TMI Tax Updates - e-Newsletter
April 6, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Best Judgement Assessment - whenever the return filed by an Assessee is not accepted at its face, it is mandatory for the AO has to issue a notice u/s 143(2) for proceeding further. It is thus not open for the AO to not issue a notice under Section 143(2) of the Act and proceed directly u/s 144 by rejecting the return filed by the Assessee. - HC
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Income Tax:
Payments made to retiring partners - whether in the nature of compensation can be termed as goodwill and subsequently eligible for depreciation? - claim of depreciation allowed - HC
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Income Tax:
Reopening of assessment - mistake made in the audit report by mentioning the system of accounting of the Assessee as ‘mixed’ - no other ‘tangible material’ was cited to justify the reopening - Assessee has convincingly shown that he has consistently been following the mercantile system of accounting not only for AYs in question but for the earlier and later AYs as well - Notice u/s 148 set aside - HC
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Income Tax:
TDS liability - the provisions were made at the year end is reversed in the beginning of the next accounting year - it cannot be said that income had accrued in the hands of the payee. - there was no liability in the hands of the assessee company to deduct TDS - AT
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Income Tax:
Penalty u/s 271B - non comply with the provisions of Section 44AB regarding tax Audit - Section 44AB were not applicable to the transaction relating to sale & purchase of shares held has investment - No penalty - AT
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Income Tax:
Donations in golaks - AO proposed to tax the anonymous donations - The Legislature intended to tax the unaccounted money or black money which was brought in the books of charitable trusts in bulk and this law was not meant for taxing the small and general charities collected by the Genuine Charitable Trusts. - No Addition - AT
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Income Tax:
Brand promotion expenses - No new asset is created by incurring the expenses. It is also not the case of the AO that the expenses are capital expenditure - Allowed as revenue expenditure - AT
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Customs:
Duty liability on warehoused goods under prevailing rate on the date - the bond executed for storage of warehoused goods in the warehouse, expired on 24-01-2003. Hence, the goods cannot be said to have been bonded or warehoused goods for which only provisions of Section 15 of the Customs Act apply - AT
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Customs:
Import of old and used photo copying machines - no licence is required for import of second hand photocopiers prior to 19-10-2005. Therefore, the fine and penalty are set aside. - AT
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Service Tax:
Waiver of penalties - The appellant paid the entire service tax and interest from their own pocket. So, this itself is a burden on the appellant - When the assessee discharged service tax alongwith interest before issuance of show cause notice, penalty waived invoking section 80 - AT
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Service Tax:
BAS - the findings of the lower authorities that the activity of getting commission on the trucks hired form various outsiders would fall under the under the category of 'commission agent' for provision or receipt of service for a consideration is incorrect - AT
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Service Tax:
Export of service - the usage of the programme after delivery to the overseas entity is irrelevant in deciding upon the tax liability as 'programme producer'. - AT
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Central Excise:
Demand of interest - The Court is not satisfied that the demand of interest for a period of three months, which was occasioned on Department’s own inability to promptly decide the request of Assessee, is sustainable in law. - HC
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Central Excise:
Refund claim - whether duty on MS & HSD was required to be paid at transaction price recovered from the dealers or the same should be based on prices prevailing at Partapur depot during the relevant period - unjust enrichment is not applicable to the existing facts on records. - AT
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VAT:
Imposition of tax - Packing material used for packing the clothes - tax not imposable on packing material used for packing the clothes - HC
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VAT:
Claim of full input tax rebate - it would be only just and fair to direct the revenue to consider the prayer of the petitioner for rectification, when there is no dispute that they were entitled to full tax rebate - HC
Articles
Notifications
Income Tax-
S.O. 1238(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - BEE ENN Charitable Trust, Jammu, J&K
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S.O. 1237(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Noida Lok Manch, Noida, Uttar Pradesh
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S.O. 1236(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Om Creations Trust, Mumbai
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S.O. 1235(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - The Vanvasi Yuva Sangthan, Panchmahal, Gujarat
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S.O. 1234(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Dutt Samajik Seva Trust, Satara, Maharashtra
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S.O. 1233(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Swayamkrushi, Secunderabad
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S.O. 1232(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Aravali Vikas Mandal, Parel, Mumbai
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S.O. 1231(E) - dated
29-3-2016
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Prabhakar Patil Education Society, Raigat, Maharashtra
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S.O. 1230(E) - dated
29-3-2016
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IT
Corrigendum - Notification Number S.O. 3455(E) dated 17th December, 2015
SEZ-
S. O. 1298(E) - dated
30-3-2016
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SEZ
De-notification of 59.3.98 hectares from Sector Specific Special Economic Zone for Footwear at SIPCOT Industrial Growth Centre, Bargur, Uthangarai and Pochampalli Taluk, Krishnagiri, Tamil Nadu
VAT - Delhi-
F.3(11)/Fin(T&E)/2009-10/DS-VI/112 - dated
1-4-2016
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DVAT
Appointment of Assistant Commissioner cum VATO
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F.3(11)/Fin(T&E)/2009-10/DS-VI/111 - dated
1-4-2016
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DVAT
Appointment of Assistant Value Added Tax Officer
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (4) TMI 173
Revision u/s 263 - Held that:- The entire details were filed and the order itself indicates that it can be inferred that the Assessing Officer not only made enquiries, but satisfied himself with the assessee's replies furnished from time to time in support of its stand. When the Tribunal concludes in this manner and finally in paragraph 16 holds that the Assessing Officer took a perfectly correct or a possible view, then, the order passed by him cannot be termed as erroneous insofar as it is prejudicial to the interest of the Revenue. The Commissioner of Income Tax was not, therefore, justified in invoking section 263 of the Act. We are of the view that the Tribunal's order and conclusions are essentially on facts. They cannot be termed as perverse and after it adverted to the rival contentions and all the materials on record. The Tribunal's order cannot thus be held to be vitiated by an error of law apparent on the face of record so as to call for interference in our further appellate jurisdiction. - Decided in favour of assessee
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2016 (4) TMI 172
Assessment u/s 144 - compulsion of notice under Section 143(2) - Held that:- It is now well established that if the AO does not accept the return filed by the Assessee on its face and he is required to issue a notice under Section 143(2) of the Act and provide an opportunity to the Assessee to produce the necessary material in support of his return It is now well settled by a number of decisions (See: Pr. CIT v. Silver Line and Anr.[2015 (11) TMI 809 - DELHI HIGH COURT], ACIT v. Hotel Blue Moon(2010 (2) TMI 1 - SUPREME COURT OF INDIA) and CIT v. Pawan Gupta (2009 (4) TMI 48 - DELHI HIGH COURT) that whenever the return filed by an Assessee is not accepted at its face, it is mandatory for the AO has to issue a notice under Section 143(2) of the Act for proceeding further. It is thus not open for the AO to not issue a notice under Section 143(2) of the Act and proceed directly under Section 144 of the Act by rejecting the return filed by the Assessee.
