Recent updates in direct & indirect taxes and in other areas of professional interest – 24th May, 2016

RECENT UPDATES IN DIRECT & INDIRECT TAXES AND IN OTHER AREAS OF PROFESSIONAL INTEREST – 24th May, 2016

CA Gopal Kumar Kedia

Ex – ITAT Member

G. K. Kedia & Co.

Chartered Accountants

Email : *****@***com

INCOME TAX

Kortek Electronics (India) Ltd Vs Addl. CIT

Whether where the creation of database is an incidental by-product and not the primary reason and cause for carrying out investigation and verification and where the credit investigation expenses incurred is a part of the running cost incurred to earn profit, then same is to be treated as revenue expenses - YES: ITAT

Whether where application capture and data entry facilitated and helped the assessee to conduct their day to day business operations, then this expenditure incurred is revenue in nature - YES: ITAT

Whether where the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an integral part of the profit-earning process and not for acquisition of an asset or a right of a permanent character, the expenditure may be regarded as revenue expenditure - YES: ITAT

Whether where the payment made by the assessee for purchase of loom hours is expenditure laid out as part of the process of profit-earning and it is a part of the cost of operating the profit-earning apparatus, then it is clearly in the nature of revenue expenditure - YES: ITAT - Assessee's appeal partly allowed : DELHI ITAT

DCIT Vs SBI Cards Payments and Services Pvt. Ltd

Whether where the creation of database is an incidental by-product and not the primary reason and cause for carrying out investigation and verification and where the credit investigation expenses incurred is a part of the running cost incurred to earn profit, then same is to be treated as revenue expenses - YES: ITAT

Whether where application capture and data entry facilitated and helped the assessee to conduct their day to day business operations, then this expenditure incurred is revenue in nature - YES: ITAT

Whether where the outgoing expenditure is so related to the carrying on or the conduct of the business that it may be regarded as an integral part of the profit-earning process and not for acquisition of an asset or a right of a permanent character, the expenditure may be regarded as revenue expenditure - YES: ITAT

Whether where the payment made by the assessee for purchase of loom hours is expenditure laid out as part of the process of profit-earning and it is a part of the cost of operating the profit-earning apparatus, then it is clearly in the nature of revenue expenditure - YES: ITAT - Revenue's appeal dismissed : DELHI ITAT

DGIT Vs GTC Industries Ltd

Whether when assessee's closed unit was rehabilitated under sanctioned Scheme but assessee sold the property without taking prior approval of Board, it would amount to alteration of scheme and assessee loses rights to seek extension of Scheme - YES: SC

Whether if once it is found that an agreement was passed in violation of the Scheme, the arrangement with the interveners entered into by the Company loses its legal force and no right would accrue to these interveners on the basis of the said agreements - YES: SC - Revenue's appeal allowed : SUPREME COURT OF INDIA

CIT Vs Canara Bank

Whether interest credited/paid by a bank on the fixed deposit receipts purchased by the 'New Okhla Industrial Development Authority' (NOIDA), is exempted from deduction of tax at source u/s 194-A(1), being a Corporation established under Industrial Act - YES: HC - Revenue's appeal dismissed : ALLAHABAD HIGH COURT

Bhawari Bai Vs ACIT

Whether an assessment order can be set aside if an opportunity of personal hearing has not been given to the assessee - Yes: ITAT

Whether an assessment order passed without giving an opportunity of being heard to the assessee is violative of principles of natural justice - Yes: ITAT - Appeal allowed : MADRAS HIGH COURT

S Thanislas Nadar & Sons Vs CIT

Whether petition filed u/s 264 is liable to be rejected, if the return of income was duly filed u/s 139(4) within the time allowed and income contained in the petition and return of income are different - YES: HC

Whether assessee can take a stand that statement was given by it under duress, when earlier return of income was filed by him voluntarily and income returned under survey u/s 133A was also accepted without making any addition - NO: HC - Assessee's writ dismissed : MADRAS HIGH COURT

Bharti Hexacom Ltd Vs ACIT

Whether provisions of section 194J are applicable in respect of roaming charges and interconnect charges – No: ITAT

Whether provisions of section 194H are applicable in respect of discount allowed to distributors in respect of prepaid cards – No: ITAT

Whether amount paid by assessee in pursuance to a composite outsourcing agreement for services and equipment has to be treated as lease rent where the beneficial ownership did not remain with assessee and in order to comply with the mandate of AS 19 assessee had capitalized the assets taken on lease but while computing the income, the amounts were added back – Yes: ITAT - Assessee's appeals allowed; revenue's appeal dismissed : DELHI ITAT

ACIT Vs Hindustan Syringes & Medical Devices Ltd

Whether when the additions are made, but not based on any incriminating material found during search operation, then these additions are sustainable in the eyes of law - Revenue's appeal dismissed : DELHI ITAT

DPSC Ltd Vs DCIT

Whether the issues involving question of law and not requiring investigation of facts could be raised for the first time even at the appellate proceedings - YES: ITAT

Whether Explanation 3 to section 115JB as well as proviso to Section 211(2), is applicable only to entities registered and recognized to be companies under the Companies Act, 1956 - YES: ITAT

Whether the disallowance u/s 14A could be added to the book profits computed u/s 115JB - NO: ITAT - Assessee's appeal partly allowed : KOLKATA ITAT

Indus Valley Housing Vs ACIT

Whether the assessee can be defaulted for non-payment of self-assessment tax, after passing of order u/s 143(1) - NO: ITAT

Whether where assessee is prevented by sufficient cause for not raising an additional ground at the time of filing of original appeal, then such additional ground can be admitted at the time of appellate proceedings - YES: ITAT

Whether just because assessee had paid the tax before the levy of penalty u/s 221(1), his liability to pay penalty u/s 221(1) shall not cease - YES: ITAT

Whether where assessee is neither a habitual defaulter nor is having adverse history tainted so as to prove that the default was committed without malafide intention and under extreme paucity of funds, no levy of penalty is warranted - YES: ITAT

Whether opportunity of being heard is mandated to be given to the assessee before imposition of penalty - YES: ITAT - Assessee's appeal allowed : CHENNAI ITAT

Sandvik Asia Ltd Vs ACIT

Whether computer software expenses incurred to obtain the application software is allowable as revenue expenditure - Yes: ITAT

Whether receipts of income i. e. interest on IT Refund, NSC Interest, Bank Interest and Other interest are eligible for claim of deduction under section 80HHC of the Act - No: ITAT

Whether provisions of Section 35AB are applicable in case of payment of lump sum consideration for acquiring technical know-how - Yes: ITAT

Whether expenditure incurred on Voluntary retirement Scheme floated by assessee in order to reduce number of its workforce for smooth and efficient running of its business operations is allowable as revenue expenditure - Yes: ITAT

Whether while determining the business profits for deduction under section 80HHC, unabsorbed business losses of earlier years under section 72 of the Act should be set off - Yes: ITAT

Whether assessee is liable to pay interest under section 234D of the Act on excess refund granted to it where the Assessing Officer had granted refund to the assessee under section 143(1) of the Act and subsequently regular assessment order was passed under section 143(3) of the Act and tax demand was raised upon the assessee - Yes: ITAT - Assessee's appeals partly allowed; Revenue's appeal dismissed : PUNE ITAT

Sgc Builders Pvt. Ltd Vs ACIT  

Whether the CIT was justified in invoking jurisdiction u/s 263 when the AO has not verified the details of the issues, on which the CIT is seeking to revise the assessment order - Whether u/s 263 the CIT can only hold the assessment order to be erroneous and prejudicial to the interest of revenue, but he cannot direct the AO to initiate penalty proceedings - Whether the CIT was justified in considered incomplete material to set aside the assessment by invoking section 263 - Case remanded : HYDERABAD ITAT

DCIT Vs Uco Bank

Whether claim for deduction u/s 36(1)(viia) can be allowed where there is no provision for bad and doubtful debts made by the assessee bank - No: ITAT

