TMI Tax Updates - e-Newsletter
August 23, 2016
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:
Credit of TDS can be given only in the hands where income therefrom is subjected to tax. If accrual of income in respect of the receipts received dejure by joint venture is shifted to a member of the joint venture through an overriding title, then credit of TDS in respect of such receipts should be considered in the hands of that member of the joint venture in whose hands such income is found assessabl - HC
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Income Tax:
Disallowance u/s.40A(2)(b) being paid by the assessee to the Excise Department on behalf of its sister concern - The assessee route collection and payment of excise duty through its trading and profit and account - No additions - HC
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Income Tax:
Addition of income being gift of India Millennium Deposit received as unexplained credit u/s 68 - genuinity stands proved - no addition - AT
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Income Tax:
The foreign travel by the Directors was to break the monotony of the daily work and therefore it is not the case of the assessee that the foreign trip of the Directors were for any business purpose - AT
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Income Tax:
Revenue is entitled for interest on outstanding amount of TDS only till the date of actual payment of TDS by the assessee to the Credit of Central Government and not till the date of framing of the order on 31-03-2011 by the AO u/s 201(1) and 201(1A) of the Act. - AT
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Income Tax:
Penalty u/s 271B - delay in submitting audit report - AO has not given any adverse finding that it affected the proper computation of income - the breach remains a technical breach of the procedural requirement - No penalty - AT
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Income Tax:
Accrual of income - income can be said to accrue only when it becomes due and must be accompanied by corresponding liability of the other party to pay the amount and only then it can be said that for the purpose of income-tax that the income has accrued to the assessee - AT
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Customs:
Request for supply of non-RUD before adjudication of the dispute - Since the appellant insisted that non-RUDs and the assessed copies of bills of entries are relevant for proper adjudication of the matter, the same cannot be denied, which will amount to gross and flagrant violation of the principles of natural justice. - AT
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Customs:
Export of handicraft item - wooden furniture - Since the condition of the notification have been substantially complied with by the appellant and the competent authority has certified the said aspect, the custom department cannot question the genuineness or authenticity of such certificates - AT
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Service Tax:
Business auxiliary services - reverse charge mechanism - The service provider is not situated outside India - No case was set up by the department that in the present case, such reverse charge mechanism applies. - Demand set aside - HC
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Service Tax:
Self adjustment of service tax liability with excess tax paid earlier - This is not a case where the amount sought to be adjusted falls under the category of excess payment on account of wrong classification, valuation or claiming of an exemption. This is a plain and simple case of payment of tax where no tax is required to be paid as no service was provided on which fact, there is no dispute. - Demand set aside - AT
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Central Excise:
Rejection of cross objections as time barred - in the Act, no such time period is prescribed. Time fixed by the learned Appellate Authority was fixed by him and there was no statutory provisions against this time period fixed by him - Appellate Authority and Tribunal erred while taking the cross objections also as time barred. - HC
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Central Excise:
Valuation - the goods sold to interconnected undertaking have to be assessed to duty at the same value at which the said goods are sold to independent whole sale buyers. - AT
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Central Excise:
Captive consumption - that in case duty is paid on the moulds on its transfer to Noida, such duty will be available as cenvat credit to the recipient factory inasmuch as the original and the destination factory belong to the same manufacturer and in fact since the former merged with the later, the whole exercise will lead to the revenue neutral situation - no demand - AT
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Central Excise:
nvat credit - received only invoices without the receipt of inputs in question - the denial of Cenvat Credit on the basis of investigations conducted at the third party end cannot be adopted as the sole basis for denial of credit. - AT
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Central Excise:
Excisability - Dolochar - Dolochar arises as a combination of Iron Ore, Dolomite and unburnt pieces of coal during the process of manufacture of Sponge Iron - No duty liability - AT
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Central Excise:
Cenvat credit - since on the date of receipt of capital goods, the final products were chargeable to nil rate of duty, the appellant becomes in-eligible for availing the credit of duty paid on the capital goods - AT
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2016 (8) TMI 777
Credit of TDS - whether the JV was no more in existence - Held that:- Income after 02.09.2002 really belonged to PEL in respect of the work carried out by it after 292002. Therefore, even if joint venture has declared income from work carried out after 02.09.2002 till 31.03.2003 as its income, it does not prevent the revenue from taxing it in the hands of PEL as it is a right person in whose hands income, after supplementary agreement was executed, could be taxed. We have already held that no AOP continued to be in existence after 02.09.2002 as one member has lost interest in earning income for itself. Unless both the parties have common interest in earning income, no AOP can be said to be in existence. In view of this, if any tax or interest has been paid by joint venture during A.Y. 2003-04 or even after 2004-05, the credit of the same should be transferred to PEL where that income is assessable. Our view is that credit of TDS can be given only in the hands where income therefrom is subjected to tax. If accrual of income in respect of the receipts received dejure by joint venture is shifted to a member of the joint venture through an overriding title, then credit of TDS in respect of such receipts should be considered in the hands of that member of the joint venture in whose hands such income is found assessable. - Decided in favour of the assessee
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2016 (8) TMI 776
Rejection of book result - estimation of sale and G.P - Held that:- The books of accounts of the assessee were periodically checked by the revenue authorities. It appears that in the subsequent year i.e. in assessment year 199596, the same G.P. rate has been accepted by the Department. It is a fact that the cost of raw materials has increased. It is also seen that 100% goods are sold to its sister concern and therefore the question of GP does not arise. The A.O. could not find that the assessee had sold finished goods at a lesser price to its sister concern. In our opinion, low profits and absence of regular stock register are not sufficient reasons for rejection of the accounts of assessee. Hence, the CIT (A) and Tribunal were justified in deleting the addition. Both the authorities below have considered the materials placed before them and we see no reason to interfere with the same. - Decided in favour of assessee Disallowance u/s.40A(2)(b) being paid by the assessee to the Excise Department on behalf of its sister concern - Held that:- The assessee company exclusively marketed its product through its sister concerns namely Babul Marketing and Babul Agencies. Accordingly assessee company collected excise duty and paid the same to the Central Excise Department as against the collected dues from these parties. The excess payment was made. The assessee route collection and payment of excise duty through its trading and profit and account. In this view of the situation, we find that there is no infirmity in the decision of CIT (A) vide which such disallowance has been deleted as the present addition is not falling within the ambit of section 40(A) (2)(b)
