Tuesday, October 6, 2015

[aaykarbhavan] Judgments and Information







Recent case laws

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TRANSFER ORDER

CBDT transfers five Addl/JCITs

CASE LAWS

2015-TIOL-2285- HC-RAJ-IT

The Rajasthan Tax Consultants Association Vs UoI

Whether if it is apparent that there was ample time available with the assessee to compile details and file return of income, the High Court need to interfere in the policy decision of the Central Government for extension of return filing date - NO: HC - Assessee' s appeal dismissed : RAJASTHAN HIGH COURT
2015-TIOL-2282- HC-ALL-IT

Income Tax Bar Association Vs UoI

Whether when a Member is appointed in a Bench of the ITAT, then without any reservation such Member should be given accommodation on priority basis without any restriction of locality - YES: HC - Appellant' s petition allowed : ALLAHABAD HIGH COURT

2015-TIOL-2281- HC-P&H-IT

CIT Vs Haryana Financial Corporation

Whether deduction of the amount paid can be claimed in respect of premium paid for unrecognised pension/superannuat ion fund and gratuity fund under the provisions of section 36(1)(iv) and (v) - NO: HC

Whether the amount actually paid to employees can be claimed as deduction u/s 37(1) on the basis that such sum has been spent wholly and exclusively expended for the purposes of the business or profession of the assessee - YES: HC - Revenue' s appeal dismissed : PUNJAB AND HARYANA HIGH COURT

2015-TIOL-2280- HC-KAR-IT
CIT Vs Doddanandi Estate

Whether order directing the AO to re-compute the capital gains by taking 70% of the sale proceeds as the market value as on 1-4-1981 be changed when no valid reasons is given by AO - NO: HC -Revenue' s appeal dismissed : KARNATAKA HIGH COURT:
2015-TIOL-2279- HC-MAD-IT

K O Mohandurai Vs ACIT

Whether when an investment made by an assessee is claimed to have come from a particular source, it is up to the assessee to prove it - YES: HC

Whether when the assessee is unable to discharge the burden cast upon him, then such investment claimed should be treated as undisclosed income u/s 68 - YES: HC - Assessee' s appeal dismissed : MADRAS HIGH COURT

2015-TIOL-2276- HC-MAD-IT

CIT Vs South India Structural Corporation Ltd

Whether the Revenue cannot challenge only one appeal, which was only consequential to the findings recorded by the Tribunal in another appeal, which was not challenged - YES: HC - Revenue' s appeal dismissed : MADRAS HIGH COURT

2015-TIOL-2273- HC-MUM-IT

Chamber of Tax Consultants Vs UoI

Whether CBDT has to make available the necessary ITR Forms on 1st April of the subject Assessment Year for the benefit of the assessee, even if, in case, there is any delay, the same should be recorded in writing and in case of delay, an extension of time in filing return is warranted - YES: HC

Whether if the decision of the Gujarat High Court and Punjab and Haryana High Court have been accepted by the CBDT u/s 119, the same warrants extension to all over India so as to avoid any discrimination - YES: HC - Assessee' s appeal allowed : BOMBAY HIGH COURT

2015-TIOL-1565- ITAT-KOL

DCIT Vs M/s Maithan Smelters Ltd

Whether the interest subsidy, transport subsidy and power subsidy received by the assessee are eligible for deduction u/s 80IB. - Revenue' s Appeal dismissed : KOLKATA ITAT

Indirect Tax Basket
SERVICE TAX SECTION

2015-TIOL-2100- CESTAT-AHM + Story
Vodafone Essar Gujarat Ltd Vs CST

ST - Rebate - Rule 5 of Export of Services Rules, 2005 - Appellant, a telecom service provider, raised bills to their client viz. Foreign Telecom Operator for service to their customers who visited India and received payments in foreign currency - services amount to export of service - rebate admissible but time bar factor applies - appeal allowed but matter remanded to adjudicating authority for verification as to whether claims are time barred or not: CESTAT [para 10, 11] - Appeals allowed : AHMEDABAD CESTAT

015-TIOL-2098- CESTAT-DEL

Hans Travels Vs CCE

ST - Travel Agent and Tour Operator service - As regards demand of Rs.9,18,286/ - confirmed under BSS, this ST is confirmed on freight charges (luggage booking charges) recovered by assessee for transportation of goods on its buses - Transport of goods on buses would not come under category of BSS merely because goods transported belonged to businessmen, indeed the inclusive part of definition leaves no scope for doubt in this regard - Demand of Rs.9,18,286/ - confirmed under BSS is not sustainable - As regards remaining demand under tour operator service, contention of assessee that it operated its buses as stage carriages does not alter category of its buses from contract carriages to stage carriages - Impugned service rendered by assessee using a contract carriage would fall under category of tour operator service - Case remanded to Adjudicating authority for de novo adjudication on limited aspect of eligibility of assessee for benefit of exemption under Notfn 20/2009-ST as made applicable w.e.f. 01.04.2000, invokability of extended period and imposability of mandatory penalty under Section 78: CESTAT - Appeal partly allowed : DELHI CESTAT

CENTRAL EXCISE SECTION

2015-TIOL-2097- CESTAT-MAD
CCE Vs Arasan Company

Central Excise - Offence case - SSI Exemption - M/s ACF found operating two dummy units, M/s RG and M/s SA engaged in manufacture of tractor trailers - confiscation of seizure, demands and penalties on firms and individuals adjudicated; same set aside by Commissioner (Appeals), and agitated by Revenue herein.

Held: The grounds of appeal of Revenue specifically brings out evidence on record to discard the conclusion of the Commissioner (Appeals) - It is contended inter alia that (a) ACF was engaged in the manufacture of trailers, but in order to avail SSI exemption separately RG and SA were floated solely for the purpose of evading payment of duty - (b) No manufacture of trailers took place at the premises of RG; the trailers shown and alleged as manufactured by RG were in fact manufactured in the premises of ACF - (c) The unit SA remained only on paper and the existence was merely to account for production of trailers manufactured in the premises of ACE so as to separately avail SSI exemption - The three units were functioning as a homogenous entity without any distinction whatsoever; and in view of the Tribunal ruling in the case of M/s U.K.Machine Tools Pvt. Limited, all the three units are to be treated as a single entity - SSI declaration filed by them were nothing but mis-declarations for the purpose of cheating the department; and the proviso to Section 11 A (1) was rightly invokable - By their acts of commission in the offence committed by ACF, the individuals had rendered themselves liable for penalty. [Para 6]

When the record itself indicates categorical statements recorded from different persons under Section 14 of Central Excise Act against assessee and there was one man show by Shri Natesan which is evident from different materials gathered by Revenue, both the units are exposed to be dummies of ACF - Revenue has also brought out that there is certificate issued Consulting Engineer to the effect that SA had no manufacturing facility for manufacture of trailers on record - The stock position of the raw materials were also under the control of ACF, clearly indicating that without ACF, both the two dummies were inoperative - When what that is apparent is not real, it is compelling reason that the order of Commissioner (Appeals) is to be set aside and OIO to be restored. [Para 7-9] - Appeals allowed : CHENNAI CESTAT

2015-TIOL-2096- CESTAT-AHM
Anil Bioplus Ltd Vs CCE

CX - Whether assessee is required to pay amounts at a particular rate on value of exempted goods (Bio Feed) cleared by them under provisions of Rule 6 of CCR, 2004 - Bio Feed is made from waste generated in manufacturing of products like Calcium Gluconate, Enzymes, Flavours, which are cleared on payment of duty - It is the case of assessee that duty paid inputs, on which credit is taken, are not used directly in manufacture of byproduct Bio Feed - No evidence has been produced by Revenue that duty paid inputs are directly used in manufacture of exempted byproduct Bio Feed - In absence of any such corroborative evidence, duty paid inputs used by assessee will be deemed to have been used in manufacture of dutiable goods Calcium Gluconate, Enzymes and Flavours manufactured by assessee and cleared on payment of duty: CESTAT - Appeal allowed : AHMEDABAD CESTAT

2015-TIOL-230- SC-CX + Story
CCE Vs Paper Products Ltd

CX - Shrink sleeves are classifiable under Chapter 39 & not Ch. 49 of CETA, 1985 - printing is only incidental and the main purpose of the product is to provide tamper protection to the product to make shatter resistance, enhance puncture resistance and tamper proof packing - Revenue appeals dismissed: SC [para 5, 7] - Appeals dismissed : SUPREME COURT OF INDIA

2015-TIOL-2095- CESTAT-MUM + Story

Tata Motors Ltd Vs CCE

CX - Rule 7 of CER, 2002 - Provisional assessment - consequent upon finalisation of assessment, excess duty paid can be adjusted against short payment as there is no unjust enrichment involved - appeals allowed: CESTAT [para 8.1, 8.4, 8.5, 8.6] - Appeals allowed : MUMBAI CESTAT

CUSTOMS SECTION

2015-TIOL-2099- CESTAT-MAD

CC Vs Hlg Trading

Customs - Stay - The respondent initially sought permission for filing manual bill of entry for availing notification 30/04-CE for exemption of CVD - Subsequently, they filed EDI Bill of Entry which was assessed and CVD charged without granting exemption - The respondent preferred appeal to Commissioner of Customs (Appeals) against denial of CVD exemption; who directed the Customs authorities to issue detention certificate for waiver of demurrage in clearance; recorded a finding that necessary action will be taken against the officials and also directed the authorities to pass a speaking order - Same agitated by Revenue seeking stay of operation of the impugned orders passed by Commissioner (Appeals).

