TMI Tax Updates - e-Newsletter
June 6, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
Income Tax
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Sale of hotel development rights - Capital gains - Section 45 read with section 47(v) - transfer of the capital assets from a wholly-owned subsidiary company to its holding company - HC
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Transfer pricing - arm's length price - Selection of comparable - Other enterprises have claimed depreciation at much lower amounts. Size of the assets besides the age of the assets of comparables was leading to difference in the profit margins and in mean margin. - Adjustment is required to be made - AT
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Capital expenditure vs Revenue expenditure - any expenditure on replacement or repairs to plant and machinery which does not bring into existence any enduring or permanent advantage in the capital field is allowable as revenue expenditure. - HC
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Additional provision for warranty Claim - Tribunal allowed normal warranty, extended warranty, however denied additional provision for warranty on domestic sales claimed by assessee considering the increase in trend of settlement of actual warranty claims in the past - Order of Tribunal confirmed. - HC
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Whether the assets received by the assessee at the time of partition are capital assets or stock-in-trade. - properties where held by the family as stock in trade - conversion of capital assets into stock in trade - AT
Customs
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Doctrine of forum conveniens - Territorial Jurisdiction of High Court - The conclusion that where the appellate or revisional authority is located constitutes the place of forum conveniens as stated in absolute terms by the Full Bench is not correct as it will vary from case to case and depend upon the lis in question. - HC (LB)
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Rejection of application for renewal of license - Whether the appeal against the order of Commissioner of Customs for rejection under Regulation (11) of CHA 2004 would lie before the Tribunal - AT
DGFT
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Foreign Trade Policy, 2009-2014 Effective from 05/06/2012. - Notification
Indian Laws
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Highlights of Annual Supplement 2012-13 to Foreign Trade Policy 2009 -14.
Service Tax
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Amendment in Service Tax vide Finance Act, 2012, regarding negative list shall be effective w.e.f. 1-7-2012 - Notification
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Amendment in Service Tax vide Finance Act, 2012 to the existing provisions empowering the CBEC to withdraw the provisions of positive list shall be effective from 1-6-2012 - Notification
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ST - When the assessee having centralized billing and accounting system, non-registration of branch office would not come in the way of availment of Cenvat credit. - AT
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ST - Whether the revisional authority has jurisdiction to impose penalty for the first time when it has not been imposed by the adjudicating or assessing authority by invoking Section 80 – Held No - HC
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ST - Whether the penalty imposable under the Finance Act, 1994 is automatic – Held no - HC
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GTA service - denial of cenvat credit on the ground that TR-6 challan is not proper document to avail cenvat credit and cenvat credit is not admissible on outward goods transportation service
- AT
Central Excise
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Excisability - Manufacture - Merely because the appellants were supplying the raw material, exercising supervisory quality control over the goods, it cannot be made a ground for holding that he is the manufacturer. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (6) TMI 89
Immunity - Settlement commission - Third person - While granting immunity from prosecution settlement commission has observed as, "No immunity is granted in respect of income contained in the seized papers on the basis of which computation of income has been made in the settlement application and which has been held not to belong to the applicant company by us. The department will be free to initiate penalty and prosecution proceedings in respect of these papers in appropriate hands as per law." - Petitioner sought to deleted this observation. Held that:- The Settlement Commission has accepted the full and true disclosure made by the petitioner, though there is dispute about the manner in which the undisclosed income was earned. - The petitioner cannot insist and claim that their application should have been dismissed as they had failed to make disclosure on the manner in which the said income was earned. - The Settlement Commission has taken on record the reasoning given by the petitioner for earning the said income and expressed dissatisfaction. Even before us the petitioner insists that it had made fully and true disclosure and also stated the manner in which the said income was earned. The petitioner cannot challenge and question the order of the Settlement Commission being the beneficiary of the order. - Decided against the petitioner with cost.
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2012 (6) TMI 88
Income u/s 2(24) - Whether the tax paid by the employer is a “perquisite” within the meaning of Section 17(2) and, therefore, in terms of Rule 3 of the Income Tax Rules, 1962 cannot be taken into consideration for computing value of the perquisite “rent free accommodation” - held that:- The definition of 'income' in clause (24) of Section 2 of the Act is an inclusive definition. It adds several artificial categories to the concept of income but on that account the expression 'income' does not loss its natural connotation. Indeed, it is repeatedly said that it is difficult to define the expression 'income' in precise terms. Anything which can properly be described as income is taxable under the Act unless, 'of course, it is exempted under one or the other provision of the Act. Under the then applicable Rule 3 value of perquisite “rent free accommodation” has to be calculated. The underlined portions above support and affirm our findings. - Rule 3 has undergone change/ amendment with effect from 01.04.2001 and as per the amended Rule, perquisite under Section 17(2) has to be excluded for the purpose of computing perquisite value of “rent free accommodation”. - Decided against the revenue.
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2012 (6) TMI 87
Validity of reassessment notice issued for AY 1984-85, 1985-86, 1986-87 on ground that no amalgamation between M/s Modipon Ltd. and M/s Indofil Chemicals ltd. had taken place in the accounting years ended on 30.6.1983 and 30.6.1984 - effective date of amalgamation is 1st July, 1982 - Revenue contending date of amalgamation to be appointed date therefore, amalgamation took place after 31st March, 1986 - Held that:- It is undisputed that assessment for AY 84-85 and 85-86 were completed recording that the business income/earnings of Indofil Chemicals Ltd. was treated as income/earnings of chemical division of the Modipon Ltd. Further in AY 86-87 Tribunal decided in favor of assessee holding that amalgamation was effective from 1st July, 1982 and accordingly income of Indofil Chemicals Ltd. was assessable in the hands of the petitioner (Modipon Ltd.) on the basis of the scheme of amalgamation which was effective from 1st July, 1982. Since Tribunal order became final, petitioner is entitled to succeed in the present writ petitions and the reassessment notices issued are accordingly set aside and quashed.
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2012 (6) TMI 86
Unexplained cash credit u/s 68 - share application money - held that:- assessee has discharged its onus, cast upon it. Even the identity of the share applicant is not disputed by the ld. Assessing Officer. Even otherwise, the ld. Assessing Officer has not brought any adverse material on record to prove otherwise. - Decided in favor of assessee. Application of section 50C on depreciate assets - held that:- provisions of section 50C were applicable to transfer of depreciable asset covered by section 50 and the capital gain arising from such transfer has to be computed by adopting the stamp duty valuation.
