TMI Tax Updates - e-Newsletter
August 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:
Penalty u/s 271(1)(a) reasonable cause for late filing of return question of mens rea does not arise or require consideration when we examine the question of penalty u/s 271 (1)(a) of the Act - HC
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Income Tax:
Assessment u/s 153A Invocation of power of revision u/s 263 - Commissioner did not have jurisdiction to initiate any proceedings u/s 263 - HC
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Income Tax:
Nature of expenses Capital or revenue Any expenditure incurred by the assessee towards repairing the premises taken on rent if he has undertaken to bear the cost of the repairs is allowed as revenue expenditure - HC
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Income Tax:
Where the purpose of a trust or institution is relief of the poor ; education or medical relief, it will constitute charitable purpose even if it incidentally involves the carrying on of the commercial activities - HC
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Income Tax:
Liability to pay capital gains - taxable in the assessment of income for the assessment year when the agreement was entered into and possession was given - actual receipt of consideration is not material - HC
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Income Tax:
Genuineness of gift Unless the recipient has proved the genuineness thereof, the gift can very well be treated to be an accommodation entry of the assessee's own money, which is not disclosed for the purpose of taxation - HC
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Income Tax:
Power of Income-tax Settlement Commission u/s 245D(2C) There is no requirement that for an application to be entertained by the Commission, the applicant must declare a new source of income from that disclosed earlier to the Department. - HC
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Income Tax:
Power of Income-tax Settlement Commission u/s 245D(2C) no provision would permit the Commission not to deal with the validity of the application at the stage of section 245D(2C) of the Act. - HC
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Service Tax:
CENVAT Credit - input services - Training & coaching service - Expenses incurred by way of brokerage for finding accommodation for its faculty - credit allowed - AT
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Central Excise:
Valuation - Transaction value or MRP based value - ceramic tiles - different class of buyers viz. Builders/contractual/ industrial/hospitals, hotels etc. were covered within the term industry - valuation to be done u/s 4 - AT
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Central Excise:
Just because the medical grade oxygen manufactured by a manufacturer and sold by him to his customers was further sold to other dealers for non-medical, use the classification of the oxygen cannot be changed to non-medical oxygen - AT
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Central Excise:
Denial of CENVAT Credit - credit was sought to be passed on without invoices being accompanied by the goods - levy of penalties confirmed - AT
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Central Excise:
CENVAT Credit - input services on advertisement charges paid by one unit - product manufactured by the other unit - is apparent that input service credit on advertisement charges are related to the business of the assessee - credit allowed - AT
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Central Excise:
Condonation of delay - Inordinate delay of 406 days - Improper advise given by Advocate - the argument not supported by any other evidence and/or affidavit of the concerned person. - HC
Articles
Notifications
Customs-
26/2014 - dated
21-8-2014
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Cus
Seeks to amend notification No.12/2012-Cus dated 17.3.2012 so as to increase duty on raw as well as refined/white sugar from 15% to 40%.
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F.No.437/96/2014-Cus IV - dated
21-8-2014
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Cus (NT)
Appointment of Common Adjudicating Authority - M/s Tirupathi Enterprises, Shop No.18 & 19, Ground Floor, 5-3-856, Nandini Complex, Goshamahal, Hyderabad.
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F. No. 437/97/2014-Cus IV - dated
21-8-2014
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Cus (NT)
Appointment of Common Adjudicating Authority - M/s S.J. Marketing , Hyderabad, M/s Sukaso Ceracolors Pvt. Ltd., Hyderabad and Grindwell Pulverizers Pvt. Ltd., Uttarakhand
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F. No. 437/95/2014-Cus IV - dated
21-8-2014
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Cus (NT)
Appointment of Common Adjudicating Authority - M/s Mulchand M. Zaveri, 202, Koi Na Pada, Chawk, Khambhat (Cambay) Gujarat.
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72/2014 - dated
21-8-2014
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Cus (NT)
Rate of exchange of conversion of each of the foreign currency with effect from 22nd August, 2014
DGFT-
91 (RE 2013)/2009-2014 - dated
21-8-2014
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FTP
Export Policy of Onions.
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90 (RE-2013)/ 2009-2014 - dated
21-8-2014
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FTP
Amendment in Para 4.1.15 of FTP, 2009-2014.
Service Tax-
17/2014 - dated
20-8-2014
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ST
Seeks to amend notification No. 25/2012- Service Tax, dated the 20th June, 2012
News
Case Laws:
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Income Tax
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2014 (8) TMI 648
Assessee order become final - appellants, who are not very educated persons, unfortunately could not be properly represented before the Assessing Officer - High Court has dismissed their appeal [2013 (5) TMI 420 - ALLAHABAD HIGH COURT] in respect of revision u/s 264 Held that:- For the AY 1998-99, the assessment is over and the assessment order has become final - the assessment order could not be interfered at this stage but direction has been issued that no penalty and interest proceedings shall be initiated against the assessees Decided against Assessee with partial relief.
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2014 (8) TMI 647
Rejection of revision petition u/s 264 - Interest accrue on deposits made by industrial electricity consumers Held that:- CIT(A) rightly rejected the revision, on the ground, that it was not maintainable - against the order u/s 154 of the Act, the assessee preferred an appeal - in view of Section 264(4)(c) of the Act, the Commissioner has no power to revise any order u/s 264 of the Act since the order was subject to an appeal before the Appellate Tribunal there was no error in the order passed by the CIT u/s 264 of the Act Decided against
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2014 (8) TMI 646
Penalty u/s 271(1)(a) reasonable cause for late filing of return Held that:- Assessee in their reply to the notice for penalty had referred to the return for the AY 1983-84 and the fact that the original return was filed taking into account payment received from DDA - this cannot be a ground for not filing the return for the AY 1984-85, specially, when the return for the AY 1983-84 was originally filed on 29th October, 1984 and the revised return was filed on 1st November, 1985 - the return for the assessment year 1984-85 was filed on 2nd July, 1986. The appellant-assessee had the opportunity to file Form No.6, which was applicable and could have given reasons for delay and belated filing of the return - The return could have been initially filed and then revised - For claiming loss, it was necessary for an assessee to file original return within the stipulated time - the assessee by not filing the return did not want benefit of carry forward of loss. Relying upon Gujarat Travancore Agency Vs. C.I.T [1989 (5) TMI 1 - SUPREME Court] - question of mens rea does not arise or require consideration when we examine the question of penalty u/s 271 (1)(a) of the Act - Penalty is a civil liability and is imposed upon infraction of law when conditions stipulated in the provision are satisfied - Mens rea is not an requirement to impose penalty under Section 271(1)(a) of the Act - As far as the factum that the return was delayed, the same is accepted and is not in dispute - Justification and cause for the delay is the issue in dispute - Facts of the present case and excuse given by the appellant has been noticed and rejected Decided against Assessee.
