TMI Tax Updates - e-Newsletter
September 24, 2014
Case Laws in this Newsletter:
Income Tax
Service Tax
Central Excise
CST, VAT & Sales Tax
Highlights / Catch Notes
-
Income Tax:
Nature of non-compete fee capital or not – the commercial right thus acquired by the assessee unambiguously falls in the category of an 'intangible asset' - eligible for depreciation - HC
-
Income Tax:
Scope of undisclosed income u/s 158B(b) – non-filing of the return and nondisclosure of the share income received by the assessee as a partner of firm from the firm is wrongly treated as undisclosed income - HC
-
Income Tax:
Section 292B to be attracted, the condition precedent is, there should be a defect in the notice - If the notice is not defective at all, the question of validating the said mistake by recourse to Section 292B would not arise - HC
-
Service Tax:
Waiver of pre-deposit - Renting of Immovable Property - services rendered by M/s Maharashtra Industrial Development Corporation (MIDC) - the activities undertaken by it can not be construed as functions of the State. - AT
-
Central Excise:
Any activity without which the manufacture of final product, though theoretically possible, is not commercially feasible, would have to be treated as having nexus with the manufacture of final product and the inputs used in such activity would be eligible for cenvat credit - AT
-
Central Excise:
Proper classification of hook and loop tape fasteners of nylon and polyester yarn being manufactured by woven fabrics would fall under Chapter Heading 58.06 of the Central Excise Tariff and not under Chapter Heading 98.06 - AT
-
Central Excise:
Whether weigh bridge (not disputed to be capital goods) purchased and came to the factory of the appellant and used outside the factory for weighing sugar cane shall entitle the appellant to the capital goods credit - held yes - AT
-
VAT:
Transformers supplied by the assessee along with other machinery for setting up a hydel project constitute a part of a renewable energy device and it falls within Entry 80 of III Schedule - HC
Articles
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2014 (9) TMI 691
Non-speaking order by Tribunal - Invocation of section 40(a)(ia) - Revenue expenditure allowable as deductions u/s 28(i) – Held that:- Assessee rightly contended that the expenditure could be claimed in the year of payment of TDS - the concession made by counsel pertains to question of law and not question of fact - there was no justification for Tribunal to set aside order of CIT (A) - the Tribunal without applying its mind whether CIT (A) was justified in relying upon decision in similar circumstances with regard to similar issues simply based on the concession given by counsel proceeds to opine that expenditure could be claimed in the year of payment of TDS - The law involved and how the interpretation has to be made was never discussed – thus, the matter is to be remitted back to the Tribunal for fresh consideration – Decided in favour of assessee.
-
2014 (9) TMI 690
Scope of undisclosed income u/s 158B(b) – Block assessment proceedings - Whether non-filing of the return by the assessee and not disclosing the share income derived / received by the assessee from the partnership M/s. Chandulal Govindlal Choksi can be said to be "undisclosed income" within the meaning thereof in Section 158B(b) under Chapter XIVB of the Act – Held that:- Assessee rightly contended that as such the firm itself filed the return of income disclosing the share income paid to the appellant and therefore, it cannot be said there was a nondisclosure of the said income and therefore, the same cannot be treated as "undisclosed income" within the meaning of Section 158B(b) under Chapter XIVB of the Act – relying upon Assistant Commissioner of Income-tax Versus Enterprises and Commissioner of Income-tax vBR. Shah and others [2013 (1) TMI 345 - SUPREME COURT] - the computation of "undisclosed income" for the purposes of Chapter XIVB of the Act, if any income which is not required to be included in computing the "total income" assessable and chargeable to tax, cannot be declared as "undisclosed income" within the meaning of "undisclosed income" as contained in clause (b) of section 158B of the Act - nondisclosure of the share income received by the assessee as partner of the firm and from the firm and non-filing of the return and not disclosing the aforesaid share income is wrongly treated as "undisclosed income" within the meaning of "undisclosed income" as contained in clause (b) of section 158B of the Act and consequently the assessment proceedings are required to be held bad in law – thus, non-filing of the return and nondisclosure of the share income received by the assessee as a partner of firm M/s. Chandulal Govindlal Choksi from the firm is wrongly treated as "undisclosed income" within the meaning thereof in section 158B(b) of the Act under Chapter XIVB and consequently the block assessment proceedings are non est – Decided in favour of assessee.
