TMI Tax Updates - e-Newsletter
July 8, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
PMLA
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
Income Tax
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Addition on account of difference in stock - Once the statement has been given making a surrender, the presumption is that it has been given voluntarily without any pressure or coercion and while stating otherwise for retracting the same, the onus is on the assessee to prove so
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Treatment of the technical fees paid to M/s Mahindra & Mahindra for use of design, drawing production tooling for manufacturing of independent front suspension - nature of expenditure - the decision of the Ld. CIT(A) in treating the payment as held to be revenue in nature is correct one.
Customs
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Valuation of imported second hand car - There has been a misdeclaration of the year of manufacture leading to undue benefit in the duty that is to be levied on the vehicles. The invoking of the extended period in section 28 of Customs Act, 1962 cannot be faulted.
Indian Laws
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Cheques on presentation got dishonoured with remarks "insufficient funds" - complaints filed under Section 138 of the Negotiable Instruments Act - it does not form one single transaction rather constitute separate cause of action. - HC
Service Tax
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Business auxiliary services - various components of the sale value recovered as ‘trade margin’ - the appellant does not, at any stage, become the owner of the goods, there can be no doubt that the said income is not trading profit but is consideration for some specific services rendered by the appellant
Central Excise
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Valuation - product development cost - includibility - The appellant made attempt to be enriched at the cost of Revenue. For deliberate act of the appellant to exclude the debit note amount from the scope of duty, questionable conduct and oblique motive of the appellant came up and that contributed to its implication to the charge
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Refund of accumulated CENVAT credit - The refund was rightly denied to the appellant as the same is not governed by Rule 5 of CCR, 2004
TMI Short Notes
Articles
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (7) TMI 204
Penalty Proceedings under Section 271(1)(c) - Held that:- Tribunal had accepted the case of the assessee that he has carried on the business of Draft Discounting and earns money thereby negating the Order of the Assessing Officer in the Assessment Proceedings. Further, no amount was added as income. On the contrary, the case of the assessee, which was negated by the assessing officer of carrying on the business of Draft Discounting, is accepted by the Tribunal. The Explanation (1) to Section 271(1)(c) of the Act, in the facts and circumstances of the present case, would not arise.- Decided in favour of assessee.
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2017 (7) TMI 203
Addition u/s 40A(3)- proof of business expedience - cash payments in excess of ₹ 20,000/- - Held that:- Assessee has been able to prove that due to exceptional, unavoidable circumstances and for business expediency, the payments were made in cash which were found to be genuine by the authorities below, therefore, explanation given by the assessee should not have been disbelieved. Therefore, hold that such payments cannot be disallowed under section 40A(3) of the Income Tax Act. See Gurdas Garg Versus The Commissioner of Income Tax (Appeals) Bathinda And Another [2015 (8) TMI 569 - PUNJAB & HARYANA HIGH COURT ] - Decided in favour of assessee.
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2017 (7) TMI 202
Unexplained investment - Statement made on oath - whether Statement made on oath can be retracted? - addition made on the basis of incriminating documents found during the course of search - Held that:- As demonstrated the assessee’s wife had sufficient resources\funds to make the impugned investments of ₹ 6.30 lacs having filed return of income at ₹ 9.25 lacs during the year. The explanation of the assessee that the investments were made by the wife of the assessee is, therefore, reasonable enough. Further there is nothing on record to prove that the impugned investments were made by the assessee himself in the name of his wife other than the statement of the assessee which he has later on retracted. The basis for retraction having been explained and found to be reasonable enough by us, we hold the retraction to be valid and direct that no addition be made on account of surrender of ₹ 6.30 lacs made by the assessee. Thus we hold that the retraction made by the assessee of the surrender of ₹ 16.30 lacs is valid and, therefore, delete the addition made on account of the same. The grounds raised by the assessee are, therefore, allowed.