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2014 (8) TMI 645
Income from sale of shares Business income or STCG Held that:- The Tribunal rightly was of the view that merely because the dividend has not been received from shares held as investments, the nature of shares cannot be treated as stock-in-trade - assessee has maintained investment portfolio as well as trading portfolio - The shares in the investment portfolio have been held in Demat account - profit on sale of shares will be assessable under the head short term capital gain and not as business income Following the decision in Gopal Purohit Vs. JCIT [2010 (1) TMI 7 - BOMBAY HIGH COURT] - the profits earned on sale of shares held as investment will be assessable under the head short term capital gains and not as business income - The shares held as investment were kept in a separate portfolio the shares related to only three companies - Shares of State Bank of India were also purchased and kept in the investment portfolio account and not treated as stock in trade - These shares were sold after a gap of 4 months or more Decided against Revenue.
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2014 (8) TMI 644
Reopening of assessment quashed by Tribunal Reason to believe Assessment of LTCG Held that:- It is well settled in view of the decision in the case of CIT v. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] that u/s 147, an assessment cannot be reopened merely on the basis of mere change of opinion, but there must be tangible material before the AO to come to a conclusion that there is an escapement of income from assessment - the only reason which was given by the AO for initiating reassessment proceedings was that the property was sold by the assessee for ₹ 31 lacs but its value for the purpose of stamp duty as per the circle rate was ₹ 82.54 lacs, resulting in an escapement of income of ₹ 51.54 lacs - The validity of the reopening of the assessment has to be determined on the basis of reasons which are disclosed by the AO - The legality of the notice reopening the assessment has to be determined, when it is questioned, on the basis of the reasons which are recorded by the AO - the Tribunal was justified in assessing the correctness of the notice for reopening the assessment u/s 148 on the basis of the reasons which were disclosed by the AO the reasons could not give rise to a reason to believe that income had escaped assessment for the simple reason that in the computation of income, the assessee had adopted the circle rate which is higher than the sale consideration Decided against revenue.
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2014 (8) TMI 643
Registration u/s 12AA(2) w.e.f. AY 2001-02 Failure to justify the delay in filing appeal - Held that:- The Tribunal had rightly recorded that the assessee was registered vide certificate of registration dated 29.1.2004 issued by the Registrar of Firms and Societies (Punjab), Chandigarh - The assessee had not given any justified cause for not applying for registration before 31.5.2007 whereas the trust was constituted vide deed dated 4.2.2000 the assessee as the assessee has failed to justify the delay in filing the application under Section 12A of the Act belated on 31.05.2007 as against the constitution of the trust vide deed dated 04.02.2000 thus, no substantial question of law arise for consideration Decided against Assessee.
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2014 (8) TMI 642
Assessment u/s 153A Invocation of power of revision u/s 263 - Whether the CIT can invoke the power u/s 263 of the Act to review the order of assessment passed by the Assessing Authority Held that:- In the eye of law there is no order of assessment. Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the total income of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction. If the commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of proceedings - the reasoning given by the Tribunal is not justified - The Commissioner did not have jurisdiction to initiate any proceedings u/s 263 of the Act Decision in the case of COMMISSIONER OF INCOME TAX vs. ANIL KUMAR BHATIA [2012 (8) TMI 368 - DELHI HIGH COURT] relied upon - Decided in favour of Assessee.
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2014 (8) TMI 641
Nature of expenses Capital or revenue Renovation expenses on modification of showroom Compulsory continuation of dealership agreement Held that:- Any expenditure incurred by the assessee towards repairing the premises taken on rent if he has undertaken to bear the cost of the repairs so as to make it more conducive to its business activity falls within the expression 'repairs to the premises' and the cost of such repairs is allowable as deduction under the provision Relying upon THE COMMISSIONER OF INCOME TAX, DELHI-IV. Versus M/s HI LINE PENS PVT. LTD. [2008 (9) TMI 25 - HIGH COURT DELHI] - expenses that were incurred were towards repairing the premises taken on lease so as to make it more conducive to its business activity - Such expenses would clearly fall within the expression of repairs to the premises as appearing in Section 30(a)(i) - The legislature has made a distinction between expenses incurred by a tenant for repairs of the premises and expenses incurred by a person who is not a tenant towards current repairs to the premises Decided in favour of Assessee.
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2014 (8) TMI 640
Order u/s 263 Calculation of FBT u/s 115WB(1)(c) Contribution made to superannuation fund Held that:- Out of the total amount of ₹ 9,13,67,379, which includes the list of 29 employees where the contribution in the superannuation fund was more than ₹ 1 lakh and their aggregate amount was ₹ 51,36,132 and from the amount, the assessee had reduced ₹ 29 lakhs being the exemption limit in respect of the 29 employees (the contribution was in excess of ₹ 1 lakh each) and the balance of ₹ 22,36,132 was considered as taxable fringe benefit tax - As per section 115WC for the purpose of the Chapter, the value of the fringe benefits shall be the aggregate of amount of contribution referred to in clause (c) of section 115WB which exceeds ₹ 1 lakh in respect of each employee - ₹ 22,36,132 was considered as taxable (the contribution with respect to 29 employees to the extent in excess of ₹ 1 lakh each), the Tribunal has rightly held that there was no calculation mistake in the calculation of the fringe benefit tax the Tribunal has rightly held that the Commissioner was not justified in exercising the powers u/s 263 of the Act Decided against Revenue.
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2014 (8) TMI 639
Condonation application rejected - Delay of six years, eight months and three days - Held that:- The Tribunal refutes the receipt of appeal at the office of the Tribunal - assessee does not have any acknowledgement, to prove that it was received in the office of the Tribunal - The reasons stated for condonation of the long delay of more than six years was found to be not satisfactory and the delay condonation application was dismissed by the Tribunal there was no reason to interfere with the order of the Tribunal revenue is also entitled to some finality in the matters, when the assessee has by his own default failed to institute a proper appeal and prosecute the same diligently before the Tribunal - there are no sufficient reasons to deem the highly belated appeal to be in time - When the assessment of the assessee remained unchallenged and for that sole reason acquired finality; no question arises of refund Decided against assessee.
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2014 (8) TMI 638
Eligibility for exemption u/s 11(1) Assessee involved in imparting education - Whether the Appellate Tribunal has substantially erred in holding that the activities of the assessee are in the field of education and that the assessee was eligible for exemption u/s 11(1) of the Act Held that:- The assessee declared the total income and claimed exemption u/s 11 of the Act on the ground that the activities of the assessee are educational activities and, therefore, they are entitled to exemption u/s 11 of the Act - Following the decision in Gujarat State Co-operative Union Versus Commissioner Of Income-Tax [1992 (2) TMI 74 - GUJARAT High Court] - the activities of the assessee such as continuing education diploma and certificate programme, management development programme, public talks and seminars and workshops and conferences, etc., the activities of the assessee is educational activities and/or is in the field of education - where the purpose of a trust or institution is relief of the poor ; education or medical relief, it will constitute "charitable purpose" even if it incidentally involves the carrying on of the commercial activities - the activities of the assessee would fall within the definition of "charitable purpose" as per section 2(15) of the Act and would be entitled to exemption u/s 11 of the Act Decided against Revenue.