Whether dividend income derived by the assessee from a company in Malaysia is liable to be taxed in the hands of the assessee - No: ITAT

Whether relief u/s 91 is available to assessee while computing tax liability on account of taxes paid outside India in relation to its operations in Hongkong - Yes: ITAT - Case remanded : KOLKATA ITAT

CIT Vs Saurasthra Cement and Chemicals Industries Ltd

Whether merely because the provisions of Sec 125A vest powers and functions of ITO in the Inspecting AC in relation to any area or classes of income, the ITO stands denuded of those powers - NO: SC

Whether in a situation of concurrent jurisdiction when the IAC does not exercise the powers and functions of the ITO, the latter is free to assume jurisdiction and pass the order - YES: SC

Whether it is the actual exercise of powers that matters and not the mere conferment of the powers - YES: SC

Whether the provisions of Sec 144B will apply even if the IAC exercises the powers and functions of the ITO - NO: SC - Revenue's appeal allowed : SUPREME COURT OF INDIA

Jhunjhunwala Distributors Pvt. Ltd Vs ACIT

Whether the CIT(A) was justified in confirming the action of the AO in making addition (1) of Rs. 2,73,32,513/- as disallowance u/s. 40A(3) and of Rs.1,43,85,532/- as unaccounted cash, totaling to Rs.4,17,18,045/- treating the same as unaccounted income when the assessee before the A. O. has not complied with the notice issued for filing of the return u/s. 153A and also not complied with the notice issued u/s. 142(1) for filing of the details?(2) of Rs.51,12,565/- being outstanding liability under the head Current Liabilities and Provisions in the Balance Sheet by treating the same as income u/s 41 when no confirmation for such creditors was furnished by the assessee and genuineness of such liabilities was not proved to the satisfaction of the A. O. - Assessee's appeal dismissed : MUMBAI ITAT

Caress Beauty Care Products Pvt. Ltd Vs ACIT

Whether the interest paid by the assessee on borrowings, which are used for specific purpose can be considered for the purpose of computing disallowance u/s.14A r. w.rule 8D - Whether investments, which are yielding taxable income, can be considered while applying the (B) in the formula specified in Rule-8D. - Case remanded : CHENNAI ITAT

CWT Vs Mohan Exports India Pvt. Ltd

Whether when the property in question had not been registered in the name of assesse, in terms of the Wealth Tax Act, 1957, the value of the said property could still be added in computing the net wealth of the Assessee - YES: HC - Revenue's appeal allowed : DELHI HIGH COURT

Sangam Theatre Pvt. Ltd Vs CIT

Whether adjustment made by the Revenue authority of refund payable to the assessee against the arrears of tax liability due from him, in absence of any prior intimation to the assessee, can be treated as legally permissible - NO: HC

Whether application filed by an assessee for settlement of outstanding demands under KVSS Scheme can be rejected, by making an adjustment of the refund against the arrears of tax was sought for settlement in the application, and without even intimating the assessee as required u/s 245 - NO: HC - Case remanded : DELHI HIGH COURT

CIT Vs Astor Dealers Pvt. Ltd

Whether in case it has been made clear that investment in debenture has been made as a business asset, there is no argument in challenge to the aforesaid finding, is it debatable that the interest paid or payable for purchase of a business asset is allowable u/s 36 - NO: HC - Revenue's appeal dismissed : CALCUTTA HIGH COURT

ACIT Vs Shlok Media Services

Whether penalty u/s 271(1)(c) is leviable where the disallowance made by AO/ CIT(A) itself is debatable in nature - No: ITAT - Revenue's appeal dismissed : MUMBAI ITAT

Sun Tan Trading Company Ltd Vs DCIT

Whether the amount of Rs.62.50 crores, received by the assessee as reimbursement and shown as 'Advance payment of taxes as per Note-9 'Loans and Advances' to the Balance Sheet as on 31/3/2011 for A. Y 2011-12, was to be taxed in the same A. Y or was exigible to tax in A. Y 2012- 13, pursuant to the crystallization of this liability consequent to the order of the Customs & Central Excise Settlement Commission and its final settlement thereof on 14/03/2012 - Whether the charging of interest is consequential and mandatory and the AO has no discretion in the matter - Assessee's appeal allowed : MUMBAI ITAT

ACIT Vs Prakash Industries Ltd

Whether the valuation made by the DVO is an estimate which can be a basis for making addition to the income of the assessee for the purpose of assessment, but the same alone cannot be the basis to construe concealment for the purpose of imposing penalty u/s 271(1)(c) - Revenue's appeal dismissed : DELHI ITAT

Sahil Study Circle Pvt. Ltd Vs DCIT

Whether addition made u/s 69 solely on the basis of the statement made during the course of survey is justified where the statement was retracted and the receipts found during the survey were reconciled and duly explained - No: ITAT

Whether advertisement expenses incurred for advertising in newspapers and magazines is allowable as business expenditure - Yes: ITAT - Assessee's appeal allowed : DELHI ITAT

ADIT Vs Express Drilling Systems LLC

Whether in case there are clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than Rs.10,00,000/ - by way of a CBDT circular, the same is binding on all the Revenue officers - YES: ITAT - Revenue's appeal dismissed : DELHI ITAT

DCIT Vs Salasar Stock Broking Ltd

Whether the levy of penalty u/s 271AAA  is automatic-YES:ITAT

Whether the penalty u/s 271AAA cannot be levied as assessee's case fell under sub-section (2) of section 271AAA - YES:ITAT

Whether where during course of search, the assessee has admitted undisclosed income, paid tax together with interest, filed his return showing said income as business income and AO had accepted the same, can it be said that assessee had not substantiate manner in which income is derived, for purpose of levying penalty u/s 271AAA - NO: ITAT

Whether where an income is not disclosed in the return filed u/s 139(1), but duly disclosed in the petition filed u/s 132(4) followed by filing of return in response to section 153A and taxes paid thereon, the penalty u/s 271AAA is not leviable - YES:ITAT - Revenue’s appeal dismissed : KOLKATA ITAT

ITO Vs Mr. Desham Satyanarayana

Whether if the land is recognised as agricultural land in the revenue records and assessee is holding the same for a period of more than 20 years as agricultural land, in the absence of any evidence that assessee sold the land as non-agricultural land or at least converted into nonagricultural land, the nature of the land can be changed - NO: ITAT - Revenue's appeal dismissed : HYDERABAD ITAT

Edelweiss Financial Advisors Ltd Vs ACIT

Whether the provisions of Section 14A read with Rule 8D of IT Act can be invoked where the interest income is more than the interest expenditure - No: ITAT

Whether Assessing Officer can proceed to work out the disallowance under Rule 8D where he fails to record his satisfaction that the disallowance offered by the assessee is not correct - No: ITAT

Whether prior period expenditure is allowable where the assessee has failed to place on record any material suggesting that the expenditure related to prior period was crystallized in the present year and the assessee has offered corresponding income in the earlier years - No: ITAT - Assessee's appeal partly allowed : AHMEDABAD ITAT

Vega Jewellery Vs DCIT

Whether shortage loss in manufacturing process of gold/silver/platinum jewellery articles in between 9 - 11% is acceptable where Assessee was consistently showing shortage loss in manufacturing process in between 9 - 11% since last many years and in the preceding year no addition has been made on this account and in the year under appeal no specific defect in the books of account was revealed by the Assessing Officer - Yes: ITAT

Whether addition on account of suppression of closing stock is justified where Assessee had been maintaining method of accounting consistently and no change was made in the opening stock by the Assessing Officer, weighted average cost has been calculated as per accounting standard issued by ICAI and no defect in the books was pointed out by the Assessing Officer - No: ITAT

Whether disallowance on account of office expenses can be made where assessees are regularly maintaining books of account which are audited u/s 44AB and all the documents relating to expenses incurred are verified by the auditors - No: ITAT - Revenue's appeal dismissed : AHMEDABAD ITAT