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2016 (4) TMI 171
Denial of relief under Section 80IB - Held that:- As the owner of the land is concerned, the assessee actually acted as the developer. They had undertaken the following activities namely (i) engagement of architects (ii) preparation of building plans for approval (iii) coordinating with the Local Body for the grant of building plan approval (iv) identification of purchasers of flats and (v) entering into agreements of construction with them. All the above activities cannot be undertaken, if a person was merely a contractor. Therefore, primarily, the view taken by the Tribunal appears to be wholly unsustainable. Drawing our attention to the Explanation inserted towards the end of Sub-Section (10) of Section 80IB, it is contended by the learned Standing Counsel for the Department that the benefit of Section 80IB is not available to any undertaking, which executes a housing project or a works contract awarded by any person. This Explanation was inserted by Finance Act 2/2001 with effect from 1.4.2001. But unfortunately for the Department, the above Explanation has no application to the case on hand. The assessee did not execute a housing project as a works contract for the owner of the land. The relationship that the assessee had with the purchasers of undivided shares has been misunderstood as the relationship that they had with the owner of the land. Therefore, the Tribunal was wrong in holding the appellant to be a mere contractor. - Decided in favour of assessee.
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2016 (4) TMI 170
Appeal admitted on second substantial question of law: Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in coming to the conclusion that no penalty is imposable under Section 271(1) (c) of the Act?
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2016 (4) TMI 169
Payments made to retiring partners - whether in the nature of compensation can be termed as goodwill and subsequently eligible for depreciation? - Held that:- The Supreme Court in the case of Commissioner of Income Tax v. SMIFS Securities Ltd. (2012 (8) TMI 713 - SUPREME COURT ) was dealing with the question as to whether 'goodwill' is an asset within the meaning of section 32 of the Income-tax Act, 1961, and whether depreciation on 'goodwill' is allowable under the said section. The Assessing Officer had held that 'goodwill' is not an asset falling under Explanation 3 to section 32(1) of the Act. The Supreme Court held that Explanation 3 states that the expression "asset" shall mean intangible assets, being knowhow, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature. A reading of the words "any other business or commercial rights of similar nature" in clause (b) of Explanation 3 indicates that goodwill would fall under the expression "any other business or commercial rights of similar nature". The principle of ejusdem generis would strictly apply while interpreting the said expression which finds place in Explanation 3(b). The court was, accordingly, of the view that "goodwill" is an asset under Explanation 3(b) to section 32(1) of the Act, and accordingly, answered the question in favour of the assessee. In the present case, from the findings recorded by the Assessing Officer, the Commissioner (Appeals) as well as the Tribunal, it is an undisputed fact that the payment made to the retiring partners has been considered to be goodwill. The Supreme Court in the above decision has held that goodwill is an asset under Explanation 3(b) to section 32(1) of the Act. Thus, the Tribunal has merely applied the above decision of the Supreme Court to the facts of the present case. Under the circumstances, it is not possible to state that there is any infirmity in the impugned order passed by the Tribunal so as to give rise to a question of law, much less, a substantial question of law, warranting interference. - Decided against revenue
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2016 (4) TMI 168
Penalty u/s 271(1) (c) - change of the head of income for purposes of taxation - Held that:- We find that in the present facts the Tribunal has rendered a finding of fact that the Respondent-Assessee has furnished all details of income in its Return of Income filed. Further on the basis of details furnished by the Respondent, the Assessing Officer had only changed the head of income. The view taken by the Tribunal in the impugned order that mere change of the head of income for purposes of taxation does not warrant a penalty is no longer res integra. This Court in Commissioner of Income Tax v/s. Bennett Coleman and Co.Ltd. (2013 (3) TMI 373 - BOMBAY HIGH COURT ) holds that no penalty under Section 271(1)(c) of the Act is not imposable on account of change of head of income. In the above case, the Tribunal held that premium received on redemption of debentures claimed as income from other sources by the Assessee was held by the authorities under the Act as appropriately classifiable as income from capital gains at the instance of the Revenue could not result in imposition of penalty. - Decided in favour of assessee
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2016 (4) TMI 167
Reopening of assessment - Held that:- Apart from the mistake made in the audit report by mentioning the system of accounting of the Assessee as ‘mixed’ and the letter issued by the Assessee himself, no other ‘tangible material’ was cited to justify the reopening of assessment for AY 2006-07 and 2007-08, the two years for which the reopening was beyond the period of four years. The reasons provided were the same reasons supplied for the reopening of the assessment for AYs 2008-09 and 2009-10 although for AY 2008-09 the earlier assessment was completed under Section 143 (1) of the Act. The fact of the matter was that the reason for the reopening of the assessment was a mistaken factual premise that the Assessee had changed the system of accounting from the mercantile to the cash system. It was more than adequately explained by the Assessee that this was an inadvertent error. The Assessee has convincingly shown that he has consistently been following the mercantile system of accounting not only for AYs in question but for the earlier and later AYs as well. Since the action of the Revenue was based on a factually erroneous premise, the Court is of the view that the reopening of the assessments for the said AYs is not sustainable in law. Decided in favour of assessee
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2016 (4) TMI 166