-
2014 (9) TMI 689
Validity of notice issued u/s 158BC - Whether the notice issued u/s 158BC is invalid for non-mentioning of the block period in respect of which the said notice is issued – Held that:- In the notice issued u/s 158BC, the time granted to the assessee to file return, was less than 15 days - when the statute specifically prescribes 15 days’ time as the minimum and 45 days as the maximum, if the requirement of law is not complied with, the notice is defective and it is not curable one u/s 292B of the Act – relying upon Assistant Commissioner of Income Tax & Anr. Versus M/s. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA] - after service of notice the assessee promptly engaged a Chartered Accountant, who is fully aware of the meaning of the word ‘block period’ - Within the time prescribed he filed NIL returns on 06.03.1988 - Therefore the assessee had no doubt in his mind what he is expected to do in law and there was no breach to any extent in non-mentioning of the block period in the notice issued to him - it is not the requirement of law that in a notice issued u/s 158BC, the period of block period is to be specifically mentioned by the authorities - If it is not mentioned, it would not invalidate the notice - Section 292B to be attracted, the condition precedent is, there should be a defect in the notice - If the notice is not defective at all, the question of validating the said mistake by recourse to Section 292B would not arise – Decided against assessee.
-
Service Tax
-
2014 (9) TMI 699
Refund - natural justice - opportunity of being heard - Held that:- On earlier occasions the Deputy Commissioner Service Tax, Division-VI, Mumbai-II and who has passed the impugned order Mr. S.P. Pradhan has been pulled up by this Court. He had not implemented and carried out the orders and directions of this Court which were specific and clear. We do not see how the approach of the officer in this case can be countenanced even in the present matter. When he is aware of the requirement of giving a personal hearing before a adverse order is passed, then, the impugned order shows either a uncalled for or undue enthusiasm which could safely be termed as arrogance as well. We do not approve of such a hasty course and, therefore, proceed to quash and set aside the impugned order. - matter remanded back for fresh decision.
-
2014 (9) TMI 698
Extension of stay order - power of tribunal - extension beyond the period of 180 days or 365 days in all - Held that:- In the present case partial waiver of pre-deposit was granted in three stay applications in an equal number of appeals, on condition of deposit of the specified percentage of service tax assessed within the specified period, during the pendency of the appeals or for a period of six months, whichever is earlier, on 20-9-2012. The present application is filed seeking extension of that order, on the ground that the period of 180 days has elapsed from the date of the initial grant. The appeal could not be disposed of, not on account of any delay tactics adopted by the petitioners/appellants but on account of the pendency of a large number of much older appeals. It is ordered that the waiver of pre-deposit and subject to the conditions stipulated therein, granted by the order dated 20-9-2012 (which have been fulfilled), shall operate during the pendency of the appeal. - We further order stay of all further proceedings for realisation of the balance adjudicated liability, for a period of six months or till the disposal of the appeal, whichever is earlier. - Decided in favor of assessee.
-
2014 (9) TMI 697
Waiver of pre-deposit - Renting of Immovable Property - services rendered by M/s Maharashtra Industrial Development Corporation (MIDC) - whether function of state or not - Held that:- Section 20 of the Act inter alia provides for maintenance fund for the Corporation and all monies received by the corporation from the Government, all fees, costs and charges received, all monies received by way of disposal of land, buildings and other properties, movable or immovable and all monies received by way of rents and profits or in any other manner or from any other sources are credited to the fund. From these provisions of the MIDC Act, it is clear that the Corporation has its own identity apart from that of Maharashtra Government and operates independently of the Government. The receipts of the corporation are credited to its own fund and do not go the consolidated fund of the State. If that be so, the activities undertaken by it can not be construed as functions of the State. In the present case we have noticed that the appellant is undertaking lease of land in two stages. In the first stage an agreement to lease the land to eligible applicants on payment of premium is entered into subject to construction of commercial buildings on the land and once the construction is completed, a lease agreement is entered into on payment of lease rental. The activity undertaken by the appellant would be amenable to service tax with effect from 1.7.2010, if not earlier. As the demand involved is huge to the extent of ₹ 536 crores, no undue hardship would be caused to the appellant if some pre-deposit is ordered, especially since no prima facie case has been made out by the appellant. - stay granted partly.
