TMI Tax Updates - e-Newsletter
April 5, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
The shares were sold first with the intention to purchase the same when its prices fell down but since the price of shares increased, the assessee had to purchase the shares to minimize the loss. - it is a speculation loss and not a contrived loss - AT
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Income Tax:
Unexplained cash credit u/s. 68 - Only by establishing the existence of the individuals purported to be the depositors and creating documentary evidence for extending loan will not make the transactions genuine. - AT
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Income Tax:
A.O. and the CIT(A) put their legs to the shoes of the assessee and determined the rate of interest paid and charged reasonably in accordance with their view which is not correct. - AT
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Income Tax:
Power u/s 254(2) cannot be exercised unless and until grave error on facts/law from the record is pointed out which is apparent on its face causing apparent injustice to the assessee. - AT
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Customs:
Reason for initiating search proceedings - the authority which had issued warrant which was ultimately executed had not applied its mind to form “reasonable belief” - proceedings quashed - HC
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Customs:
Revenue is assessing the re-imported rejected and defective goods in terms of the Valuation Rules meant for first time import of the goods but the present goods are re-import of already exported goods. - Action of revenue is incorrect - AT
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Corporate Law:
Where a contract falls for interpretation, the Arbitrator is the final judge to interpret the contract and findings of fact arrived at by an Arbitrator cannot be questioned - HC
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Central Excise:
Production of aerated and mineral water - irrespective of the fact that the petitioners have not claimed remission of excise duty either under Rule 21, they are entitle to exemption to the extent of 0.5% - HC
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Central Excise:
MRP based Valuation – Merely because assessee had cleared detergent bar of 300 gms. at the rate equivalent to the detergent cake of 250 gms., it cannot be said that Section 4A would not come into play - AT
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Central Excise:
Classification - essential character - manufacture of All Out Refill Bottles containing insecticides - the right classification for the combipack would be Chapter heading 3808.10 - AT
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VAT:
The petitioner is willing to pay the tax, the authorities are bound to release the same as the provision of law provides for release of goods on payment of tax - HC
Articles
Notifications
News
Case Laws:
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Income Tax
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2013 (4) TMI 96
Penalty u/s 271(1)(c) - disallowances of repair expenses - Held that:- The Hon'ble Delhi High Court in the case of Devsons (P). Ltd. v. CIT [2010 (11) TMI 84 - DELHI HIGH COURT] has held that when a legal issue arises for consideration, which is debatable but the claim made by the assessee is not accepted, thereis no justification to invoke the penalty provisions under Section 271(1)(c). Assessee cannot be faulted and penalty should not be imposed because the assessee had taken a particular stand point, unless there are grounds or reasons to show that the assessee had not disclosed all the facts before the departmental authorities concerned. Also see Karan Raghav Exports P. Ltd. vs. CIT ( 2012 (3) TMI 335 - DELHI HIGH COURT), CIT vs. Zoom Communication P. Ltd. (2010 (5) TMI 34 - DELHI HIGH COURT) Thus in the absence of any other contrary material or distinguishing feature brought on record by the Revenue to show that the claim of deduction made by the assessee was not bonafide or bogus, respectfully following the ratio of the above decisions and the consistent view hold that there is no concealment on the part of the assessee which may call for levy of penalty u/s 271(1)(c) the penalty imposed by the A.O. and sustained by the CIT(A) is deleted. In favour of assessee.
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2013 (4) TMI 95
Condition of monetary limit before filing an appeal - Notional Effect - Held that :- merely because even as per the Assessing Officer's order, ultimately income of the assessee is negative, the Revenue's appeal before the appellate Tribunal would not be barred by the Board's circular under Section 268A of the Act. - It is, however, clarified that the notional tax effect would have to be above the limits prescribed by the Board from time to time for presentation of such appeals. - we are of the view that the Tribunal committed an error in dismissing the Revenue's appeals as being not maintainable. In absence of the Board's circulars issued, which now can be stated to be covered under Section 268A of the Act, there are no limitations on Revenue carrying the issue in appeal either before the appellate Tribunal, the High Court, the Supreme Court. Decided in favor of revenue - matter remanded back.
