HC directs authority to consider sec. 10(23C) relief as request for approval wasn't not forwarded to it
IT : Where assessee society filed application for approval of exemption, said forms were addressed to prescribed authority and were sent through proper channel, but for some reasons were not forwarded to prescribed authority, writ petition filed by assessee was to be allowed
Section 80C- Bank term Deposit Limit increased to Rs. 1.50 Lakh
NOTIFICATION NO. 63/2014, Dated: November 13, 2014.
S.O. 2906(E). In exercise of the powers conferred by clause (xxi) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendments to the the Bank Term Deposit Scheme, 2006, namely:-
1. (1) This scheme may be called the Bank Term Deposit (Amendment) Scheme, 2014. (2) It shall come into force on the date of its publication in the Official Gazette.
2. In the Bank Term Deposit Scheme, 2006, in para 3, in clause (1), for the words "one lakh rupees" , the words "one hundred and fifty thousand rupees" shall be substituted.
[F.No.142/09/2014-TPL]
(Raman Chopra)
Director (TPL-II)
Director (TPL-II)
Note: The principal Scheme was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii),vide number S.O. 1220(E) dated the 28th July, 2006 and subsequently amended by notification number S.O. 2127(E), dated 13th December 2007.
Refund of excess duty paid cannot be denied merely on the ground of non-production of original invoices
Deepak International Vs. Commissioner of Cus. & Service Tax, Kanpur [2014 (11) TMI 233 - CESTAT NEW DELHI]
Deepak International(the Appellant)imported lighting fixtures (impugned goods) for which the Customs Authorities enhanced the value of the impugned goods. The Appellant cleared the impugned goods on payment of higher duty amount of Rs. 3,12,418/-. Being aggrieved by enhancement of value, the Appellant preferred an Appeal before the Higher Authorities and the Hon'ble Tribunal allowed the appeal with consequential relief. Thereafter, the Appellant filed refund claim of excess duty paid, which was rejected by the Lower Authorities on the ground of unjust enrichment. It was alleged that though the Appellant while issuing invoices to their Customs stamped the same as "extra customs duty deposited vide challan dated 10-3-2006 not charged from the buyers on goods imported vide Bill of Entry No. 24/2006, dated 7-3-2006", but the Appellant have produced only photocopies of the said invoices and the original do not stand produced being lost by the Appellant.
Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Delhi.
The Hon'ble CESTAT,Delhi relying upon the decision in the following cases:
CCE, Coimbatore v. Flow Tech Power [2006 (202) E.L.T. 404 (Mad.)] and
Corning S.A. v. CCE, New Delhi [2005 (192) E.L.T. 355 (Tri. - Del.)]
allowed the Appeal and observed that refund of higher duty paid by the Appellant at the time of clearance of goods, should be refunded as the Appellant has produced Chartered Accountant certificate, the invoice showing the stamp of non-passing of duty to the customers and Balance Sheet showing that the said duty is recoverable from the Revenue.
It was further held by the Hon'ble Tribunal that denial on the technical ground of non-production of original invoice is neither justified nor fair.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Penalty not warranted when importer was not having any knowledge of the mis-declaration of the goods
Commissioner of Customs (Imp.), Nhava Sheva Vs. MediPharma Drug House [2014 (11) TMI 151 - CESTAT MUMBAI]
Medi Pharma Drug House (the Assessee) obtained a licence to import into India the drug named' Cyanocobalamin (Vitamin B12) BP/USP/IP' manufactured by North China Pharmaceutical Victor Co. Ltd. of China (North China Company). Against the said license,the Assessee imported a consignment through Jet Impex International (Jet Impex) in Indent No. Jet/2007/08/49, dated March 14, 2008. However, the goods were supplied by Levachem Co. Ltd. (Levachem), Hong Kong as per the indent which certifies that the goods have been manufactured by North China Company as per licence.
On arrival of the goods, the same were sent to the Drugs and Control Department to obtain NOC wherein it was found that the labels are not matching to the labels of North China Company. Hence, the proceedings were initiated against the Assessee and the goods were confiscated with an option to pay redemption fine of Rs. 25 lakhs and penalty of Rs. 15 lakhs was also imposed. Aggrieved by the Order of the Adjudicating Authority, the Appellant preferred an appeal before the Hon'ble CESTAT, Mumbai. The Revenue also preferred an appeal before the Hon'ble CESTAT, Mumbai on the ground that the absolute confiscation is not ordered rather option for payment of redemption fine is provided to the Assessee.
The Hon'ble CESTAT, Mumbai relied on the decision in case of Oriental Containers Ltd. [(2003 (3) TMI 126 - High Court of Judicature at Bombay] and observed that the Assessee has taken every step to comply with terms and conditions of the licence given by the Drugs and Control Department as the license was granted to import the goods manufactured by North China Company. The license does not cast any duty on the Respondent to import the same directly from the manufacturer.
