TMI Tax Updates - e-Newsletter
September 18, 2014
Case Laws in this Newsletter:
Income Tax
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Treatment of income – land sold by the assesses was stock-in-trade of the dissolved firm - Tribunal had no material to come to the conclusion that the land sold by the applicant/ assessee was stock-in-trade and the Tribunal was not justified to treat it as business income - HC
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Income Tax:
Genuineness of purchases - AO rightly rejected the books of account and made the additions on estimate basis - jugglery of book entries has been played - HC
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Income Tax:
Remission of tax u/s 88E – Computation of profit u/s 115JB - The amount of remission u/s 88E would get reduced from the tax payable under the two methods/manners of computing taxable income - HC
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Income Tax:
Penalty u/s 271FA – AIR information not furnished by Sub Registrar - filer of the returns was habitual defaulter without any concern or respect for the law - HC
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Service Tax:
Refund of cenvat credit - Export of services or not - services provided from India or not - onsite work undertaken at customer’s premises - software development service - refund was rightly denied - HC
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VAT:
CST - If there is in- severable link between the local sale or purchase and export and if it is clear that the local sale or purchase between the parties is inextricably linked with the export of the goods, then the claim of exemption under Section 5(3) from State Sales Tax shall be liable to be allowed - HC
Articles
Notifications
Central Excise-
29/2014 - dated
16-9-2014
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CE (NT)
Delegation of power to Principal Chief Commissioner to specify within his jurisdiction, the jurisdiction of a Commissioner of Central Excise (Appeals) or a Commissioner of Central Excise (Audit)
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28/2014 - dated
16-9-2014
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CE (NT)
Amendments in the Notification Nos. 38/2001-Central Excise(N.T.), dated the 26th June, 2001 and 28/2008-Central Excise(N.T.), dated the 5th June, 2008.
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27/2014 - dated
16-9-2014
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CE (NT)
CBEC specifies the jurisdiction of (i) Chief Commissioner of Central Excise, (ii) Commissioner of Central Excise (iii) Commissioner of Central Excise (Appeals)
Customs-
40/2014 - dated
16-9-2014
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ADD
Seeks to impose provisional anti-dumping duty on imports of electrical insulators of glass or ceramics/porcelain, whether assembled or unassembled originating in, or exported from the People’s Republic of China for a period of six months.
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85/2014 - dated
16-9-2014
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Cus (NT)
Amendments in notification No. 83/2004-Customs (N.T.), dated the 30th June, 2004.
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84/2014 - dated
16-9-2014
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Cus (NT)
Appoints the Officers in Commissionerate of Central Excise (Audit) or Commissionerate of Service Tax (Audit)
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83/2014 - dated
16-9-2014
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Cus (NT)
Appoints the officers of the Directorate General of Audit
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82/2014 - dated
16-9-2014
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Cus (NT)
Amendments in notification No. 17/2002-CUSTOMS (N.T.), dated the 7th March, 2002.
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81/2014 - dated
16-9-2014
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Cus (NT)
Appointment of adjudication authorities in Customs cases
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80/2014 - dated
16-9-2014
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Cus (NT)
Appoints the Officers of the Directorate General of Central Excise Intelligence as as the officers of Customs
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79/2014 - dated
16-9-2014
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Cus (NT)
Specifies Jurisdiction of Chief Commissioner of Customs and Commissioner of Customs (appeals)
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78/2014 - dated
16-9-2014
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Cus (NT)
Appointment of Commissioners, Additional or Joint Commissioners and Deputy or Assistant Commissioners of Customs — Areas of jurisdiction
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77/2014 - dated
16-9-2014
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Cus (NT)
Chief Commissioners of Customs and Central Excise — Areas of jurisdiction — Notification No. 14/2002-Cus. (N.T.) superceded
Service Tax-
22/2014 - dated
16-9-2014
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ST
Appointment of certain Officers
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21/2014 - dated
16-9-2014
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ST
Delegation of powers to the Principal Chief Commissioner to specify the jurisdiction of certain Commissioners.
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20/2014 - dated
16-9-2014
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ST
Appointment of central exercise officers.