Held: The respondents have filed appeals claiming benefit of exemption notification against Bills of Entry and simultaneously claimed for detention certificate - Commissioner (Appeals) has passed the present orders without hearing the department&# 39;s view as to whether the department has considered their letter and denied issue of detention certificate - He directed the department to fix responsibility on the officers for the delay; directed the Department to issue detention certificate in terms of Regulation 6 (1) of HCCAR 2009; and held that if there is any dispute in issuance of certificate, the amount shall be recovered from the officials concerned - though respondent claimed benefit of exemption notification, the appellate authority has not decided the main issue on admissibility of exemption notification but only directed the assessing group to issue a speaking order and directed the Commissioner of Customs, to forward the case to DG Vigilance for fixing responsibility on the officials - Whether he has got powers to issue such direction without deciding the main issue would be examined at the time of appeal hearing - prima facie, his order is not in conformity with law; the operation of the impugned orders is stayed. [Para 5] - Stay granted : CHENNAI CESTAT


  

IT : Where assessee was treated as in default on account of short payment of TDS, but fact of filing of revised e-TDS return due to which tax demand had become nil, had not been considered by lower authorities, matter was to be remanded back

[2015] 61 taxmann.com 345 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'A'
Assistant Commissioner of Income-tax
v.
BA Continuum India (P.) Ltd.* https://www.taxmann.com//fileopennew.aspx?id=101010000000161747&mode=home&page=#fn1


  

IT: Embroidery work performed on grey synthetic cloth i.e. sari amounted to manufacturing activity and, thus, machinary used in said activity was entitled to receive additional depreciation

[2015] 61 taxmann.com 358 (Ahmedabad - Trib.)
IN THE ITAT AHMEDABAD BENCH 'C'
Income-tax Officer, Ward - 6 (4), Surat
v.
Yash Creation


  

Cenvat Credit : Prima facie, telecom service providers : (a) cannot take input or capital goods credit of credit of tower parts and shelters; however, (b) may take credit of 'Erection, Installation and Commissioning&# 39; and 'Commercial or Industrial Construction&# 39; services used for erection and installation of towers and shelters

[2015] 61 taxmann.com 405 (Madras)
HIGH COURT OF MADRAS
Aircel Ltd.
v.
Commissioner of Central Excise, Customs And Service Tax
Service Tax : Flats allotted to landowner under a development agreem

  

Service Tax : Flats allotted to landowner under a development agreement are prima facie liable to service tax based on price charged by assessee builder on flats sold to other flat owners


[2015] 61 taxmann.com 423 (Madras)
HIGH COURT OF MADRAS
Southern Properties & Promoters
v.
Commissioner of Central Excise




  

VAT - In course of ERP implementation even if any software comes into existence, title of software vests with client and not with the assessee - they are not goods available in market - not liable to VAT - Revision petition dismissed: High Court

BENGALURU : REVENUE has preferred a Revision Petition against the order passed by the Karnataka Appellate Tribunal deleting the levy of tax under KST Act and holding the activities of Business Consultancy services and implementation of the Enterprises Re-source Planning (ERP) software as pure services not involving any sale of goods or any transfer of property in goods in the execution of works contract.

The case of the assessee is that, in respect of the activity of the business consultancy services, the customers approach the assessee for such services. Then the assessee' s team of business consultants examine the request of the customers and then conduct Business Process Review ('BPR' ) under Business Consultancy Services ('BCS' ) programme, and identify and recommend a suitable ERP software to the customer. Then the necessary ERP software is purchased by the customer. Thereafter ERP implementation team of the assessee enters into contracts with the customers for ERP implementation services if the customers seek such implementation.

The ERP implementation service is independent of the earlier business consultancy service. Every customer does not contract for both the BCS and ERP implementation service together. When ERP software is purchased by the client, such software needs to be installed, integrated and implemented at the client's end. The installation of ERP software is performed by the project implementation team comprising of the personnel of the assessee company, along with the employees of the client. The team ensures that the ERP software is appropriately integrated in the system of the client, and thereafter implementation of the said software is done.

The case of the assessee is that in the activities of BCS and ERP software (purchased by the customers from other vendors) implementation, the assessee provides only services and no transfer of property in goods is involved.

Service tax on ERP implementation services (w.e.f 16.5.2008) has been paid on such services. BCS does not involve transfer of property in goods. Service tax is also paid on BCS receipts. In both, only the service is provided and these two services involve no transfer of property in goods.

The Counsel for the Revenue inter alia submitted that the agreement for providing service includes code writing involvement; that the said code writing constitutes sale of software which is exigible to tax. It is also emphasised that in their letter dated 19.06.2008 the assessee has admitted that 25% of the work in ERP implementation constitutes development of software and, therefore, at least 25% of the consideration paid under the agreement should be treated as sales and tax is leviable under the Act.

The respondent assessee pointed out that deliverable materials do not include commercially available software or hardware which are provided under separate agreements; deliverable materials are not marketable; they are not goods available in the market; that they are client specific and they intend making the Baan ERP functional to meet the requirements of the client; that the entire consideration received for providing services to the client have been subjected to service tax [refer 2010-TIOL-167- CESTAT-BANG affirmed by the Apex Court]. Therefore, no portion of the consideration received could be attributed to sale of the software and, therefore, the impugned order does not call for any interference.

The High Court observed that an almost identical issue was decided in the case of INFOSYS LIMITED - 2015-TIOL-2106- HC-KAR-VAT and where it is held that - since there is no transfer of ownership or the licence to use the software (deemed sale), it is a pure service contract. There is no sale of goods. It is a case of rendering service and is liable to service tax only.

The High Court concluded thus -

+ In this case, the integration process of the developed ERP software is undertaken by the assessee by deputing ERP implementation team to render ERP implementation service. What this team does is, they install the ERP software, integrate it and implement at the client's end.

+ The members of the ERP Software implementation team ensures that the ERP software is appropriately integrated in the system of the client. In the process the experts will take all necessary steps to provide functional data for the installation of the ERP software and it becomes useful for the client.

+ In the process there is no transfer of any goods involved. Unless the goods is in existence and deliverable so that the right in the goods is transferred, VAT is not attracted. There is no marketable commodity in existence to be sold. Unless such a commodity, whether tangible or intangible, exists there cannot be a sale.

+ When in the course of implementation even if any software comes into existence, the title of the software vests with the client and not with the assessee. The said deliverable materials do not constitute commercially available software. They are not goods available in the market. It is client specific. The said materials are required to make the ERP functional to meet the requirements of the client.

+ As the ownership of these deliverables vest with the client, in order to see that it does not prevent them from using that knowledge while attending to other clients, the clauses 2.2 and 2.21 in the agreement are entered into.

+ The entire consideration received for providing services to the client have been subjected to service tax. Therefore, no portion of the consideration received could be attributed to sale of the software.

+ Therefore, the finding recorded by the Tribunal is based on legal evidence and supported by the legal position as declared by the Apex Court in several judgments referred to in the order.

Holding that there is no merit in the Revision petition, the same was dismissed.

(See 2015-TIOL-2298- HC-KAR-VAT)


  

CX - Clandestine production and clearance of TMT bars without payment of duty - No credence can be paid to capacity determined under compounded levy scheme introduced in 1998 and abandoned after 2-3 years as scheme did not work properly: CESTAT by Majority

MUMBAI : THE appellant is engaged in manufacture of TMT/CTD bars.

The case booked by DGCEI in December 2006 resulted in a SCN dated 25.11.2008 alleging that the appellant had manufactured and clandestinely cleared 7697.010 MT of TMT bars during the period June 2006 to December 2006 without payment of duty.

In reply to the SCN the appellant submitted that the installed capacity of their factory is only 4441 MT per year and as per the records during the period of six months in dispute, the appellant has already cleared about 2600 MTs of TMT bars on payment of duty. Therefore, it is contended that the appellant has not manufactured the quantity in dispute as the appellant has no manufacturing capacity. It is also contended that no evidence of any change in the pattern of production or in the electricity consumption or the capacity of the plant has been examined by the investigating team. No evidence was found by the investigating team regarding the use of furnace oil for the purpose of heating the furnace. For transporting the goods alleged to have been purchased and sold clandestinely, the appellants would have required over 1000 trucks during the impugned period. He further submits that during the course of search, no incriminating documents were found in the factory and office of the appellants. No excess raw material were found on verification of the stocks.

Adjudication took place and the allegations were upheld by the CCE, Nasik in December 2009 resulting in confirmation of CE duty along with penalties etc..

Inter alia , before the Tribunal, the appellant submitted that they had sought cross examination of 31 persons whose statements have been relied upon in the show-cause notice but were not afforded the same and which is in gross violation of Section 9(d) of the CEA, 1944.

The appeals were heard in September 2014; there was a difference in opinion and upon reference to the third Member, the Majority decision was pronounced recently.

The Division Bench Members had referred the following difference in opinion to the third Member.

1. In the facts and circumstances of the case whether Member (Judicial) is correct in holding that the appellant is not having the production capacity to manufacture 10,000 tons of TMT/CTD bars during the impugned period. Therefore, on the basis of records seized during the course of investigation are for the trading activity of the appellant and no duty is payable on the trading activity

Or

Member (Technical) is correct in holding that the capacity was never determined during the period in question and duty is to be demanded from the appellant for clandestine clearances.

2. Whether Member (Judicial) is correct in holding that the evidence on the basis of which the demand has been confirmed against the appellant are not sufficient to hold that the appellant has removed that goods clandestinely.

Or

The evidence collected by the Investigating team during the course of investigation are sufficient to prove the charge of clandestine removal as held by Member (Technical).

3. Whether the Member (Judicial) is correct after relying on the case law in the case of Basudev Garg (supra) that the cross-examination was not granted to the persons whose statements have been relied on to hold that the charge of clandestine removal is in violation of principle of natural justice.

Or

Member (Technical) is correct in holding that adequate opportunity was given and further cross-examination was not requested especially on last date of hearing by the advocate and relying on case of Surjit Singh Chhabra (supra).

The third Member on reference heard the matter in June and July 2015 and pronounced his decision on 28.08.2015.

This is what he held -

Reference 1

+ The capacity claimed by the appellant is not as per the original manufacturer of plant. The appellant has not produced any catalogue, literature or correspondence with the original manufacturer which would indicate the production capacity of the plant. Similarly, no authentic literature on subject is produced to support the production capacity. As far as determination of annual production capacity as per the compounded levy scheme which was introduced in 1998 and abandoned after 2-3 years, not much credence can be given.

