TMI Tax Updates - e-Newsletter
April 1, 2016
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:
Condonation of delay - The statutory remedy of appeal having come into existence on 01.06.2015, cannot be stretched retrospectively for extending the benefit as claimed by the appellant for condoning the delay. - HC
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Income Tax:
Entitlement to exemption u/s.10(23C)(vi) - Merely because the Assessee School does not have power to purchase, acquire, or sell the property, does not mean that the school will cease to exist as an Institution. - AT
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Income Tax:
Security deposit collected from its members refundable - whether receipts does not partake the character of income? - Held No - AT
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Income Tax:
Exemption u/s 54B - assessee has purchased agricultural land in the name of his wife and the payment was made by the assessee from his own source through banking channel - assessee is entitled for the benefit of deduction u/s 54B - AT
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Income Tax:
Penalty imposed u/s 271(1)(c) - Penalty cannot be levied on the basis, merely of an estimate of cost of construction of a building built by an assessee with his funds - AT
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Income Tax:
MAT computation - Assessment u/s 115JA - AO does not have the jurisdiction to go beyond the net profit shown in the profit and loss account except to the extent provided in Explanation to Section 115JA of the Act - AT
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Customs:
Grant of waiver of demurrage charges - the Board having itself found no guideline was in place to cover the case of the petitioner, went on to say its case did not deserve consideration due to any special circumstance. - so far as the Customs was concerned their ‘bureaucratic machinery, in such a situation, will not be able to function, because none of the standard operations quite fits the special situation’. - HC
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Customs:
Violation of Regulations 11(a), 11(d) and 11(n) of CBLR, 2013 - the appellant totally failed to discharge its duties as CHA as laid down in Regulation 11 of CBLR 2013. - the Custom Broker licence continued to be suspended. - AT
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Customs:
Prohibition on goods imported through Notification No. 1/64-Cus dated 18th January 1964 under section 11 - Import of parts of air conditioners but were found to lack country of origin marks - The two lower authorities have failed to take note of the altered provisions of the statute - AT
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FEMA:
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Fifth Amendment) Regulations, 2016 - Notification
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Corporate Law:
Companies (Indian Accounting Standards) (Amendment) Rules, 2016 - Notification
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Service Tax:
Allowability - Claim for refund of the tax paid as service tax on the renting of immovable property to them during the period 1.04.2008 to 31.03.2009 - appellant is not allowed to claim refund. - AT
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Service Tax:
Application of time-limit of Section 11B of Service Tax Act, 1994 - the question of application of section 11B would not arise, as in the case, the refund of amount of Cenvat Credit availed on various input services is clearly covered by rule 5 of CCR, which lays down the time limit for filing of the refund claim i.e. within one year from the end of quarter during which services were exported - AT
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Central Excise:
Benefit of SSI Exemption - Appellant’s name of the company itself is M/s.Elac Marketing Pvt.Ltd. The company name itself has the word ‘Elac’ which is part of the company’s name and the appellants cleared the goods indicating their company name ‘Elac" followed with Excel’. Therefore, it cannot be construed that they have affixed brand name of other person - AT
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Central Excise:
Interest on refund - respondent-assessee is not entitled to interest on delayed refund because the department has sanctioned the refund within a period of three months from the date of receipt of the application for refund as per the requirement in law. - AT
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Central Excise:
Classification - these products (sl.no. 3 to 9) qualified to be considered as other chemical fertilizers and contain either nitrogen, phosphorous or potassium, which is the essential constituents to be classified under other fertilizers. - AT
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Central Excise:
Entitlement to capital goods CENVAT Credit - No reason is given for denying the credit on these items in the impugned order. Credit cannot be denied without reason arbitrarily - AT
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Central Excise:
Cenvat credit - Once the credit is availed, the use of such credit is governed by Rule 3 of the Cenvat Credit Rules, 2004. Sub-Rule (4) of the said Rule stipulates that Cenvat credit may be utilized for payment of any duty of excise on any final product. Here there is no one to one co-relation or condition that credit on input services can be utilized only for discharging tax on output services or Excise Duty on final products cannot be paid using Cenvat credit availed on input services - AT
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Central Excise:
Liability to Central Excise duty on the amount received towards erection/ installation/commissioning charges - merely because the said activity is being undertaken by the supplier of the goods does not mean that the consideration for the same has to be added in the assessable value of the goods. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (3) TMI 1070
Condonation of delay - only ground seeking condonation of delay is that since the right of appeal has now been created, therefore, the appellant has a right of appeal against the order passed in 2008 - Held that:- We are unable to agree with this proposition inasmuch as, a right of appeal is a matter of procedure that gets converted into a substantive right as a creature of statute. The appeal has to be filed within the limitation prescribed. It cannot create a retrospective right to file an appeal which did not exist in the year 2008 or even on 06.01.2009 when the order was served on the appellant. In the absence of existence of such a right, it was open to the appellant to have filed a writ petition challenging the same in 2008-09. The very same view has been taken by the Tribunal and it has declined to grant any benefit of a bona fide act as urged by the appellant. The statutory remedy of appeal having come into existence on 01.06.2015, cannot be stretched retrospectively for extending the benefit as claimed by the appellant for condoning the delay. - the appeal deserves to be rejected.
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2016 (3) TMI 1069
Disallowance u/s 14A r.w.r 8D - Held that:- The facts are proved by the increase in reserve and surplus over the years which were at ₹ 414 crores as on 31.3.2008 against the investment in subsidiaries which stood ₹ 319.43 crores as on 31.3.2008. We also note that the assessee had taken loans from Financial Institutions amounting to ₹ 722.24 crores, out of which the working capital loan ₹ 258.79 crores and remaining pertains to term loans for the specific purposes. The AO took the entire interest debited to the profit and loss account amounting to ₹ 94.35 crores and worked out the disallowance accordingly. In our opinion, the ld CIT(A) had rightly deleted the disallowance on account of interest under rule 8D(2)(ii) of the Rules and rightly upheld the disallowance to the tune of ₹ 0.5% of the value of investment which comes to ₹ 1,35,14,428/- being 0.5 % of ₹ 270.28 crores by following the decisions of the earlier years in the case of the assessee wherein the similar issue came up for consideration before the Tribunal and decided in favour of the assessee. Addition u/s 36(1)(iii) - proportionate interest expenditure pertaining to interest free loans and advances given by the assessee to subsidiaries companies out of interest bearing funds raised by the assessee - CIT(A) deleted addition - Held that:- The assessee's business expediency is proved beyond doubt that the entire interest free advances were given to the subsidiary company out of commercial expediency. In the case of Reliance Utilities and Power Ltd (2009 (1) TMI 4 - BOMBAY HIGH COURT ), The Hon'ble Court has held that the assessee has its own funds and simultaneously has borrowed interest bearing funds the presumption is that the advance of money is out of own funds and not out of interest bearing funds. We, therefore, respectfully following the ratio laid down in the above decisions supra confirm the order of ld. CIT(A) on this issue. - Decided in favour of the assessee. Loss u/s 43(5)(d) on account of M to M losses - CIT(A) deleted the loss - Held that:- In view of the facts of the assessee and various judicial decisions of the coordinate benches following the decision of apex court in the case of Woolward Governor India Pvt. Ltd (2009 (4) TMI 4 - SUPREME COURT ) and special bench decision in the case of Bank of Bahrain and Kuwait (2010 (8) TMI 578 - ITAT, MUMBAI ), we are of the considered view that case of the assessee is fully covered by the decisions of the coordinate benches and we therefore respectfully following the same allow the appeal of the assessee on the issue of MTM losses by deleting the disallowance - Decided in favour of the assessee. Disallowance of repairs and maintenance - Held that:- Expenses could not be disallowed merely on the ground that they are related to the transactions pertaining to earlier years unless and until the AO is fully satisfied after proper investigation about the crystallization of the liability and also the disallowance cannot be made merely on the ground that account maintained in the system of accounting and relates to the transactions of the previous year. In our opinion the true profits and loss of the assessee could only be determined if the expenses are allowed. Moreover, if these expenses are not allowed in this year, they are liable to be set off from the profit of the year ended 31.3.2006 related to the assessment year 2006-07. We, therefore, uphold the order of the ld. CIT(A) by dismissing the appeal of the revenue on this ground.- Decided in favour of the assessee. Addition on account of repair and maintenance of furniture - Held that:- The bill dated 25.10.2005 is in respect of repairs and maintenance of the furniture, POP, painting etc were settled and finalised during the year. We further observed from the said records that the said bill could not be accounted for in the year to which it pertained as it was received late and at the year end it could not be possible to estimate the liability with reasonable degree of accurancy. The bill was received in the subsequent year and the CIT(A) has recorded the finding of facts that the crystallisation had taken placed during the year and pertained to the current year and AO had wrongly disallowed the same. - Decided in favour of the assessee.
