RECENT UPDATES IN DIRECT & INDIRECT TAXES AND IN OTHER AREAS OF
PROFESSIONAL INTEREST – 14th July, 2015
CA Gopal Kumar Kedia
G. K. Kedia & Co.
Chartered Accountants
Email : mail@gkkedia.com
INCOME TAX
CIT Vs Vijay Solvex Ltd
Whether when similar view has already been taken by the High Court on the identical question
of law, there is no reason to deviate with the findings and question of law answered in case no
distinguishing facts have been brought on record - YES: HC - Revenue's appeal dismissed :
RAJASTHAN HIGH COURT
CIT Vs Saraf Carpet and Textile
Whether if the facts of a case are similar with that of a High Court decision which was directly
based on a Supreme Court ruling given in the favour of assessee, in no change of
circumstances can the department argue otherwise - NO: HC - Revenue's appeal dismissed :
RAJASTHAN HIGH COURT
CIT Vs Balarampur Chini Mills Ltd
Whether when the revised return filed by the assessee u/s 139 includes an expenditure
disallowable u/s 37(1), it would automatically follow that inaccurate particulars had been
furnished in the originally filed return - YES: HC
Whether furnishing of such inaccurate particulars coupled with absence of satisfactory
explanation, would per se make the assessee liable to pay penalty u/s 271(1)(c) - YES: HC
Whether concealment of income in such case shall be presumed, if the assessment leads to
addition or disallowance of any amount in computing his total income - YES: HC
Whether mens rea, during present time, is a prerequisite for imposition of penalty u/s 271(1)(c) NO: HC - Revenue's appeal allowed : CALCUTTA HIGH COURT
ITO Vs Aishwarya Art Creations Pvt Ltd
Whether the purchase and sale of telecast rights does not involve any payment of royalty,
therefore the assessee is not liable to deduct TDS under 194J - YES: ITAT
Whether penalty levied u/s. 271C on such circumstances can be sustained - NO: ITAT Revenue's appeal dismissed : HYDERABAD ITAT
State Bank of Bikaner And Jaipur Vs ITO
Whether order passed without specifying a date of hearing and informing the same by issue of
notice to assessee is bad in law - YES: ITAT - Case Remanded : DELHI ITAT
Kartik Mehra Vs DCIT
Whether where the penalty proceedings are initiated on charge of concealment, then penalty
cannot be levied on the charge of furnishing of inaccurate particulars of income and vice versa YES: ITAT
Whether penalty u/s 271(1)(c) can be sustained, in absence of any satisfaction in the penalty
order regarding concealment of particulars of income or furnishing of inaccurate particulars of
income on the part of assessee - NO: ITAT - Assessee's Appeal Allowed: KOLKATA ITAT
Karnataka Forest Development Corporation Ltd Vs ITO
Whether the assessee can be considered as the one in default u/s 206C(6D) or liable for
interest u/s 206(7) when there was delay in filing declaration in Form 27C as prescribed in Rule
37 - NO: ITAT - Assessee's Appeal Allowed: BANGALORE ITAT
District Health and Family Welfare Society Vs ACIT
Whether when an assessee society is a wholly/substantially funded by the Government of
India/State Govt., then such assessee is entitled for exemption u/s. 10(23C)(iiiac) - YES: ITAT Assessee's appeal allowed : PANAJI ITAT
Bhavesh I Gandhi Vs ITO
Whether when the assessee has not given any substantial evidence in support of deposit made
in his bank accounts, the Revenue official can make addition in assessee's income as
unexplained income on the basis of peak credit - YES: ITAT
Whether without verification of books of accounts produced by assessee and bringing any
material on record, AO was justified in rejecting the books of accounts of the assessee as an
afterthought - NO: ITAT - Case remanded : AHMEDABAD ITAT
Dr Jasleen Kaur Vs CIT
Whether when the remand report of AO himself has stated that before him the assessee was
unable to adduce all the necessary facts due to shortage of time, should it be granted an
additional opportunity of being heard - YES: HC - Case remanded : PUNJAB AND HARYANA
HIGH COURT
CIT Vs Parminder Singh
Whether if the Tribunal has made some addition in assessee's income after properly analysing
the facts and circumstances, is it justified on the part of Revenue to reagitate the same issues
before the High Court - NO: HC - Revenue's appeal dismissed : PUNJAB AND HARYANA
HIGH COURT