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2014 (8) TMI 637
Transfer to different jurisdiction u/s 127(1) - opportunity of being heard Held that:- The show-cause notice of January 9, 2014, called upon the first petitioner to present its objections to the proposed transfer of the account from Kolkata to the Kanpur Central region The notice expressed the tentative opinion that the transfer of the petitioner's account to Kanpur was necessary for a co-ordinated investigation - the Commissioner relied on a report, the contents were not made known to the assessee and the order does not indicate any reasons in support of the decision to transfer the account despite the objection of the petitioner company, the order cannot be accepted - the order of transfer passed u/s 127(1) is set aside Decided in favour of assessee.
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2014 (8) TMI 636
Liability to pay capital gains - Capital gain arise in the year of entering into development agreement or not Held that:- While upholding the Tribunal's application of law, payment of consideration on the date of agreement of sale is not required, it may be deferred for future date - The element of factual possession and agreement are contemplated as transfer - When the transfer is complete, automatically, consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income for the assessment year when the agreement was entered into and possession was given - factually it was found that both the aspects took place in the previous year relevant to the assessment year 2003-04 the Tribunal has rightly held that the assessee is liable to pay tax on the capital gains for the assessment year Decided against Assessee.
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2014 (8) TMI 635
Advances made to rural branched u/s 36(1)(viia) - co-operative society - scheduled bank - Deduction of 10 per cent of the aggregate average advances - Applicability of definition of rural branch in Explanation (ia) to section 36(1)(viia) to co-operative banks Held that:- Rural branch is a branch which falls under Explanation (ia) to section 36(1)(viia) - The Explanation to section 5(c) clearly indicates which are the transactions which would not come within the meaning of banking business - Non-schedule bank means a banking company as defined under section 5(c) which is not a scheduled bank - co-operative bank cannot be considered as a scheduled bank as the Second Schedule to the Reserve Bank of India Act does not include any of the co-operative banks - though any company which transacts business of banking in India would come within the meaning of non-scheduled bank, by virtue of Explanation (1) under this, clause scheduled bank is excluded - So far as sub-clause (a) of clause (viia) of section 36(1), two types of deductions are provided to non-scheduled bank, a scheduled bank and a co-operative bank other than a primary agricultural credit society, etc. It is to be noted that the assessees are not primary agricultural credit co-operative society or other kind of bank so as to go out of the definition of cooperative bank under sub-clause (a) to clause (viia) of section 36(1) - No doubt, Explanation (ia) to section 36(1)(viia) defines what is a rural branch - It is with reference to a place and certain number of population - It refers to branch of a scheduled bank or a non-scheduled bank - co-operative bank also falls under the category of non-scheduled bank for the purpose of this section - reading of the entire section 36(1)(viia)(a) along with the Explanation would mean two kinds of deductions referred to in the section will be allowed to all those banks only if they satisfy the terms and conditions referred to in the provision - the authorities below were justified in opining that the benefit of deduction of 10 per cent of the aggregate average advances is applicable to co-operative bank also provided their rural branches have advanced such amounts - Such rural branch means a branch as explained under Explanation (ia), as opined in the decision of Lord Krishna Bank's case [2010 (10) TMI 860 - Kerala High Court] - Decided against Assessee.
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2014 (8) TMI 634
Demand made by revenue through ex-parte order u/s 144 Failure to produce documentary evidence Held that:- The AO framed an ex parte assessment u/s 144 of the Act as the assessee had failed to respond in spite of repeated notices the AO disallowed the agricultural income for want of proof and assessed the income from business - in spite of numerous opportunities having been provided to the assessee by the AO, the assessee had failed to produce any documentary evidence with regard to proof of agricultural land and sale of agricultural produce in order to substantiate his claim that the income was agricultural income - the claim of the assessee cannot be accepted. Doctrine of merger - Revision petition u/s 264 and appeal u/s 250 Held that:- CIT(A) dismissed the appeal as not maintainable - once the petitioner had taken recourse to revisional remedy u/s 264 of the Act and after the rejection of the petition, it was not open to have fallen back on statutory remedy of appeal under the Act Relying upon Orissa Rural Housing Development Corporation Ltd. v. Asst. CIT [2011 (12) TMI 230 - ORISSA HIGH COURT] - Applying the doctrine of merger, it was held that the assessee was precluded from approaching the appellate court u/s 246/246A of the Act against the assessment order assessee was unable to justify that when the assessee has already invoked the revisional jurisdiction u/s 264 of the Act as the order of the AO had merged into the order of the revisional authority, how appeal u/s 250(6) was maintainable before the CIT(A) Decided against Assessee.
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2014 (8) TMI 633
Legal obligation of Municipal Corporation to deduct surcharge on TDS - TDS was deducted u/s 194C revenue felt that the Municipal Corporation in addition to tax deducted at source at the rate of 2 per cent., should also have further deducted surcharge on the tax at 12 per cent. at source itself - surcharge came to be introduced by the Finance (No. 2) Act, 1991 - Held that:- Section 194C (1) and (2) of the Act as existed at the relevant point of time had cast no obligation on the assessee-Municipal Corporation to deduct any surcharge during the relevant years when payments were made to the contractors Relying upon Sriram Refregeration Industries v. ITO [2014 (4) TMI 277 - ANDHRA PRADESH HIGH COURT] - section 201(1A) of the Act has no application in the case of short deduction - when we say "even assuming" it does not mean that at the relevant point of time there was any obligation on the Municipal Corporation to deduct surcharge as the very obligation to collect surcharge was not in existence and the same came to be introduced only with effect from April 1, 1991, by the Finance (No. 2) Act, 1991 the order of the Tribunal is upheld Decided against revenue.
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2014 (8) TMI 632
Revision order passed by CIT u/s 263 Genuineness of gift Onus to prove the identity of parties - Held that:- The Commissioner is empowered to exercise jurisdiction where he is satisfied that the order of the AO is erroneous in so far as it is prejudicial to the interests of the Revenue - Following the decision in Malabar Industrial Co. Ltd. v. CIT [2000 (2) TMI 10 - SUPREME Court] - the pre-requisite to exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue - Mere identification of the donor and showing the movement of the gift amount through banking channels is not enough to prove the genuineness of the gift - Since the claim of gift is made by the assessee, the onus lies on him not only to establish the identity of the person making the gift but also his capacity to make a gift and that it has actually been received as a gift. Relying upon Tirath Ram Gupta v. CIT [2006 (9) TMI 166 - PUNJAB AND HARYANA HIGH COURT] - a gift cannot be accepted as such to be genuine, merely because the amount has come by cheque or draft through banking channels, unless the identity of the donor, his creditworthiness, relationship with the donee and the occasion are proved - Unless the recipient has proved the genuineness thereof, the gift can very well be treated to be an accommodation entry of the assessee's own money, which is not disclosed for the purpose of taxation - The Tribunal has fallen into an error while setting aside the order of the CIT asking for fresh assessment - However, there is no dispute of the fact that the donor, Smt. Kamlesh Ahuja, was the real aunt of the assessee and the amount of ₹ 1 lakh, as gifted by her can only be excluded from the purview of fresh assessment proceedings Decided in favour of Revenue.