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2016 (3) TMI 1068
Capital gains v/s business income - nature of income - Held that:- Taking into consideration the total effect of the principles, as advised by the Board, it would be clear that the short term capital gains is not on account of business activity. It is but similar to the activity in long term capital gains. As noted earlier, AO has accepted the long term capital gains on similar transactions in investment account. More over assessee has substantial trading income which was dealt separately in books of accounts. Therefore, we do not find any infirmity in the order of the CIT(A) in treating the gains on shares as capital gains as against the profits from business by the AO. - Decided against revenue Disallowance of bad debts written off - Held that:- Once the bad debt is written off as irrecoverable in the books of assessee, the claim of bad debt cannot be disallowed. Moreover as held by the honourable Bombay High Court in the case of Shreyas S Morakhia [2012 (3) TMI 103 - BOMBAY HIGH COURT ] and in the case of Bonanza Portfolio Ltd [2009 (8) TMI 636 - DELHI HIGH COURT] , as assessee offered brokerage income which was taken into account in the books, the principle amount has to be considered as full amount of debt for claim of deduction. Even if a fraud was committed on that account the same is allowable as bad debt. We, therefore, uphold the order of the CIT(A) in allowing assessee’s claim of bad debts. - Decided against revenue
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2016 (3) TMI 1067
Entitlement to claim exemption u/s. 54 - reopening of assessment - Held that:- There is no dispute that assessee has made investment in the new property. It is also borne out from facts on record that investment in the second property is within the period of two years from the date of sale or original asset. That being the case, assessee will be eligible for exemption under section 54 of the Act. So far as AD's objections with regard to purchase of the property in the name assessee's wife is concerned, the same in our view is totally irrelevant and untenable. In any case of the matter, since we have already held that proceeding initiated under section 147 is invalid, this issue has become merely of academic interest. - Decided in favour of assessee.
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2016 (3) TMI 1066
Entitlement to exemption u/s.10(23C)(vi) - Held that:- Merely because the Assessee School does not have power to purchase, acquire, or sell the property, does not mean that the school will cease to exist as an Institution. Thus the ‘STATUS’ of the Assessee could be A.O.P. in the absence of any Memorandum of Association or Trust Deed. Considering the above decision of the I.T.A.T.Delhi Bench, in the present case also the above Matriculation School which is managed by Education Board and granted permission by the Director of School Education as early as 07.10.1997 is an “Institution” qualifying for exemption U/s. 10(23C)(vi) of the I.T.Act. Hence the exemption sough for the above “Institution” is to be granted. Accordingly, we direct the CCIT to grant exemption u/s.10(23C)(vi) of the Act. - Decided in favour of assessee.
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2016 (3) TMI 1065
Security deposit collected from its members refundable - whether receipts does not partake the character of income? - Held that:- The Tribunal in assessee’s own case passed for AY 2008-09, under the identical facts and circumstances of the case, has held that the security deposit collected from its members which is refundable and does not partake the character of income. Disallowance u/s 14A - Held that:- Looking to totality of the facts and circumstances of the case and in view of the submission made by the ld.counsel for the assessee, hold that the disallowance by applying the provisions of section 14A of the I.T.Act, 1961 is justified and in accordance with law.
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2016 (3) TMI 1064
Validity of assessment u/s 153A - disallowance under the provisions of Section 40A(3) - Held that:- It is undisputed fact that there was no seized incriminating material suggesting any disallowance under the provisions of Section 40A(3) of the Act. A perusal of the assessment orders does not reveal that the impugned additions made in respect of both the assessment years, have neither been based on any incriminating material seized, nor there is any whisper in the assessment orders. The law is well settled that, no assessments can be made under Section 153A in the absence of any seized incriminating material. - Decided in favour of assessee.