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2013 (4) TMI 94
Genuineness of the loan - addition - Held that:- In the present case, Tribunal while adjudicating the said issue observed that the perusal of the bank account of Shri Charan Singh depicted a uniform pattern of deposits of Rs. 5 lacs and immediate withdrawal thereafter which had not been explained. - The documents are incomplete further no evidence of agricultural operation being done by Shri Charan Singh had been brought on record. Tribunal on appreciation of evidence, thus, had come to the conclusion that the loan shown by the appellant was not genuine. - Addition confirmed - decided against the assessee.
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2013 (4) TMI 93
Addition on account of undisclosed income - difference in cash balance as per the regular balance and balance submitted during the course of the proceedings. - held that:- The Tribunal appears to have decided the issue on the ground that the Assessing Officer has gone more on conjectures, where he held that as per the disclosed sources of income the assessee should have possessed more cash. It is rightly pointed out that it is not the case of the Department that the asset was found and not explained by the assessee. Therefore, nobody was empowered to add anything on the basis of such kind of findings. Issue is essentially based on facts and since logic given is unacceptable, it calls for no interference.
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2013 (4) TMI 92
Depreciation on Plant and Machinery - sale and lease back transaction - Deprecation on motor buses leased out to Ahmedabad Municipal Transport Services @ 40% as against @ 20% - Held that:- whether the transaction of leasing out electrical equipments to Rajasthan Electricity Board is genuine or not is based on appreciation of evidence on record as found by the Tribunal by referring to the various documents like invoice etc. In absence of any evidence to show anything to the contrary no legal infirmity exists in the impugned order of the Tribunal so as to give rise to any question of law - Decided against the revenue.
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2013 (4) TMI 91
Loss on sale of shares of Divis Labs Ltd - speculation loss v/s contrived loss Held that:- The factual position that emerges is that the assessee had entered into transactions of purchase and sale of shares of Divis Labs Ltd., a company listed on the stock exchange. The transactions of sales were entered before the corresponding purchase transactions and without any existing stock being available with assessee. CIT (A) has observed that the activity of first selling and then purchasing the shares to be a permissible and normal business activity in share transactions, further the purchase and sell of shares were evidenced by purchase and sales bills which were produced during the assessment proceedings. The shares were sold first with the intention to purchase the same when its prices fell down but since the price of shares increased, the assessee had to purchase the shares to minimize the loss. In view of these facts, the CIT (A) has held the loss of Rs.31,39,183/- to be a speculation loss and not a contrived loss. These facts have not been controverted by Revenue by bringing any material on record - no reason to interfere with the order of CIT (A) - against revenue. Addition on Profit on sale of shares of TV Today - CIT(A) deleted the addition - Held that:- CIT (A) has given a finding that the purchase of 8200 shares of TV Today was accounted in the individual account of Hasmukh Vora, the payment of shares have been made from the account of Hasmukh Vora and the same is also reflected in the return of income of Hasmukh Vora for A.Y. 2004-05 in his individual capacity. These facts have not been controverted by Revenue by bringing any contrary material on record. Thus no reason to interfere with the order of CIT (A). Thus this ground of the Revenue is dismissed.
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2013 (4) TMI 90
Unexplained cash credit u/s. 68 - CIT(A) restricted the addition made by AO of Rs.43,70,000 to Rs.2,00,000/- - Held that:- Loan extended by the depositors to the assessee company does not appear to be genuine. All the loan depositors are persons of meager resources and do not have any genuine reason to extend their lifetime savings as loan to the assessee company. In all these cases cash was deposited in the bank shortly before the cheques were issued to the assessee company. All the depositors do not appear to have genuine banking transactions because the only transaction pertains to the cheque issued to the assessee company for advancing loan. Further, the opening balances maintained in the bank by the depositors are meager which establishes that the depositors have maintained the bank account only to document the loan to give a color of genuineness to these transactions. Only by establishing the existence of the individuals purported to be the depositors and creating documentary evidence for extending loan will not make the transactions genuine. Thus as AO has analyzed the depositors thread-bare and has established that they cannot be genuine depositors who could extend loans to the assessee company. Thus the order of the AO confirmed - in favour of revenue. Disallowance of interest paid on account of unexplained cash credit - CIT(A) restricted the addition made by AO of Rs.1,82,648 to Rs.11,770 - Held that:- Since the disallowance of interest of Rs.1,82,648/- is consequential to the addition made under the head cash credit invoking section 68 and since the order of the AO was sustained on that count, the order of the AO with respect to this issue was also confirmed - in favour of revenue.
