TMI Tax Updates - e-Newsletter
September 29, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
TMI SMS
Highlights / Catch Notes
-
Income Tax:
Transfer of shares for Failure to comply with the conditions of contract - If the transfer was conditional and if the Assessee fails to comply with conditions and therefore, the shares could not be transferred in his name, then, applicability of Section 28(iv) of the Income Tax Act, 1961 is ruled out. - SC dismissed the SLP
-
Income Tax:
Addition u/s 40A(3) r.w.r 6DD - payment in a sum exceeding 20,000 rupees - depositing cash into the Bank Account of Supplier Asansol Bottling and Packaging Co. Pvt. Ltd. (Warehouse) against issue / purchasers of Country Spirit - there is no evasion of tax by claiming the bogus expenditure in cash - No additions - AT
-
Income Tax:
Difference of TDS as per 26AS and TDS as declared in Return of Income (ROI) - AO failed to make inquiries - revision order u/s 263 is valid - AT
-
Income Tax:
Treatment to loss on shares - bogus loss - the broker was not suspended during the period, when the transactions for sale & purchase of the shares taken place - the suspension of the broker by SEBI will not hold the transaction invalid - AT
-
Income Tax:
Validity of proceedings u/s 153A - the date of receipt of the documents is 13.12.2006, which relates to the AY 2007-2008 - the assessment year in which the documents are received by the AO of the "other person‟ is NOT required to be made u/s 153C of the Act - AT
-
Income Tax:
Disallowance u/s 14A - correctness of the claim - no disallowance can be made by the Assessing Officer more than the exempt income - AT
-
Income Tax:
Diminution of value of shares - to be treated as business loss or not - Regular method of valuation of stock to be followed - claim of loss allowed - AT
-
Customs:
Confiscation of empty bags of sugar u/s 118(b) of the Customs Act, 1962 - attempt to illegal export to Bangladesh - Provisions of Section 118(b) of the Customs Act, 1962 are not applicable to the empty gunny bags confiscated by the Adjudicating Authority. Such confiscation of empty gunny bags is bad in law - AT
-
Customs:
The whole spirit of obligation of the CHA under the CHALR is to establish the indentity of the importer/exporter & appropriately advise his clients, is existing - reasonable steps were taken by the appellant to comply with Regulation -13 (a), (d) & (o) of CHALR. - Revocation of license and forfeiture of security deposit not justified - AT
-
Customs:
Valuation - loading the assessable value on the basis of other brand of goods - There is no evidence on record that both these brands of Chinese origin are similar - loading the assessable value on the basis of other brand of goods not justified - AT
-
Customs:
Enhancement in declared value of import - Appellant has declared the same description what is given in the invoice/customs documents not only in the present bill of entry but in the other imports of the same appellant - There is no wilful misstatement on the part of the appellant or any evidence indicating that some extra amount has been repatriated to the supplier for the present consignment - Demand set aside - AT
-
Customs:
Whether the plea that the withdrawal of the Anti-Dumping duty would have been with retrospective effect is justified? - No provisions of law found enabling the Designated Authority or empowering him to allow backdated relief in such circumstances - The answer is no - AT
-
Service Tax:
Service Tax (Third amendment) Rules, 2016 - Amendments in Half Yearly Return - Form ST-3 - Notification
-
Service Tax:
Cenvat credit - service tax paid on various input services and utilization thereof - Demand - utilization of CENVAT credit in excess of 20% - since all the issues involved in this case are of interpretative nature, there is no reason to visit appellant with any penalty. - AT
-
Service Tax:
Power and jurisdiction of Commissioner - the order directing the lower authority to file an appeal before the Commissioner (Appeals) is beyond the scope of Section 83 of the Finance Act, 1994 itself. - AT
-
Service Tax:
Refund claim - unutilized CENVAT credit - the service tax paid on the renewal of the software by the service provider is eligible to be claimed as refund by the appellant. - AT
-
Central Excise:
Classification - motor vehicle chassis manufactured and cleared in CKD/SKD condition from various divisions of the respondent - the classification of parts cleared by the respondent under CETH 8708 sustained - AT
-
Central Excise:
SSI Exemption - Valuation - retail prices charged to customers in the shop - Assessable value has to be determined by reducing the sale price in such a manner so as to arrive at the price on which the manufacturer would have sold the said goods in wholesale - AT
-
Central Excise:
Classification - Milk Shake Mixes are to be classified under Chapter Heading 0404 only - flavoured syrups/ fruit syrups/ Squashes are to be classified under Chapter Headings. 21069040/ 2106905 - AT
-
Central Excise:
Cenvat credit - dumpers and parts thereof - dumpers are to be treated as used in or in relation to the manufacture of final products and thus, qualifies as an “input” - AT
-
Central Excise:
Supply of electric wires and cables under international competitive bidding to various thermal power plants without payment of duty - exemption denied on the ground that classification against Sl. No. 400 in Notification No. 21/2002-Cus. is indicated as 9801 whereas the wires and cables manufactured and cleared by the appellants are classifiable under CETH 8544 - Denial of exemption is not valid - AT
-
VAT:
Composition of tax u/s 14A of GVAT - ongoing works contract - the competent authority shall entertain the application of the petitioner for composition of tax without objecting to the question of limitation in filing it and decide the same on merits. - HC
-
VAT:
TNVAT - taxability of sale of recharge vouchers for mobile Sim Cards - there was no element of sale involved in the sale of Sim Cards or recharge vouchers - If some mistake has been committed by the dealer, he can be given an opportunity to rectify the mistake - HC
-
VAT:
Cancellation of registration certificate with retrospective effect - reversal of input tax credit when registration was in force - principles of natural justice - The retrospective cancellation of the Registration Certificate is set aside - matter remanded back - HC
TMI Short Notes
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
-
Income Tax
-
2016 (9) TMI 1155
Applicability of section 28(iv) - value of any benefit or perquisite – transfer of shares for Failure to comply with the conditions of contract - Held that:- We do not find any legal and valid ground for interference. The Special Leave Petitions are dismissed. HC order confirmed [2014 (5) TMI 145 - BOMBAY HIGH COURT] saying If the income chargeable to income tax under the head “profits and gains” includes the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession, but finding that such benefit or perquisite, whether convertible into money or not, has not been derived in this case by the Assessee, Section 28(iv) cannot be invoked - Decided against revenue
-
2016 (9) TMI 1154
Addition u/s 40A(3) r.w.r 6DD - payment in a sum exceeding 20,000 rupees - depositing cash into the Bank Account of Supplier Asansol Bottling and Packaging Co. Pvt. Ltd. (Warehouse) against issue / purchasers of Country Spirit - Held that:- The primary object of enacting section 40A(3) were two folds, firstly, putting a check on trading transactions with the object to evade the liability of tax on income earned out of such transaction and, secondly, to inculcate the banking habits amongst the business community. Apparently, this provision was directly related to curb the evasion of tax and inculcating the banking habits. Therefore, the consequence, which were to be fallen on account of non-observation of Section 40A(3) of the Act must have nexus to the failure of such object. Therefore, the genuineness of the transactions being free from vice of any device of evasion of tax is relevant consideration. With regard to the purpose of bringing the provisions of section there is no doubt about the identity of the party. The ld. AR has directly deposited the cash in the account of the companies and has produced the sales bills of the company. So in the instant case, there is no evasion of tax by claiming the bogus expenditure in cash. - Decided in favour of assessee.
