RECENT UPDATES IN DIRECT & INDIRECT TAXES AND IN OTHER AREAS OF
PROFESSIONAL INTEREST – 01st September, 2015
G. K. Kedia & Co.
Chartered Accountants
Email : mail@gkkedia.com
INCOME TAX
ACIT Vs Greater Noida Industrial Development Authority
Whether the jurisdiction of the Assessing Officer to make an assessment under Section 143(3)
(ii) is based on the issuance of a notice under Section 143(2)(ii), and the proviso to clause (ii) of
sub Section (2) of Section 143 clearly stipulates that a notice must be served on the assessee YES: HC
Whether in case, AO has failed to issue notice within the specified period u/s 143, it has power
to assume jurisdiction under Section 143(2) - NO: HC
Whether the above defect can be cured by taking recourse to the deeming fiction provided
under Section 292BB - NO: HC - Revenue's appeal dismissed : ALLAHABAD HIGH COURT
CIT Vs Kabul Chawla
Whether addition could be made to the income of the assessee already assessed where on the
date of the search, the assessments already stood completed and no incriminating material was
unearthed during the search, no additions could have been made to the income already
assessed. - Revenue’s appeals dismissed : DELHI HIGH COURT
M G Saraf (HUF) Vs JCIT
Whether application for condonation of delay must contain cogent reasons for explaining the
delay with particulars which caused the delay - YES: HC - Assessee's motion dismissed :
BOMBAY HIGH COURT
CIT Vs Black Diamond Trading Company
Whether when the evidences of total expenditure or purchase were not available with the
revenue and consequently the assessee as well as AO both decided to determine the income
by applying a reasonable estimate of profit and that estimation was found very near to the
income offered by the assessee, the tribunal has correctly confirmed the order of CIT (A). Revenue's appeal is dismissed : GUJARAT HIGH COURT
Rai University Vs DIT
Whether at the time of registration u/s 12AA, the DIT(E) has to satisfy with regard to the
genuineness of activities of the Trust - Whether when there is no finding that the University is
not imparting education, or otherwise imparting of such education on the basis of commercial
consideration, DIT(E) was not justified in declining the registration to the assessee u/s 12AA. Assessee's appeal is allowed : AHMEDABAD ITAT
Reserve Bank Staff Co-Operative Credit Society Ltd Vs ITO
Whether in case of Co-operative Credit Society, interest income, commission income and policy
charges, etc., received from non-members will be eligible for deduction u/s 80P of Act - NO:
ITAT - Assessee's appeal dismissed : MUMBAI ITAT
Manipal Media Network Ltd Vs Addl.CIT
Whether disallowance under Section 14A r.w. rule 8D can be made where the assessee had not
made any disallowance of expenditure incurred in relation to the exempt income and the
Assessee has merely taken the stand that it has not incurred any direct or indirect expenditure
in earning its dividend income which is exempt under section 10(34). - Case remanded :
BANGALORE ITAT
ITO Vs M Dharamdas And Company
Whether the Assessee can be treated as the "assessee in default" under sec. 201 and the
interest under sec. 201(1)/201(1A) can be levied for non-deduction of tax at source in case of
terminal handling charges, container freight station charges, Mumbai Port trust charges and
Crane/Forklift charges under sec. 194I when terminal handling charges and Container Freight
Station charges, Bombay Port Trust charges are in nature of reimbursement and the assessee
does not have any right over any forklift/cranes. - Revenue's Appeal dismissed : MUMBAI ITAT
DCIT Vs Consulting Engineering Services (India) Pvt. Ltd
Whether when the payments made by the assessee company was not salary and the same was
remuneration/consultation fee paid to the highly experienced technocrats/consultants which
could not be engaged on full time basis as regular employees due to high remuneration and
temporary requirement of the assessee company, TDS is correctly deducted under section
194J. - Revenue's appeal is dismissed : DELHI ITAT
Vishnu Chemicals Ltd Vs DCIT
Whether where the issue regarding deductibility of TDS by assessee on payment of commission
made to foreign parties, had not been enquired into by the AO, such action of AO is prejudicial
to interest of Revenue and attracts invocation of jurisdiction by CIT u/s 263 - YES: ITAT Assessee's appeal dismissed : HYDERABAD ITAT
Bikramjit Singh Gill Vs CIT
Whether when there is pro rata transfer of land to the developer, the assessee can be made
liable to pay capital gains tax in respect of remaining land for which no consideration had been
received, in the event of cancellation of the Development agreement due to various orders
passed by the Apex court and High Court - NO: HC - Assessee's appeal allowed : PUNJAB
AND HARYANA HIGH COURT
CIT Vs Birender Singh
Whether non-maintenance of stock registers cannot be a ground for rejection of books, as it
depends upon the nature of the business - YES:HC
Whether when books of accounts maintained were duly audited, then the onus shifts on the
Revenue to show that the accounts were incomplete or incorrect, in order to make any addition YES:HC - Revenue's appeal dismissed : DELHI HIGH COURT
CIT Vs Shri Shriram Hiralal Soni
Whether when Revenue appeal has been dismissed in quantum proceedings, then the occasion
to restore the issue for reconsideration of the Assessing Officer for imposing of penalty does not
arise - YES: HC - Revenue's appeal dismissed : BOMBAY HIGH COURT
CIT Vs Bhawani Silicate Industries
Whether any addition cannot be made merely because there is some deficiency of quality wise
record in the books – YES : HC
Whether merely because books of accounts are rejected, it does not mean that it must
necessarily lead to addition in the return of income of the assessee – YES : HC - Revenue's
appeal dismissed : RAJASTHAN HIGH COURT
CIT Vs South Travancore Distilleries & Allied Products
Whether the High Court has power to ignore the circulars issued by the CBDT prescribing the
minimum limit to file an appeal, proceed to decide the statutory appeals on merits, if the
question involved is a substantial one - YES: HC - Case remanded : KERALA HIGH COURT
DCIT Vs Utkal Investments Ltd
Whether profits arising from purchase and sale of shares are liable to be treated as business
income where the assessee was showing these shares in its investment portfolio in the books of
accounts and the shares sold were shown in the balance sheet for the previous year and the
same had been carried forward as investment in the beginning of the next financial year and in
the earlier years - Whether assessee's income can be treated as speculative profit where
interest earned on the loans and advances granted by the assessee was the main source of
Assessee's income and the gross total income consists mainly of income which is chargeable
under the head capital gains and income from other sources. - Revenue's appeal dismissed :
DELHI ITAT
DCIT Vs Garware Polyester Ltd
Whether once the profit and loss account is prepared under Part-I & Part-II of Schedule-VI of
the Companies Act; duly certified by the Auditors; placed before the shareholders and
adopted/approved by the AGM, then the Revenue can not make any adjustments to the book
profit except to the extent provided in Explanation 1 - YES : TRIBUNAL - Revenue's appeal
dismissed : MUMBAI ITAT
Mahindra And Mahindra Financial Services Ltd Vs Addl. CIT
Whether depreciation on leased assets be allowed when in past in assessee's own case it has
been allowed and no material change since then has taken place - YES : ITAT
Whether issue of disallowance u/s 14A in respect of Interest expenditure and Administrative
Expenses on exempted income can be reconsidered and restored back to the file of AO, in light
of ratio laid down by the Bombay High Court in the cases of Reliance Utilities and Godrej
Agrovet - YES : ITAT
Whether issue of allowance of commission & brokerage be restored back to AO in view of the
decision taken in past in assessee's own case, to seek confirmations from the parties to whom
commission & brokerage has been paid in excess of Rs. 3,00,000 - YES : ITAT - Case
Remanded : MUMBAI ITAT
DDIT Vs Chennai Custom House
Whether after 01.04.2009, as per the second limb of section 2(15), any activity of rendering any
services in relation to any trade, commerce and business for a cess or any other consideration,
irrespective of the nature of use or application, or retention, of the income from such activity
cannot come under the purview of charity? Whether the assessee having 12A registration and
claiming as a charitable organization is eligible to be claimed again under principles of
mutuality? - Revenue's Appeal Allowed : CHENNAI ITAT
ACIT Vs Shri G Veera Sekhar Reddy
Whether the matter be restored to the file of the AO for deciding the same afresh after verifying
the confirmation letter which is produced as evidence before appellate authority but has not
been produced before AO - YES : ITAT
Whether passing of order based on additional evidence without giving an opportunity to AO to
examine the same is correct - NO : ITAT - Case Remanded : HYDERABAD ITAT
CIT Vs Suman Dhamija
Income tax - CBDT Instruction dated 9/2/2011 - monetary limit.