Shri Soundarrajan Parthasarathy Vs DCIT

Whether the value of the Stock Appreciation Rights given to the employees of the subsidiary company by the parent company under an incentive scheme cannot be treated as perquisite in the hands of the assessees - No

Whether since the right to receive the appreciation value alone was conferred on the assessees and not right on the stock itself, what was received by the assessees, is not capital asset - YES

Whether merely because the assessees were non - residents and rendered service outside India during the vesting period that cannot be a reason for claiming that the same was not taxable in India - YES - Case remitted back to AO : CHENNAI ITAT

Shri Hitesh B Patel Vs ACIT

Whether the statement taken during the course of survey, has no evidentiary value and it is simply an information, which can be used for corroboration purpose for deciding any issue in favour or against the assessee - YES

Whether the assessee cannot be expected to prove the entries written by third party in his diary - the onus is upon the Revenue to first prove that the assessee has received payment - YES - Assessee's appeal is allowed : AHMEDABAD ITAT

CIT Vs Shri Harsh Kochar

Whether an assessee is estopped from contending that the documents recovered from the premises of another assessee though from the cabin of the assessee in such premises, cannot be relied upon for framing block assessment, once the assessee has himself filed his return on the basis of such documents - YES: HC

Whether it is open to the AO to frame block assessment of assessee on the basis of certain documents recovered from seperate assessee's premises, where such documents are related to the search operation at the premises of the assessee on his own admission while replying to the questionnaire to explain the basis of undisclosed income declared by him - YES: HC - Revenue's appeal allowed : PATNA HIGH COURT

Five Star Shipping Co Pvt. Ltd Vs DCIT

Whether income earned from sale of agricultural produce, is entitled to be claimed as agricultural income - Yes: ITAT

Whether rent paid by an entity to its directors for leasing out their land in favour of the entity for carrying out agricultural operations, is liable to be disallowed u/s 14A, if it is directly attributable to earning of agricultural/exempt income - Yes: ITAT

Whether loss incurred in relation to activities attributable to horse races can be allowed to be set off against business income, where income from racing income contributes to only 15% of the total income - NO: ITAT - Both Assessee and Revenue's appeals dismissed : MUMBAI ITAT

Dewanchand Ramsaran Industries Pvt. Ltd Vs ACIT

Whether mobilization expenditure incurred by assessee is allowable as revenue expenditure where business of charter hiring of rigs is continuing business of assessee and no new source of business having been come into existence and the rigs which are imported are ready and available to be put to use being available for charter hiring after acquisition by the assessee company and are merely to be moved to and installed at the site of the clients - Yes: ITAT

Whether expenditure found to be allowable as revenue expenditure as per provisions of the Income Tax Act, 1961 has to be allowed as revenue expenditure under the Act while computing income chargeable to tax even if the tax-payer has given different treatment in its books of accounts by capitalizing the same in its books of accounts instead of debiting it to the Profit and Loss AccountYes: ITAT - Assessee's appeal allowed : MUMBAI ITAT

A R Developers Vs ITO

Whether assessee's request for rectification of the MOU which is the subject matter of miscellaneous application can be accepted, if in its supplementary MOU there is no mention of the earlier MOU being erroneously drafted and supplementary MOU states that earlier MOU shall remain in force & valid - No: ITAT - Assessee's Appeal rejected : MUMBAI ITAT

Shree Ram Electrocast Pvt. Ltd Vs DCIT

Whether by Explanation to s. 73, a legal fiction has been created whereby loss suffered by a company in share transactions is to be treated as a speculative loss within the meaning of s. 73, notwithstanding the fact that there was actual delivery of scrips of shares and the transaction is not within the purview of the definition of speculative transaction in s. 43(5) - Whether the intimation u/s.143(1) can be equated to a pending assessment proceeding which stood abated under the proviso to Sec.158BA - Assessee's appeal dismissed : KOLKATA ITAT

DCIT Vs Shree Salasar Properties & Finance Pvt. Ltd

Whether the penalty u/s 271AAA can be levied, if the assessee's case fell under sub-section (2) of section 271AAA - YES: ITAT

Whether where during course of search assessee had admitted undisclosed income, paid tax together with interest, filed return showing said income as business income and AO had accepted same, can it be said that assessee had not substantiated the manner in which income is derived, for purpose of levying penalty u/s 271AAA - NO: ITAT

Whether where the income is not disclosed in the return filed u/s 139(1), but duly disclosed in the petition filed u/s 132(4) followed by the filing of return in response to section 153A and taxes paid thereon, penalty u/s 271AAA is not leviable - YES: ITAT - Revenue’s appeal dismissed : KOLKATA ITAT

DCIT Vs Seaview Developers Ltd

Whether if clear cut instructions are given to the Department to withdraw or not press any appeal filed before the ITAT wherein tax effect was less than a certain limit, these instructions operative retrospectively, are also applicable to the pending appeals, is it possible for the Revenue to contradict this position - NO: ITAT - Revenue's appeal dismissed : DELHI ITAT

ACIT Vs Shri P P Ummerkutty

Whether the Standing Counsel has to be treated as the recognized agent of the Commissioner or the Income Tax Department and the date of receipt of the order of the High Court by him has to be treated as the date of receipt of the order by the Commissioner or the Income Tax Department for the purpose of calculation of limitation u/s 158BFA(3)(c) - Revenue's appeal dismissed : COCHIN ITAT

Dr. Sita Ram Sharma Vs ACIT

Whether Net Profit of 15% on the bogus purchases made by the assessee is justified when the assessee also filed various evidences before the lower authorities which shows that the assessee had made purchases as they have also charged VAT and all the particulars of drug license number, sales tax registration number and addresses of the parties had been given on the bills - Whether the CIT(A) was justified in sustaining the addition u/s 68 at Rs. 59,700 when these amounts were found credited in the books of account during the A. Y under consideration and no proper explanation was furnished with the documentary evidence with reference to such credits - Assessee's appeal partly allowed : JAIPUR ITAT

Sreevatsa Real Estates Pvt. Ltd Vs ITO

Whether it has to be considered that there was an error in the present order of this Tribunal which has been dismissed, needs to be rectified u/s 254(2), when for previous AY, on identical set of facts, the issue was remitted back to the file of the AO for reconsideration - YES:ITAT

Whether mere pendency of the civil suit before the High Court cannot be a reason to say that landed property has no realizable value - YES:ITAT - Assessee's petition dismissed : CHENNAI ITAT

Renuka Financial Services Ltd Vs ITO

Whether reopening of Assessment u/s 147/148 beyond 4 years is justified when the AO has not independently applied his mind to the information received from outside agency and arrive at the belief that income has escaped assessment and the assessee has disclosed fully and truly all material facts necessary for assessment. - Assessee's appeal allowed : DELHI ITAT

Shriram City Union Finance Ltd Vs DCIT

Whether amount transferred to Statutory Reserve in compliance with the mandatory provisions of Reserve Bank of India is an allowable expenditure - No: ITAT

Whether the interest charged under section 234D is allowable as business deduction - No: ITAT

Whether suo motu disallowance made by assessee u/s 14A can be rejected merely on the ground that the amount of indirect cost offered by the assessees against tax-free investments was very low, vis-а-vis the total investments made by the assessee - No: ITAT

Whether royalty payment made by assessee is allowable as revenue expenditure where the payment was made for the nonexclusive user of the logo based on turnover and was not a lump sum payment and the assessee had no other rights including the right to transfer the use of the logo and the right of user was given to other companies also - Yes: ITAT

Whether expenditure incurred towards Employees Stock Option Scheme is an allowable expenditure - Yes: ITAT - Assessee's appeal dismissed; Revenue's appeals dismissed : CHENNAI ITAT