-
2016 (9) TMI 1153
Revision u/s 263 - difference of TDS as per 26AS and TDS as declared in Return of Income (ROI) - reasons to believe - Held that:- AO is also duty bound to examine that apart from the AIR information, if there is potential escapement income more than ₹ 10 lacs. On the facts and circumstances of the present case, we are of the view that the AO ought to have made proper and adequate enquiries with regard to all the aspects set out in the show cause notice u/s.263 of the Act. The Hon’ble Calcutta High Court in the case of Maithan International (2015 (4) TMI 479 - CALCUTTA HIGH COURT ) has however taken a view that jurisdiction u/s 263 of the Act could be invoked when the AO fails to make an enquiry which he ought to have made in the given facts and circumstances of a case. We are therefore unable to accept the plea of the ld. Counsel for the Assessee in this regard. As we have already mentioned, at this stage that we need not go into the merits of the issues raised by the CIT in the show cause notice u/s 263 of the Act because in the impugned order the AO has only been directed to examine the issues on merits after affording the assessee opportunity of being heard. In the given circumstances we are of the view that the assessee is at liberty to put forth of its claims on the merits of the issues before the AO in the assessment proceedings to be completed pursuant to the impugned order of CIT. For the reasons given above we uphold the order of CIT u/s 263 of the Act and dismiss the appeal of the assessee. - Decided against assessee
-
2016 (9) TMI 1152
Treatment to loss on shares - bogus loss - the broker of KSE was suspended - Genuineness of transaction doubted - failure to produce books - Held that:- The transactions were complete in terms of documentation and there was no defect in the papers submitted by the assessee in support of the transactions. We also find that there were entries for the sale purchase of the shares in the bank statements, contract notes, dmat account of the assessee. In our considered view we find that the assessee has proved the transaction on the basis of documents and therefore the suspension of the broker by SEBI will not hold the transaction invalid. See Commissioner of Income Tax vs. Korlay Trading Co. Ltd. [1998 (2) TMI 104 - CALCUTTA High Court] In the instant case, ld. DR has not brought any defect with respect to the transactions of the sale & purchase of the shares but just mentioned that the broker through whom the transactions were made was suspended. We also find that the broker was not suspended during the period, when the transactions for sale & purchase of the shares taken place. The ld. DR has also not brought on record the reasons for which the broker was suspended. In view of above, we are inclined to reverse the order of authorities below - Decided in favour of assessee.
-
2016 (9) TMI 1151
Validity of proceedings u/s 153A - computing the six assessment years for assessing / reassessing u/s 153C - Held that:- The reference to the date of search in cases of “other person” where warrant of authorization was not issued, the date of receipt of the documents by the AO of the “other person” constitutes the “date of search” for the purpose of computing the six assessment years for assessing / reassessing u/s 153C of the Act. In the present case, the date of receipt of the documents is 13.12.2006, which relates to the AY 2007-2008. In view of the provisions of clause (b) of section 153A(1) of the Act, the “six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted” . Therefore, the assessment year in which the documents are received by the AO of the "other person‟ is NOT required to be made u/s 153C of the Act. Thus the assessment for the AY 2006-07, which was made u/s 143(3) of the Act, is required to be quashed on technical grounds.
-
2016 (9) TMI 1150
Disallowance u/s 14A - correctness of the claim - expenditure or no-expenditure for earning exempt income - Held that:- sub-section (2) deals with cases where the assessee specifies a positive amount of expenditure in relation to income which does not form part of the total income under the said Act and sub-section (3) applies to cases where the assessee asserts that no expenditure had been incurred in relation to exempt income. In both cases, the Assessing Officer, if satisfied with the correctness of the claim of the assessee in respect of such expenditure or no expenditure, as the case may be, cannot embark upon a determination of the amount of expenditure in accordance with any prescribed method, as mentioned in sub-section (2) of Section 14A of the said Act. It is only if the Assessing Officer is not satisfied with the correctness of the claim of the assessee, in both cases, that the Assessing Officer gets jurisdiction to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the said Act in accordance with the prescribed method. Since, no expenses were incurred by the assessee for earning the exempt income, therefore, there is no question of making any disallowance. Even otherwise, no disallowance can be made by the Assessing Officer more than the exempt income, thus, appeal of the assessee is allowed. The Assessing Officer is directed to delete the disallowance. - Decided in favour of assessee
-
2016 (9) TMI 1149
Diminution of value of shares - to be treated as business loss or not - Held that:- Regular method of valuation to be followed - No doubt it is to be seen whether diminution of investment in the shares is liable to allowable or not. This matter of controversy has already been adjudicated by the Hon’ble Supreme Court in case of United Commercial Bank [1999 (9) TMI 4 - SUPREME Court] wherein this controversy has been decided in favour of the assessee against the revenue. - Decided in favor of assessee. Determination of cost of acquisition u/s.45(2A) - computation of LTCG - Held that:- At the time of argument no distinguishable facts have been placed on record by the revenue to which it can be assume that the CIT(A) has passed the order wrongly and illegally. The specific directions has been given by the CIT(A) to determine the cost of acquisition u/s.45(2A) of the Act read with Circular No.768 dated 24.06.1998. Nothing seems unjustifiable. Since the matter of controversy has rightly been adjudicated by the CIT(A), therefore, we nowhere found any ground to interfere with this order, therefore we uphold this issue in favour of the assessee and against the revenue. Accordingly, this issue is decided in favour of the assessee and against the revenue.
-
2016 (9) TMI 1148
Revision u/s 263 - Voluntary retirement compensation - disallowance of claim of deduction allowed under sec. 10(10C) - “profit in lieu of salary” - Held that:- As decided in CIT vs. Sharda Sinha [2015 (12) TMI 1290 - DELHI HIGH COURT] wherein held that the sum paid to the assessee was “to compensate for the abrupt loss of source of income” and that the termination of contract had fatally injured the appellant’s only source of income for the last 20 years. The mere fact that the assessee was free to earn through other sources would not make a difference to this position. The question was thus answered in affirmative that in favour of the assessee and against the Revenue. A possible view to treat the compensation of ₹ 5 lacs received by the assessee from its employer was not liable to tax under sec. 17(3) of the Income-tax Act, 1961 was certainly there. Hence, it cannot be said that the assessment order allowing exemption on the said receipt of ₹ 5 lacs was erroneous and thus prejudicial to the interest of Revenue as well. We thus while setting aside order in question passed under sec. 263 of the Act restore the assessment order granting the above relief on the receipt of ₹ 5 lacs as compensation. The grounds involving the issue of validity of revisional order passed under section 263 of the Act are accordingly allowed in favour of assessee
-
2016 (9) TMI 1147
Validity of proceeding under section 153A - no notice under section 143(2) issued within the statutory period available - disallowance under section 40A(3) - existence of incriminating material - Held that:- Original return of income under section 139(1) of the Act was filed on 17/09/2009 and no notice under section 143(2) of the Act was issued within the statutory period available, which expired on 30/09/2010. Since in the case of the assessee search was conducted on 21/01/2011, no assessment was pending as on the date of the search. This fact has not been disputed by the learned CIT (DR). Further, we find from the assessment order that in the addition made for disallowance under section 40A(3) of the Act, there is no reference of any incriminating material found during the course of search. Thus, on the date of search, undisputedly no assessment was pending for abetment and it is also an undisputed fact of the present case that no incriminating material was found during the course of search. Thus, we find that on fulfillment of these two conditions i.e. no incriminating material was found during the course of search and no assessment was pending as on the date of the search, no addition could have been made in the proceeding under section 153A of the Act in the case of the assessee. We, thus, respectfully following the ratio laid down in the case of decision of the Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT ), we hold that no addition could have been made in the case of the assessee for the year under consideration. - Decided in favour of assessee.
