TMI Tax Updates - e-Newsletter
June 23, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Expenses incurred for reconditioning of over aged buses body, engine of the buses are not replaced, but it is only repairing of ware and tare - expenditure are revenue in nature - HC
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Income Tax:
TDS u/s 194LA - to the extent of land and structures acquired through mutual negotiations u/s 146 of GHMC Act, the provisions are not applicable to the acquisition of property which is not compulsory - AT
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Income Tax:
TDS u/s 192 or 194J - The doctors or professional consultants working under contract for rendering professional services and the payments made by the assessee company to the professional doctors does not constitute salary - AT
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Income Tax:
Penalty u/s 271(1)(c) - even the assessee withdrew the claim u/s 54F in respect of two flats out of three, the mere withdrawal of the claim would not turn the bonafide claim of the assessee into the category of wholly untenable and unsustainable claim having no basis - AT
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Income Tax:
Penalty u/s 271(1)(c) - assessees action in claiming the interest cannot be said to be a mistake - the claim that it is the booking of the interest in accounts that led to the wrong claim in the return, is not correct - AT
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Income Tax:
TDS u/s 194A on Interest - non deduction of TDS due to direct adjustment by the Kotak Mahindra Ltd. interest and penalty set aside - AT
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Income Tax:
Deletion of salary income received India-Thailand DTAA - conditions of Article 15(1) of India-Thailand DTAA were squarely applicable and the salary received by the assessee was taxable only in Thailand and not in India - AT
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Income Tax:
Nature of receipts of shares transfer of shares effected by the members of Bilakhia family to the assessee-company - family arrangement cannot be regarded as being without consideration so as to render them unenforceable - AT
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Customs:
Electronic Sensor Pavers Vogele machines in question are capable of having bituminous pavement from 3 meters to 6 meters i.e less than 7 meters, therefore, no reason to take a different view - AT
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Customs:
Renewal of CHA License - Appellants claim is that the complaints of misconduct are not proven one. If they are proved against the appellants, the appellants claim itself would render the appellant liable for non renewal of licence - License renwed temporarily - AT
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Service Tax:
GTA services - availing cenvat credit while availing exemption under Ntf no. 1/06-ST - as soon as this irregularity was pointed out to them, they reversed the same along with interest - it would amount to not taking the cenvat credit - AT
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Service Tax:
Business Auxiliary Service - demand based on ST-3 return - Benefit of Notification No. 14/2004-ST dated 10.9.2004 wrongly claimed - extended period is not invokable in this case - AT
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Service Tax:
Computer Reservation System (CRS / GDS) - services having been provided by a foreign based company to a foreign based head office there cannot be any liability of the present appellant to discharge its service tax - AT
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Service Tax:
Adjustment of tax paid under protest with service tax liability - The only fact that needs to be verified is whether the amount adjusted is the amount of excess tax paid or not. - AT
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Central Excise:
Valuation of the toilet soaps - trade marks provide a commercial identity to the product or service and adds value to the product and to be included in the value - AT
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Central Excise:
Demand of duty - Incomplete RG-1 Register - shortage of physical stock of final product - neither side has been able to show as to what exactly is the quantum of clandestine removal - demand confirmed partly - AT
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Central Excise:
State Electricity Board cannot be considered to be a Government or its Department and mere ownership of 100 % capital by State Government will not make the Electricity Board at par with the State Government - AT
Articles
Case Laws:
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Income Tax
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2014 (6) TMI 612
Income from house property or business income - Rule of consistency Held that:- The income derived has to be treated as income from property - in so far as the office equipments, computers, furniture / fixtures and motor car are concerned, the Tribunal as also the Commissioner referred to the fact that the grievance raised before the Tribunal as also the CIT was considered in the case of the very Assessee - the receipt of the charges for use of office equipments have been rightly termed as business income - the rule of consistency has not been blindly applied by the Tribunal - once the Department has assessed the income for the preceding year as business income, then without anything being brought on record to deviate from the finding, the stand of the revenue cannot be accepted thus, no substantial question of law arises for consideration Decided against Revenue.
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2014 (6) TMI 611
Expenses incurred for reconditioning of over aged buses Revenue or capital accrual of interest liability - Held that:- The buses need to be repaired and make them roadworthy again after the ware and tare due to the bad condition of the road the expenses cannot be called as capital in nature or enduring benefit - These are all current repairs to the already existing assets and making such assets again to be roadworthy will not bring any new assets or fresh advantage to the assessee - The expenditures are routine in nature and it is a revenue expenditure - Thousands of buses had to be repaired now and then due to the bad condition of the road and make them fit or roadworthy - The body, engine of the buses are not replaced, but it is only repairing of ware and tare - It is a routine expenditure being incurred, hence the expenditure incurred by the assessee is a revenue expenditure. Relying upon BALLIMAL NAVAL KISHORE & ANOTHER v/s COMMISSIONER OF INCOME TAX [1997 (1) TMI 3 - SUPREME Court] - the expenditure incurred to preserve and maintain the already existing assets and not to bring new assets into existence or obtain fresh advantage is a revenue expenditure and does not amount to capital expenditure - the replacement of machinery and construction of new building amounts to obtaining the enduring benefit and it is a capital expenditure - the assessee-Corporation owns more than 10,000 buses, it is has to take out the routine repair work of the buses and recondition the buses to make them roadworthy otherwise there will be breakdown of the buses every now and then - The expenditure incurred on reconditioning and overhauling of the buses is a routine work and the expenditure is revenue in nature and cannot be treated as capital expenditure Decided against Revenue. Liability to pay interest to IDBI Mercantile system followed by assessee Held that:- The principal and interest are payable half yearly in equal installments for a period of five years which was further modified to 20 installments the expenditure should have been accounted for the AY 1996-97 and not for the AY 1997-98 as the assessee is following the mercantile system of accounting - The reasoning of the Tribunal to set aside the order passed by the Assessing Authority as well as the FAA on the count is erroneous in law - the assessee is following the mercantile system of accounting, the interest accrued for the AY 1996-97 cannot be claimed to be deducted for the AY 1997-98 Decided in favour of Revenue.
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2014 (6) TMI 610
Revised return to be filed - Refund of TDS which was not claimed in the original return - Payment made for Optional Early Retirement Scheme of RBI Held that:- The matter is fairly old and the petitioner is a retired citizen, the petitioner is directed for filing its revised return of income revenue would dispose of the assessees claim for refund within a further period of two weeks from the date of filing of revised return of income.