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2016 (3) TMI 1063
Addition u/s 50C - assessee submitted that the plots were held by the assessee as stock-in-trade of the business - Held that:- We have perused the provisions of section 50C(1). It is very clear from the section itself that the provisions of section 50C(1) is attracted only in a case of a capital asset and not in the case where the asset is held as stock-in-trade. From the facts in the present case, and the paper book filed, it is very clear that all the properties sold by the assessee during the relevant year under consideration formed part of stock. Therefore, we are of the considered opinion that the provisions of section 50C are not applicable to the present facts of the case - Decided in favour of assessee Disallowance being excessive interest paid on unsecured loans to related parties above the presumptive rate of 12% - Held that:- It is not the case of the Revenue that the assessee has not paid the interest at the said rate to the lender. It is also not the case that the borrowed funds have not been utilized by the assessee for the purposes of business. If a wrong or unwise decision has been taken by the assessee, it cannot be said that the decision is dubious or the assessee in such transaction has adopted method to evade the payment of tax. It is also not the case of the Revenue that the assessee has paid any dividend from such borrowed funds. In the instant case, there is no such evidence that has been brought on record by the ld. AO of any such method or practice adopted by the assessee. We are, therefore, inclined to allow this ground of appeal in favour of assessee. Ad hoc disallowance at 20% of travelling expenses - Held that:- . In the present case it is noticed that neither the Assessing Officer nor the ld. CIT(A) has given any cogent reason while confirming/sustaining the disallowance out of travelling expenses. On the contrary the assessee paid the fringe benefit tax and incurring of expenses is not in dispute.- Decided in favour of assessee
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2016 (3) TMI 1062
Disallowance u/s 40(a)(ia) - addition on account of interest paid to various loan depositors without deduction of tax at source - Deemed date of payment of tax by the resident payee - Held that:- Restore this issue to the file of the Assessing officer with the direction that the assessee shall provide all the details to the Assessing Officer with regard to the recipients of the income and taxes paid by them. The Assessing Office r shall carry out necessary verification in respect of the payments and taxes of such income and also filing the return by the recipient. In case, the Assessing Officer finds that the recipient has duly paid the taxes on the income, the addition made by the Assessing Officer shall stand deleted - Decided in favour of assessee by way of remand. Addition on remuneration paid to partners of the assessee firm in excess of the limits prescribed u/s 40(b) - Held that:- From the said Explanation 3, it is apparent that the book profit has to be the profit as has been shown in the profit & loss account for the relevant previous year. The profit received by the assessee on the sale of goddown amounting to ₹ 10,20,430/- was duly credited in the profit & loss account as prepared by the assessee and is part of the net profit as has been shown in the profit & loss account. In view of this fact, it is of the view that both the authorities below did not appreciate the provision of section 40(b)(v), Explanation 3 and misinterpreted definition of the book profit as given under Explanation 3 to section 40(b) of the Act. Accordingly set aside the order of the CIT (A) and delete the disallowance made by the AO - Decided in favour of assessee Addition on account of amount paid for the purchase of computer - entitlment for deduction u/s 37 - Held that:- As noted that even though the assessee claims the payment for such purchase of the computer has been made through cheque to the supplier of the computer but he could not adduce any evidence, confirmation of the party as well as copy of the invoice even though the sufficient opportunity was given to the assessee. No doubt, the assessee is entitled for deduction u/s 37 of any expenditure which has been incurred by the assessee for the purpose of the business but, in my opinion, the assessee is bound to prove the genuineness of the expenditure. It is a case where the assessee has not discharge his onus proving the genuineness of the expenditure. Accordingly confirm the disallowance of ₹ 15,650/-. - Decided against assessee
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2016 (3) TMI 1061
Adoption of fair market value as at 1-4-1981 of the property sold by the assessee - Held that:- The rates adopted by the AO by obtaining the same from the office of District magistrate for 1984 cannot be applied for determining fair market value of property as at 1-4-1981. Therefore we are also not approving the rates adopted by the AO as well as by assessee. Therefore according to the law it is for the assessee to substantiate fair market value of the property by submitting the valuation report obtained from authorized valuer. If the assessee does not exercise this option than AO does not have any option but to adopt the cost of acquisition for the purposes of determining the capital gain in the hands of the assessee. As admittedly assessee has not exercised this option, in the interest of justice one more opportunity is given to assessee to submit before AO the fair market value of the assets as at 1-4-1981 by submitting the valuation report of the property from authorized valuer not later than four months from the date of receipt of this order. After that AO may act according to the provision of section 55A of the Income tax Act and decide the issue on merits. In view of this ground no 1 of the appeal is set aside to the file of AO with above direction to consider the valuation report, if any, submitted by the assessee in above time frame. - Decided in favour of assessee by way of remand Addition of deduction u/s 54B - whether the assessee has purchased agricultural land in the name of his wife and the payment was made by the assessee from his own source through banking channel - Held that:- There is no doubt that the property has been purchased by the assessee in the name of the wife of the assessee and according to the decision relied up on by the LD AR, assessee is eligible for deduction u/s 545B of the Act provided the funds from which this asset is acquired are invested by the assessee. By producing the bank account of the assessee it is apparent the cheque nos mentioned in the sale deed and the bank account are same and same has not be disputed by the ld DR. Hence assessee is entitled for the benefit of deduction u/s 54B of the act. - Decided in favour of assessee
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2016 (3) TMI 1060
Penalty imposed u/s 271(1)(c) - addition on account of unexplained investment in cost of construction cannot be made on the basis of DVO’s report - Held that:- While dealing with the assessee’s objections on the DVO’s report, the AO has relied only on the comments of the DVO in response to the assessee’s objections but has failed to give a final finding on the issue. Thus he has not dealt with the assessee’s objections properly. This might have served the Revenue’s purpose in the quantum proceedings but when it comes to imposition of penalty for furnishing of inaccurate particulars and/or concealment, utmost caution has to be exercised. The Department has not been able to substantiate as to how there has been furnishing of inaccurate particulars of income and/or concealment by the assessee when the AO has himself not brought any cogent material on record, apart from the DVO’s report, to justify the imposition of penalty. The Hon’ble High Court of Madras in CIT vs Apsara Talkies (1981 (11) TMI 2 - MADRAS High Court ) has held that, “Penalty cannot be levied on the basis, merely of an estimate of cost of construction of a building built by an assessee with his funds. Thus the penalty imposed by the Assessing Officer under section 271(1)(c) was not sustainable - Decided in favour of assessee
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2016 (3) TMI 1059
Eligibility of deduction under sec. 80P(2)(a)(i) - Held that:- sec. 80P(2)(a)(i) of the Act following the decision of the Hon'ble Bombay High Court at Panaji in the case of M/s. The Quepem Urban Cooperative Credit Society Ltd. Vs. ACIT [2015 (6) TMI 573 - BOMBAY HIGH COURT ] wherein held that the contention of revenue that the appellant is not entitled to the benefit of Section 80P(2)(a)(i) of the Act in view of the fact that it deals with non-members cannot be upheld. This for the reason that Section 80P(1) of the Act restricts the benefits of deduction of income of co-operative society to the extent it is earned by providing credit facilities to its members. As at the time when effect has been given to the order of this Court, the authorities under Act would restrict the benefit of deduction under Section 80P of the Act only to the extent that the same is earned by the appellant in carrying on its business of providing credit facilities to its members. - Decided in favour of assessee.
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2016 (3) TMI 1058
Disallowance of deduction u/s.80IB(10) - claim of the assessee was disallowed mainly for the reason that assessee did not own the land on which the project was constructed and the assessee was a works contractor and that the approval for construction of residential units was given by the local authority to the land owners and not to the assessee - CIT(A) allowed the claim - Held that:- CIT(A) after considering the submissions of the assessee and remand report from the Assessing Officer has given a finding that assessee had practically purchased the land. Ld. CIT(A) further after perusing the development agreement has given a finding that the assessee was having dominant control over the land and was found to have been fulfilling the tests laid down by the Tribunal in the case of M/s. Shakti Corporation [2008 (11) TMI 436 - ITAT AHMEDABAD ]. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) and has not brought on record any contrary binding decision. In view of the aforesaid facts, we find no reason to interfere in the order of ld.CIT(A) - Decided against revenue
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2016 (3) TMI 1057
Deemed dividend addition u/s 2(22)(e) - assessment under Section 153A - Held that:- Revenue has not placed any material on record to demonstrate that incriminating material with respect to deemed dividend (which has been added in the impugned assessment) was found during the course of search at the premises of the assessee. In such a situation, we are of the view that no addition u/s. 2(22)(e) of the Act could have been made in the present case. We, therefore, direct the deletion of addition. - Decided in favour of assessee
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2016 (3) TMI 1056
MAT computation - Assessment u/s 115JA - Held that:- Retrospective amendment in Section 115JA of the Act, the provision for doubtful debts and advances requires to be added back to the book profits u/s 115JA of the Act. The provision made for incremental wages remains an ascertained liability and not a contingent liability in the facts and circumstances of this case and accordingly does not requires to be added back as per Clause (c) of Explanation to Section 115JA(2) of the Act. Since the purchases were not debited in the profit and loss account for the financial year 1998-99 relevant to Asst Year 1999- 2000, the same is not eligible for deduction from computation of book profits u/s 115JA of the Act. However, we hold that the same is liable to be granted deduction in Asst Year 2000-2001 , being the year in which the purchases were debited by the assessee, while computing book profits u/s 115JA of the Act. The Learned AO is directed to grant relief for the same in Asst Year 2000-2001 in section 115JA computation in order to avoid double disallowance of genuine expenditure incurred by the assessee. AO does not have the jurisdiction to go beyond the net profit shown in the profit and loss account except to the extent provided in Explanation to Section 115JA of the Act. Disallowance of u/s 14A - Held that:- Provisions of Clause (f) of Explanation to Section 115JA of the Act cannot be invoked in the facts of the present case. We hold that unless an item is debited in the profit and loss account, the same cannot be the subject matter of addition to book profits under clause (f) of Explanation to section 115JA of the Act. The disallowance made u/s 14A of the Act read with Rule 8D is only artificial disallowance and obviously the same is not debited in the profit and loss account and the same cannot be imported into clause (f) of Explanation to Section 115JA of the Act.Thus we hold that no disallowance u/s 14A of the Act could be made for the purpose of computing book profits u/s 115JA of the Act.