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2013 (4) TMI 89
Disallowance of interest claim u/s 36(1)(iii) - Held that:- As decided in DCIT vs. Core Health Care Limited (2008 (2) TMI 8 - SUPREME COURT OF INDIA) interest paid for the purpose of business under section 36(1)(iii) though it may be for the purpose of expansion of the existing business. In the case under consideration, the case of the A.O. is that there is a loss on account of interest paid and received. The CIT(A) has also wrongly accepted the A.O.'s view without considering the section 36(1)(iii). The loss in the interest account was on account of different rates charged from different parties on loans and advances taken and loans and advances given. In the case under consideration, the assessee has satisfied all the conditions that the borrowed fund was used for the purpose of business as prescribed under section 36(1)(iii). Also, it was not the case of the A.O. that the borrowed fund was not utilised for the purpose of business of the assessee. A.O.'s view regarding loss in interest account on account of different rates charged by the assessee - Held that:- Refering the case of CIT vs. Dhanrajgirji Raja Narasingirji (1973 (3) TMI 6 - SUPREME COURT) wherein held that it is not open to the department to prescribe what expenditure an assessee should incur and in what circumstances he should incur that expenditure. In the case under consideration, the A.O. and the CIT(A) put their legs to the shoes of the assessee and determined the rate of interest paid and charged reasonably in accordance with their view which is not correct. Since there is no violation of conditions laid down in section 36(1)(iii) by the assessee, interest claim of the assessee is fully allowable - in favour of assessee.
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2013 (4) TMI 88
Rectification of mistakes - according to applicant in the order the original certificate from Poland certifying the assessee to be top official in managerial position was not considered - also no discussion about Section 90(2) in the order and Circular No. 333 and Circular No. 621 issued by CBDT were not considered while passing the order - Held that:- Non-consideration of original certificate from Polan was because it was an additional evidence which was not furnished before the lower authorities and secondly, the additional evidence in the form of certificate was scanned copy without any date of issuance of certificate. Thus the certificate was not considered and not taken on record as the date of issuance is crucial for a certificate on this point, therefore, reject the submission made by the A.R. on this point. Deduction of TDS - Net Income or Gross income - Held that:- On perusal of the assessment order, it is found that the AO has taxed the gross income including the tax deducted by Poland Govt. Relying on the aforesaid decisions of CIT vs. Yawar Rashid & Others [1995 (12) TMI 68 - MADHYA PRADESH HIGH COURT] the assessee is liable to tax with respect to net income i.e. the net income which it has received after deduction of tax from the Poland Company . Therefore, remit this issue to the file of A.O. for a limited purpose of examining the amount received by the assessee and the tax deducted by the Poland Company with a direction to him to consider only the income received after payment of tax as income as the taxable income of the assessee. Other mistakes like incorrect interpretation and non-considering of Circular and discussion about Section 90(2), the assessee has not been in a position to convincely demonstrate that how these are mistakes apparent from record. Power u/s 254(2) cannot be exercised unless and until grave error on facts/law from the record is pointed out which is apparent on its face causing apparent injustice to the assessee. The entire order cannot be recalled but only the typographical mistakes cited be corrected as stated hereinabove. Thus, this M.A. is partly allowed.