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2012 (6) TMI 85
TDS u/s 194A on Interest - Disallowance of re-imbursement of interest u/s.40(a)(ia) - payment of interest through the parent company - As per the language used by the Parliament what is contemplated is the ‘interest in the form of income’. In the present case the argument of the assessee is that it is only reimbursement of the interest payment in respect of the funds utilised by the assessee towards borrowing facility of it’s parent company. - held that:- the assessee is under no statutory obligation to deduct the tax at source u/s.194A of the Act and, hence, there is no justification to invoke the provisions of sec.40(a)(ia) of the Act in making the disallowance. R&D expenditure - Software Solutions - capital expenditure or revenue expenditure - held that:- without supporting evidence it is very difficult to accept the plea of the assessee in respect of the nexus of the said expenditure with the development of the software and also to arrive at a conclusion whether the same can be treated as a revenue expenditure being recurring in nature. - Decided against the assessee.
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2012 (6) TMI 84
Whether Tribunal was right in holding that the entire land introduced by the partners as their capital and later on withdrawn in the year 1986 was an agricultural land, treating it as individual property of the respective partners - Revenue contending such contribution of land as partnership firm's property on ground that land appurtenant to the structure was also part and parcel of the business of the assessee firm and the land cannot be separated from the building after construction of structure - Held that:- Tribunal observed that at no point of time the ownership of the land was transferred to the partnership firm by means of transfer entry or sale deed. Further, the land was always treated as agricultural land in the earlier assessment years, therefore, finding by the Tribunal that it was agricultural land for the relevant AY and it belonged to the individual partners and was never partnership firm's property is perfectly justified.
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2012 (6) TMI 83
Dis-allowance u/s 14A of interest expenditure and administrative expenses on ground of same attributable to exempt income earned on account of dividend and long term capital gain - assessee is in the business of making investments, besides other business - earlier, it was carrying on the activity of manufacturing and dealing in Textiles - Held that:- CIT(A) have rightly deleted dis-allowance of interest expenditure on ground that no interest expenditure stands shown as relating to the period during which the assessee company was only an investment company. Entire interest expenditure actually related to the earning of taxable income from the Textile Division. Since no nexus was brought by the AO between the borrowed funds and the tax free investment. That being so, disallowance of interest on borrowed funds was entirely uncalled for. Administrative expenses - Held that:- It cannot be gainsaid that the disallowance u/s 14A of the Act cannot be made on an ad-hoc basis and it is the Department’s responsibility to justify any such disallowance by bringing material on record to show that any expenditure was incurred for earning the exempt income. In the absence of such evidence, it was wrong on the part of the AO to proceed to compute disallowance of the expenses u/s 14A of the Act by merely applying Rule 8D(2)(iii) of the Rules. Deduction u/s 80IA/80IB - denial of deduction u/s 80 IA/80 IB for pre-demerger period to assessee company or resulting company regarding the assessee’s three units which stood demerged pursuant to the Demerger Scheme - denial also on ground that same has not been claimed in Return - Held that:- Circular No. 15/5/63 – IT(A-I) dated 13.12.63 relates that the Board agreed that the benefit of section 84 attached to the undertaking and not to the owner thereof and that the successor would be entitled to the benefit of the unexpired period of 5 years, provided the undertaking was taken over as a running concern. It is on record that audit report in form No. 10 CCB, has been filed, in which deductions u/s 80 IA(12)/80 IB(12) were duly certified to have been claimed by the assessee. It is undisputed that the claim was made by way of a Note appended to the original return of income. It cannot be gain-said that the Note to the return of income formed an integral part of the return. Thereby, it cannot be held that the deduction was not claimed in the return of income. Therefore, AO erred in denying the deduction u/s 80 IA(12)/80 IB(12) - Decided in favor of assessee.
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2012 (6) TMI 82
Set off of loss on trading in futures and options as business loss against business income - applicability of Explanation to section 73 to transactions entered into in 'Future and Options i.e. derivatives transactions of NSE - Revenue contending the same to be specualtion loss - Held that:- Transactions of 'Future and Options' are not shares although underlying asset for determining prices of future and options, which are shares, commodities, currencies etc. Future and options are in themselves the items, which are traded through stock exchange and not the underlying items to which 'future and options' relate. It means 'future and options' are not covered by Explanation to section 73 for the reasons that this is specifically excluded by way of clause (d) to section 43(5) w.e.f 01-04-06 by the Finance Act'05. It is clear that Explanation to section 73 refers to the business of purchase and sale of shares and not the business of derivative transactions carried out by recognized stock exchange by the assessee. Therefore, CIT(A) rightly allowed the set off of loss against normal business income - Decided against the Revenue.
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2012 (6) TMI 81
Search/ survey proceedings on group concerns - additions - alleged unexplained investment with HMA Group - Revenue contended unaccounted purchases on basis of few bills found during survey - Held that:- Evidence on record does indicate that these are only accommodation bills for obtaining the loans. Just because there are certain bills available, it cannot be considered as unaccounted purchases unless there is evidence that assessee purchased the goods in question and paid the amount outside the books of account. Assessee contended that amounts were settled by way of LC proceeds and these were accounted for in the books of account. In the absence of any actual purchase and the fact that the bills were discounted in the Bank, which were accounted in the books of account takes it out of the unaccounted purchase provisions of the I.T. Act - Addition deleted Alleged unaccounted sales to Liberty Marketers - dispute regarding name in which bills are raised between both parties - Held that:- As the matters were disputed, contentions were not accepted, and in absence of inquiry and examination of the actual details, matter restored to file of AO Interest paid in cash and relatable loan taken and repaid in cash - assessee contended that interest was taken upfront i.e. the interest would be deducted from the principal amount at the time of advancing the loan itself and these amounts are taken by way of cheques - Held that:- As far as the amounts of loan taken, they are tallying with the dates and these amounts are taken by way of cheques. Matter require further examination - File restored to AO. Alleged unaccounted sales to Depot - dispute is with reference to the goods sent to Branch considered as unaccounted sales of the HO on the basis of the statement obtained from the Branch office - assessee submitted that out of sales statement of 6346 No. of items, Branch has accounted sales of 2698, hence sales of 2698 may be added - Held that:- Addition is restricted upto 2698 items, balance to be deleted. Entire sales proceeds of aforesaid items will be added as against assessee contention of adding only profits. Alleged unaccounted stock at depot - no addition made in assessment order - Held that:- Unaccounted stock found subsequent to the date of search cannot be considered in the block assessment proceedings and may have to be considered under the regular assessment proceedings - Addition deleted. Alleged Cash Credits - Held that:- Since credits are accounted in the books of account and is a subject matter of inquiry in the regular assessments, therefore, in the absence of incriminating material in the course of search, these cannot be examined in the proceedings u/s 158BC. Benefit of telescoping in block assessment - Held that:- Since few grounds are restored to file of AO. hence ultimate examination of telescoping benefit has to be done by AO after deciding the issues afresh.