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2016 (8) TMI 775
Addition of income being gift of India Millennium Deposit received as unexplained credit u/s 68 - Held that:- We are bound by the positive evidences which are available on record and form a complete chain of events. Here, we accept this gift as genuine because the identity and the creditworthiness of the donor have been established on record. The reason for making this gift is also stated and its genuinity stands proved. Entire evidences, which have been referred to above like the declaration of gift, affidavit of donor, direct letter sent to AO, statement on oath both of donor and the donee, proof of source with further evidence, inter alia, go to prove the claim of the assessee. Therefore, we delete the impugned addition. Further, gift in question does not fall within the ambit of Section 56(2)(v) of the Act and same is exempt - Decided in favour of assessee
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2016 (8) TMI 774
Transfer Pricing Adjustment on account of interest on delayed realization of marketing expenses from Associated Enterprises (AEs) - Held that:- The transaction is otherwise capable of generating income but due to the related parties decided not to charge or pay to each other the basic character and nature of transaction would not change. Hence we do not find any substance in the arguments and propositions raised by the ld. counsel for the assessee that provisions of Chapter X are not applicable in this case. Extending credit period for realization of sales to the AE is a closely linked transaction with the transaction of providing services to the AE and therefore cannot be treated as an individual and separate transaction of advance or loan. Accordingly, we direct the A.O/TPO to redo the exercise of determination of ALP by considering the credit period allowed in realization of sales proceeds as closely linked transaction with the transaction of providing services to the AE and therefore both has to be clubbed and aggregated for the purpose of determination of ALP. Disallowance of electricity expenses - Held that:- In the case of the assessee on hand, no employment/service condition was relied upon or produced by the assessee either before the authorities below or before us to show that it was an obligation of the assessee company to pay the electricity bill of the residence of the Director. Accordingly, in the facts and circumstances of the case, we do not find any reason to interfere with the orders of the authorities below. Disallowance of interest of capital work-in- progress - Held that:- There is no quarrel on the issue that if capital business asset is acquired by using the borrowed fund, then interest on such borrowed fund is allowable under Section 36(1)(iii) of the Act. However, in the case on hand it is not clear whether the capital work in progress is for acquisition of new capital asset or the extension of the existing business of the assessee. Further the assessee has claimed before us that the assessee is having sufficient non- interest bearing fund. Therefore no disallowance of interest was contended before us. Since the Assessing Officer has given only a passing reference without examining the details of the availability of the assessee's own fund therefore in the facts and circumstances of the case, we are of the opinion that this issue requires a proper examination and verification of the fact with regard to the availability of sufficient fund with the assessee for the purpose of capital work in progress. Accordingly, we set aside this issue to the record of the Assessing Officer for reconsideration and adjudication after considering the relevant facts as well as the contentions of the assessee Disallowance of software expenditure as capital in nature - Held that:- We find that the expenditure incurred for system development in relation to Tally Ascent which is a tool for the assessee to develop further accounting software and therefore undisputedly the said expenditure is having an enduring benefit for a long period of time. Similarly, the expenditure on Tally dictionary and manual in various languages is also one time expenditure for creating/acquiring the software to be used in long run. Accordingly, we do not find any error or illegality in the order of the authorities below treating these expenditure as capital in nature. However, since the Assessing Officer has disallowed the claim by treating the same as capital in nature, consequently, the depreciation on the said amount is allowable as per the rate applicable. Accordingly, we direct the Assessing Officer to allow depreciation on this amount. Disallowance of foreign expenses - Held that:- It is clear from the explanation furnished before the Assessing Officer that the foreign travel by the Directors was to break the monotony of the daily work and therefore it is not the case of the assessee that the foreign trip of the Directors were for any business purpose. In the absence of any terms and conditions of the service of the Directors that they will be allowed to travel for personal foreign trip, this expenditure cannot be considered as laid out wholly and exclusively for the purpose of business of the assessee as per section 37(1) of the Act. Accordingly, we do not find any error or illegality in the orders of the authorities below. Disallowance of claim of bad debts - Held that:- In the case on hand undisputedly the debt was taken into account in the hand of the assessee for the earlier assessment year and thereafter it was transferred to the subsidiary and again retransfer to the assessee. Therefore, the character of debts will not change merely because it was transferred and retransferred when all other conditions are satisfied as required under Section 36(1)(vii) and under Section 36(2) of the Act. In view of the above facts and circumstances of the case as well as the various precedents stated above, we are of the considered opinion that when the claim of bad debts written off in question was an allowable claim against the income of the assessee prior to the transfer and was also allowable claim in the hands of the subsidiary post transfer then the retransfer of the said debts to the assessee as per the agreement between the parties would not change its character from allowable deduction under Section 36(1)(vii) to a non-allowable capital loss. Accordingly, we hold that the claim of the assessee on account of non-realisable sundry debtors written off is allowable.
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2016 (8) TMI 773
Non-deduction/payment of TDS u/s 194C, 194J and 194I - levy of interest u/s 201(1A) against the assessee from April 2005 to March 2011 i.e. till the date of the order dated 31.3.2011 passed by the AO u/s 201(1) and 201(1A) - Held that:- The provisions of Section 201(1A) of the Act are very clear that interest can only be charged till the date on which such tax was actually paid by the assessee. We are of considered view that interest being compensatory in nature, the assessee is liable to pay interest u/s 201(1A) of the Act till the date of actual payment of TDS by the assessee to the credit of Central Government and we do not see that how Revenue is aggrieved once outstanding TDS amount stood duly paid by the assessee to the Credit of Central Government and thus we order that Revenue is entitled for interest on outstanding amount of TDS only till the date of actual payment of TDS by the assessee to the Credit of Central Government and not till the date of framing of the order on 31-03-2011 by the AO u/s 201(1) and 201(1A) of the Act. We order accordingly.