Registration u/s 12A and approval u/s 80G denied - appellant trust has carried out one time activity of the distribution of sums - Held that:- From the impugned order of the ld. CIT we note that in the ground taken for rejection he observed that the appellant trust has carried out one time activity of the distribution of sums and the applicant society has not carried out any activity in the field of formal education. He further alleged that the distribution of ht sums of money cannot be described as charitable activity in view of section 2(15) of the Act. On these observations and basis we are of the view that at the time of grant of registration u/s 12A of the Act, the ld. CIT has to record his satisfaction about the charitable objects and genuineness of the proposed activities of the applicant. The clause 10 and 12 clearly mandates the charitable activities of the trust. It is not pre-requirement for seeking registration u/s 12A of the Act that the applicant must show and establish having undertaken charitable activities before filing such application for registration u/s 12A of the Act. The ld. CIT(A) has not brought out any allegation or fact on record to establish and allege that the receipts of application trust were not used for charitable purposes and nor it has been shown that receipts were misappropriated or misused by the trustees or office bearers of the trust. Hence this allegation has no legs to stand. No clause or provision in the trust deed which shows that the control of properties and finance is safely given to members to enjoy the fruits of the properties and financial resources and receipts of the trust. The trust is running on deed which was made on 27.12.2010 and the trust is an educational and charitable trust with the object to help in spreading of education in its widest connotation with special focus on education of poor and needy without any preference on the basis of religion, race, caste, sex or place of birth and operation of the trust shall be carried in accordance with the intention of earning profits will perform with service motive only. In such situation the basis and allegations labelled by the ACIT are not found to be sustainable. registration u/s 12AA to be allowed - Decided in favour of assessee
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2016 (4) TMI 165
Additions u/s. 68 - Held that:- CIT(A) has rightly deleted the addition in dispute, because the assessee has furnished satisfactory explanation in regard to the nature and source of each and every deposit made in cash / by cheque in her aforesaid bank accounts. Therefore, we do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on the issue - Decided in favour of assessee
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2016 (4) TMI 164
TDS liability - the provisions were made at the year end is reversed in the beginning of the next accounting year - Held that:- it cannot be said that income had accrued in the hands of the payee. - there was no liability in the hands of the assessee company to deduct TDS, merely on the provisions made at the year end. Hence, the assessee company cannot be treated as ‘assessee in default’ for not deducting tax at source - Decided in favour of assessee
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2016 (4) TMI 163
Interest charged on receivable deleted - recharacterization of a transaction - arm's length price adjustment at the rate of SBI prime lending rate plus 3% premium, in respect of the amounts shown as share application money against which share are not issued - Held that:- What the TPO and DRP have overlooked is that since the assessee was only shareholder of the subsidiary company, the fruits of this investment belong to the assessee only and in entirety. On giving this money to the subsidiary and on use of this money by the subsidiary, the assessee, in its capacity as sole owner of the subsidiary, is beneficiary of all the gains of the subsidiary company. Whether the assessee was allotted these shares or not, the assessee was the only shareholder of the subsidiary company and beneficial owner of all the earnings and all the assets of the company. Non allotment of these shares, during the period of payment of share application money till the actual date of allotment, did not, therefore, prejudice assessee's position anyway. All the earnings of the subsidiary company belonged to the assessee in any situation. For example, if the funds available for dividend distribution for this year were say ₹ 1,00,000 and the assessee had 100 shares before new allotment of shares and 1000 shares after the allotment, the assessee would be entitled to ₹ 1,00,000 only the either way- whether as ₹ 1,000 per share for 100 in pre new allotment situation or whether as ₹ 100 per share for 1,000 shares in post new allotment situation. In absolute terms, the dividends remain the same. Whether the assessee is allotted more shares or not is wholly academic as the assessee is a single shareholder of the subsidiary company and the face value of shares does not affect the actual benefits of the assessee, the percentage of ownership is the only material factor- which remains at 100% pre new allotment as also post new allotment. The assessee has behaved in a commercially rational manner inasmuch as whether the new shares are allotted at x point of time or y point of time, it does not make a difference to the position of the shareholder so far as the subsidiary is wholly owned by a single shareholder- as is the factual position in this case. The nominal value of shares, as long as all the shares are held by the assessee is entirely benefit neutral from a commercial point of view. The very foundation of the adjustment made by the Assessing Officer is, therefore, wholly devoid of legally sustainable merits and factually correct assumptions. Thus we hold that the adjustment on account of notional interest on the share application money, which has been recharacterized as loan, is not sustainable in law. We, therefore, direct the Assessing Officer to delete the same. As the recharacterization itself is held to be unsustainable in law and on facts of this case, all other issues raised in the assessee's appeal are rendered academic. - Decided in favour of assessee
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2016 (4) TMI 162
Disallowance of interest under sec. 36(1)(iii) - Held that:- The assessee was having sufficient non-interest bearing funds being shareholder fund (Rs.3,65,72,082 as on 01.04.2010 and ₹ 7,72,68,670 as on 31.3.2011) and since the immediate source of the loan to the director was sale proceeds of the industrial plot, in our view, there was no nexus between the borrowings of the assessee and advances made to the director out of the interest bearing borrowed funds. It is also undisputed fact that all the borrowings were sanctioned in earlier years and the total secured loan outstanding at the end of the year, has been reduced to ₹ 2,75,17,405 as on 31.3.2011 from ₹ 5,09,08,700 as on 01.04.2010, during the year, clearly establishes that all the borrowings for which interest/financial charges has been paid, were for the business purpose only. In view of the above material facts and respectfully following the ratios laid down by the Hon'ble jurisdictional High Court of Delhi in the above cited decision in the case of CIT vs. Bharti Tele-venture Ltd.( 2011 (1) TMI 326 - DELHI HIGH COURT ), we hold that the authorities below were not justified in making and upholding the disallowance of interest invoking the provisions of sec. 36(1)(iii) of the Act - Decided in favour of assessee
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2016 (4) TMI 161
Penalty u/s 271B - non comply with the provisions of Section 44AB - Held that:- It appears that the assessee got his accounts audited relating to regular business of manufacturing of GLS Lamps. However, no audit was got conducted in respect of the transaction relating to sale and purchase of shares. In the instant case, this contention of the assessee that the transaction relating to purchase and sale of shares resulted into short term capital loss and the transaction was involving capital assets, is not rebutted at any stage. From the above narrated facts, it is clear that the assessee got his accounts audited for the regular business relating to manufacturing of GLS Lamps and the other transaction was relating to the sale and purchase of shares which resulted into short term capital loss. In the present case, it is not brought on record to substantiate that the loss related to the sale and purchase of shares was assessed as a business loss or adjusted against the regular business income and that the shares sold by the assessee were kept as a stock-in-trade. Therefore, the provisions of Section 44AB of the Act were not applicable to the transaction relating to sale & purchase of shares and the penalty u/s 271B of the Act levied by the AO and sustained by the ld. CIT(A) was not justified, therefore, the same is deleted. - Decided in favour of assessee