CIT Vs Salora International Ltd

Whether when the assessee was entitled to receive the entire consideration for transfer of its assets, the manner of discharge of sale consideration would not alter the character of the scheme or the nature of transaction embodied therein for the purposes of levy of income tax under the Act. - Revenue's appeal is allowed : DELHI HIGH COURT

Tej Mohan Sachdeva Vs CIT

Whether in case the Assessee has no valid explanation regarding the source of his income for making gifts made during the AY in question, is it still possible for him to argue the section under which addition has been made regarding unexplained income - NO: HC - Assessee's appeal dismissed : DELHI HIGH COURT

PR CIT Vs Oriental Bank of Commerce

Whether loss claimed on account of fall in value of the investment held as stock in trade as a result of mark to market devaluation, can be disallowed by the AO during assessment - NO: HC

Whether if all the relevant facts regarding the deduction claimed by assessee u/s 36(1)(vii) are already on record, is it still possible for the Adjudicating authority to remand the cases on no legal ground - NO: HC

Whether in case the Assessee uses a network of computers for its business purposes, the LAN/WAN equipment is an essential part of the computer system, depreciation @60 % on computer will also be given on such essential parts - YES: HC - Revenue's appeal dismissed : DELHI HIGH COURT

ACIT Vs VIP Growth Fund Pvt. Ltd

Whether addition u/s 68 is justified when the assessee has discharged its burden of providing basic details which were required for verification to fulfill the conditions viz. identity of the creditor, credit worthiness of the creditor and genuineness of transaction. - Revenue's appeal dismissed : DELHI ITAT

Sanika Agri Impex Pvt. Ltd Vs DCIT

Whether the burden to prove that the transactions were entered to guard against from any future losses on account of fluctuation in the commodity prices and are hedging transactions within proviso (a) of Section 43(5) of the Act is upon the assessee - Yes: ITAT - Case remanded : MUMBAI ITAT

S Jogani Exports Pvt. Ltd Vs ACIT

Whether Market to Market losses in respect of forward foreign exchange contract debited to the profit and loss account are allowable - Yes: ITAT - Assessee's appeal allowed : MUMBAI ITAT

Palakkaran Bankers And Chit Funds Vs DCIT

Whether merely because the explanation of the assessee was rejected by the AO with respect to the materials seized, penalty u/s 158BF(2) can be levied that too when the additions have been made on the basis of estimation. - Assessee's appeal allowed : KOCHI ITAT

ACIT Vs Ferromatik Millacron India Ltd

Whether when the income tax payable on the total income as computed under the normal provisions is less than the tax payable on the book profits u/s 115JB, then penalty u/s 271(1)(c) is not attracted with reference to additions/disallowances made under normal provisions? - Revenue's appeal dismissed : AHMEDABAD ITAT

Bansilal Leisure Parks Ltd Vs ITO

Whether an assessee can be treated as in default on ground of his failure to collect TCS in terms of Section 206C(6), if he has submitted the copies of ITR of the parties to whom he has entered into sale transaction - NO: ITAT - Case remanded : KOLKATA ITAT

SERVICE TAX

Sydenham Institute of Management Vs CCE

ST - Collection of placement fees from students - Amount is collected to defray the expenses incurred by the Institute for organizing the campus interview, etc. - recipient client must be an employer or prospective employer and the consideration for this service must flow from such employer to the provider of the service - Not taxable under 'Manpower Recruitment & Supply Agency services' - Appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT

Health India Medical Services Pvt. Ltd Vs CST

ST - Rent-a-cab service & Air Travel Agent service, whether Input service.

Held: Both the services though used by employees of the appellant but undisputedly for performance of the appellant company's business are to be considered as Input services - expenses towards Rent-a-cab service and Air travel agent service were booked as expenditure in the P & L account of the appellant, therefore, there is no reason to not allow CENVAT credit - rent-a-cab service was excluded from the definition of input service w. e.f 01.04.2011, therefore, prior to this date the credit was admissible - Order set aside and appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT

Constro Plus Vs CCE

ST - ROM application filed on the ground that the same facts and circumstances while granting waiver of penalty imposed u/s 76 & 78 by invoking section 80 of the FA, 1994 exist for waiving penalty imposed u/s 77 of FA, 1994.

Held: There is an apparent error in the order, appellant is entitled for waiver of penalty imposed u/s 77 of FA, 1994 - as regards mention of upholding penalty of Rs. 24,000 u/s 77, it should be corrected to read u/s 70 - ROM application disposed of: CESTAT - Application disposed of : MUMBAI CESTAT

Aqdas Maritime Agency Pvt. Ltd Vs CCE

ST - For determining whether the appeal was filed in time, merely by taking the date of dispatch as the date of communication of the order does not appear to be proper - As vital aspect not properly considered, Appeal restored: CESTAT - Appeal restored : MUMBAI CESTAT

Sherock Vs CCE

ST - Valuation - Assessee was providing services of C&F agent to Lafarge India Limited - As per contract, assessee was getting their remuneration in two parts - fixed amounts for activities such as loading/ unloading material from Railway wagon or trucks and variable amounts for other activities such as transportation by road - Revenue has taken up an identical issue regarding valuation of services covering an earlier period by invoking suppression clause and claimed extended time limit for demand of service tax - On an identical issue invoking suppression and extended time limit for one more time clearly cannot be done and hence, demand for period beyond normal time limit available under Section 73 of FA, 1994 fails - First appellate authority has clearly given a finding that assessee has not satisfied conditions prescribed in Rule 5 of Service Tax (Determination of Value) Rules, 2006 to satisfy criteria for a pure agent - Demand will need to be reworked out for normal time limit under Section 73 - Consequently, various penalties imposed on assessee would need to be modified: CESTAT - Appeal disposed of : DELHI CESTAT

JSA Forwarders Vs CST

Service Tax - Valuation - appellant is engaged in providing CHA and BAS, and were subject to an audit intervention - Scrutiny of records revealed that the appellant assesse has paid service tax only on the income accounted as "Service Income" leaving the income under "Transportation Income" and "Brokerage Income' etc., unassessed - Differential tax demand with interest and penalty adjudicated; and agitated herein - Appeal partly allowed : CHENNAI CESTAT

Amrl Hitech City Ltd Vs CCE & ST

Service Tax - Refund - appellant is registered as Multi Product Special Economic Zone (MPSEZ) as a developer of AMRL Hi-Tech City and claimed the refund of unutilized credit paid on various input services under Rule 5 of CCR, 2004, read with Notification No.12/2013 dt. 1.7.2013 - the claim was partially rejected on the ground that no evidence was available in support of the contention that the impugned input services (pany Secretary Service, Chartered Accountant Service, Security Service, Legal Consultancy services etc.) were used towards authorized operation of SEZ - The partial rejection was upheld by Commissioner (Appeals), and is agitated herein - Appeal allowed : CHENNAI CESTAT

Coral Crest Builders Vs CCE

Service Tax - Rectification of Mistake - Tribunal while upholding the penalty under Section 78 of the Finance Act, 1994, in the Final Order dated 17.03.2015; held that appellants have collected the service tax and not remitted to the government - Appellant pleaded that they have paid service tax on various dates which is recorded in the grounds of appeal; that as and when tax was collected, they immediately deposited in the government account; that for the period April to June 2006, it was paid in August 2006; that therefore, there is mistake on record - it is pleaded that the finding that appellants had not paid the tax may be corrected and mistake be rectified; and penalty under Sec 78 be waived - Application dismissed : CHENNAI CESTAT

Hans Interiors Vs CCE & ST

Service Tax - Demand - Appellant engaged in providing 'Interior Decorator' service - tax demand with interest and penalty under Sec 78 adjudicated, upheld by Commissioner (Appeals), and agitated herein - Appeal allowed : CHENNAI CESTAT