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2016 (8) TMI 772
Penalty u/s 271B - violation of provisions of section 44AB - whether there is a reasonable cause for the delay on the part of the appellant to submit the audit report before the due date of filing the return of income? - assessee being a society set up under the Societies Act, 1958 - Held that:- The assessee’s belief that being a society running educational institutes is not carrying on business is a reasonable belief which is fortified by subsequent grant of registration under section 12A by the CIT. Even though grant of registration u/s 12A is not a basis that the income of the assessee would be fully exempt or the assessee wouldn’t be required to file its return of income, it is atleast a reasonable basis to hold that the provisions of section 44AB are not attracted. Basis such belief, where the provisions of section 44AB have not been complied with, it is a matter where the assessee has shown reasonable cause and the AO should have exercised his discretion in favour of the assessee in not levying the impunged penalty. Further, for the reason that there was a delay in submission of audit report where section 44AB is attracted, the AO has not given any adverse finding that it affected the proper computation of income in terms of provisions of the Act or any claim to any deduction by the assessee under any provisions of the Act. In such event, the breach remains a technical breach of the procedural requirement as the intent behind the introduction of section 44AB have been fulfilled which is basically to help support the AO to compute true income in the hands of the assessee. Thus we are of the view that penalty u/s 271B cannot be levied in the instant case hence this same is deleted - Decided in favour of assessee
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2016 (8) TMI 771
Disallowance of expenses relating to Right to use of land and plantation and horticultural expenses - Held that:- AR has submitted that the expenses have not been incurred during the year, but have been incurred in earlier years and the amortised portion of expenses has been claimed. Before us, ld.AR has not placed any order in support of its claim that though the expenses have not been incurred during the year but since the amount has been amortized, the expenditure is allowable. Further, ld.AR also could not controvert the findings of AO and ld.CIT(A). In view of the aforesaid facts, we see no reason to interfere with the order of ld.CIT(A) and thus this ground of Assessee is dismissed. Disallowance of amortization of lease charges - Held that:- We find that the ld.CIT(A) while upholding the order of AO has noted that the lease-deed nowhere indicated that the payment made was in the nature of rent and, on the contrary, the payment was termed as cost of land and further the amount was non-refundable. He has further given a finding that the claim of the assessee was in respect of amount paid towards purchase of land and not towards lease-rent. Before us, ld.AR has not placed any material on record to controvert the findings of ld.CIT(A). Further, the expenses have not been incurred during the year but were incurred in past. In view of the aforesaid facts, we see no reason to interfere with the order of ld.CIT(A) and thus this ground of Assessee is dismissed Accrual of income - Non-consideration of the shortfall in the minimum quantity amount as income of the assessee - Held that:- It is a fact that assessee is following mercantile system of accounting, but income can be said to accrue only when it becomes due and must be accompanied by corresponding liability of the other party to pay the amount and only then it can be said that for the purpose of income-tax that the income has accrued to the assessee and for this proposition, we rely on the decision of Hon’ble Apex Court in the case of CIT vs. Excel Industries Ltd. reported in (2013 (10) TMI 324 - SUPREME COURT ). Before us, Revenue has not placed any material on record to demonstrate that against the amount which is due is Assessee’s hand there is a corresponding liability of the payer, to pay the amount to the Assessee. In view of the aforesaid facts and in the absence of any contrary binding decision in favour of the Revenue, we are of the view that no income can be said to have accrued to the assessee and therefore the amount of shortfall in the minimum guaranteed quantity amount cannot be brought to tax. Thus this ground assessee’s appeal is allowed.
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2016 (8) TMI 770
Deduction u/s 80HHC - excluding the hiring charges and operating charges from the profits of the business of the Company - Held that:- This appeal is already settled by the judgment of this Court in the case of CIT v. Nirma Ltd., [2014 (10) TMI 388 - GUJARAT HIGH COURT ] . Learned Standing Counsel for the Revenue was not in a position to point out any distiguishing feature, which may warrant a different view. Consequently, Question is answered in favour of the assessee and against the Revenue Interpretation of Section 80HHC - Taxation of interest receipts as income assessable under the Head Income from other sources - Held that:- Ninety per cent of not the gross rent or gross interest but only net interest or net rent, which has been included in profits of business of assessee as computed under head “Profits and Gains of Business or Professions”, is to be deducted under Clause (1) of Explanation (baa) to Section 80HHC for determining profits of business. Learned Standing Counsel for the Revenue was not in a position to point out any distiguishing feature, which may warrant a different view. See M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) [2012 (2) TMI 101 - SUPREME COURT OF INDIA] - Decided in favour of the assessee and against the Revenue. Levy of Section 234A, 234B and 234C - Held that:- Apex Court in the case of CIT v. Bhagat Construction Co. P. Ltd. & Anr., [2015 (8) TMI 621 - SUPREME COURT ] wherein, it has been held that under the provisions of Section 234B, the moment an assessee liable to pay advance tax has failed to pay such tax or where the advance tax paid by such an assessee is less than 90 per cent of the assessed tax, the assessee becomes liable to pay simple interest at the rate of one per cent for every month or part of the month. The levy of such interest is automatic when the conditions of Section 234B are met. Learned counsel for the assessee was not in a position to point out any distiguishing feature, which may warrant a different view. Consequently, Question is answered in favour of the Revenue and against the assessee. Levy of interest under Section 234D - Held that:- Addition of explanation (2) to section 234D of the Act by Finance Act, 2012, with retrospective effect from June 01, 2003, is made applicable even to the period under assessment year 2004-2005. In respect of excess refund granted to the assessee under section 143(1) of the Act, the interest was payable by the assessee even if it was received prior to June 01, 2003, so long as the proceedings of the concerned assessment year for which the refund was granted was completed after June 01, 2003. The Bombay High Court held the explanation 2 to section 234D of the Act as declaratory/ clarificatory in nature. The same being declaratory/ clarificatory, the same was held to be applied with retrospective effect. See CITII v. Gujarat State Financial Services Ltd.[2014 (2) TMI 1249 - GUJARAT HIGH COURT] - Question is answered in favour of the Revenue and against the assessee.
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2016 (8) TMI 769
Re-opening of assessment - TDS u/s 195 - Held that:- It was only after such detailed scrutiny that the Assessing Officer passed the order of assessment in which he made no additions on the ground of failure to deduct tax at source. It is true that he has not discussed this issue actively in the order of assessment. However, this would not change the position insofar as the question of scrutinizing the issue is concerned. Any attempt on his part to reopen the assessment would thus be on a change of opinion since no fresh or new material has come on record, as can be seen from the reasons recorded in which Assessing Officer referred to ‘having noticed such facts on verification of the records. - Decided in favour of assessee.
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2016 (8) TMI 768
Addition u/s.69B - understatement of the cost of imported machinery - Tribunal deleted the addition - Held that:- Tribunal has considered the provisions of Section 69B of the Act and has come to the conclusion that the onus is on the revenue to show that the assessee has expanded extra amount i.e. the amount invested by the assessee is more than the amount as recorded in the books of account. The Tribunal has concluded that the revenue has failed to discharge the burden of proof that the assessee has invested US $ 53,75,000 in the purchase of plant and machinery. We are in complete agreement with the findings of the Tribunal that the revenue has not been able to bring any evidence or material on record which may prove that the assessee has made the payment amounting to ₹ 5,73,000 to the plant and machinery supplier. Payment made by the third party who is not subject to Indian Income Tax Act cannot be regarded to have been made by the assessee. - Decided in favour of assessee
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2016 (8) TMI 767
Computation of book profit u/s. 115J based on separate profit and loss account furnished by the assessee - Interest charged under section 234B - whether computation of income under section 115J was not liable to payment of advance tax? - Held that:- Taking into account the fact that the assessee has claimed depreciation in the profit and loss account on the basis of Income-tax Rules and not as per the Companies Act, the contention raised by the assessee, which has been rightly accepted by the Commissioner of Income-tax (Appeals) and confirmed by the Tribunal, is required to be accepted. However, if it is found that the assessee has claimed depreciation in the profit and loss account under the provisions of the Companies Act, the decision which is sought to be relied on by the revenue will apply. In that view of the matter, in view of the decision of the Apex Court in the case of Malayala Manorama Co. Ltd. v. Commissioner of Income-tax (2008 (4) TMI 20 - SUPREME COURT ), we answer question No. 1 in favour of the assessee and against the revenue. So far as question No. 2 is concerned, in view of the decision of the Apex Court in the case of Commissioner of Income-tax v. Kwality Biscuits Ltd. (2006 (4) TMI 121 - SUPREME Court ) no interest under section 234B and 234C would be leviable when income was computed by invoking provisions of section 115J of the Income-tax Act. We, therefore, answer question No. 2 in favour of the assessee and against the revenue.