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2017 (7) TMI 201
Addition on account of difference in stock - existence of any pressure or coercion at the time of making surrender - Held that:- No statement or affidavit of panch (witness) have been filed in support of pressure having been brought upon the assessee. In short, no evidence of existence of any pressure or coercion at the time of making surrender has been brought on record. The contention of the assessee that the surrender was made under pressure appears to be a mere statement with no basis at all. Once the statement has been given making a surrender, the presumption is that it has been given voluntarily without any pressure or coercion and while stating otherwise for retracting the same, the onus is on the assessee to prove so. Thus Admission made by the assessee, surrendering the excess stock, cannot be rejected as admissible evidence on this ground. Revenue has given no reason for adopting the GP rate of the immediately preceding year only i.e. 26% and we find no reason to adopt the same particularly considering the fact that the average GP rate of the preceding years comes to 20.48% and further GP rate accepted in this year is undeniably 22%. In such circumstances, we hold, it would be fair and reasonable to adopt the GP rate of the current year i.e. 22% for the purpose of calculating stock as per Books on the date of search. The retraction of the assessee is to this extent, therefore, accepted. The Assessing Officer is therefore directed to compute the difference in stock found on the date of search by calculating the stock as per Books by applying GP rate of 22% to the trading results of the assessee as on the date of search. The Gross Profit on the stock found short if any is also directed to be calculated after applying GP rate of 22% and addition is directed to be upheld of the same.
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2017 (7) TMI 200
Additions on account of unsecured loans - Held that:- CIT(A) has accepted the cash flow statement submitted by the assessee without considering the remand reports submitted by AO on this account. CIT(A) has not even referred to any of the above remand reports in the impugned order in spite of the fact the verification of the additional document, i.e., cash flow statement etc. was directed by him to be verified by the AO with reference to the books of accounts. We, therefore, find that the matter requires re-adjudication at the stage of ld. CIT(A). Accordingly, the order of the ld. CIT(A) deserves to be set aside and this issue is restored to his file for deciding the same afresh by way of speaking order as per law after considering all the facts and evidences available on record as well as reported by the AO Unexplained cash credits u/s. 68 - Held that:- CIT(A) supported by evidences on record as referred to by the first appellate authority, we find no justification to interfere with the deletion of this addition. The ld. DR could not be able to rebut the findings given by the CIT(A) on this issue nor is there any material available on record to discard the same.
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2017 (7) TMI 199
Treatment of the technical fees paid to M/s Mahindra & Mahindra for use of design, drawing production tooling for manufacturing of independent front suspension - nature of expenditure - revenue or capital - Held that:- The assessee company, being auto part manufacturer for M/s Mahindra & Mahindra is solely dependent upon the business given to it by M/s Mahindra & Mahindra and in view of the required modernization in the IFS system, the said M/s Mahindra & Mahindra made payment to the Korean company, M/s Samlip for developing the prototype tooling and allowed the assessee to use the same for manufacturing the IFS components as per the requirement of M/s Mahindra & Mahindra on payment of technical fee. Clearly in such a case, M/s Mahindra & Mahindra got the ownership over the asset and the assessee was granted limited rights by Mahindra & Mahindra to use the same to Manufactur IFS System, in accordance with their requirement, on payment of Technica1 fee'. In view of the same, the decision of the Ld. CIT(A) in treating the payment as held to be revenue in nature is correct one. Even otherwise, the assessee has been making such payment from AY 1999-2000 onwards, which have been accepted as revenue in nature by the Department in the earlier years - Decided in favour of assessee Disallowance u/s. 14A - Held that:- Calculations / quantifications needs to be examined at the level of the AO, because Ld. CIT(A) has not given any chance to the AO for making such calculations/ quantifications which in the interest of justice is very essential. Accordingly, in the interest of justice, we set aside the issue in dispute to the file of the AO for fresh consideration and decide the same in view of the law laid down by the Hon’ble Delhi High Court in its decision dated 2nd September, 2015 in the case of Cheminvest Ltd. vs. Commissioner of Income Tax (2015 (9) TMI 238 - DELHI HIGH COURT).