+ In the facts and circumstances, in my considered view, no credence can be paid to the capacity determined in 1999 under the compounded levy scheme. I do agree with Member (Technical) that the capacity was not determined during the period in question. I also agree with Member (Technical) that duty is to be demanded from the appellant for clandestine clearances based upon available evidences. Thus I agree with Member (Technical) on this point.

+ While it is true that the appellant, Gautam Enterprises and Shiv Parvati Enterprises were doing some trading activities, however, the appellant has not been able to produce any tabulation or any record or any details even from record No. 23, 24, 26 or any other record that the total quantity of MS ingots purchased clandestinely were traded. In view of this position, it cannot be presumed that the whole of MS ingots which were clandestinely cleared and purchased were used for trading activity.

Reference 2

+ The first portion is purchase of MS ingots by the appellant without bills from various manufacturers of MS ingots and the second part is the production of MS bars from such ingots and selling the same clandestinely. As far as the first part is concerned, the quantity of MS ingots which has been clandestinely purchased by the appellant is based upon the record Nos. 23, 24 and 26 recovered from office of the appellant in Mumbai.

+ I also note that clandestine purchase of MS ingots was not from one source but from number of sources and at times through brokers. Suppliers of MS ingots as also brokers had confirmed the correctness of the information indicated in the diaries recovered from the appellant' s office in Mumbai. It is also noted that majority of the suppliers of MS ingots in turn have paid the duty for the clandestinely cleared MS ingots to the present appellant. In such a situation, in my considered view, as far as the purchase of clandestinely cleared MS ingots is concerned, there can be no doubt and is proved.

+ A lot is being said about retraction of the statements made by Shri Pravesh Gautam and Shri Pravin Gautam. I find that in majority of the statements all that was done was explaining the contents of the Records or correctness of the tabulation made by the Revenue based upon these Records. These are factual matters based upon documents. If there is any incorrectness in these, the same could have been pointed out either during investigation or at the time of original adjudication. No such thing was done even before this Tribunal. No such infirmity has been pointed out. In view of this position, retractions of statement of Shri Pravesh Gautam and Shri Pravin Gautam are required to be totally ignored.

+ As far as the second aspect i.e. the sale of bars is concerned, I observe that the demands have been made based upon the assumed production from MS ingots clandestinely cleared by original manufacturer and received by the appellant. Overall, it would be seen that the records recovered from the appellant' s office in Mumbai did indicate the clandestine sale of MS bars. However, the Revenue has failed to precisely correlate or arrive at the quantity so cleared. These will be required to be recomputed by original authority.

+ I agree with Member (Technical) that the evidences collected by the investigation team during the course of investigation are sufficient to prove the charge of clandestine removal. However, my agreement is not for the whole demand or assumed production but only to the extent indicated above. The remaining demand is not sustainable for want of evidence.

Reference 3

+ From the sequence of various letters as also the records of personal hearing, it appears that though the advocate for the appellant initially asked for cross-examination of 31 persons but later on, was satisfied with the cross-examination of 5 persons which were agreed by the adjudicating authority.

+ When the final submissions are made and the final hearing is over, to write for further cross-examination is not appropriate. In any case the whole case is based upon the records which were mainly recovered from the appellant' s office and were explained by the director of the appellant company.

+ Even if we ignore the statements, the only conclusion from the documents particularly regarding procurement of clandestinely cleared goods will be what has been proposed by the Revenue. Keeping in view the overall factual matrix, I agree with Member (Technical) that adequate opportunity was given and further cross-examination was not requested especially on the last date of hearing by the advocate. I do not think that there has been any violation of the principles of natural justice in the present facts and circumstances of the case. I, therefore, agree with Member (Technical) on point No. 3.

And so, the Majority order pronounced on 11.09.2015 is -

(i) The capacity was never determined during the period in question and duty is to be demanded from the appellant for clandestine clearances.

(ii) The clandestine clearance of MS bars totaling 1641.25MT as brought out in Third Member opinion at Para 21.3 is established. The duty on this quantity is confirmed. However, for the balance quantity, the evidences are not sufficient. The duty, interest and penalty shall be proportionately reduced with reference to the above mentioned quantity. Personal penalty is ordered to be scaled down with reference to the above mentioned quantity.

(iii) Adequate opportunity was given to the appellant and further cross-examination was not requested especially on the last date of hearing by the Advocate and relying on the case of Surjit Singh Chhabra - 2002-TIOL-158- SC-CUS.


(See 2015-TIOL-2108- CESTAT-MUM)

  

I-T - Whether when assesse' s business is not restricted to only financing and treats re-possessed vehicles as stock-in-trade, any loss arising out of re-sale of such vehciles is to be construed as revenue loss - YES: ITAT

NEW DELHI : THE issue before the Bench is - Whether when assesse' s business is not restricted to only financing and treats re-possessed vehicles as stock-in-trade, any loss arising out of re-sale of such vehciles is to be construed as revenue loss. YES is the answer.

Facts of the case

A) The assessee is non-banking finance company engaged in the business of leasing, hire purchase and finance of vehicles. During the concerned year, the total receipts were Rs.29.05 crore as against Rs.70.03 crores in preceding year. As per the P&L A/c, there was a loss of Rs.6.79 crores as against loss of Rs.37.37 crore in preceding year. At the time of filing of return, the assessee had claimed deduction of Rs.1,70,83,682/ - in respect of losses on re-possessed stock which were given on hire purchase, but was repossessed by the assessee because the borrowers defaulted on the installments. The AO took the view that in light of the decision of Allahabad High Court in the case of Motor and General Sales Pvt. Ltd. Vs. CIT and for the reasons given in the assessment order of A.Y 1995-96, the loss on repossessed hire-purchase assets was not allowable as deduction because it was basically of the nature of capital loss.

On appeal, the CIT(A) held that the real business of the company was not one simply of giving loans or money lending. In the business of vehicle finance/sale on hire purchase, the business of the company takes a much larger dimension because it covers not only financing but also repossession and resale-the latter being an integral part of the business of the company. The business of the company is not only restricted to financing and the related activity of re-possession but resale was a part of its regular business activity. The trading profits of the company were enmeshed in the entire transaction that may be spread over a few years. Since the profits were enmeshed in the overall transaction, the re-possession and re-sale was also an integral part of the transaction. Consequently, any loss or profit on re-possession or re-sale would be to trading account. Accordingly, the CIT(A) held that the loss on re-sale of re-possessed vehicles is a revenue loss and directed the AO to treat the said loss as a revenue loss in respect of the repossessed vehicles that have been re-sold.

B) The assessee during the concerned year is also engaged in bills discounting activity, dealing in all kinds of securities including shares, the debentures, commercial papers, Government Securities. The AO observed that in its P&L account, loss on sale of investment amounting to Rs.1,23,33,239/ - had been claimed by the assessee. The assessee€ ¢â' '¹s investment constitute capital asset, therefore, any loss on account of sale of capital asset could not be claimed as a deduction in the P&L A/c. The AO further held that loss which had arisen was on account of shares and that on the government securities held for a very long time by treating part of it as stock-in-trade, the assessee was not entitled to claim the loss on stock-in-trade. On appeal, the CIT(A) held that each year to be considered separately, the assessment process requires fresh application of the individual€ ¢â' '¹s mind to each year as he/she interprets the law.

Having heard the parties, the Tribunal held that,

Loss on re-sale of re-possessed vehicles

++ it is noticed that the claim of the assessee for the said receipts should be treated as revenue receipts is proper as re-possessed vehicles are treated as stock-in-trade throughout the earlier years and the same was accepted by the Department in the earlier years. Thus CIT(A) has taken a correct view and directed the AO to treat the said loss as revenue loss. In light of this, the AO is directed to treat the said loss as a revenue loss in respect of the re-possessed vehicles that have been resold;

Loss on sale of shares

++ it can be seen that the contentions of the DR in respect of Section 73 cannot be sustained as the same stand was not taken by the AO while passing the assessment order and the said plea was not raised before the CIT(A) as well. The Supreme Court in case of Cocanada Radheswami Bank Ltd. clearly held that the income from the securities which formed part of the assessee€ ¢â' '¹s trading assets was part of its income derived from the business and, therefore, the loss incurred in the business in the earlier year could be set off against that income in the succeeding year. As per guidelines issued by the RBI, every NBFC is required to maintain liquid assets including investment in shares, stocks, government securities etc. and thus the assessee has made these investments in the ordinary course of its business. Therefore, loss in the said investment relates to the business.