ITO Vs Neelkanth Finbuild Ltd
Whether once the identity of the shareholder has been established, even if there is a case of
bogus share capital, it cannot be added in the hands of company unless any adverse evidence
is not on record. - Revenue’s appeal dismissed : DELHI ITAT
SPS Steel and Power Ltd Vs ACIT
Whether penalty u/s 271AAA can be levied where AO has accepted the disclosure made by
assessee and AO also admitted that assessee filed a detailed working of disclosure with cash
flow statement which was verified and AO has not disputed that the amount was admitted as
undisclosed income in the statement u/s 132(4) of the Act and duly included the same as
undisclosed income in the return of income and also paid taxes - Whether penalty u/s 271AAA
can be levied merely on the admission of the assessee where the additions of cash expenses
and payments was the result of cash available out of the disclosed cash and assessee had
furnished explanation of the above entries added by the AO during the course of scrutiny
proceedings and even in penalty proceedings and there was no conclusive evidence before the
AO that entry made in the seized documents, represents undisclosed income of the assessee A
search and seizure operation u/s 132 of the Act was conducted on the business and residential
premises of SPS Group of cases. During the course of search, one of the Directors of assessee,
disclosed an income which was explained by assessee by filing detailed working and manner of
earning of the above income. - Assessee’s appeal allowed; Revenue’s appeal dismissed :
KOLKATA ITAT
DCIT Vs Vijay Samraj Hotels Pvt. Ltd
Whether unless there is failure on the part of the assessee to disclose fully and truly all the
material facts necessary for the assessment of its income, the assessment completed u/s
143(3) cannot be reopened - YES: ITAT - Revenue's appeal dismissed : BANGALORE ITAT
ITO Vs Delcia Food (India) Pvt. Ltd
Whether the instruction issued by CBDT is applicable for pending cases also - YES: ITAT
Whether when tax effect in assessee's case pending before the CIT(A) is less than the minimum
limit prescribed for not filing the appeal, it is still possible for the Revenue to file an appeal
before the Tribunal - NO: ITAT - Revenue's appeal dismissed : DELHI ITAT
Bhupinder Kumar Chug Vs ITO
Whether when the assessee was not available at his residential address after repeated visits by
the Notice Server, the notice served by the assessing officer by passed order under Rule 20 of
order V of the C.P.C 1908 is a valid notice - Whether when the assessee could not establish as
to what was the relationship between donor and appellant and what was the occasion on which
gift was alleged to have been given, the gift is correctly considered as bogus gift. - Assessee's
appeal dismissed : DELHI ITAT
CIT Vs CNV Textiles Pvt. Ltd
Whether once the losses and other deduction have been set off against the income of the
previous year, it shall not be reopened again for the purpose of computation of current year
income under Section 80I or 80IA and the assessee shall not be denied the admissible
deduction under Section 80IA - YES: HC
Whether loss in the year earlier to the initial assessment year already absorbed against the
profit of other business cannot be notionally brought forward and set off against the profits of the
eligible business, as no such mandate is provided in section 80-IA(5) - YES: HC - Revenue's
appeal dismissed : MADRAS HIGH COURT
CIT Vs Savitridevi Ringshia
Whether the extra amount received by the assessee during the proceedings of an interim order
accrue to the assessee as its income until the finalization of the dispute - NO: HC - Revenue's
appeal dismissed : BOMBAY HIGH COURT
CIT Vs Hindustan Organics Chemicals Ltd
Whether the appeals filed by revenue before the High Court mechanically without application of
mind in respect of matters which are already concluded by various decisions of the High Court
and accepted or earlier orders of the Tribunal which are accepted by the revenue, has to be
entertained - NO: HC - Revenue's appeal dismissed : BOMBAY HIGH COURT
CIT Vs Filtrex Technologies P Ltd
Whether penalty u/s 271(1)(c) attracts automatic levy, in case any addition/disallowance is
sustained by the appellate authorities - NO: ITAT