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2016 (3) TMI 1055
Applicability of provisions of sec. 142A - non rejection of books of accounts - addition u/s 69B - - Reference made to DVO u/s 142A - Held that:- A decided in M/s Legend Estates Pvt Ltd. vs DCIT [2014 (4) TMI 154 - ITAT HYDERABAD] A reference to DVO u/s. 142A can be made only when a requirement is felt by the AO for making such reference. Requirement would arise or could be felt only when there is some material with the AO to show that whatever estimate assessee has shown is not correct or not reliable - The use of word ‘require’ is not superfluous but signifies a definite meaning whereby some preliminary formation of mind by the AO is necessary which requires him to make a reference to the DVO u/s 142A - It can only be during the course of pendency of assessment or reassessment that the AO frame his mind to refer the property to valuation cell of the Department - if there is a basis to think that the assessee may have understated the cost of construction or whatever is declared by him in this regard is not believable - reference to valuation cell u/s. 142A can be made during the course of assessment and reassessment and not for the purpose for initiating assessment – Decided against Revenue. Penalty u/s 271(1)(c) - Held that:- In this case, the assessee failed to furnish fully and accurately all particulars of expenditure said to be incurred for the land development. The clarification given by the assessee is not sufficient to substantiate or develop any confidence so as to hold that assessee-company has actually incurred any expenditure in land development. Even if any deduction is claimed b the assessee wrongly but bonafide and no malafide can be attributed, the penalty would not be levied. If there is a deliberate concealment and false/inaccurate return was filed, which was revised after the assessee was exposed of the falsehood, it would attract penalty. Further, where the claim made in the return appears to be ex facie bogus, it would be treated as a case of concealment or inaccurate particulars and penalty is to be levied. We may also take note of the observation of the Supreme Court in the case of Union of India vs Dharmendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT ], wherein held that the explanation appended to sec. 271(1)(c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of sec.271(1)(c) of the Act read with the Explanations indicate that the said section has been enacted to provide for a remedy for loss of revenue. Willful concealment is not an essential ingredient for attracting civil liability as in the case of prosecution u/s 276C of the Act. In view of this, we have no hesitation in reversing the order of the CIT(A) and restoring that of the Assessing Officer in levying penalty u/s 271(1)(c) of the Act. - Decided against assessee.
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2016 (3) TMI 1054
Reopening of assessment - exemption u/s. 10B of the Act and also exemption on receipts relating to EMA - Held that:- This issue is squarely covered in favour of the assessee and against revenue in the case of CIT Vs. Kelvinator India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA), wherein newly substituted provision of section 147 of the Act with effect from 01.04.1989 is interpreted by observing, that section 147 of the Act, as substituted w.e.f. 01.04.1989 does not postulates conferment of power upon the AO to initiate reassessment proceeding upon his mere change of opinion. Further, if ‘reason to believe' of the AO is founded on an information which might have been received by the AO after the completion of assessment, it may be a sound foundation for exercising the power under section 147 r.w.s. 148 of the Act. It cannot be accepted that only because in the assessment order, detailed reasons have not been recorded, an analysis of the materials on the record by itself may be justifying the AO to initiate a proceeding u/s. 147 of the Act. When a regular order of assessment is passed in terms of section 143(3) of the Act, a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of section 114(e) of the Indian Evidence Act, 1872, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the AO to reopen the proceeding without any thing further, the same would amount to giving a premium to an authority exercising quasi judicial function to take benefit of its own wrong. - Decided in favour of assessee
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Customs
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2016 (3) TMI 1038
Denial of exemption claim - import of copper concentrates failing under CTH 2603 00 00 - benefit of Notification No. 24/2011-Cus. Dated 01/03/2011 - an assay certificate from the mining company is required to be furnished for getting deduction of the value of gold & silver content contained in the copper concentrate - CESTAT has decided the matter conditionally in favour of assessee reported in [2015 (3) TMI 948 - CESTAT AHMEDABAD]. - Apex Court dismissed the revenue appeal
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2016 (3) TMI 1037
Whether the registration of the FIR, narrating the factual position as has already been described at the beginning of this order, as also, the communication of the first information report to the Superintendent of Police, Panipat would constitute an effective compliance of the provisions contained in Section 42 of the NDPS Act - Non-compliance of Section 42(1) of the NDPS Act contended by appellant - Possession of charas, opium and smack - Held that:- the mandate contained in Section 42(1) of the NDPS Act, requiring the recording in writing, the details pertaining to the receipt of secret information, as also, the communication of the same to the superior officer are separate and distinct from the procedure stipulated under the provisions of the Criminal Procedure Code. Sub-section 1 of Section 41 of the NDPS Act provides that a Metropolitan Magistrate or a Magistrate of the First Class or any Magistrate of Second Class specially empowered by the State Government may issue a warrant for the arrest of any person whom he has reason to believe to have committed any offence punishable under Chapter IV. The procedures under Section 41(1) and 42(2) ibid are separate and exclusive of one another. Compliance of one, would not infer the compliance of the other. In the circumstances contemplated under Section 42 of the NDPS Act the mandate of the procedure contemplated therein will have to be followed separately, in the manner interpreted by this Court in Karnail Singh v. State of Haryana [2009 (7) TMI 1144 - SUPREME COURT] and the same will not be assumed, merely because the Station House Officer concerned had registered a first information report, which was also dispatched to the Superintendent of Police, in compliance with the provisions of the Criminal Procedure Code. So, the submission of the respondent-State is not acceptable, that the registration of the first information report at the hands of the Station House Officer, Police Station Shahar, Panipat and its communication to the Superintendent of Police, Panipat would constitute sufficient compliance of the mandate of Section 42 of the NDPS Act. Therefore, Section 42 of the NDPS Act was not complied with at all. - Decided in favour of appellant
