated this aspect to the satisfaction of audit party, CIT(Audit) and predecessor CIT - the set aside for a new issue i.e. eligibility of FDR interest u/s 10AA cannot be sustained. The issue has been examined by CIT and sec. 10AA eligibility has not been disturbed in 263 order - Thus the direction to re-examine eligibility of 10AA qua the FDR interest has to fail on both counts i.e. it is not raised in show cause notice and sec. 10AA has been not disturbed - as long as the audit correspondence, letter of CIT(Audit) and predecessor CIT correspondence and order are available on record, they become part of record - Successor CIT cannot gloss over the same as it implies non perusal of record and non-application of mind - These omissions violate the 263 provisions – Decided in favour of Assessee.

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• 2014 (3) TMI 931
  Regular Assessment - Matter remitted back from High Court – Bar of limitation - Failure to serve Notice u/s 143(2) of the Act within time – Held that:- The observations made by Hon’ble High Court are very much relevant that, during the course of argument, the appellant contended that the very issuance of notice u/s 143(2) and the time provided u/s 143(2)(ii) was over – the High Court has made its mind very clear that the proceedings cannot be taken against the assessee, if the notice issued u/s 143(2)(ii) is beyond the time specified under the provisions – assessee pointed out that the return of income is filed on 06.05.2005 - the notice u/s 143(2) was served on 03.11.2006 - The time gap between the date of filing of return and the date of service of notice is more than 12 months - the notice is barred by limitation in terms of the time limit prescribed u/s 143(2) of the Act – thus, the order of the Ao set aside – Decided in favour of Assessee.

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• 2014 (3) TMI 930
  Condonation of delay – Delay of 39 days – Held that:- The assessee failed to convince the bench for the delay in filing the appeals belatedly by way of proper explanation/evidence - the law assists those who are vigilant, not those who sleep over their rights - The delay cannot be condoned simply because the assessee’s case is hard and calls for sympathy or merely out of benevolence to the party seeking relief – In granting the indulgence and condoning the delay, it must be proved beyond the shadow of doubt that the assessee was diligent and was not guilty of negligence, whatsoever - Seekers of justice must come with clean hands - as stated in the affidavit, the reasons advanced by the assessee are not supported by any cogent evidence – thus, the condonation of delay cannot be granted – Relying upon Collector, Land Acquisition Vs. Mst. Katiji and Others [1987 (2) TMI 61 - SUPREME Court] - the assessee is not vigilant and also not explained the reasons for delay in filing the appeals with sufficient and good reasons as well as not shown the delay was due to beyond the control of the assessee - the delay could have been avoided by due care and attention of the assessee – Decided against Assessee.

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• 2014 (3) TMI 929
  Addition made – Valid explanation for sources of investment not made – Held that:- CIT(A) was of the view that the assessee explained usage of receipt which was used for payment to the landlords - the assessee has not explained the sources from whom he had received and the purpose for which it was received - In the absence of source and nature of expenditure, the receipt is to be considered as trading receipt and income on this is to be estimated, as the assessee estimated on other receipts, at 25% - Decided partly in favour of Revenue. Addition made u/s 69A of the Act – Held that:- The observation of the CIT(A) is not proper - When the amount is included in Form No. 26AS the CIT(A) is not proper to hold that the assessee received the amount from M/s. Jana Chaitanya Housing Ltd., and paid to the landlords and the assessee acted only as an agent - It is the mobilisation advance given to the assessee which is liable for TDS towards land development expenditure - When the assessee undertakes the land development, it cannot be said that the assessee carried out the work without element of profit - as it is a regular work carried on by the assessee, applying net profit rate as adopted by the assessee on regular trading receipts, the AO is directed to adopt 25% of the receipt as income of the assessee – Decided partly in favour of Revenue.