Assessee's appeal were disposed of by the High Court on the basis of the instructions issued by
the Central Board of Direct Taxes dated 9.2.2011. - Case remanded : SUPREME COURT OF
INDIA
DCIT Vs Amigo Brushes (P) Ltd
Whether the deposit received by the assessee is to be treated as deemed dividend where the
assessee company did not hold a share in the lender company from which it had received
deposit - Whether foreign travel expenses can be said to be incurred for the purpose of
business wholly and exclusively where the expenditure was incurred for negotiating for spares
and purchases of manufacturing machinery - Whether expenditure incurred on account of
repairs for excavation of pond, purchase of wood shaft, ply, Burma teak wood, tiles, door, etc. is
allowable as revenue expenditure - Whether deduction u/s 80IA is allowable where District
Industries Commissioner regarded the industrial undertaking as a small industrial unit by issuing
a provisional certificate, and the assessee had always been regarded as an SSI unit by all the
departments, including excise department. - Revenue's appeals dismissed : AHMEDABAD ITAT
ACIT Vs Anthony Jose Fernandes
Whether when assessee's had purchased a land and plantations on such land, he would be
would be entitled to the deduction u/s 54B to the extent of cost of land and plantation, both NO: ITAT
Whether benefit of deduction u/s 54B would be to the amount as disclosed by the Assessee in
the sale deed - YES: ITAT - Revenue's appeal partly allowed : PANAJI ITAT
CIT Vs Smt Dimpal Yadav
Whether genuinity of a loan transaction can be doubted merely on ground of its acceptance in
cash, when the cash given by the lender is duly reflected in their books of account and is routed
through proper banking channel - NO: HC
Whether penalty u/s 271D can be invoked upon violation of Section 269SS, if the assessee in
default of the same has established a reasonable cause for his failure to comply with the
provision of Section 269SS - NO: HC - Revenue's appeal dismissed : ALLAHABAD HIGH
COURT
CESC Ltd Vs CIT
Whether section 43B of the Income Tax Act is attracted to a case where payment is to be made
to the State Government in the capacity of the State as a sovereign and not to a case where
payment is to be made to the State Government in its capacity as a principal by an agent - YES
: HC
Whether section 43B of the Income Tax Act does not apply to the electricity duty collected by
the licensee as per provisions of the Bengal Electricity Duty Act, 1935 - YES : HC - Assessee's
appeal dismissed : CALCUTTA HIGH COURT
CIT Vs The Executive Engineer
Whether if three separate contracts have been entered into by the assessee, but all the
separate contracts were integral parts of a composite contract on single sale responsible basis,
the invoices raised on the basis of the said composite contract separately mentioning the value
of the material supplied can be subjected to TDS u/s 194C - NO: HC - Revenue's appeal
dismissed : KARNATAKA HIGH COURT
Novartis India Ltd Vs DCIT
Whether lunch expenses incurred for the employees during the course of outdoor duties is to be
allowed u/s 37(3) - Whether the disallowance of Rs. 14,64,642/- for total expenses and air fares
of foreign visitors in India is justified - Whether if an excess provision has been added back and
directions have been given to the AO that he should reduce the income offered by the assessee
on such a provision written back by the assessee, then is there any merits in allowing such
excess provision in this year, as direction has been already given for consequential relief in the
next year. - Assessee's appeal partly allowed : MUMBAI ITAT
ACIT Vs Shri Raymond Nariman Elavia
Whether the the proceedings u/s 158BD can be considered as bad in law when AO of the
searched person had not recorded satisfaction that any income of the assessee under
consideration had escaped assessment. - Revenue's Appeal dismissed : MUMBAI ITAT
Webcity Builders and Developers P Ltd Vs ACIT
Whether no disallowance can be made 40A(3), when the assessee has not claimed any
expenditure during the year - YES: ITAT
Whether no deduction is valid, when reason given by the AO for such deduction is vague and
devoid of merit - YES: ITAT - Revenue's appeal dismissed : DELHI ITAT
ACIT Vs Gillette India Ltd
Whether Explanation 1 to Section 40(1)(a) is effective from 01-04-97 and cannot be given a
retrospective effect - Whether in block concept of depreciation the expression "used for the
purpose of business" only means that the assessee had used the plant and machinery for the
purpose of business in earlier years - Whether Payment made by assessee by way of terminal
benefits in implementing a VRS floated by it and approved under sec. 10(10C) is allowable
revenue expenditure. - Revenue's Appeal Dismissed : JAIPUR ITAT
Adani Power Ltd Vs ACIT
Whether the interest earned by the assessee from the surplus fund, which was admittedly
collected by the assessee for the purpose of implementation of the power project, is a capital
receipt liable to be adjusted against the project development expenditure. - Assessee's appeal
is allowed : AHMEDABAD ITAT
ITO Vs Adani Infrastructure Services Pvt Ltd
Whether the interest expenditure will have to be excluded from the expenses to be allocated
under rule 8D(2)(ii) where the interest expenditure is no way relatable to exempt income and the
entire borrowing by the assessee was passed on the group concern and entire interest on this
borrowing has been received from that group concern and it was completely a back to back
transaction. - Revenue's appeal dismissed : AHMEDABAD ITAT
ACIT Vs Deccan Grameen Bank
Whether broken period interest claimed on purchase of securities is an allowable deduction YES: ITAT
Whether securities on which premium is paid, if held under HTM category are to be treated as
stock-in-trade - YES: ITAT
Whether unless assessee bank makes a provision for bad and doubtful debt in the books of
account, no deduction is allowable - YES: ITAT - Revenue's & Assessee's appeal dismissed :
HYDERABAD ITAT
Ambience Developers and Infrastructure Pvt. Ltd Vs CIT
Whether assessment order can be said to be erroneous and prejudicial to interest of revenue
where the taxability of amount in the proper hand in view of the provisions of section 60 of the
Income-tax Act, 1961 as well as Section 53A of the Transfer of the Property Act, was not
examined by the Assessing Officer as the issue was linked to both the assessees as it was to
be taxed in one hand and effect thereof was to be given in the other hand - Whether CIT was
justified in setting aside the matter to the file of the A.O. for framing the assessment orders
afresh as per the law after examining/making inquiry on the issue and on the other hand
directing the Assessing Officer to tax the lease income in the hands of one assessee and
reduce the same from other assessee. - Assessee's appeals allowed : DELHI ITAT
ITO Vs B Mahender Reddy
Whether the penalty levied under sec. 271(1)(c)on the ground that the assessee was unable to
explain the shortage of molasses found during the assessment proceedings and the sale of
bagasse made outside books of account when it is an admitted fact that the assessee has sold
bagasse outside books of account and the assessee was unable to explain the shortage of
molasses stock. - Assessee's Appeal dismissed : HYDERABAD ITAT
B M Muniraju Vs CIT
Whether in order to prove that certain land has been used for agricultural purposes in the last
two years, an assessee is required to present some accounts with regard to expenditure made
by the assessee for sowing the crops and also revenue generated by selling the agricultural
produce - YES: HC - Assessee's appeal dismissed : KARNATAKA HIGH COURT
Mool Chand Khairati Ram Trust Vs DIT
Whether assessee would be entitled to exemption u/s 11 where the assessee's activities were
not in excess of its objects and the trustees have carried out the activities of the trust bonafide
and in a manner, which according to them best subserved the charitable objects and the intent
of the Settlor - Whether assessee would be entitled to exemption u/s 11 where in the past
period, the Assessee has been consistently granted exemption under Section 11 of the Act and
also under Section 10(22)/10(22A) or Section 10(23C) of the Act - Whether depreciation on
assets used for providing Allopathic systems of medicine would be allowable if the activities of
the Assessee are within the scope of its objects. - Assessee’s appeal partly allowed : DELHI
HIGH COURT
Ramesh Veerappa Shirol (Huf) Vs ITO
Whether one more opportunity to produce all the evidences and give explanation, be granted to
assessee, when it fail to do so earlier because books of accounts and the connected documents
are seized by the Revenue - YES: ITAT - Case Remanded : PANAJI ITAT
A P Processors Vs ACIT
Whether Books of account can be rejected without assigning specific reasons for the same NO: ITAT
Whether estimation of receipt can be sustained in the absence of any allegation regarding
suppression of receipts or per se error in the profit rate declared by the assessee - NO: ITAT
Whether the order of AO for rejection of assessee's claim for shrinkage, would amounts to
arbitrariness, in the absence of any evidence to the contrary - YES: ITAT
Whether disallowance made without bringing any kind of comparables on record to substantiate
the disallowance, is sustainable - NO: ITAT
Whether addition was justified where AO had failed to mention the details of specific payments
which in his opinion was hit by the provisions of section 40A(3) - NO: ITAT
Whether in the absence of any proof being adduced or basis to prove that the fire incident was
fabricated to claim insurance, mere assumption by revenue that the assessee's claim was not
genuine, is justified - NO: ITAT
Whether disallowance of rent paid for the machineries for the period from April to June 2006 is
justified, where liability to deduct TDS on payment of rent on machinery is introduced by the
Taxation Law Amendment Act, 2006 w.e.f. 13.7.2006 only and not before that - NO: ITAT
Whether where the processing activity done by assessee was "manufacturing", then for claiming
deduction u/s 32(1)(iia) it was immaterial that the assessee was doing the job of processing for
outside customers too - YES: ITAT - Case remanded : DELHI ITAT
Smt Ruta S Jindal Vs ACIT
Whether when AO accepts that joint family is living together in the same house, the jewellery
found in one room cannot be treated as only belonging to the lady living – Whether when at the
time of search no statement was recorded from the assessee and hence there was no occasion
for her to state that part of the jewellery belong to her mother in law/ father in law or to specify
the items of such jewellery, no adverse inference should be taken on the basis of the same. Assessee’s appeal is allowed : DELHI ITAT
ITO Vs Kalanjiam Development Financial Services
Whether when the assessee has raised loans to advance to the customers by paying interest
and it is not having own corpus in a formal capital so as to advance the loan, the assessee is
providing loans by association with various commercial banks by raising loans from them, such
kind of micro finance activity cannot be termed as charitable activity rather than it is a business
activity. - Revenue’s appeal allowed : CHENNAI ITAT
Tril Infopark Ltd Vs ITO
Whether the lease for 99 years is almost like a sale and tax cannot be deducted u/s 194-I Whether the TDS amount can be recovered from the assessee if the recipient has paid the
taxes.