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2016 (4) TMI 160
Donations in golaks - AO proposed to tax the anonymous donations in accordance with the provisions of Section 115BBC(1), as against the assessee’s version that the same being cash received through golak, did not partake the character of the anonymous donations covered u/s 115BBC(2) of the Act - CIT(A) has erred in law in deleting the addition made by the AO by invoking the provisions of section 115BBC(1)(i) - Held that:- The objects of the Trust exhibited the dual tenor of religious and charitable purpose and activities. Section 115BC of the Act was inserted in the Income Tax Act by Finance Act, 2006 and sub clauses (i) & (ii) of sub-section (1) were substituted w.e.f. 01.04.2010. The object of bringing this law in the Statute Book w.e.f. 01.04.2006 is well explained in the Memorandum explaining the provisions of the Finance Bill, 2006. From the above, it is clear that the object was to catch the ‘unaccounted money’ which was brought in as Tax Free Income in the hands of the Charitable Trusts and this law was never meant for taxing the Petty Charities. The Legislature intended to tax the unaccounted money or black money which was brought in the books of charitable trusts in bulk and this law was not meant for taxing the small and general charities collected by the Genuine Charitable Trusts. As contended, the concept and importance of charity, against the backdrop of the Indian Society, has been in existence from time memorial in all religions, without exception. The assessee, in this regard, has cited Zakaat from Islam, Dasvand from Sikhisim and the recognition of this concept from Manu-Samriti, the original magnum opus on the Indian social system. That this concept has continued to be accepted and practiced in India all along down the ages, and thus it is firmly entrenched in our society, cannot be questioned. . Accordingly, we hold that the ld. CIT(A) has correctly deleted the addition for both the assessment years under consideration. - Decided in favour of assessee
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2016 (4) TMI 159
Brand promotion expenses - expenses considered by the Assessing Officer as expenditure, which granted benefits of enduring nature and which called for allowance over a period of five years - Held that:- As in the case of assessee itself for the assessment year 2001-02 in the identical facts and circumstances, has decided the similar issue in favour of the assessee wherein held the concept of deferred revenue expenditure is not known under the Income-tax Act. The expenditure can be either capital expenditure or revenue expenditure. If the expenditure is revenue in nature and claimed u/s. 37, the same is allowable in whole and cannot be spread over number of years. Admittedly, the advertisement and publicity expenses are revenue expenses. Admittedly, the advertisement and publicity expenses are revenue expenses. No new asset is created by incurring the expenses. It is also not the case of the AO that the expenses are capital expenditure. The finding of the learned CIT(A) that the expenditure are wholly and exclusively for the purpose of business and which is not challenged in appeal. We, therefore, confirm the deletion of disallowance - Decided against revenue
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2016 (4) TMI 158
Reopening of assessment - unexplained gifts - reasons to believe - Held that:- AO merely mentioned that the name of the assessee appear in the list of beneficiaries having channelized her undisclosed income in the garb of gift. Admittedly. In the present case gift was from her paternal aunt, a close relative and the donor Smt. Sita Devi cann't be alleged as bogus or accommodation entry provider in absence of any substantial evidence, specially when the assessee has established her identity, capacity and genuineness of the transaction of gift by furnishing bank statement of the donor, affidavit of the done (assessee) and the donor (Smt. Sita Devi) gift deed dated 23.1.2004, copy of acknowledgement and Balance sheet of Smt Sita Devi showing her capital and assets, copy of PAN card etc. The AO has not mentioned in the reasons recorded that he either examined the information or verified it from the relevant assessment record of the assessee for AY 2004-05 which clearly shows not application of mind and issuance of notice u/s 148 of the Act in a mechanical manner. Because had the AO examined the details and the alleged information, he would have certainly known that information and allegation of accommodation entry is factually incorrect and baseless. Thus we are inclined to hold that the AO proceeded to initiate reassessment proceedings and to issue notice u/s 147/148 of the Act on the vague information without verifying and examining the same and without application of mind in a mechanical manner and hence, the AO did not assume valid jurisdiction to issue notice u/s 148 of the Act and thus notice u/s 148 of the Act and impugned necessary order passed in pursuant thereto u/s 143(3) r.w.s. 147 of the Act is not sustainable and we quashed. - Decided in favour of assessee
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2016 (4) TMI 157
Transfer pricing adjustment - rejecting the CUP / RPA methods adopted by the assessee in respect of "royalty" and other international transactions - Held that:- TPO travelled in the wrong presumption that the assessee used TNMM method for benchmarking the transactions as evident from the language used in the order of the TPO. It is undisputedly wrong as the TP study indicates the application of different methods for different transactions by the assessee, which are already extracted and placed in the above paras of this order. The aggregation approach of benchmarking the international transactions by the TPO is not sustainable as per the today‟s legal position. It is a trait law that the transactions have to be independently benchmarked applying the appropriate method in benchmarking of the transactions. We also perused the submissions of the assessee before the TPO wherein it was categorically submitted by the assessee that the reasons for rejection of the CUP and RPA methods should be given to the assessee and the same is part of the submissions. But, either the AO or the TPO / DRP is bothered to furnish the same. In fact, as seen from para 7.3 of the DRP order, the onus is kept on the assessee by mentioning that the assessee agreed for substituting the TNMM method as an appropriate method, which is not proper. Considering the above deficiencies, inaccuracies and incompleteness, we are of the opinion the matter should be set aside to the file of the TPO / AO for fresh adjudication. AO / TPO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice.