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2012 (6) TMI 80
Capital gains - Transfer of property - joint development agreement - Validity of reassessment order passed under section 143(3) r.w.s. 147 of the Act. - held that:- It is seen that the learned CIT(A) found that the Assessing Officer issued the notice under section 148 only after obtaining the sanction of the appropriate authority [mentioned in section 2(28C)] as laid out in section 151 of the Act. We also find that all the objections raised by the assessee, pointing out so called infirmities in the said notices, have been addressed in accordance with the provisions of section 292(b) and the judicial decisions cited were distinguished by the learned CIT(A) - Decided against the assessee. Capital gains - Transfer of property - joint development agreement - held that:- the assessee transferred all control and interest in the land to the developer at the time of agreement dt.30.6.1994 when the assessee gave the developer exclusive rights over the property. The assessee has not been able to produce any contrary evidence to show that the property was handed over on any subsequent date and more so in the period relevant to Assessment Year 2003-04. - in accordance with the provisions of section 2(47) of the Act r.w.s. 53A of the Transfer Property Act, 1882, we hold that the capital gains on the assessee’s land at Kayathamaranahalli, Mysore has been correctly brought to tax in Assessment Year 1995-96 by the Assessing Officer. - Decided against the assessee.
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2012 (6) TMI 79
Disallowance u/s 40A(2) - payments of commission to relatives and sister concerns - excessive or unreasonable - held that:- so long as there is no intention to evade tax and so long as the commission is not shocking, the said commission has to be accepted, particularly in the light of the wordings of sec. 40A(2) of the Income-tax Act and it is not the quantum alone that govern such cases but the fair market value of the goods, services, legitimate needs of the business or profession of the assessee would be guiding factor in terms of sec. 40A(2) of the Income-tax Act.
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2012 (6) TMI 65
Premium received on sale of export quota - Taxability u/s Section 28(iiia) to 28(iiic) - Exemption u/s 80HHC - whether the premium received on sale of export quota is covered by Section 28(iiia) to 28(iiic) and accordingly, has to be included while computing the deduction as per the provisos to sub-Section (3) of Section 80HHC of the Act. - held that:- premium on sale of export quota is not covered by clauses 28(iiia) to (iiie) and, therefore, the same cannot be taken into consideration. - The question of law mentioned above, therefore, is answered in negative i.e. in favour of the appellant-Revenue and against the respondent-assessee. Revision u/s 263 - held that:- The tribunal was wrong in holding that the order passed by the Commissioner of Income Tax under Section 263 was bad and contrary to the provisions of the Act. The question of law is answered in negative i.e. in favour of the Revenue and against the respondent-assessee.
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2012 (6) TMI 64
Sale of hotel development rights - Capital gains - Section 45 read with section 47(v) - transfer of the capital assets from a wholly-owned subsidiary company to its holding company - held that:- The term “subsidiary” or “wholly owned subsidiary” have not been be defined in the Act i.e. the Income Tax Act. Therefore, reference is to be made to the other Acts and in this case, the Companies Act. Effect of the violation of Section 49 and 187C of the Companies Act is one aspect but the other issue, which has to be examined, is the evidentiary value and the effect when no such declaration was initially made and the subsequent filing of the declaration is disputed and contested. As per the case of the appellant, material and evidence found during the search and subsequent enquiries had revealed that the respondent assessee was not a 100% subsidiary of Sunair Hotels Ltd. It is, therefore, the contention of the appellant that the assessment order dated 9th February, 1998 does not help or protect the respondent assessee as the said order had proceeded on the basis of premise and assumption that the respondent assessee was not a 100% subsidiary of Sunair Hotels Ltd. This aspect will be examined by the tribunal.
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2012 (6) TMI 63
Capital expenditure vs Revenue expenditure - expenditure incurred on repairing of godowns damaged in Tsunami disaster - Revenue contended the same as capital expenditure on basis of quantum of expenditure - Held that:- CIT(A) has rightly observed that no inference can be drawn from the facts of the case that new asset has been credit, neither the AO has pointed out any such creation of the new asset. It is further observed the expenditure incurred for godown maintenance for the past five years has been allowed by the revenue as revenue expenditure. Hence, the same is allowed as revenue expenditure - Decided in favor of assessee. Upfront fee for term loan - Prepayment penalty charges - assessee submitted that expenses were incurred in relation to obtaining bank loans by shifting the same from Consortium of Banks to ABN AMRO Bank against the Floating Crane on which depreciation has been claimed starting from FY 2003-04 - no new asset came into existence - Held that:- There is no need to further capitalize the upfront fee for term loan in connection with the transfer of the loans from one bank to another against prepayment penalty charges paid to the existing banks. Especially when the subsequent loan as bearing is having less rate of interest i.e. 10% as against the existing term loan of three banks which is 15% - Decided in favor of assessee.
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2012 (6) TMI 62
Kick back money - reassessment - Deduction u/s 37 disallowed on the ground that as per Volcker Committee report, the payments made to this company were “illegal payments in the nature of kick-backs, which were ultimately received by the Iraqi authorities” and “as the amounts paid by the assessee are illegal and prohibited by the law of the land, the same cannot be allowed as expenses under the Income Tax Act, 1961 - held that:- The assessee has made payment for commission and has been rendered services in consideration of the same. As a matter of fact, it is not even revenue’s case that no services have been rendered at all. The fact that services have been rendered by a party other than the agent to whom commission is paid is wholly immaterial so far as deductibility in the hands of the assessee is concerned. As for the position that the payment was highly excessive vis-à-vis the local costs, even if that be so, that aspect of the matter does not affect the deductibility in the hands of the assessee either. The assessee is concerned with commercial expediency of the said payment and not with what are the actual costs incurred in rendering the services for which the payment is made. As we have seen earlier in this order, from the extracts of the Volker Committee report itself, it was absolutely necessary for the assessee to make the impugned payments and, in any event, the commercial expediency of these payments has not even been called into question by the Assessing Officer. The case of the revenue is confined to invoking the Explanation to Section 37(1). - Decided in favor of assessee.