Whether where the assessee has acted upon the certification wherein the Chartered Accountant
has not reported any violation by the assessee which would attract disallowance u/s 40(a)(ia),
no penalty can be levied u/s 271(1)(c) by infering concealment of income - YES: ITAT Revenue's appeal dismissed : KARNATAKA HIGH COURT
CIT Vs HMA Data Systems Pvt. Ltd
Whether when the contention of the Revenue that assessee has been in the business of
purchase and sale of shares, has been debiting the P & L A/c with increase or decrease in the
value of shares is not in conformity of the facts of the case, the amount on sale of shares held
as investment can be considered as business income - NO: HC
Whether if the assessee has not discharged the burden cast on it by furnishing the details of
travel made, the order of AO as affirmed by the lower appellate authorities cannot be found fault
with - YES: HC
Whether in the absence of any commercial expediency of incurring certain expenditure as
technical support charges, the disallowance can be warranted - YES: HC - Revenue's appeal
dismissed : KARNATAKA HIGH COURT
DDIT Vs Naroda Enviro Project Ltd
Whether reopening of assessment u/s 147 merely on the basis of audit objection is permissible NO: ITAT - Revenue's appeal dismissed : AHMEDABAD ITAT
Ashish Chaudhary Vs ITO
Whether when the shares were purchased for investment motive, held as investment in the
books of account, purchased by owned funds, transactions were delivery based and were held
for longer period, the gain arising on the sale of these shares cannot be termed as business
income but has to be accepted as capital gain. - Assessee's appeal allowed : DELHI ITAT
Sagittarians International Ltd Vs DCIT
Whether if the assessee is not carrying out business activity in the current year, can he be
allowed deduction u/s 37(1) in respect of the expenditure incurred in the past years - NO: ITAT Assessee's appeal dismissed : KOLKATA ITAT
Abhilash Software and Development Centre Vs ITO
Whether when the CIT(A) changes the head of income and if such change of head of income
results in enhancement of income and consequently enhancement of tax, then the CIT(A) has to
issue a notice u/s 251(1) before bringing it to tax. - Case remanded : BANGALORE CESTAT
Shri Basant Bansal Vs ACIT
Whether the disclosure can be said to be voluntary or given under coercive circumstances
where assessee's DDs. of huge amounts were retrained by the department and pressure was
built on assessee for disclosure since no incriminating material was found during search Whether search proceedings and assessment can be based solely on the basis of disclosure
which is involuntary - Whether addition can be made in a search assessment u/s 153A where
neither any worthwhile incriminating material, information, and evidence was discovered as a
result of impugned multiple search operations nor the additions sustained are based on any
such material. - Assessee's appeals allowed : JAIPUR ITAT
Hindustan Unilever Ltd Vs DCIT
Whether when there is no demand outstanding/payable for a concerned A.Y, there will be no
occasion to adjust any part of the refund due to the assessee for subsequent A.Y to meet a non
existing demand for previous A.Y - YES: HC
Whether an order passed by an officer superior to the AO granting stay would always be binding
upon the AO - YES: HC
Whether where a stay is granted u/s 220(6), in view of pending appeal before the CIT(A), then
such an assessee would not be treated in default even after the expiring of the period of 30
days - YES:HC
Whether where the AO has rejected assessee's contention at the time of making TP
adjustment, he is required to inform the assessee as to why assessee's objections are not
sustainable, before exercising power u/s 245 - YES: HC
Whether where an assessee is not an assessee in default u/s 220 till such time as its appeals
are decided, there is no occasion to charge interest at such stage u/s 220(2) - YES: HC Assessee's appeal allowed : BOMBAY HIGH COURT
Beacon Projects Pvt. Ltd Vs CIT
Whether when the assessee, on cancellation of purchase of flats, refunds the sum with a part of
the excess amount collected from new purchaser, such excess payment is to be construed as
interest, liable to TDS u/s 194A - NO: HC