It was further observed that the Assessee was not having any knowledge of the mis-declaration of the goods as they came to know about the fraud only when the goods were sent to the Drugs and Control Department for obtaining NOC. Thus, confiscation of the goods and penalty on the Assessee was not warranted. Further, since impugned goods have been destroyed in the fire at CFS on January 31, 2010 before the out of charge, question of absolute confiscation or confiscation has become infructuous.
Accordingly, the Hon'ble Tribunal allowed the appeal in favour of the Respondent and dismissed the appeal of the Revenue.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Utilization of credit for payment of duty which was not required to be paid is effectively reversal of credit
No need to reverse Cenvat credit availed of duty paid on HR coils/sheets for discharging duty on HR slitted and pickled coils on dispute whether slitting and pickling is a manufacturing activity under Section 2(f) of the Central Excise Act, 1944
Asian Colour Coated Ispat Ltd. Vs. Commissioner of Central Excise, Delhi-III [2014-TIOL-2111-CESTAT-DEL]
Asian Colour Coated Ispat Ltd. (the Appellant) was engaged in the process of slitting and pickling of HR coils/ sheets (the activity). They availed Cenvat credit of Rs. 37 crores of the duty paid on HR coils/sheets and discharged Excise duty amounting to Rs. 42 crores on the HR slitted and pickled coils.
The Commissioner of Central Excise, Delhi alleged that the activity undertaken does not amount to manufacture and hence the Appellant was not entitled to avail Cenvat credit on the alleged inputs.Accordingly, a demand of Rs.37.04 crores was confirmed along with imposition of an equivalent amount of penalty. Being aggrieved, the Appellant preferred an appeal before the Hon'ble CESTAT, Delhi.
The Revenue adverted to the provisions of Section 5B of the Central Excise Act, 1944 ("the Excise Act") and submitted that since notification has not been issued in respect of the activity, Cenvat credit cannot be allowed. Reliance was further placed upon the Circular No. 911/1/2010 – CX dated January 14, 2010, Circular No. 940/1/2011 – CX dated January 14, 2011.
In the CESTAT, there was conflict of views between the Hon'ble Members.
The Hon'ble Member (J), inter alia, observed that there is no quarrel about the proposition that the Delhi High Court in the case of Faridabad Iron & Steel Traders Association [2003-TIOL-79-HC-DEL-CX] ("Steel Traders case") has held that the activities of cutting or slitting of steel sheet in coil is a non-manufacturing activity. However, adverting to the plethora of decisions wherein it is held that "By utilization of credit for payment of duty which was not required to be paid, credit was effectively reversed and Revenue cannot once again ask for reversal of credit", the Member (J) allowed the appeal with consequential relief.
In the matter of the reference made to Section 5B of the Excise Act and various Circulars, the Hon'ble Member (J) observed that if the Appellant does not approach the Central Government, the same cannot stop him from pursuing the legal remedy before the Courts.
On the other hand, the Hon'ble Member (T), inter alia, held that the Appellants cannot be allowed to circumvent the legal position and presume an activity as manufacture and avail Cenvat credit on inputs forcibly and pay duty on finished goods not required to be paid under the law and then pass the credit to the buyer. Holding that there is no question of granting input credit against such manufacture, the Hon'ble Member (T) upheld and confirmed the demand but reduced the amount of penalty to Rs.5 crore.
Consequently, the matter was referred to the Third Member for a Majority view.
The Hon'ble Third Member allowed the appeal and held as under:
- Decision given in Steel Traders case was only in respect of the process of cutting or slitting of steel coils to the required sizes as no new commodity and distinct article having distinct name, character and use has emergedand the excisability of pickling process has not been examined since it was not in dispute;
- The process of pickling involves treatment of the HR sheets/ coils by solution of acids and chemicals to remove surface defects and obtain a sheet with smooth surface;
- In Heading No.7208 of the Central Excise Tariff Act, 1985, there is separate sub-heading for HR coils subjected to the process of pickling and probably because of this, the Appellant were under impression that this process amounts to manufacture, and paid duty in respect of this process;
- Since there is no judgment of any High Court or Apex Court on the specific issue as to whether the HR coils subjected to the process of slitting as well as pickling would amount to manufacture, the provisions of Section 5B of the Excise Act are not attracted.
- Even if it is accepted that the activity does not amount to manufacture, it amounts to saying that the Appellant have cleared the Cenvat credit availed inputs as such and this is something which is not prohibited, if at the time of removal of Cenvat credit availed inputs, in terms of the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004, an amount equal to the Cenvat credit availed is paid under an invoice issued under Rule 9 of the Central Excise Rules, 2002;
- Since the amount paid on the clearance of pickled HR sheets is more than the Cenvat credit availed, the Cenvat credit availed stands more than reversed and there is no need to recover the same again.