The assessee is a joint venture with the object of development of Special Economic Zone for
Information Technology / Information Technology Enabled Services. The AO by the impugned
order found that the assessee had not deducted tax u/s 194-I on the payment made to TN
Industrial Development Corporation Ltd. The AO held the assessee as assessee in default u/s
201(1), and levied penal interest u/s 201(1A). The AO passed the order on 3.10.2013 treating
the assessee as assessee in default for the A.Y 2009-10. The CIT(A) affirmed the AO order. Case remanded : CHENNAI ITAT
Shree Yogi Steels Pvt. Ltd Vs DCIT
Whether when AO has applied his mind and taken a possible view after going through returns of
the assessee for earlier years, CIT is not justified in taking action against the assessment order
- Whether the explanation appended to section 251 authorizes the Commissioner, while
disposing of an appeal to consider and decide any matter arising out of the proceeding in which
order appealed against was passed, notwithstanding that such matter was not raised before the
Commissioner by the appellant - Whether when it is assumed that AO has committed an error
by not computing the true capital gain with the application under sec. 50(1) then also ultimately
no prejudice has been caused to the revenue as the impact is revenue neutral.- Assessee's
appeal allowed : AHMEDABAD ITAT
Tetra Soft (India) Pvt. Ltd Vs ACIT
Whether where an assessee has not remitted employees contribution to PF within the due date
as prescribed u/s 36(1)(va), the said amount can be disallowed if the assessee has remitted the
same within the due date of filing of return u/s 139(1) - NO: ITAT
Whether UPS being part and parcel of computer system, the depreciation on the same can be
claimed at 60% as prescribed for computers - YES: ITAT - Assessee's appeals allowed :
HYDERABAD ITAT
DCIT Vs NSL Renewable Power Pvt. Ltd
Whether sale of carbon credits is to be considered as capital receipt and not taxable income YES: ITAT - Revenue's appeal dismissed : HYDERABAD ITAT
PR.CIT Vs Good Times Marketing Pvt. Ltd
Whether when the assessee's staff had failed to deposit the membership fee with IHCL, as per
the agreement, then such money paid by the Assessee to IHCL should have been allowed as
business loss - YES: HC - Revenue's appeal dismissed : DELHI HIGH COURT
CHIEF CIT Vs Maharani Luxmi Bai Memorial Educational Society
Whether if an assessee is claiming exemption u/s 10(23C)(vi), the objects appear to be ancillary
to the main object of running the institution, it can be held that the objects can be anything
without any linkage to the main purpose of imparting education - NO: HC - Case remanded :
UTTARAKHAND HIGH COURT
Kothari Metals Omkar House Vs ITO
Whether if re-opening of the assessment was done on the basis of a statement recorded by the
Income Tax authorities of some other person, which statement was never furnished to the
assessee in the reasons to believe, this would amount of violation of principals of natural justice
- YES: HC - Assessee's appeal allowed : KARNATAKA HIGH COURT
CIT Vs Jasjit Singh
Whether in the case of the searched person, the date with reference to which the proceedings
for assessment or reassessment of any assessment year, within the period of the six
assessment years, should be the date of initiation of the search under Section 132 or the
requisition under Section 132A - YES:HC - Revenue's appeal dismissed : DELHI HIGH COURT
CIT Vs Hanuman Sugar Industries Ltd
Whether the assessee can be allowed deduction on account of interest arising out of a liability
which was neither paid nor shown to have been incurred in the books of accounts, the assessee
himself has disputed the same - NO: HC - Revenue's appeal allowed : CALCUTTA HIGH
COURT
CIT Vs Compucom Softwares Ltd
Whether when a fact finding authority has decided an issue after complete verification of
documents and records, it is possible to interfere in such a case on the basis of Tribunal's order
- NO: HC - Case remanded : RAJASTHAN HIGH COURT
CIT Vs Radha Swami Communication
Whether where there is contradiction regarding period of deposit of TDS as to either before or
after the conduction of survey operation, the matter requires restoration to the Tribunal being a
final fact finding authority - YES: HC - Case remanded : RAJASTHAN HIGH COURT
Pushpak Bullion Pvt. Ltd Vs DCIT
Whether the AO is bound to decide objections raised by assessee on re-opening of his
assessment on merit, even if the assessee has failed to file his return within a period of not less
than 30 days in pursuant to the notice of reopening issued u/s 148 - YES: HC - Assessee's
appeal allowed : GUJARAT HIGH COURT
Punjabi Cooperative House Building Society Vs CIT
Whether mere pro-rata transfer of land as a licensee for the development of the property would
attract Section 53A of Transfer of Property Act, where no possession was given by the
transferor to the transferee of the entire land in part performance of the joint development
agreement - NO: HC
Whether the assessee is liable to the capital gains tax in respect of remaining land under joint
development agreement, for which no consideration was received and which stood cancelled
and incapable of performance due to orders passed by the Supreme Court or High Court - NO:
HC - Case remanded : PUNJAB AND HARYANA HIGH COURT
Maina Shetty Vs DCIT
Whether in case the reopening was on the basis of an order passed by the Tribunal beyond the
period of limitation specified in Section 149 of the Act, the reopening can be held as valid in
nature - NO: HC - Assessee's appeal allowed : KARNATAKA HIGH COURT
Muzaffarpur Central Co-operative Bank Ltd Vs ITO
Whether the liability for deduction of tax at source u/s 194A gets extinguished upon lapse of
reasonable period of time, when liability is determined and stands outstanding on the part of
deductee - NO: ITAT
Whether in the said absence of abatement of recovery as per TDS provisions, any limitation
period can be prescribed for levy of interest liability u/s 201(1A) - NO: ITAT
Whether the charge in respect of tax deductible at source would abate with time and the tax due
can be held as not payable or recoverable by the Central Government, upon non action by it
toward recovery for a particular period of time - NO: ITAT - Assessee's appeal dismissed :
PATNA ITAT
Soham Builders Vs ACIT
Whether merely because a higher percentage of income is estimated by the Revenue on the
basis of fair gross profit ratio, the assessee can be penalized for concealment of income - NO:
ITAT
Whether when the assessee himself has declared reasonable profits alongwith the additional
income in respect of extra work done on no profit basis, he can be held guilty for concealment of
income - NO: ITAT - Assessee's appeal allowed : AHMEDABAD ITAT
SERVICE TAX
Zenith (Bangalore) Rollers Pvt. Ltd Vs CCE
Service Tax - Classification - Re-rubberization of old and worn out spindles for the printing
industry by fresh coat of vulcanized rubber - Activity held classifiable as Business Auxiliary
Services in the light of Zenith Rollers ratio and falls within the ambit of exemption Notification
No.14/2004-ST dt. 10/09/2004 - Impugned orders denying benefit of Notification by classifying
the said activity under Management, Maintenance or Repair (MMR) quashed and appeal
allowed with no costs - Assessee appeal allowed : HYDERABAD CESTAT
Century Star Vs CST
Service Tax - Transportation charges within the port from warehouse to wharf and vice versa
during the years 2006-07 and 2007-08 - Allowed under GTA service - Post 2010, the Finance
Act treated all services rendered within the port area as “port service” - Prior to 2010, services
rendered within port are classified according to the category and nature of service - For the
period in dispute, appellant was engaged in transportation within the port from warehouse to
wharf and vice-versa - Held justified in believing that services rendered covered under GTA
service - Authorities below failed to show how inter carting work undertaken by the appellant
amounted to rendering of steamer agent service - Since the appellant paid entire amount of tax
along with interest prior to issue of show cause notice, without contesting issue of classification,
held is entitled to the benefit waiver of penalty by invoking provisions of Section 80 - Appeal
thus allowed confirming demand and interest. - Assessee appeal partly allowed : BANGALORE
CESTAT
Windsor Machines Ltd Vs CCE & ST
ST - Canteen/catering services - Once the assessee had produced a CA's certificate from
competent authority and claimed that no cost of food recovered from its employees, then the
same cannot be brushed aside by Revenue on a presumption without taking any alternative
opinion from an expert that such a cost has been recovered from its employees - No
documentary evidence has been brought on record by Revenue that some portion of cost of
food supplied by assessee is recovered from employees - Entire ST credit is admissible to
assessee and order passed by First Appellate Authority is set aside: CESTAT - Appeal allowed :
AHMEDABAD CESTAT
CCE Vs Vodafone Essar South Ltd
ST/CE - S.35C(2A) of CEA, 1944 - If the main provision cannot be treated as mandatory, the
first, second and third proviso also cannot be treated as mandatory but directory - The three
provisos have to advance the cause of justice and not to defeat it - Tribunal is vested with the
power to extend the stay order beyond the specified maximum time limit prescribed - Revenue
appeals dismissed: High Court - Appeals dismissed : ALLAHABAD HIGH COURT
CC, CE & ST Vs Tpsc India Pvt. Ltd
Service Tax - Employees of parent company at Japan deputed to work in India - Demand under
reverse charge under Supply of manpower service - Revenue in appeal against the order of
Tribunal granting unconditional stay - Held: The Tribunal had taken into consideration of the fact
that the issue with regard to similar circumstances was already the subject matter of two
decisions of the Tribunal at Delhi. In that view of the matter, when the issue is squarely covered,
there would be no justification for directing a pre-deposit - No illegality or infirmity in the
impugned order - The appeal is dismissed. - Appeal dismissed : ANDHRA PRADESH HIGH
COURT
Phoenix Logistics Pvt. Ltd Vs CC
Service Tax - Appeal against the order of Tribunal declining to condone the delay in filing the
appeal and dismissing the same on the ground of delay - Held: The fact that order dated
26.03.2012 came to be served on the employee of a sister concern and the same came to the
notice of the appellant belatedly, cannot be ignored. No motive as such can be attributed to the
appellant for not filing appeal in time, especially in view of the fact that the appellant is diligently
agitating the issue involved as against the assessment for the previous years and also for
subsequent years - The Tribunal could have taken a lenient view and, by putting the appellant
on terms, could have condoned the delay - Inasmuch as the Tribunal failed to exercise the
discretion, considering the facts of the case, appeal is allowed on condition of the appellant
depositing a sum of Rs.3,50,000/- within a period of six weeks. Appeal allowed : ANDHRA
PRADESH HIGH COURT
IJM (India) Infrastructure Ltd Vs CC, CE & ST
Service Tax - Service provided to Associate enterprise - Absent debit/credit entries in books of
account, outstanding amount due from associated enterprise as of 10/5/2008 - Held cannot be
treated as amounts paid for the purpose of levy of tax - Amendment to Section 67 of Finance
Act, 1994 not retrospective - Following precedent decision, demand held unsustainable Directed to hear appeal without insisting pre-deposit. - Stay granted : BANGALORE CESTAT
B R Singh And Co Vs CCE & ST
ST - Litigants should not suffer due to the fault of their Advocate - Appeal should have been
decided on merits and not on mere technicalities - Delay of 536 days in filing appeal condoned:
High Court - Petition disposed of : JHARKHAND HIGH COURT
Tajmahal Tobacco Company Pvt. Ltd Vs CCE
Service Tax - Rectification of error - incomplete sentence at para-5 in the Final Order
No.40056/2015 dt.13.1.2015passed by the Bench - brought to notice for rectification.