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2017 (7) TMI 198
TPA - comparability - selection criteria - Held that:- In the present case, the assessee itself excluded those companies which had been declared sick or were having negative net worth. However, a company cannot be excluded from the list of comparables if it was a loss making company in view of the decision of the ITAT Special Bench Chandigarh in the case of DCIT Vs Quark Systems (P.) Ltd. (2009 (10) TMI 591 - ITAT, CHANDIGARH). Therefore, in our opinion, the TPO/DRP was not justified in excluding M/s Besant Raj International Ltd. only on this basis that it was a loss making company, particularly when it was functionally the same and was deriving income from consultancy services as in the case of the assessee. Since this company is functionally similar with the assessee and making of the loss cannot be criteria for the exclusion from the list of comparables. We, direct the AO to include this company in the list of the comparables. As regards to the exclusion of M/s Capital Trust Ltd. is concerned, it is an admitted fact that the said company was engaged in the foreign consultancy but the assessee is not engaged in such activity. Therefore, this company cannot be considered as functionally similar with the assessee, so it was rightly excluded from the list of the comparable. M/s Priya International Ltd. was functionally different from the assessee and should not have been included in the list of the comparable. We, therefore, direct the AO to exclude M/s Priya International Ltd. from the list of comparables and then work out the OP/TC ratio.
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Customs
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2017 (7) TMI 186
Valuation - imported used offset press complete and paper printing machines along with standard accessories - The grievance of the appellant is that custom authorities have disregarded the load port Chartered Engineer certificate without valid reasons to reject the same - Held that: - local Chartered Engineer was not in possession of any additional information to decide the valuation. Virtually, he has not given any reference to the technical manual or information based on which value of the machines have been reassessed. In fact, the local Chartered Engineer has indicated the year of manufacture of offset printing machine as different to that of Chartered Engineer at load port in respect of one or two machines - reassessment value on the basis of local Chartered Engineer certificate is not valid. The imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the Customs Act, 1962 - the importers are liable for imposition of penalty also under Section 112 (a) ibid - however, redemption fine reduced to ₹ 85,000/- and penalty to ₹ 45,000/- - appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 185
Valuation - imported used offset printing machines along with standard accessories - The grievance of the appellant is that custom authorities have disregarded the load port Chartered Engineer certificate without valid reasons to reject the same - Held that: - local Chartered Engineer was not in possession of any additional information to decide the valuation. Virtually, he has not given any reference to the technical manual or information based on which value of the machines have been reassessed. In fact, the local Chartered Engineer has indicated the year of manufacture of offset printing machine different to that of Chartered Engineer at load port in respect of one or two machines - customs authorities have rejected the opinion of one expert simply on the basis of opinion by another expert. We note that there is no other sufficient independent reason for such rejection. The imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the Customs Act, 1962 - the importers are liable for imposition of penalty also under Section 112 (a) ibid - however, redemption fine reduced to ₹ 75,000/- and penalty to ₹ 40,000/- - appeal allowed - decided partly in favor of appellant.
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2017 (7) TMI 184
Principles of natural justice - fabrication of shipping bills to enable duty-free import - whether adequate opportunity had been afforded to the appellant which he did not avail of? - Held that: - there is no challenge that the contents of the show cause notice lacked consistency and veracity. It is also not contended by the appellant that the documents sustaining the allegations had not been provided - The impugned order has a detailed finding on the role and involvement of the appellant in the entire scheme of imports besides being not unaware of the illicit origins of the advance licences used to claim the benefit of duty exemption. Even in the appeal filed before us, the appellant has not considered it necessary to distance himself from the conspiracy that has been established in the impugned order. There is no reason to hold that the adjudicating authority would have arrived at a different conclusion had the appellant joined the adjudication proceedings - appeal dismissed - decided against appellant.
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2017 (7) TMI 183
Valuation of imported second hand car - violation of the condition of possession of car - Held that: - some eligible importers had been persuaded to procure vehicles for resale in India and, thereby, overcome the restrictions that are placed on import of new and second-hand vehicles by Indian residents. The existence of records pertaining to manufacture of vehicles are not easily discredited - There is no reason to doubt the veracity and authenticity of the price certificates issued for the three vehicles. There has been a misdeclaration of the year of manufacture leading to undue benefit in the duty that is to be levied on the vehicles. The invoking of the extended period in section 28 of Customs Act, 1962 cannot be faulted. Penalty u/s 114A of CA - Held that: - the ingredients that warrant the invoking of this section is identical to that for invoking the extended period - Consequently, the imposition of penalty under section 114A of Customs Act, 1962 also cannot be faulted. Appeal dismissed - decided against appellant.