-
2016 (9) TMI 1146
Disallowance in respect of fee paid to SEBI - Held that:- CIT(A) has rightly respectfully followed the decision in the case of CIT vs. BLB Ltd. reported [2010 (3) TMI 907 - DELHI HIGH COURT] by observing that the assessee was required to pay a fee to SEBI. The assessee filed an appeal before the Securities Appellate Tribunal who passed the order dismissing the appeal and thereafter the assessee made the payment. The amount was therefore paid during the year. In view of the discussion above the amount was rightly allowed as a deduction to the assessee and thus addition was deleted and ground of appeal was ruled in favour of the assessee. Re-computing and allowing long term capital loss after considering indexation - Held that:- CIT(A) has rightly observed that the AO determined long term capital loss at ₹ 75 lacs but did not allow indexation of cost. However, the assessee has stated that the loss after indexation works out to RS.1,19,10,163/-. Therefore, the Ld. CIT(A) was right in directing the AO to re-compute and allow the loss after considering indexation. In view of the above, CIT(A) has passed a well reasoned order which does not need any interference - Decided against revenue
-
2016 (9) TMI 1145
Allowability of expenditure incurred to renovation of expenses - revenue v/s capital expenditure - Held that:- We find that ld.CIT(A) while deciding the issue in favour of assessee has noted that the expenditure incurred was to make tenanted premises more suitable and conducive to business activity and by incurring the expenditure no new asset has been brought into existence. He has also given finding that the expenditure incurred also included expenditure by way of replacement /repairing of old existing furniture and fixtures and modification made to facilitate the display of changed models of products of companies whose goods are sold by assessee. - Decided against revenue Addition on account of notional interest on furniture deposits - Held that:- We find that the ld.CIT(A) while deciding the issue has given a finding that the deposits have been given for the purpose of business and further it was for use of existing furniture for which assessee was not paying any rent. We also find that identical issue arose in assessee’s own case for AY 2008-09 in favour of assessee as noted that the furniture deposit was old amount given to Sales India and M/s.Santosh Trading for using the existing furniture of these concerns without payment of rent. He has further noted that the deposits have been given for the purpose of business and there was no justification of disallowing the notional interest - Decided against revenue Addition u/s 40A - Held that:- The assessing officer has not properly appreciated the facts and considering the factual aspect of the payment and the fact that no such disallowance was made in the earlier years except in AY 1990-91 which was also deleted and applying the principle of consistency to the similar facts the addition u/s.40A(2)(b) is directed to be deleted and this ground of appeal is allowed in favour of assessee Disallowance of delayed payment of employees’ contribution of ESIC - delayed payment - Held that:- The employees’ contribution of ESIC has not being paid before the due dates and in the absence of any contrary binding decision in favour of assessee, we respectfully following the decision of Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT ) we set aside the order of ld. CIT(A) on this issue and uphold the decision of A.O. - Decided against assessee
-
2016 (9) TMI 1144
Deduction u/s 80IC - allegation that sales have been inflated in order to claim deduction u/s 80IC of the Act - Held that:- A.O held that the assessee has not been able to explain the source of cash deposits in his bank account of ₹ 7,77,86,000/- and he added the same u/s 68 of the Act as unexplained and consequently, he dismissed claim of deduction u/ 80IC of the Act on this amount i.e. ₹ 7,77,86,000/-. Since by the earlier part of the order we have held that the rejection of books of accounts was not in accordance with the provisions of section 145(3) of the Act, thus the impugned cash sales cannot be treated as income from other sources and deduction u/s 80IC of the Act cannot be denied on the amount of such cash sales. However, we cannot ignore that the A.O had no occasion to examine the details and documents filed by the assessee. Consequently, the action of the A.O in rejecting the books of accounts and treating cash sales as income from other sources and denying deduction u/s 80IC of the Act is set aside and the A.O is directed to examine and verify the claim of the assessee regarding cash sales, for deduction u/s 80IC of the Act. We also direct the A.O to verify and examine the cash sales in the light of commercial tax payment, raw material consumed and stock register verification, if any, after considering the submissions of the assessee and after providing due opportunity of hearing for the assessee. - Decided in favour of assessee for statistical purposes. Addition u/s 68 in respect of cash sales proceeds deposited in the bank account - Held that:- We observe that the authorities below categorically noted that the assessee did not submit copy of bank statement with HDFC Bank with which the impugned proceeds of cash sales was deposited. Per contra, it is contended by the ld. Counsel of the assessee that the assessee submitted all relevant documents including copy of the bank statement with HDFC bank during assessment proceedings. Further move the impugned cash sales can be verified from the respective purchasers and other related offices including the commercial tax deptt. The disallowance of cash sales and not treating the amount 2% of total sales as income from eligible unit have been made without considering the entire relevant evidence and explanation of the assessee and the issue of cash sales detailed verification and examination of all related documentary and circumstantial evidence. The AO shall also consider the percentage of the consumption of fuel and raw materials in proposition to finished goods and will also take into consideration the percentage of gross profit ratio of other similar unit, if any, in the similar factual conditions. We may point out that without considering the relevant evidence, details and explanation alongwith earlier and subsequent year financial results and GP ratio of the assessee and similar unit in similar location the Aon cannot make disallowance and addition and it is also on the assessee to justify and explain the situations wherein huge cash sales was made and cash was deposited to bank account which is 40 KM away from the office of the assessee. The assessee may also submit all other relevant details pertaining to transportation, commercial tax payment and purchasers to establish its claim of cash sales. With there observations issue restored to the file of the AO for de novo adjudication. No disallowance u/s 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 can be made for A.Y 2008-09 and addition made by the AO in this regard is not sustainable and consequently we dismiss the same
-
2016 (9) TMI 1143
Bogus long term capital gain entries - whether the statement of Shri Mukesh Choksi is sufficient to the addition? - Held that:- Except the statement of Shri Mukesh Choksi there is no material available to the Assessing Officer for the said addition. No opportunity of cross examination of Shri Mukesh Choksi was given to the assessee. It is not in dispute that the sales were effected from Demat Account No.10111342 with Dena Bank. Sale consideration of ₹ 1,83,768/- were deposited in the appellant’s saving bank account No. HS 7310 of Central Bank of India. There is no cogent and convincing material with the Assessing Officer for the above said bogus transaction to the tune of ₹ 1,83,768/-. As discussed above the statement of Shri Mukesh Choksi is not sufficient to arrive at this conclusion that the transaction with M/s. Gold Star Finvest Pvt. Ltd. is bogus specifically in the circumstances when no opportunity was given to the assessee to cross examine the Shri. Mukesh Choksi. The number of decisions have come in favour of the assessee which were based upon the statement of Shri Mukesh Choksi - Decided in favour of assessee.
-
2016 (9) TMI 1142
Unexplained sundry creditors - Held that:- The documents available on record relied upon before the AO the CIT(A) have been taken into consideration. We find that in the absence of any argument assailing the same the finding of the CIT(A) that the addition deserves to be deleted cannot be faulted with. It is seen that the conclusion drawn that the sundry creditors had not directly confirmed to the AO was found to be incorrect. Further the non-receipt of a response to notice under section 133(6) from M/s Ajanta Transport, Kolkata, the assessee has explained it by stating that the notice was sent to an incomplete address. The same has been confirmed by the said party and the evidences have also been confirmed by way of an email. In the absence of any infirmity pointed out by the Revenue, the Departmental ground is dismissed. Addition u/s 69C - unexplained expenditure of commission - confirmation from commission agents that they had rendered services and receive the said amounts - Held that:- Sri Vinod Maheshwari and Mrs. Urvashi Maheshwari at the relevant point of time aged 40 and 38 are stated to have 20 years and 12 years experience in dealing in petroleum products and their qualifications were B.Com. and B.A. respectively. The services rendered have been explained that they booked orders of petroleum products for Modern Chemicals effecting sales to the tune of ₹ 52,69,216/- and ₹ 36,76,469/- by Mr. Vinod Kumar Maheshwari and Smt. Urvashi Maheshwari respectively. Accordingly on a consideration of the peculiar facts, circumstances, evidences and the material on record, we find no good reason to interfere with the finding arrived at in deleting the addition - Decided in favour of assessee.
-
2016 (9) TMI 1141
Reopening of assessment - ‘reason to believe’ - income earned from the Navsari Project -Held that:- As no income has been earned from the Navsari Project which is a contract agreement dated 12th September, 2009. Hence in this year also the reopening u/s 147 is again based on wrong assumption of fact qua the income earned by the assessee in this year, therefore, our finding given in aforesaid appeal will apply mutatis mutandis in this year also. Accordingly, we hold that, the entire reopening under section 147 is bad in law and hence the appeal of the assessee is treated as allowed.