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2014 (6) TMI 609
Chargeability of interest u/s 201(1) of the Act - Non-deduction of TDS u/s 194LA of the Act Structural component of land compensation paid Held that:- Assessee has deducted tax on the land portion of the compensation paid to the land owners - If the property was not acquired compulsorily and the order of the CIT(A) in earlier year is applicable as contended by the assessee, it is not understandable why assessee has to deduct tax on the land compensation part alone, as the provisions of section 146 are applicable for both land portion as well as structure portion - Assessee having deducted tax on the compensation paid on land portion, it is not correct to contend that structure portion is not acquired and therefore, TDS provisions are not applicable - whether assessee pays the compensation for demolition of the existing structure or acquires and later demolishes for the purpose of road, the facts are similar so long as the provisions of Land Acquisition Act were invoked for acquiring the property and the Land Acquisition Officer determines the compensation paid for acquiring the property. Both the land portion as well as structure portion acquired by the assessee falls under the word "any immovable property" as defined in section 194LA and to the extent of property acquired under Land Acquisition Act, the assessee is covered by provisions of section 194LA of the Act - to the extent of land and structures acquired through mutual negotiations u/s 146 of GHMC Act, the provisions are not applicable to the acquisition of property which is not compulsory - only in case where there is delay from date of TDS to the date of payment of tax by the persons, interest u/s 201(1A) can be levied - The aspects also required to be examined in detail item-wise and then only AO can raise the demand either u/s 201(1) or 201(1A) thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (6) TMI 608
Payments made to professional Doctors Professional payments or not - Employer-employee relationship - TDS deducted u/s 194-J of the Act Assessee in default u/s 201(1) and 201(1A) of the Act - Held that:- following Deputy Commissioner of Income-tax Versus Yashoda Super Speciality Hospital [2010 (6) TMI 642 - ITAT HYDERABAD] the exclusion cannot be considered to be an agreement to treat the doctors as employee - There is no prohibition in law to engage the services of a professional exclusively for a particular hospital - Merely because the doctors were engaged for two years, it does not mean that they are employees of the assessed hospital - CIT (A) the other factor such as PF, Job assignments, working hours, direction and supervision are all the relevant factors to consider the existence of employer and employee relationship - the agreement between the assessed and doctors are one for providing professional services, and there is no element of employer and employee relationship existing - tax has to be deducted u/s.194J as fee for professional services and not as salary. The terms of appointment clearly indicate appointment of professionals for providing consulting services and not appointment of employee - The Doctors are not precluded from pursuing the professional pursuits elsewhere as long as there is no conflict of interest - once the Doctors achieve some seniority and standing, their remuneration is a percentage of fees collected from patients consulting him - Explanation (a) to sec 194J defines professional services to mean services rendered by a person in the course of carrying on legal, medical - Normally the services rendered by a Doctor should be considered as a professional service unless the contracts of service categorically states and the conditions are clearly and indubitably that of employment - the services rendered by the Doctors are more appropriately classifiable as professional services and therefore Assessee had correctly deducted tax at source from payment to Doctors u/s 196J. The doctors or professional consultants working under contract for rendering professional services and the payments made by the assessee company to the professional doctors does not constitute salary and hence, the assessee would not be responsible for deducting tax at source on the said payments treating them as (salaries) in terms of section 192(1) of the Act - The consultant Doctors do not take directions from the assessee on how a patient is to be treated and clearly there is no employer employee relationship between the assessee and the professionals Decided against Revenue.
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2014 (6) TMI 607
Levy of penalty u/s 271(1)(c) of the Act - Claim of deduction u/s 54F - investment in two adjacent houses Held that:- The assessee has made a claim u/s 54F to the extent of the investment made in three flats at same floor of the building - out of the three flats one flat was purchased in the name of assessee himself and two other flats were purchased in the joint name of assessee and his wife as well as the assessee and his son respectively - the investment made in flats are from the sale proceeds of the asset sold by the assessee and there is no dispute on this fact - if the investment is made by the assessee in the new asset though in the joint name of the assessee and his wife, the exemption u/s 54/54F is allowable Relying upon ITO Vs. Ms. Sushila M. Jhaveri [2007 (4) TMI 289 - ITAT BOMBAY-I] - the exemption u/s 54F is available in respect of the investment in two adjacent houses which constitute one residential unit. The claim u/s 54/54F may be allowable in case of purchase of more than one new flats when more than one flat constitutes one residential house - all three flats in which the assessee invested the consideration received on sale of the old assets are located at the same floor of the building - the claim of the assessee would not fall under the category of bogus of absolute untenable claim under the law - The assessee has brought on record the entire facts relating to the claim and further there are various decisions supporting the claim of assessee, even the assessee withdrew the claim u/s 54F in respect of two flats out of three, the mere withdrawal of the claim would not turn the bonafide claim of the assessee into the category of wholly untenable and unsustainable claim having no basis - the claim of exemption u/s 54F is a highly debatable one and it cannot be said that it is an absolutely untenable claim under the law thus, the penalty levied u/s 271 (1)(c) is not justified and is to be set aside Decided in favour of Assessee.
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2014 (6) TMI 606
Levy of penalty u/s 271(1)(c) of the Act Claim of interest - Held that:- Following Bharat Commerce and Industries Ltd vs. CIT [1998 (3) TMI 2 - SUPREME Court] the tax under the Act as well as the interest on the short fall in its payment is paid by the assessee not in his capacity as a trader, but as a taxable entity under the Act, levying tax on income or profits from any activity, including from business or profession it does not qualify to be an outgoing of the business, which has to be adjudged in the light of the accepted commercial practices and trading principles. A mistake is itself an admission of a wrong claim and, thus, of an inability to explain the same, so that there is by definition concealment and/or furnishing inaccurate particulars of income - a mistake cannot be said to be deliberate, which a sine qua non of penalty - the assessees action in claiming the interest cannot be said to be a mistake - the claim that it is the booking of the interest in accounts that led to the wrong claim in the return, is not correct - If the interest gets included as an organizational expense by mistake, the same would also likewise stand to be included in working the disallowance u/s14A there was no justification by the assessee for the exclusion of interest on the ground that the same does not finance, either in whole or in part, the investments yielding income not forming part of the total income thus, the contentions of the assessee cannot be accepted and the levy of penalty is upheld Decided against Assessee.
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2014 (6) TMI 605
Genuine purchases treated as non-genuine Held that:- The primary onus is on the assessee to prove the genuineness of transactions - It was incumbent upon the assessee to produce the relevant evidence in support of genuineness of the purchase transactions from these parties - AO verified the status of the parties from the official website of Maharashtra Sales Tax Department and found that M/s N B Enterprises was notified as Hawala Dealer who issues bill without delivery of goods - there was enough information and fact came to the knowledge of the AO to doubt the genuineness of the transactions in the absence of quantitative reconciliation of the purchase and the goods used in the execution work as well as sold it is not possible to match the purchases and sales because the sales of the assessee involves consumption of the goods as well as the work executed by the assessee under the contract. The assessee has also failed to establish the actual delivery of goods by production of all details in the challan like quantity and nature of goods supplied under the challan - the mode of transportation and proof of transport of the goods purchased by the assessee are also not brought on record despite due opportunity given in the assessment proceedings as well as in the remand proceedings - merely because the assessee claimed to have been making payment through cheque is not sufficient to establish the genuineness of the transactions when the AO has brought on record the facts and circumstances to indicate the non-genuineness of the purchase transactions in respect of the two parties thus, there was no error in the order Decided against Assessee. Addition of unaccounted sales recognition of income - Held that:- CIT(A) has directed the AO that if the amount has been recognized as sales by the assessee in the subsequent year then the AO should verify and consider the same - the amount is only an advance received and work was executed only in the subsequent year the amount cannot be treated as sales for the year under consideration - if the assessee has recognized this sale in the subsequent year on the basis of the fact that work has been executed in the subsequent year then this amount cannot be treated as sales of the assessee the AO is directed for verification Decided in favour of Assessee.
