TMI Tax Updates - e-Newsletter
April 2, 2013
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:
Charging of interest u/s 234A - AO should be specific and clear and the assessee must be made to know that the AO has applied his mind and has ordered charging of interest. - HC
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Income Tax:
Expenditure on know-how – Deduction of revenue expenditure was available u/s 37 and such deduction cannot be curtailed or limited by applying section 35AB. - HC
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Income Tax:
Disallowing the claim derivative loss as speculation loss - once the approval is granted in the relevant previous year the approval has to be taken as effective from the beginning of the relevant year - AT
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Customs:
Smuggling goods – Gold - Smuggled goods” are not “imported goods” - the provisions of Section 28 (demand of duty) are not attracted in the case of smuggled goods. - AT
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Corporate Law:
Infringement of trademark - defendant's trademark FREEDOM is deceptively similar to that of the plaintiff's trademark FREEMANS - HC
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Service Tax:
Confirmation of demand beyond the scope of SCN - Though demand was not sustainable, the same was not contested - Therefore while confirming the appropriation of service tax, penalty set aside - AT
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Service Tax:
SCN - the authority failed to keep an open mind and has shown his closed mind to the petitioner and it is a clear case where the “principle of natural justice must not only be done but it must eminently appear to be done” has been violated - Show cause notice set aside - HC
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Central Excise:
MRP based duty or Duty based on Tariff Rate - ordinary Portland cement - export to Nepal - the duty shall be determined as in the case of goods cleared in other than packaged form - AT
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Central Excise:
Pan Masala and Gutka - even if an installed packing machine was not working during a month, the same shall be deemed to be operating packing machines during the whole month - AT
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VAT:
Classification - dermicool powder which is described as a prickly heat powder is also commonly understood to be of use in treating prickly problem and not as an ordinary talcum powder - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2013 (4) TMI 16
Registration to the firm - whether the Tribunal was right in reading the Partnership deed of 24.05.1974 and the Memorandum of 06.02.1980 together in maintaining the order of the Commissioner (A) directing registration to the firm for the assessment year 1980-81?" - assessee firm filled rectification deed dated 06.02.1980 - Held that:- Section 184 (4) provides that application for registration of the firm shall be made before end of the previous year for the assessment year. Section 184 (8) requires that on any change in the constitution of the firm fresh registration be obtained. Explanation of Section 185 (1) of the Act has limited scope of the inquiry of the Income-tax Officer to the extent that as to whether any partner stand in relationship of a spouse or minor child or any income of the firm being shared by benaimdar. In this case, the respondent moved for fresh registration well within time. The income of the firm was not shared by any benamidar, nor any paratner stand in relationshop of a spouse or minor, as such, the application could not be rejected. Income-tax Authority cannot question the change in the constitution of the firm. Thus ITAT was right in directing the directing registration to the firm for the assessment year 1980-81 - Question referred is answered in affirmative i.e. against the Department and in favour of the respondent.
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2013 (4) TMI 15
Request for stay of demand till the expiry of the time limit for filing an appeal declined - Held that:- In terms of order passed by the Division Bench of this Court in UTI Mutual Fund Versus Income Tax Officer 19(3)(2) & ors. [2012 (3) TMI 333 - BOMBAY HIGH COURT] the fixed deposits to the tune of Rs. 20.00 crores were not encashed during the pendency of the appeal before the Commissioner of Income Tax (Appeals). After the appeal was decided, the embargo on the revenue to encash the fixed deposits came to an end and consequently the revenue was within its jurisdiction to encash the guarantee of Rs. 20.00 crores. Thus it is not find that the assessee is entitled to stay of recovery proceedings during the limitation period for the filing of the appeal. There is no deemed stay of liability after the enforceable order is passed by an authority under the statute. Reference may be made to Collector of Customs, Bombay Vs. Krishna Sales (P) Ltd. [1993 (9) TMI 124 - SUPREME COURT OF INDIA] In an another judgment, the Court held that pending appeal, it is open to the Decree holder to execute decree subject to the right of restitution in Inderchand Jain v. Motilal, (2009 (7) TMI 1029 - SUPREME). The court only at the time of passing a judgment and decree reversing that of the appellate court should take into consideration the subsequent events, but, by no stretch of imagination, can refuse to do so despite arriving at the findings that the plaintiff would not be entitled to grant of a decree. In view of the above, mere fact that the petitioner had time limit to file an appeal does not bar the revenue to execute the order passed. No merit in the present petition.