-
2016 (9) TMI 1140
Reopening of assessment - addition on account of low gp - Held that:- In order to reopen the assessment, where the scrutiny assessment has already undertaken, even before the end of the four years, the AO should possess some fresh tangible material, which came to the possession of the AO after the conclusion of the assessment. A bare perusal of questionnaire and the particular question raised at serial no.11, it is of the view that the AO has already gone through all the material in the scrutiny assessment and no fresh material came to his possession. - Decided in favour of assessee
-
Customs
-
2016 (9) TMI 1123
Effect of withdrawal of Anti-Dumping Duty - Sodium Tripoly Phospate - import from China - based upon the Final Finding of the Designated Authority, notification No. 13/2012-Cus (ADD) dated 22.2.2012 rescinded the earlier notification No. 58/2011-CUs dated 8.7.2011 except as respects things done or omitted to be done before such rescission - Whether the exception clause of the notification is justified and the plea that the withdrawal of the Anti-Dumping duty would have been with retrospective effect is justified? Held that: - It is only vide mid-term review that a conclusion contrary to the first Finding was arrived at and the Designated Authority has rightly observed that such conclusion would be applicable only prospectively. Such mid-term review for reviewing the changed circumstances was in terms of Rule 23 of the Anti Dumping Rules and making recommendations for withdrawing the duty. Based upon such mid term review, the Designated Authority could not have upset, its own Final Finding recorded in original investigation, in as much as having not put to challenge the same had attained finality. He has rightly observed that there is no provision under Rules empowering the Designated Authority to recommend discontinuation of Anti Dumping Duty with retrospective effect. In other words, Rule 14 enabling power of Designated authority to terminate the proceedings is not available for review proceedings in terms of Rule 23. No provisions of law found enabling the Designated Authority or empowering him to allow backdated relief in such circumstances - no justifiable reason to interfere in the Final order dated 10.2.2012 of the Designated Authority. Appeal rejected - decided against Appellant.
-
2016 (9) TMI 1122
Issuance of writ of mandamus to implement the order passed by the appellate authority - the appellate authority dismissed the appeal filed by the Department and allowed the petitioner's appeal and reduced the redemption fine for re-export from ₹ 2,10,000/- to ₹ 1,50,000/- and did not interfere with the personal penalty - order of appellate authority not implemented by the respondents - revision filed against the order - whether on not granting of order by the Revisional Authority would amount to stay of order passed in the appeal? - Held that: - the decision in the case of NVR Forgings v. Union of India [2016 (5) TMI 7 - PUNJAB AND HARYANA HIGH COURT] is relied upon where it was held that the Revisional Authority has no jurisdiction to entertain the Revision Petition, against an order passed by the Officer, who is in the same cadre. In any event, the order passed by the Appellate Authority, having been nearly one year back, this Court is of the view that one more opportunity can be granted to the Department to pursue the revisional remedy and if they are unable to obtain any orders, either interim or final, then, they have to comply with the Order-in-Appeal. Writ petition disposed off - four weeks time granted to the respondent / Department from the date of receipt of the copy of this order, to obtain appropriate interim or final orders from the Revisional Authority, failing which, the orders passed by the Commissioner of Appeals, dated 29.10.2015, shall be implemented within a period of ten days from the date on which the thirty days' period expires - decided against petitioner.
-
2016 (9) TMI 1121
Confiscation of empty bags under Section 118(b) of the Customs Act, 1962 - huge quantities of sugar stored in the house of one Amal Mali for illegal export to Bangladesh - search of premises on seizure of sugar/ empty bags - restriction on sale/export of sugar came into operation only by a letter dated 10/5/2006 issued by Ministry of Consumer Affairs Food and Public Distribution - Held that: - even intention to export and preparation alone are not sufficient to constitute an attempt and has to be associated with a positive penultimate commission/act, depending upon the circumstantial evidences available in each case. The decision in the case BABBAN KHAN Versus COLLECTOR OF CUSTOMS (PREVENTIVE) [1992 (9) TMI 208 - CEGAT, CALCUTTA ] followed. Any violation of a procedural requirement under Sugar (Control) Order 1966 that too for the period after 10.05.2006, for local movement/ control of sugar, cannot be made as the basis for confiscation of the sugar under Section 113 of the Customs Act, 1962. These provisions are applicable only when any prohibited goods are brought inside a customs area for export and not to local movement of goods in India, outside customs area or goods stored in a godown. Sugar is also not a notified/specified category of goods under the Customs Act, 1962 which cannot be brought near the international border - confiscation of sugar and imposition of penalties set aside. Confiscation of empty bags under Section 118(b) of the Customs Act, 1962 - Held that: - goods, if brought in packed form into a customs area then such packages are liable to confiscation. Here, neither the seized goods are contained in packages nor brought into customs area for export. There is also no evidence to indicate that exported goods, if any, were once contained in the empty gunny bags seized by the department. Provisions of Section 118(b) of the Customs Act, 1962 are not applicable to the empty gunny bags confiscated by the Adjudicating Authority. Such confiscation of empty gunny bags is bad in law - confiscation of empty bag is set aside. Appeal allowed - decided in favor of appellant.
-
2016 (9) TMI 1120
Revocation of CHA license - forfeiture of security deposit - Regulation 20(1) of Customs House Agents Licensing Regulations 2004 - declaration of consignment as photocopying machines - on examination Red Sanders Wood found - whether Adjudicating authority is justified in revoking the CHA license of the appellant under Regulation 20 (1) for not discharging the obligations under Regulation- 13 (a), (d) & (o) of CHALR? - Held that: - CHA is required to verity the antecedents of his clients & suitably advice them. At no stage, appellant had the knowledge that there is any irregularity in the export/ import consignments. The goods imported were put to first check examination and the importer very well exists. Similarly the export consignment was received in a sealed container duly examined & certified by the jurisdictional Central Excise authorities. The exporter is also existing. Bills of entry & shipping bill were filed by the appellants based on the documents furnished by the importer / exporter. If there was any irregularity in the documents then the same was also available before the assessing officers and the Customs examining officer. If the same could not be detected by the appellant the same also could not be detected by departmental assessing/ examining officers. There is no evidence on record that appellant came to know of any irregularity before the same were detected by the department or that he did not advise the concerned clients - It is also observed that the points of difference from the Inquiry report are not so glaring to justify revocation of CHA license as held by the Adjudicating authority. The whole spirit of obligation of the CHA under the CHALR is to establish the indentity of the importer/exporter & appropriately advise his clients, is existing - reasonable steps were taken by the appellant to comply with Regulation -13 (a), (d) & (o) of CHALR. Revocation of license and forfeiture of security deposit not justified - appeal allowed - decided in favor of appellant.
-
2016 (9) TMI 1119
Valuation - loading the assessable value on the basis of other brand of goods - Westride Brand - LingLong Brand - CIF value - whether or not first appellate authority has correctly loaded the assessable value of the Chinese origin tyres? - Held that: - No evidence is available on record that both the above brands of tyres of Chinese origin are having same qualities and market standards in China Identical goods and similar goods are defined in Rule 2 (c) & 2 (e) of the Customs Valuation (Determination of Valuation) Rules, 1988. The decision in the case of M/s. Deekay Exports Vs. Commr. of Customs, Calcutta [1996 (9) TMI 401 - CEGAT, CALCUTTA] has been relied upon where it was held that a quantity of 18 MT of glycerine imported by M/s. Shalimar Paint cannot be held to be contemporary for import of 144 MT of glycerine imported by Appellant Deekay Exports. The case of C.C. New Delhi Vs. D.M. International [2013 (5) TMI 549 - CESTAT NEW DELHI] relied upon where it was held that quality, import of origin, place and time of import are relevant factors and NIDB data cannot be made the basis for enhancement of value. The quantity of tyres imported by the appellant is much more than the quantity imported in the relied upon bill of entry. Further independent Delhi importers have also imported China origin tyres at values lower than the value of relied upon bill of entry. The brand name of the tyres imported by the appellant is Linglong whereas the brand name in the relied upon Bill of Entry is Westride . There is no evidence on record that both these brands of Chinese origin are similar - loading the assessable value on the basis of other brand of goods not justified - appeal allowed - decided in favor of appellant.