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (9) TMI 554
Treatment of income – gain on sale of land treated as business income against LTCG - Whether the Tribunal had any material to come to the conclusion that, land sold by the assesses was stock-in-trade of the dissolved firm, hence assessable business income – Held that:- There is nothing to show that the assessee as also the erstwhile Smt. Amrutben Chheda had dissolved the firm with the intention to carry on the business of the firm in their individual capacities - The assessee and the former partner sold the land to a third party - They did not carry on the business of M/s. Laxmi Construction Co., the partnership firm i.e. of builders and/or contractors - the land was sold to a third party who incidentally might have been in the business of constructio. This was provided for in the dissolution deed itself which records in clause (3) that the parties have agreed to take over the plots of land as co-owners and as capital assets and they shall have co-ownership and as a test of conversion if applied, the assessee has indeed provided for conversion - the property does not seem to be stock-in-trade by the execution of the dissolution deed - there is no mode which provides for conversion of stock-in-trade into capital assets except by agreement of parties - the deed of dissolution achieves that objective - In the case of Khatau Valabhdas, the Court was concerned with the division of stock-in-trade i.e. grocery products - the business of the partnership was of builders/contractors and not of buying and selling the land and the partners at the material time were not engaged in any construction activity and no such construction was being carried out on the land - A building was to be put up on the land purchased by the erstwhile partnership firm but the land remained vacant and nothing is done on the land or to the land so as to show it as stock-in-trade and not treat it as capital assets share of the assessee - the Tribunal had no material to come to the conclusion that the land sold by the applicant/ assessee was stock-in-trade and the Tribunal was not justified to treat it as business income – Decided in favour of assessee.
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2014 (9) TMI 553
Revision u/s 263 - Applicability of section 36(1)(viii) - Whether the Tribunal was correct in holding that two views are possible with regard to the applicability of Section 36(1)(viii) r.w.s. 41(4A) even though the provisions of Section 36(1)(viii) as amended with effect from 1/4/1997 do not provide any room for interpretation other than the one adopted by the Commissioner of Income Tax in his order passed u/s 263 of the Income Tax Act – Held that:- Merely because the Tribunal adopts one of two views possible and that has resulted in loss of the Revenue it cannot be treated as erroneous order prejudicial to the interest of the Revenue unless the view taken by the tribunal is unsustainable in law - there was no justification for invoking section 263 and setting aside the order of the AO – there is no justification in setting aside the order of the AO - there is no justification in assailing the order of the tribunal which correctly held that there was no obligation to maintain the fund, when the fund was created and the withdrawal of the fund from the special reserve was before the obligation to maintain the fund came into effect on 1st April, 1998 - The withdrawals that have occasioned in the each of the above petitions do not fall foul of law - There are no errors apparent on the face of the record – Decided against revenue.
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2014 (9) TMI 552
Penalty order passed u/s 13 of Interest Tax Act – Interest on Banks-Bills Re-discounting Scheme - Held that:- When two legal interpretations were plausible and there was honest and bona fide difference of opinion, penalty for concealment/furnishing of inaccurate particulars, should not and cannot be imposed - If the view taken by the assessee required consideration and was reasonably arguable, he should not be penalized for taking the position - The tax statutes are complex and there can be a bona fide difference of opinion on legal interpretation and understanding of a provision - even when the interpretation placed by the Revenue is accepted, penalty should not be imposed if the contention of the assessee was plausible and bona fide. Establishment of mens rea is not the requirement or a condition precedent to impose penalty - The question of mens rea etc. is important and relevant in the criminal proceedings but not for the purpose of civil penalty u/s 13 of the Act - The nature and character of the two proceedings is different - Presence of mental element or mens rea in most criminal proceedings is mandatory unless the legislature mandate is to the contrary but not so in the penalty proceeding under Section 13 of the Act - the Tribunal has not erred in upholding the order of the CIT(A) in deleting the penalty – relying upon National Insurance Company Limited versus Commisioner of Income Tax and Another [2011 (6) TMI 123 - CALCUTTA HIGH COURT] - Section 2(5) would override and interest earned on bill discounting with credit institutions would not be included in interest u/s 2(7) of the Act – the order of the Tribunal is upheld – Decided against revenue.