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2013 (4) TMI 14
COD Clearance - revenue appeal rejected against deletion of addition on the share of loss in Auto Ancillary Trust and Tamilnadu Infotech Fund and also made a disallowance under Section 14A by CIT (A) on the reason that clearance from the Committee of disputes was not obtained by the Revenue before filing the appeal - Held that:- It is admitted by both sides that getting CoD clearance for filing appeal is no more required in view of the latest decision of in the case of Electronic corporation of India Vs. Union of India and others [2011 (2) TMI 3 - SUPREME COURT]. Thus the order passed by the Tribunal is set aside and the matter is remitted back to the Tribunal to hear the matter on merits and pass orders in accordance with law - in favour of the revenue.
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2013 (4) TMI 13
Deletion of additions on account of unex-plained share capital, unexplained share application money, unexplained sundry creditors, difference in the cost of construction being unexplained investment, FDRs purchased by the company, loading and unloading and salary expenses. Held that:- the Commissioner of Income-tax (Appeals) and the Tribunal find that the assessee had produced relevant evidence before the Commissioner of Income-tax (Appeals) establishing that all the persons, who had deposited the share application, were not fictitious persons. Most of them were identifiable ; they made the payment by cheques and most of them were assessed to income-tax. The Tribunal has given further relief to the asses-see and has not accepted the argument of the Department that the expla-nation furnished by the assessee for the addition under section 69 on account of the unexplained investment was not to the satisfaction of the Assessing Officer. - Revenue's appeal dismissed - decided in favor of assessee. Regarding charging of interest - held that:- Even if any provision of law is mandatory and provides for charging of tax or interest, the view taken in Ranchi Club Ltd. [2000 (8) TMI 79 - SUPREME COURT] is that such charge by the Assessing Officer should be specific and clear and the assessee must be made to know that the Assessing Officer has applied his mind and has ordered charging of interest. The mandatory nature of charging of interest and the actual charging of interest by application of mind and the mention of the proviso of law under which such interest is charged are two different things. - Decided in favor of assessee.
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2013 (4) TMI 12
Reassessment - Notice u/s 148 - deduction under section 10B - According to Department it is a case of escape assessment and assessee was not entitled for deduction under section 10B of the Act and therefore serve a notice u/s 148 for reopening of the case. Held that :- During the course of assessment proceedings the Income-tax Officer has raised certain queries with regard to deductions, which were replied by the assessee and in the assessment order in paragraph 4.1 the Assessing Officer has dealt with the question of grant of deduction and has allowed deductions. - The reasons given for reopening the assessment and the notice issued under section 148 of the Act is nothing but a change of opinion. It is not the case of escape assessment. For the aforesaid reasons, notice issued under section 148 of the Act deserves to be quashed. This writ petition succeeds and is allowed.
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2013 (4) TMI 11
Transfer of technology know-how – expenditure on know-how – whether the expenditure incurred is revenue expenditure or whether it is an expenditure which is capital in nature - Held that:- Assessee had not purchased or obtained ownership of such technical know-how from the foreign company. The assessee was merely a licensee for the purpose of its business temporarily. For such acquisition of know-how, the assessee paid lump sum payment. It had also come on record before the Tribunal that such technical know-how was used for the purpose of manufacturing the existing items which the assessee was manufacturing since years. - the expenditure are revenue in nature. Reliance made in the case of Commissioner of Income Tax v. Swaraj Engines Ltd. [2008 (5) TMI 257 - SUPREME COURT]. The provisions of section 35AB of the Act can apply only in case of capital expenditure and of course, provided the conditions set out therein are fulfilled. In such a case, during the period when section 35AB remained in operation, the assessee could claim benefit thereof. However, such provision would not apply to a revenue expenditure even if the same was incurred for acquisition of technical know-how. Deduction on such expenditure was available even before the introduction of section 35AB of the Act and such deduction cannot be curtailed or limited by applying section 35AB. In that view of the matter, taking such an expenditure out of section 37(1) of the Act, would not arise. The tax appeals are dismissed.