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• 2014 (3) TMI 928
  Deleting of dis-allowance u/s.14A of the Act r.w. Rule 8D – Held that:- The decision in Godrej & Boyce Mfg. Co. Ltd v. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] followed - Rule 8D is applicable from assessment year 2008-09 – it cannot now turn around and say that no expenditure whatsoever was incurred for earning the exempt income – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of Revenue. Deletion of dis-allowance u/s 40a(i) of the Act - Overseas payments of professional and consultancy charges – TDS not deducted - The decision in CIT Vs. M/s. Vector Shipping Services (P) Ltd. [2013 (7) TMI 622 - ALLAHABAD HIGH COURT] followed - the provisions of section 40a(i) do not apply to those amounts which have already been paid by the assessee before the close of the relevant previous year – thus, the dis-allowance u/s.40a(i) applies only to the amounts ‘payable’ and not to those amounts which are already ‘paid’ – Decided against Revenue.

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• Customs

• 2014 (3) TMI 927
  Determination of rate of duty or value of goods - exemption notification - failure to achieve pro-rata export obligation prescribed in Notification No.44/2002-Customs dated 19.4.2002 - Held that:- in this case, rate of duty is already determined and is linked to the export obligation and therefore, the question of determination of fresh rate of duty does not arise. The assessment part is already completed when the concessional rate of duty was extended by the department and the issue in consideration is only whether the assessee is eligible for the concessional rate of duty which was the result of assessment or not. Therefore it cannot be said that this is a case where rate of duty is to be determined by interpreting a notification or tariff heading or any other matter. Similarly, the value of the goods is also determined and it is nobody’s case that here the assessing authority would be revising the value or would be considering concessional rate of duty, etc. There was no letter issued by Ministry of Commerce to the appellant for approaching the DGFT and one arm of the Government having advised the appellant to approach DGFT, it would be appropriate to at least wait for a decision by that authority. Therefore I consider that it would be in the interest of justice to give some more time to the appellants. Accordingly the appellant is given six months time from today to produce the decision of the DGFT and in the alternative deposit an amount of ₹ 10.5 lakhs as pre-deposit - Decided partly in favour of assessee.

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• 2014 (3) TMI 926
  Vacation of stay order - recovery of dues - 100% EOU - clandestine removal of capital goods imported duty free for the product Cut Flower-Rose - Levy of penalty - Held that:- The stay granted earlier is vacated and the Revenue is free to recover the dues adjudged against the appellant, as the appellant has not appeared before the Tribunal for final hearing inspite of service of notice. - Decided against the assessee.

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• 2014 (3) TMI 925
  Redemption fine - Enhancement - Whether redemption fine once imposed while allowing clearance of imported goods can be enhanced subsequently - Held that:- redemption fine cannot exceed the market price of the confiscated goods less the duty chargeable on the imported goods. - For the purpose of determining the quantum of redemption fine, therefore it is essential to determine the market price of the confiscated goods adjudicated upon. It is possible that adjudicating authority may not have determined the Margin Of Profit (MOP) properly and actual MOP could be more. Under such circumstances theoretically redemption fine could be enhanced. However, to arrive at such an opinion of enhancing redemption fine concerned authorities need to determine the market price of the imported goods around the time of import and determine the Market Price and the MOP. In the instant case there is no evidence at all that after adjudication a higher MOP with respect to the imported goods, was determined by the Appropriate Authorities. In the absence of any such evidence on record, there is no justification for enhancing the redemption fine imposed by the Adjudicating Authority - Decided in favour of assessee.

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• 2014 (3) TMI 924
  Denial of refund claim - Unjust enrichment - Subject to final assessment, Revenue deposit was made - refund of Security/Revenue deposit - Held that:- Provisions of unjust enrichment are not attracted in this case. Further, I find the issue of unjust enrichment have been duly considered in the Order-in-Original - Decided in favour of assessee.

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• Corporate Laws

• 2014 (3) TMI 923
  Winding up petition - failure to pay debts - respondent contended that, this petition is not maintainable as the Gati has put the decree into execution, and since the decree has not yet been returned unsatisfied, the petition must be dismissed in limine. - Held that:- A petitioning-creditor with a decree need not put it into execution before bringing a winding up petition. - He can proceed either under Section 434(1)(b) or, having served a notice, move against the debtor-company under Section 434(1)(a). Whether claim is time barred - Held that:- The petition is based entirely on the decretal debt, not the underlying cause of action. Limitation would be governed not by Article 137 but by Article 136, and that provides a period of 12 years from the date when the decree is enforceable. - It is also settled that winding up is an equitable mode of execution. There is no manner of doubt that Atcom is commercially insolvent. Not only must it be deemed to be unable to pay its debts on account of its failure to comply with the demand in the statutory notice, but its reply contains vital admissions of financial inability, commercial insolvency, its lack of income and that it is doing no business. Gati has a valid decree in its favour. Petition admitted - The Official Liquidator is appointed Provisional Liquidator of the respondent company. - Decided in favor of petitioner.