-
2016 (9) TMI 1118
Valuation - import of Crystal beads of marquise shaped glass with coating on its back - whether enhancement in declared value has been correctly made and upheld by the lower authorities with respect to glass beads/Chattons imported by the appellant? - Held that:- The customs authorities are bound to assess duty on the transaction value and does not allow the department to ascertain an imaginary value based on the basis of DOV data. Only in exceptions specified in Section 14 of the Customs Act, 1962 can the department follow Customs Valuation Rules. The supplier of glass beads and importer are not related persons and there is no evidence on record that any amount in excess of what has been declared by the appellant has been repatriated by the appellants. Thus there is no ground for rejecting the transaction value. Appellant has been importing the same goods at the declared/invoice value and no objection was raised for those contemporary imports of the appellant. There is also no evidence on record whether contemporary imports relied upon by the department are Identical goods or similar goods as defined in Rule 1(c) & 1 (e ) of the Customs Valuation (Determination of Imported goods) Rules 1988. There is thus no reason to doubt the declared/invoice value paid by the appellant - enhancement of assessable value in the present proceedings is arbitrary and not justified. Appellant has declared the same description what is given in the invoice/customs documents not only in the present bill of entry but in the other imports of the same appellant. Assessable value of the synthetic glass beads is showing vide variations from ₹ 9.20/kg. to ₹ 19,069/- per kg. There is no wilful misstatement on the part of the appellant or any evidence indicating that some extra amount has been repatriated to the supplier for the present consignment. - confiscation of imported goods and imposition of penalty not attracted. The decision in the case of Eicher Tractors Ltd. Vs. C.C., Mumbai [2000 (11) TMI 139 - SUPREME COURT OF INDIA] followed. Appeal allowed - decided in favor of appellant.
-
2016 (9) TMI 1117
Demand of duty forgone on imported material - exemption availed under Notification No. 53/97-Cus dated 03.06.1997 - EOU engaged in manufacture of Polyester Texturised/Dyed Yarn - Partially Oriented Yarn - The entire consignment of POY imported by them was sold to M/s. Arihant Synthetics Ltd., without any processing - inter-unit transfer of goods - is the transfer of goods to another unit results to violation of conditions stipulated in Notification No. 53/97-Cus dated 03.06.1997 and is demand of duty forgone justified? - Held that: - it does not require existence of any valid reason for transfer of goods to another EOU. No restriction imposed in respect of supply from one EOU to another such EOU. The dates and events were examined by the Commissioner and it was found that these events would constitute a valid reason in terms of para 6.16 of the EXIM Policy - demand of duty not justified. Earlier the Appeal No. C/771/05 was filed in form E.A-5. However, the Asst. Register vide letter dated 24.06.2005 informed the appellant that appeal needs to be filed in C.A-5 instead of E.A.5. Accordingly, an appeal in the form C.A-5 was filed. The earlier appeal filed before this Tribunal in Appeal No. C/771/05 therefore becomes infructuous and duplicate. Appeal disposed off - decided against Revenue.
-
Service Tax
-
2016 (9) TMI 1138
Validity of Deputy Commissioner and Commissioner (Appeals) order - Doctrine of Merger - jurisdiction of the same to adjudicate a demand notice involving the amount more than ₹ 5,00,000/- - all the services covered by the impugned order became taxable services only from 16.6.2005 by virtue of Finance Act, 2005 which introduced new services in relation to survey and map making services - ignorance of legal principles of Doctrine of Merger - Held that:- the Deputy Commissioner lacks jurisdiction to pass the order and all the proceedings before him is void ab initio. Secondly, the order passed by the Deputy Commissioner is also bad in law as he did not have the pecuniary jurisdiction to pass adjudication order at the relevant time which is clear from the Board s circular dated 1.10.2003. Further, we also find that by Doctrine of Merger, the order passed by the Deputy Commissioner no longer survive and therefore, to review an order which does not exist in law is not permitted by law, more so when review order is passed much after order passed by the Commissioner (Appeals). We also find that the Department has also filed appeal against the Order-in-Appeal. In view of these facts and circumstances, we are of the considered opinion that the impugned order is bad in law and we set aside the same. - Decided in favour of appellant
-
2016 (9) TMI 1137
Refund claim - service tax paid on GTA services - Notification No. 41/2007-ST which allows refund of service tax in case of export of the goods - export was not done by the assessee himself but the same were through a merchant exporter - Held that:- an earlier appeal of the Revenue against the said respondent was disposed of by the Tribunal reported as Commissioner of Central Excise, Indore Vs National Steel and Agro Industries Ltd. [2016 (1) TMI 847 - CESTAT NEW DELHI]. It was held that the fact that the export was affected through a merchant exporter will not result in denial of refund of service tax to the assessee who has actually paid the same. - Decided against the Revenue
-
2016 (9) TMI 1136
Cenvat credit - service tax paid on various input services and utilization thereof - Demand - utilization of CENVAT credit in excess of 20% - Held that:- as per the provisions of Rule 6(3)) of Cenvat Credit Rules, 2004, cenvat credit cannot be utilized in excess of 20% of the credit, if an assessee is providing taxable and non-taxable services. Appellant was correct in submitting that similar issue in respect of appellant is decided by this Bench as reported at [2009 (2) TMI 91 - CESTAT NEW DELHI]. Since similar issue in appellant's own case is decided in their favour following the same, we hold that revenue has no case on this issue. Demand - CENVAT credit of service tax paid on construction of tower - Held that:- on perusal of Tribunal's order , it is found that same issue was agitated before the Bench. Tribunal considering the issue from all angles held that CENVAT credit can be availed of service tax paid on services utilized for erection of towers. We do not find any reason to deviate from such a reasoned order. Accordingly, we hold that CENVAT credit availed of service tax paid on services utilized for erection of tower. Demand - availment of CENVAT credit on capital goods at one go -Held that:- it is the case of revenue that appellant cannot do so and as per rules they have availed 50% of the duty paid in first year in which CENVAT credit are received and balance 50% next year. Appellant has availed 100% credit in the second year. We find that there is no dispute that appellant is eligible to avail CENVAT credit on the capital goods and Central Excise duty is paid on capital goods; they are received by appellant and used. In our view the provisions of Rule 4(2)(a) of Cenvat Credit Rules, 2004, do no restrict availment of credit of 100% of duty paid on capital goods in the second year. The issue is now squarely covered in favour of appellant in the case of Herbicure Pvt. Ltd. [2007 (4) TMI 102 - CESTAT, KOLKATA] wherein similar issue is decided by Tribunal in favour of assessee. By respectfully following the ratio we hold that the appeal of the appellant on this point succeeds. Demand - supply of Diesel - diesel is excluded input for availing CENVAT credit - Held that:- it is claimed by the learned Chartered Accountant that they had availed credit of service tax paid on the various services which are associated with the supply and running of DG set and not availed the credit of duty paid on Diesel. This stand was taken by the appellant before adjudicating authority. It seems that the same is accepted by the adjudicating authority as there are no findings recorded on this issue. On perusal of definition of inputs and input services in Rule 2(k) and (l) of Cenvat Credit Rules, 2004, we find that CENVAT credit cannot be availed of duty paid on Diesel, but there is no bar in availing CENVAT credit of service tax paid on services associated with delivery of diesel, loading in DG set etc. Accordingly, we hold that CENVAT credit cannot be denied to appellant on this point. The appeal is allowed. Demand - liasioning charges, catering services etc. - Held that:- the stand of revenue on these two points seems to be not in consonance with the law as it is undisputed that appellant has engaged professional service for liasioning with various authorities for and in respect of the business activity and paid service tax to the Government. This issue is now settled by Hon'ble High Court of in the case of Hindustan Coca Cola Beverages Pvt. Ltd. [2010 (5) TMI 235 - CESTAT, NEW DELHI] and in respect of catering charges by the decision of this Bench in their own case in final order dated 31.03.2015 [2015 (3) TMI 1214 - CESTAT MUMBAI]. Accordingly, appeal of the appellant on these two points are allowed. Demand - Tower and Shelter - CENVAT credit of duty paid on Towers and Shelters - Held that:- the issue is no more res integra and is covered against the appellant by the judgement of the Hon'ble High Court of Bombay in the case of Bharati Airtel [2014 (9) TMI 38 - BOMBAY HIGH COURT]. Accordingly, we hold that appellant's appeal on this point fails and they are directed to pay back the amount with interest. Imposition of penalty - Held that:- since all the issues involved in this case are of interpretative nature, there is no reason to visit appellant with any penalty. - Appeal disposed of
-
2016 (9) TMI 1135