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2013 (4) TMI 10
Disallowing the claim derivative loss as speculation loss - Approved stock exchange - Clause (d) of proviso to Section 43(5) of the Income tax Act - Held that:- once the approval is granted in the relevant previous year, and in the absence of anything indicated to the contrary, the approval has to be taken as effective from the beginning of the relevant year. - all the transactions entered into in the relevant previous year by the assessee in National Stock Exchange are to be treated as non-speculative transaction. No part of losses incurred in the relevant previous year can be treated as speculation loss and disallowance of expenses as relatable to such loss cannot also be made - Decided in favor of assessee.
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2013 (4) TMI 9
Disallowances of Expenses - Sec. 37 - No supporting evidences to establish wholly and exclusively for business purposes - Onus of establishing the genuineness of expenses lies on the assessee and not on the department - Held that:- The CIT(A) after considering all the aspects of the issue, disallowed 10% of out of handling and freight expenses, it also held that the AO has wrongly disallowed festival expenses & business promotion ignoring the details, which reveal the expenditure not of personal nature, therefore, merely for want of some vouchers, it is not appropriate to disallow 100% of such expenditure. As regard repair & maintenance 10% of expenditure shown in cash can be allowed on the ground of reasonability. Regarding disallowability of courier charges it has rightly restricted the disallowance to 10%. After considering the facts of the case, we are of the view that the action of the CIT(A) in restricting the disallowance to against the total disallowance of is proper and therefore, the order of the CIT(A) is hereby upheld on this count and the ground raised by the revenue is dismissed. - Decided against the revenue.
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2013 (4) TMI 8
Allowability of ESIC & PF - Addition as professional fees - Held that :- Insofar as the Income-tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down in Vinay Cement (2007 (3) TMI 346 - Supreme Court of India) where the deletion of the second Proviso to s. 43B was held applicable to earlier years as well. As the deletion of the 2nd Proviso is retrospective, the case has to be governed by the first Proviso. Dharmendra Sharma (2007 (11) TMI 39 - HIGH COURT , DELHI) & P.M. Electronics (2008 (11) TMI 3 - DELHI HIGH COURT)followed. - If the employees’ contribution is Not deposited by the due date prescribed and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also. - deduction claimed by the Assessee has to be allowed. - Decided in favor of assessee. Regarding Professional Fees - AO added the sum observing that the assessee failed to reconcile the bills and books of account. - The assessee’s stand was that in the receipts it had reflected a sum of Rs.40,200/- as receipt from TCM Property Consultancy Pvt. Ltd. - This sum was arrived at by the assessee by deducting Rs. 5594/- as service tax received from Rs. 45794/- receivable from the aforesaid party. - Held that:- matter remanded back for reconsideration.