Whether such payment made by the assessee to the purchaser, one in discharge of any preexisting obligation can be termed as interest as defined in section 2(28A) - NO: HC
Whether section 2(28A) is not attracted to every payment made and that the provision can be
attracted only in cases where there is debtor-creditor relationship and that payments are made
in discharge of a pre-existing obligation - YES: HC - Assessee's appeal allowed : KERALA
HIGH COURT
ACIT Vs Shri S Ganesh
Whether when an issue is finally settled by the Higher/appellate authority and the findings have
become final, the AO has to mandatorily give effect to the order of the appellate authority by the
decision of which, the issue has been finally settled - YES: ITAT
Whether the refusal or failure to comply the order of the higher/appellate authority by the lower
authority amounts to contempt of court which may invite penal action under the Contempt of
courts Act as well under the other relevant provisions of Code of Criminal Procedure- YES: ITAT
Whether such disregard and disobedience of the orders of the higher judicial authorities in
hierarchy amounts to the gross abuse of process of law - YES: ITAT - Revenue's appeal
dismissed : MUMBAI ITAT
ITO Vs Department of Tourism
Whether if according to terms of the contract, the contractor is permitted to retain sale proceeds
received by selling the scrap and such sale proceeds was to be ultimately adjusted against the
bid amount due and payable by the Assessee to such contractor, liability of TDS arises in this
case - YES: ITAT - Revenue's appeal allowed : PANAJI ITAT
ITO Vs Mr Filipe Neri Piedade Correia
Whether when neither the Assessee's valuation report nor the Department's valuation report
was before the Tribunal to make a comparison as to which valuation was correct, it is
appropriate to remand such case - YES: ITAT - Case remanded : PANAJI ITAT
ACIT Vs Hero Honda Motors Ltd
Whether royalty and technical guidance fee paid is allowable as revenue expenditure - Whether
the expenditure on purchase of software, which were used in day to day operation and conduct
of assessee's business, is revenue expenditure - Whether AO correctly reduced the claim
excluding 90% of amount received under DEPB scheme from profits of business by treating the
same as 'other receipts' in terms of clause (baa) of Explanation to section 80HHC of the Act. Assessee's appeal partly allowed : DELHI ITAT
DCIT Vs Pnb Housing Finance Ltd
Whether the finance charges and interest paid on loans obtained by the assessee for making
investment in shares is deductible u/s 57(iii) in computing 'Income from other sources' - Whether
deduction of interest paid on loans is allowable u/s 57(iii)where there is no discussion as to the
nexus of investment in bonds with the interest bearing or interest free bonds and the AO had
gone with the figures of the current year to hold that interest bearing advances were more than
the interest bearing loans. - Case remanded : DELHI ITAT
ITO Vs K-Ites (P) Ltd
Whether the Assessee can be considered eligible for exemption u/s 10A when the assessee
has purchased machines after approval of STPI, Computers and stentura machines were
imported thereafter and the return of income was filed duly accompanied by audit report and
report in Form No.56F - Whether assessee is entitled for depreciation as the machinery was
kept ready for use during the entire previous year and the assessee could not get orders. Revenue's Appeal dismissed : CHENNAI ITAT
ITO Vs Shri Rajpal Singh Shekahawat
Whether if uniform amount is deposited by the assessee in its bank account, for which no
written submission is available with him, the total of such cash deposits can be considered as
unexplained income of the assessee - NO: ITAT
Whether in such a case theory of peak credit can be applied by the Revenue authorities - YES:
ITAT
Whether when the Revenue authority has disallowed certain portion of expenditure incurred by
the assessee on estimate basis as the assessee was not maintaining regular books of
accounts, such order warrants any interference by the higher authorities - NO: ITAT - Revenue's
appeal dismissed : AHMEDABAD ITAT
ACIT Vs South Suburban Clinic Pvt Ltd
Whether monetary limits for filing of appeal before ITAT as per circular no. 5/2014 dated