Held: Due to typographical mistake, the citation of the Supreme Court's judgement is not typed Accordingly, the last sentence of para-5 in Final Order No.40056/2015 dated 13.1.2015 is
corrected to read as under :"He relied upon the Hon'ble Supreme Court judgment in the case of Gujarat Ambuja Cements
Ltd. Vs UOI - Letter disposed of : CHENNAI CESTAT
Goel Nitron Constructions Vs CCE
ST - Appellants are builders/promoters of housing society, constructing residential flats and are
in appeal against levy of ST on 'one-time maintenance/contribution' collected from purchasers of
the flats - such maintenance charges are collected for the interim period till the society is formed
as per the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale,
Management and Transfer) Act, 1963 and thereafter once the building is occupied by the flat
owners, they would form a housing society as per CHS Rules - the appellants are collecting
corpus for maintenance etc. and balance of funds along with account of utilisation are
transferred to the newly formed society in terms of s. 5 & 6 of the Act, 1963. Held: Relying upon
the earlier decision in the case of Kumar Beheray Rathi & Others vs. CCE, Pune-III - held that
appellants are not liable to pay ST under the category of 'Maintenance and Repair services' on
the 'one-time maintenance' charges collected from buyers of the flats - appeals are allowed with
consequential relief: CESTAT - Appeals allowed : MUMBAI CESTAT
Patanjali Yogpeeth Trust Vs CCE & ST
ST - In so far as the demand for Rs.4,59,89,553/- is concerned in view of the doctrine of
mutuality between a Club or Association and its members spelt out in several judgments,
including Ranchi Club Ltd. assessee is seen to have made out a strong prima facie case for
grant of waiver - Demand of Rs.43,87,283/- is on consideration received by "Vanprashta
Ashram Donations" for providing cottage facilities - Prima facie case made out, in respect of its
immunity on this demand - Pre-deposit of Rs.22 lakhs ordered in this regard: CESTAT
Intellectual Property Right service - Since the agreement has covenants, expressing conferment
of assessee's copyright in Audio Visual Content in favour of MCCS and since copyright is an
excluded component of IPR service defined in Section 65 (55a) and (55b) read with Section
65(105)(zzze) - Waiver of pre-deposit granted: CESTAT - Stay application disposed of : DELHI
CESTAT
Affinity Express India Pvt. Ltd Vs CCE
ST - Refund - Rule 5 of CCR, 2004 - Once credit is not objected at availment stage, it is not
permissible for Revenue to challenge the same at the stage of processing refund under Rule 5
of CCR, 2004 - In previous o-in-o, Assistant Commissioner has passed favourable orders where
refund in respect of export of Embroidery software has been granted without disputing that Input
services were used in Embroidery software development - these orders have been accepted by
Revenue - appeals allowed with consequential relief: CESTAT - Appeals allowed : MUMBAI
CESTAT
Nagar Taluka Sahakari Kharedi Vikri Sangh Ltd Vs CCE, C & ST
ST - Renting of Immovable property service - Appellant had given its immovable property on
rent and received rent of Rs.51.99 lakhs during the period 01/06/2007 to 30/06/2011 on which
ST of Rs.4.87 lakhs was not paid - SCN issued and proposals confirmed vide order dated
09/07/2012 - Commissioner(A) upheld o-in-o - appeal before CESTAT. Held: Appellant paying
entire service tax along with interest on 26/11/2012 and seeking waiver of penalties imposed
u/ss 76, 77 & 78 of FA, 1994 - under special provisions in the FA, 2012, immunity is granted
from imposition of penalties if appellant pays the tax due as on 06/03/2012 within a period of six
months from date on which Finance Bill, 2012 was enacted - Bill received assent on 28/05/2012
and, therefore, six months period expired on 28/11/2012 - as appellant has paid liability on
26/11/2012, they have made a clear case for waiver of penalties in terms of s.80(2) of the FA,
1994 - penalties imposed u/ss 76, 77 & 78 waived - appeal allowed to the said extent: CESTAT
- Appeal partly allowed : MUMBAI CESTAT
GKN Sinter Metals Pvt. Ltd Vs CCE
ST - Applicant seeking extension of stay on the ground that their appeal has not come up for
disposal for no fault of theirs. Held: In the case of Venketeshwara Filaments Pvt. Ltd. - it is held
that consequent upon omission of 1st , 2nd and 3rd proviso to section 35C(2A) of the CEA,
1944 by the FA, 2014 it is to be held that there is no provision for making further application for
extension of stay and that the stay order passed by the Tribunal, if it is in force beyond
07.08.2014, it would continue till the disposal of the appeals and there is no need for filing any
further applications for extension of orders granting stay either fully or partially - since the stay in
the present case was in force beyond 07.08.2014, same would continue till the disposal of the
appeal - Application disposed of: CESTAT - Application disposed of : MUMBAI CESTAT
Y N Warehousing Company Vs CC & CE
ST - Valuation - s.67 of FA, 1994 - Appellant registered as Clearing and Forwarding Agent and
collecting fixed computer stationery charges and godown rent - Revenue alleging that the said
charges are to be included in the gross value of services rendered and ST to be discharged
accordingly - Period involved is October 2002 to March 2006 - Asst. Commr. dropping the
proceedings but Commissioner as reviewing authority confirmed the demand and imposed
penalties and interest - appeal to CESTAT. Held: Commissioner in review order relies upon
Rule 5 of ST (Determination of Value) Rules, 2006 which were not in statute during the material
period - provisions which were not in statute cannot be applied for demand of tax - on this point,
order is non est. - so also, provisions of rule 5(1) of Rules, 2006 have been struck down by
Delhi High Court in case of Intercontinental Consultants & Technocrats Pvt. Ltd. - order is
unsustainable and hence set aside - appeal allowed with consequential relief: CESTAT - Appeal
allowed : MUMBAI CESTAT
CENTRAL EXCISE
Force Motors Ltd Vs CCE
CE - CENVAT credit suo motu reversed by assessee - where there has been no determination
of the demand u/s 11A(2) of CEA, 1944, penalty u/s 11AC cannot be imposed - however,
interest is payable u/s 11AB irrespective of the fact that the inadmissible credit was not utilized Appeal partly allowed: CESTAT - Appeal partly allowed : MUMBAI CESTAT
Pepsico India Holdings Pvt. Ltd Vs CCE & ST
CX - Classification - Assessee engaged in manufacture of various namkeens and potato chips
with different flavours - In order to give various flavours to these products, assessee procures
various spices from market and make spice mixes as per their specifications - Whether
classification of such mixtures of spices falls under Chapter 9 of CETA as claimed by assessee
or under Chapter 21 as stated by Department - Such mixtures will have an essential character
not necessarily that of single ingredient spice but of combination of such spices as per their
proportion - Even if additional materials are added what is required is that these mixtures retain
their essential character of various ingredients of spices - Further, essential character of spices
are basically relating to aroma, taste and flavour - Further, Original Authority's finding that apart
from spices, certain chemical ingredients, dilutants and additives and salts are used in different
proportion in spice mix - Conclusion of Original Authority is not substantiated to the effect that
how such addition of certain chemicals or additives has taken away the essential character of
spice mix - Addition of ingredients like onion powder, garlic powder and tamarind, etc was
considered as addition of other materials - Spice Board clearly indicates the garlic and tamarind
as Indian spices, hence, addition of these items if at all cannot be a consideration for excluding
classification for spice mixtures under Chapter 9 - Having closely examined the scope of entry
under Heading No.2103 and scope of Chapter 9, it is concluded that spice mixtures produced
by assessee are to be classified under Chapter 9 and not under Heading No. 21: CESTAT Appeals allowed : DELHI CESTAT
Shalimar Ispat Vs CCE
Assessee are a rolling mill and period of dispute is from September 1997 to March 2000 - By a
Notfn 32/97-CE (NT) dated 18.8.1997 issued under Section 3A(2) of CEA, 1944, Central
Government notified Hot Rerolling Steel Mills Annual Capacity Determination Rules, 1997 which
came into force w.e.f. 1.8.1997 - Rule 3(3) of Rules prescribed formula for determination of
annual capacity of production on basis of various parameters, one of which was nominal centre
distance of pinions in pinion stands in millimeter - Declaration about parameters in terms of Rule
3(1) had been made on 18.8.1997 - Nominal centre distance had already been changed from
210 MM to 185 MM in April 1997 i.e. prior to coming into force of Capacity Determination Rules,
1997 and as such, this is not a case of change of parameters in terms of Rule 4(2) - Since Rule
5 had been introduced w.e.f. 1.9.1997 by notfn 45/97-CE (NT), this cannot be given
retrospective effect when notfn itself makes it effective w.e.f. 1.9.1997 - Therefore, Rule 5 would
not be applicable to cases where declaration under Rule 3(1) declaring parameters for
determination of annual capacity of production had been made to Commissioner during period
prior to 1.9.1997 - An assessee who had made this declaration during period prior to 1.9.1997
would be entitled for determination of his annual capacity of production on the basis of Capacity
determination Rules as same existed during that period: CESTAT - Appeal allowed : DELHI
CESTAT
Gujarat State Fertilizers And Chemicals Ltd Vs CCE & ST
Appellant was supplying Caprolactum to their sister concern - Differential duty was paid by
assessee on 06.08.2007 and SCN demanding duty and for imposing penalty was issued on
21.07.2008 - The 'relevant date' for demanding interest will have to be 'mutatis mutandis', one
year from the date of payment of interest made under Section 11A of CEA, 1944, because on
the date of payment of duty only the exact amount of interest, from the date of clearances to the
date of payment of differential duty, can be calculated for the purpose of issuing a quantified
demand on account of interest - Demand for interest was thus issued within a period of one year
- When supplies are made to sister concerns then demand cannot be upheld on Revenue
Neutrality which means both differential duty and interest cannot be demanded - Further, in view
of Siddheshwar Textile Mills Pvt. Ltd., when duty demand itself is not sustainable on Revenue
Neutrality, it will not be correct to demand interest on differential duty voluntarily paid by
assessee: CESTAT - Appeal allowed : AHMEDABAD CESTAT
Transformers And Rectifiers (India) Ltd Vs CCE
CX - Assessee entered into a contract with Tamil Nadu Electricity Board (TNEB) for supply of
Transformers on ex-factory price - TNEB reduced the price and therefore, refund claim was filed
for excess payment of duty - Agreement made between parties before clearance of goods, but it
is not clear from records that letter dtd 1.9.2007 of M/s TNEB of reduction of price would be
applicable for present clearance of goods - Findings of Commissioner (A) is beyond the scope
of adjudication order - Adjudicating Authority had rejected refund claim on ground that assessee
is not eligible for refund on merits - After considering decision of Tribunal in case of Mahavir
Cylinders, matter remanded to Adjudicating Authority to decide afresh in light of said decisions
on merit and issue of unjust enrichment, in interest of justice: CESTAT - Case remanded :
AHMEDABAD CESTAT
Videocon Industries Ltd Vs CCE
CX - S.4A of CEA, 1944 - Valuation - While arriving at the assessable value for the retail sale
price, an amount of abatement specified by notification can only be deducted - there is no
provision under the law to exclude warranty charges from the RSP - statutory provision under
Section 4A cannot be altered or influenced merely because the appellant has chosen to
discharge service tax on portion of the retail sale price - Demand upheld and appeal dismissed:
CESTAT - Appeal dismissed : MUMBAI CESTAT
Balkrishna Industries Ltd Vs CCE
CX - Appellant selling six year old used forklift on discharge of CE duty at depreciated value after department raised objection that appellant should have paid an amount equal to credit
taken, appellant paying differential duty along with interest under protest - later refund claimed
of amount paid which was rejected. Held: Machine (fork lift) cleared after putting into use cannot
be treated as cleared 'as such' - insertion of proviso in rule 3(5) of CCR, 2004 w.e.f 13.11.2007
makes it clear that there is a difference between machine cleared without putting into use and
cleared after use - in view of authoritative judicial pronouncement in case of Raghav Alloys Ltd.,
order rejecting refund set aside and appeal allowed with consequential relief: CESTAT - Appeal
allowed : MUMBAI CESTAT
Asiatic Gases Ltd Vs CCE
CX - Interest - Whether appellant is required to pay interest in a case where duty along with part
interest was paid voluntarily - appellant submitted that interest on delayed payment of duty
cannot be demanded unless duty is determined under s.11A(2) of CEA, 1944. Held: It is an
admitted fact that there is substantial delay in payment of duty even though appellant has paid
interest voluntarily - even though the duty was not determined u/s 11A(2) of CEA, 1944 but