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Customs
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2013 (4) TMI 7
Smuggling goods – Demand of duty u/s 28 and penalty u/s 117 of the Customs Act. - Appellant is a goldsmith and in his custody gold and silver ornaments are found he could not produce any documents showing the licit possession and ownership of the goods - Appellant makes the following submissions that Gold is not notified under Section 123 and the said provisions would not apply. It is evident that the goods were seized by the Police under the presumption that they were stolen property and the goods were not seized by the Customs from the appellant. Therefore, the burden to prove the gold in question is not smuggled is not required to be discharged by the appellant and it is for the department to establish that the goods are smuggled and this onus has not been discharged by the department. Mere foreign marking on the gold does not by itself establish the smuggled nature of the goods. It can at best establish the foreign origin of the goods. Merely because the appellant could not produce the documents to establish the licit nature of the goods is not sufficient to establish the smuggled nature of the goods. Held that :- The argument provided by the appellant is wrong for the reason that subsequent to sub-section (2) of Section 123 clearly provides that the section applies to gold and the manufacturer thereof. Customs authorities did not seize the goods from the appellants; therefore, the provisions of Section 123 which casts the onus on the appellants to prove that the goods are not smuggled is not applicable, inasmuch as no seizure has been made from the appellant by the Customs. Therefore, the burden and onus of proof to establish the fact that the goods are smuggled lies on the Revenue and not on the appellants. In respect of these gold articles, there is no evidence whatsoever in record to show that they are of foreign origin. Tribunal do not find any infringement of the provisions of Customs Act so as to attract confiscation under Section 111(e) and (i) of the said Act and accordingly, and set aside the same. The next issue for consideration is whether the appellants are liable to pay Customs duty demanded under Section 28 of the Customs Act. Invoking the provisions of Section 28 applies to imported goods. Smuggled goods” are not “imported goods” as held by the Hon’ble Apex Court in the case of Commissioner of Customs v. Ambalal & Co. [2010 (12) TMI 16 - Supreme court of India]. Therefore, the provisions of Section 28 are not attracted in the case of smuggled goods. Thus, the determination of duty and the demand of duty in the instant case is not in accordance with law and, therefore, the same has to be set aside.
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Corporate Laws
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2013 (4) TMI 6
Infringement of trademark - Permanent injunction seeked against infringement and passing off - plaintiff has also prayed for damages and delivery up of all infringing articles qua the plaintiff's trademark “FREEMANS” adopted for measuring tapes and part components thereof - whether the defendant's trademark is deceptively similar to that of the plaintiff's and whether the act of the defendants constitute infringement and passing off? - Held that:- Applying the test laid down in Amritdhara Pharmacy v. Satya Deo Gupta [1962 (4) TMI 65 - SUPREME COURT] to the facts of the present suit, it is found that the defendant's trademark FREEDOM is deceptively similar to that of the plaintiff's trademark FREEMANS. Both the competing trademarks represent the same class of goods i.e. measuring tapes. Both the trademarks also have an inherently distinct connotation i.e., the trademark has no relation with the product being sold. In addition, it should be kept in mind that while deciding cases such as the present suit, the Court should view the two trademarks from the eyes of a person with imperfect recollection. Further, the fact that the plaintiff's trademark has been in the market for over five decades and is now known globally is evidence to the fact that the plaintiff has built up a reputation in the market and its products have acquired enormous goodwill. To take advantage of this, the defendants seem to have the intention of passing off their product as that of the plaintiff by adopting a name which is similar to the plaintiff's trademark. Also the defendant no.1 was the earlier distributor of the plaintiff's products shows that adoption of the said trademark was not merely a coincidence and that he had the intention of passing off his products as that of the plaintiff's. Thus a permanent injunction restraining the defendants from launching, using, advertising the trademark FREEDOM with respect to measuring tapes/ components thereof passed. No reason to decree the suit with regard to delivery up as the defendants have not yet launched their product in the market due to a temporary injunction operating against them, thus the plaintiff has not suffered any loss the prayer for damages also stand dismissed. The suit stands disposed. Decree be drawn accordingly.