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Customs
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2013 (4) TMI 87
Reason for initiating search proceedings - Department conducted a search proceedings u/s 105 of Customs Act on a legal opinion formed by the department itself pursuant to which confiscation of goods has been initiated. Officer in the proceedings has submitted before the Court that he has invited attention to original records to show the material looked into has been correctly shown there and on the strength of that material honestly, the responsible Officers have reached a particular belief. He contends that name of the person, who gave secret information cannot be disclosed and, therefore, it has not been recorded. Held that - The law as laid down by Honorable Apex Court in judgement of Income Tax Officer v. Lakhmani Mewal Das [1976 (3) TMI 1 – SUPREME] Court has been used in it. - the authority which had issued warrant which was ultimately executed had not applied its mind to form “reasonable belief” and the material on record does not support any such satisfaction. - The Search carried on, therefore, cannot be said to be in accordance with law. The same is accordingly quashed and set aside. - Decided in favor of assessee
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2013 (4) TMI 86
Reimport of goods – Valuation - Claim of benefit Notification No. 158/95-Cus - return of the goods, was beyond the period of one year, as contained in the said notification, the benefit was not extended- Valuation demanded by the department - Held that - Revenue is assessing the re-imported rejected and defective goods in terms of the Valuation Rules meant for first time import of the goods but the present goods are re-import of already exported goods. The same are defective and rejected by the customers and as such we do not agree with the Revenue to apply Valuation Rules for adopting the original transaction value between the buyer and the seller in terms of provisions of Rule 4. - Decided against the revenue.
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Corporate Laws
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2013 (4) TMI 85
Arbitration and Conciliation - appellant declined to make any payment taking a stand that the respondent had not achieved the CBV of Rs.250 crores and additionally had also failed to maintain the Return On Investment (ROI) in the ratio 3:1 as envisaged by the agreement - respondent informed having achieved Cumulative Price Differential of more than Rs.8 crores, a figure which was above what was to be achieved under the contract - respondents served a legal notice on the appellant calling upon it to make payment in sum of Rs.1,72,40,906/-, to which appellant responded on June 20, 2005 denying any liability - dispute got referred to arbitration - Held that:- The Arbitrator returned a finding of fact after considering the documentary evidence that the appellant had consented to 2 projects being postponed due to market conditions being volatile. Interpreting the contract and in particular Article 6.1 of Schedule 1 the he opined that the appellant were obliged to make monthly payments and refusal to make payments after August 2003 entitled respondent to not proceed ahead with the work. Though not so expressly stated by the learned Arbitrator, it is apparent that the agreement was read as containing reciprocal obligations with commitment of the appellant being to make a monthly payment and the reciprocal obligation of the respondent being to proceed ahead with the work. The Arbitrator, after adjusting the amounts paid, awarded the first claim i.e. commitment fee in sum of Rs.1,53,90,360/-. Rejecting the volume deficit fee because of the finding that there was consent even by the respondent to postpone 2 projects and finally give up the same due to market conditions not being favourable, Rs.1 lakh was awarded towards reimbursement of expenses. Pre-claim interest was awarded in sum of Rs.25,16,687/- and pendente lite and future interest was awarded @ 9% per annum. Cost of arbitration in sum of Rs.15 lakhs was awarded. Needless to state the counter claims were denied. The Single Judge has held that judicial interference to an award is not to sit as an Appellate Court. Where a contract falls for interpretation, the Arbitrator is the final judge to interpret the contract and findings of fact arrived at by an Arbitrator cannot be questioned save and except as being perverse or based on no evidence or ignoring relevant evidence. We refuse to deal with all the contentions urged in appeal for the reason each and every contention has been dealt with by the learned Arbitrator - appeal is dismissed but without any order as to costs.
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Service Tax
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2013 (4) TMI 98
Payment of service tax - Contract work performed by the petitioners - Petitioner entered into contract(s) with respondent No. 1 and had received a notice from respondent No. 2 for payment of service tax in respect of the work and same was contested by the petitioner stating that liability to make payment of tax is of respondent No. 1. Respondent no. 1 didn’t contest the demand but stated that petitioner has not disclosed the particulars in respect of which contract it requires decision and also notice issued by the respondent No. 2 to the petitioner and also stated that the petitioner may submit a fresh representation furnishing all the aforesaid details so that respondent No. 1 can decide the representation of the petitioner. Held that – Court held that petitioners may submit all the documents/representations as prayed to respondent No. 1. If for deciding the representation an opportunity of personal hearing is required to be extended to the petitioners, then respondent No. 1 shall extend such opportunity.