when there is admitted delay in payment of duty, interest is chargeable even prior to 11.05.2001
- in view of apex court decision in International Auto Ltd. interest is levied for loss of Revenue on
any count - no infirmity in the order, hence sustained - appeal dismissed: CESTAT - Appeal
dismissed : MUMBAI CESTAT
Ambassador Coolers Pvt. Ltd Vs CCE
CX - Assessee has placed purchase order to supply all goods to M/s. Nowrangroy Rameshwar
with directions that goods are required to be delivered at job worker's place - Invoices were
raised in name of assessee and goods were delivered to job worker, which were received by
assessee after processing - Rates quoted are of job work charges only, although the job worker
has paid VAT thereon - It cannot be concluded that goods have been sold by job worker to
assessee - When assessee has filed reply to SCN, facts were required to be verified which
Revenue has failed to do so - Under notfn. 214/86, job worker is required to intimate the
department that they are undertaking activity of job worker and not required to pay duty but that
fact has also been not verified by department - Assessee is entitled to take Cenvat credit Appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
Pepsico India Holdings (P) Ltd Vs CCE
CX - Assessee are manufacturers of Aerated Water, one of the inputs is glass bottles in respect
of which input duty CENVAT Credit has been taken - Some glass bottles, during use get broken
and same are cleared as glass scrap - During period of dispute there was no provision in CCR,
2001/2002 providing that when CENVAT Credit availed inputs are cleared as waste, some
amount in respect of same is required to be paid - Impugned order set aside and appeal
allowed: CESTAT - Appeal allowed : DELHI CESTAT
Hetero Labs Ltd Vs CCE
Central Excise - Bulk drug manufacture - Procurement of duty free imported and indigenous raw
material - Cenvat credit utilization -Whether or not credit availed on duty paid inputs can be
used for discharge of duty at the time clearance of the duty free imported inputs - Held in
matters of CENVAT credit, there is no one-to-one correlation and where appellants have used
such credit for payment of duty for clearance of imported raw materials, they would not be in a
position to use the same at the time of clearance of the final product-Treating reversal as
proper, pre-deposit dispensed with - Matter remanded to the Commissioner (A) for a decision on
merits - Remanded : BANGALORE CESTAT
Shah Paper Mills Ltd Vs CCE & ST
CX - Assessee is manufacturer of kraft paper from waste paper - Whether main assessee was
eligible to take credit on basis of cenvatable documents showing payment of duty - Assessee
taking cenvat credit is not required to go beyond cenvatable document to know as to how it has
arisen - What input recipient is required to verify is that supplier of raw material is genuine and
proper duty is paid - Both the conditions are fulfilled - Duty paid on waste kraft paper was
accepted by officer Incharge of supplier unit M/s SPPML - On merit assessee was eligible to
take CENVAT credit - No evidence brought on record that main assessee and its Director were
aware that inputs received was as a result of an activity not amounting to manufacture Demand issued is clearly time barred as extended period is not imposable and no penalties can
be imposed upon assessee: CESTAT - Appeals allowed : AHMEDABAD CESTAT
Surya Roshni Ltd Vs CCE
CX - Refund - Assessee is manufacturer of electric bulbs and are procuring inputs and capital
goods and also availing Cenvat Credit thereon - They opted to avail exemption under notfn
50/2003-CE i.e. area based exemption - At the time when assessee took Cenvat Credit on
inputs/capital goods, their final product was dutiable and later on they opted for availing
exemption under said notfn - As per Apco Pharma Ltd., they are not required to reverse Cenvat
Credit on input / inputs contained in work-in-progress / finished goods lying in their factory:
CESTAT - Appeal allowed : DELHI CESTAT
CCE Vs Hindustan Lever Ltd
Central Excise - Classification - Vaseline Intensive Care Heel Guard is medicament: The issue
involved in the appeal is as to whether Vaseline Intensive Care Heel Guard (for short, 'VHG') is
to be treated as merely a skin care preparation or it is a medicament having curing properties.
While contrasting the two Entries, namely, Entry 3304.00 on the one hand and 3003.10 on the
other, it can be discerned that if it is a product for care of the skin, then it would fall under
Chapter Heading 3304.00 but if it is for the cure of skin disease then the product in-question
would be medicament; meaning thereby the inquiry has to be whether it is a care product or a
product meant for cure.
The product in question, Vaseline Intensive Care Heel Guard, is marketed as a solution for
cracked heels and it is claimed that this solution is specially developed by the scientists at
Vaseline Research. The composition of this product includes salicylic acid I.P. 1.5% w/w. lactic
acid 8.0% w/w. Triclosan 0.1% w/w. Cream base - q.s. Salicylic acid is described as keratolytic
substance having bacteriostalic and fungicidal properties used in the treatment of fungus
infection of the skin. The Tribunal, while deciding that the aforesaid product is a medicament,
pointed out that the product was formulated and essentially used for treatment of 'cracked
heels', protection from further cracks in the human heels due to extreme climatic conditions and
low humidity, constant exposure of feet to water and due to absence of shoe or other protection
while walking. It also found that this product was manufactured under a drug licence as drug
authorities had treated the same as a medicament. The Tribunal also found that the usage of
this product was related to the effect of therapeutic or mitigating substance of prophylactic
substances added. Thus, the effect of mitigation of an external condition is primary effect and
the effect of smoothing the skin was secondary in nature and, therefore, it was to be treated as
a medicament and classified under Chapter 30.
The decision of the Tribunal holding the product in question to be a medicament and, therefore,
covered by Chapter Heading 3003.10 is perfectly justified and does not call for any interference.
- Revenue Appeal Dismissed: SUPREME COURT OF INDIA
Purolator India Ltd Vs CCE
Central Excise - Valuation - Cash Discount has to be taken into account in arriving at "price"
even under Section 4 as amended in 2000: It can be seen that Section 4 as amended
introduces the concept of "transaction value" so that on each removal of excisable goods, the
"transaction value" of such goods becomes determinable. Whereas previously, the value of
such excisable goods was the price at which such goods were ordinarily sold in the course of
wholesale trade, post amendment each transaction is looked at by itself. However, "transaction
value" as defined in sub-clause (3)(d) of Section 4 has to be read along with the expression "for
delivery at the time and place of removal". It is clear, therefore, that what is paramount is that
the value of the excisable goods even on the basis of "transaction value" has only to be at the
time of removal, that is, the time of clearance of the goods from the appellant's factory or depot
as the case may be. The expression "actually paid or payable for the goods, when sold" only
means that whatever is agreed to as the price for the goods forms the basis of value, whether
such price has been paid, has been paid in part, or has not been paid at all. The basis of
"transaction value" is therefore the agreed contractual price. Further, the expression "when
sold" is not meant to indicate the time at which such goods are sold, but is meant to indicate that
goods are the subject matter of an agreement of sale.
When sold does not mean the time: The expression "actually paid or payable for the goods,
when sold" only means that whatever is agreed to as the price for the goods forms the basis of
value, whether such price has been paid, has been paid in part, or has not been paid at all. The
basis of "transaction value" is therefore the agreed contractual price. Further, the expression
"when sold" is not meant to indicate the time at which such goods are sold, but is meant to
indicate that goods are the subject matter of an agreement of sale - Appeal partly allowed in
favour of assessee : SUPREME COURT OF INDIA
Value Industries Ltd Vs CCE
CX- Whether the activity of repair carried out on returned defective compressors falls under
"repair" as provided u/r 173H of CER, 1944 or ‘manufacture' u/s 2(f) of the CEA, 1944 - Activity
is repair as no new commodity emerges - CE duty demands set aside and appeal allowed:
CESTAT - Appeal allowed : MUMBAI CESTAT
Varroc Engineering Pvt. Ltd Vs CCE
CX - Appellant availing CENVAT credit of tax in respect of services provided by Prakash Air
Freight Pvt. Ltd. – department of the view that appellant had wrongly paid ST on service which
were exempted from payment of ST vide notification 29/2005-ST in relation to transport of
goods by aircraft operator and subsequently availed credit – appellant submitting that bills
issued by service providers shows the same as 'courier service' - credit denied and in de novo
proceedings Assistant Commissioner concluding that 'courier service' provided by service
provider was not covered under definition of 'input service' – Commissioner(A) holding that
services are post clearance export activities not connected with manufacture of goods, hence
credit not admissible. Held: As delivery charges are included in selling price, in view of
Karnataka HC decision in ABB Ltd., the expression 'activities relating to business' admittedly
covers transportation up to the customers place and, therefore, credit cannot be denied – as it is
an integral part of business of manufacturer to transport and deliver the goods manufactured,
appellant entitled to take credit – Appeal allowed with consequential benefits: CESTAT - Appeal
allowed : MUMBAI CESTAT
Timex Watches Ltd Vs CCE
CX - Whether inputs on which assessee have taken modvat credit have been put to use for
manufacture of watches - As per Report of Defective Work, assessee initially availed modvat
credit on inputs/parts of watches, at time of receipt of same before putting to use, assessee has
conducted certain tests to find out whether inputs to be usable or not - Inputs which did not find
fit to be used, assessee has reversed credit thereon, rest of inputs were issued by assessee for
processing or assembling of watches - Defective goods were found only after inputs were
issued for processing or assembling of watches, assessee is entitled to credit as per Rule 57D
of erstwhile Central Excise Rules, 1944: CESTAT
CX - Shortage of inputs - Assessee have explained general ledger of stock adjustment account
reflected inputs have been short accounted in some cases and in some other cases inputs are
in excess, therefore, there is no actual shortage of inputs - Shortages and excesses are due to
the fact that stock accounting used to be done on weighment basis since minute inputs ran into
millions and physical counting is not possible - There is no shortage of inputs as explained by
assessee - All shortages/rejections have been supported by chartered accountant certifying the
same which has not been controverted by Revenue with cogent evidence - Assessee are not
required to reverse modvat credit taken by them - Penalty is not imposable on assessee:
CESTAT - Appeal allowed : DELHI CESTAT
VST Industries Ltd Vs CCE, C & ST
Central Excise - Capital goods - Scope - Inputs (insect controlling traps) used for
managing/controlling the tobacco beetle infestation - Held, have to be considered as eligible
cenvattable inputs having been used in relation to manufacture of final products - Credit availed
clearly reflected in the records - Question of malafide intention does not arise - Stereotype
reasoning given in all the cases of adjudication orders by Revenue to invoke extended period of
limitation, deprecated- Impugned order of duty demand, penalty and confiscation of goods, set
aside - Assessee appeal allowed : BANGALORE CESTAT
Bharat Heavy Electricals Ltd Vs CC & CE
CX - Provisional Assessment - Rule 7 of CER, 2002 - Interest is leviable even where differential
duty was paid prior to the finalization of the assessment - Bombay HC decisions in CEAT &
Ispat Industries disagreed: Allahabad HC - Appeal dismissed : ALLAHABAD HIGH COURT
Rajuri Steels Pvt. Ltd Vs CCE & C
CX - Appellant was working under the compounded levy scheme u/s 3A of CEA, 1944 - since
appellant did not discharge CE duty liability as fixed u/r 96ZP(3) of CER, therefore, SCN issued
and duty confirmed which appellant paid without contesting the order-in-original - subsequently,
another SCN was issued demanding interest and equal amount of penalty u/r 96ZP(3) and
which was confirmed - appellant before CESTAT. Held: No discretion is provided to any
authority to either reduce or waive penalty and interest in any circumstances - when there is
admitted delay in payment of duty under compounded levy scheme, interest and penalty
provided under the proviso to the rule shall unavoidably be imposed - Penalty and interest
rightly imposed by adjudicating authority and upheld by Commissioner(A) which do not require
any interference - Order upheld and appeal dismissed: CESTAT - Appeal dismissed : MUMBAI
CESTAT
Mettur Thermal Power Station Vs CBEC
Central Excise - Demand of duty on Fly Ash and Fly Ash bricks cleared post 01.03.2011 Petition challenging the Show Cause Notice on various grounds.