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2012 (6) TMI 61
Cascading effect of dis-allowance u/s 43B and 40(a)(ia) on deduction u/s 10B - Held that :- It is the well established fact recomputed profits shall be considered for the purpose of computation of deduction u/s 10B. If the assessing Officer recomputes the profit from eligible business by disallowing certain expenditure and liability u/s 40(a) (ia) and 43B, such recomputed profit shall be considered for the purpose of deduction u/s 10B - Decided in favor of assessee. Dis-allowance u/s 40(a)(ia) - Held that:- It is the well established position of law that section 40(a)(ia) has no application where the amount incurred and paid without deduction of TDS. It is applicable only when provision is made in the books of accounts and shown as payable without being deducting TDS. In present case, all the payments are being paid and none of the payments are shown as payable and hence dis-allowances made u/s 40(a)(ia) is deleted - Decided in favor of assessee. Dis-allowance of expenditure towards export business - rejection of books of account, ignoring report of special auditor reporting that there was no discrepancies in the books of accounts maintained - Held that:- When Assessing officer himself got the accounts audited from special auditors u/s 142(2A) then he cannot ignore the audit report submitted by the special auditors. If the special auditor points out any discrepancies with regard to allocation of expenditure and correctness of books of accounts, then it is open to the assessing officer to reject the books of accounts and resort to estimation. Therefore the AO is not correct in re-allocating the common expenditure on the basis of ratio of export turnover to total turnover by rejecting the books of accounts. Dis-allowance of unpaid liability u/s 43B - assessee contended that service tax, and provision for leave encashment which is future liability are not covered within the meaning of any tax or duty u/s 43B - Held that:- Section 43B covers any sum payable by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force. Therefore service tax liability is covered u/s 43B and non -payment of same within the stipulated time attracts dis-allowances. Similarly, Leave encashment is allowed as deduction on payment basis. Therefore, dis-allowance of provision for leave encashment is upheld - Decided against the assessee. Expenditure incurred for increase in authorized capital - capital or revenue expenditure - Held that:- Amount incurred for increase in authorized capital is in the nature of capital expenditure - Decided against the assessee.
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2012 (6) TMI 60
Transfer pricing - arm's length price - master software development agreement - Selection of comparable - held that:- When the assessee was mainly engaged in software development services, though in a different vertical, having regard to the overall circumstances of the case, such comparable companies selected by the TPO should be considered as comparables in this case. As regards those four companies referred to by the assessee are concerned, after discussing the factual position in respect of those companies and applying those filters adopted by him, in para 13 at page 93-94 of his order, he has clearly held that the same cannot be considered as comparables in this case. In fact, having regard to the factual findings given by the TPO in that para, his decision in rejecting those four companies as comparables, is justified. Accordingly, we reject the plea of the assessee. Regarding ALP - held that:- Other enterprises have claimed depreciation at much lower amounts. Size of the assets besides the age of the assets of comparables was leading to difference in the profit margins and in mean margin. On the contrary, claim of depreciation is eating up large chunk of profit in the case of the taxpayer. - The CIT(A) has not said a word on "asset" employed and "risks" suffered by the tested party and the comparables. Thus, material differences needing suitable adjustment were ignored and a flawed analysis was carried even in appellate proceedings. Without considering obvious material differences, the contention of the assessee to take profit without depreciation was rejected. This rejection is not sound in law. This ground is allowed.
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2012 (6) TMI 59
Capital expenditure vs Revenue expenditure - expenditure on account of replacement of moulds and dies - assessee engaged in the manufacture of die-casted components for automotive manufactures having high requirement of modules - Held that:- It has been factually found that the purchase of dies and moulds did not bring into existence any permanent or enduring advantage to the assessee. Due to continuous use they wear out fast and they have to be replaced frequently to ensure quality of the product. Moreover, the moulds have to be produced to suit the requirements of the particular customer and after the order is met, they become useless and ultimately have to be destroyed to prevent misuse. It is well settled that any expenditure on replacement or repairs to plant and machinery which does not bring into existence any enduring or permanent advantage in the capital field is allowable as revenue expenditure. Therefore, dies and tools were allowable as revenue expenditure.
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2012 (6) TMI 58
Additional provision for warranty Claim - dis-allowance - Tribunal allowed normal warranty, extended warranty, however denied additional provision for warranty on domestic sales claimed by assessee considering the increase in trend of settlement of actual warranty claims in the past - Held that:- The observations record that an assessee is entitled to compute the warranty provision on the basis of estimate every year for future warranty expenses. Such estimates may be re-assessed every year but the re-assessment has to be on some scientific method of accounting which is to be adopted by the assessee. In the present case the Tribunal has noticed that the scientific method constantly adapted and followed by the assessee was on the basis of average of last three years. In the present case the warranty provision was increased from 0.28% to 0.39% of the turnover. The assessee wants to make an additional provision of Rs. 91.70 lakhs over and above Rs. 885.28 lakhs already made. This is an increase of more than 12% in the provision for warranty as per the formula regularly adopted. The said jump is quite substantial. hence, order of the Tribunal does not call for any interference - Decided in favor of Revenue
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2012 (6) TMI 57
Issue of reassessment notice u/s 147/148 instead of issuing notice u/s 143(2) for scrutiny assessment - held that:- we do not think that the Assessing Officer is prevented and barred from recording reasons in writing and issuing fresh notice under Section 148 of the Act in view of the objections raised by the petitioner to the present proceedings or in view of the decision of this Court in Ved & Co. (2007 (2) TMI 212 (HC)). Of course, the petitioner will be entitled to question the reassessment proceedings if initiated on other grounds or reasons as per law. The respondents have agreed to and will be bound by the statement to withdraw notice under Section 147/148 dated 5th July, 2011, but will have liberty and right to issue fresh notice under Section 147/148, after recording reasons to believe. The said notice will not be barred because the respondents had not initiated proceedings by issue of notice under Section 143(2) of the Act or they had earlier issued notice under Sections 147/148 dated 5th July, 2011.
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2012 (6) TMI 56
Whether the assets received by the assessee at the time of partition are capital assets or stock-in-trade. - properties where held by the family as stock in trade - conversion of capital assets into stock in trade - held that:- the assessee was allotted the family's real estate business. - the assessee, on partition of the joint family, had received the balance capital of the family in the real estate business comprising various assets, which were in the nature of stock-in-trade and it cannot be considered that the various assets or properties received by the assessee on partition are capital assets and these capital assets were converted into stock-in-trade of the real estate when the assessee continued to carry on the business of the erstwhile joint family. Valuation - held that:- the value of the properties fixed at the time of partition or determined aliunde would be the cost to be adopted in the hands of the recipient of the properties. However, the specific provisions of section 49(1) of the Act have been enacted in the Income Tax Act, 1961, to fix the cost of the capital asset acquired on partition to be the cost at which it was acquired by the previous owner. In other words, the judgment of the Hon'ble Apex Court in Kalooram Govindram (1965 (4) TMI 15 (SC)) would not be applicable in a case of capital assets received on partition in the light of the provisions of section 49(1) of the Act. However, since the provisions of section 49(1) of the Act, does not apply to other assets, viz. stock-in-trade etc., the ratio of the judgment of the Hon'ble Apex Court would be applicable and it is the cost at which the assessee acquired the property in the partition that has to be taken.