National Internet Exchange of India Vs CST

ST - Assessee, a company incorporated in 2003 are promoted by Department of Information Technology in association with Internet Services Provider Association of India - Revenue views that assessee is providing franchise service in as much as they are operating their Registry known as ".IN registry" - Assessee may not fall under category of franchiser under Section 65 (48) - Assessee is not holding exclusive rights or ownership of domain name so that he can be made liable for giving representational right for consideration - The domain ".IN" is Government of India's right - As per Direct Internet Solutions Pvt. Ltd., assessee has made out a case for waiver of pre deposit of adjudicated dues: CESTAT - Stay granted : DELHI CESTAT

Senior Post Master Vs CC, CE & ST

ST - While most departments of the government do end up participating in litigation initiated by private entities, they are not normally geared for litigation with other government departments - delay in filing appeal condoned: CESTAT - Application allowed : MUMBAI CESTAT

Darshan Enterprise Vs CCE, C & ST

ST - Non-compliance with order of pre-deposit - Tribunal by order dtd 2.12.2014 had not dismissed appeal for non-compliance of stay order but dismissed appeal for non-compliance of earlier Final Order dtd 22.3.2013 - Tribunal dismissed appeal after considering their earlier order and therefore there is no reason to interfere such order: CESTAT - ROA Application dismissed : AHMEDABAD CESTAT

Ramesh Kumar Jethani Vs CCE & ST

ST - Commissioner(A) passed an order against assessee but the same was not received by them - When Revenue approached them for recovery of dues the existence of such order became known to them and they procured a copy of order under cover of Revenue's letter dated 25/04/2012 - Assessee filed an appeal within limitation period from date of receipt of order - On examination of dispatch register, value of stamp fixed on the same was found to be Rs. 12/- which is an insufficient amount for sending it either under speed post or under registered AD - Moreover, as per dispatch register, consignee's address is also incomplete - In absence of any documentary evidence, date of receipt of order has to be taken as 26/04/2016 when same was delivered by hand - Hence, appeal filed on 04/06/2012 is within period of limitation - Matter remanded for decision on merits - Impugned order set aside: CESTAT - Case remanded : DELHI CESTAT

Hero Motocorp Ltd Vs CST

ST - Banking and other financial services - Assessee engaged in manufacture of motor vehicles - Based on an audit of its records, Revenue contends that they are liable to pay ST under category of "banking and other financial services" on ground that it is a body corporate who has lent funds to another group company and received consideration for same - Assessee is mainly a manufacturing company and only because they are a body corporate and given loan to their group company does not bring them under coverage for such tax levy - Assessee has made out a strong case for waiver of pre-deposit of all dues: CESTAT - Stay granted : DELHI CESTAT

CENTRAL EXCISE

Jalan Dyeing & Bleaching Mills Vs CCE

CX - CENVAT - When rule 7 of CCR, 2002 prescribes an easy procedure of endorsement on the body of the invoice, there is no logic for the appellant to have not followed the same but obtaining a separate letter of endorsement thus giving rise to a suspicion of evasion - Credit rightly denied - Appeal dismissed: CESTAT - Appeal dismissed : MUMBAI CESTAT

Steel Authority Of India Ltd Vs CCE & ST

CX - Refund - Assessee had deposited Rs.2,25,09,611/- and took suo moto credit thereof - They sought refund of only Rs. 1,90,10,718/- after factoring in an amount of Rs.6,72,532/- which was ordered to be pre-deposited in case listed which is yet to be decided by CESTAT - Demand of only Rs. 30,15,050/- was confirmed in remaining 9 cases in respect of which pre-deposit of more than Rs.30,15,050/- had already been made, there is no doubt that impugned amount of pre-deposit (Rs.1,90,10,718/-) cannot be retained by Revenue - Assessee is entitled to impugned refund: CESTAT - Appeal allowed : DELHI CESTAT

Vinod Choudhary Vs UoI

CX - It is obligatory upon the Tribunal to satisfy itself about delivery or tendering of the notice before presuming that the notice was served as per s.37C(2) of the CEA, 1944 - Matter remanded for adjudication on merits by Commissioner (A) - Appellant directed to deposit 25% of principal amount - Appeal disposed of: High Court - Matter remanded : RAJASTHAN HIGH COURT

Nssl Ltd Vs CCE & C

CX - Refund - Appellant is engaged in the manufacture of Industrial Valves - while supplying goods to M/s BPCL, in the sale invoice the price was wrongly fed as Rs.3,64,495/- instead of Rs.36,495/- per unit - excess duty paid was claimed as refund but same was rejected by lower authorities on the ground that description does not tally between the invoice and the purchase order - appeal to CESTAT.

Held: Facts that the price was charged on the higher side and excise duty paid thereon is not under dispute - M/s BPCL has issued a letter mentioning that the actual price for the item is Rs.36,495/- but appellant had wrongly invoiced at Rs.3,64,495/- and correspondingly duty was charged on higher side; wrong entry was corrected and payment was made for actual amount - it is clearly mentioned that the payment of only Rs.6,76,732/- was made against the value shown in the invoice of Rs.14,15,748/- - with this evidence all the doubts stand cleared that the appellant has charged higher amount inadvertently and accordingly excess duty was paid - no reason why the refund should not be granted of the excess paid duty - order set aside and appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT

Jindal Steel and Power Ltd Vs CCE & ST

CX - Refund - Assessee had supplied iron and steel products pursuant to purchase order placed by buyer M/s Somani Ispat - Due to error in SAP package, said invoice has reflected excise duty of Rs. 4,30,779/- as against actual liability of Rs. 82,050/- - Upon realization of mistake regarding excess payment of duty, assessee had lodged refund claim - CA has also certified that excess amount of duty has not been paid by buyer to assessee - Incidence of excess paid excise duty has not been passed on by assessee to its buyer and excess paid excise duty has been borne all along by assessee, for which the refund claim cannot be rejected on ground of doctrine of unjust enrichment: CESTAT - Appeal allowed : DELHI CESTAT

CCE Vs Golden Tobacco Mfg Co Pvt. Ltd

CX - Abatement under Notfn 11/2011-CE (NT) - Assessee engaged in manufacture of 'Khaini' - Machines installed in their factory were shut down during period 14.09.2011 to 30.09.2011 - Abatement claim for said period was rejected by Department on ground that production activity was stopped on 13.09.2011 and clearances were made on 17.09.2011 - Assessee had removed only those of goods which were already manufactured by date of these lying of goods and were lying in balance - Except the fact of delay of two days in removing goods, assessee has fulfilled requirement of notification to entitle him abatement of duty - Non-filing of intimation with Department within time is a procedural lapse, for which substantive right conferred in statute cannot be whittled down: CESTAT - Appeal dismissed : DELHI CESTAT

Eicher Tractors Vs CCE

CX - Appeal filed against O-I-O in terms of which CENVAT Credit demand was confirmed along with interest and penalties on ground that assessee had not reversed CENVAT Credit attributable to stock of raw material, inputs contained in work-in-progress and contained in final product in stock, when final product namely, tractors became fully exempt from CE duty - Issue is no longer res integra having been decided in favour of assessee vide Madras High Court in case of Tractor and Farm Equipment Ltd - A manufacturer obtains credit for excise duty paid on raw material to be used by him in production of an excisable product immediately it makes requisite declaration and obtains an acknowledgement thereof - It is entitled to use credit at any time thereafter when making payment of excise duty on excisable product - Impugned order set aside: CESTAT - Appeal allowed : DELHI CESTAT

Sirmaxo Chemicals Pvt. Ltd Vs CCE

CX - Refund - Rule 5 of CCR, 2004 - Whether refund is admissible to the appellant against supply of final product to SEZ - lower authorities rejected the refund claim of the accumulated CENVAT credit on the ground that supplies made to SEZ is a deemed export and not a physical export - appeal to CESTAT. - Appeal allowed : MUMBAI CESTAT