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2014 (9) TMI 551
Grant of stay pending for disposal – Higher amount ordered for pre-deposit – Held that:- The facts cannot come under the category of an unreasonably high pitched assessment - the financial hardship of the assessee has been taken into consideration - the assessee is a public charitable trust and also if the bank statement is looked into, it cannot be thought that assessee will be able to make payment of 25% of the demand – thus, the assessee is directed to deposit 10% of the demand – Partial stay granted.
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2014 (9) TMI 550
Maintainability of petition - Rectification of order u/s 254(2) - Held that:- The Tribunal has not applied its mind to the merits which are now sought to be canvassed in questions, which have been formulated in support of the appeal by the assessee - The only point which weighed with the Tribunal was that once the post-acquisition assets were shown at ₹ 567.62 crores, there was no basis for enhancing the value to ₹ 575.05 crores in the revised return - the issues which have been raised on behalf of the assessee as well as the submissions which have been urged on behalf of the Revenue would merit a primary determination by the Tribunal and it would not be appropriate or proper for the Court to express a finding in the absence of a considered decision of the Tribunal - the questions of law which have been raised on behalf of the assessee would require consideration by the Tribunal - The Tribunal has not made any finding on the merits of the issues which are sought to be raised in the appeal - Revenue rightly contended that it would not be appropriate and proper to express a determination on the issues raised in the absence of a finding thereof by the Tribunal – thus, the matter is to be remitted back to the Tribunal for fresh adjudication – Decided in favour of assessee.
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2014 (9) TMI 549
Genuineness of purchases - Whether the liabilities/purchase pertaining to M/s Gopal Enterprises is genuine – Held that:- Sri Ram Gopal Sharma, proprietor of M/s Gopal Enterprises stated that he made the purchases from the local market without any bill - He was not having any vouchers - from last one year, he is not doing any business and only for the year 2007-08 he had received a payment of ₹ 7,50,000 - He has nothing to do with the business of the assessee, so the liability shown to the assessee for ₹ 31,18,137/- is not connected with him - he clearly stated that no money is due on the assessee - Sri Ram Gopal Sharma is doing independent business - He is running a dummy business - He is a proprietor of a firm which is not functioning for the last one year - the AO rightly rejected the books of account and made the additions on estimate basis - jugglery of book entries has been played - Both the orders of AO appears reasonable, where he has rightly made the additions pertaining to the bogus purchases – the order of the Tribunal is set aside – Decided in favour of revenue.
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2014 (9) TMI 548
Assessee in default u/s 201 and 201(1A) – Liability to deduct u/s 194I - Whether the assessee was liable to deduct tax as the assessee was not paying any rent to M/s Usha Udyog Ltd. in respect of land and building including the factory but the assessee was paying hiring charges of plant and machinery only - Held that:- The agreement indicated that the assessee was required to carry on re-rolling work in the factory of M/s Usha Udyog Ltd. for which a rate was fixed @ ₹ 200/- per metric ton on the raw material produced by them and that the agreement indicated that the assessee would not utilize the building along with plant and machinery - the agreement is related to the use of plant and machinery and not to the use of land and building - the assessee on the basis of the agreement was not found paying rent in respect of use of land and machinery including factory building but was making payment for use of plant and machinery on monthly production basis - the assessee was not liable to deposit tax at source u/s 194-I of the Act on the amount paid by the assessee towards hiring charges on plant and machinery - no case for payment of penalty could be made out against the assessee – Decided against revenue.
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2014 (9) TMI 547
Remission of tax u/s 88E Computation of profit u/s 115JB - Whether remission/rebate of tax u/s 88E should be taken into consideration for computing difference between the tax payable on normal income and on book profits for invoking Section 115JB of the Act Held that:- The Tribunal had rightly followed Delhi High Court in Commissioner of Income Tax Vs. MBL and Co. Ltd. [2013 (5) TMI 669 - DELHI HIGH COURT] - there is no reason why the remission of tax u/s 88E should not be available on tax as computed under the Minimum Alternative Tax scheme as both Section 115JB as well as normal provisions have been enacted to provide the machinery for computing total income of the assessee which is exigible to tax - There would be no rationale to limit the plain words of Section 88E and hold that remission in payment of tax is only applicable to the tax determined under the normal provisions of the Act. While computing the tax payable u/s 115JB, remission in form of Securities Transaction Tax (STT) in terms of Section 88E read with Section 87 would be available to the assessee it would be the position while computing the tax payable under the normal provisions - the tax remission u/s 88E has to be and should be taken into consideration both under the normal provisions as well as book profits computed u/s 115JB - The amount of remission u/s 88E would get reduced from the tax payable under the two methods/manners of computing taxable income - The end result would be that the figure of STT would get balanced and not adversely affect either the Revenue or the assessee revenue accepts that in case benefit of Section 88E is given under the two methods, the difference on the tax payable would be less than 10% - Section 115JB would not be applicable Decided against revenue.