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Service Tax
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2013 (4) TMI 21
Show cause notice challenged - violation of principle of natural justice - Opportunity of being heard - as per assessee the authority concerned has already made up mind and this notice has been issued only to project that opportunity of hearing is sought to be given to the petitioner before passing the same order for which decision has been taken by the authority and it has been communicated in the show cause notice itself - Held that:- From the entire notice, it appears that the authority issuing notice appears to have tried to convince himself more, instead of putting questions to the assessee. The dispute is only with respect to interpretation of two contracts entered into between the parties – petitioner on one side and other two parties- Aravali Power Company Private Limited and Damodar Valley Corporation on the other. They may be composite and inextricable related contract forming one transaction or may not be. Those contracts may be turnkey project contract or may not be. The evidence may justify forming either of the opinion, for which a party, if wants to take a decision fairly, then he is supposed to give not only an opportunity of hearing to other party but also is required to show that the action of even initiation of proceedings is fair and without any predetermination of mind. The paragraphs running in several pages of SCN created an impression that one of the highest officers has been targeted, who himself in the earlier occasion made it clear to the Department that the person who is the competent officer and who is in know of the fact has already deposed before the authority. The purpose can be served by showing that the reasons indicated in the notice are only to make the assessee aware of the facts and the legal issues which he is required to answer. It is very unfortunate that the respondent-Department’s Officer-in-charge in reply affidavit went to the extent of stating that the contracts have been entered into by the petitioners not under free and genuine consent and have been entered into (due to or under) pressure/undue influence of the customers. It appears that the respondents, on facts, on point of law, on the basis of conduct of the company, on the basis of the conduct of its officers and on the interpretation of the contract, tried to say that the stand which has been taken by the petitioner before the Commissioner, who issued the notice, is absolutely wrong on fact and in law and bona fidely. Such notice cannot be treated to be a notice to show cause in any manner. It is only a consequence of predetermined mind of the Officers issuing the notice and is fortified more seriously by the counter affidavit filed by the Officerin- charge of the respondents. As decided in Oryx Fisheries Private Limited fully [2010 (10) TMI 660 - SUPREME COURT OF INDIA] if on a reasonable reading of a show cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. In this case, the authority failed to keep an open mind and has shown his closed mind to the petitioner and it is a clear case where the “principle of natural justice must not only be done but it must eminently appear to be done” has been violated. Hon’ble Supreme Court in the case of Siemens Ltd. [2006 (12) TMI 203 - SUPREME COURT OF INDIA] stated Ordinarily writ court may not exercise discretion in entertaining the writ petition questioning the notice of show cause , in certain circumstance, writ petition can be entertained and one of the situations may be of premeditation and the writ petition is maintainable - Show cause notice set aside. However, since the show cause notice is set aside based on the above grounds, permission granted to the authority to issue a fresh show cause notice to the petitioner.
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2013 (4) TMI 20
Appellant is in the business of sale of space and time for advertisement and entered into an agreement with another party for outsourcing sale. The same has been banned by the High Court of Andhra Pradesh therefore appellant Converted the amount of outsourcing fee into equity shares through an agreement. Department contested the same and demanded service tax along with interest and penalties for that converted amount. - Held that – No service has been rendered in pursuance of the agreement which was entered due to the bann imposed by the Hon'ble High Court - stay granted.
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2013 (4) TMI 19
Waiver of Predposits – Liability on appellant under Intellectual Property Service - eligibility to avail the benefit of SSI notification No.6/2005-ST – Matter remanding back to adjudicating authority.