Held: Process does not amount to manufacture - To be subjected to levy of excise duty
"excisable goods" must be produced or manufactured in India. For being produced and
manufactured in India, the raw material should have gone through the process of transformation
into a new product by skillful manipulation. Excise duty is an incidence of manufacture and,
therefore, it is essential that the product sought to be subjected to excise duty should have gone
through the process of manufacture.
The Apex Court Union of India versus Ahmedabad Electricity Company Limited" - has
categorically held the "cinder" which is unburnt part of coal, is not exigible to excise duty since
no manufacturing process was involved to produce the same and as such it did not satisfy the
test of being manufactured in India as envisaged in the provisions of the Act and that the onus
to establish that cinder has gone through the process of manufacture in India was not
discharged by the department. -The difference between 'cinder' and 'fly ash' is that when coal is
not burnt fully and leaves pieces behind, is called 'cinder' whereas, when it is fully burnt and
reduced to ash, is called 'fly ash'. Therefore, The ratio decided in the above said decision would
squarely apply in the case of 'fly ash' also since the product 'fly ash' also cannot be said to have
gone through any manufacturing process.
Notification No 89/95 CE - Waste arising out of exempted goods is exempted under Notification
No 89/95 CE - 'Electricity' has been specified in the First Schedule of the Central Excise Tariff
under heading 27160000, but it is not subjected to a duty of excise since under the 'rate column'
the duty of excise is indicated as 'nil'. Merely, rate of duty is mentioned 'nil', it cannot be
construed that it is non-excisable good. They were excisable goods. Nil rate of duty is also a
rate of duty. Therefore, electricity is excisable good and can be construed as exempted goods The exemption Notification No.89/95-CE would squarely applicable to the product 'fly ash',
which is a waste arise during the course of manufacture of electricity, which is an excisable
good chargeable to "nil" rate of duty.
Fly Ash Bricks dutiable - Fly ash does not itself get shaped as bricks unless some
manufacturing activity is involved. Since the raw material fly ash undergoes a change since an
operation performed on it, resulting into fly ash brick, such operation would certainly amount to
processing of the commodity and such commodity is recognized as a new and distinct article,
i.e. 'fly ash brick'. Therefore, the good 'fly ash brick', having satisfied the test of being
manufactured in India and also marketability, is leviable to excise duty.
Writ Petition partly allowed by setting the demand in respect of Fly Ash - Petition partly allowed :
MADRAS HIGH COURT
Vishnu & Co Pvt. Ltd Vs Superintendent Central Excise
CX - S.9/9AA of CEA, 1944 – Demand of duty set aside by CESTAT - Quashing of FIR sought since the petitioners have an alternate and efficacious remedy to seek discharge from trial court,
High Court not inclined to exercise its inherent jurisdiction under Section 482 of CrPC: HC Petitions disposed of : DELHI HIGH COURT
Aircel Ltd Vs CCE, C & ST
Central Excise - Pre-deposit - CENVAT Credit of duty paid on Tower parts and Shelters and
input services used for erection and installation of towers and shelters - Appeal against the
order of Tribunal directing the appellant to pre-deposit Rs 12 crores.
Held: Following the order of the High Court in appellant's own case, pre-deposit is modified to
Rs 10 crores, to be paid in three installments. - Appeal disposed of : MADRAS HIGH COURT
Castrol India Ltd Vs CCE
CX- CENVAT - Rule 2(l) of CCR, 2004 - Outdoor Catering Service - Eligibility - in view of LB
decision in GTC Industries Ltd. & appellants own case, credit is admissible - however, since
appellant have collected 3% of the total catering charges from their employees, CENVAT credit
is not permissible on the attributable amount - as copies of input services invoices have been
submitted by appellant from time to time along with monthly returns, extended period of
limitation is not applicable - demand hit by time bar, demand beyond one year of SCN is
dropped - interest payable on the quantified amount - penalty waived: CESTAT - Appeal partly
allowed : MUMBAI CESTAT
Ismt Ltd Vs CCE
CX - During the course of manufacture of Alloys and Non-alloy cast and rolls, slag arises which
is waste material and which is cleared without payment of duty - Revenue demanding amount of
10% of value of slag by invoking rule 6(3)(i) and (ii) of the CCR, 2004. Held: In terms of para 3.7
of Chapter 5 of the CBEC's Excise Manual of Supplementary Instructions, 2005, CENVAT credit
is admissible even in respect of input contained in any waste, refuse or by-product, therefore,
demand under rule 6(3) is not maintainable - Supreme Court in case of Hindustan Zinc Ltd. has
held that demand under rule 6(3)(i) is not sustainable in respect of any waste, by product, refuse
cleared without payment of duty - in view of settled legal position, Order set aside and appeal
allowed: CESTAT - Appeal allowed : MUMBAI CESTAT
CCE Vs Ispat Industries Ltd
CX - Valuation - s.4 of CEA, 1944 - Whether cost of transportation from factory to depot will be
includible in the value of goods during the period April 2002 to March 2003 - Commissioner (A)
allowed appeal keeping in view Tribunal's order dated 01.12.2003 wherein it was held that
respondent is not responsible to pay the cost of transport from the place of removal to the place
of delivery i.e. from the factory gate to the depot separately & in terms of Rule 5 of the Valuation
Rules, 2000, such a cost of transport which is also separately shown is not includable in the
valuation for the purpose of excise duty - Revenue in appeal. Held: Tribunal's order has been
upheld by the Supreme Court vide order dated 25.03.2015 - in view of the said decision,
Revenue appeal dismissed: CESTAT - Appeal dismissed : MUMBAI CESTAT
SEW Infrastructure Ltd Vs CCE & C
CX - Penalty imposed of Rs.2.94 crores on appellant under rule 25 of CER, 2002 - Appellant
submits that Tribunal has vide Final order dated 06.03.2014 allowed the appeal of the main
noticee against whom a demand of Rs.2.94 crores was made and equal amount of penalty was
imposed; that since the demand itself has not been sustained, no penalty can be imposed on
co-noticee. Held: Since duty demand on main appellant has been set aside, penalty on the
present appellant cannot survive - penalty set aside - appeal as well as stay petition are
allowed: CESTAT - Appeal allowed : MUMBAI CESTAT
Kovaai Silicates Vs CESTAT
Central Excise -Non prosecution - duty demand on Sodium Silicates cleared on job work basis
confirmed with interest and penalty in adjudication, upheld by Commissioner (Appeals) and
agitated before the Tribunal, who dismissed their appeal for non prosecution - impugned
Tribunal order agitated herein.
Held: considering the number of adjournments already granted in the case and the number of
occasions on which the case was adjourned at the instance of the appellant/assessee and
having regard to the different reasons, which were compelling in nature for which the
adjournment were sought for, the Tribunal ought not to have dismissed the appeal for nonprosecution and ought to have considered granting one more opportunity to the
appellant/assessee to prosecute its case - no reason to arrive at a conclusion that the assessee
was not interested in prosecuting the appeal, depriving the assessee of its right to prosecute the
appeal on merits - impugned order set aside and the matter is remanded back for fresh disposal
on merits and in accordance with law - The appellant/assessee is directed to co-operate with
the Tribunal for earlier disposal of the appeal, without seeking further adjournments - Matter
remanded : MADRAS HIGH COURT
CCE Vs Railway Equipment And Engg Works
CX - Classification - Whether Cast Iron Plates for Emery machinery manufactured by assessee
will be classified under CH 7325.10 of CETA, 1985 or under heading 8437.00 - Commissioner
(A), while holding classification of goods under 8437.00, has relied upon one report from
Superintendent of Central Excise, Range Mathura - From report reproduced in order of First
Appellate Authority, it is correctly held that goods were classifiable under heading 8437 - If
manufacturing unit is lying closed at moment then case of Revenue cannot be decided in their
favour because it is responsibility of Department to establish, with documentary evidence, that
claim made by manufacturing unit is not acceptable or that other finishing activities were
required to be done on cast iron plates for emery machinery - Appeal dismissed: CESTAT Appeal dismissed : ALLAHABAD CESTAT
CCE Vs Indorama Synthetics (I) Ltd
Central Excise - Valuation - Additional Consideration - transfer of the right to procure duty free
imported raw material is additional consideration, to be included in value: additional monetary
consideration, in addition to the price being paid for the goods, i.e. transfer of advance import
licence in favour of the seller by the buyer enabling the seller of the goods to effect duty free
import of the raw materials and bringing down the cost of production/procurement, is a
consideration, the monetary value of which has to be considered under the provisions of the
Rules, i.e. Rule 6 thereof. It needs to be emphasized at the cost of repetition that the resultant
effect of invalidating the advance licence by the buyer was issuance of licence for intermediate
supply in favour of the assessee and the said licence ensured certain benefits in favour of the
assessee. In the present case, on these facts, we have to simply see as to whether the
definition of 'transaction value', as contained in Section 4 of the Act read with Rule 6 of the
Rules, would encompass this benefit as amounting to additional consideration. It would come
within the ambit of additional consideration indirectly flowing from the buyers to the assessee.