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2017 (7) TMI 182
Valuation of imported goods - ‘compressed natural gas (CNG) kits and cylinders’ - rejection of declared value - Held that: - The suppression of the price-list of the manufacturer from assessing authorities by the importer was considered sufficient to discredit the declared value - No cogent explanation has been afforded by the appellant to justify the condition in which unduly high discount was accorded in the negotiation - The contemporaneous nature of the goods imported for the purposes of comparison of valuation do not appear to be in doubt. The adjudicating authority has gone on to adopt a ‘contemporaneous price’ for the levy of duty under Customs Act, 1962. However, in doing so, the impugned order has failed to place on record the bills of entry from which it was sourced as well as the manner in which that assessment was compliant with the valuation provisions - In order that the adjudication order is seen to be legal and proper, it is necessary that this glaring lack be rectified by examination of the bills of entry pertaining to imports effected contemporaneously and adequate opportunity be given to the appellant to present the case - appeal allowed by way of remand.
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Corporate Laws
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2017 (7) TMI 181
Direction to Official Liquidator to hand over possession - winding up - Held that:- In view of the status-quo order passed by this Court against the applicant in the said notice of motion, which order is in force, the applicant even could not have applied for seeking possession of the leasehold land in question in this proceeding. Be that as it may, the applicant has not made out any case for recovery of possession of the leasehold land from the Official Liquidator, as prayed or otherwise. In my view transfer of the leasehold rights of the company in liquidation for the remaining period which is for substantial period for clearing the debts of the creditors of the company in liquidation is for beneficial winding up of the company in liquidation and is permissible. As the prayer of the applicant for recovery of the arrears of rent from the Official Liquidator is concerned, the Official Liquidator through his counsel has made a statement before this Court that the arrears of rent would be cleared by the office of the Official Liquidator within such time as may be granted by this Court. In my view, this grievance of the applicant for recovery of arrears of rent from the Official Liquidator is justified and deserves acceptance. As the direction sought by the Official Liquidator for reduction of the reserve price fixed by this Court in respect of the leasehold property in question is concerned, in my view, the interest of justice would be met with if such prayer is considered after a fresh valuation report is obtained by the Official Liquidator in respect of the said leasehold rights in view of passage of time. The Official Liquidator can apply for the said relief after such valuation report is obtained by his office in respect of the leasehold land in question. Company Application seeking an order and direction against the Official Liquidator to hand over quiet, vacant and peaceful possession of the open land admeasuring 4743.21 sq. mtrs, bearing survey no.194/1, village Majiwade, Thane (West) is rejected. The Official Liquidator is directed to pay the arrears of rent from the date of winding up of the respondent company till 30th June, 2017 within eight weeks from today and shall continue to pay the agreed rent every month to the applicant on or before the 15th day of each month. The Official Liquidator is directed to obtain a fresh valuation report in respect of the leasehold rights in the land in question within three months from today.
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2017 (7) TMI 180
Auction of properties of Saharas - permitting the sale of Grosvenor House Hotel - Held that:- In the interlocutory application relates to grant of permission for sale of Grosvenor House Hotel, i.e. by transfer of shares of the company to the buyer i.e. GH Equity U.K. Limited. Mr. Arvind P. Datar, learned senior counsel appearing for the S.E.B.I. has no objection if such permission is granted. The permission is, accordingly, granted. Permit Saharas to sale their lands at the price less than 90% of circle rate - Held that:- Direction for auction of the property confimed. Therefore, no further order need be passed on the said prayer. Accept the properties of Saharas as a security for the balance principal amount instead of cash deposit - Held that:- We are not inclined to pass any order thereon and, accordingly, they are rejected at this stage. As we had directed the Official Liquidator of the High Court of Bombay to proceed with the drafting of terms and conditions of sale notice for the Amby Valley property. Mr. Vinod Sharma, Official Liquidator submits that the terms and conditions have been scrutinized by Justice B.N. Agarwal, formerly a Judge of this Court, who has been nominated to supervise the refund process. A copy of the terms and conditions be handed over to the learned counsel for the contemnor. The original terms and conditions of the sale notice which have been filed in the Court be taken on record.Let the matter be listed at 3.30 p.m. on 5th July, 2017.