-
2014 (9) TMI 696
Waiver of pre-deposit - Classification of services - Business Auxiliary Service or repair and maintenance service - development of the infrastructure as agreed upon apart from furniture, fixtures, furnishings and equipment internal maintenance of common areas, maintenance, replacement of capital equipments, etc - Availing Cenvat Credit while availing benefit of abatement Notification No. 1/2006-S.T. - Held that:- The petitioner is the licensee of the premises and expenses are incurred for the upkeep and efficient use of the licensed premises. Prima facie these activities would not therefore amount to provision of Business Auxiliary Services, for or on behalf of IHC. On this analysis, the petitioner has made out a strong prima facie case, in respect of Service Tax assessed on Business Auxiliary Service. Regarding cenvat credit - Held that:- it is asserted that since the credit availed has been reversed though subsequently, the petitioner would be entitled to the benefit of abatement under Notification No. 1/2006-S.T., which was denied by the adjudicating authority. Prima facie case is in favor of assessee - stay granted.
-
Central Excise
-
2014 (9) TMI 687
CENVAT Credit - non receipt of goods - showing the goods removed for Job work - Job Workers in their respective statements recorded under Section 14 of the Central Excise Act, 1944 admitted that they have not received any raw materials from PMS for processing and as such - Held that:- Though the PMS had requested for supply of the RTO reports but the same were not supplied and similarly while they requested for cross examination of 21 out of 24 job workers, and also of 7 transporters but the same were disallowed by the Commissioner on the ground that the same is not required and the request is being made only to delay the adjudication proceedings. When in this case is the main evidence relied upon by the department is the statement of 24 job workers, in our view, before relying upon the statement of the job workers, and using the same against the PMS, their cross examination should have been permitted. In this regard, Section 9D (1) of the Central Excise Act, 1944 provides that a statement made and sent by a person before any central excise officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contained, when the person who had made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. In view of the provisions of sub-section (2) of Section 9 D, the provisions of sub-section (1) of Section 9 D are applicable to the adjudication proceedings also and accordingly, as far as possible before using the statement of a person recorded under Section 14 of the Central Excise Act, 1944, against an assessee, that person must be examined by the adjudicating authority and if his cross examination is requested, the same must be allowed. in view of the provisions of sub-section 9D (2) of Central Excise Act, 1944, the cross examination of a witness, whose statement has been relied upon by the adjudicating authority is a must. Besides this, when the report of the RTO regarding the registration number of the vehicles mentioned in the invoices being non-transport vehicles was relied upon by the department, the copies of the reports should be supplied to the appellant, which admittedly have not been supplied. In view of this, the impugned order is not sustainable. The same is set aside. The matter is remanded to the original adjudicating authority for de novo adjudication after supplying the reports of the RTO relied upon by the department and also examination of the job workers by the Commissioner in terms of the provisions of Section 9 D(2) and also permitting their cross examination by the appellant. - Matter remanded back - Decided in favour of assessee.
-
2014 (9) TMI 686
CENVAT Credit - part of the steam generated supplied to adjoining sister concern - whether appellant will be entitled to CENVAT Credit with respect to furnace oil used for generation of that part of the steam which is supplied to the sister concern of the appellant - Held that:- Procedures existed at the relevant time to avail cenvat credit on inputs sent to the power plant as job worker. The only irregularity committed by the appellant was that they did not follow the prescribed procedures. It has been a settled position of law now that a substantial benefit of cenvat credit cannot be denied for not following the prescribed procedures when it is not disputed that inputs on which credit is taken have been utilized for manufacture of final product on which Central Excise Duty has been paid/payable. In the case of sister concerns such captive consumption of materials become a case of revenue neutral exercise. Accordingly, cenvat credit with respect to inputs, sent to the power plant by the clinker unit for generation of electricity sent to grinding unit, cannot be denied to the appellant for not following the prescribed procedures of Rule 4(5)(a) and Rule 4(6) of the Cenvat Credit Rules 2004 which allowed the appellant to send the clinker to grinding unit under job work and then clear the finished goods from the job worker’s factory premises when diversion of inputs/electricity is not alleged by the Revenue. Matter remanded back - Decided in favour of assessee.