Hence, the matter was decided in favour of the Appellant with majority view.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
Section 195 – No TDS on reimbursement of expenses for supply of data
Briefly stated facts are that the assessee claimed deduction for Rs.6,88,12,554/- and Rs.23,78,781/- being amount payable to EYGS LLP and Ernst & Young LLP, UK respectively towards reimbursement of costs for providing access to system & management audit methodology updates, knowledge updates through web etc. assistance in development of common programs and policies, endeavoring to ensure that professional and to other people resources are available to assist the firm or its clients in all jurisdiction. But the AO disallowed both these amounts claimed by way of reimbursement of cost for services utilized in the assessee' s business. According to him assessee is laible to deduct tax but it has failed to deduct tax under section 195 of the Act. He, accordingly, disallowed a sum of Rs.7,11,91,335/- paid towards 'Cost of Reimbursements' u/s. 40(a)(ia) of the Act. Aggrieved assessee preferred appeal before CIT(A) , who deleted the disallowance by following the decision of ITAT, Kolkata in assessee's own case for AY 2003-04 in ITA No. 1750/Kol/2006 vide order dated 16th Nov. 2007, wherein it has been held as under:
"10. We went through the rival submissions of both the parties and perused the documents. In our considered view as per the provisions of section 195, we agree with the view taken by the Delhi Branch of the Tribunal that before a TDS is required to be charged on any sum, it has to be shown that it is an income as per the provisions of section 195 because the very wording under section 195 "any other sum chargeable under the provisions of the Act" means that chargeable as income as per section 4 of the Income-tax Act. Unless and until it is chargeable, there is no requirement of withholding tax by any India person responsible for paying to any non-resident , not being a company, or to a foreign company, any sum payable on any account. There is no rebuttal frorn the side of the department that the expenses are relating to reimbursement of expenses for supply of data as per the agreement stated to have been made amongst the global firms to which the assessee company is treated as one of the members. Apart from this factual aspect it has been observed that in the case law reported in 142 ITR 493 in the case of Dunlop India Ltd. the facts appear to be identical to that of the present case in hand. Therefore, both factually as well as legally the assessee has a case and on this issue the assessee, therefore. should succeed in our considered opinion as the amount is towards the reimbursement and with the passage of time, now globalization has been adopted by different countries for facilitating data and technical skill of different countries. Simply because thee supply of data pertains to technical services, the department should not be rigid for application of section 195 without examining the actual factual aspect of the matter that it is a result of an agreement in between the parties for sharing the data amongst the members firms in the globalization process. This aspect, in parlicular, has not been controverted by the ddepartment at any stage of the proceeding. Hence, we decide this issue in favour of the assessee and against the Revenue.
Aggrieved revenue came in appeal before us.
We have heard rival submissions and gone through facts and circumstances of the cxase. Before us, Ld. Counsel for the assessee stated that the issue is squarely covered in favour of assessee and against revenue. We find that the Tribunal is consistently deleting this disallowance as reproduced above one of the Tribunal's decision in AY 2003-04. We find the factual position that the assessee company is a member of the international organization of Ernst & Yound and its several associate concerns worldwide. Ernst & Young Global Services LLP and Ernst Young UK LLP provide administrative and management support services in connectionwith technology updates, system and methodology and upgrades, training through webs etc. to the assessee and to other associate concerns of the Group. The assessee and its other associate concerns share the costs. A sum of Rs.6,88,12,554 was reimbursed to Ernst & Young Global Services LLP and a sum of Rs.23,78,781 to Ernst & Young UK LLP by the assessee during the current assessment year on account of its share of costs for such services. The said concerns were set up by member firms of Ernst & Young for providing resources to obtain best methodologies at a lower cost which in the present days of globalisation was imperative for any professional firm. Development of such methods by anyone concern would have been cost prohibitive apart from lacking uniformity and mutual compatibility. Accordingly, arrangement was arrived at for such services to be developed in pool by the said two concerns to which the member firms would have access to it and reimbursing their respective shares of cost incurred therefor. Such reimbursement was agreed on the basis of respective turnover of the member firms. These facts are not denied by revenue even now before us and these are reimbursement of expenses. Once these are reimbursement of expenses the assessee is not liable to deduct TDS u/s. 195 of the Act. Accordingly, we confirm the order of CIT(A) and this issue of revenue's appeal is dismissED
DCIT vs. Ernst & Young Pvt. Ltd (ITAT Kolkata),I.T.A No.1159/Kol/2012, Date of pronouncement: 30.04.2014
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