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2016 (3) TMI 1035
Grant of waiver of demurrage charges - Exportation of copper wires - Petitioner sent goods but the importer did not turn up to file Bill of Entry hence, the petitioner sought for reshipment of goods - Board chose to not to exercise power under Section 53 of the said Act and rejected the claim for demurrage - Held that:- in rejecting the claim of the petitioner, upon having entered into an exercise to consider the same, the Board relied on guidelines for waiver of demurrage charges on imported cargo on recording there is no guideline for waiver of demurrage charges on export cargo. Inference can be drawn that the petitioner was taken by surprise on the reliance of such guidelines as they had come prepared and did submit without reference to the same. Prejudice appears to have been caused to the petitioner and the demonstration of it is borne out from the face of the impugned order itself. The Board did not invite the petitioner, as does not appear from the impugned order, to make submissions with reference or regard to the guidelines for waiver of demurrage on imported cargo. Apart from that the Board having itself found no guideline was in place to cover the case of the petitioner, went on to say its case did not deserve consideration due to any special circumstance. On the top of that record bears the finding by this Court in the petitioner’s earlier writ petition, as would appear from the passage reproduced above, that so far as the Customs was concerned their ‘bureaucratic machinery, in such a situation, will not be able to function, because none of the standard operations quite fits the special situation’. Therefore, the impugned order is not sustainable and set aside. Also, the respondent no.1 shall revisit the claim of the petitioner for waiver of demurrage charges. Such direction is being made because the said respondent itself chose to consider the same under Section 53 of the said Act inasmuch as the claim of the petitioner was not rejected in limine. - Petition disposed of
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2016 (3) TMI 1034
Seeking modification of confirmation order - Continuation of suspension of Custom Broker licence in terms of Regulation 19(1) of the CBLR, 2013 - Violation of Regulations 11(a), 11(d) and 11(n) of CBLR, 2013 - Misdeclaration of packages of Jaipur Bench and Wooden Floor Lamps exported and and illegal export of red sander and sandal wood - Held that:- it is evident that the appellant was handling the consignment of the said exporter for the first time but had neither met the exporter nor verified its antecedents. It did not verify its permanent and present address. This constitutes serious violation of Regulation 11 of CBLR, 2013 on the part of the appellant. Nothing can possibly be a graver mis-conduct on the part of a CHA than to file Shipping Bill without making even preliminary enquiries about the genuineness of exporter in the name of which the S/B was filed. Such dereliction of duty on the part of a CHA, can potentially have even graver financial/security consequences. Thus the appellant totally failed to discharge its duties as CHA as laid down in Regulation 11 of CBLR 2013. Therefore, by applying the decision of Hon'ble High Court in the case of CC (General) versus Worldwide Cargo Movers [2006 (11) TMI 281 - BOMBAY HIGH COURT ], the Custom Broker licence continued to be suspended. - Decided against the petitioner
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2016 (3) TMI 1033
Invokation of Section 11 of the Customs Act, 1962 - Prohibition on goods imported through Notification No. 1/64-Cus dated 18th January 1964 under section 11 - Import of parts of air conditioners but were found to lack country of origin marks, therefore, violation of section 117 of Trade and Merchandise Marks Act, 1958 - Held that:- the two lower authorities have not ascertained and rendered a finding on the applicability of the prohibition to the goods under import. That there has been no such effort is apparent from the reference made to a prohibition in the omnibus notification of 1964 without verifying its continued existence in 2004. The Act relied upon by the lower authorities were replaced by the Trade Marks Act, 1999; no doubt existing notifications continued to exist under the corresponding provisions of the new Act but Section 117 of the old law was replaced by section 139 in the new Act. The two lower authorities have failed to take note of the altered provisions of the statute and appear to have taken recourse to a provision in notification issued under section 11 of Customs Act, 1962 without examining substantive compliance on the part of the importer or whether the exclusionary clauses of the primary notification were available to the importer. Therefore, Section 11 ibid can not be invoked. Decided in favour of appellant
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Corporate Laws
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2016 (3) TMI 1029
Winding up petition - direction to official liquidator to handover possession of the land to the owners - Held that:- Insofar as liability under Section 13(1)(k) of the Bombay Rent Act is concerned what is to be noticed is the requirement of unjustified non-user for a period exceeding 6 months which evidently is not be attracted to the present case in view of the pendency of the liquidation proceedings. That apart, Clause 5 of the lease deed which deals with non-user of the leased land does not contemplate eviction on account of such non-user but merely entitles the lessor to receive rent for the period of such non-user of the land. The mere fact that the company has been ordered to be wound up cannot be a ground to direct the official liquidator to handover possession of the land to the owners inasmuch as the company in liquidation continues to maintain its corporate existence until it stands dissolved upon completion of the liquidation proceedings in the manner contemplated by the Companies Act. In the present case it has been repeatedly submitted before this Court by both sides that presently revival of Prasad Mills is a live issue pending before the Gujarat High Court, a fact which cannot be ignored by this Court in deciding the above issue against the appellants.
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2016 (3) TMI 1028
Reduction of share capital - Held that:- There appears to be no impediment to grant sanction to the resolution, passed by the shareholders, at their EGM held on 06.12.2014, for reduction of its share capital by a sum of ₹ 24,34,700, comprising of 243470 shares of ₹ 10 each, held by public shareholders. As indicated above, necessary power for reduction in share capital is contained in Article 48 of the Articles of Association of the petitioner company.For the foregoing reasons, as prayed, the resolution passed, at the EGM, held on 06.12.2014, by the shareholders of the petitioner company is approved. As the petitioner company has no secured and unsecured creditors, it is exempted from using the expression “AND REDUCED” as a suffix against its name.The fact that the petitioner company is not listed on any stock exchange, an averment which is not refuted by the RD, the SEBI, so to say, may not have any role to play in the present petition.