10.07.2014 are applicable to all pending appeals even if the appeals were filed before the date
of circular. - Revenue's appeal dismissed : KOLKATA ITAT
V V Constructions Vs ACIT
Whether when the defects as pointed out by the AO are trivial in nature which do not call for
rejection of the book results, the rejection of books of account is not sustainable. - Assessee's
appeal is allowed : PUNE ITAT
DCIT Vs Scooters India Ltd
Whether on the facts and in the circumstances of the case, CIT(A) was not justified in
confirming the disallowance under Prior Period Adjustment without understanding the concept
and policy followed by the assessee in preparing the account and without realizing the fact that
the expenses got crystallized during the year. - Assessee's appeal partly allowed : LUCKNOW
ITAT
ITO Vs Srinilaya A R Projects
Whether there is no justification in making a further addition which will give an unusual higher
net profit rate of 34%, when there is a clear down-fall in the sales of the assessee and net profit
of 9% is declared by the assessee on the entire sales for the year - YES: ITAT - Revenue's
appeal partly allowed : HYDERABAD ITAT
CIT Vs Arvind Remedies Ltd
Whether when the assessee could not claim a particular benefit in respect of two heads
properly, this could be a ground for the Revenue to initiate reassessment proceeding u/s 147 NO: HC
Whether when it is clear from the order of the Tribunal that it was failure on the part of AO to
consider the material, the assessee had placed all the materials before AO during the regular
assessment, the Proviso to Section 147 can get attracted - YES: HC - Revenue's appeal
dismissed : MADRAS HIGH COURT
CIT Vs Vishishth Chay Vyapar Ltd
Whether when the assessee mainly provided a link between the companies floated by an entry
provider and no sum was paid for purchase of untraded shares, such sale and purchase is to be
construed as sham - YES: HC - Revenue’s appeal allowed : DELHI HIGH COURT
CIT Vs Shri J M Joshi
Whether interest income earned by the assessee on fixed deposits with the bank and other
interest income is eligible for deduction u/s. 80IA - YES: HC - Revenue's appeal dismissed :
BOMBAY HIGH COURT
Smt Sumanlata Bansal Vs ACIT
Whether provisions of section 153A of the Act, mandates issuance of notice u/s 143(2) of the
Act - NO: ITAT - Assessee's appeal dismissed : MUMBAI ITAT
Satellite Cable T V Network Pvt. Ltd Vs ITO
Whether merely the common shareholding of the borrower and lender company can be a
ground to attract the provisions of deemed dividend u/s 2(22)(e) - NO: ITAT – Assessee's
appeal allowed : MUMBAI ITAT
Birla Sunlife Insurance Company Ltd Vs JCIT
Whether 'income' including 'loss', the loss of the pension fund has to be excluded in determining
the business income under Chapter IV-D, i.e., in terms of section 44 - YES: ITAT - Assessee's
appeal allowed : MUMBAI ITAT
SC Johnson Products Pvt Ltd Vs DCIT
Whether if the assessee as per the approval granted by the jurisdictional High court, got
amalgamated, the assessment order passed in the name of non existing assessee has
precedence value - NO: ITAT - Assessee's appeal allowed : DELHI ITAT
Applitech Solution Ltd Vs DCIT
Whether a non-speaking order passed by the AO while giving effect to the order of the CIT(A) is
sustainable in law - Whether the order passed by the AO under sec. 254/154 charging interest
under sec. 234B upto the date of the orders passed by him in consequence of the order of the
Tribunal is justified. - Assessee's Appeal Partly Allowed : AHMEDABAD ITAT
ACIT Vs Soma Textiles And Industries Ltd
Whether AO is entitled to alter the profit and loss account prepared by the assessee under the
provisions of the Companies Act while arriving at book profits under section 115JA of the Act Whether deduction under section 80HHC of the Act for the purpose of deduction under section
115JB(2)(iv) has to be allowed on the basis of adjusted book profits and not on the basis of the
profit computed under the regular provisions of law applicable to the computation of profits and
gains of business or profession. - Case remanded : AHMEDABAD ITAT
SERVICE TAX
CST Vs United Spirits Ltd
Service Tax - Sponsorship of IPL cricket teams - Revenue's appeal against order of the Tribunal
setting aside the demand on the ground that the services relate to sporting event.