-
2014 (9) TMI 685
Manufacture - intermediate goods - Captive consumption of Sulphuric Acid - Exemption Notification No.06/2002-CE dated 01.03.2002 - Held that:- until the Sulphuric Acid finally manufactured comes out after attaining its required strength, the Sulphuric Acid utilized in the manufacturing system in the double contact (double absorption) process in a continuous process is neither segregated nor its quantity is ascertainable In fact, it is not a marketable commodity and hence not excisable. In recording the conclusion that Sulphuric Acid in the Circulation Tank, is not liable to duty, the adjudicating Commissioner has reasoned that there was manufacture of one product only, namely, Sulphuric Acid at the final stage, and also observed that the proposal to recover duty at two different stages - one at the intermediate stage, and thereafter, at the final stage, is incorrect, as there was no manufacture of any new excisable commodity at the intermediate stage, which is in the Circulation Tank and used repeatedly in the manufacture of Sulphuric Acid only. He also observed that Sulphuric Acid remains Sulphuric Acid at both intermediate and final stages, thereby, falling under the same Chapter Sub-Heading - Following decision of Ambalal Sarabhai Enterprise[1989 (8) TMI 72 - SUPREME Court], United Phosphorous [2000 (4) TMI 38 - SUPREME COURT OF INDIA], Bhor Industries [1989 (1) TMI 128 - SUPREME COURT OF INDIA] and Moti Laminates [1995 (2) TMI 67 - SUPREME COURT OF INDIA] - Decided against Revenue.
-
2014 (9) TMI 684
Duty of excess clearance of goods beyond SSI exemption - Benefit of MODVAT Credit - benefit of abatement towards sales tax paid on the sale of goods - Computation of duty - Penalty u/s 11AC - Held that:- From the records, the appellant themselves have admitted to a duty liability to ₹ 6,27,728/- in their reply dated 26-3-1999 and a reduced liability of ₹ 5,21,149.25 in their reply dated 24-9-1999. Thus, the appellant have been adopting changing stands in their replies, but the fact remains that the appellant did exceed the exemption limit of ₹ 30 lakhs and did not discharge the excise duty liability. In the absence of any evidence to the contrary led by the appellant, the only conclusion that can be reached is that the duty demands computed by the lower authorities are correct. It is on record that during material period, the appellant was not registered with the department nor were they following any of the statutory procedures prescribed for availing of Modvat Credit. Modvat scheme as it stood at the relevant time envisaged filing of declaration, maintenance of records showing receipt of the goods, consumption of goods for manufacture, filing of returns indicating the amount of duty paid through the credit account and other statutory requirements. When none of these requirements have been complied with by the appellant, we do not understand how he can claim the benefit of Modvat Credit. In view of the above legal and factual position, we are of the considered view that the appellant is not eligible for the benefit of Modvat Credit on the inputs used in the manufacture of pipes which was manufactured and cleared by them clandestinely, without payment of duty. Whether the appellant is liable to penalty under Section 11AC of the Central Excise Act especially when the said provision came into the statute book only with effect from 28-9-1996 - In the show cause notice the proposal is for imposition of penalties under Section 11AC read with Rule 173Q of the Central Excise Rules, 1944. Rule 173Q as stood at the material point of time provided for imposition of penalty up to five times the value of the goods clandestinely removed. However, in the impugned order penalty has been sought to be imposed only equal to the duty sought to be evaded. Since penalty has been imposed within the limits prescribed by the law as it stood at the material point of time, the same cannot be faulted. Therefore, imposition of penalty equal to the duty for the period prior to 28-9-1996 can be clearly sustained under Rule 173Q and for the period on or after 28-9-1996, the same is sustainable under Section 11AC of the Act. - Decided against assessee.
-
2014 (9) TMI 683
Waiver of pre deposit - Eligibility for cenvat credit of various items parts and accessories, components etc. used for maintenance of the captive power plant - Held that:- For being covered by the definition of "capital goods" eligible for cenvat credit, the only points which are relevant are that the goods must be those mentioned in Rule 2(a) of CCR 2004 and should have been used in the factory of manufacture of final product and how the goods are used and whether the goods after being installed become fixed to the earth and together constitute a manufacturing plant, is not relevant. It is absolutely wrong to mix the issue of eligibility for capital goods cenvat credit of the items mentioned in Rule 2(a) of CCR, 2004 with the issue of excitability of the manufacturing plant. Therefore, just because the various items of machinery covered by Chapter 82, 84, 85 and 90 of the Tariff, pipes and tubes, tanks etc., all of which are covered by the definition of "capital goods", have been installed and after installation have become fixed to the earth power plant, the same would not cease to be the "capital goods". If a process or activity is so integrally connected to the ultimate manufacture of goods so that without that process or activity, manufacture may, even if theoretically possible, be commercially inexpedient, the goods intended for use in such process or activity would be treated as used in the manufacture of goods. The expression used in Rule 2(k) of CCR, 2004 in the definition of "input" is "used in or in relation to the manufacture of final product whether directly or indirectly", whose scope is much wider than the scope of the expression "used in the manufacture". Therefore, in our view, any activity without which the manufacture of final product, though theoretically possible, is not commercially feasible, would have to be treated as having nexus with the manufacture of final product and the inputs used in such activity would be eligible for cenvat credit. impugned order is prima facie contrary to the provisions of the law and the appellant have a strong prima facie case in their favour and the requirement of pre-deposit under section 35F in these circumstances would cause undue hardship to the appellant. Therefore, the requirement of predeposit of cenvat credit demand, interest thereon and penalty is waived for hearing of the appeal and recovery thereof is stayed during pendency of appeal - Stay granted.