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2016 (8) TMI 766
Long Term Capital Gain - what is the cost of acquisition of 1665 shares in Yashomal Leasing and Finance (P) Ltd. (now merged in Lavasa Corporation Ltd.) which have been admittedly sold by the respondent – assessee along with other preference shares during the subject assessment year for the purpose of computing the capital gains - Held that:- The fact that Mr. and Mrs.Bhale, the vendors of 1665 shares to the respondent – assessee had not disclosed the receipt of consideration of sale in their returns of income and had not offered the same for tax cannot lead to the conclusion that no consideration was received by them. This is an issue which the Revenue is to take up with Mr. and Mrs.Bhale. The purchasers of shares cannot be held responsible for default made by the vendors of shares in filing their return of income and not disclosing consideration received by them for sale of their shares. It is also to be borne in mind that the Assessing Officer completely ignored the confirmation letter given by vendors of 1665 shares. Further fact that the respondent – assessee had paid the consideration for the sale of 1665 shares by account payee cheques is also significant. It is also pertinent to note that before the Tribunal the grievance of the revenue is that the CIT (A) has accepted explanation of the respondent – assessee. It has been correctly observed by the Tribunal that the explanation given by any party has to be taken into consideration and if the same is found to be acceptable and correct, the authority has to accept the same. The consequences would follow. In view of the fact that there are concurrent findings of fact recorded by the CIT(A) and the Tribunal accepting the purchase of 1665 shares of Lavassa Corporation Ltd. in the assessment year 2002-03 for a consideration of ₹ 41.25 lakhs as claimed by the respondent – assessee. Nothing has been shown to us which would lead us to a conclusion that the finding of fact arrived at by the CIT(A) and the Tribunal are perverse. The view taken by both authorities on the basis of evidence and explanation made available before them was a possible and reasonable view. In the above view the question as posed for our consideration does not give rise to any substantial question of law.
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2016 (8) TMI 765
Sale of shares - business income or investment income - Held that:- The transactions taken place in the year under consideration show that the assessee is indulged in purchasing and selling of shares within a short time i.e. within a period of twelve months. The assessee did not wait even for twelve months to dispose of the shares. Thus the assessee has carried on business in shares. Therefore, the intention of the assessee was not of an investment. In that view of the matter, the Tribunal has rightly held the assessee as a dealer in shares for the year under consideration. Both the appeals, therefore, fail and are dismissed. The question referred to us is answered in favour of the revenue and against the assessee.
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2016 (8) TMI 764
Assessment under section 153A - disallowance made u/s 14A - Held that:- No disallowance made u/s 14A by the Assessing Officer was bad in law in absence of any incriminating material having been found in the course of search qua the said disallowance - Decided in favour of assessee
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2016 (8) TMI 763
Deduction u/s 10(B)- denial of claim holding that the assessee, a firm of Advocate & Solicitors engaged in production and export of customized electronic data or legal database is not eligible for deduction - Held that:- The work of the assessee i.e. compiling, editing, data processing and legal data-base is transmitted or exported from India to outside India by any means and lieu earned foreign exchange, which is eligible for deduction u/s 10B of the Act, the CIT (A) rightly allowed the claim of the assessee and we confirm the same. The appeal of the Revenue is dismissed. - Decided in favour of assessee
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2016 (8) TMI 762
Determination of valuation of the property to DVExchange of plots between the appellant and Vatsalabai Dattatray Charitable Trust without any monetary consideration as transfer of capital asset - tax on the capital gain as per stamp duty valuation - Held that:- The plot of land was vacant and the assessee wanted to exchange the same to commercially exploit the same which is admitted by the assessee and is also borne out from the assessment order passed by the AO . The said plot of land was thereafter gifted by the assessee to son of the Karta of the assessee on 11/06/2008 which is stated by the AO in the assessment order para 3 which is not denied by the assessee and later developed by son of the Karta of the assessee. Further, the assessee has taken a plea that if it is held to be capital gain chargeable to tax u/s 45 of the Act and Section 50C is invoked, then the matter be referred to the Departmental Valuation Officer(DVO) for determining the correct valuation of the property as the valuation adopted by the stamp duty valuation authority for stamp duty valuation authority is excessive for the reasons stated above and also that the assessee had exchanged property of value of ₹ 1,30,89,000/- with the property valued at ₹ 94,51,000/- and hence it exceeds the fair market value of the property on the date of transfer. In our considered view, this plea of the assessee augers well on merits and deserves to be allowed and we are inclined to set aside and restore the issue to the file of the AO to refer the determination of valuation of the property to DVO in terms of provisions of Section 50C(2) of the Act. The assessee shall be allowed to submit relevant evidences and explanation in its defense which shall be admitted and adjudicated on merits. Needless to say proper and adequate opportunity of being heard shall be provided to the assessee in accordance with principles of natural justice in accordance with law. We order accordingly. Finally, we may reiterate that the AO shall de-novo adjudicate the issue on merits after duly considering our decisions in the preceding para’s as well report of DVO, valuation of the property as determined by stamp duty valuation authorities for stamp duty purposes, relevant evidences adduced by the assessee in its defense and all other material on record in accordance with law.
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2016 (8) TMI 761
Deduction u/s 54F - whether the sales consideration invested in Capital Gain Account within the period allowed u/s 139 (4) should also be considered to be within the period allowed u/s 139(1) of the Act? - Held that:- The assessee is entitled for deduction u/s 54F in respect of the sales consideration utilised within the extended time of filing of return of income u/s 139(4) of the Act, for purchase/construction of new residential house and for investment in Capital Gain Account. It appears from the records that the assessee has invested total sum of ₹ 1,50,21,799/- ( i.e. ₹ 43,61,799/- in making payment for the purpose of new residential house and deposit of ₹ 1,06,60,000/-in capital Gain Account ) before filing the return of income u/s 139(4) of the Act, which is more than the sales consideration of ₹ 1,50,00,000/- of original assets and thus the assessee is entitled for deduction u/s 54F of the Act of whole of the Long Term Capital Gain of ₹ 1,43,03,205/- arising from the capital assets transferred during the relevant previous year. Hence the addition of ₹ 1,01,44,025/- made to returned income is deleted. Thus the appeal of the assessee is allowed.