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2014 (9) TMI 546
Disallowance u/s 14A(1) – Expenses on interest free advances u/s 36(1)(iii) – Held that:- The Tribunal had rightly followed the decision in SA BUILDERS LTD. Versus COMMISSIONER OF INCOME-TAX [2006 (12) TMI 82 - SUPREME COURT] - Assessee had advanced loans to the group concerns and interest on such advances was disallowed – it has been decided in assessee’s own case for the earlier assessment year’s also, thus, the order of the Tribunal is upheld – Decided against revenue.
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2014 (9) TMI 545
Penalty u/s 271FA – AIR information not furnished by appellant – Limitation u/s 275(1)(c) – Held that:- Following the decision in The Joint Sub Registrar, Sangat, District Bathinda vs. Director of Income Tax (CIB), Chandigarh [2014 (9) TMI 499 - PUNJAB & HARYANA HIGH COURT] – The assessing authority on appreciation of material had concluded that the filer of the returns was habitual defaulter without any concern or respect for the law - The plausible explanations in terms of Section 273B of the Act in the cases of Sub Registrar, Talwandi Saboo, Sub Registrar, Lambi, Sub Registrar, Malout, Sub Registrar, Maur Mandi, Sub Registrar, Doda and Sub Registrar, Rampura Phul are also similar and therefore, the levy of penalty under Section 271FA of the Act cannot be faulted – Decided against appellant.
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Service Tax
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2014 (9) TMI 568
Refund of cenvat credit - Export of services or not - services provided from India or not - onsite work undertaken at customer s premises - software development service - Rule 5 of the CENVAT Credit Rules, 2004 read with the Notification No. 05/2006-CE(NT) - export of service as provided in Rule 3(2) for the period post 27/02/2010 - Held that:- first condition (clause (a)) with regard to provision of service from India and its use outside India has not been satisfied. The services have been performed at overseas' customers' site by the subsidiaries of the Appellants, though they may be to the customers of the Appellants. However, these services have not been provided by the Appellants, but claimed to be provided by their subsidiaries. The agreement has been referred to in great details by the Tribunal and it arrived at a conclusion that there may not be any privity of contract as between the subsidiaries of the Appellants and customers, but the situs of service and its provision is both abroad. With the provision of service and site at which the service is provided the Appellants who are in India cannot be said to be involved. The service has been held to be not provided by the Appellants from India. Tribunal was right in it's conclusion that the services provided do not satisfy the requirement of the Export of Service Rules, 2005 as prevailing prior to their amendment with effect from 27.02.2010. In such circumstances any wider questions or controversy need not be gone into and decided. The Written Submissions of the Appellants referred to the services in relation to immovable property and based on that the arguments are canvassed. We are of the view that there was no Rule 3(1) (ii) of the Export of Service Rules, 2005 as initially introduced. There was Rule 3(1)(i) and (iii). We are not in agreement with Mr.Sridharan that the business establishment of the service provider is in India and final consumption and consumer is outside India. We find that the provider of service is also a subsidiary outside India and recipient is also outside India. Regarding alternative claim of refund under different provision - Held that:- Appellants had not invoked any specific provision and made an application under the same to claim refund. They could not have invoked Section 11B of the Central Excise Act, 1944 during the course of the proceedings. In the facts and circumstances of the present case Mr.Kantharia is right in urging that the reasons assigned in paragraph 5.9 of the impugned order by the Tribunal cannot be faulted. There is no application made in a prescribed format and time by the Appellants to claim the refund. The refund claim will have to be decided in accordance with the provisions and after the compliance is made with the procedural formalities set out therein. Today, we cannot entertain the argument alternatively made on the claim of refund without any such compliance leave alone any application. For all these reasons we do not find any basis for the alternate claim as well. In the event the Appellants wish to make any such claim it is open for them to invoke the provisions in that regard and as available in law - Decided against Assessee.