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2012 (6) TMI 55
Issue of reassessment notice u/s 147/148 instead of issuing notice u/s 143(2) for scrutiny assessment - whether the notice issued on 30.12.2004 under Section 143(2) of the Act was validly served upon the assessee-firm on 31.12.2004 as claimed by the Assessing Officer. - held that:- Tribunal was not right in quashing the assessment proceedings. We hold that the assessee was properly served with the notice under Section 143(2) of the Act and within the statutory period prescribed by the proviso to the said sub-section. Accordingly, the substantial question of law is answered in the negative, in favour of the Revenue and against the assessee.
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Customs
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2012 (6) TMI 77
Enhancement of assessable value of glass beads (semi-finished) imported for garments at US $0.32 to US $1.00 per Kg.(CIF) on the basis of DOV data - lower assessable value of the contemporaneous import of the similar goods denied on the ground that the appellant have not produced any B/E in support of their contention - Held that:- Now, the Appellant are in a position to submit the bills of entry numbers, which they have obtained through RTI, by evidencing the import at lower assessable value in case of similar goods. In these circumstances, the case is remanded to the Commissioner (Appeals) to decide the matter afresh.
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2012 (6) TMI 76
Doctrine of forum conveniens - Territorial Jurisdiction of High Court - Decision in the matter of New India Assurance Company Limited v. Union of India and Others [2012 (6) TMI 96 (HC)] Held that:- The finding recorded by the Full Bench that the sole cause of action emerges at the place or location where the tribunal/appellate authority/revisional authority is situate and the said High Court (i.e., Delhi High Court) cannot decline to entertain the writ petition as that would amount to failure of the duty of the Court cannot be accepted inasmuch as such a finding is totally based on the situs of the tribunal/appellate authority/revisional authority totally ignoring the concept of forum conveniens. Even if a miniscule part of cause of action arises within the jurisdiction of this court, a writ petition would be maintainable before this Court, however, the cause of action has to be understood as per the ratio laid down in the case of Alchemist Ltd. (2007 (3) TMI 382 (SC)). An order of the appellate authority constitutes a part of cause of action to make the writ petition maintainable in the High Court within whose jurisdiction the appellate authority is situated. Yet, the same may not be the singular factor to compel the High Court to decide the matter on merits. The High Court may refuse to exercise its discretionary jurisdiction by invoking the doctrine of forum conveniens. The conclusion that where the appellate or revisional authority is located constitutes the place of forum conveniens as stated in absolute terms by the Full Bench is not correct as it will vary from case to case and depend upon the lis in question. The finding that the court may refuse to exercise jurisdiction under Article 226 if only the jurisdiction is invoked in a mala fide manner is too restricted/constricted as the exercise of power under Article 226 being discretionary cannot be limited or restricted to the ground of mala fide alone. While entertaining a writ petition, the doctrine of forum conveniens and the nature of cause of action are required to be scrutinized by the High Court depending upon the factual matrix of each case in view of what has been stated in Ambica Industries (2007 (5) TMI 21 (SC)) and Adani Exports Ltd. (2001 (10) TMI 321 (SC)). The conclusion of the earlier decision of the Full Bench in New India Assurance Company Limited [2012 (6) TMI 96 (HC)] “that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens” is not correct.
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2012 (6) TMI 54
Rejection of application for renewal of license - Whether the appeal against the order of Commissioner of Customs for rejection under Regulation (11) of CHA 2004 would lie before the Tribunal – Held that:- There is a specific provision for filing of appeal to the Tribunal under Regulation, 23(8) against orders of suspension or rejection of license but there is no such provision in the case of rejection of renewal of license - the period of license is fixed under Regulation 12 and on expiry of the same license can be renewed under Regulation 11 - suspension/ revocation of licence and non-renewal of license are to be treated on different footings - right of appeal is a creature of statute and there being no provision under which a CHA could file appeal before this Tribunal against order rejecting the renewal application – on reading Regulation 9 with Regulation 11 even if an application for renewal is treated as a fresh licence, the Regulations permitted appeal only where an application is rejected under Regulation 9(3)and Regulation 11 does not so provide. Whether CHA may avail the remedy against the order of rejection of application for renewal of license under sub-regulation (5) of Regulation (9) of the said Regulation – Held that:- It is seen that when a fresh application for issuance of license is filed and the same stands rejected by the Commissioner, there is a specific provision for filing an appeal before the Chief Commissioner of Customs, in terms of clause 5 of Regulation 9 - The CHA license holder is at liberty to file an application before the Commissioner before the expiry of validity period for renewal of the license for a further period of ten years from the date of expiry- discrimination cannot be made on the ground that the application was for renewal of license and not for grant of fresh license.
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Corporate Laws
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2012 (6) TMI 91
Negotiable Instruments Act – dishonor of cheque - Held that:- cheques referred to in both the complaints are presumed to have been given for consideration. The presumption under section 139 of the Act has not been rebutted by the accused and, therefore, trial court wrongly acquitted the accused by taking a view that there was no consideration for which the cheques were given by Munish Jain to the complainants. accused ought to have been held guilty, especially accused No. 4, Munish Jain who had signed all the cheques for M/s. A.T. Overseas Ltd. Munish Jain, accused No. 4 and respondent No. 4 herein, in both the cases guilty of the offence under section 138 of the Act. Accused Munish Jain was acquitted by the trial court and the High Court has confirmed the acquittal, which is being set aside by this Court by allowing these appeals. as per the provisions of section 235(2) of the Criminal Procedure Code, this Court will have to give an opportunity of being heard to him on the question of sentence
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2012 (6) TMI 75
Mismanagement and oppression - donation of significant sums of money to Madhav Prasad Priyamvada Birla Apex Charitable Trust, who are the Chairman of the Board and his family/associates control the said trust and such donations in substance constitute siphoning of funds of the company to the HVL controlled trust - application to prevent further flow of funds to the said trust - Order of CLB - violation of the principles of natural justice. - Held that:- they did not get adequate opportunity of hearing. stay of operation of the impugned order
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2012 (6) TMI 74
Maintainability of appeal - petitioners have alleged/various illegal acts on the part of the existing management of the company, and the prayers of the petitioner centre around preventing the existing management from running the affairs of the company - allegation is that the petition is a motivated one and for a collateral purpose and instigated by Birla groups and the petitioners and the consenting shareholders who had acquired shares recently cannot voice any grievance relating to alleged acts of oppression/mismanagement in the past – Held that:- once the qualification test laid down in section 399 of the Companies Act for maintaining an application under the provisions of sections 397 and 398 of the Act is satisfied, there is no further necessity to enquire into the quality of the applicant members before entertaining a petition of this nature. An appellant assailing an order of the Company Law Board is not usually required to obtain any entry-permit from the court before being allowed into the arena of adjudication at the appellate stage. If this established course is to be followed then the only enquiry at the stage of admission would be to ascertain from the memorandum of appeal as to whether the grounds on questions of law have been formulated or not, with a very broad correlation with the finding of the Company Law Board in the judgment under appeal. The scope of enquiry thus has to be minimal at this stage. Applying such minimal scrutiny test, in my opinion the appellants have made out a case for admission of the appeal. Pre-admission objection on the question of maintainability of the appeal is rejected.