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2014 (6) TMI 604
TDS u/s 194A on Interest - non deduction of TDS due to direct adjustment by the Kotak Mahindra Ltd. Assessee had obtained margin amount from Kotak Mahindra Ltd for making application in public issue of shares and the amount paid to Kotak Mahindra Ltd. was considered as cost of purchase of shares and not as interest. Held that:- CIT(A) while granting relief to the Assessee has given a finding that Assessee had not made payment to Kotak Mahindra Ltd. towards interest but the account of the Assessee was directly adjusted by the charges and Assessee had no control and therefore it could not deduct TDS - Kotak Mahindra Ltd. has given a confirmation that it had filed its return and has also paid the taxes Relying upon Hindustan Coca Cola Beverage Pvt. Ltd. vs. CIT 2007 (8) TMI 12 - SUPREME COURT OF INDIA] - there was no justification for levy of demand u/s. 201(1) and 201(1A) of the Act - Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record thus, the order of the CIT(A) is upheld Decided against Revenue. Imposition of Penalty u/s 271C of the Act Held that:- CIT(A) rightly was of the view that the assessee had no chance to apply its mind and deduct tax at source, particularly when it had not made any payment or credited the amount at the relevant time - The amount was directly adjusted by Kotak Mahindra Ltd. from assessee's account with them - CIT(A) while deleting the penalty levied by AO has held that default of non-deduction of tax by the Assessee was not intentional and further Kotak Mahindra Ltd. had already paid tax on returned income - Assessee had reasonable cause for non-deduction of TDS - Revenue could not controvert the findings of CIT(A) thus, there was no reason to interfere with the order of CIT(A) Decided against Revenue.
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2014 (6) TMI 603
Deletion made u/s 68 of the Act receipt of security deposits from 38 persons - Unverified depositors Held that:- AO in the assessment order observed that out of the 38 persons, only confirmations of 19 persons involving amount of Rs 24,44,050/- could be furnished by the assessee - CIT(A) was of the view that out of Rs 71,14,300/-, Rs 68,97,100/- was received by the assessee through banking channels and the same was supported by the bank statement of the payee. The identity of the payee was also established by furnishing copy of PAN Card, Voter ID Card etc. Therefore, on being satisfied that the deposits of Rs 68,97,100/- were genuine, the CIT(A) deleted the addition to the extent of Rs 68,97,100 - In respect of balance amount of Rs 2,13,200/-, the CIT(A) observed that the assessee could not furnish confirmation from the parties from whom deposits were received and therefore, confirmed the addition to the extent of Rs 2,14,200 revenue could not point out any specific error in the finding of the CIT(A) also revenue could not point out any case where the identity or genuineness of the transaction was not established by the assessee and the addition was deleted by the CIT(A) revenue could not bring any material on record to show that any of the deposits out of Rs 68,97,100/- was not genuine thus, there was no reason to interfere with the order of the CIT(A) Decided against Revenue.
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2014 (6) TMI 602
Deletion of purchases made Purchases treated as bogus and non-genuine Held that:- Following ACIT, CC-1(1), Ahmedabad Versus Gujarat Ambuja Exports Ltd. [2014 (6) TMI 349 - ITAT AHMEDABAD] - CIT(A) while deciding the appeal has held that the facts of the case in the year under appeal are identical to the facts for earlier assessment year - CIT(A) while deleting the addition has also noted that AO did not issue any summons u/s 131 of the Act to Amber Trading Company and Assessee was also not informed about non production or non -attendance of proprietor - Revenue has not brought any contrary material on record in its support thus, there is no reason to interfere in the order of the CIT(A) Decided against Revenue.
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2014 (6) TMI 601
Deletion of salary income received India-Thailand DTAA - residential status of employee - Held that:- CIT(A) rightly was of the view that the remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only if the recipient is present in the other State for 3 period or periods not exceeding in the aggregate 183 days in the reliant "previous year" or "tax year" concerned, as the case may be, and the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State/ and the remuneration is not borne by an enterprise of the other Contracting State or by 3 permanent establishment or a fixed base which the employer has in the other state. The assessee was a resident of Thailand during the year - He worked physically in Thailand, he's working was utilized by company of that country, the supervision and control over his work was with that company and it can be said without any doubt that he exercised his employment in Thailand - the conditions of article 15are squarely applicable and therefore the salary is taxable in Thailand Following British Gas India Private Limited, In re [2006 (11) TMI 139 - AUTHORITY FOR ADVANCE RULINGS] - salary was held not taxable in India - The conditions of article 15(2) too would not be met because the basic condition of exercise of employment in India is not there - He has already paid tax in Thailand - The deduction of TDS in India would not be overriding the provisions of the treaty and is not a material fact - the salary income of the assessee is taxable in Thailand - assessee was a resident of Thailand and worked under the supervision and control of the company based in Thailand - CIT(A) was of the view that the conditions of Article 15(1) of India-Thailand DTAA were squarely applicable and the salary received by the assessee was taxable only in Thailand and not in India tax on which has already been paid in Thailand Decided against Revenue.