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2016 (8) TMI 760
Disallowance on account of Sales Promotion expenses - Held that:- Since the transactions are recorded in the books of accounts of the assessee, unless there is a fact to contradict such transactions, disallowances cannot be made on the basis of certain assumptions. It is a normal practice in business that expenses are incurred as incentive to the dealers against bulk orders to push sales. Such endeavor of the assessee can be seen as successful in increase of the turnover. The action of the AO to make the addition just for the sake of the addition ignoring all the material facts brought into the assessment proceedings by the assessee is not justified and hence addition made was deleted and this ground of appeal was allowed. In view of the aforesaid discussions and precedent relied, we are of the considered view that transactions were recorded in the books of accounts of the assessee and unless there is a fact to contradict such transactions, the disallowance cannot be made on the basis of assumptions. Moreover, it is noted that it is a normal practice in the business that expenses are incurred as incentive to the dealers against bulk orders to push sales which can be seen from the increase turnover of the assessee. Therefore, the Ld. First Appellate Authority has rightly deleted the addition in dispute and there is no need to interfere in the well reasoned finding given by the ld. First Appellate Authority, hence, we uphold the order of the Ld. CIT(A) on the issue in dispute and decide the same in favour of the Assessee and against the Revenue. Addition u/s. 40A(2)(b) - Held that:- Nature of transaction is genuine and in the absence of any revenue loss, and rightly deleted the disallowance by passing a well reasoned order which does not need any interference on our part, hence, we uphold the same. Accordingly, this ground raised by the Revenue is decided in favour of the Assessee and against the Revenue.
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2016 (8) TMI 759
Disallowance of depreciation - depreciation claimed by the assessee on w.d.v. and new motor car purchased falling under the category of 50% block of depreciation which was not accepted by AO on the basis of specific observation that assessee’s business is not of running cars on hire and assessee’s claim of depreciation under 50% rate is not admissible - Held that:- Assessee was having special block of asset for depreciation @ 50% in the preceding year and in the year under appeal on LMV i.e. Toyota Car which fits in the category of new commercial vehicle because it was purchased in March, 2009 and it clearly falls under the head machinery and plant at Sl.No.3(via) of New Appendix-I as it is acquired after 1st January, 2009 but before 1st October, 2009 and there is no dispute to the fact that this asset was put to use before the first day of October, 2009, therefore, assessee is eligible to claim depreciation under block rate 50%. - Decided in favour of assessee.
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2016 (8) TMI 758
Penalty u/s 271(1)(c) - fictitious payments of commission - Held that:- We find no reason to entertain these Special Leave Petitions, which are, accordingly, dismissed. HC order confirmed [2016 (2) TMI 899 - DELHI HIGH COURT] for levy of penalty.
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Customs
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2016 (8) TMI 800
Request for supply of non-RUD before adjudication of the dispute - principles of natural justice - Held that: - the request of the appellant for supply of the non-RUDs has not been considered favorably by the adjudicating authority and no reasons have been assigned for such non-acceptance. Since the appellant insisted that non-RUDs and the assessed copies of bills of entries are relevant for proper adjudication of the matter, the same cannot be denied, which will amount to gross and flagrant violation of the principles of natural justice. Commissioner (adjudicating authority) directed to provide the non-RUDs and the assessed copies of bills of entries to the appellant and thereafter to issue the notice for personal hearing to the appellant for explaining the case for the purpose of adjudication - appeal disposed off - decided in favor of appellant.
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2016 (8) TMI 799
Demand - denial of benefit of exemption notification - Notification No. 21/2002 dated 1.3.2002 - export of handicraft item - wooden furniture - certificate wrongly obtained from Export Promotion Council for Handicraft (EPCH)- Held that: - EPCH which is a sponsored organisation under the Ministry of Textile, Government of India, upon verification of the records maintained by the appellant, has certified inter alia, that handicraft goods have been exported by the appellant on due compliance of the conditions contained in the Notification No. 21/2002 dated 1.3.2002. Further, the CA also certified the fact that the appellant had exported handicraft goods during the period 1.4.2003 to 31.3.2004 for FOB value of 2,77,89,234/-. Since the condition of the notification have been substantially complied with by the appellant and the competent authority has certified the said aspect, the custom department cannot question the genuineness or authenticity of such certificates - appeal allowed - decided in favor of appellant.
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2016 (8) TMI 798
Denial of refund of additional duty of customs (SAD) - no declaration of refund on original copies - no enquiry conducted at the buyer's end to prove that the invoices issued to them depicted any levy of additional duty of customs - Held that: - Tribunal would have come to rescue of the Revenue had there been any enquiry conducted to show that the burden of the additional duty of customs was passed on to the buyer. There is no such instance that has come to record. The invoices produced exhibited that there was only levy of VAT on the goods sold by appellant. No additional duty of customs was charged. Also, an endorsement on original document may not be necessary since the invoice do not carry the duty element - appeal remanded to original authority to examine the reasons of stamping the duplicate bills and pass appropriate order.
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Corporate Laws
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2016 (8) TMI 792
Offences punishable u/ss.209(5) r/w.Sections 211(7) and 628 of the Companies Act for non-maintenance of proper books of accounts - Held that:- The petitioner is a practicing advocate and it is his main vocation. Incidentally, he might have accepted Directorship, but merely he is a formal Director, no process can be issued against him unless specific allegation has been made against him in the complaint or primafacie ingredients of the offence has been established against him. Here in this case, it is established from the complaint itself that, though the present petitioner has been named as an accused in the said complaint, neither there is specific allegation made nor prima-facie ingredients of the offence established from the said complaint against the petitioner. It seems that he has been joined as an accused in the said proceedings merely because he is a formal Director in the Company. In absence of any specific averments or ingredients in the complaint against the petitioner, the process issued against the petitioner requires to be quashed. A plain reading of Section 211(7) and 209(5) of the Act would go to show that the default is punishable with imprisonment for a term which may extend to six months and shall also be liable to fine which may extend to ten thousand rupees, or with both. Section 628 provides for punishment with imprisonment, which may extend to two years and shall also be liable to fine. It is not in dispute that the alleged contravention with regard to the maintenance of Registers of Directors are for a period spanning from 1997-98 and 1998-99. The complaint came to lodged in the year 2006 The question which falls for my consideration is whether the learned Magistrate could have taken cognizance of the alleged offence, after the expiry of the period of limitation as provided under Section 468 of the Code of Criminal Procedure. Section 468 provides that the period of limitation shall be six months, if the offence is punishable with fine only, and three years if the offence is punishable with imprisonment for a term exceeding one year, but not exceeding three years. Having regard to the nature of the contravention, it could not be said that the Sections 211(7), 209(5) and 628 of the Companies Act are continuing offences so that the period of limitation would keep on running. What is continuing offence has been exhaustively explained by this Court, while disposing of Special Criminal Application No. 809 of 2014 today itself. In view of above facts and circumstances, the Special Criminal Applications are allowed. Thereby, the criminal proceedings of Criminal Complaint against the applicant pending before the Court of learned Addl. Chief Judicial Magistrate, Ahmedabad are hereby ordered to quashed.