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2013 (4) TMI 97
Recovery service tax - attaching the bank account - circular dated 1 January 2013 of the CBEC - Held that:- The law laid by the Court on the interpretation of the circular of the Central Board of Central Excise and Customs would bind all authorities who are subject to the jurisdiction of this Court. There was absolutely no reason or justification on the part of the appellate authority to keep the stay application pending and take recourse to coercive remedies under the law. Since the amount has now been withdrawn, we decline to accede to the request of the advocate of the Petitioner in the facts of this case that the Revenue should be directed to bring back the amount. Instead, consider it appropriate having regard to the ends of justice to direct that the appeal which has been filed by the Petitioner, shall be disposed of expeditiously by the Commissioner of Central Excise(Appeals) within a period of four weeks of the date on which an authenticated copy of this order is produced on the record. We,however, direct that henceforth the controlling authority shall issue a circular to all the authorities within his jurisdiction that the directions contained in the judgment of this Court in Larsen and Toubro Limited(2013 (2) TMI 188 - BOMBAY HIGH COURT) shall be duly observed.
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2013 (4) TMI 77
Legal services - levy of service tax - stay - Held that:- Attention is drawn to the interim order [2011 (4) TMI 57 - DELHI HIGH COURT] passed by this Court whereby it was directed that the amendment made in Section 65(105) (zzzzm) by the Finance Act, 2011 shall not be given effect to Going by the spirit of that order, which continues to be in force - We direct that the provisions of Sections 65B(44) and 66B of the Finance Act, 1994 (as amended by the Finance Act, 2012) as well as Rule 2(1)(d)(D)(II) of the Service Tax Rules, 1994 shall not be given effect till the next date of hearing - Allowed, subject to just exceptions - The application is disposed of
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Central Excise
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2013 (4) TMI 84
Availing the remedy of appeal against the order - Held that:- In view of the judgment of M /s Surya Air Products (P) Ltd., vs. the Union of India & others [2013 (4) TMI 107 - PUNJAB & HARYANA HIGH COURT], the present writ petition is dismissed as not maintainable with liberty to the petitioner to avail the remedy of appeal against the order impugned in the present writ petition.
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2013 (4) TMI 83
Entitlement to exemption of excise duty to the extent of 0.5% of tolerance limit on the production of aerated and mineral water - petitioners submitted that the CBEC circulars dated 8.9.1971 and 17.9.1975 are binding upon the authorities and therefore petitioners are entitle to exemption of excise duty & the withdrawal of the above circulars vide circular dated 9.7.2010 is only prospective in nature and cannot be applied to the excise goods produced prior to its issuance - Held that:- A plain reading of the above circular brings to the forefront with certainty that the aforesaid circular aims to avoid disputes in future and as such is clearly prospective in its tenor. It does not provide that it would be applicable retrospectively or to transactions/production of excise goods prior to its issuance or its enforcement. The circulars dated 8.9.1971 and 17.9.1975 accords benefit to the assessee and as such are essential piece of sub-ordinate legislation furnishing legitimate aid to the construction of relevant provisions so as to give effect to internal complexity for fiscal adjustment. In CCE Vs. Mysore Electrical Industries Limited (2006 (11) TMI 202 - SUPREME COURT OF INDIA) held that a circular which is beneficial in nature applies retrospectively but a circular which is oppressive has to be applied prospectively. In short, a circular which is against the assessee is always prospective in nature. Also in Suchitra Components Limited Vs. Commissioner of Central Excise Guntur (2007 (1) TMI 4 - SUPREME COURT OF INDIA) it was observed that when a circular is against the assesee they have a right to claim enforcement of the same prospectively. Thus, applying the above principle, as the circular dated 9.7.2010 is against the assessee, as it purports to withdraw the benefit extended to the asseseee vide circulars dated 8.9.1971 and 17.9.1975, it has to be treated as prospective in nature and cannot be applied with retrospective effect. Department to insist for claiming