(See 2015-TIOL-1568- ITAT-DEL)


  

Direct Tax Basket

2015-TIOL-2292- HC-DEL-IT

Consultating Engineering Services (India) Pvt Ltd Vs DCIT

Whether it can be inferred that there is failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment, when the AO has not considered the entire material inspite of giving a detailed assessment order - NO: HC

Whether the Revenue is permitted to reopen the assessment beyond four years from the end of the relevant A.Y, in case the necessary pre-condition for doing so has not been fulfilled - NO: HC - Assessee' s petition allowed : DELHI HIGH COURT

2015-TIOL-2291- HC-P&H-IT

Kewal Chaudhary Vs CIT

Whether if the final fact finding authority, has passed an order which is violative of principles of natural justice and does not satisfy the requirements of a reasoned order, as it is a verbatim copy of the order of CIT(A), does it have any legal value - NO: HC - Assessee' s appeal allowed : PUNJAB AND HARYANA HIGH COURT

2015-TIOL-2290- HC-P&H-IT

Shakun Mehta Vs CIT

Whether when the affidavits filed by the assessee are not supported by corroborative evidences, the same would be considered as self serving documents which cannot be believed for making allowances in case of such assessee - YES: HC - Assessee' s appeal dismissed : PUNJAB AND HARYANA HIGH COURT

2015-TIOL-2289- HC-ALL-IT

PR CIT Vs Rakesh Kumar Jaiswal

Whether if the assessee has changed his place of residence, AO is under a statutory obligation to adopt another mode of service by way of publication as is provided under the Act, non adoption of which would render the process of service of notice a failure - YES: HC - Revenue' s appeal dismissed : ALLAHABAD HIGH COURT

2015-TIOL-2288- HC-MAD-IT

Khizaria Leathers Vs DCIT

Whether in case the assessee firm not in need of money, entered into certain loan transactions in violation of the provisions of section 269SS, can contend that the depositor was a partner earlier and intention behind such transaction was to deposit the money for safe custody as the firm consists of her sons, could be a reasonable cause for such violation - NO: HC - Assessee' s appeal dismissed : MADRAS HIGH COURT

2015-TIOL-2287- HC-KAR-IT

K S Venkatesh Vs DCIT

Whether a debatable issue as to allowability of income earned by way of interest on fixed deposits & NSCs to be set off as business loss u/s 72, can be considered as a basis for rectification of an order by invoking section 154 - NO: HC - Assessee' s appeal allowed : KARNATAKA HIGH COURT

2015-TIOL-2286- HC-ALL-IT

Dr Shiva Kant Mishra Vs CIT

Whether when an issue was already declared by the assesse in his returns filed under Section 139, which was also analysed by the AO during assessment, it is possible for the Revenue to raise similar issue during reassessment proceedings - NO: HC

Whether protective assessment could only be made at the stage when there was any doubt or dispute about the assessability of a particular sum either in relation to the assessment year and/or in relation to the assessee - YES: HC - Assessee' s appeal allowed : ALLAHABAD HIGH COURT

2015-TIOL-1568- ITAT-DEL + Story

GE Capital Transportation Financial Services Ltd Vs DCIT

Whether the loss on re-sale of re-possessed vehicles is a revenue loss, in case assessee' s business is not only restricted to financing, but involves re-sale of re-possessed vehicle as its regular business activity and such re-possessed vehicles are treated as stock-in-trade throughout the year - YES: ITAT

Whether an assessee is entitled to claim loss on account of investment in securities, where such investment constitutes its regular business activity - YES: ITAT - Assessee' s appeal allowed : DELHI ITAT

2015-TIOL-1567- ITAT-DEL

Clc Textile Park Pvt Ltd Vs ITO

Whether interest earned on fixed deposits can be treated as income from other sources in the hands of the assessee - NO: ITAT

Whether where genuineness of sales transaction as well as purchase transaction remains unproved, the addition made u/s 68 on grounds of unexplained cash credits is justified - YES: ITAT - Assessee' s appeal partly allowed : DELHI ITAT

2015-TIOL-1566- ITAT-DEL

DCIT Vs Cement Corporation Of India Ltd

Whether Quarry Development Expenses can be treated as revenue expense - Whether when some of the units are closed and some of the units are working, then, the depreciation on the entire block of assets can be claimed - YES: ITAT - Revenue' s appeal dismissed : DELHI ITAT


Indirect Tax Basket
SERVICE TAX SECTION

2015-TIOL-2295- HC-MP-ST

M P Audhyogik Kendra Vikas Nigam Vs CHIEF CC, CE & ST

ST - Demand of Service Tax confirmed against the petitioner on the ground that they are providing the services of Management, Maintenance or repairs of roads - Petitioner submits that vide amendment to the Finance Act, 2012 inserted w.e.f. 28.05.2012, Section 97(1) was incorporated in the Finance Act, 1994 and in terms of which Management, Maintenance or Repairs of roads was totally exempted from payment of service tax between 16.06.2005 to 26.07.2009 and thereafter another notification bearing notification No.24/2009 dated 27.07.2009 was issued granting exemption from payment of service tax.

Held : Once we find that the imposition of tax is not permissible as indicated herein above, is wholly unsustainable and impermissible under law - It is not necessary to relegate the petitioner to take recourse to the remedy available of filing the appeal - It is a case where, apparent from the face of the record the imposition of duty is per se found to be illegal and, therefore, there is no reason why jurisdiction in a petition under Article 226 of the Constitution of India should not be exercised - Accordingly, we allow this petition: High Court [para 6, 7] - Petition allowed : MADHYA PRADESH HIGH COURT

2015-TIOL-2106- CESTAT-MUM

CST Vs Fil Capital Advisors India Pvt Ltd

ST - Revenue filing ROM application against Final order dated 18.03.2015 on the ground that in the Revenue' s appeal against o-in-a, one of the ground is that the services on which credit has been taken by respondent do not appear essential or have nexus with output services; documents not in the name of assessee and the Commissioner( A) has not discussed at all as to why he has extended the benefit; order is a non-speaking one. Held: It is agreed that Tribunal has not given any finding on the grounds as raised; however, the disputed services have been considered as Input services in various judgments and credit has been allowed; as expenditure towards bills were booked in respondent&# 39;s account, credit is admissible although bills were in personal name; credit is admissible, therefore, order dated 18.03.2015 of the Tribunal is maintained - ROM disposed of: CESTAT [para 4] - Application disposed : MUMBAI CESTAT

2015-TIOL-2105- CESTAT-MUM

CCE & ST Vs Bobst Indian Pvt Ltd

ST - Commission received by respondent from their parent company - Revenue case is that the said commission is taxable under BAS - adjudicating authority dropping demand and department in appeal. Held: Issue involved is squarely settled by judgment of Tribunal in case of Microsoft Corporation - 2014-TIOL-1964- CESTAT-DEL where by a majority it is held that any commission received for rendering services in India to the principals situated abroad will be export of services moreso if the agent is rendering the services of ascertaining potential customers, informing about market conditions and competitor activities, identifying customers, contacting customers and selling over etc. - Order of adjudicating authority is correct and legal and does not suffer from any legal infirmity - Revenue appeal rejected: CESTAT [para 4, 5] - Appeal rejected : MUMBAI CESTAT

2015-TIOL-2104- CESTAT-MUM + Story

National Environmental Engineering Research Institute Vs CC, CE & ST

ST - Consulting Engineer Service - Project titles may, in general, indicate content, however, determination of tax liability without examining the specifics is inappropriate - NEERI has not provided Consulting Engineer service - Demand set aside & appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT

2015-TIOL-2102- CESTAT-MUM + Story

CCE Vs Deepak Kumar Uttamchand Advani

ST - Respondent could have entertained a bonafide belief as to non-applicability of service tax on the contract executed by them - ST imposable under € ¢â' '¸Commercial and Industrial Construction Service' by vivisecting the Works Contract in view of LB decision - there existed a reasonable cause for non-discharging the service tax for the material period - penalty imposable u/s 76 of FA, 1994 waived by invoking s.80 of FA, 1994: CESTAT [para 4, 4.3] - Appeal partly allowed : MUMBAI CESTAT


CENTRAL EXCISE SECTION

2015-TIOL-2294- HC-MP-CX
Anoop Bishnoi Vs CC & CE

CE - Appellant fraudulently availed modvat credit of duty paid on inputs and capital goods on the strength of duty paying documents procured by them without actual receipt of inputs/capital goods € ¢â' '³ demand confirmed & in appeal Tribunal remanded the matter € ¢â' '³ in denovo proceedings demand once again confirmed € ¢â' '³ Tribunal upholding the order and dismissing appeal of assessee € ¢â' '³ appeal to High Court € ¢â' '³ Appellant pleading that non-supply of documents by the department is a violation of principle of natural justice and matter needs to be remitted to adjudicating authority with a direction to supply the 64 floppies and, thereafter decide the matter a fresh € ¢â' '³ Counsel for department invited attention to adjudication order where it is mentioned that documents in question are just non-relied upon documents and the SCN did not rely upon them; that all the relied upon documents on the basis of which the case was built upon, were provided to them way back in 1997; that at that time, the Noticee was only asking for the relied upon documents and on receipt of the same, they wanted to adjourn the case proceedings on the pretext of non-receipt of non relied upon documents; that these non-relied upon documents though not much relevant to the case were located from the old records and were offered to them but instead of receiving the same, the Noticee was not cooperating with the Department on flimsy grounds.

Held: - In view of the concurrent finding of fact recorded by both the authorities, High Court does not find any substance in these appeals and appeals involve no substantial question of law - appeals have no merit and are accordingly, dismissed: High Court [para 9, 10] - Appeals dismissed : MADHYA PRADESH HIGH COURT

2015-TIOL-2110- CESTAT-MAD + Story

Ultratech Cements Ltd Vs CCE & ST

Central Excise - Supply of Cement to SEZ units/developers without payment of duty - Demand of duty on clinker captively used for manufacture of such Cement by denying the benefit of exemption under Notification No 67/95 CE - Appeals by assessees against confirming demands and by revenue against dropping the demands by lower Authorities.