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2016 (8) TMI 791
Proceeding under the SARFAESI Act - winding up proceedings - whether OLR cannot proceed because the Company (in Liqn.) is before the BIFR? - Held that:- In the facts of the present case also, the debts owed by the Company (in Liqn.) to IOB have been assigned to ARCIL [which admittedly is an ARC] long before the reference [on behalf of the Company (in Liqn.)] was filed before the BIFR. This being the factual scenario, as per the 2nd proviso to section 15(1) of SICA, 1985, the reference itself was not maintainable and non-est in the eyes of law. Consequently, there is no question of the Company (in Liqn.) and/or its Ex-Directors contending that the Company (in Liqn.) gets protection under section 22 of SICA, 1985. In view of this clear enunciation of the law, I have no hesitation in rejecting the argument of Mr Shetye that this OLR cannot proceed because the Company (in Liqn.) is before the BIFR. As far as the prayers in the OLR are concerned, Mr Shetye points out that as far as the advertisement charges of ₹ 25,749/- are concerned [prayer clause (a)], the said directions have already been complied with. The representative of the Official Liquidator who is present in Court today, has also confirmed this fact. In this view of the matter, no directions in this regard are necessary save and except that the Official Liquidator is directed to pay the charges of the advertising agency out of the sum of ₹ 25,749/- already deposited with the Official Liquidator. Official Liquidator has also sought a direction against IOB to take the physical possession of the factory premises and appoint security guards for the same [prayer clause (b)]. Ms Awasthi, appearing on behalf of ARCIL states that symbolic possession of the factory premises was taken by IOB and thereafter IOB also made an application under section 14 of the SARFAESI Act for the purposes of taking physical possession. This application under section 14 of the SARFAESI Act was allowed by the Magistrate vide his order dated 29 November, 2011 and appointed the authorized officer of IOB to take the physical possession of the factory premises. Thereafter, Mr Nikumbh Kanakiya and others filed a Securitisation Application No. 111 of 2011 before the DRT-III challenging the actions initiated by IOB. Though, initially the DRT has passed an interim injunction restraining IOB from proceeding under the SARFAESI Act, on 8 December, 2012, the said SA was dismissed for default. Thereafter, IOB has assigned the debts owed by the Company (in Liqn.), in favour of ARCIL. ARCIL is in the process of amending / modifying the order passed by the Magistrate on 29 November, 2011 for taking physical possession of the factory premises in the name of ARCIL instead of IOB. This Application is still pending. Considering that IOB had already taken steps under the SARFAESI Act for taking possession of the factory premises, and even ARCIL has now taken the steps in that regard, the directions sought in prayer clause (b) of the OLR are rendered infructuous. As Company has already been ordered to be wound up and the Official Liquidator has already been appointed, there is no question of the Company and/or its Ex-Directors carrying on its business after the date of the winding up order.
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Service Tax
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2016 (8) TMI 797
Business auxiliary services - reverse charge mechanism – sales promotion expenses pertained to business expenditure to promote its products by conducting the doctor meetings, scientific sessions with doctors, distributing physician samples, printing of literatures, printing of gimmicks, printing of visual aids, supporting hospitals and clinics to purchase medical instruments, field business meeting to discuss about market trends and strategies, sales target related incentives to field personnel etc. – failure to obtain registration and file ST-3 returns. Held that: - The service provider is not situated outside India - No case was set up by the department that in the present case, such reverse charge mechanism applies. - no reverse charge mechanism exists. Calling upon the service recipient to pay service tax in absence of reverse charge mechanism is an unsustainable premise. Providing taxable service by petitioner – receiving taxable service by petitioner under section 66A - absence of proposal in SCN – Held that: - Mere reference to the statements of the officers of the company which may have a hint of any such providing of service, would not enable the department to levy service tax without a show cause notice and adjudication on this aspect. Relegate the petitioner to appellate remedy – Held that: - Commissioner had no jurisdiction to levy tax in absence of any finding that the petitioner had provided a taxable service. When the issue rests only on admitted facts and when on the basis of such admitted facts, it is found that the Commissioner of Service Tax had no jurisdiction to levy service tax on the petitioner, relegating the petitioner to appellate remedy would be futile and would cause unnecessary hardship to the petitioner – impugned order set aside - petition allowed – decided in favor of petitioner.
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2016 (8) TMI 796
Self adjustment of service tax liability with excess tax paid earlier – manpower recruitment and supply agency service - Held that: - the adjustment of excess service tax paid by the appellant to the Central Government for the service not provided by him wholly or partially for any reason against his service tax liability for the subsequent period is permissible and this can be done only when the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. This is not a case where the amount sought to be adjusted falls under the category of excess payment on account of wrong classification, valuation or claiming of an exemption. This is a plain and simple case of payment of tax where no tax is required to be paid as no service was provided on which fact, there is no dispute. Raising only debit notes and not any invoices or bills since the transactions were only with sister concerns – Held that: - the finding in the impugned order that the appellant had not produced any material to substantiate that they had refunded the taxable value including the service tax to their group concerns/clients to which the services had been rendered is not even an allegation in the SCN and therefore not addressed – appeal allowed – decided in favor of appellant.
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2016 (8) TMI 795
Eligibility of Refund claim – excess payment of service tax due to calculation mistake on the basis of some bills - goods transport agency service – services of cargo handling – Held that: - the Tribunal after detailed examination of the factual and legal issues held that there is no service tax liability under GTA service for the appellant – appeal allowed – decided in favor of appellant.
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2016 (8) TMI 794
Condonation of delay – Held that: - no delay in filing appeals. Filing of appeal in correct position. Stay of appeal – demand of tax, interest and penalty – pre-deposit – educational bodies conferring degrees - commercial training or coaching centre – amendment in finance act w.e.f.01/05/2011 – Held that: - demand of ₹ 10,60,37,882/- for 2010-2011 pertaining to ICFAIAN Foundation and demand of ₹ 2,30,686/- for the period 2010-2011 pertaining to ICFAI, Hyderabad is disputable and open to interpretation. . The appellants are directed to deposit 50% of ₹ 10,62,68,568/- within four weeks, subject to payment of which, recovery of remaining demands in respect of other appeals will stand stayed till the disposal of the appeals – decided in favor of appellant.
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2016 (8) TMI 793
Valuation - commercial or industrial construction service - construction of residential complex service - Notification No. 15/2004 or 1/2006 providing abatement of 67% - Held that: - the issue stands decided by the larger Bench of the Tribunal in the case of Bhayana Builders (P) Ltd. vs. CST, Delhi [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)]. Value of free supplies by service recipient do not comprise the gross amount charged under Notification No. 15/2004-ST, including the Explanation thereto as introduced by Notification No. 4/2005-ST - decided in favor of appellant.