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2014 (8) TMI 631
Power of Income-tax Settlement Commission u/s 245D(2C) full and true disclosure of income - Chapter XIX-A of the Act was amended with effect from June 1, 2007 - Held that:- application filed prior to June 1, 2007, would be deemed to be admitted provided the requirements of Chapter XIX-A of the Act as then existing are complied with. Requirement for proof of payment of tax and interest must be attached to the application - additional income disclosed - Held that:- if the Commission at the final hearing under section 245D(4) of the Act determines higher income, than that disclosed in the original application, the entire process will not be rendered bad only on account of failure to pay the tax along with the application as is subsequently determined by the Commission at the final hearing stage. - the requirement is only to pay the tax on the full and true disclosure of income made at the time of filing the application. Requirement of additional source of income - Held that:- There is no requirement that for an application to be entertained by the Commission, the applicant must declare a new source of income from that disclosed earlier to the Department. Whether case was pending - Held that:- It is very clear that the application for settlement has not been filed by STAR Ltd. for the assessment year 2000-01, as it is an issue pending before this court in an appeal from the order of the Tribunal. So far as the other parties are concerned, there is nothing in law which prohibits them from filing an application for settlement. Even respondent No. 2-STAR Ltd. can file an application for settlement in respect of the assessment year other than the assessment year for which the appeal is pending before this court. - all applications even pending before the Tribunal or in the appeal/revision before the authorities under the Act could be entertained by the Commission on the date when the respondents filed their application before the Commission on March 5, 2007. Application in respect of TDS - Held that:- At this prima facie stage before the Commission it appears that the application made by the respondents is not for the purpose of settling its liability to deduct tax at source but it is an application made, containing full and true disclosure of the petitioner's income which has not been disclosed before the Assessing Officer. Therefore, the aforesaid decision in the case of Shaw Wallace [2003 (6) TMI 19 - CALCUTTA High Court] would have no application to the present facts at this stage. - Decided against the revenue.
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2014 (8) TMI 630
Power of Income-tax Settlement Commission u/s 245D(2C) Commission postponed to deal with the validity of application - commission held that the objection raised by the petitioner (Revenue) would be considered at a subsequent stage, i.e., at the time of final hearing under section 245D(4) - full and true disclosure of its income by the assessee - Held that:- once it is held that the issue of true and full disclosure in the application for settlement is a jurisdictional issue and in the absence of its satisfaction jurisdiction cannot be exercised by the Commission, it follows that mere participation in the proceeding by the parties cannot by itself bestow the jurisdiction on the Commission - The exercise of jurisdiction by an authority when not so vested in it is open to challenge and participation in the proceeding will not confer any jurisdiction as held in Carona Ltd. v. Parvathy Swaminathan and Sons [2007 (10) TMI 606 - Supreme Court of India]. There is a statutory change consciously made by Parliament in 2007 in Chapter XIX-A of the Act in respect of application for settlement whose validity has to be decided under section 245D(2C) of the Act and cannot be postponed. Even if the application for settlement is declared to be valid in terms of section 245D(2C) of the Act, yet it would not estop/bar the Commission from rejecting the application for settlement at later date for non-disclosure of true and full information of the income or the manner in which income was derived. As the requirement of full and true disclosure of the income and the manner in which the income is derived is a requirement to be satisfied by the applicants at all times before the Commission. However, this by itself would not permit the Commission not to deal with the validity of the application at the stage of section 245D(2C) of the Act. Matter restored before the Commission to decide the validity of the applications for settlement dated January 31, 2013, filed by the applicants under section 245D(2C) of the Act after taking into consideration the report filed by the Commissioner (petitioner) under section 245D(2B) of the Act read with rule 6 of the Settlement Commission Procedure Rules - Decided in favor of revenue.
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Customs
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2014 (8) TMI 652
Denial of refund claim - Notification No.64/2008-Cus. came on 9.5.2008 - Retrospective effect or prospective effect - Held that:- Law is well settled in the case of CCE Vs. Sunwin Technosolution Pvt. Ltd. - [2010 (9) TMI 71 - SUPREME COURT OF INDIA] that benefit granted by notification shall not be retrospective. The goods went out of the customs purview prior to the date of notification shall, not enjoy benefit of above notification - Decided against assessee.
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2014 (8) TMI 651
Confiscation of goods - Misdeclaration of goods - Malafide intention to avail benefit of DEEC Scheme - Redemption fine - Held that:- earned counsel for the appellant fairly submitted that on the plea of mis-declaration with regard to grade and value of the goods, he is not seriously disputing the finding of the Commissioner of Customs as well as the Tribunal - Tribunal has, in fact, been lenient in reducing the redemption fine from ₹ 2,50,000/- to ₹ 1,00,000/- and penalty from ₹ 30,000/- to ₹ 5,000/- in a case of proven mis-declaration of goods with an intention to avail the benefit conferred under DEEC Scheme, which, in our considered opinion, justifies confiscation of goods and imposition of redemption fine and penalty. Considering the facts and circumstances of the case, we are of the firm view that the order passed by the Tribunal warrants no interference and the importer is not entitled to seek any further indulgence. - Decided against assessee.
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2014 (8) TMI 650
Duty demand - Coercive measure to compel demand - Held that:- The Petitions can be disposed of with a direction that the Respondents shall keep the coercive measures in abeyance till 22nd August 2014 to enable the Petitioners to approach the Hon'ble Supreme Court of India and seek appropriate interim relief in the pending proceedings. In the event any such applications are made and orders are passed therein, the parties to abide by the same. However, in the period we have specified, if no steps are taken by the Petitioners then it would be open for the Respondents to take such steps, as are permissible in law including pursuing the impugned communications - Decided in favour of assessee.
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Corporate Laws
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2014 (8) TMI 649
Jurisdiction of court - Dishonour of cheque - Whether Courts at Gurgaon holds the jurisdiction to entertain the appeal ince the notice as contemplated in Section 138 of the Negotiable Instruments Act, 1881 had been dispatched from Gurgaon - Held that:- It appears that the learned Judicial Magistrate, First Class (Special Court), District Gurgaon, Haryana, on 14.6.2010 issued Summons to the Appellant. The Appellant thereupon approached the High Court of Punjab & Haryana at Chandigarh, which passed the impugned order. On 23.9.2013, this Court issued notice and also ordered that proceedings before the Trial Court shall remain stayed. It is evident, therefore, that evidence, post-summoning, has not been recorded. Courts at Gurgaon do not possess territorial jurisdiction to entertain the present proceedings under Section 138 of the NI Act solely because, on the instructions of the Respondent, a legal notice of demand has emanated from that city. The Complaint be returned to the Complainant/Respondent for refilling in the appropriate Court at Bangalore, Karnataka. As mentioned in Dashrath Rupsingh, if the Complaint is re-filed in the appropriate Court in Bangalore within 30 days, it shall be deemed to have been filed within limitation. The interim orders stand recalled.