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• Service Tax

• 2014 (3) TMI 947
  Period of limitation for filing an appeal before Commissioner (Appeals) - Whether the order of dismissal of appeal is time barred by the Commissioner (Appeals) is correct in the eyes of law or not - Held that:- They have received the order on 14.02.2013. As they have not received the order before that, and the case law relied by the appellant in Wellman Hindustan Ltd. (2009 (6) TMI 664 - CESTAT, MUMBAI) where the copy of the order was tendered physically and same was received by someone. Same is the contention of the appellant in the matter in hand, and in support of the same, they have filed an affidavit. When an affidavit has been filed by the appellant and same has not been contravened by the department, affidavit is having an evidential value. Accordingly, I hold that appeal is filed by the appellant within time - Matter remanded back - Decided in favour of assessee.

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• 2014 (3) TMI 946
  Demand of service tax - Rent a cab service - Held that:- Though the service tax on rent-a-cab has been introduced since 16.07.1997 and the period of dispute in this case is 2002-2003, it is seen that the contract of the BSNL with the respondent is silent about service tax and as such, it is not in dispute that BSNL were not paying service tax to the respondent along with the vehicle hire charges. Moreover, during the period of dispute, there was confusion on the point as to whether service tax under the Heading Rent-a-Cab Scheme Operators Service under Section 65(105)(o) read with Section 65(91) and 65(20) & 65 (71) would be attracted when vehicles are supplied along with drivers and the charges are on the basis of distance travelled by the vehicle, as the Tribunal in the case of Kuldeep Singh Gill reported in [2005 (5) TMI 353 - CESTAT, NEW DELHI] has held that in such a case, when the vehicle supplier is paid on the basis of distance as per rate sheet, service tax under rent-a-cab operator’s service would not attracted. When there was lack of clarity about the scope of the rent-a-cab operator’s service covered by Section 65(105)(o) and the respondent in this case is an individual who in terms of his contract with BSNL was supplying vehicles and charging for the same on kilometer basis and when the respondent’s contract with BSNL did not mention any service tax, and this is not case a case where the Appellant as service provider while collecting the service tax from the BSNL did not pay the same to the Government, it cannot be said that the respondent was aware of the service tax liability and had deliberately evaded the payment of tax. Therefore, we do not find any infirmity in the impugned order waiving the penalty on the respondent under Section 80 of the Finance Act, 1994 - Decided against Revenue.

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• 2014 (3) TMI 945
  Denial of refund claim - Refund on monthly basis as per the provisions contained in Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 and refund claims for the period April 2007 & May 2007 - Held that:- It is evident from the above provisions that refund claims under this notification are required to be filed once in a quarter. However, a proviso is also existing that is case of EOU such refund claims may be submitted for each calendar month. The word used in the relevant proviso is 'may' and not 'shall' which means that EOU's are given an additional facility that such refund claims could be filed on monthly basis. But such a proviso does not exclude EOU's from the fact that quarterly refund claims under the notification cannot be filed by them. Commr.(A) order to that extent is required to be set aside. Whether non filing of monthly refunds will make such refund claims time barred under Section 11B of the Central Excise Act, 1944 - Held that:- Commr.(A) has not discussed this aspect at all and has only held that refund filed by the appellant is time barred. It is observed from the main body of Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 that the same is issued under Rule 5 of the Cenvat Credit Rules, 2004 and does not link this refund procedure in any way to the provisions of relevant date under Section 11B of the Central Excise Act, 1944. No time limit has been prescribed in this notification also as to within which time the refund claims (monthly basis or quarterly basis) are required to be filed. In view of the above and the case laws relied upon by the appellant, it has to be held that time limit prescribed under Section 11B of the Central Excise Act, 1944 will not be applicable to the refund claims filed under Notification No.5/2006-C.E.(N.T.) dt. 14.03.2006 which is issued under Rule 5 of the Cenvat Credit Rules, 2004 - Decided in favour of assessee.