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2012 (6) TMI 66
Power of SEBI to issue circular - petitioners, all of whom are distributors and sell mutual funds to investors have challenged a policy circular laying down guidelines – Held that:- powers conferred upon SEBI vide section 11 of the Securities Exchange Board of India, Act, 1992, Section 11(1) of the Act is very widely worded and casts a duty on the Board to protect the interest of the investors; promote, develop and regulate the securities market by such measures as it deems it. circular has brought in transparency by prohibiting entry load for all mutual fund schemes. It means that the investor who subscribes Rs. 100 would be issued mutual fund units equivalent in value to Rs. 100, depending upon the prevailing unit rate of the unit of the fund. If the distributor so desires, he can negotiate with a customer and settle the commission which he would be receiving. those who render service to a large number of people would be able to cut down on overhead expenses and those who operate individually would have to incur higher expense to maintain their establishment. Being inherent to every business, it would not render the policy circular violative of any law. Appeal dismissed
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2012 (6) TMI 53
Company under liquidation - transfer and purchase of equity shares. - Since admittedly, the transfer took place after commencement of the winding up, sub-Section (2) of Section 536 states that such a transfer of share is void. In case, the transfer is made after the winding up orders passed by the Court, then it can only be validated by the Court. It means that the transfer is treated as void but the Court which has passed the winding up order has given the power to validate the transfer. Held that:- the learned Company Judge rightly observed that when the claims of the secured creditors got settled the members of Gupta family, i.e., the appellants had second thoughts. They not only withdrew the applications filed by them seeking transfer of shares in favour of the propounders, the appellants terminated the agreements thereafter. Significantly, applications were withdrawn with liberty to refile for same relief. In this backdrop, merely alleging misrepresentation on behalf of the propounders would not mean that the applicants have been able to prove the same. When we see the matter in the aforesaid perspective other arguments of the appellants stand automatically answered. We may also place on record that one of the appellants, viz., Akhilesh Gupta, even conceded that he had not revoked the MoU by virtue of which shares had been transferred to the propounders. It is more so when the appellants have been given liberty to challenge the factum of share transfer agreement prior to second motion. - Decided against the appellant with cost.
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2012 (6) TMI 52
Winding up - company unable to pay its debts – non-payment of debt on the ground of oversupply - respondent company admitted that the petitioner supplied various quantities of engineering items, spare parts of heavy equipments and industrial machinery, but denied having placed any orders - stand is also taken that the goods supplied were not utilised by the respondent as they were not as per the requirements of the respondent - petitioner in support of the petition placed reliance on the various invoices showing the despatch of materials, and the letter dated 16.2.2009 addressed to the respondent company wherein the managing director-cum-chairman of the respondent company confirmed the payments due to the petitioner – Held that:- it is proved that the debt owed to the petitioner is admitted and the respondent company is unable to pay the debt. The dispute raised by the respondent company cannot be said to be bona fide dispute, but merely an attempt to deny the admitted liability, on a false plea, which is not supported by any document. On the other hand, documentary evidence on record shows that the liability is admitted liability. Petition allowed. Winding up petition admitted - provisional liquidator appointed.
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FEMA
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2012 (6) TMI 78
FEMA – Penalty for contravention of Sections 6(4) & 6(5) read with Section 13A-10 of Exchange Control Manual - granting of loan to the petitioner, a Non-Resident Indian (NRI) and relending of the same to the respondent No.5 M/s. Prime Petro Products Ltd. through its Chairman and Managing Director Sh. R.K. Mishra impleaded as respondent No. 6 – Held that:- Bank had at the time of granting loan to the petitioner obtained her undertaking that she was not taking the loan for further committing loan transaction and had also complied with the other instructions issued by the Reserve Bank of India in this regard. It was thus held that the Bank and its official could not be said to be privy to or in the know of the illegality committed and no case for imposition of penalty against them was made out – petitioner unable to explain as to how the petitioner is affected by the order so as to have a locus to challenge the same. petition dismissed.
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Service Tax
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2012 (6) TMI 95
CENVAT credit on GTA services - period involved January, 2005 to July, 2006 - assessee contended that since the period involved in the present case is prior to 01.04.2008, accordingly the Service Tax paid on the Outward GTA Service, is available to them as CENVAT Credit - Held that:- Issue of availing the CENVAT Credit on GTA service as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004 is no more res integra. Accordingly, Order passed by the Commissioner (Appeals) is set aside and the Appeal is allowed in favor of assessee.
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2012 (6) TMI 94
CENVAT credit on GTA services - period involved January, 2005 to February, 2006 - assessee contended that since the period involved in the present case is prior to 01.04.2008, accordingly the Service Tax paid on the Outward GTA Service, is available to them as CENVAT Credit - Held that:- Issue of availing the CENVAT Credit on GTA service as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004 is no more res integra. Accordingly, Order passed by the Commissioner (Appeals) is set aside and the Appeal is allowed in favor of assessee.