remission under Rule 21 of the Rules in respect of exemption of excise duty on 0.5% of the tolerance limit permitted in the circulars - Held that:- The circular dated 8.9.1971 in plain and simple language permits exemption of excise duty on 0.5% of the aerated waters produced on account of loss due to breakage of bottles during movement subject to its verification by the Range Staff. Once such breakage is certified by the Range Staff, no excise duty on it would be payable. In case the loss is not certified or is more than 0.5%, then it has to be decided by the Assistant Collector. The remission of excise duty under Rule 21 of the Rules which essentially means waiver or cancellation of excise duty legally payable in general terms where the goods have been lost or destroyed by natural causes, or by unavoidable accident or claimed to be unfit for consumption or marketing. Rule 21 of the Rules gets attracted only where the party claims exemption from excise duty for the loss or destruction of goods by natural causes or due to unavoidable circumstances or where they are rendering unfit for consumption or marketing. The procedure for remission of excise duty prescribed under Rule 21 of the Rules is to be followed where it is being claimed for reasons other than those prescribed in the circulars. However, as regards 0.5% tolerance limit provided for aerated water it stands exempt on being certified by the Range Staff in terms of the circulars. The said circulars have the effect of impliedly reducing the quality of aerated water produced by 0.5% of the monthly production. In this situation, when the quantity produced stand reduced there is no necessity for claiming any remission. In addition to the above, when the department itself through its staff certifies the loss due to breakage of bottles in handling, their remains no justification for any further investigation in granting exemption to the extent indicated as Rule 21 of the Rules also permits remission subject to satisfaction of the Commissioner. The limited exemption of excise duty provided by the circulars is not in conflict with Rule 21 of the Rules rather it supplements the same. Thus irrespective of the fact that the petitioners have not claimed remission of excise duty either under Rule 21 of the Rules or Rule 49 of the 1944 Rules, they are entitle to exemption to the extent of 0.5% of the excise goods produced/manufactured by them in their monthly returns pursuant to the circulars dated 8.9.1971 and 17.9.1975 as the same has been certified by the department - in favour of assessee.
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2013 (4) TMI 82
Undervaluation - MRP Valuation – u/s 4A - Respondent is engaged in the manufacture of Detergent Cake. The respondent cleared product weighing differently respectively at the same MRP. - Held that:- Undisputedly the respondents had cleared product on payment of duty calculated in terms of Section 4A of the Central Excise Act, 1944. Contention of the appellant (revenue) is misconceived for the reason that Explanation 2 to Section 4A deals with the situation where on the same package of an excisable goods more than one MRP is declared. - Merely because under marketing scheme the respondent had cleared detergent bar of 300 gms. at the rate equivalent to the detergent cake of 250 gms., it cannot be said that Section 4A of the Central Excise Act, 1944 would not come into play and the transaction value for the purpose of excise duty is to be assessed as per Section 4 of Central Excise Act. Thus, we find no merit in the appeal.
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2013 (4) TMI 81
Cenvat Credit – in or in relation of manufacture - various items like MS Angles, MS Channels, MS Plates, etc. - Held that – It is evident that the finding of the Commissioner (Appeals) against the appellant is based upon the entries contained in the ledger account maintained by the appellant. - the finding of the Commissioner (Appeals) is correct because appellant doesn’t have any documentary or corroboratory evidence in support of their argument. The appellant has not produced evidence of the persons who did work of repair of furnace nor he has produced bills or account for the said repair work claimed to have been undertaken by him. Coming to the issue of limitation. On reading of the proviso to Section 11A of the Act, it is clear that the Department can invoke the extended period of five years limitation in cases of fraud, collusion, or wilful misstatement or suppression of fact by the assessee or contravention of any provision of the Excise Act. - Demand confirmed - decided against the assessee.