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Service Tax
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2016 (3) TMI 1053
Liability of Service tax - Banking and Financial Service during the period September, 2002 to August, 2006 - Credit cards are used by appellant to customers, who use the same various outlets and the said payments are made by the bank to the outlet after retaining the small amount - Held that:- by following the ratio as settled by the larger bank in the case of Standard Chartered Bank Vs CST [2015 (8) TMI 686 - CESTAT DELHI (LB)], the service tax liability for the activity indicated in these appeals of the assessee is not taxable. - Decided in favour of appellant
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2016 (3) TMI 1052
Allowability - Claim for refund of the tax paid as service tax on the renting of immovable property to them during the period 1.04.2008 to 31.03.2009 - Service tax paid on the premises rendered by them from the various landlords - Held that:- appeals of the appellant herein are devoid of merits as by notification no. 23/2007-ST dated 22.05.2007, the government of India section 125 to the Finance Act, 2007, services rendered under the category of renting of immovable property for the use of in course of furtherance of business and consumers was retrospectively taxed with effect from 1.6.2007. A challenge to constitutional validity of the same was dismissed by the Hon'ble High Court of Bombay in the case of Retailers Association of India [2011 (8) TMI 58 - BOMBAY HIGH COURT]. Therefore, in view of the above the appellant is not allowed to claim refund.- Decided against the appellant
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2016 (3) TMI 1051
Waiver of demand - Business Support Services - Space booking for ocean freight - Appellant contended that excess amount if any recovered from the exporters as ocean freight cannot be treated as providing of Business support services - Held that:- by relying on the various decisions of co-ordinate bench, appellant has made out a prima facie case for complete waiver of demands with respect to taxability on ocean freight for exports. Admissibility of CENVAT Credit - Appellant has already deposited an amount of ₹ 25.00 Lakh through challan and ₹ 7.72 by way of reversal of credit - Held that:- applicant has already paid an amount of ₹ 32.72 Lakh through challan and reversal of CENVAT Credit regarding demand of CENVAT Credit, and is also agitating the issues on merits. Therefore, such deposit shall be considered sufficient for granting stay. - Stay granted
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2016 (3) TMI 1050
Eligibility for exemption from Service tax in terms of Notification No.13/2003-ST dated 20.06.2003 - Notification exempts from payment of Service Tax the “Business auxiliary services” provided by a “commission agent” - Engaged in marketing and selling of Indian Made Foreign Liquor (IMFL) for BDA LTD. - Consideration which the appellant was to receive for such services was linked to the quantum of goods actually sold - Commissioner denied the benefit of exemption on the ground that the activities performed by the appellant were much wider than that of a 'commission agent' as defined in the Notification - Held that:- the twin requirement of the definition of 'commission agent' viz., that the agent should cause sale or purchase of goods on behalf of another person and that the consideration should be linked to the quantum of such sale or purchase, stand fully satisfied. In view of the specific definition of the expression commission agent in the Notification, we are not inclined to look at the common parlance meaning of the said expression or its meaning in the VAT Laws. A letter dated 23.03.2000 addressed to the Appellant by BDA Ltd., shows that the appellant's service charges were fixed with reference to the quantum of products marketed by it. The debit advice annexed to the appeal shows that the consideration received was always linked to the quantum of sales effected. This evidence seems to lend support to the contentions of the appellant and in the absence of any specific finding in the impugned order or any allegation to the contrary in the Show Cause Notice and also during the period relevant to this appeal, there is no evidence to show that the appellant had indeed carried out any activity other than the activity of selling goods belonging to BDA Ltd. On this factual ground also, the appellant is entitled to succeed. Even if the appellant has rendered services relating to procurement of goods on behalf of BDA Ltd., or helped in collection or recovery of payments, it would remain entitled to the benefit of exemption. - Decided in favour of appellant with consequential relief
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2016 (3) TMI 1049
Application of time-limit of Section 11B of Service Tax Act, 1994 - Rejection of refund claim of Cenvat Credit lying unutilized during the July to September, 2012 - Rule 5 of Cenvat Credit rules 2004 (CCR) read with notification no. 27/2012-CE (NT) - Export of "Consulting Engineering Services" to their customers situated outside India - Appellant exported entire services and in order to render said services taken the credit of service tax paid on input services and eligible for refund of the Cenvat Credit which remains unutilized - Held that:- as regards the application of time limit, of section 11B to the entire issue, the question of application of section 11B would not arise, as in the case, the refund of amount of Cenvat Credit availed on various input services is clearly covered by rule 5 of CCR, which lays down the time limit for filing of the refund claim i.e. within one year from the end of quarter during which services were exported. Therefore, the finding recorded by the first appellate authority on this point is correct and does not require any in curtains. - Decided against the revenue
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Central Excise
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2016 (3) TMI 1048
Penalty invoking provisions of Section 11AC - willful misstatement of facts - shortages of phosphoric acid and sulphuric acid - Held that:- Willful misstatement or suppression of facts with intent to evade payment of duty is not established on the part of the appellants. The special facts of the case that a Government of India Enterprise - a Public Sector Undertaking (and its employees) are part of the proceedings and that “willful misstatement of facts with intent to evade duty” have not been found proved. Consequently, the demand of duty in both the appeals beyond the period of one year from the date of show-cause notice cannot survive. Revenue , thus has to recalculate the duty liability in respect of only one year period for which the demand has been found lawful as willful misstatement or suppression of facts with intent to evade payment of duty on the part of the appellants have not been found to be existing. The original adjudicating authority is directed to recalculate the duty liability in respect of the said shortages of phosphoric acid and sulphuric acid arrived at by the impugned Orders-in-Original. The demand of duty along with interest at appropriate rate for this said shortage, which is accountable for the period of only preceding one year prior to the date of show-cause notice is hereby sustained under the provisions of Section 11A(1) of Central Excise Act, 1944 read with Rule 6 of Central Excise (RGCRDMEG) Rules, 2011 and Section 11AB of the then Central Excise Act, 1944. In this regard, the appellants are directed to give all the documents if required by the original adjudicating authority and original adjudicating authority will also give the appellants sufficient opportunity by way of personal hearing to produce the data and documents, if any. This process of revision and recovery of demand has to be completed within three months of receipt of this order.
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2016 (3) TMI 1047
Benefit of SSI Notification No.8/2003 - whether assessee have used the brand name of other person and whether the demand is hit by limitation and, consequently, penalty is imposable or not? - Held that:- Concept of ‘similar’ etc. cannot be used to interpret the meaning of the word occurring in the notification by taking recourse to modes other than plain language. We find that para-4 of the notification stipulates that notification shall not apply to the goods bearing a brand name or trade name of another person. In the present case, appellants have not used the brand name of ‘Elac’ of another person but cleared under their own brand name ‘Elac Excel’. Further, it is pertinent to state that as already dealt the issue in the preceding paragraphs, the Appellant’s name of the company itself is M/s.Elac Marketing Pvt.Ltd. The company name itself has the word ‘Elac’ which is part of the company’s name and the appellants cleared the goods indicating their company name ‘Elac" followed with Excel’. Therefore, it cannot be construed that they have affixed brand name of other person. The brand name of ‘Elac Excel’ used by the appellant on Automatic Storage Water Heaters is not a brand name / trade name of any other person and not hit by para (4) of SSI Notification and they are eligible for the SSI exemption limit of ₹ 1.5 crores under the said notification.
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2016 (3) TMI 1046
Transaction value - whether the advertisement expenditure incurred by the dealers of the respondent-company does not form part of the transaction value for purposes of levy of excise duty? - Held that:- The Commissioner has taken the view that the expenditure so incurred on any advertisement campaign was liable to be included as part of the transaction value under the Act for purposes of levy of excise duty. A reading of the order passed by the Tribunal, however, leaves much to be desired in as much as several issues and aspects that arose for consideration and that had been dealt with by the Commissioner in his order have not been even mentioned leave alone satisfactorily dealt with. The order is on that short ground alone liable to be set-aside. In fairness to Mr. V.Lakshmikumaran, learned counsel for the respondent, we must mention that even he was agreeable to the matter being remitted back to the Tribunal for a more articulate and satisfactory adjudication of the aspects that arise for consideration. In the result, we allow this appeal, set-aside the order passed by the Tribunal and remit the matter back to the Tribunal for a fresh disposal in accordance with law.