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• 2014 (3) TMI 944
  Waiver of pre-deposit - Service rendered to the vehicle owners from the manufacturer - Held that:- Following decision of M/s SEVA AUTOMOTIVE PVT LTD Versus CCE, NAGPUR [2013 (9) TMI 553 - CESTAT MUMBAI] - Stay granted.

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• Central Excise

• 2014 (3) TMI 922
  Denial of refund claim - Unjust enrichment - Classification of goods 'Gulabari' - Classification under sub heading 3003.30 or under sub heading 3303.00 - Whether, under the facts and circumstances of the case the respondents have rebutted the statutory presumption under Section 12-B of the Act so as to be entitled for refund under Section 11-B of the Act - Held that:- differential excise duty paid by the appellant after the order dated 11.12.1997 related to the period 1st March, 1990 to 30 September, 1997. The classification of the product by the department, which imposed 18% excise duty, was challenged by the respondent and in pursuance to the demand as made by order dated 11.12.1997, the deposits were made by the respondent under protest after writing letter dated 18.12.1997 which has been brought on the record as Annexure-C.A.-3. In the letter dated 18.12.1997, it was clearly mentioned that the respondent does not agree with the classification of the product. It was further mentioned that the respondent is not changing the maximum retail price or wholesale price of the product. When the payment of differential excise duty was made by the respondent under protest and the M.R.P. has not been raised by the respondent, we fail to see that how the incidence of such duty shall be treated to have been passed on the buyer of such goods. The Assistant Commissioner Central Excise had referred to the letter dated 18.12.1997 sent by the respondent by which it was mentioned that respondent has not change maximum retail price or wholesale price and is paying the duty under protest. Amount of ₹ 10,94,263/- was deposited by the party on their own has not been shown in the balance sheet of relevant year 1997-98 in the schedule of loans and advances to be recovered for the department is not sustainable as the party had deposited this amount under protest as an advance payment of central excise duty pending enquiry and investigation and intimated this fact to the Additional Director General of DGAE, Central Excise New Delhi vide their letter dated 06.12.1997 and has also shown in their Balance Sheet of the company for whole of the group in the relevant year 1997-98 in the schedule of "OTHER CURRENT ASSETS". - Revenue had not disputed the facts of examination of balance sheet in their Grounds of Appeal. So, it is evident from the record that the Commissioner (Appeals) allowed the refund claim after examining the unjust enrichment. Hence, I do not find any reason to interfere the order of the Commissioner (Appeals) - Decided against Revenue.

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• 2014 (3) TMI 921
  CENVAT Credit - Place of removal - Place of removal is defined in section 4(3)(c) of Central Excise Act, 1944 – Cargo Handling Services - Assessee took credit of Cargo Handling Services used for export of goods manufactured by it - Department denied said credit on ground that credit could be availed only upto place of removal, port of shipment cannot be regarded as place of removal - Whether the Tribunal was correct in holding that Credit of Service tax paid on Cargo Handling Services is admissible to the manufacturer as "input service tax credit", by overlooking the Statutory provisions of Rule 2(l) of the Cenvat Credit Rules, 2004. Held that:- When manufacturer transports his finished goods from factory to any other place such as, go-down, warehouse, etc. from where it would be ultimately removed, such service is covered in expression "outward transportation upto place of removal" since such place other than factory gate would be place of removal - Taking this analogy further, in case services are availed essentially for purpose of exporting goods, then, place of removal shall have to be essentially ' port' from where goods are actually taken out of country and, accordingly, said services (including transportation of finished goods upto such place of removal being port) would be input service - Therefore, in case of export of final product, place of removal would be port of shipment and not factory gate and therefore, manufacturer would be entitled to credit of input services availed upto such ' port of shipment'. Though there is no express inclusion of cargo handling service in definition of input service; however, in light of precedents, it can be held that in case of export of final product, place of removal would be port of shipment and not factory gate and therefore, manufacturer would be entitled to avail amount claimed towards cargo handling as input service under Cenvat Credit Rules - Since, in this case, cargo handling services were utilized for purpose of export of final product, said services availed upto place of removal being port of export (i.e., until goods leave India from port) were service used in relation to clearance of final products upto place of removal - Therefore, assessee was entitled to credit – Decided against Revenue.