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2013 (4) TMI 18
Waiver of Pre-deposit U/s 76 and U/s 78 of the Finance Act, 1994 - service for mobilizing to mutual fund distributors and receiving commissions - Business Auxiliary Services - jurisdiction - Held that:- In the case of levy of Service Tax it is difficult to ascertain where the services are rendered and where the services are received unless a finding is recorded on these facts. We agree with learned A.R. (Commissioner) that it becomes a mixed question of facts and law and should have been raised before the Commissioner during the course of adjudication - Such issues could be considered only after a detail deliberation on the place of receipt of services and/or place of delivery of services whereas presently we are examining the impugned order and issues involved on a prima facie basis. Therefore the case laws referred by the Ld. Advocate are not relevant at this stage On the issue of applicability of service tax - Held that:- We find that the applicants are rendering their services to the distributors of the various mutual fund companies and not to the Mutual Fund Companies directly hence prima facie we are of the opinion that they are not strictly covered under the said principle of levy of service tax under reverse mechanism as laid down under Rule 2(1)(d)(vi) and applicable to mutual fund distributors of Mutual Fund Companies. On the issue of limitation -Held that:- We find that the adjudicating authority has given a cogent finding on the aspect of applicability extended period of limitation which is again a mixed question of facts and law and needs detail analysis which could be made at the time of hearing of the appeal. Guidelines laid down by the Hon’ble Supreme Court and other Hon’ble High Courts from time to time including that of Hon’ble Andhra Pradesh High Court in Shri Chaitanya’s case (2011 (1) TMI 356 - HIGH COURT ANDHRA PRADESH ).We direct the applicant to deposit 25% of the Service Tax confirmed against them within a period of Eight Weeks from today and report compliance on 1st of May, 2012. On deposit of the said amount, the balance amount of Service Tax, penalties imposed stand waived and its recovery stayed during the pendency 1st of the appeal.
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2013 (4) TMI 3
Classification of Services - Valuation - extended warranty services - Authorized Service Station Service or Business Auxiliary Service - Held that:- Commissioner (Appeals) has confirmed the demand of service tax and appropriated the amount paid by them under the category ‘Business Auxiliary Service’. Therefore the learned Commissioner (Appeals) has travelled beyond the show-cause notice Even though the payment was made under ‘Business Auxiliary Service’ by the appellant in July and August 2007 with interest, it is surprising that the show-cause notice was issued on 25-3-2008 proposing to demand service tax on the entire amount of premium. The submission that Commissioner (Appeals) travelled beyond the show-cause notice has to be upheld. Further the appellants are not challenging the demand for service tax and appropriation of the amount of service tax and interest paid by them and therefore whatever has been paid and appropriated has to be upheld. - When Demand itself is not sustainable, the imposition of penalty under Section 76 of Finance Act, 1994 cannot be sustained. - Decided in favor of assessee.
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Central Excise
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2013 (4) TMI 24
MRP based duty or Duty based on Tariff Rate - ordinary Portland cement - export to Nepal - as per the department since there was no requirement to print MRP in respect of the packaged cement exported to Nepal and as such there was no MRP, the appellants were required to pay duty on this cement at the tariff rate - Held that:- In terms of third proviso to Sl. No. 1C of the table annexed to the Notification No. 4/2006-C.E., where the retail sale price of the goods are not required to be declared under SWM Rules, 1977 and are not declared, the duty shall be determined as in the case of goods cleared in other than packaged form. Since, in this case the goods had been cleared for export to Nepal and as such there was no requirement to declare the MRP on the bags of the cement in accordance with the provisions of SWM Rules, 1977, the cement would have to be treated as “other than packaged form” even though the MRP had been printed and accordingly, the same would be covered by Sl. No. 1C of the table annexed to the Notification No. 4/2006-C.E., where the duty is 14% adv. or Rs. 400/- per M.T. whichever is higher. There is no dispute that if the duty is charged at the rate prescribed in Sl. No. 1C of the table annexed to the Notification No. 4/2006-C.E., there would be no short payment. As the same prima facie view had been taken by the Tribunal in the appellant’s own case for the previous period in the Stay Order dated 24-1-2012 by which the requirement of pre-deposit had been waived. - stay granted.
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2013 (4) TMI 5
Cenvat Credit - deemed reversal of credit - fraudulent invoices - Issued invoices for final products without manufacturing anything and filed returns- - Appellant paid a small amount through cash also - Held that:- the credit availed by them was reversed by utilizing for payment of duty, which even according to the Revenue, they were not required to pay. Inasmuch as the entire credit was reversed by making debit entry used for payment of duty on final products, any direction to deposit the credit against them would not be fair. By adopting the above modus operandi, the appellant have indulged in the passing of fraudulent modvat credit to their buyers. This is a serious allegation. Keeping in view the fact that a lot of evidence has come on record to uphold the above activity of M/s.Satvik Industries, in the form of various statements, machine installed in the factory so as to manufacture such huge quantum of final products - the appellant directed to deposit part of penalty. - appellant directed to deposit an amount of Rs.30 lakhs towards penalty.