Held: Dispute relates to service tax payable on any service/taxable service - High Court has no
jurisdiction under Section 35G - Appeal dismissed as not maintainable - Appeal dismissed :
KARNATAKA HIGH COURT
Rasi Travels and Cargo Pvt. Ltd Vs CCE & ST
Service Tax - Restoration of appeal - Initially, appeal was dismissed for failure to comply with
pre deposit vide Final Order No.1313/2009 dt. 14.9.2009 - Appellant filed ROA on 23.2.2015,
praying that apart from Rs.2 lakhs paid as noted in the stay order, they have deposited another
Rs.5 lakhs on 21.5.2009 & 13.7.2009 by way of TR.6 challans and sought for time to deposit
balance amount; that being a small unit, they could not arrange funds to predeposit the amount
in time.
Held: There has admittedly been delay of more than 5 years in complying with the predeposit
order - However, on perusal of payment details, the appellant took initiative to pay the amounts
in various installments starting from 2009 to Dec 2013 which clearly indicates appellant's
genuine interest in pursuing the appeal - Considering conduct of appellant and their financial
constraints as well as the case law relied upon, the delay is condoned; ROA is allowed; and
appeal is restored to its original number. - ROA allowed : CHENNAI CESTAT
Nagar Palika Parishad Vs CC, CE & ST
ST - Assessee, Nagar Palika Parishad have leased out shops - Levy of ST came into effect with
effect from 1.6.2007 on renting of immovable property - SCN dated 3.7.12 was issued to
assessee as they were not paying ST on Lease Rent received by them - As per Saswad Mali
Sugar Factory Ltd., extended period of limitation is not invokable, therefore, demands confirmed
by invoking extended period are set aside - Appeal partly allowed: CESTAT - Appeal partly
allowed : DELHI CESTAT
Century Apparels Pvt. Ltd Vs CCE
Service Tax - Stay / dispensation of pre deposit - Demands confirmed under 'BAS' and 'GTA'
categories, upheld by Commissioner (Appeals) and agitated; appeal dismissed for non
prosecution vide FO No.40888/2014 dated 03.12.2014 - petition for ROA, COD and stay taken
up for consideration herein.
Held: Considering reasons to be genuine, ROA and COD applications allowed - Tax in respect
of GTA stands discharged considering 75% abatement - As per clause 3 & 4 of the agreement it
is evident that service provider at UK agrees to packing or repacking as required by the buyer of
the First Part for which consideration has been paid not exceeding 5% of the invoice - amount
paid to the overseas person is for the packaging of garments at Ireland, U.K. though it is
mentioned as "packaging commission" - taking into consideration the fact that the service
rendered by the overseas person is only packaging of garments and not for procurement of
orders, the appellant has made out prima facie case for waiver of predeposit - Stay granted :
CHENNAI CESTAT
Srinivasan Associates Pvt. Ltd Vs CCE
Service Tax - Works contract - Valuation - Appellant contends that gross value of the contract
receipt is to be reduced by the value of the goods used in the contract - Demands adjudicated
on the ground that no evidence of use of the materials were submitted.
Held: Law relating to taxation of service by Finance Act, 1994 is not commodity taxation law, it
would be proper to give an opportunity to the appellant to adduce necessary evidence
supporting its claim on the value of the goods used in execution of the works contract - If the
authority is satisfied as to the value of use of the goods in the work to be substantiated by
evidence, the gross value of the contract shall get reduced by the proved value of the goods
and the residue shall only be liable to service tax at the appropriate rate prevailing during the
relevant period - Appellant is directed to make an application to the adjudicating authority within
60 days of receipt of this order along with evidence to be relied upon praying for fixation of date
of hearing - expressly clarified that the scope of remand does not cover classification and
composition scheme - Matter remanded : CHENNAI CESTAT
Obulapuram Mining Company Pvt. Ltd Vs CCE, C & ST
Service Tax - Claim of service tax paid on debit note - Can be allowed when the debit note
contains all the details required as per the Cenvat Credit Rules - Matter remanded to examine if
the disputed debit note contained all the necessary particulars to extend the benefit.