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Customs
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2016 (4) TMI 141
Imposition of penalties under sections 114 and 114AA of the Act 1962 - Illegal procurement and export of Red Sanders, a prohibited goods through CHA - Appellants actively engaged in this illegality - Except statement no other evidence found - Held that:- the appellant booked the containers from OAC India through M/s IAL Logistics (India) Ltd, Jaipur and stuffed the material in their factory and sent to Mundra Port without sealing. Shri Digpalsinh Bhupatsinh Sodha, Proprietor of the CHA firm M/s Fortune Shipping Services, in his statement dt.11.10.2013 stated that the forwarders sent the containers from Jaipur, they usually sent their goods by trucks and alongwith them they also bring supplier's invoice attached with the lorry receipt; that the forwarders send the export details by email to him before the arrival of the goods; that one of the type of exports opted by the forwarder is when the goods is sent within the container stuffed at the factory, but without line seal, Excise seal or any other seal, this is known as “buffer containers”, as it is shown as being stuffed at CFS but the same were already stuffed at the factory of the Exporter, then the shipping bill is filed and 2nd type of exports opted by the forwarder is where the goods arrive by the trucks and the same is stuffed at the CFSs at Mundra and then export Customs documents i.e. Shipping Bill is filed. If the Appellant cleared the export materials without sealing the containers, the burden of proof heavily lies with them that the offending goods were not loaded by them. Here, the appellants failed to prove that the offending goods were not loaded by them. So, from the impugned order it is seen that Shri Mangi Lal Lohiti, Proprietor of M/s Lahoti Impex and Director of M/s Indo Sino Impex P. Ltd, in his statement dt.09.10.2013 recorded under Section 108 of Customs Act, 1962 stated that Shri Rameshwar Sharma used to come with transport on which partly filled containers were loaded and in these partly loaded containers, he himself used to get the goods stuffed in the containers with the help of crane and labour, that the crane and labour were also arranged by Shri Rameshwar Sharma; in addition the partly stuffed goods wre packed in wooden boxes with lassing and were not visible. Hence, the penal provisions would be invoked against the appellant. As the appellant had not filed any appeal against the confiscation of the said goods by the Adjudicating authority which means the appellant had not disputed the confiscation of the declared goods. Section 50 of the Act, 1962 provides entry of goods for exportation. Sub-section (2) of the Section 50 provides the exporter of any goods, while presenting the shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of the contents. The appellant is the exporter and filed shipping bills, which were found attempted to export the Red Sander, prohibited under the Act, 1962 and other laws, by mis-declaring the description of the goods in the shipping bills and therefore, imposition of penalty under Section 114 of the Act is justified. Also as the appellant knowingly or intentionally used the shipping bills which is false or incorrect particular therefore, separate penalty is liable to be imposed under Section 114AA of the Act, 1962. Shri Suresh Sharma, employee of the export firm had knowingly involved in smuggling of Red Sander and therefore, imposition of penalty is warranted. Penalty is reduced to an extent. - Appeal disposed of
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2016 (4) TMI 140
Enhancement of value of goods imported from US$ 4.22 per kg to 5.61 per kg - Deposition of duty collected on loaded value “under protest” - Held that:- the grounds of appeal is not controverting the factual findings. The findings of the first appellate authority are correct and having not issued a show-cause notice and followed the principal of natural justice, the assessment of Bill of Entry by loading the value is incorrect. Therefore, the impugned order is correct,legal and does not suffer from any infirmity. - Decided against the revenue
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2016 (4) TMI 139
Duty liability on warehoused goods under prevailing rate on the date - Goods cleared from Customs bonded warehouse - Application of Section 15 of the Customs Act, 1962 - Department claimed that duty liability was worked out as applicable at the time of warehousing of the goods but appellant claiming to be charged under prevailing rate on the date - Held that:- the duty liability should be on the date of clearance of the consignment from Custom bonded warehouse. The appellant has no case, the bond executed for storage of warehoused goods in the warehouse, expired on 24-01-2003. Hence, the goods cannot be said to have been bonded or warehoused goods for which only provisions of Section 15 of the Customs Act apply. - Decided against the appellant
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2016 (4) TMI 138
Import of old and used photo copying machines - Mis-declaration of goods - Imposition of fine and penalty under Section 112 (a) of the Customs Act, 1964 - Enhancement of value and confiscation of the goods for contravention of license policy - During the during the period under import i.e. on 17.9.2004, the import of old and new photo copier machines covered under the policy as second hand capital goods and the policy was specifically amended on 19.10.2005 where the second hand photo copiers were brought under restricted category - Held that:- by relying on the decision of Tribunal in the case of M/s. Office Tec Industries Vs. CC (Port-Export), Chennai [2015 (9) TMI 243 - CESTAT CHENNAI], no licence is required for import of second hand photocopiers prior to 19-10-2005. Therefore, the fine and penalty are set aside. - Decided partly in favour of appellant
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Service Tax
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2016 (4) TMI 156
Coal Handlers - Classification - Service under the Cargo Handling Service - Coal handlers are involved in the loading/unloading of coal in the collieries and into railway wagons in railway sidings - Held that:- all the cases involving handling of coal in the collieries have been decided in favor of revenue on common grounds by holding the services to be classifiable as cargo handling services and there was no contrary view. In case of three of the appellants (handling coal in the mines), the decision has been taken by the Hon'ble High Court of Orissa and in two cases of the coal handlers, the decision has been taken by the Tribunal relying on the decision of Hon'ble High Court of Orissa. So, it is clear that in case of coal handlers listed as A(i) to A(v) in first para there is no contrary view. All the orders are aligned to the views expressed by the Hon'ble High Court of Orissa order dated 25.2.2011. Therefore, the matters relating to the coal handlers, not being contrary, do not appear to have been remanded to the CESTAT. Coal Packers - Classification - under packaging services and Cargo Handling Service - Engaged in Palletisation or packing of goods for the purpose of ease of transport - Held that:- in case of Packers the decision of CESTAT (Bangalore) has been upheld by Hon High Court of AP and therefore merged with it. It would appear that the correct facts were not presented before the Hon Supreme Court. The contrary views in the cases listed before the Hon Supreme Court was only between the decision of Hon High Court of AP and that of Kolkata bench Tribunal, and that too only in case of Packers. There are no two decision of CESTAT which were before the Hon Supreme Court, and which were contrary to each other. In these circumstances the contesting parties may seek guidance from the Hon Supreme Court, as to the scope of the issues for resolution by the Tribunal. - Adjourned to be heard at later date
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2016 (4) TMI 155