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• 2014 (3) TMI 920
  Valuation - waiver of pre-deposit - whether the trade discount passed on by the appellant to Oil Marketing Company can be considered as trade discount or not and whether excise duty is leviable on this amount considering the same as part of the value of the goods sold - Held that:- stay petition came up for consideration before this Tribunal on the last occasion on 21.1.2014, this Tribunal after considering the submissions made by both the sides, directed the appellant to make a pre-deposit of 50% of the duty confirmed on the ground that on the earlier decisions, pre-deposit was ordered taking into account the demand for the normal period of time. In the case before us, the entire demand is for the normal period of time. It is a well settled position that while considering various decisions on a matter, the latest decision should be preferred as that would have taken into account all the previous decisions on the subject - Conditional stay granted.

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• 2014 (3) TMI 919
  Waiver of pre-deposit of CENVAT Credit - Inputs destroyed during process of manufacture - though had issued the inputs for manufacture of finished goods, but the same were not used in the manufacture but had been lost/destroyed in the process. - Held that:- There is no allegation that the inputs as such were lost and hence no credit would be admissible on the same. On the issue of eligibility of CENVAT Credit, on inputs contained in the WIP material lost/damaged, prima facie, we find that this Tribunal in the case of Arvind International Ltd.’s case (2012 (12) TMI 264 - CESTAT, NEW DELHI) had taken a view that in respect of the inputs, contained in the work in process material, destroyed in fire, is eligible to CENVAT Credit. In view of the said decision, we are of the opinion that the Applicant could able to make out a prima facie case for total waiver of pre-deposit of dues adjudged - Stay granted.

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• 2014 (3) TMI 918
  Maintainability of miscellaneous application as Appeal - Condonation of delay - Refund / Rebate of duty paid on goods supplied to SEZ - Earlier order passed by Court in [2013 (6) TMI 610 - CESTAT MUMBAI] - Difference of opinion - Majority order - The order of the lower appellate authority dated 02/05/2012 has not been challenged by the appellant and has thus become final. However, vide Miscellaneous application dated 22/08/2013, the appellant has sought for implementation of this Tribunal's order dated 26/05/2011 [2013 (6) TMI 610 - CESTAT MUMBAI]. Held that:- Miscellaneous application is not a substitute for an appeal as provided in law - There is no provision or procedure under the Central Excise Act to consider a miscellaneous application as an appeal and condone the delay suo motu even without knowing the reasons for delay. In the earlier order of the Tribunal, there are no findings in relation to rebate even though in the facts position, certain arguments of the appellant are mentioned. Moreover, clause (b) of first proviso to Section 35B(1) prohibits this Tribunal to entertain appeals relating to rebate claim - miscellaneous application is not maintainable as the same cannot be considered as an appeal as provided for in the law relying on the decision of Hon'ble Apex Court in the case of State of Punjab and Ors. Vs. Gurdev Singh, Ashok Kumar [1991 (8) TMI 328 - SUPREME COURT] - Matter sent back for necessary action - Decided against Appellant.

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• 2014 (3) TMI 917
  Valuation - Whether the freight though charged in addition to the price of the goods and shown separately in the invoices, but charged on equalized basis is excludible from the assessable value - Held that:- Though the new Section in force w.e.f. 1-7-2000, does not have a provision specifically providing for exclusion of the cost of transportation from the place of removal to the place of delivery if the transaction value at the place of removal is not known, the cost of the transportation from the place of removal to the place of delivery has to be excluded as, as per the provisions of Section 4(1)(a), the transaction value has be for delivery of the goods at the time and place of removal. In fact for this reason only Rule 5 of the Central Excise (Valuation) Rules, 2000 specifically provides for exclusion of the cost of freight from the place of removal the place of delivery when it is charged from the customer in addition to the price and is mentioned separately in the invoices. The provisions of Rule 5 of the Valuation Rules, 2000 can thus, be said to be analogous to the provisions of sub-section (2) of Section 4, as it stood during period prior to 1-7-2000 - Decided in favour of assessee.