Supreme Court Judgement in IFGL case affirmed, Mazagon Dock distinguished: In
Commissioner of Central Excise, Bhubaneswar - II v. IFGL Refractories Ltd., the Supreme Court
had held that in pursuance of the contract of sale, there is directly a flow of additional
consideration from the buyer to the seller. The value thereof has to be added to the price.
Though the Counsel sought a re-consideration of this judgement, the Supreme Court did not
agree. The Supreme Court distinguished the judgement in the case of Commissioner of Central
Excise, Bangalore v. Mazagon Dock Ltd., wherein it was held that subsidy given by the
Government need not be included in the assessable value. This judgement has no bearing on
the present matter. - Revenue Appeal allowed : SUPREME COURT OF INDIA
Bhuwalka Steel Industries Ltd Vs UoI
Central Excise - Hot Re-rolling Mills Annual Capacity Determination Rules, 1997 (ACP Rules
1997) - Demands adjudicated and agitated in appellate channel, culminating in a writ petition
praying inter alia for declaring Rule 5 of the ACP Rules 1997illegal, ultra virus and
unenforceable - Order passed by single bench upheld by Divisional bench and agitated before
the Apex Court, which disposed of a bunch of cases by remand to the respective High Courts The restoration was based on the observation in the Daoba Steel Mills case, that in all those
appeals, there is no challenge to the validity of Rule 5 of the 1997 Rules inserted vide
Notification dated 30-8-1997 and, therefore, the Court was required to interpret it and examine
the width of its application - The restored WP is disposed of herein.
Held: Order passed by the Court on 7.12.2005 indicates that the issue of constitutional validity
of Rule 5 was considered -judgment of the Single Judge came to be affirmed on re-appreciation
of contentions by Division Bench viewing that Rule 5 cannot be stated to be violative of Article
14 or ultra vires Section 3A; and that the differentia or classification, as alleged, have a rational
nexus with the object to be achieved by the law - it has been held by the Division Bench that
Rule 5 of the ACP Rules, 1997 is neither violative of Article 14 of the Constitution of India or
ultra vires of the provisions contained in Section 3A of the Central Excise Act, 1944 and thereby
dismissed the appeals - the co-ordinate Bench as well as Division Bench of the Court has dealt
extensively with regard to constitutional validity of Rule 5 of the ACP Rules, 1997 - question of
re examination of the said issue does not arise. - WP dismissed : KARNATAKA HIGH COURT
Shreematha Precision Components Vs CCE
Central Excise - Default in payment of duty - Rule 8(3A) of the Central Excise Rules, 2002 - In
WP 1438/2015 though the duty liability for the quarter ending March 2011 has been paid on
26.5.2011 and interest having been paid on 29.5.2012, it was held by the authorities that in
terms of sub-rule (3A) of Rule 8 of Central Excise Rules, 2002, petitioner has defaulted in
payment - In WP 13104/2015, the respondent authorities alleged that petitioner has failed to pay
the central excise duty on the goods cleared during the said month and same had been paid
belatedly thereby, petitioner has committed default by contravening the provisions of Rule 8(3)
of the Central Excise Rules, 2002 - recovery notices under Sec 11 issued, agitated in the WPs
herein.
Held: Under Rule 8(3A), in the event of assessee committing default in payment of duty beyond
30 days from the due date as prescribed under sub-rule (1), then notwithstanding anything
contained in sub-rule (1) or sub-rule (4) of Rule 3 of CENVAT Credit Rules, 2004, such
assessee would be required to pay excise duty for each consignment at the time of removal,
without utilizing the CENVAT credit till the date the assessee pays the amount including the
interest thereon; otherwise, such clearance would be deemed as one cleared without payment
of duty and the consequence of penalties as prescribed under the Rules would follow - A bare
reading of Rule 14 would indicate that where the assessee has taken or utilized wrongly or has
been erroneously refunded the CENVAT credit, then authorities would be entitled to recover the
same from the manufacturer or the provider of the output service and provisions of Sections
11A and 11AB of Central Excise Act or Sections 73 and 75 of the Finance Act would apply
mutatis mutandis for effecting such recoveries - Thus, before initiating recovery proceedings, it
would be incumbent upon the authorities to issue notice to the petitioners under Section 11A of
the Act for having either utilized the CENVAT credit wrongly for bringing such action within the
scope of sub-rule (3A) or to construe such transaction as having cleared the goods without
payment of duty or in other words, such belated utilization of CENVAT credit for payment of
central excise duty to be construed as one in contravention of sub-rule (3A) of Rule 8 - The
audialterempartem principle would be squarely applicable in case of such recoveries and
particularly, when it is alleged that CENVAT credit has been utilized beyond the prescribed
period - impugned notices cannot be sustained as it is contrary to Rule 14 of CENVAT Credit
Rules, 2004, and in violation of natural justice - recovery notices and demand notices quashed respondent permitted to initiate proceedings under the Act read with Rule 14 of Cenvat Credit
Rules, 2004. - WPs allowed : KARNATAKA HIGH COURT
S L Industries Vs CCE & ST
Central Excise - Relied upon documents - Petitioner firm engaged in manufacture of plastic
articles - offence case booked and notice issued, proposing duty demand with interest and
penalty - notice pending adjudication; WP filed, seeking direction to respondent to furnish copies
of documents relied upon in raising the demand proposals, to enable them defend their position
prior to adjudication.
Held: petitioners have sought for copy of entire order sheet, office notes, copies of summons
issued to various constituents of petitioners and documents referred to in the seizure order and
also information contained in CPU of VIP make computer with CD - documents referred to in the
show cause notices in question, including seizure mahazar has been furnished to petitioners in
three volumes - the documents which are now sought for by petitioners in their respective
representations have not been relied upon in the show cause notices - question of issuing any
writ of mandamus to respondent to furnish copies of documents to petitioners, as sought for in
the respective representations, does not arise - It is not the case of petitioners that documents
which are indicated in the show cause notices have not been furnished to petitioners; or that the
same has been relied upon by the respondent - WPs devoid of merit - Petitions dismissed :
KARNATAKA HIGH COURT
Bhushan Steel Ltd Vs CCE
CENVAT - Since pipes are sold on basis of length, end cuttings which are not saleable are sent
under cover of duty paid invoices by registered depots to Sahibabad unit for manufacture of
ingots - credit is availed on the duty suffered on value varying from Rs.36/- to Rs.42/- per kg Contention of department is that as invoices issued of end cuttings mention value as Rs.15/- per
kg, credit is to be restricted only to the duty payable on said value - Demand of Rs.1.20 crores
confirmed. Held: Stand of the Department is not correct in view of the Apex court's judgment in
the case of Commissioner of Central Excise & Customs vs. MDS Switchgear Ltd., wherein it has
been held that the receiver manufacturer who had received the duty paid inputs from a suppliermanufacturer is entitled to Cenvat credit of the duty paid by the supplier manufacturer and the
CEx Authorities having jurisdiction over the recipient manufacturer cannot review the
assessment of the duty at the end of the supplier manufacturer - Demand of Credit is without
any basis - CENVAT Credit of duty paid on Welding Electrodes as well as CI Slog Pot is also
admissible - Appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
Purab Printers Vs CCE
CX - Clause 4(e) of Notfn. 8/2003-CE - Appellant manufacturing and supplying self adhesive
labels - Benefit of SSI sought to be denied on the ground that they are branded goods and not
covered by clause 4(e). Held: Intention of government is to grant the benefit of SSI exemption to
goods, namely, packing material, containers, metal labels etc. which may carry brand name of
customers - stated policy is clearly not to consider these labels manufactured by one person
themselves as having any connection in the course of trade with the goods manufactured by
customer for whom labels are made - Oxford dictionary describes a sticker as "an adhesive
label or notice" - no reason not to consider a label as sticker especially in view of the fact that
metal labels are also mentioned in clause 4(e) - an interpretation to the effect that stickers would
mean only gummed labels is not borne by sound reasoning - labels are eligible for exemption in
terms of notification 8/2003-CE as amended by 47/2007-CE - order set aside and appeal
allowed: CESTAT - Appeal allowed : MUMBAI CESTAT
CUSTOMS
Indian Acrylics Ltd Vs CC
Cus - At the time of import of goods, the DEPB scrips were not found forged - there is no
dispute that the Importer imported the goods on the basis of the documents, which were valid at
the time of importation and therefore, such document is valid, till it is not set-aside, extended
period cannot be invoked - demand barred by limitation - Penalties on Supdt. CE & CHA also
set aside in view of earlier order of Tribunal in their own case - as the exporter and its Director
had committed the fraudulent activities by manipulating the Let export order and Bill of Lading,
they were the actual beneficiary and, therefore, imposition of penalty on the Exporter and its
Director are justified, legal and proper: CESTAT - Appeals partly allowed : AHMEDABAD
CESTAT
Able Shipping Agencies (I) Pvt. Ltd Vs CC
Cus - Issue is regarding denial of draw-back and dismissal of appeals by the first appellate
authority - As per first proviso to section 129A(a) of the Customs Act, 1962 appeal lies to
Government of India and not before Tribunal - Appeals disposed of as not maintainable:
CESTAT - Appeals disposed of : MUMBAI CESTAT
CC Vs Dozco (India) Pvt. Ltd
Customs - Refund claim of Special Additional Duty (SAD) - Limitation applicability - SAD refund
claim filed beyond one year relating to the period prior to the date of issue of amending
Notification No. 93/2008 dated 1.8.2008 - Following Delhi High Court ruling in Sony India Pvt.