Waiver of penalties levied u/s 76,77 & 78 of the Finance Act, 1994 - Provider of services of ‘Manpower Recruitment or Supply Agency' falling under Section 65 (105)(k) of the Finance Act, 1994 - Held that:- appellant on advice of the Jurisdictional Asstt. Commissioner, on his visit to Range Office, agreeing with the Asstt. Commissioner, discharged the entire service tax liability along with interest. Appellant was assured that no further action will be taken if the payment of service tax along with interest is made. It is clear that the appellant paid entire service tax along with interest and opted the waiver of the show cause notice with clear intention that they do not want to contest payment which they have made with a clear view that no action should be taken against them. It is found that the appellant is a small time service provider without any higher education background. It is also found that on perusal of the invoices submitted by the appellant, it is observed that they have neither charged the service tax to their client nor collected any amount towards the service tax. The appellant paid the entire service tax and interest from their own pocket. So, this itself is a burden on the appellant. When the assessee discharged service tax alongwith interest before issuance of show cause notice penalty has been waived, therefore, when the appellant themselves after discharging the service tax liability along with interest, opted the waiver of show cause notice the case is clearly falls under the provisions of Section 73(3) of Finance Act and the appellant has made out a fit case for waiver of penalty. The penalties and fees imposed under Sections 76, 77, 78 and 70 of the Finance Act, 1994 by invoking Section 73(3) read with Section 80 are waived of. - Decided in favour of appellant
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2016 (4) TMI 154
Demand of Service tax and imposition of penalty - Commission received liable to tax under business auxiliary service - Engaged in the business of transportation as well as providing transportation to their clients by hiring truck/vehicles from others on commission basis - Department claimed that the service tax liability on such transportation of goods to and fro Bajaj Auto Limited is discharged by M/s Bajaj Auto Limited, being one of the persons required to discharge the service tax liability under reverse charge - Held that:- the findings of the lower authorities that the activity of getting commission on the trucks hired form various outsiders would fall under the under the category of 'commission agent' for provision or receipt of service for a consideration is incorrect for more than one reason as the final service rendered by the appellant to M/s Bajaj Auto Limited is 'Goods Transport Agency'. Therefore, the activity if it is taxed under a particular head any amount received such activity, cannot be considered again under 'business auxiliary service' as the appellant is not providing any service in relation to business auxiliary service. - Decided in favour of appellant
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2016 (4) TMI 153
Eligibility for Cenvat credit of the service tax paid by the provider of service (GTA) - Service tax not deposited and the same have been paid by the GTA - Held that:- the words "in respect of such taxable service as may be notified", have been inserted in subsection 2 of Section 68 with effect from 1/7/2012 by the finance act 2012. Thus prior to 1/7/2012, under the provisions of section 68 (1), the tax already has been deposited by the GTA in the present case. Also Rule 2(1)(d)(v) of service tax rules does not override the provisions of the Act. Moreover it has been clarified by CBEC in circular number 97/8/2007 - ST dated 23/8/2007 - clarifying that service tax may be paid either by the consignee or by the consignor or by the GTA, where the consignee is a manufacturer and the service in question is input service for them, in such case manufacturer would be eligible to take the Cenvat credit of the same. Accordingly the appellant have taken Cenvat credit in accordance with law. Further, invoice is a prescribed document under rule 9(1) (f) of Cenvat credit rules 2004 on which credit can be taken. Accordingly, the impugned order is set aside. - Decided in favour of appellant with consequential benefit
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2016 (4) TMI 152
Export of service - produced and distribution of television programmes Consideration received for taxable export service between April 2006 and March 2008 from M/s. SGL Entertainment Ltd., Hongkong - Export of Service Rules, 2005 - Contract between the two dating back to April 2006 for further distribution - Held that:- the reviewing authorities had, inappropriately, placed emphasis on the usage by the recipients of the programmes produced by the appellants. We find that the activity that is liable to tax must be one which is specifically listed in section 65 (105) of Finance Act, 1994 and which, with reference to the business of the appellant is described in sub-clause (zzu). The appellant is a 'programme producer' within the meaning of section 65(86b) and contracted with the overseas entity in that capacity. 'Programme' had been defined in section 65 (86a) in the context of the taxable but the service rendered by a programme producer in relation a programme. There can be no doubt that, if the programme producer or any other person were to further disseminate the programme to others, such dissemination would be liable for tax as a separate and distinct service. Consequently, the usage of the programme after delivery to the overseas entity is irrelevant in deciding upon the tax liability as 'programme producer'. By following the settled law, the contention of Revenue that the distinction should remain blurred is rejected. Therefore, the services rendered by the respondent is delivered or provided from India to the overseas entity. Receipt in Indian currency is Receipt of consideration in convertible foreign currency or not - contract designates the consideration in Indian rupees - Held that:- HSBC, their bankers, indicating that inward remittance from the overseas entity was in convertible foreign currency. - Consequently, there is no justification for entertaining any doubt that inward remittances were in convertible foreign currency. Therefore, both the conditions for export in Rule 3(2) of Export of service Rules,2005 have been complied with. - Decided against the revenue
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Central Excise
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2016 (4) TMI 174
Denial of rebate claim - export of manufactured goods - Excise duty paid both on the inputs and on the manufactured product - Rule 18 - rebate / refund rejected on the ground that, the assessee is entitled to one of the two claims for rebate, i.e., either rebate of duty paid on exported goods or the duty paid on inputs used in the exported goods, and not on both of them - Supreme Court has decided the issue in the favour of assessee reported in [2015 (10) TMI 774 - SUPREME COURT]. - Apex Court dismissed the revenue review petition
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2016 (4) TMI 151
Photocopy of the order eligible for appeal - CENVAT denied - Held that:- This Court is of the view that no interference is called for in the writ proceedings and the petitioner is directed to file an appeal on the basis of a photocopy of the impugned order along with an application stating that it is within limitation. Needless to say, such an application would be adjudicated on merits, after giving an opportunity of hearing to the respondent.
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2016 (4) TMI 150
CENVAT credit denied on the capital goods - exparte order - Held that:- The Tribunal had decided the matter, exparte, considering the issues raised before it. Even though the order of the Tribunal had been passed, on merits, we are of the considered view that a reasonable opportunity ought to have been given to the appellant assessee to put forth its contentions before the Tribunal. As such, we find it appropriate to set aside the impugned order, dated 19.3.2015, passed by the Tribunal and to remit the matter back to the Tribunal for passing appropriate order, on merits and in accordance with law, as expeditiously as possible, after permitting the appellant assessee as well as the respondent department to raise all the grounds available to them. Accordingly, the appeal is ordered.