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2014 (6) TMI 600
Nature of receipts of shares Minimum Alternate Tax (MAT) - transfer of shares effected by the members of Bilakhia family to the assessee-company - Whether the transfer of the shares of Nestle India Ltd and Hindustan Lever Ltd held by the members of Bilakhia family as investment by them to the assessee-company as per family arrangement dated 16-02-2001 claimed to have been transferred without any monetary consideration can be held to be gift or not Held that:- Following Commissioner of Wealth-Tax, Mysore Versus HH Vijayaba, Dowager Maharani Saheb of Bhavnagar Palace, And Others [1979 (3) TMI 1 - SUPREME Court] - any transfer of any moveable or immovable property can be treated as gift only if the same is made voluntarily and without any consideration - family arrangement cannot be regarded as being without consideration so as to render them unenforceable - family arrangement in the present case is enforceable and binding, the assessee cannot take the plea that transfer of shares by the family members to the assessee in pursuance to the family arrangement was without consideration. Transfer of shares of Nestle India Ltd and Hindustan Lever Ltd held as investment by members of Bilakhia family to the assessee-company as per family arrangement dated 16-02-2001 claimed to have been transferred without any monetary consideration cannot be held to be a gift- thus, the order of the CIT(A) is set aside Decided in favour of Revenue. Gifts received from the family members - Assignment of the right to receive back the loans and advances given to third parties by the directors Held that:- Assessee-company itself has treated the money as its own money and taken the amount to the capital reserve, therefore, the full amount was treated as income of the assessee by the AO while finalizing the assessment under regular provisions and under special provisions of section 115JB of the Act - gift of Rs. 14 crores by the family members to the assessee-company and Rs. 17,11,839/- received by the company on account of the assignment of the right to receive back loans and advances given to third party by the directors of the assessee-company, to equalize the wealth of three brothers of the family as per the understanding reached by way of family agreement, this total sum of Rs. 14,17,11,839/- cannot be treated as gift in the hands of the asssessee-company for the reasons given by us while holding that transfer of shares by the family members to the asssessee-company was not a gift in the hands of the assessee-company thus, the order of the CIT(A) is set aside Decided in favour of Revenue. Validity of re-opening of the assessment by AO u/s. 147 of the Act Change of opinion - Held that:- The AO reached the belief that there was escapement of income 'on going through the return of income" filed by the assessee after he accepted the return u/s 143(1) without scrutiny, and nothing more - This is nothing but a review of the earlier proceedings and an abuse of power by the AO Following Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited 2010 (1) TMI 11 - SUPREME COURT OF INDIA] reasons recorded by the AO do confirm the apprehension about the harm that a less strict interpretation of the words reason to believe vis-ΰ-vis an intimation issued u/s 143(1) can cause to the tax regime - There is no whisper in the reasons recorded, of any tangible material which came to the possession of the assessing officer subsequent to the issue of the intimation - It reflects an arbitrary exercise of the power conferred u/s 147. There was escapement of income - no income has escaped assessment while in the last line it is mentioned that there is no escapement of tax which means he also admitted escapement of income - The provisions of the act are clear that reopening of assessment is permissible if there is escapement of income and for doing so it is not necessary that there should also be escapement of tax which in certain circumstances as in the case of assessee there is escapement of income while there is no escapement of tax - both the grounds on which re-opening of assessment was challenged by the assessee are devoid of merit Decided against Assessee. Adjustment to book profit u/s 115JB of the Act Held that:- Shares received by the assessee-company were not gifts in the hands of assessee-company, the argument advanced on behalf of the assessee-company that shares received as gift do not constitute investment and hence gain on sale of these shares were not required to be routed through profit and loss account falls flat, the assessee was not justified in crediting the sale proceeds of the shares directly to capital reserve account without routing through profit and loss account - AO has rightly taken the credits for the purpose of adjustment to book profit u/s 115JB of the Act Decided against Assessee.
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2014 (6) TMI 599
Addition of unaccounted receipt Held that:- Assessee is engaged in the business of securities services and he has claimed expenses against the receipt on account of salary expenses, conveyance expenses, petrol expense banking expenses and tea expenses - CIT(A) has given relief to the assessee to extent of salary expenses subject to verification by AO - The other expenses are nothing but incidental expenses in the line of business in which assessee is engaged i.e. security services and since expenses are reasonable when compared to the total receipts, deserve to be allowed the order of the CIT(A) is set aside Decided in favour of Assessee. Addition of unexplained credit entries in books of account Held that:- CIT(A) gave relief to the assessee to the extent of Rs. 15,000/- subject to verification of the confirmatory letter of the creditor Mr. Rajesh Joshi and confirmed the balance addition of Rs. 85,000/- for want of evidence in this respect - no evidence has been brought on record in this respect, thus, there was no need to interfere with the order passed by CIT(A) Decided against Assesse.
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2014 (6) TMI 598
Admission of additional grounds - Addition of STCG as Business income Trading of derivates - Held that:- Assessee had suffered loss on trading of derivatives which has been reflected by Assessee as speculation loss in the return of income - the profits earned on sale of shares which were treated by Assessee as short term capital gains was considered as business by the Assessee - the loss suffered from trading of derivatives was not considered as business loss through as per the provisions of the Act, it is a business loss and therefore eligible for set off against the other income Relying upon National Thermal Power Company Limited Versus Commissioner of Income-Tax [1996 (12) TMI 7 - SUPREME Court] the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the Assessee notwithstanding the fact that the same was not raised before the lower authorities. Additional ground of the Assessee admitted - the additional ground raised for the first time, thus, the matter is liable to be remitted back to the AO for fresh adjudication Decided partly in favour of Assesee.
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2014 (6) TMI 597
Disallowance u/s 14A of the Act Nexus between the expenses debited and the exempt income - Held that:- Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax [2011 (11) TMI 267 - Delhi High Court] - if no expenditure is found to have been incurred for earning exempt income, disallowance u/s 14A could not be made by the AO - Sub-section (3) of Section 14A further extends the scope of sub-section (2) and the AO is required to record the similar finding even where the assessee claims that no expenditure has been incurred by him in relation to the exempt income- the AO has to record his satisfaction as required by sub-section (2) & (3) of Section 14A, is accepted. CIT(A) while exercising his appellate jurisdiction has exercised his co-terminus power with that of AO and has recorded his dissatisfaction with the correction of the claim of the assessee that no expenditure was incurred in relation to income which does not form part of the total income under the Act - the assessee is not forthcoming with the expenditure incurred by it to earn to exempt income, a procedure has been prescribed by the statute which has been followed in this case and the disallowance has been calculated as per the prescribed method envisaged in Rule 8D and the assessee has failed to show any mistake in the calculation made under the Rule so the order need not be disturbed. Even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of the total income under the Act, the officer exercising jurisdiction, while assessing the assessee will have to verify the correctness of the claim - If the assessees reply/ explanation are not acceptable for the authorities then it shall state reasons and after recording his dissatisfaction, shall reject the claim - the authorities have to determine the amount of expenditure incurred in relation to income which does not form part of the total income under the Act - CIT(A) exercised his co-terminus power and after recording his dissatisfaction as to the claim of the assessee in respect to expenditure in relation to exempt income has computed the expenditure as provided under Rule 8D as one-half percent of the average value of the investment, income which does not form part of the total income, is taken - The AY under consideration is 2008-09 and Rule 8D was applicable - the AO and CIT(A) has computed the disallowance under Rule 8D and as per formula provided under Rule 8D, the disallowance worked out to Rs. 13,82,741 - CIT(A) in exercise of his co-terminus powers has recorded satisfaction as envisaged u/s 14A and the assessee is not able to point out any mistake in the disallowance made under Rule 8D and since the disallowance under Rule 8D, had been worked out as per the formula given in the Rules, the order of the CIT(A) is upheld Decided against Assessee.