Held: Covered by Surya Roshini case - The Tribunal in Surya Roshini case - 2013-TIOL-424- CESTAT-DEL, has categorically discussed the meaning of exempted goods defined in Rule 2(d) of Cenvat Credit Rules and held that the goods supplied to the SEZ units/developers are neither chargeable to nil rate of duty nor the goods are exempted from payment of duty by any Exemption Notification issued under Rule 5A. The Principal Bench's above decision is squarely applicable to the facts of the present case. (para 24)

Cement is not exempted goods - Proposition of revenue that Section 26(1)(c) of the SEZ Act clearly exempts the goods supplied by the DTA to SEZ units/developers and this should be considered while construing the proviso to Notification No.67/95-CE is not acceptable and the word used in the proviso to Notification No.67/95-CE is dutiable and exempted final products in relation to Cenvat Credit Rules, 2001. In the present case, the final product Cement is an excisable commodity falling under Chapter 25 of CETA which are dutiable. There is no exemption of excise duty on cement. Therefore, in view of the Tribunals Principal Bench decision of Surya Roshini case, the final product cement cleared to SEZ units/developers is not exempted goods under any notification issued under Rule 5A of the Central Excise Act.(para 25)

Cement cleared to SEZ unit/developers are not exempted goods but cleared without payment of duty by following the procedures and conditions stipulated in both SEZ and Rule 19 of CER Rules and the clinkers used captively for manufacture of cement cleared to SEZ is covered under Notification 67/95 from exemption of excise duty. (paras 26)

Covered by CBEC Circular - The issue has been clarified by the Board in Circular No.1001/8/2015. Cx.8, dated 28.04.2015 with regard to granting of rebate of duty on goods cleared from DTA to SEZ. This circular, summarizes the contents of all previous Boards circulars and considered various provisions of SEZ Act and SEZ Rules and categorically clarified that supply of goods from DTA to SEZ units/developers constitutes exports.(para 27)

Reference to CENVAT Credit Rules, 2001 in Notification No 67/95CE to include CENVAT Credit Rules, 2004 - Cenvat Credit Rules, 2001 has been amended by Cenvat Credit Rules, 2002 and further amended by Cenvat Credit Rules, 2004. Merely for the reason that the Notification No.67/95 referring to Cenvat Credit Rules, 2001 and not Cenvat Credit Rules, 2004 cannot be a valid reason to deny the exemption under clause (vi) of the proviso to the notification. Even if only 2001 Rules is applied, still the benefit under Clause (vi) of the proviso to the Notification cannot be denied as Rule 6(5) (ii) of the 2001 Rules covered supplies to SEZs. Hence the obligations under Rule 6 of the 2001 Rules would also stand discharged. (para 31)

The word FTZ to be substituted with SEZ - The Revenue' s contention that the Notification applies only to clearances to FTZ, but not to SEZs cannot be accepted for the reasons that during the relevant period under dispute there were no FTZ in operation and if the Revenues view is to be taken, no clearance would be made to FTZ after the enactment of SEZ Act with effect from 10.02.2006. Once the SEZ Act came into effect from 10.02.2006 all the units functioning as FTZ were declared as SEZ units. Notification No.4/2003-CE, dated 30.03.2003 was issued to convert various FTZs into SEZs.( para 32)

As per the Notes Explaining Clauses of the Finance Bill, 2007 clause 106, after enactment of SEZ Act FTZs have become redundant and hence it seeks to amend sub-section (1) of Section 3 of the Central Excise Act. By virtue of the above Act, the word FTZ was omitted and substituted with the word SEZ. Therefore, the Revenues plea that the goods supplied to SEZ is not covered under clause (i) of the Proviso to the notification is not acceptable. (para 33)

Issue is revenue neutral - The issue is also hit by Revenue neutrality, as the appellants are otherwise entitled to avail the Cenvat credit of the duty, if any paid on clinker. Alternatively, if a manufacturer avails exemption on intermediate product under Notification 67/95-CE and chooses to pay duty on the cement when cleared to SEZ unit/developer, the duty paid on final product will be fully available to him as refund/rebate. Thus, on both counts the issue is purely revenue neutral. It is not the intention of the government to demand duty on the intermediate product having considered that the supplies to SEZ are exports. Therefore, the demand of duty on the intermediate product clinker used in manufacture of cement supplied to SEZ units/developers is clearly revenue neutral as the appellants could have claimed refund or availed Cenvat credit. (para 34) - Assessees' appeals allowed / Revenue' s appeals dismissed : CHENNAI CESTAT

2015-TIOL-2109- CESTAT-MUM

Lona Industries Ltd Vs CCE

CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - ST paid on Insurance service of Employee Personal/Group Insurance premium, whether an Input Service. Held: There is a nexus in expenses for Group Insurance Scheme for workers - Staff Insurance forms part of manufacturing cost also under CAS-4 standard - Credit admissible as the same are Input services - Appeal allowed: CESTAT [para 5] - Appeal allowed : MUMBAI CESTAT

2015-TIOL-2108- CESTAT-MUM + Story

Salasar Ispat Pvt Ltd Vs CCE & C

CX - Clandestine production and clearance of TMT/CTD bars without payment of duty - No credence can be paid to the capacity determined under the compounded levy scheme introduced in 1998 and abandoned after 2-3 years as the scheme did not work properly - Demand confirmed in r/o 1641.25 MT for which evidences available - Duty to be computed by adjudicating authority with proportionate reduction in interest and penalty - personal penalty is also required to be scaled down: CESTAT by Majority - Appeals partly allowed : MUMBAI CESTAT (THIRD MEMBER)

2015-TIOL-2107- CESTAT-BANG


Andhra Polymers Pvt Ltd Vs CCE, C & ST

Central Excise - Eligibility to availability of Cenvat credit on Capital Goods exclusively used for manufacture of exempted final products - Has to be judged at the time of receipt of the capital goods - Subsequent becoming of the goods as dutiable on account of withdrawal of exemption does not revive the question of admissibility - Thus when the capital goods were received by appellant, the final product was exempted - Appellant having used the capital goods for a period of more than four years for manufacture of exempted final products held is not entitled to the Cenvat credit of duty paid on such capital goods post withdrawal of exemption - Impugned order requires no interference - Assessee appeal has no merit hence is rejected. (Para 3.1, 4) - Assessee appeal rejected : BANGALORE CESTAT

2015-TIOL-2101- CESTAT-MAD

Asia Match Co Pvt Ltd Vs CCE & ST

Central Excise - Stay / dispensation of pre deposit - Valuation under Rule 10A of CE Valuation Rules 2000 - Appellant firm engaged in manufacture of match sticks; discharged excise duty and cleared to various parties, eight companies belonging to their group and eleven independent match manufacturing companies with independent central excise registrations - These units received the duty paid match sticks and manufacture final product 'Match Boxes' with the brand name of "Chavi" and in turn sell the finished goods to the appellants or to their group companies on payment of excise duty - the adjudicating authority concluded that all the eleven companies are nothing but job workers of the appellant unit and clubbed them together for demanding excise duty - demands confirmed with interest and penalties on the firm and individuals, agitated herein.

Held: Appellant' s unit cleared match sticks after paying excise duty on sale to other units and they in turn manufacture final product under the brand name "Chavi" and discharged excise duty - If the department disputed the price at which excise duty is paid by the eleven units the demand should have been made on those eleven units, same cannot be demanded on the appellants for trading of goods - It has not been clearly brought out in the order whether the appellants are the principal manufacturer and whether eleven units are only job workers - as per the records neither the appellants nor eleven units have opted any job work procedure - the adjudicating authority has defined them as job workers and demanded duty on the price at which the match boxes are sold by the appellants, which is contrary to Rule 10A of Central Excise Valuation Rules - appellants have made out a prima facie case for waiver of pre-deposit of the duty demands and penalties; same stand waived. [Para 5] - Stay granted : CHENNAI CESTAT

CUSTOMS SECTION

2015-TIOL-2293- HC-AHM-CUS

Anita Exports Vs UoI

Cus - Refund - Once the orders-in-original has been set aside, the Customs department has no authority in law to retain the amounts deposited by the petitioners towards duty and/or penalty and/or redemption fine under the orders-in-original, which subsequently have been annulled by the orders passed by the Appellate Commissioner by remanding the matter to the proper authority - orders/communicatio ns issued by the respondent Customs department returning the refund claims filed by the petitioners as being premature, cannot be sustained - Petitions suceed: High Court [para 9]

Refund - Communications dated 09.02.2015 issued by the second respondent returning the refund claims filed by the petitioners as being premature, are hereby quashed and set aside - Having regard to the fact that the refund claims have already been returned to the petitioners, the petitioners shall submit such refund claims once again within a period of four weeks - If the petitioners file refund claims latest by 26th October, 2015, all such applications shall relate back to the first presentation before the Customs authority - The period of limitation for presenting such application and computation of interest in case eventually the refund is granted, shall be reckoned from such date - respondent authorities shall decide the same in accordance with law within a period of four weeks thereafter: High Court [para 10] - Petitions allowed : GUJARAT HIGH COURT

2015-TIOL-2103- CESTAT-MUM

R Kishan And CO Vs CC


Cus - Appellant had filed drawback shipping bills for export of "football goalkeeper gloves of leather" - case of revenue is that on prima facie examination it appeared that the goods were overvalued for claiming ineligible duty drawback - consequent upon market enquiry in the wholesale market in the presence of the appellants&# 39; representative, the declared FOB value was rejected and the same was re-determined and duty drawback claim was accordingly restricted and penalty imposed - appeal to Tribunal. Held: Lower authorities have not considered the fact that the gloves were procured by appellant from local vendors under tax invoices, whose names were given to tax authorities - both lower authorities have blindly recorded that appellant did not produce documents - invoices indicate VAT registration and an endorsement which reads € ¢â' '¸sold under € ¢â' '¸H' form for Export' - said invoices cannot be discarded summarily by lower authorities unless there is contrary evidence - market enquiry may generate suspicion about the declared value but the export value ought to have been re-determined by adopting procedures laid down in Valuation Rules - directly jumping to rule 6 without applying rules 4 & 5 is not in consonance with law - in the absence of any contrary evidence, transaction value as declared by appellant is to be treated as correct value - revenue authorities have also not bothered to check up with the supplier of the goods to ascertain the correct value - Order set aside and appeal allowed with consequential relief: CESTAT [para 8, 9, 10, 11] - Appeal allowed : MUMBAI CESTAT


  

ST - Wikipedia has universal appeal among internet users but fails to acquire oracular significance - it is a source of knowledge for amateur research - Project titles may, in general, indicate content, however, determination of tax liability without examining specifics is inappropriate: CESTAT

MUMBAI : NATIONAL Environmental Engineering Research Institute (NEERI), Nagpur is in appeal against the Order-in-Appeal passed by Commissioner (Appeals) which has modified the liability of service tax determined by the Dy. Comm. (Service Tax) to the extent of Rs. 1,86,17,905/ - for the period July 1997 to March 2001 while upholding the penalties imposed u/ss 76 & 77 of FA, 1994.

Brief facts are that the appellant is a constituent laboratory of the Council for Scientific & Industrial Research (CSIR) and is registered under the Registration of Societies Act, 1960. It has an elaborate mandate encompassing the field of environmental science and engineering since its creation in 1958. About 125 scientists from various disciplines figure on its rolls and, supported by technical staff, undertake various studies and projects in the field of environmental science and engineering.