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2016 (4) TMI 149
Early hearing applications - Held that:- Tribunal is justified in rejecting the applications for early hearing. Even though the order passed by the Tribunal dismissing the applications filed by the appellant, for the early hearing of the appeals, is cryptic in nature, it cannot be said that the appellants could be really aggrieved by the said order. In such circumstances, we find that there is no merit in the present appeals filed by the appellants. Hence, the appeals stand dismissed.
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2016 (4) TMI 148
Refund claim - CESTAT rejected of claim as time barred - Held that:- Department has taken a stand which is too technical in nature. The sum and substance of the letter of protest has to be read as a whole and not in portion. As per the order of the Tribunal, this letter of protest indicates that the appellant had protested against the determination of its annual capacity as per the order of the Commissioner dated 16th of April 1999. The appellant requested for redetermination of the annual capacity and consequently, the duty payable, and contended that hence onwards the duty would be paid under protest till the annual capacity and duty is redetermined. In our opinion, this letter of protest covers the period prior to 14th of June, 1999. Once the department accepts the contention of the appellant and grants refund for the period subsequent to 14th June, 1999, there was no reason why the refund for the period prior to 14th June, 1999 could not have been given.
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2016 (4) TMI 147
Abatement of the excess duty paid denied - demand of interest - Held that:- No plausible reason has been given by the Department in the first instance for the delay of three months in deciding the Assessee’s request for abatement of the excess duty paid by it during the month of January 2011. The Court is not satisfied that the demand of interest for a period of three months, which was occasioned on Department’s own inability to promptly decide the request of Assessee, is sustainable in law. Consequently, the Court leaves the question raised in the present case for examination in an appropriate case if the facts so warrant.
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2016 (4) TMI 146
Demand of the differential duty - exceeded the adhoc exemption granted to Konkan Railway corporation for supply of pre-stressed concrete sleepers - FAA set aside th demand - Held that:- In exercise of the powers conferred by sub-section 2 of Section 5A of the Central Excise & Salt Act, 1944, and in supersession of Adhoc Exemption Order No. 2/2/94-CX dated 4.4.94, the Central Government, having regard to the strategic importance of the Konkan Railway Line and being satisfied that it is necessary in the public interest so to do, hereby exempts prestressed concrete sleepers manufactured and supplied during the period December, 1990 onwards, by the following manufacturers, to Konkan Railway Corporation, from payment of the whole of the duty of excise leviable thereon. It can be seen from the above reproduced adhoc exemption, the exemption is to the value of the sleepers and does not include the excise duty paid, if any. The calculation brought forth by the learned counsel for the respondent is correct as if the amount of excise duty paid approximately 3.29 crores is reduced from 23.36 crores as is mentioned in the grounds of appeal, the respondent's clearance to Konkan Railway Corporation lies within the limit of 21.80 crores as is mentioned in the adhoc exemption. - Decided against revenue
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2016 (4) TMI 145
Refund claim - applicability of doctrine of unjust enrichment - whether duty on MS & HSD was required to be paid at transaction price recovered from the dealers or the same should be based on prices prevailing at Partapur depot during the relevant period - Held that:- Appellant paid excess duty on an amount which was charged from the dealers in Partapur area. However, for the supplies made to Noida & Bulandsahar area, where lower transaction price was agreed upon as compared to Partapur, duty was paid at higher value but duty at lower value was recovered from the dealers of Noida & Bulandsahar at the agreed upon price. The duty for such clearances was thus required to be paid at the agreed upon price (Transaction value) and not the value at which duty was paid. Transaction value under the existing Section 4 cannot be fixed based on the place of clearance alone but has to be seen alongwith the fact as to what is the agreed upon price for the purpose of determining transaction value. It is also observed that CBEC Circular dated 30/6/2000 (Para-5) also conveys the same interpretation regarding new Section 4 of the Central Excise Act, 1944. Therefore, appellant on merits has correctly filed the refund claims alongwith requisite documents and calculations. So far as applicability of unjust enrichment once documentary evidences/certificates have been produced by the appellant to the effect that excess duty paid has not been recovered from the dealers then it has to be held that appellant has discharged its onus of non-recovery from the customers/dealers as per Section 11B of the Central Excise Act, 1944. Even the invoices issued to the dealers also do not suggest that excess duty paid by the appellant has been recovered from the dealers. Once appellant has discharged the initial burden of non recovery of the duty refund sought for, then burden shifts to the Revenue to substantiate with documentary evidence that appellant has recovered the excess duty from the customers. It is not the case of the Revenue that excess duty paid by the appellant has been included in the manufacturing expenditure and not reflected as an amount receivable in their books of accounts. In the absence of any such counter, it is held that unjust enrichment is not applicable to the existing facts on records.