Premier Heavy Engineering Corporation Vs CCE

Central Excise - Show Cause Notice to dummy unit - No notice was issued to dummy unit and the demand was confirmed against main unit - On appeal, Tribunal directed to supply copy of the Show Cause Notice to dummy unit and re-adjudicate - Order of Tribunal challenged by dummy unit on the ground that it expanded the scope of appeal. - Appeal allowed : GUJARAT HIGH COURT

Sanmar Foundries Ltd Vs CCE

Central Excise - CENVAT Credit on input services - Eligibility of Maintenance or repair or helicopter, Rent a cab, Management consultancy Service - Rule 2(l) of the CENVAT Credit Rules, 2004- Appeal allowed : CHENNAI CESTAT

Mahindra Sona Ltd Vs CCE

CX - CENVAT credit availed on services used exclusively in respect of exempted goods - in the self-assessment memorandum, appellant has declared that the credit has been taken correctly as per CCR, 2004 - this declaration is incorrect and which fact is undisputed - in the era of self assessment, the onus of taking credit correctly has been put on the appellant - extended period rightly invoked - Appeal dismissed: CESTAT - Appeal dismissed : MUMBAI CESTAT

CCE Vs Bharat Forge Ltd

CX - Appellant installing a machine in their plant for doing job work for their clients - For this purpose, appellant were manufacturing dies in their premises and using the same capital goods - SCN issued for recovery of CENVAT credit availed on the inputs used for the manufacture of dies and for the purpose of job work on the ground that job work activities were exempted under notification 214/86-CE - Credit denied in four cases and hence appeal to CESTAT - in one case Revenue in appeal against dropping of demand by Commissioner(A). Held: Decision of Larger Bench in the case of Sterlite Industries - (which is upheld by Bombay High Court) holding that the provision of rule 57C of CER, 1944 would not be attracted to a job worker where the principal manufacturer undertakes to pay duty is squarely applicable in the facts of the case - Appeals of assessee are allowed and that by Revenue is dismissed: CESTAT - Assessee appeal allowed/Revenue appeal dismissed : MUMBAI CESTAT

ITC Ltd Vs CCE & C

CX - Appellant had given machineries on hire to MR Brown Bakers (I) Pvt. Ltd. (MRBBIPL) to manufacture Biscuits - On termination of contract, as per appellant's directions, the capital goods were dispatched to Utsav Food Products and Disha Foods Pvt. Ltd. - however, while clearing the goods MRBBIPL did not pay excise duty/reverse credit - capital goods were seized from the premises of Utsav Food Products and Disha Food Products Pvt. Ltd. and, thereafter, . MRBBIPL paid entire duty along with interest on 12.12.2007 - SCN issued on 08.04.2009 and demand confirmed/appropriated along with interest - original authority allowing redemption of seized goods on payment of redemption fine of Rs.13 lakhs - appeal rejected by Commissioner (A), therefore, appellant before CESTAT - Appeal allowed : MUMBAI CESTAT

Rathi Dye Chem Pvt. Ltd Vs CCE

CX - Whether Clearing & Forwarding agent service, Insurance service on finished goods in transit and Maintenance & Repair service of vehicles an Input service for availment of CENVAT credit - Appeal allowed : MUMBAI CESTAT

Vasudha Chemicals Pvt. Ltd Vs CCE

CX - Capital goods - In 2004-05, Appellant availed cenvat credit to the tune of 50% of Rs.1,04,828/- and remaining 50% was capitalized - appellant claimed the depreciation on the total assessable value and 50% of excise duty, i. e. Rs. 1,04,828/- - In the year 2005-06, the appellant reduced an amount of Rs.1,04,828/- from the capital account and availed cenvat credit of the said amount as remaining 50% - SCN issued for denying entire credit - Commissioner (A) denying credit of 50% - appeal to CESTAT. Held: Rule 4(4) of CCR, 2004 clearly provides that only part of the value of capital goods which represents the amount of duty on such capital goods, which the assessee claimed as depreciation shall not be allowed as cenvat credit - In the present case, the part of the value, which is claimed as depreciation, is Rs. 16569/- only - Therefore, to this extent the appellant is not entitle for the cenvat credit, however the remaining amount i. e. Rs 88263/- (Rs.104832-16569/-) is eligible as cenvat credit to the appellant for the reason that in respect of this amount of Rs. 88263/-, depreciation was not claimed - appellant is entitled for cenvat credit of Rs. 104828/- in the year 2004-05 and Rs. 88263/- in the year 2005-06 - Appeal partly allowed: CESTAT - Appeal partly allowed : MUMBAI CESTAT

Heranba Industries Ltd Vs CCE & ST

CX - Whether on conversion of DTA unit to an 100% EOU, CENVAT Credit lying in balance at time of conversion can be availed and utilized by 100% EOU - Issue is no more res-integra - Assessee had availed CENVAT Credit as per CCR and it does not prohibit domestic unit converted into an 100% EOU, availing and utilizing CENVAT Credit lying in balance - Prior to amendment of Rule 17 of CER, 2002, an 100% EOU was not allowed to pay duty by utilizing cenvat/modvat credit - In view of consistent decisions of Tribunal in Sun Pharmaceuticals Indus. Ltd and GTN Exports Ltd's case, Tribunal do not see any reason to record a different finding - Impugned order is set aside and appeal allowed: CESTAT - Appeal allowed : AHMEDABAD CESTAT

Auro Lab Vs CCE

Central Excise - Exemption - The appellant cleared "sutures" to M/s RITES LIMITED, New Delhi, on payment of duty for the 'Cataract Blindness Control Project', financed by the World Bank - Subsequently they filed a refund claim on the ground that they are eligible for exemption under Notification No.108/95-CE dated 28.08.1995 - The claim was rejected in adjudication on the ground that they were ineligible for the exemption inasmuch as the conditions were not satisfied - the rejection was upheld by Commissioner (Appeals); and is now agitated herein. - Appeal allowed : CHENNAI CESTAT

Monarch Catalyst Pvt. Ltd Vs CCE

CX - CENVAT - Event Management was organized to showcase their new plant (within the same factory) and its production capacities to the prospective buyers - same has to be considered as part of sales promotion activity - Credit admissible - Appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT

NCR Corporation India Pvt. Ltd Vs CCE

Central Excise - Valuation - ATMs were supplied by the appellant to SBI and warranty charges were paid, but not included for assessment to duty - differential duty demand with interest and penalties under (proviso to) Sections 11A(1), Sec 11AB, Sec 11AC of CEA 1944; and Rule 26 of CER 2002, on the firm as well as individuals adjudicated; and agitated herein - Matter remanded : CHENNAI CESTAT

Jeevan Diesels and Electricals Ltd Vs CCE

Central Excise - Demand - appellants are 100% EOU engaged in the manufacture of Diesel Generating sets with control panels, switchgears, Enclosures and accessories etc. - they are entitled upto 50% of the FOB value of exports into DTA sales; and cleared the goods to their DTA unit during the material period, without payment of duty - Duty demand with interest and penalty under Sec 11A(4) read with Sec 11D, Sec 11AB and Sec 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002 confirmed in adjudication; amounts paid were appropriated; and is agitated herein - Appeal partly allowed : CHENNAI CESTAT

Hindustan Unilever Ltd Vs CCE

Central Excise - CENVAT credit - input credit availed on 'jumbo bags' sent to the job worker for dispatch of bulk detergent powder back to appellant, denied in adjudication on the ground that it is not an input for the appellant; and is agitated herein - Matter remanded : CHENNAI CESTAT

Hinduja Foundries Ltd Vs CCE

Central Excise - CENVAT credit - input services credit (professional fees, and internet tele-communication service) availed on the basis of debit notes - same denied in adjudication, demand for its recovery with interest and penalty confirmed; upheld by Commissioner (Appeals), and agitated herein. - Appeal allowed : CHENNAI CESTAT