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2014 (9) TMI 567
Denial of refund claim - export of servcies - Notification No.6/2010-ST dated 27.02.2010 - Whether in the facts and circumstances of the case, the CESTAT was correct in holding that the Assessees satisfy the condition laid down for exports as defined in Rule (3) of the Export of Service Rules, 2005 in respect of onsite services rendered by them abroad for the period from 27.02.2010 onwards - Held that:- onsite services rendered by the Appellants abroad would qualify for being termed as export of service. Therefore, the findings of the Tribunal on this point cannot be termed as perverse or vitiated by any error of law apparent on the face of the record. The reasoning in the impugned order is, therefore, in consonance with the material produced including amendments to the concerned clauses and subrules. No substantial question of law arises - Decided against Revenue.
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Central Excise
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2014 (9) TMI 563
Maintanability of appeal before High Court - Jurisdiction - what is meant by the term “determination of any question having relation to rate of duty (for service tax) or value (of service) for the purpose of assessment” - Invocation of extended period of limitation - revenue prayed to refer the matter to larger bench - Held that:- Following decision of Commissioner of Service Tax Versus Ernst & Young Pvt. Ltd. And Others [2014 (2) TMI 1133 - DELHI HIGH COURT] - appeals are returned as they are not maintainable before the High Court. Decided against Revenue.
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2014 (9) TMI 562
Imposition of penalty - Invocation of extended period of limitation - Held that:- Respondent is engaged in manufacture of Galvanized Transmission Towers and parts thereof falling under Chapter 7308 of the Central Excise Tariff Act, 1985. The Officers of the Preventive Unit pointed out that the Respondents cleared these goods and parts thereof with remarks on the invoices and which demonstrate that they are exempted from payment of excise duty. The notification in that behalf has been referred by the Commissioner (Appeals) in paragraph 2 of his order. He has also adverted to the cause shown by the Assessee. Eventually after analyzing the entire material the Commissioner (Appeals) concluded that the Assessee acted bonafide on the advice/ purchase order of the customer and availed the exemption. When it was pointed out later on that the condition No.64 of the Notification is not fulfilled and the exemption is not available to the Assessee, the Assessee paid the amount of duty leviable together with interest thereon. There was nothing on record about any ingredients, namely, fraud, collusion or any willful misstatement or suppression of facts, etc. so as to enable the Revenue to impose the penalty and therefore, the Commissioner (Appeals) has set aside the penalty. No substantial question of law arises for consideration from such concurrent findings - Decided against Revenue.
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2014 (9) TMI 561
Condonation of delay for filing an appeal before Appellate Authority for Industrial and Financial Reconstruction (AAIFR) - Sick unit - order issued versus order served - AAIFR condoned the delay in favor of revenue - Held that:- order dated 21st July, 2008, was passed without issue of notice and hearing the respondent-Revenue on the question whether or not waiver of interest/penal interest or penalty were justified. Directions were issued for waiver of entire interest levied or leviable on excise duty and service tax arrears. It was further directed that the payment of the principal amount should be made in five annual instalments, without any interest/penal interest or penalty. (The modified scheme refers to period of 7 years and 5 annual instalments for payment but the learned counsel for the petitioner has stated that the scheme, which was actually sanctioned, postulated payment of dues in 5 years). It is apparent and manifest that there was violation of principles of natural justice. This is why the Revenue had filed an appeal, inter alia, stating that the order directing complete waiver of interest and penalty should not have been passed without hearing them and without their point of view being considered and examined by the BIFR. It is submitted on behalf of the respondent-Revenue that settlement cannot be forced and imposed on an unwilling party and whether or not to accept the terms had to be decided by the Central Excise authorities in accordance with law as per the guidelines in vogue and applicable. AAIFR has rightly relied on the decision of a Division Bench of this Court in Director-General of Income Tax (Admn) vs. Board of Industrial and Financial Reconstruction and Ors.,[2000 (8) TMI 981 - HIGH COURT OF DELHI]. - Decided against assessee.