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2014 (6) TMI 596
Claim of deduction u/s 80P(2) of the Act - Activities akin to commercial banking - Scope of term Member u/s 2(16) of Societies Act, 1983 Held that:- The authorities cannot go beyond their jurisdiction and make classification within a classification of members to deny the benefit of deduction Relying upon M/s. SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. Versus The Income Tax Officer [2014 (5) TMI 556 - ITAT CHENNAI] - the nominal members also enjoy statutory recognition as per the Act - once the nominal members or non-voting members are themselves included in the definition of members, they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i) - the objections of the Revenue that the members defined in sub-clause(i) of section 80P(2) should only include voting members would amount to a classification within classification which is beyond the purview of tax statute - unless provided specifically by the legislature - under the very provision that for the purpose of impugned deduction, it is irrelevant so far as classification of the members in A or B category is concerned - the assessees are eligible to claim benefit of deduction u/s.80P(2)(a)(i) of the Act Decided in favour of Assessee.
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Customs
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2014 (6) TMI 615
Denial of benefit of Notification no. 21/2002-Cus. dated 1.3.2002 - import of machines - Electronic Sensor Pavers Vogele Model Super 1800-2 with AB 600-2 TV Screed of working width upto 9.5 meters for laying Bituminous Pavement - Held that:- The only contention of the present respondents is that with the addition of bolt-on extensions, the machine in question is capable of laying bituminous pavement of 7 meters size and above. From the purchase order and from the packing list, we find that the accessories i.e. bolt-on extensions were separately ordered. In a situation when bolt-on extensions are not imported, the relevant question would then be whether the machines still qualify for exemption under Notification 21/2002. As per the product literature, the machines in question are capable of having bituminous pavement from 3 meters to 6 meters i.e less than 7 meters, therefore, we find no reason to take a different view as in the case of Gammon India Ltd. (2013 (4) TMI 598 - CESTAT MUMBAI). - Decided against Revenue.
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2014 (6) TMI 614
Renewal of CHA License - Employee of appellant prosecuted for export of red sander - Work came to standstill - Held that:- CHA knowingly involved himself in smuggling of red sanders and acted in a dishonest and fraudulent manner. The allegations are grave and serious. However, it is the contention of the CHA that neither the show cause notice nor the criminal case has been yet decided against them and unless the charges are proved in the first court of law, the pendency of the charge-sheet cannot be held against them. While considering the application for renewal of the licence, Commissioner of Customs has to take into consideration the performance of the licensee with reference, inter alia, to the obligations specified including the absence of instances of any complaints of misconduct. The present dispute revolves around the interpretation of the phrase absence of instances of any complaints of misconduct . It is the contention of the CHA that merely a complaint of misconduct cannot come in the way of renewal unless that complaint has been proved against them. In other words, the CHA is suggesting that the phrase instances of any complaints of misconduct has to be read as instances of any complaints of proven misconduct. Charge sheet reproduced does not lead to the conclusion that there is conclusive evidence of knowledge of red sanders in the container leave alone connivance. There is definitely need for more detailed examination of all the evidences and documents and records. If the show-cause notice issued for revocation of licence was adjudicated and licence revoked, the renewal allowed would not have any effect on the proceedings against the licensee in any way whatever be the outcome. If the revocation is not ordered, the appellant-CHA can continue without any further problems since the only ground for rejection of renewal is the show-cause notice. In the present case if we allow the appeal on a permanent basis, the department cannot issue a show-cause notice for revocation of licence in view of the fact that no show-cause notice has been issued for revocation of licence and the regulations require that if there is a complaint of a misconduct licence should not be renewed. Appellants claim is that the complaints of misconduct are not proven one. If they are proved against the appellants, the appellants claim itself would render the appellant liable for non renewal of licence - License renwed temporarily - Decided conditionally in favour of appellants.
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Corporate Laws
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2014 (6) TMI 613
Winding up of the respondent company - Failure and neglection to pay a sum alongwith interest - whether the respondent company is liable to be wound up on account of its inability to pay its debts - Held that:- petitioner, contend that the debt owed by the respondent was much larger than the sum of Rs.250 lacs, however, he was not permitted to urge the same in view of the order of this Court. Accordingly, the inability of the respondent to pay its debts has considered in reference to the admitted debt of a sum of Rs.250 lacs and interest thereon. The respondent was directed to deposit the said sum with this court and the said direction was complied with by the respondent without prejudice to its rights and contentions. The respondent contended that no interest was payable as the offer for settlement of debt for Rs.250 lacs had never been communicated to the respondent and it is only during the present proceedings that the respondent had indicated that it was willing to settle the disputes for a sum of Rs.250 lacs. In these circumstances, according to the respondent, the interest, if any, could only run from the 24.05.2012 i.e. the date of the order and not prior to the said date. In my view, this contention is wholly erroneous. The respondent had approached IDBI and had offered a sum of Rs.225 lacs as full and final settlement of its dues. This offer was considered by a Committee of IDBI in its meeting held on 21.03.2006 and the same was not accepted. Although, there was no binding agreement between the respondent and IDBI, the respondent had been contending that it was only liable to pay Rs.250 lacs as had been approved by the committee members. Thus, according to the respondent own showing, the respondent would be liable for interest on the said amount from 27.03.2006 i.e. the date of approval of the counter offer by the concerned committee of IDBI. The respondent cannot on one hand insist that it settle its dues on the terms as considered by IDBI on 21.03.2006/27.03.2006 and on the other hand plead that interest should run from 24.05.2012. Respondent could be called upon to pay a reasonable interest on the sum of Rs.250 lacs provided the petitioner was willing to accept the same as full and final settlement of its dues. While the learned counsel for the respondent indicated that respondent would be willing to pay simple interest @12% per annum from 27.03.2006, the same was not acceptable to the petitioner. The petitioner contended that the respondent would be liable to pay 21% compounded interest, which was stated to be the contractual rate of interest in terms of the agreement between IDBI and the respondent. This was seriously disputed by the respondent. The aforesaid narrative clearly indicates that no settlement could be arrived at between the parties. Pleadings filed by the petitioner does mention that the respondent has not commenced its business, the focus of the petition is not that the respondent is liable to be wound up on account of noncommencement/ suspension of business. The petitioner had confined the petition only to a claim of debt, at the time of issuance of notice. This by itself would be reason enough for not permitting the petitioner to urge that the respondent has lost its substratum and should be wound up on account of its failure to commence business. Company is pursuing its counter claim against IDBI and the question whether the company would be able to revive or not can only be considered after that controversy has concluded. Concededly, the jurisdiction to wind up a company under section 433(e) and 433(f) of the Act is discretionary. In my view, this is not a case where this court should exercise its discretion to wind up of the company. Further, no prejudice has been caused to the petitioner by the existence of the respondent company. - Registry is directed to refund a sum of Rs.250 lacs along with interest, if any, to the respondent - Decided against Petitioner.