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• 2014 (3) TMI 916
  Duty demand - Manufacturing of resin and using the same in exempted goods - Held that:- no duty is chargeable on resins and the first appellate authority in the appellant’s own case has set aside the demands confirmed by the adjudicating authority for a period which is subsequent to the period in the issue before us in these appeals, and there being an acceptance of the said order of the Commissioner (Appeals) in the appellant’s own case for the subsequent period, we do not find any reason to sustain the impugned order which is in appeal before us - Following decision of Moti Laminates Pvt. Ltd. - [1995 (2) TMI 67 - SUPREME COURT OF INDIA] - Decided in favour of assessee.

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• 2014 (3) TMI 915
  Denial of CENVAT Credit - Clearance of goods by 100% EOU - Credit to receiver of goods - Revenue contended that Cenvat credit of Customs duty paid is not available to the receiver of the goods, the availment of credit by appellants is against the provisions of the law. - Held that:- In terms of provission of Section 3 of Central Excise Act, 1944, a 100% EOU, when clearing the goods in DTA is required to clear the same on payment of Excise duty. The measure of such duty shall be equal to the amount of Customs duty which would be leviable under Customs Act, 1962 or in any other law for the time being imposed on like goods produced or manufactured, outside India if imported into India. As such what is required to be paid by a 100% EOU is Central Excise duty and not Customs duty - invoices show payment of Central Excise duty and Education Cess on Excise duty. As such admittedly the supplier of the goods has paid Central Excise duty. If the duty paid by the supplier is the Central Excise duty, the appellants is admittedly entitled to the benefit of Cenvat credit of the same - Decided in favour of assessee.

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• 2014 (3) TMI 914
  Recall and rectification of order - Quantum of penalty - High Court and Supreme Court have dismissed the reference application - Held that:- Once the provisions of Section 11AC are held to be invocable against the appellants, the Tribunal has no jurisdiction to reduce the penalty. In the facts of the present case, we find that the Tribunal vide its earlier order dated 11-10-2000 has held the appellants liable to penalty in terms of provisions of Section 11AC. The said order of the Tribunal stands confirmed by the Hon’ble High Court and subsequently by the Hon’ble Supreme Court - Once the provisions of Section 11AC has been held to be applicable in the appellants’ case, calling for imposition of penalty upon them, such penalty has to be to the extent of 100% of the duty amount. As such by following the Apex Court’s judgment in the case of Rajasthan Spinning & Weaving Mills as also in the case of Dharamendra Textiles, we enhance the penalty equivalent to the duty confirmed against the appellants - Decided against assessee.

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• 2014 (3) TMI 913
  Classification of goods - printed paper boards (wrappers) - Whether to classify the subject goods under SH 4901.90 ‘as products of printing industry’ as claimed by the assessee or under SH 4823.90 as claimed by the revenue - Held that:- Precedent case has classified similar products of different manufacturers as ‘products of printing industry’ under SH 4901.90. The products so classified include printed PVC films, printed polyethylene coated paper etc. This Bench in the said case held that the printing activity was essential rather than incidental. This view was taken after examining the relevant tariff entries and Section Note (Note-2 to Section 11 of the CETA Schedule) - Decided against Revenue.

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• 2014 (3) TMI 912
  Reversal of Cenvat credit - Denial on the ground that the activity of wire drawing does not amount to manufacture - Held that:- demand of duty which has been confirmed by the adjudicating authority and set aside by the learned Commissioner (Appeals) is in respect of Cenvat credit availed by the assessee-respondent on the inputs used for drawing of wire. It is also not disputed that the final product cleared by the respondent-assessee is on payment of appropriate duty during the relevant period. We find that the learned Commissioner (Appeals) has correctly come to the conclusion that the disallowment of Cenvat credit is not in accordance with the law for more than one reason. First of all, the duty discharged by the appellant on the final product, will in a way amount to reversal of Cenvat credit taken and the ratio of the order of the Tribunal in the case of Venus Wire Industries cited supra, will squarely apply in this case. Secondly the CBEC Circular dated 26-7-2006 also talks about regularisation of credits availed on inputs and duty paid on wires drawn by a retrospective amendments. We find that para 4.4 of the said CBEC Circular will apply in this case - Decided against Revenue.