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2016 (3) TMI 1045
Interest on refund - refund claim sanction - Held that:- The refund claim was filed on 17.12.2005 and the same was sanctioned within three months from the date of filing the refund claim and, therefore, as per Section 11BB, the assessee is not entitled to claim interest from the date when the alleged amount was deposited during investigation. As decided in Union of India & Others Versus M/s Hamdard (Waqf) Laboratories [2016 (3) TMI 68 - SUPREME COURT ] interest under Section 11BB of the Act becomes payable, if on an expiry of a period of three months from the date of receipt of the application for refund, the amount claimed is still not refunded. Thus, the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under Sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable - Decided against assessee
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2016 (3) TMI 1044
CENVAT Credit - denial of benefit on Input, Input Service and Capital Goods used in the manufacture of excisable goods and Outward Service - denial of Cenvat Credit on photo copy of the invoices - Held that:- We find that the definition of Input under Rule 2 (k) of Cenvat Credit Rules 2004 is in two parts. Clause (i) of Rule 2(k) relates to the manufacturer. Clause (iv) of Rule 2 (k) is in respect of the Output Service. We agree with the submission of the Ld. Authorised Representative to the extent that the inputs exclusively used in the manufacture of Ship, the appellants are not eligible to avail Cenvat Credit. The Adjudicating Authority should provide the report to the assessee before taking decision. In view of the above discussion and following the earlier order the denial of Cenvat Credit on Input, Input Service and Capital Goods for the construction of Dry Dock is set aside. Regarding the availment of Cenvat Credit on inputs, input service and capital goods for manufacturing Ship which is exempted from the Central Excise duty, we are directing to the Adjudicating Authority to examine as to whether the inputs exclusively used in the manufacture of Ship and decide the matter in accordance with law. The denial of Cenvat Credit on photo copy of the invoices, we direct the Adjudicating Authority to decide afresh after providing the report and to consider the submission of the appellant. Penalty is set aside.
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2016 (3) TMI 1043
Classification - 1. Allwin Gold, 2. Allwin Top, 3. Allwin Top plus, 4. Allwin Wonder, 5. Allwin Wonder Plus, 6. Allwin Legume, 7. Allwin Elixer, 8. Ramdoot, 9. Bolt, 10. Dosth. Out of these 10 products, appellant claimed classification 3105 9090 whereas the Revenue classified them under 3824 9090 as plant growth regulators - Held that:- We find that Allwin Wonder plus and Allwin wonder contains potassium and nitro benzene which has elements of both Nitrogen and potassium. In the case of Allwin Top plus and Allwin Top contains Mono ammonium phosphate, and potassium humate which contains both phosphorous and potassium. In the case of Allwin Legume and Allwin Elixier both products contain nitrogen, phosphorous etc., which clearly confirms as other fertilizers as stipulated under Chapter note 6 of chapter 31 and confirms Board’s Circular referred above. There is no dispute on the composition as confirmed from the test reports and confirms that both nitrogen and phosphorous or nitrogen and potassium or either one of the above are present in these mixtures and the usage as folio spray is not under dispute. Therefore, the adjudicating authority relying Fertilizer Control Order (FCO) for deciding the classification under 3105 is not justified and not substantiated. Accordingly, we hold that these products (sl.no. 3 to 9) qualified to be considered as other chemical fertilizers and contain either nitrogen, phosphorous or potassium, which is the essential constituents to be classified under other fertilizers. Accordingly, we hold that these products are rightly classifiable under 3105 9090 and not under 3824 9090. As regards Allwin Gold, we find that the adjudicating authority proposed to classify it under 3808 9340. As already discussed above, the composition of the product contains nitro benzene (20%) and urea (3%) along with other chemicals, which is not under dispute. It is not the case here that the appellants are clearing nitro benzene as such but it is used as one of the raw materials for manufacture of the product which is Allwin Gold. Both urea and nitrobenzene contains nitrogen which is essential ingredient for fertilizers. Therefore, the Revenue classifying them as plant growth regulators is not justified. We also find from the test reports and noticed that it does not contain any hormone ie., auxins, gibberellins or cytokinins. These are chemical hormones whether naturally or synthetically considered as growth regulators. In the present case, it is only a mixture of chemicals which are sprayed as folio spray for enhancing the growth of the folio in the stage of blooming. Accordingly, we do not see any justification by the Revenue classifying the products under 3808 9340 as PGR. Therefore, we hold that Allwin Gold is rightly classifiable under 3105 9090. As regards the last item “Dosth”, we find that this product was not declared by the appellant nor it was cleared separately but kept in the packets as a combi-pack. On perusal of the sample packet of Allwin wonder plus, we find that Dosth is a wetting agent and kept inside the pack of Allwin wonder plus as 20 ml sachet. It is an option to the user to use this wetting agent comes with combi-pack. There is no dispute that that the appellants are not clearing the wetting agent separately. But it is packed inside Allwin Wonder plus and sell it as a combi-pack. Accordingly, we hold that "Dosth" is rightly classifiable under 3105 9090 along with the main item.
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2016 (3) TMI 1042
Entitlement to capital goods CENVAT Credit - capital goods credit denied on the ground that the same are used partially for producing electricity which is sold outside - Held that:- It can be seen that in the instant case the Capital Goods are not used exclusively for producing electricity that is wheeled out. The benefit of credit can not be denied to items namely, Sr No. 21, 42, 43, 61, 63, 65, 67 and 53 of the annexure B.Items at Sr. No. 22, 58 and 64 of the said annexure B are claimed to be capital goods. Learned counsel informed that Sr. No. 32 is G.I. Plates scrap; Sr. No. 58 is SHRINKKOMP-30 and Sr. No. 64 is FRP Motor Cover. He could, however, not give exact usage of these items. No reason is given for denying the credit on these items in the impugned order. Credit cannot be denied without reason arbitrarily.- Decided in favour of assessee Non entitled to CENVAT Credit on the input services - claim denied as the plant was not set up with intention to captive consumption but also to the pre-set mind to sale electricity out of it for commercial consideration - Held that:- The Cenvat rules are common for both the inputs and for input services. Thus what the Hon'ble Supreme Court in Maruti Suzuki Ltd. [2009 (8) TMI 14 - SUPREME COURT ] has held in case of inputs will apply to the input services as well. In the instant case they have infact not availed entire credit but only the credit which is admissible to them in terms of Rule 6(2) of the Cenvat Credit Rules, 2004. In view of above we find that there is merit in the appeal filed by the appellants on this count. - Decided in favour of assessee Non admissible service tax - demand under Rule 6(3)(i) of the Cenvat Credit Rules - the electricity generated from the plant does not attract Central Excise duty - Held that:- The rule 6(3) can be invoked only if it is found that the appellant has failed to follow the previous provisions of the said rule 6 of the Cenvat Credit Rules 2004. In this case the appellants have taken credit only to the extent of credit that is eligible to them as the demands of reversal credit themselves have been set aside. In such circumstances the rule 6(3)(i) of the Cenvat Credit Rules 2004 cannot be invoked. The said rule comes into play only when there is a wrong and excess availment of credit. As the appellant have been taking credit only to the extent eligible to them rule 6(3)(i) of the Cenvat Credit Rules 2004 cannot be invoked. - Decided in favour of assessee
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2016 (3) TMI 1041