Ltd, held is not barred by limitation - Revenue appeal has no merit hence was rejected. Revenue appeal rejected : BANGALORE CESTAT
CC Vs Pioneer Power Corporation Ltd
Customs - Refund - respondents are registered for import of capital goods under project import
and made a cash security deposit at the time of registration of the project - On finalisation of
project imports, the adjudicating authority sanctioned the refund, which was credited to the
Consumer Welfare Fund by holding that it attracts bar of unjust enrichment - Commissioner
(Appeals) has allowed the appeal with consequential relief, agitated by Revenue herein.
Held:Board's circular dated 09.08.95 stipulates the requirement of cash security deposit of 2%
when registering the project - Revenue's only contention is that the cash security deposit made
by the respondent under project imports is nothing but customs duty and pleaded the bar of
unjust enrichment is applicable - case law relied upon by Revenue distinguished - Madras High
Court examined identical issue in Cable Corporation case and held that the bar of unjust
enrichment is inapplicable to security deposit - ratio squarely applicable to the instant dispute appellants are eligible for refund of cash security deposit and there is no infirmity in the order of
the Commissioner (Appeals) which is upheld - Appeal rejected : CHENNAI CESTAT
Commissioner of Customs Air Port and Air Cargo Complex Vs Pfizer Products India Pvt.
Ltd
Customs - Interest on delayed refund under Section 27A of the Customs Act, 1962 - Revenue in
appeal against the order of Tribunal granting interest after expiry of three months from the date
of claim - Contention of revenue is that interest is payable only after expiry of three months from
the date of Supreme Court order in favour of the assessee.
Held: From plain reading of Section 27A, it is clear, that interest would be payable if the amount
is not refunded within three months from the date of the application. The rate of interest would
vary from 5% to 30% per annum, as may be fixed by the Central Government by Notification
from time to time. Explanation immediately after the proviso in the said Section only means that
the liability to pay the amount would arise after the order of refund of the amount is finalized,
either in appeal or by the Commissioner, Tribunal or the Court, but such liability would be from
three months after the date of application. The same cannot be interpreted that the liability to
pay interest would be from the date of the order of the Tribunal or the Court, which may be
passed in appeal.
While considering a similar case under the Central Excise Act, the Apex Court in Ranbaxy
Laboratories Ltd., has interpreted under Section 11BB as well as the Explanation of the said
Section in the same manner as has been held by the Tribunal. The provisions of Section 11BB
of the Central Excise Act, 1944 and Section 27A of the Customs Act are parimateria.
No substantial question of law arises in this appeal for determination - Appeal dismissed Appellant directed that besides the payment of interest from 24.03.1999 (which is three months
after the date of application for refund of customs duty filed by the respondent) till the actual
date of the payment, which shall be at such rates notified from time to time, the appellant shall
further be liable to pay additional interest at the rate of 9% per annum (besides the notified
interest) on the amount which is found liable for payment as on 13.04.2011, till its actual
payment - Appeal Dismissed : KARNATAKA HIGH COURT
Microsoft India (R & D) Pvt. Ltd Vs CC & CE
Customs - Duty exemption availed without fulfilling conditions stipulated in Notification No.
52/2003-Ownership of subsidiary is a condition precedent for sharing of assets - Holding
company merely having effective control over subsidiary does not per se amount to ownership
of holding company over the subsidiary - Sharing of common facilities/assets constitutes breach
of conditions stipulated in Notification No.52/2003 - Confirmation of the duty demand on the
appellant is thus unassailable and warrants no appellate interference - Duty on the valuation
must reckonfrom the date of commencement of sharing of the assets - Impugned order suffers
from no infirmity and requires no interference - Assessee appeal has no merits hence is
dismissed. - Assessee appeal dismissed : HYDERABAD CESTAT
Paramount Exports Vs CC
Cus - Appellant filed Shipping Bill for export of tobacco product - In view of CBEC letter dated
30.08.2011 tobacco product in plastic pouches were no longer permissible for export, goods
held liable for absolute confiscation and exporter held liable for penalty on the ground that
goods have been entered for exportation in contravention of the provisions of Plastic Waste
(Management and Handling) Rules, 2011 - appeal to CESTAT.
Held : Supreme Court in the case of Baba Global Ltd. had directed that the petitioner 100%
EOU will be exempted from the operation of the Rules, 2011 - issue is, therefore, no longer res
integra - in view of the amendment in the mode of packing made by the MoEF vide notification
dated 2.7.2011, there was confusion as to the applicability and subsequent clarification by the
apex court - held that there was no contumacious conduct on part of the appellant in carting the
tobacco product for export packed in plastic sachet - order of confiscation and penalty set aside
- appeal shall be entitled to take the goods back to town if the same are still in good condition
and usable - appellant will also be entitled to refund of fine and penalty already deposited in
pursuance of order of lower authority along with interest - Appeal allowed: CESTAT - Appeal
allowed : MUMBAI CESTAT
Zile Singh Vs State Of Haryana
NDPS -Based on intelligence that appellant Zile Singh was habitual seller ofcharas and was
present near the watercourse, a police party apprehended him in the presence of a civil gazette
officer and detected 500g of charas in his pocket - the material was seized; sample sent to
forensic lab confirmed it to be charas - After completion of required formalities and finding a
prima facie case for the offence punishable under Section 20(b) of NDPS Act, the appellant was
charge-sheeted; statement under Section 313 CrPC recorded; to which he pleaded not guilty
and claimed trial-contentions that (i) the prosecution case suffers from material discrepancies;(ii)
SI Ram Chander being complainant, was not entitled to investigate the case;(iii) no independent
witness was joined during investigation of the case; and(iv) the provisions of Section 50 NDPS
Act were not complied and the offer of search given to the appellant suffered from material
discrepancy to the effect that he was not apprised to get himself searched before a Magistrate;
discarded by trail Court - appellant convicted for the offence punishable under Section 20(b) of
Narcotic Drugs and Psychotropic Substances Act, 1985; sentenced to undergo rigorous
imprisonment for five years; pay a fine of `40,000, and in default thereof, to undergo further
imprisonment for a period of two years - Trial Court ruling is agitated herein. - Appeal allowed :
PUNJAB AND HARYANA HIGH COURT
Senior Intelligence Officer Vs K P Karunamoorthy
Customs - EPCG Scheme - Export Obligation Discharge Certificates obtained by fraudulent
methods - Petition filed by the department against the anticipatory bail granted by the Principal
District and Sessions Judge.
Held: The dictum laid down by the Supreme Court would clearly show that once anticipatory bail
is granted, the same cannot be cancelled in a mechanical manner. Only if there is any abuse of
concession granted to the accused, then only the court can cancel the anticipatory bail. In the
instant case, even according to the revenue, it is not the case of the petitioner that the
respondent is abusing the concession granted to him. On the other hand, it is the submission is
that the reasons assigned by the Court below for granting anticipatory bail to the respondent are
factually incorrect. The said submission will not serve as a ground for cancellation of
anticipatory bail granted to the respondent - Petitioner has not made out any case to cancel the
anticipatory bail.- Petition dismissed : MADRAS HIGH COURT
Parisons Agrotech (P) Ltd Vs UoI
FTP - ban of import of palm oil through the ports of Kerala, in public interest - upheld: It is more
than abundantly clear that the restriction is imposed keeping in view the welfare of 35 lakhs
farmers in the State of Kerala. Matter was examined at the highest level.
The Government had two alternatives before it, either to increase the custom duty i.e. duty on
the import of crude oil or to issue impugned Notification. Enhancing the import duty would have
all India ramification, whereas the problem was Kerala specific. Therefore, instant step was
taken. When a particular decision is taken in the interest of the said farmers which are
marginalized section of the society, more so for their survival, this policy decision of the Central
Government provides a complete rational in support of the decision having nexus with the
objective sought to be achieved - Appeals Dismissed : SUPREME COURT OF INDIA
DVR Freight Forwarders Pvt. Ltd Vs CC
Customs - Customs Broker Licensing Regulations, 2013 (CBLR 2013) - Appellant acted as
Customs Broker in the import of PVC Flex Banners - DRI investigation revealed that the
importers misdeclared the country of origin to evade anti dumping duty and it was alleged that
the petitioner was involved in the evasion - CHA License suspended under Regulation 19(1) of
CBLR 2013, suspension continued under Regulation 19(2) ibidem with a notice proposing
revocation under Regulation 18 ibidem - impugned order was passed, revoking the licence of
the petitioner and ordering forfeiture of the amount of security deposit made by the petitioner;
agitated herein.
Held: After issuance of the show cause notice, the petitioner had submitted their reply;
participated in the enquiry on completion of which, the petitioner was given opportunity to file
their reply; the petitioner filed the reply, duly considered by the first respondent who passed the
impugned order revoking the license - having replied to the show cause notice and to the report
of the Enquiry Officer and having participated in the enquiry, it is not appropriate for the
petitioner to raise objections regarding the show cause notice that too after the impugned order
was passed and in fact, the show cause notice got merged with the impugned order - The
impugned order in the instant case has been passed by the Commissioner of Customs (Imports)
in exercise of his power under the Customs Brokers Licensing Regulations, 2013 which are
framed under Article 146(2) of the Customs Act, 1962 - Regulation 21 provides that a Customs
Broker who is aggrieved by any order passed by the Commissioner of Customs under the said
regulations may prefer an appeal under Section 129-A of the Customs Act to the Customs,
Central Excise and Service Tax Appellate Tribunal, which is an efficacious alternative remedy
available to an aggrieved broker
The writ Court is averse to interfere with the acts and actions of the statutory authorities unless
those are beyond jurisdiction or in excess of jurisdiction; and unless those ingredients are
present, the Writ Court will be slow to interfere in the matter - In the present case, the first
respondent has not acted contrary to the principles of natural justice or beyond his jurisdiction,
meriting interfere with the impugned order -Apex Court in the ‘Titaghur Paper Mills Co.Ltd.
versus State of Orissa', and ‘Whirlpool Corporation versus Registrar of Trade Marks' heldin
essence that where right or liability is created by a statute which gives a special remedy for
enforcing it, the remedy provided by that statute must be availed of- in view of existence of
alternate statutory appellate remedy in the instant case, Court disinclined to exercise its
extraordinary power under Article 226 of the Constitution of India - Petitioner free to agitate the
revocation of license before jurisdictional bench of Tribunal within six weeks of receipt of this
order; Tribunal directed to entertain it without examining limitation. - WP dismissed : MADRAS
HIGH COURT
Madan Lalwani Vs CC
Cus - Pre-deposit - Board Circular 984 dated 16/09/2014 applies to appeals filed after the
amendment of section 129E of the Custom Act on 6.8.2014 - Tribunal is not inclined to review
own Order: CESTAT - Application dismissed : MUMBAI CESTAT