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2013 (4) TMI 80
Cenvat Credit on inputs used in manufacture of exempted final products - Held that - In this case, the Cenvat credit availed inputs in process had been used in the manufacture of finished products, which were exempted goods, as the same had been cleared at nil rate of duty under Notification No. 23/2004-C.E. Thus, in this case, the Cenvat credit availed inputs in process and inputs contained in the final products lying in stock had been used in the manufacture of exempted goods and, therefore, the provisions of Rule 6(1) would be attracted and the Cenvat credit would not be admissible and since the same had been availed and same would be required to be reversed. - As discussed above, the judgment of Larger Bench in the case of H.M.T. v. CCE (2008 (10) TMI 54 - CESTAT, NEW DELHI) is of the period prior to the judgment of the Apex Court in the case of the Apex Court in the case of Commissioner of Central Excise v. Gujarat Narmada Fertilizers Co. Ltd. reported in [2009 (8) TMI 15 - SUPREME COURT] in the light of which, the same would be no longer be a good law. - Decided against the assessee.
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2013 (4) TMI 79
Classification - combipack - essential character - manufacture of All Out Refill Bottles containing insecticides falling under Chapter Heading 3808.10 or under heading 8516 - Held that - The question arises here is what would be the right classification for combipack. After considering the General Rules for the Interpretation of this Schedule to the Central Excise Tariff Act, 1985 it is clear that the combipack comprises of two different articles classifiable under different chapters and sub-heading of the Central Excise Act, 1985, the classification of combipack would be governed by Rule 3(b) of the above quoted Rule. Now the question arises, which of the two components, i.e. electro thermic apparatus or refill bottle of pesticides gives essential character to the combination pack. To find answer to this question, it would be essential to look at the combination pack from the buyer’s perspective. - the right classification for the combipack would be under Chapter heading 3808.10. - Decided in favor of assessee.
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2013 (4) TMI 78
Recovery proceedings - Circular dated 1st January 2013 mandating the initiation of recovery proceedings thirty days after filing of the appeal calls for interference - Held that:- There is large pendency of appeals for hearing before the authorities and there being only one bench of CESTAT at Bangalore, with territorial jurisdiction over three southern States, no useful purpose would be served by directing consideration of applications for stay at this distance of time. Regard being had to the fact that the Union of India has failed to set up large number of Tribunals such as CESTAT and if this is done, then there would be no cause for complaint over the non-consideration of the applications for stay, in appeals, by only one Tribunal, presently functioning at Bangalore. This should be an eye opener for Union of India to establish and constitute any number of Tribunals in all the States in the Country - Petitions are accordingly ordered.
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CST, VAT & Sales Tax
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2013 (4) TMI 100
Detention notice - demanding tax together with compounding fee – goods were sent for trial - Held that - The petitioner is willing to pay the tax under protest in terms of Section 67(4) of the Tamil Nadu Value Added Tax Act, 2006 and the authorities are bound to release the same as the provision of law provides for release of goods on payment of tax. Regarding compounding of an offence - held that:- The notice for composition of offence is in order and the petitioner is at liberty to pursue the same insofar as composition of offence is concerned. The authority is to pass appropriate final orders on composition notice based on the merits of the petitioner's case. The goods under detention shall be released on payment of tax demanded forthwith in terms of Section 67 of Tamil Nadu Value Added Tax Act, 2006. Writ Petition is disposed of
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2013 (4) TMI 99
Revision application - Tribunal has increased the stay order to the extent of 80% as against 50% allowed earlier still not satisfied the assessee has preferred this revision - Held that:- It has been settled by various decisions that while considering the stay application, the authorities should deal with the prima facie merit of the case and in case the chances of success are more the interim protection be accorded accordingly. In the present case the tribunal has not dealt with the case on merits at all in granting interim protection and the same has been granted simply for the reason that the Presiding Officers are not available. Thus the revision only involves application of the settled law and no question of law but as the settled principles applicable for grant of interim protection have not been adhered in the interest of justice, the revision is being disposed of with the direction to the FAA to reconsider the matter within a period of one month from the date of production of certified copy of this order. For a period of six weeks or till final assessment order is passed or the interim stay application is considered by the FAA whichever is earlier no coercive measure shall be taken to recover the disputed amount of tax from the assessee.
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