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2014 (9) TMI 560
Invocation of extended period of limitation - Did the Tribunal fall into error in holding that the extended period of limitation invoked against the assessee in terms of Section 11A of the Central Excise Act was not justified, in the circumstances of the case - Held that:- Order-in-Original dated 13.01.2010 in addition to deciding questions of limitation and penalty also decided the dispute regarding classification and held that 'Nestle Tea Premix' should be classified under Chapter sub heading 2101.20 of the Central Excise Tariff Act, 1985. jurisdiction of the High Court as an appellate forum would depend upon the issues adjudicated and decided in the order in original. The order in original decided the dispute relating to rate of duty. appeal is not maintainable before the High Court. The same is returned - Decided against Revenue.
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2014 (9) TMI 559
Condonation of delay - Held that:- Tribunal had permitted the Revenue to file additional statement in support of the delay condonation application. We have perused such an additional statement filed by the Revenue at Annexure G to the appeal. We are broadly in agreement with the learned counsel for the respondent that the statement itself should not be sufficient to condone the delay. It is, of course, true that the Revenue had pressed in service strong prima facie case and substantial questions of law being involved. These, though would be relevant considerations, cannot form the sole basis for condoning delay in absence of any explanation whatsoever. In that view of the matter, we are inclined to place the proceedings back to the Tribunal for giving one opportunity to the Revenue to file additional affidavit. Decided in favour of Revenue.
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2014 (9) TMI 558
Condonation of delay - waiver of pre-deposit - Held that:- Writ petition is disposed of, directing the third respondent to consider and pass appropriate orders on Ext.P4 petition for stay, and Ext.P5 petition for condoning the delay in filing Ext.P3 appeal, which shall be done at the earliest at any rate within one month from the date of receipt of a copy of this judgment. Similarly, the 4 respondent is directed to consider and pass appropriate orders on Exts.P8 to P10 interlocutory applications and pass appropriate orders thereon at the earliest, at any rate within one month from the date of receipt of a copy of this judgment. Till the orders are passed on the Interlocutory Applications as above, further coercive proceedings pursuant, to Ext.P11 shall be kept in abeyance. Petitioner shall produce a copy of the judgment along with a copy of the writ petition before the 3rd and 4th respondents for further steps.
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2014 (9) TMI 557
Maintainability of appeal - Held that:- appeal preferred by the Department is liable to be dismissed in view of the instructions issued by the Department as the tax effect is less than ₹ 4,00,000/-. Counsel appearing for the Department has not disputed this submission - Decided against Revenue.
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2014 (9) TMI 556
Stay application - COD clearance not obtained - Appeal dismissed by tribunal - Held that:- Public sector undertakings are not above the law, nor above the citizen and in this matter, the order was passed against the petitioner-assessee long back and its appeal was dismissed as back as on 19-12-2008. For the reasons best known to the revenue, they did not choose to recover the amount which should have been recovered after the dismissal of the appeal and for want of any interim order from any Court of law, it was the duty of the revenue to recover the amount. Revenue is due from the petitioner, since the year 2008 and today, even no appeal is pending questioning the liability and only application for restoration of appeal is pending and twice the restoration application has been dismissed by the appellate authority. Therefore, in the facts of the case, we do not find any reason to stay the demand - Decided against assessee.