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2013 (4) TMI 4
Cenvat / Modvat Credit - Judicial discipline - order consequent to the directions of the High Court - The question as to whether the Central Cables Pvt. Ltd., had transferred the raw materials to the job workers, if transferred the goods for manufacture of intermediate product, then how the job worker could take credit of duty paid by Central Cables Pvt. Ltd. On raw materials purchased from MMTC under actual user conditions. - Held that:- As we find that CESTAT has not correctly applied the mind to present facts, we quash and set aside the judgment and order dated 23-2-2011 in Appeal Nos. E/2850 to 2853 of 1990 and restore those appeals back to file of CESTAT for fresh consideration in accordance with law. The substantial question of law is thus answered in favour of the appellant and Respondent No. 5-Tribunal is directed to take fresh decision on all questions as formulated in para 6 of judgment dated 13-10-2010 by this Court in Central Excise Reference No. 4 of 2003. CESTAT to attempt to decide the appeals as early as possible.
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2013 (4) TMI 2
Non-compliance with Section 35F of the Central Excise Act - Denying the benefit of Notification No. 3/2004-C.E. and had also imposed equal amount of penalty - Held that:- There is no prima facie evidence even of a water supply plant, as defined under the Notification, having been set up by the appellant. In this view of the matter, the denial of exemption prima facie cannot be faulted. Therefore, the appellant ought to have honoured the appellate Commissioner’s direction for pre-deposit. We direct the appellant to pre-deposit the duty amount within six weeks and report compliance to the Commissioner (Appeals), whereupon the learned Commissioner (Appeals) shall take up the appeal for disposal as above - The stay application also stands disposed of.
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2013 (4) TMI 1
Pan Masala and Gutka - Duty based on capacity of production - Period of stoppage - Abatement under Rule 10 - Held that:- for claiming abatement under Rule 10, there must be total stoppage of the machines which have to be sealed in such a manner that same cannot be operated and besides this, there should be no clearances of any specified goods during the period of stoppage of production for which abatement has been claimed. - it is not the case of the appellant that during the period of abatement, there was total stoppage of production and clearances. In respect of certain periods, for which abatement has been claimed, the Department‘s allegation is that period of non-production is less than 15 days, an allegation which has not been refuted by the appellant. Under Rule 7, the duty payable for a particular month is to be calculated by applying appropriate rate of duty specified in Notification No. 42/2008-C.E., to the number of operating packing machines in the factory during the month - From Rule 8, it is clear that even if the number of operating packing machines have been changed during the month or that some machines were not working during the entire month, the number of operative packing machines shall be taken as the maximum number of packing machines installed on any day during the month and even if, a machine was not working for certain periods in a month, the same shall be deemed to be operating packing machines for the entire month The provisions of Pan Masala Packing Machines Rules, 2008 cannot be interpreted from the language used in the Notification No. 42/2008-C.E., more so, when in terms of para 2 of the Notification No. 42/2008-C.E., the number of packing machines shall be determined in terms of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 and in view of the second proviso to Rule 8, even if an installed packing machine was not working during a month, the same shall be deemed to be operating packing machines during the whole month and accordingly duty in respect of that machine would be charged as if it had been operated during the entire month and not for a fraction of the month for which it was actually operational. We, therefore, are of the prima facie view that on this point also, the appellant have not been able to establish prima facie case in their favour. This is not a case for total waiver from the requirement of pre-deposit. - Stay grated partly.