-
2014 (9) TMI 682
Classification of goods - appellants engaged in the manufacture of “hook and loop tapes” of nylon and polyester yarn - Classification under Heading 5806.10 or under sub-heading 9806.90 - Imposition of penalty - Held that:- tapes in question admittedly have selvedges on both the sides, which are discernible from the rest of the fabrics and they prevented any yarn from unravel from other side of the woven fabrics. If according to the observations of the adjudicating authority himself the tapes in question have selvedges, at the unfinished stage and there is no finding that such selvedges were subsequently cut before finishing the fabrics in question, it has to be held that the product was manufactured with selvedges on both the sides. Government of India, who was approached by the units manufacturing hooks and loop tape fasteners for imposition of Anti- Dumping Duty has passed the order 14/24/2003-DGAD, dated 7-6-2005. Vide the said order it stands clearly held that the goods in question fall under Heading 5806.10 and not under Heading 9606.90 - There is clear finding of the fact by the Ministry of Commerce and Industry, while giving its final finding vide order dated 7-6-2005 that hooks and loop tapes are classifiable under 58.06. The said finding stand accepted by the Government of India and carry a lot of weight. It stands observed in the said order that there are 4 producers of domestic like product in India. The application stand filed by M/s. Sky Industries Ltd. and the other producers i.e. Magic Fasteners Pvt. Ltd., Delhi and M/s. Siddharth Filament Yarn Ltd. and M/s. Siddharth Magic Tape Pvt. Ltd. have supported the application. Accordingly, the authorities has recommended the Anti-Dumping Duties to be imposed by the Central Government on all imports of narrow woven fabrics having pile woven made up of man-made fabrics. They are also known as hook and loop tapes fasteners or Velcro tapes or fasteners, tapes falling under Customs Heading 58.06. Proper classification of hook and loop tape fasteners of nylon and polyester yarn being manufactured by woven fabrics would fall under Chapter Heading 58.06 of the Central Excise Tariff and not under Chapter Heading 98.06 as held by the Commissioner. Accordingly, the impugned orders classifying the product under Chapter Heading 98.06 and confirming demands and interest and imposing penalties are liable to be set aside. Decided in favour of assessee.
-
2014 (9) TMI 681
Denial of input service credit - Rent services - nexus with the manufacturing activity - Held that:- any service availed by the assessee who is a manufacturer of excisable goods in the course of their business is entitled for CENVAT credit of the same. Therefore, under these circumstances, it is immaterial whether the rented premises is within the factory or outside but the same should be availed in the course of manufacture of final product. In this case, it is not disputed that the rented premises is not used for storage of manufactured goods by the appellant. Therefore, following the decision of Ultratech Cement Ltd. (2010 (10) TMI 13 - BOMBAY HIGH COURT) the appellants are entitled to input service credit of rent service - Decided in favour of assessee.
-
2014 (9) TMI 680
Eligibility to CENVAT Credit - Capital goods - Whether weigh bridge (not disputed to be capital goods) purchased and came to the factory of the appellant and used outside the factory for weighing sugar cane shall entitle the appellant to the capital goods credit - Held that:- in absence of any contrary evidence neither leaves any scope to doubt the genuineness of the claim nor even use thereof for weighment of sugar cane which is integrally connected to the manufacturing activity. Capital goods came to the factory of the appellant but moved during crushing season for use outside the factory (for weighment of sugar cane) and such weighment is an integral part of the process of sugar industry. There appears no removal of portable weigh bridge from the factory causing loss to revenue. Therefore, any interpretation to deny the capital goods credit under Rule 4 of Central Excise Credit Rules, 2004, shall defeat the spirit of the law. However, it may be appreciated that the definition of capital goods requires that capital goods shall be used in the factory of the manufacture of final product - Decided in favour of assessee.