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2012 (6) TMI 93
Waiver of pre-deposit - adjustment of excess payment of service tax when the appeal is pending before Tribunal and stay has been granted - Held that:- appellant submitted that the issue as to whether the appellant was liable to pay Rs. 9,11,520/- during the year 2006-07 is before the Tribunal and stay against the recovery of the same has already been granted, matter is pending before the Tribunal and stay has been granted, it cannot be said that this amount has been confirmed, proper procedure to be followed would have been to wait for the outcome of the appeal filed by the appellant and pending before the Tribunal and before reaching the conclusion that the adjustment of Rs. 4,82,768/- was wrong, waiver is granted and stay against the recovery of the dues is also granted during the pendency of the appeal
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2012 (6) TMI 92
Refund claims rejected is that the services were not rendered from a registered premise - held that:- the benefit has been denied on the ground that the services were not rendered from a registered firm and nowhere it has been stated that the service was not rendered from the premises at all. - the ld. Commissioner could not have travelled beyond the show-cause notice in the revision proceedings. This aspect also will have to be considered in detail. In these circumstances, on this issue also, appellant has been able to make out a prima facie case in their favour. Input services - repair and maintenance of capital goods - held that:- services used in repair and maintenance of capital goods can be said to have direct nexus with the output service. - appellant has made out a prima facie case. When the assessee having centralized billing and accounting system, non-registration of branch office would not come in the way of availment of Cenvat credit. Since no contrary decision has been placed before me, on this ground also appellant has made out a prima facie case. Joint ownership of property - service tax on renting - Payment of service tax by the appellant after dividing the rent on its own portion - prima facie case in favor of appellant - stay granted.
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2012 (6) TMI 69
Whether the penalty imposable under the Finance Act, 1994 is automatic – Held that:- imposition of penalty under the Act is not automatic. The ingredients mentioned in the Section should exist. In respect of Sections 76, 77 and 78 of the Act, not only the ingredients of those Sections should exist, but also there should be absence of reasonable cause for the said failure. Whether Sections 76 and 78 of the Act are mutually exclusive – Held that:- Sections 76 and 78 are mutually exclusive. If penalty is payable under Section 78, Section 76 is not attracted. Therefore, no penalty can be imposed for the same failure under both the provisions. Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if "reasonable cause" is shown for the failure, whether the authorities have power to impose penalties given the explicit discretion in Section 80 of the Act – Held that:- Even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no power to impose penalty in view of Section 80 of the Act. Whether the revisional authority has jurisdiction to impose penalty for the first time when it has not been imposed by the adjudicating or assessing authority by invoking Section 80 – Held that:- When the assessing authority, in its discretion has held that no penalty is leviable, by virtue of Section 80 of the Act, the revisional authority cannot invoke its jurisdiction and impose penalty for the first time. Power of revisional authority - assessing/adjudicating authority was satisfied with the "reasonable cause" shown by the assessees but still penalty was imposed, not on the ground that there was no reasonable cause or that the reasons were not acceptable to him, but penalty was imposed in substance to educate the taxpayer about his moral responsibility - assessee has not challenged the said orders but has paid the same – Held that:- revisional authority had no jurisdiction to interfere with the said orders as the authority held that there was sufficient cause for non-payment of duty. Therefore, the order passed by the revisionary authority is erroneous and calls for interference. Hence, no case for interference with the impugned order is made out. Hence, these appeals are dismissed
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2012 (6) TMI 68
Pre-deposit - D.R. submits that when the taxable entry made clear to bring management, maintenance or repair of any property immovable or not to the fold of Section 65(105)(zzg) read with Section 65(64) Finance Act, 1994, service provided by the appellant is taxable. Held that:- document exhibits that it was obligation of lessee to pay the annual consideration to the appellant to avail certain services under that deed and appellant had duty to the lessees under law in terms of contractual obligation, Maintenance of the industrial area was obligation of the Appellant. Such prima facie observations bring the appellant to the fold of taxable entry read with aiding definition as suggested by Revenue aforesaid. appellant directed to make pre-deposit
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2012 (6) TMI 67
Waiver of pre-deposit – Whether assessee CPT was liable to pay Service Tax under 'Port Services' on royalty, upfront charges, rent on jetties and estate rentals received Royalty - Royalty charges were paid by IGTPL to develop and operate RGCT within the port premises – Held that:- This amount was paid by IGTPL to CPT for allowing it to develop and operate Rajiv Gandhi Container Terminal at the port premises. royalty received by the appellant is not a consideration for any port services rendered by CPT. If at all IGTPL pays service tax as demanded, the same will be available to it as cenvat credit, and can be used to meet its liability on services rendered by it. demand not liable to be sustained Regarding upfront charges - ownership/lease hold rights of the equipment of the appellant shall stand transferred to the licensee from the date of receipt of first instalment of the upfront payment. consideration received was accounted in the financial records of CPT as sundry debtors and the value of the assets written off at the written down value of ₹ 7.6 crores. Even if the equipment is held to have been leased to IGTPL and not sold, no tax can be levied on the consideration as it is not received towards port services rendered by CPT Regarding rental amounts collected for renting out various jetties within the port area – Held that:- assessee did not put up jetties but collected charges for licenses granted to other persons to put up structures on the waters coming within the administrative jurisdiction of CPT. These charges are collected in accordance with Cochin Port (licensing of jetties, slipways and boat pen) Regulations, 1968. these charges for licenses as not classifiable under 'port services' or taxable under that head Regarding estate rentals - these are recovered for leasing out immovable property of IGTPL for permitting it the use of the site belonging to CPT. Renting of immovable property services under which the impugned activity will be appropriately classified was introduced only on 1.6.2007 post the period of dispute. Therefore, the impugned demand under 'Port Services' is liable to be set aside Demand and penalty set aside and appeal allowed
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2012 (6) TMI 50
Condonation of delay in filing the appeal - appellants have taken over the management of appellant firm - order was received by them was sent to the outgoing management to take proper action but they failed to do so – Held that:- appellants are liable to pay liability of the appellant firm, therefore, took steps for filing the appeal which caused delay of 30 days in filing the appeal. delay are satisfactory, the application for condonation of delay in filing the is allowed Demand of service tax, penalty and interest - appellants are availing the GTA service and are not paying service tax thereon - appellants are not challenging the liability of service tax and interest – Held that:- appellants have taken the plea before the adjudicating authority due to financial crisis, they could not deposit the service tax in time and before the Commissioner (Appeals), they have taken another defence plea that as the appellant was pre-occupied with the treatment of his brother for kidney failure. The appellants are not entitled for the benefit of section 80 of Finance Act,1994. option to the appellants to pay 25% of service tax as penalty. penalty under section 78 is confirmed. The penalty under section 76 is dropped as per provision to amended section 78 of the Finance Act, 1994. appeal as well stay petition is disposed of.