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2014 (9) TMI 555
Cenvat Credit - reasonable steps before availing credit - original manufacturer of fabrics were alleged to be fictitious - endorsed invoices - period of limitation - the question that falls for determination is whether the department can escape its liability to find out a person who was registered with them and to pursue him for payment of duty - Following decision of PRAYAGRAJ DYEING & PRINTING MILLS PVT. LTD. Versus UNION OF INDIA [2013 (5) TMI 705 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2014 (9) TMI 566
Classification under entry 8471 or entry 8470 - portable handheld ticketing machine - Whether portable hand held electronic ticketing machine is an IT produce and falls under heading and sub-heading No.8471 to be eligible for tax at 4% - Held that:- it is clear that where a commodity is described against any heading or subheading, if the aforesaid description is different in any manner from the corresponding description in the Central Excise Tariff Act, 1985, then only those commodities described as aforesaid will be covered by the scope of this notification and other commodities though covered by the corresponding description in the Central Excise Tariff will not be covered by the scope of this notification. 8471 in the notification at Sl.No.4 is the replica of the description contained in the Central Excise Tariff Act at 8471. In the Central Excise Tariff Act, against the said description in the end they have used the words “not elsewhere specified or included”. Now 8471 under the Tariff act includes ticket issuing machines. Therefore, by virtue of the words used in 8471 “not elsewhere specified or included”, 8471 do not include ticket issuing machines. When ticket issuing machines are expressly mentioned in 8470 and in the notification issued on 31.3.2006 under the heading “the Information Technology product” 8470 is not included, the assessee is not entitled to the benefit of 4% tax. How the goods are understood in the commercial sense has to be taken into consideration for the purpose of classification of the goods and the scientific and technical meaning has no place. Therefore, when the goods involved is a portable handheld ticketing machine that is how the assessee has described the machine and that is how the customers have also understood it and in the Central Excise Tariff Act this ticket issuing machines are expressly included in Entry 8470, by any stretch of imagination, the Court cannot hold that it falls under 8471 especially when it specifically states that “not elsewhere specified or included”. The notification issued specified 8471 does not include this ticketing machine - Decided against assessee.
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2014 (9) TMI 565
Levy of penalty under Section 27(3) - wilful non- disclosure of assessment turnover - Held that:- Order of assessment does not deal with the objections raised by the petitioners item-wise. While issuing pre-revision notice for all the six assessment years, each assessment year contains a different allegation or more than two allegations. The petitioners have submitted their objections in respect of all the pre-assessment notices specifically raising a contention in respect of each of the allegation in the notice. Therefore, the assessing authority bound to consider the objections item-wise and accept or reject the same or partially accept the same. However, by a three paragraphs order, the order of assessment has been finalized and the proposal in the pre-revision notice has been confirmed. Petitioners did not produce the records before the audit party. Nevertheless, a show notice has been issued by the Assessing Officer, in which, the petitioners should be given an opportunity to show-cause as to why the assessment should not be revised and while showing cause, it is always open to the petitioners to produce the records to substantiate the same. If there are no records available, then the petitioners can substantiate their stand by raising objections. In such circumstances, there is a duty enjoined upon the Assessing Officer to consider the objections and passes speaking order rejecting the same. These aspects which are primarily necessary to be followed while finalizing an order of assessment, especially a revision of assessment has been given a go by by the assessing officer. The petitioners in respect of the pre-revision notices, for two assessment years specifically requested for an opportunity of personal hearing. This opportunity has not been rejected nor granted. Matter remanded back - Decided in favour of assessee.
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2014 (9) TMI 564
Benefit of exemption under Section 5(3) of the Central Sales Act - Whether the Tribunal was justified in denying the benefit of exemption under Section 5(3) of the Central Sales Act to the applicant and rejecting Form-H having been filed by the applicant, only on the basis that the goods sold by the applicant to the purchaser/ exporter have not been exported by it in the same form, which is contrary to the decision of the Hon'ble Apex Court in the case of State of Karnataka Vs. Azad Coach Builders Pvt. Ltd. [2010 (9) TMI 879 - SUPREME COURT OF INDIA] - Held that:- Section 5(3) of the Act clearly indicates that the phrase 'in the course of export' comprises in itself three essentials, namely; (i) that there must be a sale, (ii) that goods must actually be exported and (iii) that the sale must be a part and parcel of the export. The words 'occasioning the export' mean the factors, which were immediate course of export. The words `to comply with the agreement or order' mean all transactions which are inextricably linked with the agreement or order occasioning that export. The expression `in relation to' are words of comprehensiveness, which might both have a direct significance as well as an indirect significance, depending on the context in which it is used and they are not words of restrictive content and ought not be so construed. If there is in- severable link between the local sale or purchase and export and if it is clear that the local sale or purchase between the parties is inextricably linked with the export of the goods, then the claim of exemption under Section 5(3) from State Sales Tax shall be liable to be allowed. - Decided in favour of assessee.
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