The case of Revenue is that the appellant was engaged in rendering "consulting engineer" service valued at Rs. 46,78,48,801/ - during the period 7 th July 1997 to 31 st March 2001 without being registered as service provider and on which they had failed to discharge service tax liability of Rs. 2,33,92,441/ -. A SCN demanding ST came to be issued on 10.10.2002.

After the matter was remanded by the first appellate authority, the appellant admitted that 151 projects undertaken during the period were classifiable as "consulting engineer" service and they remitted tax of Rs. 1,20,06,928/ - by 28 th April 2006 but contested the demand relating to 116 other projects which they claimed were classifiable under "scientific or technical consultancy" services which was made leviable to tax only from 16 th July 2001.

In denovo adjudication, the original authority allowed exemption of a turnkey project and confirmed tax liability of Rs. 2,32,17,905/ - including the amount admitted by the appellant.

In appeal, the Commissioner( A) dropped another portion of the demand pertaining to one more turnkey contract [with M/s Paramount Pollution Control Ltd] and further set aside the penalty u/s 78 on the ground that this provision was not invoked in the SCN. This was in the year 2011. And the demand confirmed is of Rs. 1,86,17,905/ -.

Before the CESTAT, the appellants submitted that they, being a society, are excluded from the definition of service provider and that the identified projects are not liable to Service Tax. Reliance is placed on the decisions in Shakumbari Sugar & Allied Ind Ltd. - 2006-TIOL-1119- CESTAT-DEL and Shree Sidhbal Steels Ltd. - 2007-TIOL-687- CESTAT-DEL to submit that tendering of a few engineering advices does not detract from the main activity to make it an engineering firm.

The Member (T) writing for the Bench in his inimitable style (also see - 2015-TIOL-2062- CESTAT-MUM observed that the lower authorities as well as the appellant and the AR found the allure of Wikipedia irresistible insofar as relying upon the entry for the term 'environmental engineer' and that that was not a good idea since, in his words, - Wikipedia has universal appeal among internet users because of the range of subjects covered, its widespread accessibility and its amenability to updating but, by reason of the same attributes, it fails to acquire oracular significance. Indutiably, it is a source of knowledge for amateur research and may map out directions for extensive foray into any topic but being subject to emendation at any time from all and sundry, with or without appropriate qualification, it can, at best, fill up gaps that are not particularly critical to a final conclusion. Placing sole or near absolute reliance on its contents for tax determination detracts from the credibility of the findings.

Proceeding further, the Member (T) noted that the disputed projects are -

-Environmental Biotechnology (5)

-Environmental Impact Assessment (56)

-Environmental Monitoring (38)
-Environmental Policy Analysis (7)
-Hazardous Waste Management (1)

Thereafter, the Member (T) referred to the Encyclopaedia Britannica and Merriam Webster dictionary & observed that the lower appellate authority has relied upon the "unauthenticat ed source" to conclude that all five are engineering projects and that while titles may, in general, indicate content, determination of tax liability without examining the specifics is inappropriate.

The Member(T) further held -

"11. The appellate authority, in considering the 38 environmental monitoring projects, does not entertain any doubt that that these, besides actual measurement, involve predicting, evaluation and suggestions for remedial action. And in the specific analysis of one project, he unhesitatingly regards it as natural resource management and thereby within the ambit of the exposition on environmental engineering in the unauthenticated source. It should be amply clear that mere measurement of phenomena and comparison with the normative cannot be equated with activity that suggests altering of matter to achieve a desired outcome. Monitoring studies are not in the realm of engineering though subsequent remedial action maybe.

12. The appellate authority classified the remaining eight projects as other applications of environmental engineering as stated in the unauthenticated source. Such superficial fitment within the segregation cited in the unauthenticated source is not sufficient to deem the said activity as engineering. More so, as the distinction between the two types of consulting is so visibly apparent.


13. From the above it is amply evident that the disputed projects do not involve engineering. Levying of tax on the consideration received for the disputed projects on the ground that these arise from rendering "consulting engineer" service is, therefore, not sustainable. The appellant has admitted these to be scientific and technical studies. We find that the appellant has registered itself as "scientific and technical consultants" with effect from 4 th January 2002 shortly after this service was made taxable and has discharged tax liability on the projects admitted as "engineering consulting" . As the disputed projects are not "engineering&q uot;, they were not taxable during the relevant period€ ¢â' ¦."


The Service Tax demand of Rs.1,86,17,905/ - was set aside and the appeal was allowed.


Relief in passing: What has a writer to be bombastic about? Whaever good a man may write is the consequence of accident, luck, or surprise, and nobody is more surprised than an honest writer when he makes a good phrase or says something truthful - Edward Dahlberg .


(See 2015-TIOL-2104- CESTAT-MUM)
ITR 377(4)

 



INCOME TAX REPORTS (ITR)--PRINT AND ONLINE EDITION

ONLINE EDITION

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Business expenditure --Disallowance- - Clearing agent--Amounts paid to sub-contractors for speedy disposal of goods by labourers--Tax deducted at source on such payments--No evidence that transactions with sub-contractors not genuine--Disallowan ce of 30 per cent. of amounts paid to sub-contractors- -Not justified--Income- tax Act, 1961-- CIT v. Clifford D€ ¢Ã¢â'¢¬â'¤¢Soza (Karn) . . . 224

Charitable purposes --Charitable trust--Registration --Cancellation of registration- -Scope of section 12AA(3)--Registrati on can be cancelled only if activities of trust are not genuine or activities are not being carried out in accordance with objects of trust--Fact that trust has more income from commercial activities-- Not material--Income- tax Act, 1961, s. 12AA-- Director of Income-tax, Exemption v. Kodava Samaja (Karn) . . . 218


PRINT EDITION

ITR Volume 377 : Part 4 (Issue dated : 5-12-2015)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Appeal to Appellate Tribunal --Duty of Tribunal--Duty to pass reasoned order--Duty to disclose basis when making an estimate--Income- tax Act, 1961, s. 254-- CIT v. Premkumar B. Rathi (Guj) . . . 447

----Powers of Tribunal--Power to remand--Loss- -Failure to produce documents--Disallow ance of loss to fullest extent without discussion-- Assessee submitting working of gross profit--Matter remanded for reconsideration- -Disallowance of expenditure in relation to exempt income--Whether funds available for making investments- -Matter remanded--Discretio n not perverse--Income- tax Act, 1961, ss. 14A, 144-- CIT v. Akar Laminators Ltd. (Guj) . . . 394

Capital gains --Capital loss--Foreign government unable to pay for services--Agreement with Government of India and issue of compensation bonds--Loss attributable to receipt of such bonds--Not deductible under head € ¢Ã¢â'¢¬Å'³Capital gains€ ¢Ã¢â'¢¬Â'½--Income-tax Act, 1961-- Ircon International Ltd. v. Deputy CIT (Delhi) . . . 503

----Computation- -Conversion of land held as capital asset into stock-in-trade of business of development of property--Sale of land--Gains assessable under section 45(2)--Cost of land--Year of conversion of land into stock-in-trade to be determined-- Matter remanded--Income- tax Act, 1961, s. 45-- CIT v. Saffire Hotels P. Ltd. (Bom) . . . 523

Capital or revenue receipt --State subsidy--Revenue receipt--Includible in income of assessee--Income- tax Act, 1961-- Joint CIT (Assessment) v. Colourman Dyechem P. Ltd. (Guj) . . . 411

Charitable purposes --Exemption- -Stock exchange registered as a charitable trust--Objects charitable-- Profits to be used for services of public utility--Stock exchange entitled to exemption--Income- tax Act, 1961, ss. 2(15), 11-- CIT v. Jaipur Stock Exchange Ltd. (Raj) . . . 469

Co-operative society --Special deduction under section 80P--Scope of--Income attributable to extension of credit facilities to members--Meaning of € ¢Ã¢â'¢¬Å'³attributable€ ¢Ã¢â'¢¬Â'½--Co-operative society engaged solely in provision of credit facilities to its members--Interest on deposits in banks--Entitled to special deduction--Income- tax Act, 1961, s. 80P-- Guttigedarara Credit Co-operative Society Ltd. v. ITO (Karn) . . . 464

Exemption --Provision of software development services in Software Technology Parks--Exemption given to undertakings- -Claim in respect of thirty-one undertakings- -Finding that there were only thirteen undertakings- -Exemption available only for thirteen undertakings- -Income-tax Act, 1961, s. 10A-- HCL Technologies v. Asst. CIT (Delhi) . . . 483

Income from undisclosed sources --Receipt of excess payment on sale of property alleged--No evidence of such receipt--No addition could be made to income--Income- tax Act, 1961-- CIT v. Saffire Hotels P. Ltd. (Bom) . . . 523

Income or capital --Funds allotted to Government company for a scheme--Specific direction that interest on amount should be utilised for the scheme--Interest not assessable as income--Income- tax Act, 1961-- CIT v. Karnataka State Agricultural Produce Processing and Export Corporation Ltd. (Karn) . . . 496

----Subsidy received by assessee from its holding company against specific obligation to incur expenditure on specific activities-- Unutilised subsidy not income of assessee in year of receipt--Income- tax Act, 1961-- CIT v. Canon India P. Ltd. (Delhi) . . . 514

Income-tax --General principles-- Benefit not dependent on treatment of facts by assessee-- HCL Technologies v. Asst. CIT (Delhi) . . . 483

Penalty --Concealment of income--Claim of assessee not accepted by Revenue--Does not mean that assessee made a wrong claim by furnishing inaccurate particulars attracting penalty--No scope for levy of penalty--Income- tax Act, 1961, s. 271(1)(c)-- Principal CIT v. G. K. Properties P. Ltd. (T & AP) . . . 417

----Concealment of income--Revised return filed showing additional income--Finding by Commissioner (Appeals) and Tribunal that revised return was valid--No concealment of income--Penalty could not be levied--Income- tax Act, 1961, s. 271(1)(c)-- CIT v. Bhavinkumar M. Dagli (Guj) . . . 389