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Service Tax
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2014 (6) TMI 628
Demand of service tax - Goods Transport Agency - availing cenvat credit while availing exemption under notification no.1/06-ST dated 1.3.2006 (S.No.6) - as soon as this irregularity was pointed out to them, they reversed the same along with interest. The point of dispute is that as to whether the subsequent reversal of the cenvat credit would amount to non availment of credit - Held that:- for availment of 75% abatement in the notification no.1/06-ST which came into force w.e.f. 1.2.2006 the conditions of non-availment of cenvat credit in respect of input service has been added. - Apex Court has held that, when the benefit of an exemption is subject to the condition of non-availment of cenvat credit and initially, the assessee has taken the cenvat credit but subsequently, before the clearance of the exempted goods or after the clearance of the exemption goods the credit taken was reversed, it would amount to not taking the cenvat credit and the benefit of exempted notification cannot be denied - Following decision of Chandrapur Magnet Wires (P) Ltd. (1995 (12) TMI 72 - SUPREME COURT OF INDIA) and the judgement of the Honble Allahabad High Court is in the case of Hello Mineral Water Pvt. Ltd. (2004 (7) TMI 98 - HIGH COURT OF JUDICATURE AT ALLAHABAD) - Decided in favour of assessee.
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2014 (6) TMI 627
Business Auxiliary Service - extended period of limitation - demand based on ST-3 return - Benefit of Notification No. 14/2004-ST dated 10.9.2004 wrongly availed - Held that:- it is seen that assessee mentioned N.A. in the column meant for value of taxable service which is understandable as during the said months they did consider the impugned service as exempt i.e. non-taxable. There is no other ground given in the SCN for alleging wilfull mis-statement / suppression of facts. Indeed, the adjudicating authority itself considered the case fit enough for the benefit of Sec 80 of Finance Act 1994. Thus even the adjudicating authority conceded that there was a reasonable cause for the Respondents failure to pay tax. As is evident from the facts of this case, the reasonable cause for failure was their belief that the impugned service was exempt during the period 10.09.2004 to 15.06.2005 - Thus, it is evident that there is not even an iota of evidence to even suggest that there was any wilfull mis-statement or suppression of facts on the part of the Respondents. Consequently, extended period is not invokable in this case - time limit for raising demand is only one year in the absence of the ingredients required for invoking the extended period of five years, the demand is clearly time barred - Decided against Revenue.
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2014 (6) TMI 626
Demand of service tax - Computer Reservation System (CRS / GDS) - services relating to the reservation of ticket availability position through on line computer system - whether "Online Database Access or retrieval Service" was received by the appellant M/s British Airways during the period from 18/04/2006 to 31/05/2008 from foreign based CRS service provider and liable to service tax in terms of section 66A of the Finance Act, 1994 on reverse charge mechanism basis - Difference of opinion - Majority order - Held that:- M/s British Airways, India has to be treated as a separate person. If that be so, in view of the admitted position that the contract between CRS/GDS companies is not with M/s British Airways, India and is only that M/s British Airways, UK, the present appellant cannot be held to be recipient of the services so as to make him liable to pay service tax, on reverse charge basis, in terms of the provisions of Section 66A. British Airways, UK having received the services, which stands provided by CRS companies located outside India and the consideration for which stands provided by British Airways UK. The same stands consumed in UK only inasmuch as the Server provided by CRS/GDS companies to IATA agents are connected between the two of them and such services are being utilised by the travel agents. Service is consumed by the persons receiving the same. The service having been provided by a foreign based company to a foreign based head office there cannot be any liability of the present appellant to discharge its service tax, inasmuch as service tax being a destination and consumption based tax cannot be created against the non-consumer of the services. It is also not the Revenue's case that British Airways, India has made any payments for the services so procured by British Airways, U.K. In fact on the contrary, it is admitted position that the entire consideration for the services stand paid by British Airways to the CRS/GDS companies. The appellant in the present case is only appointing IATA agents, dealing with them, collecting sale proceeds of the tickets sold by them and remitting the same to the head office. They are not, in fact, even using the said service directly and as such can, by no stretch of imagination held to be service recipient in India so as to pay any service tax. Extended period of limitation - Revenue neutral exercise - Held that:- Admittedly British Airways India is discharging its service tax liability in respect of air transportation tickets sold by them. The present demand confirmed against them, was admissible to them as Cenvat credit, which could have been further utilised for discharge of their service tax liabilities - demand, having been raised by invoking the longer period of limitation is hit by the provisions of Section 11A of the Act. If non-registration and non-filing of returns is the criteria for rejecting the appellant's plea of bona fide belief and holding against them, the plea of limitation would not be available to any assessee, inasmuch as the service tax liabilities would arise only in those cases where the appellants are not registered and are not filing the returns. If an assessee entertained a bona fide belief that inasmuch as the service is not being received by him, and he is not required to pay any tax, he cannot be blamed for the same. Further the fact that the entire exercise was Revenue neutral is also one of the factors to be considered in support of the appellant's plea of bona fide belief. If the appellant would have paid the said tax, they would have been entitled to the credit of the same and would have been in a position to use the same in discharge of their admitted service tax liabilities - demand is barred by limitation and is required to be set aside along with setting aside of penalty - decided in favour of assessee.
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2014 (6) TMI 625
Adjustment of tax paid under protest with service tax liability - Whether the appellant could have adjusted the excess Service Tax demand of Rs. 4,17,73,025/- which has been paid under protest - Held that:- appellant sought clarification from the department and they were advised by the department that they are not liable to pay Service Tax on renting/leasing the premises in the Airport. The appellant adjusted the excess Service Tax paid by them against the tax liability during January - March, 2007. The action taken by them was strictly in accordance with the provisions of said Rule and, therefore, we find that the demand towards such adjustment of credit in the impugned order is not sustainable in law. The only fact that needs to be verified is whether the amount adjusted is the amount of excess tax paid or not. This needs to be verified by the department from the records and the evidence adduced by the appellant in this regard. If, on such verification, it is found that the appellant is not liable to pay any Service Tax, the question of imposition of any penalty also would not arise. As regards the demand towards excess Cenvat credit availed on the input service during the impugned period, this position has been clarified by the C.B.E. & C. in Circular No. 137/12/2008-CX.4, dated 21-11-2008, wherein the Board has clarified that utilization of accumulated credit on account of 20% cap under Rule 6(3)(c) of the Cenvat Credit Rules, 2004, is permissible from 1-4-2008. Therefore, the assessee is entitled to avail the accumulated credit on account of 20% cap w.e.f. 1-4-2008 or the subsequent period. In case any assessee has utilized the accumulated credit prior to 1-4-2008, they are liable to pay the interest on the excess credit availed and utilized during the period. In view of the above clarification by the Board, the demand of Rs. 1,41,15,163/- is not sustainable in law. What can be recovered from the assessee is only interest on the said amount of excess credit utilized prior to 1-4-2008. - Matter remanded back - Decided in favour of assessee.
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2014 (6) TMI 624
Penalty u/s 77 - whether the three letters issued by the department can be held to be served upon the appellant or not - Held that:- The appellants contention is that they have not received the said letters whereas the Revenues stand is that the same were sent to them through courier - As the disputes relates to the receipts of said letters seeking information, which stands contested by the appellant, by extending the benefit of the appellant I set aside imposition of penalty - Decided in favour of assessee.