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Central Excise
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2016 (8) TMI 790
Rejection of cross objections as time barred - Whether the learned Tribunal was justified in dismissing the appeal of the appellant on account of delay in filing of appeal before the respondents as the order in original passed by the Additional Commissioner (Appeals) was never delivered to the appellant - appellant has been providing space for installing the hoardings to the advertising agency and charged advertisement tax for the same - Held that:- admittedly copy of the order was sent to the appellant by speed post. Section 27 of General Clauses Act provides that presumption of service would be raised when document is delivered by registered post. So far as the speed post is concerned, the provision has been made in the Central Excise Act, 1944, however, no such corresponding amendment was made in the General Clauses Act. Resultantly, no presumption can be raised in respect of document sent by speed post. However, under Section 114 of Evidence Act, such presumption can be raised against the appellant that when the order was sent to them by speed post, it would have been reached in ordinary coarse of nature, and therefore, burden lies on the appellant to prove that speed post sent by the respondents was not delivered to them as provided for by sub Section 2 of Section 37-C of the Act. When no such evidence is produced by the appellant, it may be presumed that the speed post must have reached the office of the appellant in due course. It was observed by the Appellate Authority that cross-objection was not filed within 45 days of the notice received by them. According to provisions of Order 41 Rule 22 of CPC, cross objections should be filed after receiving notice of appeal within 30 days. However, in the Act, no such time period is prescribed. Time fixed by the learned Appellate Authority was fixed by him and there was no statutory provisions against this time period fixed by him and accordingly, when the authorized representative appeared before the Appellate Authority on 26.11.2010 and he was granted time by the authority to file cross-objections within one week, which was filed on 03.12.2010, and which were taken on record, it cannot be said that cross objections filed by the appellant was not filed in time and were time barred. Accordingly, in considered opinion of this Court, the Appellate Authority and the learned appellate Tribunal erred while taking the cross objections also as time barred. Hence, this appeal is partly allowed in respect of cross objections filed by the appellant and dismissed in respect of appeal filed by the appellant. - Appeal disposed of
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2016 (8) TMI 789
Valuation - cast articles cleared to independent buyers as well as other interconnected parties, at the same assessable value - Held that:- the Larger Bench of the Tribunal in the case of Ispat Industries Ltd. vs. CCE [2007 (2) TMI 5 - CESTAT, MUMBAI] has observed that where the goods are sold to related persons as well as to independent buyers, the transaction value charged to the independent buyers shall apply in the case of supply of goods to the related person also. The said decision stand followed in the recent judgment of the Tribunal in the case of Handy Wires Pvt. Ltd. vs. Commissioner of Central Excise, Nagpur [2015 (11) TMI 1241 - CESTAT MUMBAI]. Examining an identical situation, the Tribunal observed that the goods sold to interconnected undertaking have to be assessed to duty at the same value at which the said goods are sold to independent whole sale buyers. - Decided against the Revenue
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2016 (8) TMI 788
Captive consumption - whether transfer of the moulds to appellant’s other unit violate the condition in the Notification No. 67/95-CE dated 16.03.1995 to the effect that the moulds enjoy the exemption as long as they are used within the factory of manufacture - Held that:- the condition specified in the notification is not violated inasmuch as the factory itself has moved to Noida and since the mould in question continues to be used within the factory it cannot be said that the moulds have been cleared out of the factory. The fact also remains that in case duty is paid on the moulds on its transfer to Noida, such duty will be available as cenvat credit to the recipient factory inasmuch as the original and the destination factory belong to the same manufacturer and in fact since the former merged with the later, the whole exercise will lead to the revenue neutral situation and no useful purpose will be served while charging duty for such clearances. - Decided in favour of appellant
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2016 (8) TMI 787
Cenvat credit - received only invoices without the receipt of inputs in question - clearance of defective CTD bars and rods by showing them as scrap which amounted to almost 80% of the production - Held that:- there is nothing on record to show that the goods were not actually received by the present appellant, which stands duly reflected by them in their RG-23 Part A register and stand utilized by them in the manufacture of their final product. Further, as seen from the impugned order of the Commissioner (Appeals), he has observed that there is circumstantial evidence available on record to indicate that the defective rounds produced by the manufacturer were not scrap. Such circumstantial evidence referred to by the Commissioner (Appeals) is the fact that the original manufacturing unit has shown more clearance of defective rounds than the prime quality rounds. There is otherwise no evidence to show that such excess cleared defective rounds were received by the present appellant. They may have received defective goods/ scrap, which was admittedly defective and was capable of melting in the furnace. In the absence of any evidence to the contrary, it is found that the denial of Cenvat Credit on the basis of investigations conducted at the third party end cannot be adopted as the sole basis for denial of credit. - Decided in favour of appellant
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2016 (8) TMI 786
Excisability - Dolochar - Dolochar arises as a combination of Iron Ore, Dolomite and unburnt pieces of coal during the process of manufacture of Sponge Iron - Held that:- the issue is no longer res-integra, as is decided by the Hon'ble Supreme Court in the favour of appellant in the case of Union of India vs. Ahmedabad Electricity Company Ltd. [2003 (10) TMI 47 - SUPREME COURT OF INDIA] which has been followed by the Tribunal in the case of H.E.G. Ltd. vs. CCE, Raipur. - Decided in favour of appellant
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2016 (8) TMI 785
Cenvat credit - availed CENVAT credit on capital goods and services received by them during the period 01/04/2005 to 28th of February 2006 - asbestos cement sheets were chargeable to nil rate of duty up to 28/02/2006 but w.e.f. 1st of March 2006 the goods became chargeable to duty at the rate of 8% - Held that:- there is no doubt that at the time of receipt of capital goods, the final products of the appellant were chargeable to nil rate of duty and therefore these capital goods fall within the purview of sub rule 4 of rule 6 and hence not entitled to Cenvat credit. The only weak argument advanced by the appellant is that the credit has been taken in the same financial year in which their final products became dutiable. We find that this is not a valid reason to permit such credits. By applying the decision of Larger Bench of this Tribunal in the case of Spenta International Ltd versus Commissioner of Central Excise, Thane [2007 (8) TMI 25 - CESTAT, MUMBAI], since on the date of receipt of capital goods, the final products were chargeable to nil rate of duty, the appellant becomes in-eligible for availing the credit of duty paid on the capital goods. - Decided against the assessee.