Reassessment --Notice after six years--Reassessment proceedings initiated solely on direction issued by Commissioner (Appeals) in the case of another assessee--Direction issued by Commissioner (Appeals) set aside by Tribunal and order confirmed by High Court--Reassessment proceedings and notice not valid--Income- tax Act, 1961, ss. 147, 148-- Devendra Somabhai Naik v. Asst. CIT (Guj) . . . 402

Rectification of mistakes --Limitation- -Reassessment- -Doctrine of merger--Meaning of € ¢Ã¢â'¢¬Å'³any order€ ¢Ã¢â'¢¬Â'½ in section 154--Reassessment based on issue not covered in original assessment-- Not relevant--Limitatio n under section 154 starts from date of reassessment order--Notice under section 154 issued within four years therefrom--Not barred by limitation-- Income-tax Act, 1961, ss. 148, 154-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

----Writ--Limited powers of High Court--High Court finding that notice under section 154 not barred by limitation-- Question whether the alleged mistake was a debatable issue could not be considered-- Income-tax Act, 1961, s. 154--Constitution of India, art. 226-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

Revision --Commissioner- -Powers-- Voluntary disclosure of income--Acquisition of land--Compensation- -Capital gains assessed in mother€ ¢Ã¢â'¢¬â'¤¢s hands based on her return--Inclusion of capital gains by son in declaration under Voluntary Disclosure of Income Scheme--Assessment cannot be challenged in revision before Commissioner- -Voluntary Disclosure of Income Scheme, 1997--Finance Act, 1997, ss. 69, 70--Income-tax Act, 1961, s. 264-- Kurien Jose v. Asst. CIT (Ker) . . . 442

Search and seizure --Block assessment-- Undisclosed income--Amounts shown in second set of account books--Second set of account books not legal--Addition of amount justified--No proper explanation regarding source of particular payment--Addition of such amount justified--Income- tax Act, 1961, s. 158BC-- Quality Liquor Agencies v. Asst. CIT (Karn) . . . 528

Words and phrases --Meaning of € ¢Ã¢â'¢¬Å'³attributable€ ¢Ã¢â'¢¬Â'½-- Guttigedarara Credit Co-operative Society Ltd. v. ITO (Karn) . . . 464

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Constitution of India :

Art. 226 --Rectification of mistakes--Writ- -Limited powers of High Court--High Court finding that notice under section 154 not barred by limitation-- Question whether the alleged mistake was a debatable issue could not be considered-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

Finance Act, 1997 :

S. 69 --Revision-- Commissioner- -Powers-- Voluntary disclosure of income--Acquisition of land--Compensation- -Capital gains assessed in mother€ ¢Ã¢â'¢¬â'¤¢s hands based on her return--Inclusion of capital gains by son in declaration under Voluntary Disclosure of Income Scheme--Assessment cannot be challenged in revision before Commissioner- - Kurien Jose v. Asst. CIT (Ker) . . . 442

S. 70 --Revision-- Commissioner- -Powers-- Voluntary disclosure of income--Acquisition of land--Compensation- -Capital gains assessed in mother€ ¢Ã¢â'¢¬â'¤¢s hands based on her return--Inclusion of capital gains by son in declaration under Voluntary Disclosure of Income Scheme--Assessment cannot be challenged in revision before Commissioner- - Kurien Jose v. Asst. CIT (Ker) . . . 442
Income-tax Act, 1961 :

S. 2(15) --Charitable purposes--Exemption --Stock exchange registered as a charitable trust--Objects charitable-- Profits to be used for services of public utility--Stock exchange entitled to exemption-- CIT v. Jaipur Stock Exchange Ltd. (Raj) . . . 469

S. 10A --Exemption- -Provision of software development services in Software Technology Parks--Exemption given to undertakings- -Claim in respect of thirty-one undertakings- -Finding that there were only thirteen undertakings- -Exemption available only for thirteen undertakings- - HCL Technologies v. Asst. CIT (Delhi) . . . 483

S. 11 --Charitable purposes--Exemption --Stock exchange registered as a charitable trust--Objects charitable-- Profits to be used for services of public utility--Stock exchange entitled to exemption-- CIT v. Jaipur Stock Exchange Ltd. (Raj) . . . 469

S. 14A --Appeal to Appellate Tribunal--Powers of Tribunal--Power to remand--Loss- -Failure to produce documents--Disallow ance of loss to fullest extent without discussion-- Assessee submitting working of gross profit--Matter remanded for reconsideration- -Disallowance of expenditure in relation to exempt income--Whether funds available for making investments- -Matter remanded--Discretio n not perverse-- CIT v. Akar Laminators Ltd. (Guj) . . . 394


S. 45 --Capital gains--Computation- -Conversion of land held as capital asset into stock-in-trade of business of development of property--Sale of land--Gains assessable under section 45(2)--Cost of land--Year of conversion of land into stock-in-trade to be determined-- Matter remanded-- CIT v. Saffire Hotels P. Ltd. (Bom) . . . 523

S. 80P --Co-operative society--Special deduction under section 80P--Scope of--Income attributable to extension of credit facilities to members--Meaning of € ¢Ã¢â'¢¬Å'³attributable€ ¢Ã¢â'¢¬Â'½--Co-operative society engaged solely in provision of credit facilities to its members--Interest on deposits in banks--Entitled to special deduction-- Guttigedarara Credit Co-operative Society Ltd. v. ITO (Karn) . . . 464

S. 144 --Appeal to Appellate Tribunal--Powers of Tribunal--Power to remand--Loss- -Failure to produce documents--Disallow ance of loss to fullest extent without discussion-- Assessee submitting working of gross profit--Matter remanded for reconsideration- -Disallowance of expenditure in relation to exempt income--Whether funds available for making investments- -Matter remanded--Discretio n not perverse-- CIT v. Akar Laminators Ltd. (Guj) . . . 394

S. 147 --Reassessment- -Notice after six years--Reassessment proceedings initiated solely on direction issued by Commissioner (Appeals) in the case of another assessee--Direction issued by Commissioner (Appeals) set aside by Tribunal and order confirmed by High Court--Reassessment proceedings and notice not valid-- Devendra Somabhai Naik v. Asst. CIT (Guj) . . . 402

S 148 --Reassessment- -Notice after six years--Reassessment proceedings initiated solely on direction issued by Commissioner (Appeals) in the case of another assessee--Direction issued by Commissioner (Appeals) set aside by Tribunal and order confirmed by High Court--Reassessment proceedings and notice not valid-- Devendra Somabhai Naik v. Asst. CIT (Guj) . . . 402

----Rectification of mistakes--Limitatio n--Reassessment- -Doctrine of merger--Meaning of € ¢Ã¢â'¢¬Å'³any order€ ¢Ã¢â'¢¬Â'½ in section 154--Reassessment based on issue not covered in original assessment-- Not relevant--Limitatio n under section 154 starts from date of reassessment order--Notice under section 154 issued within four years therefrom--Not barred by limitation-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

S. 154 --Rectification of mistakes--Limitatio n--Reassessment- -Doctrine of merger--Meaning of € ¢Ã¢â'¢¬Å'³any order€ ¢Ã¢â'¢¬Â'½ in section 154--Reassessment based on issue not covered in original assessment-- Not relevant--Limitatio n under section 154 starts from date of reassessment order--Notice under section 154 issued within four years therefrom--Not barred by limitation-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

----Rectification of mistakes--Writ- -Limited powers of High Court--High Court finding that notice under section 154 not barred by limitation-- Question whether the alleged mistake was a debatable issue could not be considered-- Rastriya Ispat Nigam Ltd. v. Asst. CIT (T & AP) . . . 420

S. 158BC --Search and seizure--Block assessment-- Undisclosed income--Amounts shown in second set of account books--Second set of account books not legal--Addition of amount justified--No proper explanation regarding source of particular payment--Addition of such amount justified-- Quality Liquor Agencies v. Asst. CIT (Karn) . . . 528

S. 254 --Appeal to Appellate Tribunal--Duty of Tribunal--Duty to pass reasoned order--Duty to disclose basis when making an estimate-- CIT v. Premkumar B. Rathi (Guj) . . . 447

S. 264 --Revision-- Commissioner- -Powers-- Voluntary disclosure of income--Acquisition of land--Compensation- -Capital gains assessed in mother€ ¢Ã¢â'¢¬â'¤¢s hands based on her return--Inclusion of capital gains by son in declaration under Voluntary Disclosure of Income Scheme--Assessment cannot be challenged in revision before Commissioner- - Kurien Jose v. Asst. CIT (Ker) . . . 442

S. 271(1)(c) --Penalty--Concealm ent of income--Claim of assessee not accepted by Revenue--Does not mean that assessee made a wrong claim by furnishing inaccurate particulars attracting penalty--No scope for levy of penalty-- Principal CIT v. G. K. Properties P. Ltd. (T & AP) . . . 417

----Penalty- -Concealment of income--Revised return filed showing additional income--Finding by Commissioner (Appeals) and Tribunal that revised return was valid--No concealment of income--Penalty could not be levied-- CIT v. Bhavinkumar M. Dagli (Guj) . . . 389


  

Benefit of Notification No 67/95 CE is admissible to clinker captively consumed for manufacture of Cement supplied to SEZ units/Developers - Tribunal allows bunch of appeals by Cement Companies and dismisses revenue appeals

CHENNAI : THE issue involved in these appeals is whether the assessees, engaged in the manufacture of Cement are eligible for exemption under Notification No 67/95CE in respect of clinker captively consumed for manufacture of Cement supplied to SEZ units and SEZ developers.

It is the case of revenue that as per the proviso to Notification, the benefit of the Notification is not admissible if the finished goods are exempted from payment of duty or are chargeable to Nil rate of duty. Since no duty is paid on Cement cleared to SEZs, the assessees are liable to pay duty on clinker captively consumed in respect of such cement. The dispute pertains to the period when the goods supplied to SEZs were exempted under Notification No No.58/2003-CE, dated 22.07.2003 as well as after the enactment of SEZ Act, 2005.