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Service Tax
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2014 (8) TMI 673
Condonation of delay - Cenvat credit - penalty under Rule 15 of the Cenvat Credit Rules, 2004 readwith Section 11AC - whether the appellant had received the order-in-original dated 16/03/12 in the month of March itself or as contended by them, they received this order on 18/06/12, when as per the endorsement on the last page of the order, a Xerox copy of the same was supplied to them - Held that:- It is seen that on the same day i.e. on 16/03/12, the Jurisdictional Range Officer had also addressed a letter to the appellant directing them to deposit forthwith the duty demand of ₹ 20,42,197/- confirmed against the appellant alongwith interest and penalty of equal amount imposed on them, but he did not endorse the copy of the adjudication order. Since on that day, the appellant had not received the order, after waiting for sometime, they addressed a letter on 13/04/12 to the Range office informing him that the order had not been received and with a request to supply the same. Moreover, in this case when on 13/04/12, the appellant had informed the Department that the order had not been received and if the order had been supplied forthwith, the appellant would have been able to file the appeal within time, but this was not done. In view of this, I hold that the date of receipt has to be treated as 18/06/12 and if the limitation period is counted from this date, the appeal has been filed within time. In view of this, the impugned order dismissing the appeal as time barred is not sustainable. The same is set aside and the matter is remanded to the Commissioner (Appeals) for decision on merits - Decided in favour of assessee.
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2014 (8) TMI 672
Denial of CENVAT Credit - Training & coaching service - Expenses incurred by way of brokerage for finding accommodation for its faculty - Held that:- CENVAT credit has been claimed by the Noticee in respect of Training and Coaching, Management Consultants and Convention Services' Noticee have utilized the credit on output services such as 1) maintenance of pond and garden, (2) Extension of Road, (3) Brokerage amount on account of purchase/lease of flats, (4) Fabrication, fencing of compound, (5) Jogging Track repairs. Noticee have claimed that the maintenance of pond and garden, extension of roads, fabrication, fencing of compound, jogging track repair services have been used by them in maintaining/renovating/repairing of their training campus in good running condition for purpose of providing output services of Training and Coaching, Management Consultants and Convention Services' and these activities relate to their business. Further services of brokerage for purchase/lease of flats are for procuring residential accommodation for their-in-house faculty members who take lectures in their training programme and this service is also sued for providing output service. On this point I have observed that unless and until the premises are maintained in good and running condition for the purpose of output services i.e. Training and Coaching, Management Consultants and Convention Services'. Expenses incurred for input service by the appellant by way of brokerage for finding accommodation for its faculty is related to its output service of providing training. The appellant cannot provide the output service of training without having the faculty available for the same. Thus the impugned order is set aside - Decided in favour of assessee.
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2014 (8) TMI 671
Refund under Rule 5 of the Cenvat Credit Rules, 2004 - Information Technology Software Services - Held that:- The ground no. (i), (ii) and (v) raised by Revenue in the appeals are to the effect that the value of taxable service exported does not tally with the figures shown in St-3 return. So far the above mentioned ground is concerned, the Revenue relies on the Order-in-Original but is unable to dispute the findings of the lower appellate authority and also the points urged in cross-objection field before the Tribunal. The next ground (iii) taken in the appeal is nexus is required to be proved of the input services used for services provided outside India, the same is required under condition No. 5 of Notification No. 5/2006. So far this ground is concerned, I find from the Order-in-Original that this was not the ground of rejection of refund, hence not sustainable. As the said finding of Commissioner (Appeals) has not been challenged, I hold that this ground is also not sustainable. No substantial question is raised vide ground Nos. (iv) & (vi) and the same stand rejected - Decided against Revenue.
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2014 (8) TMI 670
Demand of service tax - Classification of service - Manpower Recruitment and Supply Agencys Services or Cargo Handling Services - Held that:- There is a dispute in the classification of the service, can be decided only at the time of final hearing. Prima facie, we see merit in the argument of the applicants. In view of this observation, the applicants have made out a case of waiver of pre-deposit, as they are discharging their Service Tax liability under the category of Manpower Recruitment and Supply Agencys Services. Accordingly, waiver of pre-deposit of the entire amount of Service Tax, interest and penalty is granted and we stay recovery thereof during the pendency of the appeal - Stay granted.
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2014 (8) TMI 669
Demand of service tax - Erection, Commissioning and Installation Services - Held that:- All the activities undertaken by the applicants can be identified separately. Therefore, following the decision in the case of Commissioner of Central Excise, Raipur v. BSBK Pvt. Ltd. reported in [2010 (5) TMI 46 - CESTAT, NEW DELHI - LB], wherein this Tribunal has held that when the activities undertaken by the applicants are identifiable separately, then, the whole of the activity cannot be termed as composite contract. In the instant case also, the activities undertaken by the appellants can be identified separately, therefore, following the decision in the case of BSBK Pvt. Ltd. (supra), we find that the applicants have made out a prima facie case for 100% waiver of service tax, interest and penalty. Accordingly, we waive the requirement of pre-deposit of the entire amount of service tax, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.
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2014 (8) TMI 668
Waiver of pre-deposit - Installation of PCO booths - Held that:- Applicants are liable to pay Service Tax on the net amount they have received from the booth operator. Therefore, they are not liable to pay Service Tax on the gross amount received from the customers for the services provided by the booth operator - Accordingly, the appellants have made out a case for 100% waiver of pre-deposit of the impugned demands and, therefore, we waive the requirement of pre-deposit of the entire amount of Service Tax, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.
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2014 (8) TMI 667
Denial of refund claim - Bar of limitation - Held that:- except for a portion of the claim prior to more than one year from the date of receipt of the claim by the Revenue, the balance amounts claimed as refund would be admissible has to be upheld. Accordingly, the appeal is allowed to the extent of refund claims within one year from the date of export as per the notification and the matter is remanded to the original adjudicating authority for fresh consideration of the claims in terms of the trade notice issued by Commissioner of Central Excise & Service Tax, Dibrugarh - Decided in favour of assessee.
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2014 (8) TMI 666
Waiver of pre-deposit of Service Tax - Availment of CENVAT Credit - Works contract service - Held that:- On perusal of Rule 2A of Service Tax (Determination of Value) Rules, 2006, we do find that the said provisions start with the wordings Subject to the provisions of Section 67. If this is the case, we find that the provisions of Section 67 may also be applicable for valuation purposes. We also find prima facie force in the contentions raised by the ld. Counsel that the appellant had an option to discharge the Service Tax liability under the Works Contract Composition Scheme for payment of Service Tax - appellant has made out a prima facie case for waiver of pre-deposit of the amounts involved. Accordingly, the application for waiver of pre-deposit of balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal - Stay granted.