Power and jurisdiction of Commissioner - Commissioner directed the Assistant Commissioner to file an appeal before the Commissioner (Appeals) against the order of original adjudicating authority prior to 19.08.2009 - Held that:- Sections 84 clearly reveals that prior to 19.08.2009, it was the Commissioner himself who was having the power and jurisdiction to call for the records of proceedings before the adjudicating authority and was empowered to pass an order in respect of the same as he may deem fit. However, w.e.f. 19.08.2009 the provisions were changed and the Commissioner was empowered to examine the order of the adjudicating authority and if he was not satisfied, to direct the said authority to file an appeal before the Commissioner (Appeals). The impugned order of the Assistant Commissioner, in the present proceedings, was passed on 28.01.2009 and the order in review by the Commissioner directing the Assistant Commissioner to file an appeal was passed on 05.03.2009 i.e. well before 19.08.2009. As such, it can be safely held that, during the relevant period, there were no powers or jurisdiction with the Commissioner to direct the Assistant Commissioner to challenge the order passed by him before the Commissioner (Appeals). As such, the appeal filed by the Assistant Commissioner before the Commissioner (Appeals) in terms of the order-in-review dated 05.03.2009 is without jurisdiction and against the clear law laid down in the Act. Consequently, the order-in-original passed by the Commissioner (Appeals) is bad in law, being beyond jurisdiction. Refund claim - service tax paid on various service utilized for export of the goods - Notification No. 41/2007-ST dated 6.10.2007 - Held that:- we note that certain provisions of Central Excise Act, 1944 have been adopted for the disputes relating to service tax in terms of the provisions of Section 83 of the Finance Act, 1994. On going through the Section 83 of the Finance Act, 1994, we note that while adopting certain provisions of Central Excise Act, 1944, which stand mentioned in the said Section itself, Section 35-E does not stand adopted. In this view also, we find that the order directing the lower authority to file an appeal before the Commissioner (Appeals) is beyond the scope of Section 83 of the Finance Act, 1994 itself. Therefore, by following the various decisions, the impugned order of commissioner (Appeals) is without jurisdiction and the same is accordingly set aside. - Decided in favour of appellant
-
2016 (9) TMI 1134
Refund claim - unutilized CENVAT credit of service tax paid - amount of credit availed on Mediclaim for the family members of the staff and service tax paid from the opening balance of the CENVAT account - Held that:- the refund is ineligible and fairly conceded by the learned Chartered Accountant. Accordingly, the appeal by the appellant on the denial of this refund amount is rejected. Refund claim - unutilized CENVAT credit of service tax paid - corporate car parking - Held that:- the identical issue came up before the Tribunal in the case of HCL Technologies Ltd. vs. Commissioner of Central Excise, Noida [2015 (8) TMI 595 - CESTAT NEW DELHI] and the bench held in favour of the assessee therein by relying upon the ratio of the judgment of the Tribunal in the case of KPMG vs. Commissioner of Central Excise, New Delhi [2013 (4) TMI 493 - CESTAT NEW DELHI]. Since identical issue has already been decided in favour of the assessee, respectfully following the same, we hold that refund of CENVAT credit of service tax paid on car parking services is eligible. Refund claim - unutilized CENVAT credit of service tax paid - renewal of software used - Held that:- we find from the invoices raised by the software company that it is in respect of the software which are used by the appellant in furtherance of their business activity. Since these services are directly connected with the business activity of the appellant, which is management consultancy, consulting engineer, IT software service, etc., we hold that the service tax paid on the renewal of the software by the service provider is eligible to be claimed as refund by the appellant. - Appeal disposed of
-
Central Excise
-
2016 (9) TMI 1133
Modvat credit - necessary entries relating to aluminium shots used in the manufacture of steel were not made in RG-23A Part-I, since at the material time, the appellants were not aware as to whether deemed credit on the said goods were admissible - instead of taking the credit at the time when appellant received the goods, they took the credit at a later period - Held that:- by respectfully following the decision of the Hon’ble High Court of Allahabad in the case of CCE Vs. Ramswarup Electricals Ltd. [2007 (5) TMI 116 - HIGH COURT , ALLAHABAD] which was taken by relying on the decision of Hon'ble Apex Court in the case of Collector Vs. Raghuvar (India) Ltd. [2000 (5) TMI 40 - SUPREME COURT OF INDIA], we hold that the deemed Modvat Credit is admissible. - Decided in favour of appellant
-
2016 (9) TMI 1132
Classification - motor vehicle chassis manufactured and cleared in CKD/SKD condition from various divisions of the respondent - whether to be classified under CETH 8708 as per appellant or CETH 8706 as per Revenue - Held that:- a correct classification of appellant's goods for the period 15.09.2005 to 30.11.2005 will be the correct classification for the period prior to 15.09.2005 or after 30.11.2005 so long as there is no change in the relevant CET headings. Before the issue of present show cause notice dt. 01.03.2004 respondent was seeking change in the classification of the impugned goods by writing letters to the department. Once department has chosen to demand duty in show cause notice dt. 01.03.2004, then respondent had every right to contest that differential duty demand as not payable due to incorrect classification even if duty was paid with interest. We do not find anything wrong in OIA dt. 26.09.2007 of the First Appellate Authority to hold the classification of parts cleared by the respondent under CETH 8708 by relying upon the decision of Tribunal in the case of Tata Motors Limited Vs. CCE, Jamshedpur [2007 (8) TMI 209 - CESTAT, KOLKATA] passed by this bench. It is further observed that ground (iv), taken in the grounds of appeal by the Revenue, is not valid now as order rejecting Revenue s ROM has been finally upheld by Apex Court by dismissing Revenue s appeal. The apprehension of the Revenue in ground (vi) of the grounds of appeal, that change in classification for the earlier period will tantamount to making re-assessment, is not the correct appreciation of law. As per Rule-2(b) of the Central Excise Rules, 2002 assessment includes self-assessment of duty made by the assessee and provisional assessment under Rule-7. At the same time it will also include self-assessment . Assessment or re-assessment is not restricted to only deciding classification of the goods manufactured by an assessee, but will also include deciding the valuation of goods and the rate of duty applicable. It will also include demands/refunds under Section 11A and Section 11B of the Central Excise Act, 1944 arising as a result of scrutiny and finalization of provisional assessments. The issue of deciding the classification of the respondent s products does not mean that all the procedural requirements of assessment/re-assessment/self assessments have been changed. The provisions of Section 11B of the Central Excise Act, 1944 will have to be followed and satisfied if re-assessment has to be completed. - Decided against the Revenue
-
2016 (9) TMI 1131
SSI Exemption - Valuation - Notification No. 8/2003-CE dated 1.3.2003 - retail prices charged to customers in the shop - Held that:- appellant pleaded that the department added the value of even non-excisable goods and exempted excisable goods which are to be excluded as per the Notification No. 8/2003-CE. In this regard, we observe that the assessee/appellant is correct that for deciding on the eligibility of exemption Notification No. 8/2003-CE the turnover is to be computed after excluding the value of non excisable and exempted excisable goods. Revenue has to follow this principle that value of non-excisable and non exempted goods are not to be added when the turnover is computed to decide on the entitlement to benefit of Notification No. 8/2003-CE. Assessee has been manufacturing various kind of items and some of these items may not have the facility of abatement under Central Excise law. Assessable value has to be determined by reducing the sale price in such a manner so as to arrive at the price on which the manufacturer would have sold the said goods in wholesale. It is to be noted that value has been defined in Explanation (c) to the Notification No. 8/2003; therefore, total turnover to decide on eligibility is to claim benefit of Notification No. 8/2003 to be computed by totalling the value of specified goods only. The submission of the assessee for giving them the benefit of abatement is correct; and assessable value of excisable items being manufactured by the assessee/appellant is to be arrived at after giving them the benefit of abatement. The appellants have referred to a copy of Notification No. 14(NT) dated 1.3.2008 claiming the facility of abatement, whereas the goods have been assessed at the retail sale price of subject items. This aspect has not been discussed by the lower authorities, when it is so then the department has to consider/give abatement as admissible for the goods being manufactured by the assessee before arriving at the liability of central excise duty against the assessee. The matter, therefore, deserves to be remanded to the original adjudicating authority for deciding afresh the liability of Central Excise duty of the appellant unit after calculating the correct turnover (i.e. after deducting the value of