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• 2014 (3) TMI 911
  CENVAT Credit - Whether M.S. Plates, M.S. Angles & Joist, HR sheets etc. used in the factory by the appellant for repair and maintenance of the plants and machinery for replacement of worn out parts or for fabrication of structures and machinery used in production of sugar and molasses are eligible for Cenvat credit as inputs or capital goods - Held that:- There is no mention in this statement that the structures referred to are the supporting structures for the machinery. When these items are used for fabrication of various machinery or their parts, the same would be covered by the definition of ‘input’ and would be eligible for Cenvat credit. When these items are used for repair and maintenance of plant and machinery, the Cenvat credit would be admissible in respect of these, in view of judgment of Hon’ble Rajasthan High Court in the case of Union of India v. Hindustan Zinc Ltd. (2006 (5) TMI 44 - HIGH COURT RAJASTHAN), and of the Tribunal in the case of CCE, Salem v. India Cements Ltd. (2005 (11) TMI 348 - CESTAT, CHENNAI) wherein it has been held that M.S./S.S. Plates used for repair and maintenance of the machinery, which is used for manufacture of final product would be eligible for Cenvat credit. - Decided in favour of assessee.

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• 2014 (3) TMI 910
  Valuation of goods - Textile articles - Job Work - Inclusion of traders profit, Octroi duty transportation charges, loading/unloading charges of fabrics and marketing expenses and interest - Held that:- as per C.B.E. & C. Circular No. 619/10/2002-CX., dated 19-2-2002, the traders profit is not includible in the assessable value. The departmental officers are bound by board circular. Therefore, the demand of Rs. 0.94 for addition of traders profit is not sustainable. If at all the demand of transportation, loading/unloading charges and manufacturing expenses are to be taken into account to arrive assessable value, the respondent has already included Rs. 0.75 per metre in the assessable value after adopting the formula as laid down by the Apex Court in the case of Ujagar Prints [1988 (11) TMI 106 - SUPREME COURT OF INDIA] that is cost of raw material + Job charges. Therefore, the charges made in the show-cause notice are not sustainable - Decided against Revenue.

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• 2014 (3) TMI 909
  Waiver of pre-deposit - recovery of the amount which has been refunded to the appellant under the Notification No. 32/99, as amended from time to time - Held that:- it is not in dispute that the appellant had correctly followed the conditions of Notification No. 32/99, as amended from time to time. We find that the said Notification provides exemption from duty on the goods specified in First Schedule and Second Schedule of the Central Excise Tariff Act, 1985 cleared from the Unit located in notified areas in the North-East Zone. We find that prima facie, the appellant has made out a case in their favour and that the view is fortified by judgments of Hon’ble High Court. The show cause notice in this case is issued to the appellant under Section 11A of the Central Excise Act, 1944. As correctly pointed out by the learned Counsel, this has been not accepted as a correct position of law by the Hon’ble High Court of Gauhati in the case of C.C.E., Shillong v. Jellalpore Tea Estate (2011 (3) TMI 11 - GAUHATI HIGH COURT ). In view of the foregoing, we are of the considered view that the appellant has made out a prima facie case for waiver of the pre-deposit of the amounts involved - Stay granted.

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• 2014 (3) TMI 908
  Availment of CENVAT Credit - Cenvat credit was availed on the basis of 27 TR-6 challans under which the appellant’s head office at Mumbai had paid the service tax as service recipient on behalf of the Malanpur unit - Held that:- GTA service in respect of which Cenvat credit had been taken, had been availed by the Malanpur unit of the appellant and since for the payment of service tax on GTA service, centralized registration had been taken by their head office at Mumbai, the service tax had been paid by the head office and on the basis of the TR-6 challans/taxpayer’s counterfoils, the Malanpur unit had availed the Cenvat credit. Since, the head office of the appellant had opted for centralized registration for payment of service tax and had paid the service tax under TR-6 challans in respect of the GTA service received by Malanpur unit and the Malanpur unit had taken Cenvat credit only in respect of the service tax paid by the head office, on the GTA service received by the Malanpur plant, the issue of invoice by the head office as input service distributor allocating credit to the Malanpur unit would be only technical necessity. We are, therefore, of prima facie view that in absence of such invoices, it would not be correct to deny the Cenvat credit. The requirement of pre-deposit of Cenvat credit demand, interest and penalty is, therefore, waived for hearing of this appeal and the recovery thereof is stayed, till the disposal of the appeal - Stay granted.