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Central Excise
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2014 (6) TMI 622
Denial of CENVAT Credit - various items used and consumed for setting up such a refinery - non-filing of the declaration - HTPE sheets, insulation packages, domestic (refractory) anchors etc. though not falling under specific Chapters of 84, 85 and 90, are used in the refinery as either components or spares in the plant and machinery which are used for the manufacturing of the final products - Substantial time was taken for setting up the entire refinery - Held that:- Capital goods and other goods were received and consumed in the setting up of the unit, mere non-filing of the declaration cannot be a ground for denial of credit in the view which has been upheld by the Honble High Court of Madras in the case of Kothari Sugars & Chemicals (2008 (10) TMI 627 - Madras High Court ). We also find strong force in the contentions raised by the Ld. Counsel that sustantative benefits should not be denied to an assessee only on the ground of non-fulfillment of procedural conditions. As long as, there being no dispute as to the duty paid character of the capital goods / other goods, and the receipt in and consumption thereof, there cannot be the denial of Cenvat Credit to the appellant. - Decision in the case of Jewel Brushes Pvt. Ltd. [2008 (4) TMI 644 - CESTAT, AHMEDABAD], Steelco Gujarat Ltd. [2010 (2) TMI 307 - GUJARAT HIGH COURT] and Vimal Enterprises [2005 (7) TMI 111 - HIGH COURT OF GUJARAT AT AHMEDABAD] followed - Credit allowed. As regards HTPE sheets, insulation packages, domestic (refractory) anchors etc. - Held that:- the items and the usage thereof which has been demonstrated before us, from the documents on records, clearly indicate that these items were consumed / used as components, spares or parts of the various machineries which were either fabricated and installed alongwith bought out items for setting up of the refinery. - Decision in the case of Essar Steel Ltd. [2008 (12) TMI 566 - CESTAT, AHMEDABAD] followed - Credit allowed. As regards credit in respect of consumables such as enamels, paints, polyester resins, electrodes and chemicals - Held that:- Appellant has been able to demonstrate before us and also canvassed before the adjudicating authority that these items were essential items without which factory could not be set up and needed for maintenance due to substantial time taken for setting up the entire refinery. Since it is undisputed that these items were used in the factory premises for maintaining of the plant and machinery, fabrication of machinery, not having the stock of the said items cannot be a ground for denial of the Cenvat Credit the appellant. - Credit allowed. Demand of interest on Reversal of Cenvat Credit where assessee has accepted the credit is ineligible - Held that:- It is also undisputed that they have reversed the said amount. In our view, all the arguments made by the Ld. Counsel that interest cannot be charged, would not carry the case any further, as the Apex Court in the case of Indswift Laboratories Ltd. (2011 (2) TMI 6 - Supreme Court), was specifically interpreting the provisions of Rule 14 of the Cenvat Credit Rules, 2004 and held that even if the credit is taken and subsequently reversed, interest liability arises. Respectfully following the ratio laid down, we hold that the appellant is liable to pay the interest on the amount. Decided partly in favour of assessee.
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2014 (6) TMI 621
Valuation of goods valuation of the toilet soaps - Section 4 of Central Excise Act, 1944 - Inclusion of advertisement charges - inclusion of amounts received under non-compete agreement and trademarks licence fee agreement as they are additional considerations - confiscation of machinery - Held that:- the buyer, PGG has incurred advertisement and sales promotion expenses on the toilet soaps manufactured by and purchased from GSL. In terms of the Joint Venture Agreement, there was an understanding between the two parties, that is, GSL will manufacture and sell the toilet soaps to PGG and PGG will market these soaps to the ultimate consumers. There is nothing on record nor any produced before us that there has been any flow back of consideration from PGG to GSL. After conceding that PGG and GSL are not related, there cannot be any presumption of flow back from PGG to GSL unless there is a direct evidence to that effect which is lacking in the present case - the demand of excise duty by including the cost of advertising and sales promotion expenses incurred by PGG cannot be legally sustained. - Decided in favor of assessee. Inclusion of non-compete fee - Held that:- there is a JVA between GSL and PGG and as part of the JVA, three agreements, namely, manufacturing agreement, trade mark agreement and non-competition agreement have been entered into among/between the parties. - these are all co-terminus with JVA and all the three agreements are integrally connected with each other and are inseparable. - Following the decision of Alnoori Tobacco Products [2004 (7) TMI 91 - SUPREME COURT OF INDIA] three cases relied upon by the assessee rejected as Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect - the consideration paid by PGG to GSL under the non-compete agreement and through G&B to GSL under the trademark agreement should have a definite bearing on the price paid by PGG to GSL under the manufacturing agreement and the pricing formula adopted therein. - addition of non-compete fee confirmed - Decided against the assessee. Inclusion of trade mark licence fee paid by PGG to G&B - Held that:- On termination of the JVA, the trade marks were transferred back to GSL by G&B for a nominal consideration of Rs. Ten thousand vide Godrej Trade Mark Registered User Agreement dated 20/05/1996. Thus the whole arrangement of assignment of trade marks by GSL to G&B, grant of right to use the trade mark to PGG, transfer back of the trade marks to GSL for a nominal sum was only a mechanism adopted for routing the payment for the trade mark indirectly to GSL through G&B. The Trade marks pertained to the toilet soaps manufactured by GSL and were incorporated on the product itself apart from the packages for the toilet soaps. - Thus the trade marks provide a commercial identity to the product or service and adds value to the product. Trade marks or brand names link a particular product with a particular manufacturer. - The reasons adduced for inclusion of non-compete fee in the assessable value, in the preceding paragraphs, would apply equally well in the case of trademarks also. - Decided against the assessee. Extended period of limitation - Held that:- it is evident that the appellant had never disclosed the existence of various agreements in respect of manufacture of toilet soaps. In the price declarations filed by the appellant with the department, there was no mention of any of the agreements with PGG and others. The fact of receipt of non-compete fee and trademark licence fee by GSL was also not informed/declared to the department. Thus it is a clear case of deliberate non-disclosure on the part of the appellant with an intent to evade payment of appropriate excise duty - Extended period of limitation invoked - Decided against the assessee. Levy of interest - Held that:- interest under Section 11AB on the duty demand confirmed will be operative only from 28-9-1996 and not earlier. Levy of penalty u/s 11AC - Held that:- When the goods were cleared and duty became due, the said provisions was not in existence. Therefore, imposition of penalty under section 11AC of the Act on GSL cannot be sustained. - Penalties waived - Decided in favor of assessee. Levy of penalty on related parties and personal penalty on directors - Held that:- In the present case, the responsibility of correct declaration of price, assessing and paying excise duty, complying with the statutory provisions was on GSL and not on PGG, PGIL and G&B. In other words, there was no statutory obligation or requirement on PGG, PGIL and G&B to do any act in respect of their transactions with GSL. Further the issues involved related to interpretation of statutory provisions relating to valuation of the goods which was the sole responsibility of GSL. In these circumstances, imposition of penalties on these parties are not warranted. - Penalties waived. Confiscation of plant and machinery - Held that:- confiscation is justified in as much as GSL tried to evade excise duty by mis-declaration of value and suppression of facts. Rule 173Q of the Central Excise Rules, 1944, mandates such confiscation. Thus the confiscation and grant of redemption in lieu of confiscation on payment of fine has to be upheld. - Decided against the assessee.