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PMLA
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2017 (7) TMI 177
Money laundering - nature of offence - Held that:- It invariably involves secretive actions and dealings by the perpetrators, of transfer and rotation of moneys within and outside the country. It is also likely to involve fabrication and fudging of documents and records. The persons involved in money laundering invariably cover their tracks, and conceal their identities. The challenge faced by the investigating authorities is to uncover the money trail, so as to expose the process and mechanism of money laundering. The propensity and likelihood of the suspects involved in money laundering, to further cover their tracks and destroy the evidence, whenever there is an effort underway to unearth their crime, would obviously be high. Thus, while scrutinizing the decision of the authorized officer concerned to arrest the suspect in exercise of the power conferred under Section 19 of the PMLA by applying the principles and guidelines laid down in Section 41 and 41A of the Code, the same would be tested in the aforesaid light, and while keeping in view the object and purpose of the PMLA. We are not inclined to pass any orders of restraint as sought by the petitioner in the present application. In case the authorities under the PMLA invoke their power under Section 19 of the said Act, they shall comply with the requirements of Section 19 of the Act and also adhere to the guidelines laid down in Sections 41 and 41A of the Code as explained herein above.
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Service Tax
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2017 (7) TMI 197
Completion and finishing activity - benefit of N/N. 1/2006-ST dt. 1.3.2006 - activity of laying of synthetic/wooden flooring in various sports stadium - Whether the benefit of CENVAT Credit can be extended to the appellant in case they are denied the benefit of N/N. 1/2006-ST.? - Held that: - In the event that the benefit of notification No. 1/2006-ST is denied the appellants would be clearly entitled to the cenvat credit irrespective of the fact that they have not claim it earlier while claiming benefit of Notification No. 1/2006-ST. The demand confirmed on this is therefore set aside and matter remanded to the original adjudicating authority to examine the detail account submitted by the appellant - matter on remand. Whether appellant are liable to service tax in respect of services provided to Shri Sathya Sai Health and Education Trust, Government of Maharashtra in respect of Balewadi Stadium for Commonwealth Youth Games and Delhi Development Authority? - Held that: - Tribunal in the case of Anand Construction Co. [2013 (3) TMI 250 - CESTAT MUMBAI] relying on the Circular No. 80/10/2004-ST dt. 17.9.2004 held that no tax can be demanded under the head of commercial or industrial construction in respect of services provided for construction of sports complex for Government of India and for charitable institution - appeal allowed. Appeal allowed in part and part matter on remand.
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2017 (7) TMI 196
Manpower and supply agency services - Penalty - invocation of section 80 - Held that: - The appellants had not obtained any registration nor filed any return during the period and in these circumstances no leniency can be shown to the appellant. The appellant has sought invocation of Section 80. However, they have not made any ground for invocation of Section 80 or to establish their bonafide. In the absence of bonafide, Section 80 cannot be invoked - appeal dismissed - decided against appellant.
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2017 (7) TMI 195
GTA service - whether Service Tax is payable on the GTA services for transportation of sugarcane from it's farmers to the Sugar Mills when there no consignment note was issued for such transportation? - Held that: - A similar issue has been decided by this Tribunal in the appellant's own case Bhima Sahakari Karkhana Ltd Versus CCE, Pune-III [2015 (10) TMI 627 - CESTAT MUMBAI], where this Tribunal held that in absence of consignment note, services cannot be considered as GTA service and accordingly, Service Tax cannot be levied - appeal allowed - decided in favor of appellant.
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2017 (7) TMI 194
Business auxiliary services - various components of the sale value recovered as ‘trade margin’ i.e., the difference between the sale price and the purchase price - Held that: - the appellant deducts service charges of 2% on exports, bank charges and trade margin etc. If the transactions were one of trading, the appellant would have treated the sale value of goods as receipts from which expenditures is to be deducted instead of treating them as receipts. Taken in conjunction with the admitted fact that the appellant does not, at any stage, become the owner of the goods, there can be no doubt that the said income is not trading profit but is consideration for some specific services rendered by the appellant - appeal dismissed - decided against appellant.