Service Tax - Survey fee - If covered by Technical Testing and Analysis - Matter remanded to
examine if the service provider has classified services in question under any one of the services
specified in the Notification or not - Remanded : BANGALORE CESTAT
R Rami Reddy & Co Vs CCE, C & ST
Service Tax - Construction of hostels in TTD run medical college and site formation service of
agricultural lands - Commercial or non-commercial activity - show-cause notice was issued in
this case on 31.05.2012, whereas the demand for reworking of agricultural land relates to the
year 2008-09 - Whether appellants have sufficient grounds to consider it as agricultural work or
not need to be examined in detail - On facts, pre-deposit is waived - Stay ordered :
BANGALORE CESTAT
Gspl India Transco Ltd
Service Tax - Cenvat Credit - Transport of gas through pipelines - Eligibility to credit of ST paid
by EPC Contractor/other construction contractors and other service providers against
assessee's output service tax liability - Though EPC Contracts awarded by assessee to various
EPC Contractors would involve both supply of goods like pipes and rendering of
construction/erection, installation and commissioning services, and further the price agreed
between assessee and EPC Contractor(s) will be a composite price, such composite price will
be divided into two key components, viz. price for supply of goods and price for rendering of
services - EPC Contractors would charge separately for supply of goods like pipes from
assessee and separately for provision of services - It is not possible to think of a situation
regarding transport of gas without pipelines except with help of Tankers, which would be highly
uneconomical - Service of laying of pipeline is different from construction of building or a civil
structure, as under erstwhile Section 65(25b) of the Finance Act, 1944 - Assessee is eligible to
avail Cenvat Credit of ST paid by EPC Contractor/other construction contractors and other
service providers (except for Service Tax paid vis a vis construction services for the civil works
package for building the pipeline substations) against assessee's output ST liability under
taxable output service in nature of transport of gas through pipelines. - Applicant's application
allowed : AUTHORITY FOR ADVANCE RULINGS
Global Franchise Architects India Pvt. Ltd Vs CST
Service Tax - Franchise Services - Sale of proprietary items suffered sales tax - Not liable to
service tax - Pre-deposit is waived - Stay ordered : BANGALORE CESTAT
Fun Multiplex Pvt. Ltd Vs UoI
ST - Tax on distributors/sub-distributors of films & exhibitors of movie under BSS - Petitioner
claiming that Board Circular and O-in-O founded on the same is ultra vires FA,
1994/Constitution of India - Commissioner's findings may refer to the Circular issued by the
Board, but prima facie , it is not entirely based on the same - Merely making a reference to
some Circular would not mean that the Appellate Tribunal cannot be approached or that the
Appellate Tribunal will not view the matter in its entirety and in proper perspective - Tribunal to
entertain the Appeal and not dismiss it on the ground that it is barred by limitation if appeal is
filed within four weeks - Petition disposed of: High Court - Revenue's appeal dismissed :
BOMBAY HIGH COURT
CST Vs Mail Order Solutions (I) Ltd
ST - s.35EE of CEA, 1944 - Rebate of Service Tax - Appeal lies before Joint Secretary (R),
Department of Revenue, Ministry of Finance, Government of India - s.86 of FA, 1994 as
amended by FA, 2015 - Retrospective effect from 28.05.2012 - Registry to transfer all these
cases to Government of India: CESTAT - Appeals disposed of : MUMBAI CESTAT
Shivraj Cable Network Vs CCE
ST - CENVAT - Invoices not in the name of appellant - appellant claimed that name was
wrongly mentioned by service provider whereas the invoices were meant for appellant only although the name in invoice is mentioned as Hemraj Cable Network but the same stands
corrected on the basis of letter by distributor of M/s Zee Turner Ltd. who certified that this
mistake is due to feeding error in computer - on scrutiny of invoices, account ledger, bank
statement etc. it is clearly found that for all these six invoices, payment was made by appellant
to service provider - case of appellant is also covered by the provisions of rule 9(2) of CCR,
2004 - appellant is legally entitled for CENVAT credit on all six invoices - order denying credit
set aside and appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT
Radhe Residency Vs CCE & ST
ST - Assessee engaged in providing taxable services falling under category of Construction of
Residential Complex services, under Section 65 of FA, 1994 - Differential ST amount was paid
by assessee before date of visit of audit officers - Only interest amount was not paid, which also
was paid by assessee before issue of SCN - No intention to evade payment of ST can be
attributed on part of assessee and penalty under Section 78 of the Act is not imposable - It was
the case for non issue of SCN under Section 73(3) of the Act, 1994: CESTAT - Appeal allowed :
AHMEDABAD CESTAT
Informatics India Ltd Vs CST
Service Tax - Commissioner (A) dismissing appeal for non-compliance of stay order - Order is
appealable before the Tribunal - Delay being sufficiently explained, condoned.