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2016 (8) TMI 784
Whether in the earlier proceedings penalty was imposed on the appellants for concealment of particulars of their duty liability - clandestine despatch of finished goods without payment of duty - habitual in committing offence - Held that:- it is clear from the admission of the appellant no.2 in 2010 proceedings that there was concealment of particulars of duty liability which, by order dated 4th January, 2011 passed under section 32F(5), led to the imposition of penalty for concealment of duty liability of the order dated 27th August, 2014. Since it is evident from the order dated 4th January, 2011 that penalty was imposed on the appellants for concealment of particulars of their duty liability which had been taken note of and discussed exhaustively in the order dated 27th August, 2014 passed by the Commission, we are of the view that the learned Single Judge was justified in holding that “ An element of mens rea was fastened to this petitioner company upon the order of the Settlement Commission being passed on January, 4, 2011.” In this regard it is noteworthy that the “Explanation” to section 32-O(1)(i), inserted by Finance (No.2) Act, 2014, laying down that “concealment of particulars of duty liability relates to any such concealment made from the Central Excise Officer” is in aid to and is evidently in consonance with the provisions contained in section 32-E(1) which provides “An assessee may, in respect of a case relating to him, make an application, before adjudication, to the Settlement Commission to have the case settled, in such form and in such manner as may be prescribed and containing a full and true disclosure of his duty liability which has not been disclosed before the Central Excise Officer having jurisdiction,….” Whether in view of the order dated 27th August, 2014, rejecting the application for settlement, the settlement proceedings stood abated under section 32F(1) and if so, whether the appellants are entitled to have their case adjudicated before the appropriate authority - Held that:- it is evident that by order dated 27th August, 2014 the Commission had rejected that application for settlement for lack of jurisdiction. Hence, on 27th August, 2014, under Section 32F(1) the proceedings stood abated. Since the appellants cannot be without a remedy, the show cause notice dated 6th February, 2014 has to be adjudicated under the Act. Hence, the appeal is dismissed. The judgement of the learned Single Judge is hereby affirmed. Accordingly, no order is passed on the application and the same is disposed of. However, since the proceedings before the Commission have abated, as submitted on behalf of the appellants, they are at liberty to pursue the adjudication proceedings before the appropriate authority by filing reply to the show cause notice dated 6th February, 2014. If reply is filed, the adjudicatory authority shall proceed expeditiously in accordance with law after complying with the principles of natural justice. - Decided against the appellant
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2016 (8) TMI 783
Demand of duty alongwth interest and penalty - Reversal of Cenvat credit - Zinc Ash under Rule 3(5) of the Cenvat Credit Rules, 2004 - Held that:- the respondent has never imported Zinc Ash and the Zinc Ash has emerged during the course of processing of Zinc Skimmings, therefore, the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004 are not applicable to the facts of this case as the respondent has not cleared Zinc Skimmings as such. Further, the Ld. Commissioner (A) in the impugned order has observed that the respondent has taken the cenvat credit only on the metallic part taken out from the Zinc Skimmings after process and no cenvat credit has been taken attributable to Zinc Ash. In these circumstances, there is no case of the revenue to attract Rule 3(5) of the Cenvat Credit Rules, 2004. - Decided against the Revenue
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2016 (8) TMI 782
SSI Notification No. 9/99-CE - entitlement for benefit - use of brand name of foreign manufacturer - Held that:- as it is seen that, the benefit of small scale exemption notification stands extended to an assessee, where he was using the brand name of foreign manufacturer, which was assigned to the Indian manufacturer under an agreement. Inasmuch as the issue is decided by the Supreme Court in the case of Commissioner of Central Excise , Bangalore Vs. Otto Bilz (India) Pvt. Ltd. [2015 (10) TMI 2149 - SUPREME COURT], no merits found in the present appeal of the Revenue. - Decided against the Revenue
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2016 (8) TMI 781
Demand - 10% of value of job work goods - Rule 6(3) of the Cenvat Credit Rules, 2004 - non-maintenance of separate account for dutiable as well as exempted goods - Held that:- it is an admitted fact that the job work goods manufactured by the respondent are dutiable goods. The respondent is manufacturing only and only dutiable goods, therefore, the question of invoking the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 does not arise at all. - Decided against the Revenue
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2016 (8) TMI 780
Demand - duty short paid - excess paid duty did not adjusted by the Revenue - Held that:- the issue is no longer res-integra. It is well settled that at the time of finalization of provisional assessment that the excess paid duty can be adjusted towards the duty short paid. Therefore, to arrive at final duty liability, adjustment of excess duty paid to the short payment have to be made. - Decided in favour of appellant with consequential relief
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2016 (8) TMI 779
Valuation - adoption of higher value of goods - Commission not included in the assessable value - Held that:- it is found that the identical dispute was the subject matter in that case and it was held that even though duty was required to be paid on the goods exported, rebate of equal amount was available to the assessee so as reaching the revenue neutral situation. In such a scenario, the confirmation of duty was set aside. - Decided in favour of appellant
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2016 (8) TMI 778
Demand - recovery of credit availed - irregularly availed 100% CENVAT Credit in the same year on capital goods viz: Ingot moulds, Forged Rolls & Metal Rolls for the period 2005-06, 2006-07 & 2007-08 - Held that:- the appellant is eligible to avail 50% credit in the subsequent year. In such case, there is no revenue loss and the availment of 100% credit in the same year of purchase is only a procedural lapse. The appellant has already paid the interest and penalty which in my opinion would suffice as compensation for the procedural lapse committed by them. In the present case there is no finding that appellant resorted to any contumacious conduct of reversal of irregular credit, on pointing out by department and had later on availing the same in the subsequent financial year. Further, as the appellant was eligible to avail the balance 50% in subsequent year, it cannot be said that there was any dishonest intention. The appellant prays to restore the adjudicating authority's order dated 29.10.2009. Taking into account the evidence and the fact that appellant has paid the interest and penalty, I am of the view that the demand/recovery of credit availed is not sustainable. - Decided in favour of assessee
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CST, VAT & Sales Tax
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2016 (8) TMI 803
Assessment order - Revision of input tax credit – purchase from registration cancelled dealers – TNVAT - Held that: - Whatever benefits that has accrued to the petitioners based on valid documents in the course of sale and purchase of goods, for which tax has been paid cannot be declined. The transaction that took place when the registration certificates of the selling dealer were in force cannot be denied to the petitioners/assesses. The notices, revised assessment orders and the provisional assessment order, insofar as it seeks to deny the benefit of input tax credit to the petitioners/assessees only on the ground that the registration certificates of the selling dealers have been cancelled with retrospective effect, are set aside – writ petition allowed – decided in favor of appellant.
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2016 (8) TMI 802
Issuance of a writ of certiorari to quash attachment notice – lien over the property to recover tax dues - default in payment of loan amount – sale of property by Debt Recovery Tribunal to petitioner’s vendor and certificate of sale issued in his favor – creation of encumbrance by the department thereafter – Held that: - the property was subject matter of mortgage with the bankers, who were secured creditors and they had brought the property for sale, after long drawn litigation and the petitioner's vendor had purchased the same for valid consideration through the Debts Recovery Tribunal and a certificate of sale was issued in his favour. Therefore, as long as the said certificate of sale has not been cancelled or modified, the Department cannot have any lien over the property – writ petition allowed – impugned order quashed – decided in favor of petitioner.
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2016 (8) TMI 801
Revision of assessment - co-operative society carrying out printing works – sale – works contract – change of opinion – Held that: - the decision taken by the Appellate Authority for the earlier assessment years by an order dated 04.05.2001 binds the respondent and therefore, the respondent could not have issued the impugned revision notice. Also, it was held that no sales tax was payable on the supply of printed material which were printed by the dealer on orders received from their customers, according to their specification using their own paper in the case State of Tamil Nadu v. Anandam Viswanathan [1989 (1) TMI 359 - SUPREME COURT OF INDIA] – writ petition allowed - impugned order quashed – decided in favor of appellant.
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