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Central Excise
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2017 (7) TMI 193
CENVAT credit - written off part of the value of the inputs - Held that: - as regard the written off input it is established that firstly the goods in respect of which the value was written off was available in the factory. Therefore the reversal of CENVAT Credit was not required - there was no statutory provision for reversal of credit on the inputs which is written off shown in the books of accounts at the material time said provisions was inserted in Rule 3 by sub-rule (5B) only w.e.f. 11.5.2007 vide amendment N/N. 26/2007-CE (NT) dt. 11.5.2007 - the Hon’ble Bombay High Court in the case of Indian Petrochemicals Corpn. Ltd. [2007 (8) TMI 359 - HIGH COURT OF JUDICATURE AT BOMBAY] held that CENVAT credit in respect of the written off input service is not required to be reversed. As regard the physical verification, the appellant have made a categorical submission write from the audit stage to the audit officer and also before the Jurisdictional Departmental Officer that this is related to the shortage of finished goods found during movement between the factory and the depot - as regard the demand related to the physical verification difference the matter is remanded to the original adjudication authority to reconsider this issue. Appeal allowed - decided partly in favor of appellant and part matter on remand.
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2017 (7) TMI 192
Valuation - product development cost - includibility - Held that: - Revenue proved its case against the appellant. The appellant made attempt to be enriched at the cost of Revenue. For deliberate act of the appellant to exclude the debit note amount from the scope of duty, questionable conduct and oblique motive of the appellant came up and that contributed to its implication to the charge - appeal dismissed - decided against appellant.
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2017 (7) TMI 191
CENVAT credit - input services - provider of lift maintenance service - catering service at the guest house of the appellant - house-keeping service in their residential colony - Held that: - The nexus of the production facility to the guest house and residential colony is a question of fact. This needs to be ascertained and can be done only at the level of the original authority - The impugned order set aside and matter remanded back to the original authority to enable appellant to be afforded an opportunity to establish that the guest house and residential colony are in some manner connected to the production process and thereby entitled to claim tax paid on input services deployed at the facilities as CENVAT credit - appeal allowed by way of remand.
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2017 (7) TMI 190
CENVAT credit - inputs - benefit of reduced penalties - SSI exemption - N/N. 8/03-CE dt.1.3.2003 - Held that: - it was held by the Tribunal in the case of Sridhar Paints Co.P.Ltd. [2005 (11) TMI 143 - CESTAT, BANGALORE], the benefit of CENVAT credit on evidence of payment of duty on inputs is allowable even where goods are removed clandestinely - In the present appeal, the appellant No.1 have produced detailed tables purported to be of their inputs and on that basis calculated the CENVAT credit on their inputs. Admittedly, the said document was not produced before the Commissioner (Appeals). They would also need to produce prescribed documents showing proof of duty paid on inputs in support of their claim - matter on remand. Reduced penalties - Held that: - no documentary proof or even dates for said payments have been produced - plea for reduced penalty cannot be examined in absence of these documents/details of payments. Appellants are therefore directed to submit documentary proof of payment of duty, interest and penalty paid by them before the Commissioner (Appeals) with clear indication of dates and amounts of payment of each - matter on remand. Appeal allowed by way of remand.
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2017 (7) TMI 189
Benefit of N/N. 162/86 dated 1.3.1986 - chassis - Held that: - we are not able to express any opinion whether duty was paid or unpaid on chassis that was cleared and reached the premises of the appellant for FRP body building - Learned authority shall examine the same and also the input came to the premises of the appellant as well as the output that was cleared from its premises to ascertain the levy and test the fulfillment of the requirement of the chapter note and the tariff heading 8702 as well as mandate of the notification - appeal allowed by way of remand.