-
CST, VAT & Sales Tax
-
2014 (9) TMI 695
Karnataka Sales Tax Act, 1957 - Sections 13, 21 & 25A - rectification - period of limitation - Whether adjudication can be made on the ground of limitation when neither the assessee nor his counsel had appeared before the first Assessing Authority - Held that:- petitioner has a remedy by way of an appeal under Section 22 of the Act. Be that as it may, counsel for the petitioner submitted that the impugned order has been passed without appreciating the objections raised by the petitioner on 7.3.2014. It is noted from the impugned order that on that day the petitioner’s counsel appeared and had filed objections. But it was the petitioner who had sought for a personal hearing in the matter. After filing objections on 7.3.2014 neither the petitioner nor his counsel had appeared before the first respondent/Authority, but the impugned order has been assailed on various grounds including on the ground of limitation. - The petitioner or his representative to be heard personally and thereafter the first respondent to pass fresh orders in accordance with law - Matter remanded back - Decided in favour of assessee.
-
2014 (9) TMI 694
Principle of natural justice - According to the petitioner, the 1st respondent has passed the impugned orders influenced by the orders of the 2nd respondent - TNVAT - levy of tax on chemicals used by the petitioner in the works contract (processing of exposed negatives) to recover TDS on the alleged construction, repair and maintenance expenses and to recover the TDS on the maintenance charges paid to the foreign supplier which were issued based on the directions of the 4th respondent. - Held that:- since it is stated by the learned Counsel for the petitioner state that the 1st respondent has followed the order of the 2nd respondent and the petitioner themselves are ready to deposit 25% of the demanded tax amount in each case to show their bonafide, the impugned orders are set aside - The petitioner are directed to deposit 15% of the demanded tax amount in each case on or before 31.7.2014 in first instalment and to deposit the remaining 10% in each case on or before 31.8.2014 in 2nd instalment - matter remanded back for fresh order - Decided in favour of assessee.
-
2014 (9) TMI 693
Denial of refund claim - penalty levied under Section 28-A(4) - Whether on the facts and in the circumstances of the case and in law,, the Karnataka Appellate Tribunal is right in allowing the Appeals and setting aside the penalty order levied under Section 28-A(4) of the Act by the Check Post Officer - Held that:- It is clear that the Tribunal did not consider the appeals in proper perspective and got impressed with the production of the photocopy of Form No.II before the Appellate Authority by the assessee for the first time. Even, the reliance placed on the judgment in N. Subramanya, on the face of it, was misplaced - The assessee, in the present case, chose not to contest the matter before the Officer in-charge of Check Post and they volunteered to pay penalty. In this backdrop, in our opinion, the Tribunal committed a grave error of law in allowing the appeals based on the judgment of this Court in N. Subramanya which has no application to the facts of the present case. The findings of fact and the proposition of law carved out by the Tribunal, in our opinion, are perverse and hence the order of the Tribunal deserves to be set aside. Decided in favour of Revenue.
-
2014 (9) TMI 688
Classification of goods - Classification of transformers - On the facts and in the circumstances of the case, and in law whether the Tribunal is right in holding that the levy of tax at 4% is correct in respect of sale of transformers used in construction of Mini Hydel Project fall under Sl. No.80 of III Schedule of KVAT Act 2003 (renewable energy devices) - Held that:- assessee is in the business of manufacturing goods for erection, testing and commissioning of equipments for power transmission lines, power house, etc. In pursuant to the contract entered by the assessee with Atria Brindavan Private Limited, it supplies iron and steel structures, transformers, distribution boxes, etc. and the renewable energy device is erected using the materials supplied by the assessee. One such material goods supplied is transformer. The transformer is a part of renewable energy device. The said transformer is manufactured keeping in mind the need of the clients. In other words, it is clients’ specific. It is not available in the open market. This renewable energy device is erected to run the hydel project whereby using water electricity energy. The energy is produced. The Karnataka Renewable Energy Development Limited, a Government of Karnataka Enterprise, which is expert body dealing with renewable energy device has also opined that the electro mechanical equipments like turbines, generators, gear boxes, cables, control panel, transformers, switch gear and hydro mechanical gates are renewable energy devices. Tribunal was justified in holding that the transformers supplied by the assessee along with other machinery for setting up a hydel project constitute a part of a renewable energy device and it falls within Entry 80 of III Schedule and therefore, the order passed by the Tribunal cannot be found fault with - Decided against Revenue.
|