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CST, VAT & Sales Tax
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2013 (4) TMI 23
Grant of exemption certificate rejected - review application filed twice being rejected - condonation of delay filed - Held that:- The conclusion drawn by the Tribunal that the petitioner could have at least challenged the review order also while challenging the main order is strictly in accordance with law and to that extent the order of the Tribunal does not need any interference. An order on merit is always welcome viz. a. Viz. an order on technicalities. It is settled law that all Courts of law and Tribunals are established for furtherance of interest of substantial justice and not to obstruct the same on technicalities. Reference - See Jai Jai Ram Manohar Lal Vs. National Building Material Supply [1969 (3) TMI 71 - SUPREME COURT] wherein held that if substantial justice and technicalities are pitted against each other, the cause of substantial justice should not be defeated on technicalities. No procedure in a Court of law should be allowed to defeat the cause of substantial justice on some technicalities. Also see Ghanshyam Dass & Ors. Vs. Dominion of India & Ors (1984 (3) TMI 348 - SUPREME COURT) Therefore this Court feels that it would have been more appropriate for the Tribunal in the facts of the case to afford one opportunity to the petitioner to amend his appeal so as to challenge the order passed on the review application or else to file a separate appeal against the order whereby the review application had been rejected. Thus the petitioner directed to make an amendment application for including the prayer for quashing of the order passed on the review application dated 9th January, 2002 to be filed within three weeks from today along with certified copy of this order.
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2013 (4) TMI 22
Classification - Duties payable as per Entry 41 and 49 of Part-III of Schedule II ( @12% )or as per Entry no.11 of Part-IV of Schedule II (@8%) - Held that: - The Supreme Court in Puma Ayurvedic Harbal (P) Ltd. vs. Commissioner, Central Excise [2006 (3) TMI 141 - SUPREME COURT OF INDIA] cited the case reported which was a case of Nycil Prickly Heat Powder (1999 (5) TMI 33 - HIGH COURT OF DELHI ) which was also held not to be an ordinary powder but falling in the category of medicament - We are also of the view that dermicool powder which is described as a prickly heat powder is also commonly understood to be of use in treating prickly problem and not as an ordinary talcum powder. Considering the all over facts and circumstances of the case, we are of the opinion that the item dermicool powder must be held to be a medicine taxable under Entry 11, and not a medicinal preparation of a cosmetic within the meaning of those words as used in Entry 41 or 49 quoted above.
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Indian Laws
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2013 (4) TMI 17
Land Acquisition Act, 1894 - Under Section 4 read with Section 17 of the Act, Notification was issued for the acquisition of the lands - Section 11 of the Act, the Land Acquisition Officer assessed the market value of the acquired lands - Enhanced compensation by the Reference Court. Lands in Village of Harthala Held that:- The scope of interference by this Court was delineated by the decision in Kanta Prasad Singh v. State of Bihar wherein this Court held that there was an element of guess work inherent in most cases involving determination of the market value of the acquired land. Assessment of market value thus made should not be disturbed by the Supreme Court. We are of the view that the sum of Rs. 80 per square meter awarded as compensation in these cases is just compensation paid to the land owners. Once we have thus found the compensation to be just, there arises no occasion for this Court to interfere with the decision of the High Court restoring the award of the Land Acquisition Officer - All the appeals relating to Harthala have only to be dismissed. Lands acquired in village of Mukkarabbpur Held that:- We are not inclined to grant any of the reliefs that he has asked for, then we may direct that the amounts paid by way of compensation pursuant to the judgment of the Reference Court need not be recovered and the securities furnished by some of the appellants need not be enforced. This prayer is contested by the learned counsel for the respondents. This request of Shri. Varma appears to be reasonable. The land acquisition in question is of two decades old, and it is plausible that the landowners have utilized the compensation amount paid for one purpose or the other. In such circumstances, we are not inclined to put an extra burden of repayment on them. Therefore, while dismissing the appeals, we clarify that in the peculiar facts and circumstances of the case and in the interest of justice, we restrain the respondents from recovering the amounts paid as compensation or enforcing security offered while withdrawing the compensation amount pursuant to order passed by the Reference Court - The appeals are dismissed.
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