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2012 (6) TMI 47
GTA service - denial of cenvat credit on the ground that TR-6 challan is not proper document to avail cenvat credit and cenvat credit is not admissible on outward goods transportation service Regarding proper document – Held that:- in the case of Gabriel India Ltd. (1991 (12) TMI 177 (Tri)) that TR-6 is an instrument showing the payment of duty. Therefore, TR-6 challan is a valid document to avail cenvat credit. Therefore, in this case, the appellants are entitled to avail cenvat credit on the strength of TR-6 challan Regarding - input service credit on outward transportation service, Hon'ble Karnataka High Court case of ABB Ltd. (2011 (3) TMI 248 (HC)) has held that the assessee is entitled for input service credit on outward transportation of the goods from the place of removal which is an activity of their regular business. appellants are entitled for input service credit on GTA service appeal is allowed
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Central Excise
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2012 (6) TMI 73
Excisability - Manufacture - dispute regarding manufacturer - demand imposed in relation to fabrication of structural and other items of steel on ground that same were manufactured by the appellant in their factory whereas assessee contended that said goods were being fabricated by the contractors, it is the contractor who has to be held as manufacturer - Held that:- Merely because the appellants were supplying the raw material, exercising supervisory quality control over the goods, and that the said fabrication was being done by the contractors as per the specifications of the appellants, it cannot be made a ground for holding that it is the appellants who had fabricated the goods when the contractors have admitted having fabricated the goods for and on behalf of the appellants. If that be so, the appellant cannot be held as a manufacturer. There is nothing in the Revenue's case to show that the said goods were manufactured by them for clearance from the factory. On the contrary, statements of contractors revealed that the goods were meant for use in the factory itself. Accordingly, applicants are entitled to the benefit of Notification No.281/86 dtd. 24.04.86 and Notification No.217/86, dtd. 02.04.86 It is well settled law that when during the relevant period, the decisions of higher appellate forum were in favour of the assessee or there were conflicting decisions, no suppression can be attributed to the assessee so as to invoke the longer period of limitation.
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2012 (6) TMI 72
Clandestine removal - whether the shortages detected by the officers on weight method, can be said to be on account of clandestine removal - Held that:- There are number of decisions laying down that shortage detected at the time of visit of officers cannot admittedly lead to the findings of clandestine removal in the absence of sufficient corroborative evidences. In view of the foregoing, impugned order is set aside and appeal of appellant is allowed with consequential relief
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2012 (6) TMI 71
Whether the welding electrodes used for repair and maintenance of the plant and machinery of the sugar mills are eligible for cenvat credit – Held that:- in the case of Hindustan Zinc Ltd. (2008 (7) TMI 55 (HC)) welding electrodes used for repair and maintenance of the plant and machinery are eligible for cenvat credit as inputs as well as capital goods. appeals are allowed.
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2012 (6) TMI 70
Whether the appellant is eligible for availment of Cenvat credit on welding electrodes which is used by them for repair and maintenance of plant and machinery – Held that:- Cenvat credit can be availed on welding electrodes which are used for maintenance of plant and machinery. in the case of Vikram Cement (2009 (7) TMI 217 (Tri)). appeal is allowed
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2012 (6) TMI 51
Cenvat credit – by-product – input used for manufacture of dutiable and exempted final product – assessee was paying 10% of the value of the exempted final product at the time of clearance from the factory – Held that:- when the by-product, residual and waste & scrap is arising in the course of manufacture of main product, regularly and continuously and the same being sold in the open market, the intention of the manufacturer to manufacture and sell not only the main product but also the subsidiary product, cannot be considered as erroneous. It is his submission that the process of manufacture of by-product which arises is a continuous one and is continuously sold in the market. It is his submission that the provisions of Rule 11(3) of CENVAT Credit Rules, 2004 is not at all applicable as the appellants have followed the provisions of Rule 6(3) of CENVAT Credit Rules, 2004. It is his submission that the provisions of Rule 11(3) of CENVAT Credit Rules, 2004 will be applicable to a case where the manufacturer is manufacturing "a final product", which is exempted from payment of duty. It is his submission that the appellant being a manufacturer of more than one final product and discharging duty liability on other final products and only one final product being exempted, Rule 11(3) cannot be made applicable. provisions of Rule 6(2) and Rule 6(3) read together will cover the case of the assessee inasmuch as the appellant has claimed that they have reversed an amount as indicated in the provisions of Rule 6(3) of CENVAT Credit Rules, 2004. in the case of Bharat Petroleum Corpn. Ltd. (1992 (2) TMI 250 (SC)) would cover the issue in favour of the assessee. order is set aside and the appeal is allowed
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2012 (6) TMI 49
Eligibility of the exemption Notification No.30/98 dated 1.3.1998 - Revenue demanded duty on the ground that the said product contained Niacinamide which is a vitamin B compound and therapeutically active ingredient in addition to Dexamethazone held to be not eligible for the exemption under the Notification – Held that:- The contents of Niacinamide are reported to be 20 mg per ml whereas the Prophylactic dose as per British Pharmacopoeia has to be between 5 mg to 30 mg per kg of body weight – as per these standards, the equivalent Niacinamide contents in Curadex would work out to be 20 times less than the recommended dose of Niacinamide as per BP - the exemption on such product under Notification could not be denied to the Appellants – in favour of assessee
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2012 (6) TMI 48
Duty demand on the ground that paper cess is to be taken into consideration while calculating the amount of education cess and higher education cess - appeal dismissed on the ground as there is a delay of 20 days in filing the appeal and no sufficient reason has been explained - assessee contested that in the forwarding letter of the adjudication order, it is stated that the appeal can be filed within 90 days from the receipt of the order - Held that:- In the forwarding letter it was specifically mentioned that appeal can be filed within 90 days from the receipt of the order, hence finding merit in the contention of the applicants pre-deposit of the dues is waived for hearing of the appeal - the issue is covered against the Revenue in the case of CCE vs. Sahakari Khand Udyog Mandali Ltd. [2010 (3) TMI 718 (HC)] - matter is remanded to the Commissioner (Appeals) to decide the appeal on merits without asking for any pre-deposit - in favour of assessee.
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Indian Laws
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2012 (6) TMI 96
Territorial jurisdiction – Writ petition – held that:- that where an order is passed by an appellate authority or a revisional authority, a part of cause of action arises at that place when the original authority is situated at one place and the appellate authority is situated at another, a writ petition would be maintainable at both the places. As the order of appellate authority constitutes a part of the cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the petitioner is dominus litis to choose his forum, and that since the original order merges into the appellate order, the place where the appellate authority is located is also forum conveniens.
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2012 (6) TMI 90
Indian Stamp Act 1899 - Principle of Natural Justice - appellate order being passed by the same officer who has passed the basic order - Held that:- Allowing the appeal to be heard by the same officer who had passed the basic order would tantamount to reducing the appellate jurisdiction into that of review. Also it would violate the principles of natural justice that no man can be a judge in his own cause. Therefore, Commissioner has manifestly erred in law and acted against the settled principles of natural justice by deciding the appeal against his own order passed as an inferior authority.
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