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• CST, VAT & Sales Tax

• 2014 (3) TMI 949
  Recovery of tax dues – Liability of Director - Provision to recover company tax dues from the personal assets of the Director – Held that:- Judgment in M/s Meekin Transmission Ltd., Kanpur Nagar vs. State of U.P. and others [2008 (2) TMI 406 - ALLAHABAD HIGH COURT] followed – Company has a separate juristic personality and there is no provision in the U.P. Trade Tax Act under which the dues of the dealer Company could be recovered from the personal assets of a Director - Recovery has been issued against the Company, showing the name inter alia of the petitioner as a proprietor – No need to interfere with the enforcement of the recovery citation against the Company and this judgment is confined only in respect of the enforcement of the recovery citation against the personal assets of the petitioner – Petition allowed and set aside the recovery citation only insofar as it operates against the personal assets of the petitioner – Decided in favour of assessee.

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• 2014 (3) TMI 948
  Initiation of proceeding and issuance of notice u/s 21 (2) of the U.P. Trade Tax Act, 1948 – Re-opening of assessment order – Whether a complete assessment under the Act could be reopened and any case for reopening the assessment u/s 21(1) is made out after prescribed period when that period has been enlarged by amending the law - whether it is a case of change of opinion – binding force of per incurium judgment - Held that:- Decisions in Binani Industries Limited Versus Assistant Commissioner Of Commercial Taxes, Vi Circle, Bangalore [2007 (4) TMI 353 - SUPREME COURT OF INDIA] and Additional Commissioner (Legal) and another Versus Jyoti Traders and another [1998 (11) TMI 531 - SUPREME COURT OF INDIA] followed – By virtue of Section 21(2) and the proviso added to it, it is clear that the CST could authorize making of assessment or reassessment after the expiration of 6 years from such year, i.e upto 31.03.1999 or March 31,2002 whichever is later - It is immaterial if a period for assessment or reassessment u/s 21(2) before the addition of the said proviso had expired - Notice to the assessee follows the authorisation by the CST - A fiscal statute can have retrospective operation - If we accept the interpretation given by the respondents, the proviso added to Section 21(2) providing limitation up to 31.03.2002 becomes redundant - Proviso now added to Section 21(2) does not put any embargo on the CST not to reopen the assessment if period had expired before the proviso came into operation - To reassure oneself, one may go into the intention of the legislature in enacting such provision –thus, the impugned notice issued is well within time. While delivering the judgment the DB in M/s Prag Ice and Oil Mills and others Vs. Additional Commissioner of Trade Tax, Aligarh Zone and another; 2008 have not noticed the retrospectivity of the provisions contained in the proviso added to section 21(2) and the amended Ist proviso added on 5.3.2001 as a whole as interpreted by Apex Court in M/s Binani Industries Limited case(Supra) and Jyoti Traders case (Supra) as such the judgment in Prag Ice and Oil Mills case (Supra) being per incuriam have no binding force and are not binding precedent - Decided against assessee. The notice under section 21 has been issued without any fresh material but not on account of change of opinion - Initial opinion while passing the original assessment order was to grant exemption on such sale of scooters has not been changed while issuing the notice but on the same principles it was found that exemption has wrongly allowed to the extent of ₹ 97,02,050.65 which ought to be taxed - So far as this calculation of total amount of 270 certificates are concerned, the correctness of the same has not been disputed by the petitioner - In view of the factual matrix of this case the AC was having well founded reason to believe for issuing impugned notice and fall within the ambit of section 21(1), in limb-IV – Decided against assessee.

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