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2014 (8) TMI 665
Waiver of pre-deposit - Information Technology Literacy Course - Business Auxiliary Service - Held that:- Prima facie the activity of MKCL is not in the nature of business. Therefore, the service rendered by the applicants prima facie does not fall under Business Auxiliary Service. Accordingly, we waive the requirement of pre-deposit of entire amount of Service Tax, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.
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2014 (8) TMI 664
Input service credit - repair, maintenance and manpower recruitment services - Held that:- applicant has made out a prima facie case in their favour as these services have been availed by the applicant as manufacturer in the course of their business. Accordingly, we waive the pre-deposit of the entire amount of duty, interest and penalty and stay recovery during the pendency of the appeal. - Following decision of Commissioner of Central Excise, Nagpur v. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT] - Stay granted.
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2014 (8) TMI 663
Condonation of delay - Waiver of pre deposit - Bar of limitation - Head injury of Accounts Manager - Held that:- Probably no investigation has also been conducted as to whether this Accounts Manager was seriously ill or not. In such a situation, the affidavit filed and the medical certificate have to be accepted. No doubt, the Accounts Manager should have and could have handed over the paper before 25th and even when he was in bed rest, he could have handed over it to the company. But, he apparently did not do so. No doubt, it would appear that no sufficient care was taken by the Accounts Manager of the company and as pointed out the company also did not take care This is a case where the delay has occurred because of accident resulting in head injury. Certain amount of humanitarian and sympathetic approach is called for. Minor omissions/commissions mentioning the facts cannot be taken as ground for denying the justice. Under these circumstances, in the interest of justice and humanitarian ground and taking into consideration that the Accounts Manager met with an accident and suffered head injury, the delay is condoned - appellant has deposited entire amount of duty demanded with interest and treating the same as sufficient, the requirement of pre-deposit of balance dues is waived and stay against the recovery of the same is granted during the pendency of the appeal - Stay granted.
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Central Excise
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2014 (8) TMI 660
Clandestine manufacture and removal of Ingots without payment of duty - Allegation on the basis of electricity consumption - Revenue contends that manufacturing units are showing more electricity consumption for production per MT of MS ingots - Reliability on the case of R.A. Castings Put Ltd vs CCB reported in [2008 (6) TMI 197 - CESTAT NEW DELHI] - Difference of opinion - Matter referred to larger bench - Majority order - Held that:- it is evident that the demand alleging clandestine removal and suppression has been made mainly on the basis of the report of Dr. Batra, in preference to other available reports produced by the appellants which show higher consumption of electricity. Even the actual consumption found by the department on physical verification in the unit of the appellant was more than the highest reported by Dr. Batra. The raw material consumed as per findings of Commissioner comprised about 90% of Sponge Iron, which could have increased the power consumption as per available reports. Admittedly, the power consumption could have carried for various reasons which were placed before the Commissioner, and it was also contended that there was no evidence adduced for alleged clandestine removal. The various circumstances narrated in the impugned order however created doubt in the mind of the Commissioner. No incriminating statement recorded in the instant case has been brought to my notice by the department. In the matter of SRJ Peety, on being asked to clarify on higher consumption of electricity than in Dr. Batra's report, in his statement dated 03.05.2008, Shri. S.S. Peety gave many reasons such as unscheduled shut downs in supply of electricity and furnace, unskilled labour, furnace efficiency, model of furnace, units required in burning loss of inputs, power voltage fluctuation, inferior quality of scrap, tripping of electricity supply, power transmission losses, decrease in efficiency of plant and machinery and consumption of roughly 20% power in Auxiliary Load. He has not accepted the allegation of clandestine removal in his statement. Commissioner is not relying on the same and the findings of the Commissioner, as recorded earlier, have not been challenged by the Revenue. All these other allegations were also levelled in R.A. Casting (supra). It was further observed in R.A. Casting (supra) that it would be appropriate on the part of the Revenue to conduct experiments in the factory of the appellants and others and that too on different dates to adopt the test results as the basis to arrive at a norm, which can be adopted for future. None of the so called other evidences referred in the impugned Orders prove clandestine clearance. The primary evidence of department is admittedly excess electricity consumption based on benchmark adopted allegedly from report of Dr. Batra, which was already held to be arbitrary by Hon'ble Tribunal in RA Casting (supra). Thus, in my opinion the primary evidence relied in the impugned Order is itself inadmissible, and no other evidence in the instant case proves clandestine production and clearance to sustain the demand. It is contended by Revenue that furnaces installed in the factory of present appellants were in sound condition as compared to R.A. Casting (supra), however I neither could find any material in support of this argument, nor any such finding in the Orders impugned in the appeals. There can be no dispute on the fact that in adjudication proceedings, the charge of clandestine removal is definitely to be established on the basis of preponderance of probabilities. However, it cannot be merely on the basis of presumption and assumptions. Regarding the claim of the Revenue that subsequent to passing of impugned Orders the power consumption for manufacturing one MT of Ingots has reduced in factories of all the appellants, I am of the view that it cannot be a basis to sustain the findings in the impugned Orders by assuming that there could not be any reason for lower consumption of electricity during the subsequent period. I also agree with the finding of the Hon'ble Vice President that in any event, this additional material is also only of power consumption. Further, in Sarvana Alloys Steels Pvt. Ltd. [2011 (2) TMI 1211 - CESTAT, BANGALORE] similar order based on power consumption was held unsustainable and the appeal was allowed after considering inter alia the judgments in D. Bhoormull (1974 (4) TMI 33 - SUPREME COURT OF INDIA), Gulabchand Silk Mills (2005 (3) TMI 192 - CESTAT, BANGALORE), as also Hans Casting (1998 (3) TMI 298 - CEGAT, NEW DELHI). In A.K. Alloys, [2011 (10) TMI 427 - CESTAT, NEW DELHI] the Tribunal followed the decision of R.A. Casting (supra) and allowed the appeal, as the demand was based mainly on the evidence of power consumption without any evidence of clandestine removal - judgment in R.A. Casting (supra) would be squarely applicable in the facts of the instant case in all the appeals - Decided in favour of assessee.