Admissibility of Cenvat credit on industrial construction service as the said service had no nexus with manufacture and clearance of excisable goods - Held that:- It has been admitted that the said input service is used for providing output services. Therefore, the objection is on utilization of such credit as available on input service for payment of Central Excise duty on industrial furniture. Thus find the reasoning by the lower Authorities is devoid of any legal merit. The eligibility of credit on the input service has not been contested. Once the credit is availed, the use of such credit is governed by Rule 3 of the Cenvat Credit Rules, 2004. Sub-Rule (4) of the said Rule stipulates that Cenvat credit may be utilized for payment of any duty of excise on any final product. Here there is no one to one co-relation or condition that credit on input services can be utilized only for discharging tax on output services or Excise Duty on final products cannot be paid using Cenvat credit availed on input services. Hence, the order of the lower Authority disallowing the Cenvat credit on input service is not legally sustainable. It is seen that the impugned order (para 11) examines the scope of 'input service'. The learned Commissioner (Appeals) observed that credit of service tax on input service is admissible only on those services which have connection or nexus with the manufacture and clearance of goods and includes services used in relation to activities relating to business. He proceed to deny the credit on commercial construction on the ground that the same is not connected to manufacture of industrial furniture. The impugned order has not examined whether the input service is eligible for credit as it has got nexus with taxable output service provided by the manufacturer. Thus, the discussion and findings were mis-directed resulting in the unsustainable conclusion. - Decided in favour of assessee
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2016 (3) TMI 1040
Cenvat credit denied - various items namely aluminium coils, S.S. Sheets, plates channels, M.S. angles etc. - revenue has declined to accept them as capital goods - Held that:- Keeping in view the law laid down by the Hon'ble High Courts and the Supreme Court in Rajasthan Spinning & Weaving Mills [2010 (7) TMI 12 - SUPREME COURT OF INDIA ] and M/s. Lloyds Metals and Engg Ltd.[2014 (8) TMI 913 - CESTAT MUMBAI ], it is of the considered view the appellants are entitled to CENVAT Credit on all the items mentioned above and the impugned order denying the CENVAT Credit solely on the basis of law laid down by the Larger Bench in the case of M/s. Vandana Global Limited (2010 (4) TMI 133 - CESTAT, NEW DELHI (LB) ) is wrong. Extended period of limitation invoked - Held that:- After going through the various judgments cited by the ld. Counsel for the appellants on limitation, wherein the various benches of the Tribunal has held that when the same provision of law is subject to various interpretation by different benches, then in that situation, extended period of limitation should not be invoked. As in that situation, no malafide can be attributed on the part of the appellants so as to justify invoking the longer period of limitation. Therefore, on limitation also I find that the entire demand except ₹ 14,206 is beyond limitation.
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2016 (3) TMI 1039
Liability to Central Excise duty on the amount received, from buyers of electronic exchange, towards erection/ installation/commissioning charges - Held that:- We notice first of all it is an optional activity. There is no allegation of artificial splitting of sale value or transaction value towards material and installation. We find the electronic exchanges are cleared as full equipment on payment of duty to the buyer's premises for installation and commissioning. We also find that the Tribunal had occasion to examine the same issue in respect of the same appellant [2013 (8) TMI 846 - CESTAT NEW DELHI] for earlier period wherein held as merely because the said activity is being undertaken by the supplier of the goods does not mean that the consideration for the same has to be added in the assessable value of the goods. In any case, the appellant has already discharged their service tax liability in respect of the said consideration, in which case the same cannot be taxed to Central Excise duty - Decided in favour of assessee
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CST, VAT & Sales Tax
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2016 (3) TMI 1032
Re-assessment of tax turn over - Escaped assessment - Section 12(8) of Odisha Sales Tax Act, 1947 - Assessing officer did re-assessment solely on the basis of Audit report without providing opportunity of personal hearing - Held that:- the Sales Tax Officer has to form his objective opinion by taking the evidence of the opposite party into consideration. But here, no enquiry, independent of the report filed against the opposite party by the Income Tax Department, has been considered. By relying on the decision of Hon'ble Apex Court in the case of Mahadayal Premchandra v. Commercial Tax Officer, Calcutta and another [1958 (4) TMI 73 - SUPREME COURT OF INDIA], followed in the case of Orient Paper Mills Ltd. v. Union of India [1968 (5) TMI 15 - SUPREME COURT OF INDIA] and again followed by this Court in the case of Indure Limited v. Commissioner of Sales Tax, Cuttack [2006 (7) TMI 572 - ORISSA HIGH COURT] with the provisions of law, the learned Tribunal has rightly observed that the conclusion arrived about escaped assessment, is based on suspicion and no opportunity has been given. Therefore, as no reasonable opportunity has been given to the opposite party to pass order under section 12(8) of the Act, the Tribunal's order is valid. - Decided against the appellant
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2016 (3) TMI 1031
Allowability of concessional rate of tax relating to the assessment year 1988-89 - As per Contract appellant engaged in designing, manufacturing, supplying and commissioning and for handing over of eight numbers of Yard Tractors with drive clutch unit and though the vehicle was named as tractor, there was nothing but a cabin built for the driver on the trailer/lorry chassis.- As per G.O.P.No.227, dated 3.3.1984, concessional rate of tax has been provided on the sale of lorry chassis - Held that:- the impugned order passed by the Tamil Nadu Sales Tax Appellate Tribunal (Main Bench), Chennai, is set aside and the matter is remitted back to the Tribunal to decide the matter, afresh, based on the evidence placed before it and to render a finding as to whether the vehicle in question is eligible for the concessional rate of tax, as held in the case of similar vehicles, during the assessment year 1989-90, after giving an opportunity of personal hearing to the assessee and the Department. - Matter remitted back
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2016 (3) TMI 1030
Seeking direction for declaring Section 62(5) of the Punjab Value Added Tax Act, 2005 as ultravires - Violative of Article 14 as it provides mandatory deposit of 25% tax, interest and penalty as a condition precedent for hearing of appeal without giving any discretion to the appellate authority to waive such deposit - Demand of tax in lieu of not providing exemption - Petitioner engaged in the business of running a rice mill at Faridkot and an exempted unit from 10.12.1999 to 9.12.2009 - Held that:- by relying on the decision of this court in the case of Punjab State Power Corporation Limited vs. The State of Punjab and Others) [ 2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT], even when no express power has been conferred on the first appellate authority to pass an order of interim injunction/protection, by necessary implication and intendment in view of various pronouncements and legal proposition expounded above and in the interest of justice, the partial or complete waiver can be granted only in deserving and appropriate cases where the first appellate authority is satisfied that the entire purpose of the appeal will be frustrated or rendered nugatory by allowing the condition of pre-deposit to continue as a condition precedent to the hearing of the appeal before it. - Petition disposed of
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Indian Laws
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2016 (3) TMI 1027
Appointment of Arbitrator - Held that:- Averments made in the petition must, in the absence of any counter from the respondent, be taken to be correct at least for the purposes of deciding whether the matter ought to be referred to an Arbitrator. This is especially so when the averments are supported by an affidavit filed by the petitioner. In that view, therefore, we see no reason to decline the prayer for appointment of an Arbitrator made by the petitioner. We, accordingly, appoint Hon’ble Mr. Justice H.S. Bedi, former Judge of the Supreme Court of India as the sole Arbitrator to adjudicate upon the disputes that have arisen between the parties. The Arbitrator shall issue notices to the parties in connection with the arbitral proceedings. He is left free to determine his fee. We make it clear that we have expressed no opinion on the merits of the case which aspect is left open for the parties to urge before the worthy Arbitrator.
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