The appellant assessees contended inter alia that cements cleared to SEZ is not exempted goods. In this case cement is neither exempted by any notification nor is it chargeable to nil rate of duty. Therefore, cement is not an exempted goods but merely cleared without payment of duty under Rule 19 of the Central Excise Rules, by following the procedure set out for clearance of the goods for exports. They have followed all the procedures set out for exports like filing ARE-1 return and clearing the goods for export under bond. Clearance to SEZ is treated as exports and the duty is not required to be paid on the cement cleared to SEZ as it is treated on par with physical exports. As per Section 2 (m) and Section 51 of the SEZ Act, any supplies by DTA units to SEZ are treated as exports and they are entitled for the benefits like clearance without payment of duty, rebate, drawback and refunds. Cement is not exempted from payment of duty under Section 5A of the Central Excise Act. Therefore, they are not hit by the proviso to the Notification 67/95-CE.

On behalf of revenue, it was argued that the assessees are not eligible exemption under Notification No 67/95 CE and they are required to pay duty.

After hearing both sides, the Tribunal held:

+ The Tribunal in Surya Roshini case - 2013-TIOL-424- CESTAT-DEL, has categorically discussed the meaning of exempted goods defined in Rule 2(d) of Cenvat Credit Rules and held that the goods supplied to the SEZ units/developers are neither chargeable to nil rate of duty nor the goods are exempted from payment of duty by any Exemption Notification issued under Rule 5A. The Principal Bench's above decision is squarely applicable to the facts of the present case.

+ Revenue contended that Section 26(1)(c) of the SEZ Act clearly exempts the goods supplied by the DTA to SEZ units/developers and this should be considered while construing the proviso to Notification No.67/95-CE. This proposition of the Revenue is not acceptable and the word used in the proviso to Notification No.67/95-CE is dutiable and exempted final products in relation to Cenvat Credit Rules, 2001. In the present case, the final product Cement is an excisable commodity falling under Chapter 25 of CETA which are dutiable. There is no exemption of excise duty on cement. Therefore, in view of the Tribunals Principal Bench decision of Surya Roshini case, the final product cement cleared to SEZ units/developers is not exempted goods under any notification issued under Rule 5A of the Central Excise Act.

+ Cement cleared to SEZ unit/developers are not exempted goods but cleared without payment of duty by following the procedures and conditions stipulated in both SEZ and Rule 19 of CER Rules and the clinkers used captively for manufacture of cement cleared to SEZ is covered under Notification 67/95 from exemption of excise duty.

+ The issue has already been clarified by the Board in Circular No.1001/8/2015. Cx.8, dated 28.04.2015 with regard to granting of rebate of duty on goods cleared from DTA to SEZ. This circular, summarizes the contents of all previous Boards circulars and considered various provisions of SEZ Act and SEZ Rules and categorically clarified that supply of goods from DTA to SEZ units/developers constitutes exports.

+ In view of the Boards circular, dated 28.04.2015 and as per objectives of the SEZ Act, it is held that the goods supplied to SEZ unit/developer constitute as export and no duty can be levied on the clinker used in the manufacture of cement as the finished goods are supplied to SEZ units/developers without payment of duty by following procedures of Rule 19 of Central Excise Rules and Rule 30 of SEZ Rules.

+ Cenvat Credit Rules, 2001 has been amended by Cenvat Credit Rules, 2002 and further amended by Cenvat Credit Rules, 2004. Merely for the reason that the Notification No.67/95referring to Cenvat Credit Rules, 2001 and not Cenvat Credit Rules, 2004 cannot be a valid reason to deny the exemption under clause (vi) of the proviso to the notification. Even if only 2001 Rules is applied, still the benefit under Clause (vi) of the proviso to the Notification cannot be denied as Rule 6(5) (ii) of the 2001 Rules covered supplies to SEZs. Hence the obligations under Rule 6 of the 2001 Rules would also stand discharged.

+ The Revenue contended that the clause (i) of proviso to Notification No. 67/95 provides exception only for clearance to FTZ and not for SEZ. It is contended that the very purpose of the non-inclusion of SEZ in Notification No.67/95 is to make it apply only to FTZ and not to SEZ. This view cannot be accepted for the reasons that during the relevant period under dispute there were no FTZ in operation and if the Revenues view is to be taken, no clearance would be made to FTZ after the enactment of SEZ Act with effect from 10.02.2006. Once the SEZ Act came into effect from 10.02.2006 all the units functioning as FTZ were declared as SEZ units. Notification No.4/2003-CE, dated 30.03.2003 was issued to convert various FTZs into SEZs.

+ As per the Notes Explaining Clauses of the Finance Bill, 2007 clause 106, after enactment of SEZ Act FTZs have become redundant and hence it seeks to amend sub-section (1) of Section 3 of the Central Excise Act. By virtue of the above Act, the word FTZ was omitted and substituted with the word SEZ. Therefore, the Revenues plea that the goods supplied to SEZ is not covered under clause (i) of the Proviso to the notification is not acceptable.

Accordingly, the Tribunal allowed the appeals by the assessees and dismissed the appeals by the revenue.

(See 2015-TIOL-2110- CESTAT-MAD)


  

Excise & Customs : Aluminium dross/ash arising as a by-product in course of melting and die-casting of aluminium ingots, is not excisable and not liable to excise duty, as no manufacturing process is involved

[2015] 61 taxmann.com 420 (SC)
SUPREME COURT OF INDIA
Bajaj Auto Ltd.
v.
Commissioner of Central Excise & Customs, Aurangabad



  

Excise & Customs : 'Shrink sleeves' is a packing material and its main purpose is to provide shatter resistance, puncture resistance and tamper proof packing; printing thereon of details as per requirement of customer is merely incidental. Hence, it is classifiable as 'plastic and articles thereof' and not 'product of printing industry'

[2015] 61 taxmann.com 376 (SC)
SUPREME COURT OF INDIA
Commissioner of Central Excise, Vapi
v.
Paper Products Ltd.


 

RASHMIKANT BAXI (HUF) vs.INCOME TAX OFFICER
BOMBAY TRIBUNAL
Capital Gains€ ¢â' '´Reference to valuation officer€ ¢â' '´Validity€ ¢â' '´Assessee a resident individual had shown income under the head € ¢â' '¸income from other sources€ ¢â' '¹â' '´During year under consideration, assessee sold land vide an agreement and as per computation of long term capital gain, cost of land as on 1.4.1981 was valued at Rs.22,45,250 and after indexation the value was arrived at Rs.1,23,76,838€ ¢â' '´Assessee thereof showed Nil capital gain€ ¢â' '´AO rejected the valuation report on grounds that it did not appear to be acceptable looking into the status of the property and the valuation€ ¢â' '´AO held the valuation report to be on higher side€ ¢â' '´AO worked out long term capital gain at Rs.57,02,300 before allowing exemption u/s 54€ ¢â' '´Assessee challenged the very validity of reference to DVO u/s 55A€ ¢â' '´CIT(A) upheld the order of AO€ ¢â' '´Held, it was a settled legal position that a reference to DVO can be made under s 55A only in two cases, firstly, in a case when the value adopted by the assessee was based on estimate made by the registered valuer; and secondly, in a case when the value of the asset as claimed by the assessee was not supported by an estimate made by a registered valuer€ ¢â' '´In assessee€ ¢â' '¹s case, fair market value adopted as on 01.04.1981 was based on valuation report of registered Valuer€ ¢â' '´AO should have applied the provisions of s 55A(a) and according to said provision, fair market value claimed by assessee could be rejected only if fair market value was less than fair market value as per AO€ ¢â' '´As fair market value claimed by assessee as on 1st April, 1981 was higher than that estimated by AO, the provisions of s 55A should not have been invoked€ ¢â' '´Provisions of s 55A(b)(ii) as resorted by AO for referring the matter to DVO could be invoked only in case the valuation report was not submitted by assessee at all€ ¢â' '´Hence, reference made by AO u/s 55A(b)(ii) was not correct€ ¢â' '´Valuation report of registered valuer may be accepted and fair market value given therein as on 1.4.1981 may be accepted at Rs.22,46,250€ ¢â' '´Assessee€ ¢â' '¹s appeal allowed



CSR Committee recommends going slow on non-compliant cos, advises against monitoring agency

High Level Committee constituted by MCA submits its report ​for suggesting measures for improved monitoring for implementation of CSR Policies by cos.; Committee states that it is premature to assess issues of non-compliance at this stage, since MCA filing are yet to be completed, suggests​ that initial 2/3 years of roll out of CSR programme are going to be 'learning period' for stakeholders and therefore recommends action should not be taken against cos. for non-compliance; With respect to monitoring and evaluation of CSR projects/activities through expert agencies for selected cos., Committee states that extant provisions under Cos. Act, 2013 and Rules made there under, are sufficient and external agency is neither required nor desirable as cos. are internally capable to undertake the exercise; With respect to monitoring of CSR undertaken by Govt. cos., Committee states that existing mechanism of CAG Audit and study by Parliamentary Committee on Public Undertakings are sufficient to monitor CSR implementation: Report of MCA's High Level Committee

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MCA advises corporates to plan annual filing to avoid last minute rush

With an intention to avoid last minute rush and system congestion on MCA portal during October/November 2015, MCA advises corporates to plan and file their financial statements & annual returns at the earliest without postponing it to the last few days; States that Corporate Seva Kendra / Help Desks would give priority to e-filing / answering queries of companies for such filing.

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Notification exempting Govt. Cos. producing defense equipment from P&L disclosure published in Official Gazette

MCA Notification exempting Govt. Cos. producing defense equipment from certain disclosure requirements in statement of P&L (prepared in accordance with Schedule III ​to ​Cos. Act, 2013), has been published in Official Gazette; This notification shall be applicable in respect of financial statement prepared for FYs ending on / after March 31, 2016.

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Posted by: Dipak Shah <djshah1944@yahoo.com>


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