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2014 (8) TMI 659
Clandestine manufacture and clearance of goods - removal of pan masla/gutka - Held that:- appellants could not made different stands at different print of time. We note that this is a case of clandestine manufacture and clearance and therefore no adjustments could be considered. We note that the matter pertains to two raids and for two different manufacturing premises of which only one was registered with the Revenue for payment of Excise duty. Intent to evade duty has clearly been manifested. Further the appellants never produced relevant purchase / sale records clearly indicating that most of the activities were undertaken with fraudulent intent to evade duty. Appellants have failed to show that intent to evade was not there. We do not find any ground to interfere and accordingly uphold the demand. Invocation of extended period of limitation - Held that:- Appellant contention that the extended period was not invokable as no case of clandestine removal was made has no force. As noted above, this is a case of clandestine manufacturing and clearance where gutka was being cleared without bills/ invoices and one unit of the appellants in the same name and style was not even registered with the Central Excise department. Mens rea was clearly manifested indicating intent to evade and to defraud governmental revenues. Penalty - it has clearly come up that M/s Narendra products have indulged in clandestine manufacture and clearance of Gutka. There were having one declared unit and they have been running a additional unit in the same name and style and that too without registration with Central Excise department. Clandestine production and clearance from unregistered unit clearly proved their intentions to defraud government revenue. Once fraud is committed, it vitiates everything. Above discussions have clearly brought out facts relating to clandestine manufacture and clearance. In view of above, extended period was also rightly invoked. Accordingly, this is fit case for imposition of penalty under Section 11AC - Decided against assessee.
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2014 (8) TMI 658
Valuation - Transaction value or MRP based value -ceramic tiles - appellants defence was that once they have declared retail sale price of such goods duty is leviable under section 4A of Central Excise Act, 1944 but not under section 4 of the said Act - Commissioner concluded that such clearances were not eligible for valuation under section 4A of the Act - Held that:- In respect of exemption under Rule 34 of the PC Rules, 1977, it has been observed that MRP declaration was not required based on the decision of Tribunal in the case of CCE, New Delhi vs. Trishul Research Pvt.Ltd.- [2002 (4) TMI 130 - CEGAT, COURT NO. I, NEW DELHI] wherein it has been held that soap supplied to hotel industry on contracted prices required no declaration of MRP when such soap was not to be sold but is issued to the guests who were staying in the hotel, valuation of such soap was to be done under section 4 of the Act. On the basis of same premise, it has been observed that different class of buyers viz. Builders/contractual/ industrial/hospitals, hotels etc. were covered within the term industry and valuation of such ceramic titles was correctly covered under section 4 of the Act as per law laid down in Trishul Research case referred to supra. - Decided against the assessee. Extended period of limitation - Held that:- Valuation was done by appellant under section 4A with the sole intention to evade payment of duty as is revealed by the fact situation of the case. Suppressing of material facts was manifested resulting in invokation of extended period in terms of first proviso to section 11A of the Act. Once suppression was manifested, appellant was liable to the imposition of penalty and plea of time bar fails - Commissioner has rightly arrived at the conclusion that assessment of goods supplied to bulk buyers should be done under section 4 and not under section 4A. Invokation of extended period of limitation and consequent imposition of penalty under section 11AC is justified - Decided against assessee.
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2014 (8) TMI 657
Valuation of goods - manufacture and supply of Industrial gases viz. Oxygen, Nitrogen, Hydrogen, Helium, Argon and also mixture of these gases - inclusion of cylinder rental and maintenance charges - inclusion of excess amount of transportation charges - classification of the medical grade oxygen - Cenvat Credit in respect of cryogenic tank - Held that:- where the gases were supplied in the cylinders brought by the customers, it is not disputed that the gases, in question, were marketable as such in as much as a substantial quantity of the gases was being supplied in tankers as well as through pipe line and also in the cylinders brought by the customers and as such, the packing of the gases into cylinders is not necessary for making the gas marketable - In view of this factual matrix, the ratio of the Tribunal's decision in the case of CCE Vs. Grasim Industries Ltd. reported in [2014 (4) TMI 650 - CESTAT NEW DELHI] would be applicable to this case and these charges would not be includible in the assessable value. - Decided in favour of assessee. Inclusion of differential freight charges - Held that:- even if the appellant make profit from their activity of arranging transport by charging higher amount than the expenses actually incurred on transportation, the differential freight would not be includible in the assessable value and in this regard, the Apex Court judgement in the case of Baroda Electric Meter [1997 (7) TMI 126 - SUPREME COURT OF INDIA] would be applicable. - Decided in favour of assessee. Classification of medical grade oxygen - Held that:- When the tariff does not provide that the classification would be determined by the condition of the end use, the condition of end use cannot be brought in for deciding the classification and just because the medical grade oxygen manufactured by a manufacturer and sold by him to his customers was further sold to other dealers for non-medical, use the classification of the oxygen manufactured and cleared by the manufacture cannot be changed to non-medical oxygen. - notwithstanding the statement of some of the dealers that the medical grade oxygen purchased by them from the appellant company was sold by them to some other persons for non-medical use the oxygen gas, in question, would be correctly classifiable as medical grade, oxygen under sub-heading 2804.11, as the fact that it is more than 99.5% pure is not disputed. - Decided in favour of assessee. As regards the Cenvat Credit demand on the used cryogenic tanks, which have been removed, it is not disputed by the department that the appellant at the time of clearance of the used cryogenic tanks had reversed the Cenvat Credit equal to the amount of duty paid on the transaction value. In view of this, no amount over and above amount already reversed would be recoverable from the appellant in view of the judgments of the Hon'ble Madras High Court in the case of CCE, Salem Vs. Rogini Mills Ltd. (2010 (10) TMI 424 - MADRAS HIGH COURT) and the judgement of the Hon'ble Punjab & Haryana High Court in the case of Raghav Alloys Pvt. Ltd. (2010 (4) TMI 294 - PUNJAB & HARYANA HIGH COURT). - Decided in favour of assessee.
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2014 (8) TMI 656
Denial of CENVAT Credit - Whether where only paper invoices are issued without the accompaniment of goods, cenvat credit could be availed by the recipient and whether penalty could be imposed for such fraudulent activity of issue of fake invoices - Held that:- M/s. Khemka Ispat Ltd. have not undertaken any manufacturing activity and therefore, the question of their supplying any goods on the authority of invoices did not arise. Apparently the said party was only a manufacturer on paper. Therefore, the transactions between the said manufacturer and the respondents-dealers, were only paper transactions without actual movement of goods, thus fake in nature. The original authority rightly held that the concerned manufacturers of final products who have taken Cenvat credit based on invoices, were not eligible for Cenvat credit and were liable for imposition of penalties. The invoices issued by M/s Khemka Ispat were not legal invoices for the purpose of availment of cenvat credit and hence all consequent invoices issued on the basis of invoices of M/s Khemka Ispat were also not valid documents for the purpsose of availment of credit irrespective of the fact as to whether the subsequent sale by dealers were with or without material and whether the payment has been recorded as made against the cenvat by these dealers shown on such invoices of M/s Khemka Ispat. Under Rule 26 of Central Excise Rules, penalty can be imposed only on the person who has acquired possession or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with, any excisable goods which he knows or has reason to believe are liable to confiscation - applicants are registered under the Central Excise Rules as registered dealer and by virtue of rules they are authorized to issue cenvatable invoices to their customers in respect of the goods supplied by them. In the present case, the applicants issued invoices without supplying any goods on the strength of which credit has been availed by their customers. The applicants are duty bound to maintain time and correct stock of excisable goods and they are duty bound to issue invoices which shall contain description, classification, time and duty of removal, rate of duty, quantity and value of goods and duty payable thereon. In these circumstances, as the applicant being a registered dealer has not complied with the condition of the Central Excise Rules, prima facie, I find that it is not a fit case for waiver of penalty. Undisputedly, the credit was sought to be passed on without invoices being accompanied by the goods. Such an act is certainly a major violation of the provisions of law. Being so, in such cases, question of imposition of penalty upon the dealer - first stage or second stage - who facilitated such illicit transaction, cannot be faulted with. These dealers have been instrumental in committal of fraud to defraud the revenue. Decided against assessee.