Primo Pick N Pack Ltd Vs CCE & ST

CX - Assessee engaged in manufacture of HDPE woven bags - Machine was removed from factory to a nearby premises for finishing of manufacturing process - Process in these premises was carried out by assessee themselves - Machine was used by assessee for production of final products - Thus, activity of assessee in using machine (capital goods) can be said to be part of its manufacturing activities of final products in its registered factory premises - There is no justification for denying credit - As there is no suppression of facts on part of assessee as he intimated the department about removal of machine by proper documents, cenvat credit cannot be denied to assessee: CESTAT - Appeal allowed : DELHI CESTAT

Rinox Engineering Vs CCE

CX - Cum duty price - SCN was issued to both assessees for demand of duty on scrap due to discrepancy in documents and goods were not covering challans sought to be confiscated and for imposition of penalty on both assessees - Assessee is only praying that benefit of cum duty price would be given - As it is not coming from records that assessee has charged any amount over and above sale price, assessee is entitled for cum duty benefit - Therefore, assessee be given benefit of cum duty price which shall be calculated by adjudicating authority and benefit of same shall be given to assessee - Goods which were found without cover on invoice/challans during investigation have been exported and on verification report has obtained from revenue which also certified that goods in question were ultimately exported - There was not mala-fide intention of assessee to de-fraud the revenue - Goods are not liable for confiscation - Therefore, penalty on both assessees under rule 25 & 26 are not imposable: CESTAT - Appeal allowed : CHANDIGARH CESTAT

B E Billimoria & Co Ltd Vs State Of Karnataka

Whether if the mixed questions of fact and law which are required to be determined by the authorities created under the Act providing assessee the remedy of appeal, writ can also be filed in respect of the same - NO: HC - Assessee's writ dismissed : KARNATAKA HIGH COURT

Uni Cast Pvt. Ltd Vs CCE

CX - Whether endorsed invoices are valid documents for taking modvat credit after 1.4.1994 : HELD - agree with the decision of the Division Bench of this Court in the case of Hindalco Industries Pvt. Ltd. and hold that Rule 57G of the Central Excise Rules, 1944 is only procedural in nature - when the genuineness of the transaction is established and the inputs received by the applicant has suffered excise duty, there is no reason why the applicant should be denied what is legitimately due to it - in the instant case, the invoice bill was produced, which evidenced payment of excise duty on the inputs received by the applicant - the said bill was endorsed by the manufacturer - the mere fact that the certificate issued by the manufacturer did not give the details of payment of duty was immaterial - the amended Rules provided payment of duty and inputs to be indicated in the invoice, which existed as per the invoice supplied by the supplier - the fact that the invoice did not indicate the name of the appellant was only a procedural lapse, which was rectified by the endorsement made by the manufacturer in favour of the applicant - endorsement made by the manufacturer in favour of the applicant on the bills raised by the supplier does not make the invoice invalid and the applicant is entitled to avail modvat credit - endorsed invoices were valid documents for taking modvat credit - reference application disposed of : HIGH COURT - Reference Application disposed of : ALLHABAD HIGH COURT

Krishnav Engineering Ltd Vs CESTAT

CX - Whether the appellant was entitled to take re-credit to the tune of Rs.3.02 lakhs, which was earlier reversed by the appellant : HELD - on realising that they were eligible for the cenvat credit on furnace oil, the appellant issued a letter dated 25.4.2005 indicating its intention to again make the reversal of its cenvat credit entries and also enclosing the original invoice bills - since it is only an account entry reversal, provisions of section 11B of the Central Excise Act is not applicable and cenvat credit taken was in accordance with the procedure provided under rule 9 of the Cenvat Credit Rules, 2004 - SCN quashed, adjudication order set aside : HIGH COURT - Appeal allowed : ALLAHABAD HIGH COURT

Indian Farmers Fertilisers Cooperative Ltd Vs CCE

CX - Once the deposit of duty was made under protest, the second proviso of section 11-B of the Central Excise Act, 1944 comes into operation, namely, that the period of limitation of six months would not apply to a claim of refund - the finding of the Tribunal that being a buyer, the appellant is not entitled to claim refund of duty is patently perverse - section 11-B of the CEA provides that any person can make an application for refund of duty - further, the appellant is not only a purchaser but is also a manufacturer of fertiliser and was entitled to purchase naphtha under notification issued under the CEA at a concessional rate of duty - since the appellant was denied the requisite forms/certificate and deposited the duty under protest, he was entitled to claim refund - appeal allowed - orders of the Tribunal and all the other authorities denying the claim of refund set aside : HIGH COURT - Appeal allowed : ALLAHABAD HIGH COURT

Chandra Metal Enterprises Vs DCCE

CX - Whether the appellant was entitled to the first and second proviso to section 11AC of the Central Excise Act, 1944 with regard to the payment of penalty to the tune of 25% : HELD - in view of the decisions in the cases of K. P. Pouches (P) Ltd., Exotic Associates, Gopal Fiber, Bhagyodaya Silk Industries and clarification issued vide CBEC circular F. No.208/07/2008-CX-6 dated 22.5.2008, the adjudication order requires the quantification of penalty to be made in terms of the first and second proviso of section 11AC of the CEA - this option was not given in the instant case - further, the quantum of penalty determined was equivalent to 100% of the duty payable which is not in consonance with the first proviso to section 11AC of the CEA - duty had already been deposited prior to issuance of SCN - appellant was, therefore, entitled to pay 25% penalty only - since 25% of the penalty had already been paid by appellant, the order in original is modified to the extent that since the duty had already been deposited prior to SCN, the appellant was entitled to pay 25% of the duty as penalty - appeal allowed : HIGH COURT - Appeal allowed : ALLAHABAD HIGH COURT

SAIL Ltd Vs CCE & ST

CX - ROA - Assessee filed restoration of appeal application seeking recall of CESTAT order, on ground that COD application although available on date of dismissal of appeal, was not brought to notice of CESTAT and is now being submitted with ROA application - It is held that CESTAT had granted liberty to assessee to apply for restoration of appeal on production of necessary clearance from COD and had not set any time limit for doing so - Thus, appeal should be restored as clearance from COD has been produced - On perusal of COD clearances, it is observed that appeal cannot be ordered to be restored except for penalty aspect - Restoration of appeal allowed - Pre-deposit of penalty waived and its recovery stayed during pendency of appeal: CESTAT - Appeal allowed : DELHI CESTAT

CUSTOMS

Monte International Vs CC

Cus - Difference of opinion among member (Judicial) and Member (Technical) - SCN dated 31.3.05, proposing recovery of duty draw back in terms of Rule 16 of the Customs and Central Excise duty draw back Rules, 1995 stands issued by ADG, DRI Delhi Zonal unit - Member (Technical) opines that there is lack of jurisdiction for issue of SCN, when there is fraudulent claim of drawback and evidenced from record requiring recovery on merit - While Member (Judicial) opines that there is no jurisdiction with DRI officers to issue SCN and recovery of drawback is not sustainable on merits. - Appeals allowed : DELHI CESTAT

Amber Distilleries Ltd Vs CCE

Cus - Application for fixation of brand rate under the Customs and Central Excise Duties Drawback Rules, 1995 needs to be filed within a period of three months from the date of export - However, appellant filed application beyond the period of three months but before the expiry of 12 months from the date of Let Export Order made in the shipping bills - The Commissioner has turned down the request for condonation/extension of the delay in filing the said application recording that he is not convinced by the reasons given. Held: Granting of drawback or industrial brand rate which is a beneficial legislation needs to be considered in a broader perspective rather than a narrow view as done by the lower authorities - statute mandates that an application can be filed for condoning the delay beyond the period of three months but within 12 months from the date of Let Export Order needs to be read in the correct perspective in line with beneficial legislation and delay, if any, needs to be condoned - Order set aside & matter remanded to the Commissioner with a direction to condone the delay by taking a liberal approach and deciding the application - Appeal disposed of: CESTAT - Matter remanded : MUMBAI CESTAT

Ashok B Tiwari Vs CC

Cus - Appellant is a 'G' card holder and a power of attorney holder and was involved in customs clearance of the consignment which was found to be mis-declared - Other noticees approached Settlement Commission for settlement of the case - considering the order of the CCESC, Commissioner (A) reduced penalty on appellant from Rs.5 lakhs to Rs.10,000/- - appellant before CESTAT seeking waiver of the penalty imposed.