non-excisable and exempted excisable goods) and further after giving the benefit of abatement as applicable in respect of the items manufactured, which are under abatement facility. Proper opportunity of being heard shall be provided to the appellant as per law. Invokation of extended period of limitation - assessee has been in correspondence with the department since the year 1998 - numerous letters and correspondence between the assessee and department on the problems faced by them - regular returns with the department on the goods manufactured were filed by the assessee - Held that:- it is established that there has not been any suppression of facts or wilful misstatement on the part of the appellants. Therefore, for the present facts law of Central Excise does not permit the Revenue to invoke extended period of limitation. In other words, Deptt. cannot issue demand for the period beyond one year from the relevant date, which is the date of Show Cause Notice (SCN). Therefore, demand for the period beyond one year is set aside and demand for the period of one year preceding the relevant date which is 29.12.2006, the date of SCN, is sustained. Imposition of penalty - Held that:- it is clear that the appellant No. 2 Shri Atul Tandon, partner in the appellant No. 1 firm has not knowingly been involved in any manner in contravention of laws of Central Excise with reference to the subject goods making the said goods liable to confiscation under the law of Central Excise. Therefore, the penalty of ₹ 5 lakhs imposed on the appellant No. 2 Shri Atul Tandon, partner of the appellant No. 1 assessee under Rule 26 of Central Excise Rules, 2002 is hereby set aside. - Appeal disposed of
-
2016 (9) TMI 1130
Classification - Milk Shake Mixes - whether they are to be classified under Chapter Heading 1901.90 90 of Central Excise Tariff as per Revenue or under 0404 as claimed by the assessee - Held that:- by considering the CESTAT's decision in the case of Amrit Foods Vs. CCE, Meerut-I [2006 (3) TMI 523 - CESTAT, NEW DELHI] endorsed by Hon ble Apex Court in the case of CCE, Vs. Amrit Food [2015 (9) TMI 1269 - SUPREME COURT], we hold that the Milk Shake Mixes are rightly classifiable under Chapter Heading 0404 only. Classification - flavoured syrups/fruit syrups/Squashes - whether they are to be classified under Chapter Heading 21069040/2169050 as per Revenue or under Chapter 20 of Central Excise Tariff as per assessee - Held that:- it is found that the appellant has not given complete ingredients of the subject items; they have only conveyed that products have got more than 25% fruit contents. The Explanatory Notes to HSN for Chapter Heading 2009 inter alia mention that wherever greater quantity of water has been added, the resultant diluted product may have the character of the beverages of Heading 22.02, but the classification under Chapter 22.02 has not been argued by any side in the present proceedings i.e. either by the Revenue or by the assessee/appellant. The Revenue specifically pleads for classification under Chapter Heading 21069040 and 21069050. Consequently, from the records available and the submissions given by both sides, when no other alternative classification like Heading 22.02 etc. has been cited by either the appellant or the Revenue, and after considering the description given for the Chapter 2106 of Central Excise Tariff as well as the Explanatory Notes to HSN for Chapter 2106 mentioned above, we are of a considered view that the subject items are to be classified under Chapter Headings. 21069040/2106905. Notification No. 3/2005-CE dated 24.2.2005 - benefit of exemption - eligibility - chocolate syrup, Butter Scotch, Blue curacao, Grenadine, Mint, Orange, Triple Seed, Caramel, Natural Caramel, Vanila, Lime - goods sold without brand name of assessee - Held that:- the appellant claims that goods were unbranded whereas the Revenue says that there was no sufficient evidence produced by the appellant to prove that the goods were unbranded. We remand the case back to the original adjudicating authority for decision afresh on this issue within three months of receipt of this order, where the appellants would be given opportunity of hearing and production of evidence, if any, in respect of branding or unbranding of the goods. Notification No. 3/2005-CE dated 24.2.2005 - benefit of exemption - eligibility - Mixed Seasoning Chinese Flavour - Held that:- the appellant contended that both the conditions of Notification No. 3/2005 that goods be in other than unit container and be not bearing the brand name, have been fulfilled. There is clear finding that goods are in unit container. The appellants say that the goods were in unit container up to 28.2.2005. Further from the facts on record for the period after 29.2.2005 it is not proved that the goods were not bearing the brand name. It means that the assessee/appellants in any case are not entitled to the benefit of the Notification No. 3/2005 for these goods up to 28.2.2005. Therefore, the demand of duty of Central Excise on all these goods for the period up to 28.2.2005 is hereby confirmed. However, for the period after 28.2.2005, the matter is remanded back to the original adjudicating authority to decide afresh within three months of receipt of this order. Invokation of extended period of limitation - demand and imposition of penalty - wilful suppression or mis-statement of facts - intention to evade payment of duty - Held that:- there is no material on record to prove wilful suppression or any mis-statement of facts with intention to evade payment of duty of Central Excise on the part of the appellants. Therefore, it is held that liability of duty of Central Excise can be fixed only for the period of one year from the relevant date. Consequently, demand beyond the period of one year from the relevant date is time barred as per the provisions of law of Central Excise. As there is no wilful suppression or mis-statement with intention to evade payment of duty of excise by the appellants, the penalties imposed of ₹ 71,83,194/- on the appellant No. 1 under Section 11AC of Central Excise Act, 1944 and of ₹ 2,00,000/- on appellant No. 2, Shri Rajiv Behl, Director under Rule 26 of Central Excise Rules, 2002 are hereby dropped.
-
2016 (9) TMI 1129
Cenvat credit - eligibility - inputs and capital goods i.e. steel, copper items used in fabricating support structures which is not included in the registered premises - structures emerging are not capital goods and or immovable civil constructions - Held that:- we have carefully considered the nature of impugned items and their usage as elaborated in the chart submitted by the Chartered Engineer. It has been categorically submitted that the steel items have not been used for making support or civil structure or for making foundation. The copper tube, rod were used for making bus duct/bar of channels, copper earthing and for instrumental in the captive power plant. A perusal of the chart submitted by the respondent indicates that the findings in the impugned order is being challenged by the Revenue mainly on general assertions and case laws. As noted, there has been no attempt to independently verify the nature of various items and their ultimate usage in order ascertain the respondent’s eligibility of credit on such items. The appeal is mainly on general principles and case laws without any specific material evidence to controvert the findings by the lower Authority. Taking into consideration the analysis made by the First Appellate Authority and the detailed chart submitted by the respondent regarding usage of impugned items, we find no merit in the present appeal by the Revenue. - Decided against the Revenue
-
2016 (9) TMI 1128
Refund claim - period from July, 2001 to March, 2002 - Special Excise Duty & Educational Cess paid by them from 1st March, 2005 to 6th April, 2005 on the goods manufactured by them - unjust enrichment - appellant passed on various discounts to the buyers during the said period by issuing credit notes - appellant pleaded that at the time of removal of the goods, it was not possible to know the quantum of discount that was to be deducted from the transaction value - Held that:- the Hon’ble High Court of Punjab & Haryana held that both the appellate authorities below have recorded a concurrent finding of fact that no incidence of duty, in respect thereof the claim had been preferred by the assessee, had been passed on to the customers. We find that the ruling of Hon’ble High Court is squarely applicable in the present case. Therefore, we allow the appeal filed by M/s Varun Beverages Ltd. We further do not find the ground raised by Revenue, to be tenable in law. - Decided in favour of appellant
-
2016 (9) TMI 1127
Cenvat credit - dumpers and parts thereof - dumpers used for carrying raw materials like limestone etc. from the mining area to the site of the crusher - Held that:- dumpers are material handling equipments used for transportation of limestone from mining area to the crusher which is further used for the manufacture of cement; therefore, the dumpers are to be treated as used in or in relation to the manufacture of final products and thus, qualifies as an “input”. Therefore, in view of the various decisions of higher judicial fora and the case laws , the subject goods -dumpers and parts thereof are held to be entitled to cenvat credit. - Decided in favour of appellant with consequential relief
-
2016 (9) TMI 1126