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2017 (7) TMI 188
Refund of accumulated CENVAT credit - accumulation of credit due to variation of rate of duty between inputs and final product - denial on the ground that firstly refund under Rule 5 of Cenvat Credit Rules shall not be applicable in case the assessee claim rebate or drawback. Secondly, the Rule 5 is applicable only in case where the export is made under bond - Held that: - The accumulation of Cenvat Credit is not due to export of goods as the export of goods was made on payment of duty refund under Rule 5 of Cenvat Credit Rules, 2004 is admissible only when the accumulation is due to non-payment of duty on the export goods that means if the goods is cleared under bond then due to non-payment of duty the cenvat credit gets accumulated and the same is refunded under Rule 5, as per the input output ratio between the export goods and the input used, the Rule 5 provides the refund of accumulated credit only in case the export of goods made under bond and not in the case of export under rebate - Moreover, there is a condition in the notification under Rule 5 that the refund shall not be applicable when the assessee claims the rebate of duty drawback. The refund was rightly denied to the appellant as the same is not governed by Rule 5 of CCR, 2004 - appeal dismissed - decided against appellant.
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2017 (7) TMI 187
Valuation - goods cleared by EOU in DTA - Section 3(1) of the Central Excise Act, 1944 - related party - Held that: - At this stage, whether a buyer or seller is related or not, the adjudicating authority is in a better position to examine and decide the modus operandi of the buyer and seller - the proviso to Section 3 of the Central Excise Act having made specific provisions that the goods manufactured by DTA shall be treated as if the goods were manufactured abroad. That shall also be relevant. Therefore learned adjudicating authority shall determine the value in accordance with Section 14 of the Customs Act, 1962 with the assistance of Customs Valuation Rules, 1988 - appeal allowed by way of remand.
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Indian Laws
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2017 (7) TMI 179
Cheques on presentation got dishonoured with remarks "insufficient funds" - complaints filed under Section 138 of the Negotiable Instruments Act - Held that:- Mere availing of the OCC/OD limit of ₹ 50,00,000/- does not ipso facto suggest that the offence committed is one. Whereas, the cheques issued on the different dates constitute different cause of action under Negotiable Instruments Act. The trial Court correctly awarded substantive sentence to run consecutively rather than to award the sentence concurrently although the cheques issued by the petitioner were to meet their outstanding liability for the OCC/OD limit availed by him qua against the respondent/complainant-Bank but it does not form one single transaction rather constitute separate cause of action. It is an admitted fact emerging on the record that the petitioner was directed to pay a fine of ₹ 1,00,000/- in each complaint cases as compensation to the respondent/complainant-Bank and in default of payment the petitioner shall further undergo a simple imprisonment of one month for each complaint cases which does not exceeds one fourth of the term of imprisonment that the learned Metropolitan Magistrate could have awarded. The trial Court while awarding the sentence and fine as compensation under Section 357(3) of the Cr.P.C. could have increased the fine amount twice the cheque amount under Section 138 of the N.I. Act, whereas the learned Metropolitan Magistrate has awarded the compensation of only ₹ 1 lakhs in each complaint cases which shows nothing biased/adverse qua against the petitioner exist in the factual parametric of the present revision petitions. As discussed above, this Court is of the view that the conviction judgment passed by the learned Metropolitan Magistrate-03, NI Act, Tis Hazari Courts, Delhi and order on sentence passed by the learned Metropolitan Magistrate-03, NI Act, Tis Hazari Courts, Delhi does not require any interference by this Court.
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2017 (7) TMI 178
Special Judge cognizance of the offence when there is no evidence found by the investigating agency/CBI - Held that:- As per the prosecuting agency/CBI no case is made out against the petitioners. There is no occasion for the trial Court to look into additional evidences to give direction under Section 173(8) Cr.P.C. since there is no additional evidence filed on record and the prosecuting agency/CBI takes stand on their investigation and the closure report qua against the petitioners therefore, the cognizance taken against the present petitioners is bad. Even if the prosecution case taken to be gospel truth still do not constitute prima facie case qua the present petitioners in absence of any evidence against the petitioners in the charge-sheet filed by the respondent CBI. The cognizance taken qua the present petitioners without taking recourse under Section 173(8) Cr.P.C. for further investigation is hereby set aside.
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