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2014 (6) TMI 620
Demand of duty - Incomplete RG-1 Register - shortage of physical stock of final product - Seizure of goods - Held that:- red diary seized has not been challenged; its recovery has not been challenged; the original adjudicating authority had made specific observations about parallel invoices and at least in the case of one customer viz. M/s. Prakash Tyre Works, Kolhapur, there is no challenge to the observation that there were parallel invoices; other specific instances brought out by the original adjudicating authority have also not been challenged. The above facts brought out would show that neither side has been able to show as to what exactly is the quantum of clandestine removal. The assessee should have submitted a statement showing the exact quantity in the red diary which was shown as cleared as per statutory records and arrived at the quantum of differential duty which they have not done. Department also in spite of the statement of Shri Mustafa Khan that certain portion of the red diary have been cleared on payment of duty and further he was not admitting the entire clearances in red diary as clandestine removal, no efforts have been made to quantify the exact quantum of tread rubber cleared without payment of duty. In such a situation, both sides have failed to make out a case in their favour in accordance with their submissions - It will be unfair on my part to either uphold the entire demand or to adjourn the matter for further quantification in view of the fact that the case relates to the year 1995-96 and the matter is coming before this Tribunal for second time. Under these circumstances, keeping the total amount involved for consideration and the facts as discussed above, in my opinion, it would be appropriate if the assessee is required to pay the duty on the quantity found short at the time of visit of the officers - Decided partly against assessee.
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2014 (6) TMI 619
Denial of benefit of notification - Whether the state Electricity Board can be termed as State Government - notification no. 74/93CE, dated 20.02.93 - Held that:- State Electricity Board cannot be considered to be a Government or its Department and mere ownership of 100 % capital by State Government will not make the Electricity Board at par with the State Government. Accordingly, the benefit of Notification No. 74/93 CE is not available to the Electricity Board. - Following decision of Asstt. Engineer (Civil) V/s. CCE, Raipur reported as [2008 (9) TMI 105 - CESTAT NEW DELHI] - Decided against assessee.
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2014 (6) TMI 618
Duty demand - Difference in loss - appellant is receiving lubricating oil from M/s. IOBL, Kolkata either on payment of duty or without payment of duty under bond - assessee were repacking the same into small packs to be sold in the market under their own brand and style - Held that:- Admittedly the duty is being demanded in respect of difference on account of loss or shortage which was allowed under Standards Weights and Measures (Packaged Commodities) Rules, 1977 as also in terms of Input-Output Norms declared under Exim Policy 2002-2007. There is no evidence on record to show that such shortage/wastage was used by the appellant in the manufacture of final products and stands cleared by the appellant without payment of duty - Decided against Revenue.
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2014 (6) TMI 617
Waiver of dues - Denial of CENVAT Credit - Revenue contends that credit availed without receiving inputs - Held that:- authorized signatory M/s. Dhuleva Trading Corporation admitted that the goods were supplied and only proprietor of M/s. Nakoda Trading Coprn. has denied the supply of the inputs. The applicants availed credit in respect of the input received from M/s Nakoda Trading Corpn. to the extent of approximately Rs. 60 lakhs. In these circumstances, the offer made by the applicant is sufficient for hearing of the appeal - stay granted partly.
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2014 (6) TMI 616
Waiver of pre deposit - CENVAT Credit - manufacturing of Capital goods - use of M.S. Angles, Channels, M.S. Flats, Plates, M.S. Bar, CTD Bars, Joist, Beams, Coils Welding Electrodes, LPG Gas, Oxygen Gas, etc. for fabrication and erection of supporting structures required for mounting of machines, erection of heds etc. - Held that:- appellants plea is that these items were used for fabrication of various items of capital goods or their components and accessories. However, in support of this claim, the appellant have not produced any evidence, as neither the fabrication of the capital goods nor components or accessories have been specifically intimated by the appellant to the jurisdictional central excise officers nor the fabrication of various items of capital goods and their components and accessories was declared in the ER-I return. - Cenvat credit in respect of these items would be admissible only if there is conclusive evidence that these items had been used for fabrication of capital goods and their components, parts and accessories. But prima facie, such evidence in this case is lacking. Therefore, we are of the prima facie view that the items were not eligible for cenvat credit either as inputs or as capital goods. - this is not case for total waiver - stay granted partly.
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CST, VAT & Sales Tax
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2014 (6) TMI 623
Denial of refund claim - Unjust enrichment - Payment of TDS - stand of the petitioner was accepted in the assessment proceedings and the petitioner was not found to be exigible to sales tax (now trade tax) for the job works done by him - assessing authority in the assessment order directed the office to verify the T.D.S. certificate and, if the same was found to be correct, the amount deducted was directed to be paid to the petitioner - Held that:- Contractee was duty bound to deduct the tax for the job works done by the petitioner under Section 8-D of the Act. The contractee issued T.D.S. certificate in favour of the petitioner. The said certificate was evidence that the payment of tax was deducted at source on the bills presented by the petitioner and credit was required to be given at the time when an assessment order was made. The Court finds that in the instant case, the petitioner presented the T.D.S. certificate before the Assessing Officer, who accepted the books of account as well as the T.D.S. certificate and found that the petitioner was not exigible to sales tax for the job work carried out by him and consequently, was eligible for refund of the tax that was deducted at source. The Assessing Officer, accordingly, directed the office to verify the T.D.S. certificate and if the same was found to be correct the deducted amount was to be paid to the petitioner. The respondents, as a counter blast, issued a notice dated 06.02.2006 alleging that the petitioner was not entitled for any refund of the T.D.S. amount as prima facie it was found to be a case of unjust enrichment. - the stand of the respondents is the same, namely, that it was a case of unjust enrichment and such tax collected by the petitioner cannot be refunded. The verification that was required to be done by the Assessing Officer was whether the deductee had deposited the money in the Government Treasury and if the amount was deposited, the refund was to be given by the petitioner. This was the only limited area of verification that was required to be done as per Rule 90 of the U.P. Trade Tax Rules, 1948. Consequently, the exercise done by the respondents could not have been gone and was without jurisdiction. The impugned orders cannot be sustained and is quashed. A writ of mandamus is issued directing the respondents to refund the amount along with interest as per the rate specified under Section 29(2) of the Act. The Assessing Officer will verify as to whether the amount shown in the T.D.S. certificate has been deposited in the Government's account by the deductee. Upon such verification the respondents will refund the amount along with interest - Decided in favour of assessee.
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