Held: It is clear that the appellant was aware of the actual importer and knowingly he has handled the documents of IEC holder who was not the actual importer - Therefore, even though he may or may not be aware of the content of the consignment he was involved in the illegal import of the goods - essence of the cited case law is that the treatment given to the other parties by the Settlement Commission should also be extended to the present appellant - as the Commissioner (A) has rightly reduced the penalty substantially from Rs.5 lakhs to Rs.10,000/-, the same does not require any interference - order upheld and appeal dismissed: CESTAT Appeal dismissed : MUMBAI CESTAT

CC Vs Bright Point India Pvt. Ltd

Cus - Assessee imported different types of HTC Mobile Phones supplied by M/s HTC Corporation, Taiwan - A bill of entry was filed by them classifying goods under Chapter 85171290 and claiming benefit of Sl. No. 87 of Notfn 21/2012-CUS - Commissioner (A) allowed the appeal by accepting assessee's stand that goods were not meant for sale and were supplied free of charge as supplier units/ service buffers for distribution directly to HTC Authorized service station - Revenue contends that assessee has declared in their bill of entry that goods were meant for sale and as such declaration so made has to be accepted - Assessee had made claim in bill of entry only because in previous import such claims were being made and this seems to be like human error - No infirmity in impugned order: CESTAT - Appeal rejected : DELHI CESTAT

CC Vs 3 M India Ltd

Customs - Valuation - respondents imported capital goods, raw materials, finished products from their principal company and their related subsidiaries located in other countries - Since the respondent and the supplier are related, the issue was dealt with by Special Valuation Branch by issue of Circulars renewed / reviewed periodically - From 1991 till 2008, renewal orders were issued accepting the declared price for the purpose of transaction value - subsequently, it was reviewed and the Deputy Commissioner of Customs, SVB, Seaport, Chennai accepted the declared price, which was agitated by Revenue before the Commissioner (Appeals) on the ground that royalty is addable in the imported goods under Rule 10 (1) (c) of Customs Valuation Rules, 2007 - Commissioner (Appeals) upheld the OIO passed by DCC, SVB vide the impugned order agitated by Revenue herein - Matter remanded : CHENNAI CESTAT

Karnataka Power Corporation Ltd Vs CC

Customs - Classification - appellants are a State PSU, and imported parts of Hydro Electric Generator i. e., 'Epoxy insulated single turn half coils with accessories and Epoxy insulated single turn half coils wave stator windings etc.' - The goods were assessed under CTH 8544.11 and the appellant paid duty without protest - Subsequently, they filed the refund claim and claimed the classification under 8503 - Commissioner (Appeals) rejected their appeal, which in turn was upheld by the Tribunal - The Apex Court set aside the orders and remanded the matter to the Assistant Commissioner to decide the original refund application - The adjudicating authority in his denovo order held that the goods are rightly classifiable under 8544 and rejected the claim; the same was upheld by Commissioner (Appeals) which is agitated herein - Appeal allowed : CHENNAI CESTAT

Vinay Aggarwal Vs CC

Cus - M/s Western Impex imported certain goods and filed bill of entry - It is alleged that assessee had helped M/s. Western Impex in procuring orders from exporter and in getting it cleared from Customs and as per statement of Mr. S. Chandra, Proprietor of M/s. Western Impex, assessee had financed the imports - It is held that M/s. Western Impex is actual importer, in terms of definition of "Importer" u/s 2 (26) of CA - By confirming differential demands and by giving an option to M/s. Western Impex, Revenue has also accepted this fact - Hence, assessee has no role to play as regards declarations required to be made to Customs Authorities, no penalties upon him can be called for, even if he was the financer of consignments, since he cannot be said to have done any act or omitted to do an act which have rendered goods liable to confiscation - Impugned order set aside & penalty imposed on assessee is not maintainable: CESTAT Appeal allowed : DELHI CESTAT

Abacus Peripherals Pvt. Ltd Vs CC

Cus - Refund - Assessment group of Customs has informed that no out-of-charge was given to the said bill of entry and it is also informed that no re-export permission was given to the importer - in these circumstances, either delivery of the goods should be given to the appellant and if department has failed to give delivery of the goods then appellant shall be entitled for the refund of the duty and interest paid by them - Matter remanded: CESTAT - Matter remanded : MUMBAI CESTAT

Bhalinder Singh Mann Vs CC

Cus - Suspension of license - It is alleged that assessee acted in a irresponsible manner and failed to fulfill obligation under Regulation 11(a), 11(d) and 11(n) of CBLR, 2013 - License of assessee licence was suspended on 20.03.2015 but SCN in terms of CA, 1962 was issued on 18.11.2015 and still no notice or proceedings have been issued u/r 22 of CBLR, 2013 - It is held that since no proceeding by way of issue of SCN or inquiry has been initiated under CBLR, 2013, therefore, impugned order confirming suspension of licence is not sustainable - Impugned order set aside: CESTAT - Appeal allowed : DELHI CESTAT

Sri Navratan Jain Vs CC

Cus - Whether 500 bags of betel nuts seized from vehicles are of foreign origin and smuggled into India and whether Shri Nirmal Baid is rightful claimant of these 500 bags - Entire case of Revenue is solely based on information received and statements of occupants of vehicles in which seized betel nuts were being carried - None of occupants of vehicle had prior intimation that they have to go to site for loading betel nuts of foreign origin - All occupants of vehicles were contacted by a person, who later fled - None of drivers and khalasis of vehicles ever stated that they have either transferred seized betel nuts across border from Nepal or have witnessed such transportation across the border - Revenue has failed to establish that seized betel nuts are of Nepal origin and are smuggled into India - Claimant has furnished ample evidences of his identity in form of his VAT registration, purchase bills, filing of VAT returns by buyer of seized goods which were easily verifiable - Claimant has made out a case for ownership of 500 bags seized as also there is no other claimant for these goods - Impugned order set aside: CESTAT - Appeal allowed : KOLKATA CESTAT

PR CC Vs Santosh Handloom

Cus - Extension of time for issuing SCN u/s 124 - Post amendment by the Finance Act, 2012, Section 153 of Customs Act, 1962 does not provide for service of SCN on a customs broker/customs agent - right of owner of goods cannot be defeated without prior notice on him - seized goods rightly ordered to be released to respondent by Single Judge - Revenue appeal dismissed: Division Bench of High Court - Appeal dismissed : DELHI HIGH COURT

Vja Flynn Vs CC

Cus - Confiscation of goods - Assessee contends that documents relied upon by Adjudicating authority were not provided to assessee and was not given any opportunity to cross-examine the persons, who gave opinion under Section 24 of AAT Act about impugned goods being antiques - Mr. Manjhi's report is most crucial to conclude that impugned goods were antiquities - Even if his report is final as per Section 24, he can still be cross-examined on several grounds - Not permitting cross-examination of Mr Manjhi is grossly violative of principles of natural justice and therefore impugned order is not sustainable - As regards to cross-examination of panchas who signed seizure memo at airport, it is found that same has been signed by assessee also - Therefore cross-examination of panchas will in no way further the cause of justice - Also, in absence of cross-examination of panchas, assessee is not prejudiced in any way - Accordingly, assessee has not made out a case for cross-examination of panchas - Cross-examination of Mr. Dharamvir Sharma is not warranted because nothing is predicated upon his opinion in impugned order - As far as seizure at airport is concerned, even if for sake of argument, coins did not turn out to be antiques, confiscation under section 113 (i) of the Customs Act, 1962 will be sustainable because goods seized at airport were not declared by assessee as required under section 77 ibid: CESTAT - Case remanded : DELHI CESTAT