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2014 (8) TMI 655
CENVAT Credit - Rule 6 of CCR, 2004 - Common inputs/input services for manufacture of dutiable and exempted goods Cement cleared to contractors of the developers of SEZ without payment of duty Held that:- The finished goods cleared by the appellants to contractors of SEZ units/developers without payment of duty during the period in dispute are not exempted goods' within the meaning of Rule 2(d) of the Cenvat Credit Rules, 2004. Finished goods manufactured and cleared by the appellants to the contractors of SEZ units/ SEZ developers are subject to a rate of duty under the First Schedule to the Central Excise Tariff Act, 1985 and are not wholly exempt from payment of duty. Further, there is no notification issued under Section 5A(1) of the Central Excise Act, which grants exemption excise duty to good manufactured and cleared by a DTA unit to the contractors of SEZ units/SEZ developers. Therefore, it is submitted that both the conditions required to be fulfilled for the goods in question to qualify as exempted goods' under Rule 2 (d) of the Cenvat Credit Rules, are not satisfied in the present case. Hence, the finished goods cleared by the appellants to the contractors of SEZ units/SEZ developers are not exempted goods. Accordingly, the provisions of Rule 6(1), 6(2) and 6 (3) of Cenvat Credit Rules, 2004 are not attracted in the present case. amendment under Rule 6(6)(i) made on 31.12.2008 is clarificatory in nature and is applicable retrospective from the date when the 2004 Rules were implemented. Accordingly, the impugned orders are set aside - Following decision of UOI Vs. Steel Authority of India Ltd. [2013 (5) TMI 460 - CHATTISGARH HIGH COURT] - Decided in favour of assessee.
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2014 (8) TMI 654
Denial of CENVAT Credit - input services on advertisement charges - product manufactured by the other unit - Held that:- Credit cannot be denied merely because the service tax on advertisement charges was paid by the Unit-I for the advertisement of product of Unit-II, while both are under the umbrella of the same company. At any event, Unit- I could be registered as input service distributor under the Rules 2004. The Tribunal held that credit should not be denied for such procedural infraction when substantial part of the rule is complied. The another aspect of this case is that Unit-I, appellant herein, is eligible to avail the credit on service tax paid on advertisement charges. The reason for denial of the credit is that the contents of the advertisement is in respect of product of other unit. It is contended by the appellant that the advertisement charges incurred by the appellant had been added to the cost. The Hon'ble Bombay High Court in the case of M/s. Coca cola India Pvt. Ltd. [2009 (8) TMI 50 - BOMBAY HIGH COURT] allowed the credit of service tax paid on advertisement. In that case, the appellant manufactured non-alcoholic beverage bases known as "concentrates". The concentrate was sold by the appellant to bottling companies who, in turn, sold aerated beverages from the concentrates to distributors who, in turn, sold to retailers for the ultimate sale to the consumer. The advertisement and sales promotion activities including market research was undertaken by the appellant. Revenue denied the credit on the ground that the advertisement did not relate to "concentrates" manufactured by the appellant. - it is apparent that input service credit on advertisement charges are related to the business of the assessee. Taking into account of the facts and circumstances of the present case, in so far as both the units are under the same manufacturer and the input service credit is related to the advertisement charges, "relating to business" of the same assessee, there is no reason to deny the input service credit to the appellants - Decided in favour of assessee.
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2014 (8) TMI 653
Condonation of delay - Inordinate delay of 406 days - Improper advise given by Advocate - Huge amount due on assessee - Held that:- as such and so stated in the Affidavit-in-reply filed on behalf of the respondents that as such the authorised person of the Company was the ex-employee of the department and therefore, the contention on behalf of the petitioners that he advised that before filing an appeal, the Company will have to deposit the entire amount of duty and penalty and since the Company was not in a position to deposit the entire amount of duty and penalty, they did not prefer appeal, cannot be accepted and is rightly not accepted by the learned tribunal. At this stage, it is also required to be noted that as such the aforesaid is not supported by any other evidence and/or affidavit of the concerned person. Even the conduct on the part of the petitioners so stated in the Affidavit-in- reply disentitles the petitioners to any discretionary relief in exercise of powers under Article 226 of the Constitution of India. More particularly when there is a huge liability of approximately more than ₹ 8 Crores and even now there is no property of the Company as the same has been sold and alleged to have been purchased by the close relatives of the petitioners and even in the premises of the petitioner No.1 Company, other Companies are running and they applied for Registration Certificate, we see no reason to interfere with the impugned order passed by the learned tribunal - Condonation denied.
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CST, VAT & Sales Tax
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2014 (8) TMI 662
Assessment on the value of land, External Development Charges (EDC), Infrastructure Development Charges (IDC), Licence fee, Processing fee etc - Held that:- VAT is sought to be imposed on the items other than the goods, which is not legally tenable. It was argued that in such circumstances, the assessment order is totally without jurisdiction and the alternative remedy of appeal would not be effective remedy. - counsel for the petitioner is directed to furnish the requisite number of copies of the paperbook to the learned State counsel during the course of the day.
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2014 (8) TMI 661
Detention of goods - relevant documents including Form 38 etc. were not available either with Transporter or with authorities managing or supervising godown during survey - Held that:- Inspection was made on 7.12.2013. The show cause notice was issued on 12.12.2013. There was a gap of 5 days but during this entire period, no attempt was made on the part of Revisionist or else to approach the authorities concerned along with documents to show that the genuine documents were already there but for some valid reasons, could not be shown at the time survey was conducted on godown. No plausible reason or explanation has been given in this regard. It is true that reply has been submitted within time prescribed in the show cause notice, but the fact remains that documents for the first time has come before the authorities concerned along with reply dated 23.12.2011 and from the date of survey till the date of reply, there is a gap of more than 15 days. Therefore, the adverse inference drawn by authorities concerned in passing the order impugned in this Revision cannot be said to be wholly improbable in the facts and circumstances of this case. These are findings of fact recorded by the authorities and I do not find any material on record to show any perversity therein. It is no doubt true that mere non availability of document, as such, may not be a justification for seizure of goods but then there has to be an attempt on the part of Dealer to immediately produce the document before authorities concerned. In the present case it is sought to be explained that documents were ready and available with representatives of godown yet could not be shown to Survey Authorities. Reasons therefore is not provided - Decided against assessee.
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