Exemption Notification No. 6/2006 dated 01.03.2006 read with Notification No. 21/2002-Cus. dated 01.03.2002 - availment of benefit - supply of electric wires and cables under international competitive bidding to various thermal power plants without payment of duty - exemption denied on the ground that classification against Sl. No. 400 in Notification No. 21/2002-Cus. is indicated as 9801 whereas the wires and cables manufactured and cleared by the appellants are classifiable under CETH 8544. Held that:- in view of the various decisions of Tribunal in the case of Sarita Steels and Industries Ltd. vs. CCE [2010 (7) TMI 568 - CESTAT, BANGALORE], in the case of Om Metals SPML JV Unit 2 vs. CCE &ST, Jaipur [2013 (11) TMI 1361 - CESTAT NEW DELHI] and in the case of Paramount Communications Limited [2016 (7) TMI 863 - CESTAT NEW DELHI] wherein it was held that the denial of exemption on the ground of classification shown under Customs Notification is 9801 is not sustainable, it is clear that the denial of the exemption to the appellant is not legally sustainable. Admittedly, the condition stipulated for exemption under Notification No. 6/2006-CE has been fulfilled by the appellant except for the classification in column-2 of Entry No. 400 in Customs Notification No. 21/2002-Cus. As clearly noted, the classification 9801 is not available in Central Excise Tariff and the same relates to project import, as such the denial of exemption on this grounds is legally not sustainable. - Decided in favour of appellant
-
2016 (9) TMI 1125
SSI Exemption - Period of limitation - Refund claim - duty paid at the full rate by availing Cenvat Credit during financial years 1989-90 to 1993-94 as the SSI certificate was rejected - subsequently the SSI certificate was granted w.e.f 12.05.1989 as per the directions of the Hon'ble High Court of Madhya Pradesh at Jabalpur - Held that:- the original authority has rejected the refund claim taking the view that the claim has been filed beyond the period of one year and hence time barred under Section 11-B of the Central Excise Act. He has considered that the duty paid by the assessee cannot be considered as paid under protest. He has further held that the claim is liable to be rejected on the ground of unjust enrichment as the assessee has failed to produce the copies of the contracts entered into with the customers from which it could have been established. We find that the first appellate authority in the impugned order has considered all these submissions and given a detailed finding on all the points. Therefore, we are in complete agreement with the view taken by the first appellate authority and find no reason to take a different view. Accordingly, the impugned order is upheld. - Decided against the Revenue
-
2016 (9) TMI 1124
Demand alongwith interest and penalty - Zinc Dross and Zinc Ash arising during the manufacture of G.P. Coils & G.P. Sheets - Held that:- it is very clear from the Circular dated 25th April, 2016 issued by C.B.E.C. that Revenue has taken a view that Dross, ash or any such by-product or waste of non-ferrous metals are non-excisable goods. We, therefore, hold that the impugned Order-in-Original is liable to be set aside. - Decided in favour of appellant with consequential relief
-
CST, VAT & Sales Tax
-
2016 (9) TMI 1116
Composition of tax under section 14A of the VAT Act - registered dealer under the provisions of the Gujarat Value Added Tax Act - works contract for construction of industrial establishment and factory buildings - dealer as defined in section 2(10)(f) of the VAT Act - for eight different works contract which the assessee was executing at the time of application but which had commenced prior to 1.4.2006 - whether on the facts and in the circumstances of the case, Gujarat Value Added Tax Tribunal is justified in law in holding that the appellant assessee is not entitled to be granted permission under Section 14A of the Gujarat Value Added Tax, 2003 read with Rule 28(8) of the Gujarat Value Added Tax Rules, 2006? - Held that: - in cases other than those falling in clause (iiia) of subrule( 8)(b) of Rule 28, an application for composition of tax would have to be made within 30 days from the beginning of the contract. However, in cases where the works contract is ongoing during the year 2006-2007, the last date for filing the application would be 30.11.2006, in such a case, the requirement of filing application within 30 days from the commencement of work envisaged in clause(iii) of subrule( 8)(b) of Rule 28, would not apply. The authorities below however, did not apply the provisions of clause (iiia) and merely with the aid of clause (iii) rejected the assessee's application for composition of tax on the ground that the same was beyond 30 days from the commencement of the contract - the competent authority shall entertain the application of the petitioner for composition of tax without objecting to the question of limitation in filing it and decide the same on merits. Appeal allowed - decided in favor of appellant.
-
2016 (9) TMI 1115
Validity of order of assessment - Tamil Nadu Value Added Tax Act, 2006 - taxability of sale of recharge vouchers for mobile Sim Cards - similar issue has been decided in the case of BSNL v. Union of India and Others [2006 (3) TMI 1 - Supreme court] where it was held that there was no element of sale involved in the sale of Sim Cards or recharge vouchers. If the petitioner had filed appropriate returns, then there would not have been any problem in that regard and by applying the decisions of the Hon'ble Supreme Court, the Assessing Authority would have treated the sale as exempted sale. - while submitting the returns, though in the annexure, the petitioner had mentioned it as exempted goods, while giving the commodity code, the petitioner gave the wrong commodity code, by mentioning it as 363 , which is the commodity code for Television Sets. This resulted in an impugned assessment being made and tax being demanded. If some mistake has been committed by the dealer, can he be given an opportunity to rectify the mistake? - Held that: - Section 84 of the TNVAT Act, provides for such a remedy and the Assessing Officer is empowered to rectify the mistake - if on account of the mathematical error committed by the dealer resulted in a wrong assessment imposing higher rate of tax, such mathematical error can be corrected. This is what was requested by the petitioner stating that he has wrongly given the commodity code. The petitioner also states that he has got all the purchase bills and documents to prove that the nature of business conducted by him was only the sale of recharge coupons. The assessment can be re-done, after giving due opportunity to the petitioner - matter remanded - petition allowed - decided in favor of petitioner.
-
2016 (9) TMI 1114
Validity of assessment order - cancellation of registration certificate with retrospective effect - reversal of input tax credit when registration was in force - principles of natural justice - requirements of Rule 10(2) of the Tamil Nadu Value Added Tax Rules, read with Section 19 of the Tamil Nadu Value Added Tax, 2006 - Sections 39(14) and 39(15) of the Act - Section 17 of the VAT Act, 2006 - Held that: - there cannot be any quarrel that input tax credit availed by any registered dealer is only provisional and that the Assessing Officers are empowered to revoke the same, if it appears to the assessing authority to be incorrect, incomplete or otherwise not in order. If Section 19(15) of the VAT Act, 2006, to be given effect, in letter and spirit, then, no sooner the Registration Certificate of the selling dealer is cancelled by the appropriate authority, such registered dealer, who had purchased any taxable goods from the selling dealer and availed input tax credit in respect of the said goods, has to pay the amount availed on the date from which the order of cancellation of the Registration Certificate takes effect. The buying dealer is also liable to pay, any addition to the amount due, interest at the rate of two percent per month on the amount of tax payable, for the period commencing from the date of claim of input tax from the dealer. Section 39(15) of the VAT Act, 2006, is silent, as to whether the competent authority is empowered to cancel, modify or amend any certificate of registration granted by him, retrospectively. The decision in the case of the Hon'ble Supreme Court in State of Maharashtra vs. Suresh Trading Co. [1996 (2) TMI 451 - SUPREME COURT OF INDIA] is relied upon where it was held that whatever be the effect of retrospective cancellation upon the selling dealer, it can have no effect upon any person, who has acted upon the strength of a registration certificate, when such certificate was alive. The retrospective cancellation of the Registration Certificate is set aside - appellant was not provided with an opportunity to file any counter affidavit, on the grounds of challenge made in the supporting affidavit to the writ petition filed to quash the Registration Certificate, with retrospective effect - matter remanded to writ court - petition dismissed.
-
Wealth tax
-
2016 (9) TMI 1139
Applicability of provisions of Urban Land (Ceiling & Regulation) Act, 1976 for determining the market value of the plot for purposes of Wealth-tax on the relevant valuation date - Held that:- Once there is a restriction on transfer of any land falling under the ULCAR Act, the fair market value of the property would be depressed on account of such restrictions/considerations. Admittedly, in the instant case, it was not open to the assessee to sale the land on account of the restrictions imposed under the ULCAR Act and therefore, the value of the land in question cannot be more than what the Government was to offer to an assessee under the provisions of the ULCAR Act, where the maximum rate of compensation is ₹ 5/- per sq. mt., therefore, the same value has to be held to be the fair market value as on the valuation date and in our view, the Tribunal was just and proper in coming to the aforesaid conclusion that the fair market value of the excess land ad-measuring 16000 sq. mt., would be ₹ 80,000/- @ ₹ 5/- per sq.mt.. Consequently, the question of law is answered in favour of the assessee and against the revenue.
|