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2016 (4) TMI 144
100% EOU/STP Unit - Eligibility for exemption Notification No. 1/95-CE dated 4/1/1995 and Notification No. 140/91-Cus dated 22/10/1991 - Held that:- The goods procured by the respondent are indeed capital goods and as per the conditions, Asstt. Commissioner has to satisfy himself that the goods so procured either have been installed in the premises of the respondent or otherwise used within the bonded premises within a period of one year from the date of procurement. According to this, there is no condition that the goods so procured should be used in the development of software. As regard the facts of installation/ use of the goods, in the premises of the respondent has not been disputed. The judgments cited by the Ld. A.R. neither relevant to the facts of the present case nor on the issue of the notification involved in the present case. Therefore judgments cited by the Ld. A.R. are not applicable in the present case. Ongoing through the judgments relied upon by the Ld. Counsel for the respondent, we find that on the identical facts the exemption Notification No. 1/95-CE has been extended to the assessees. Therefore the ratio of the judgments are applicable in the facts of the present case. As per our above discussion and case laws, we are of the considered view that the Ld. Commissioner(Appeals) has rightly allowed the exemption Notification No. 1/95-CE dated 4/1/1995 and Notification No. 140/91-Cus dated 22/10/1991 by proper application of mind. The impugned order is maintained. - Decided against reveneue
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2016 (4) TMI 143
Clandestine clearance of finished MMF(P) measuring 66,91,771.78 L.Mtrs. - confiscation of the goods of MMF(P) 66,91,771.81 L.Mtrs though not physically available proposed - demand of duty - Held that:- Clandestine removal cannot be sustained in the absence of evidence of clandestine manufacturing. The statements were uncorroborative nature and could not be made sole basis for holding against the assessee. Their veracity has to be gauged from accompanying circumstances and corroborated by independent evidences. Thus the demand of duty of ₹ 1,99,11,979.00 on 62,22,212.00 L.Mtrs cannot be sustained. But, we find force in the submission of Revenue in respect of demand of duty of ₹ 14,65,949.00 on 4,82,220.00 L. Mtrs of grey fabrics. It is seen that there was shortage of 4,82,220,00 L. Mtrs of grey fabrics during the physical stock verification. The appellants failed to give a proper reason. Thus, the demand of duty on the shortage of the raw material is justified. The Learned Authorised Representative cited various decisions on this issue. We agree with the submission of the Learned Authorised Representative. The demand of duty of ₹ 27,560.00, the Learned Advocate had not contested, and therefore, it is required to be upheld. Regarding imposition of penalty on Shri Sandeep Arunkumar Khaitan Director of the assessee company, we find that he has accepted the removal of finished goods to the quantity of 4,82,220.00 L. Mtrs, and therefore, the imposition of penalty is warranted. However, the quantum of the penalty is required to be reduced. We do not find any material against imposition of penalty on Shri Mohan Lal Khaitan and M/s Koral Prints. There is no material available of involvement of Shri Mohan Lal Khaitan, and M/s Koral Prints and therefore, imposition of penalty on them are not justified. It is well settled by serious of decisions that if the goods are not available, confiscation of goods and imposition of redemption fine cannot be warranted. In view of the above discussion, the impugned order is modified to the extent the demand of duty of ₹ 14,65,949.00 and ₹ 27,560.00 alongwith interest and the imposition of penalty of equal amount of duty are upheld. The demand of duty of the balance amount alongwith interest and penalty is set-aside. The penalty on Shri Sandeep Arunkumar Khaitan is reduced to ₹ 2,00,000.00 (Rupeees Two Lakhs only). Confiscation and Redemption Fine are set-aside. The penalty on Shri Mohan Lal Khaitan and M/s Koral Prints are set-aside. The assessee is entitled to option to pay penalty 25% of duty alongwith entire amount of duty and interest within 30 days from the date of communication of this order as provided under Section 11AC of the Act, 1944. The appeals filed by the M/s. Santosh Textile Mills and Shri Sandeep Arunkumar Khaitan are disposed of in the above terms. The appeals filed by Shri Mohan Lal Khaitan and M/s Koral Prints are allowed.
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2016 (4) TMI 142
Denial of cenvat credit on welding rods/electrodes used as inputs for repair and maintenance of plant and machinery - Held that:- Appellants are eligible for input credit availed on electrodes used for repair and maintenance of the plant and machinery which in turn used for manufacture of final product. See CCE Trichy Vs India Cements [2006 (6) TMI 114 - MADRAS HIGH COURT ]
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CST, VAT & Sales Tax
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2016 (4) TMI 137
Imposition of tax - Packing material used for packing the clothes - Held that:- relying on the decision of co-ordinate Bench of this Court in the case Commercial Taxes Officer, Anti Evasion, Bhilwara Vs. M/s Suzuki Textiles Ltd., Village Gudda, Post Office- Mandal, District Bhilwara, S.B. Civil (Sales Tax) and Assistant Commissioner, Commercial Taxes Department Vs. Teletube Electronic Ltd. [2002 (4) TMI 929 - RAJASTHAN HIGH COURT], the tax not imposable on packing material used for packing the clothes. - Decided against the revenue
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2016 (4) TMI 136
Claim of full input tax rebate - Engaged in the manufacture and sale of sunflower oil, groundnut oil and soya oil - Returns of turnover in Form VAT 100 for the tax periods April 2008 to March 2009 were filed compiled on the basis of books of account and the tax was paid as admitted therein - Petitioner claimed partial input rebate in terms of section 17 of the KVAT Act in respect of sunflower cake, groundnut cake and soya seeds used as input in the extraction of oil on the understanding of the law while filing returns that it was not eligible for full input tax rebate - Held that:- in a situation where if the revenue were to be in the position of the assessee and if it was discovered that by virtue of the operation of law, the revenue was entitled to a certain amount from the dealers, it would have certainly turned the tables on the assessee and proceeding on that presumption. So, it would be only just and fair to direct the revenue to consider the prayer of the petitioner for rectification, when there is no dispute that they were entitled to full tax rebate by virtue of the decision in M.K.Agro Tech Private Limited vs. State of Karnataka [2015 (1) TMI 854 - KARNATAKA HIGH COURT]. Now, it would be a formality for the respondent to pass a rectification order and grant full tax rebate to the petitioner. - Decided in favour of petitioner
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2016 (4) TMI 135
Seeking direction to release of detained goods - Transit pass manually generated and other related documents not available for verification - Held that:- the transit pass manually generated was produced at the time of check and the transaction is inter-state in nature. When such being the case, the respondent cannot demand tax as if the transaction is meant for local sale. For not affixing the signature of the Consignor or Consignee, only a sum of ₹ 2,000/- (Rupees Two Thousand only) can be imposed as fine. Therefore, it is inclined to order release of the detained goods on payment of ₹ 2,000/- (Rupees Two Thousand only) by the petitioner. - Petition disposed of
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2016 (4) TMI 134
Entitlement for refund claim - Amount paid as luxury tax in lieu of bank guarantee as directed by this court - Appellant was requested to pay the tax in cash on specific understanding that such amounts would be refunded, if the appellant was successful in the litigation - Held that:- the question of unjust enrichment does not arise, since the appellant was enjoined only to furnish bank guarantee and therefore would not be liable to have the same encashed. It is only because the appellant had paid the amounts as requested by the respondents in cash. The State cannot be permitted to take advantage of a wrongful promise held out by it to deprive the appellant of the amounts that it would otherwise have been entitled to, had it not succumbed to the assurances. Therefore, the appellant is entitled to refund of the amounts paid in pursuance of communications. - Decided in favour of appellant
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