Service Tax - Trading activity - Listed as an exempted service with effect from 1.4.2011, long
after the period in dispute - Therefore during the relevant period, the appellant was required to
reverse the proportionate credit - However, as pleaded, portion of the demand being time
barred, appellant is directed to deposit an amount of Rs.2 lakhs within the time prescribed Commissioner to decide the matter afresh after giving reasonable opportunity. - Appeal partly
allowed : BANGALORE CESTAT
Gurpreet Galvanising Pvt. Ltd Vs CC, CE & ST
Service Tax - Rejection of refund claim - GTA service - Inward and outward transportation of
goods - Claim rejected on ground that appellant failed to claim refund of excess service tax paid
on inward transportation - Held, assessee's act of not claiming refund in respect of inward
transportation is irrelevant to determine the eligibility for refund of tax paid on outward
transportation - Impugned order set aside - Appeal allowed with consequential relief - Assessee
appeal allowed : BANGALORE CESTAT
Parsons Brinckerhoff International INC Vs CCE & ST
ST - Consulting Engineer Service received from associate enterprises located abroad - demand
raised on the amount outstanding as on 10.05.2008 - demand of Rs.1,59,95,229/- confirmed
along with interest and penalties on the ground that the appellant had received the amount from
the associate enterprises located abroad, but had not paid service tax under reverse charge
mechanism - appeal to CESTAT.
Held: Amendment to explanation (c) in section 67 of FA, 1994 by FA, 2008 - in the case of
Gecas Services India Pvt. Ltd. , CESTAT has held that the amendment to the said Explanation
is prospective in nature - It is also evident that the demand has been raised on the outstanding
amount in respect of service from associate enterprises received before 10.05.2005 - It is
nowhere brought out in the impugned order or in the SCN that the outstanding amount as on
10.05.2008 has ever been paid by the appellant - Pre-deposit waived and stay granted:
CESTAT - Stay granted : DELHI CESTAT
Newton Engineering and Chemicals Ltd Vs CCE & C
ST - By Order dt.16.01.2014, appeal was dismissed for non-compliance of stay order wherein
assessee was directed to pre-deposit - Assessee approached before Gujarat High Court, and
went up to Supreme Court which extended the period of compliance till 31.08.2014 to make
deposit - Assessee deposited the amount on 16.01.2015 and have filed application before
Supreme Court for delay in making pre-deposit - By Order dt.27.04.2015 Supreme Court
directed that delay stands condoned - Tribunal Order dt.16.01.2014 is recalled and appeal is
restored to its original number: CESTAT - ROA application allowed : AHMEDABAD CESTA
CC & CE Vs The Clique
ST - Commercial Training and Coaching Institute - assessee is providing pre-licensing training
and coaching to the prospective insurance agents sponsored by Insurance companies and also
for personality development and human resources - assessee was under the impression that
they are not required to pay service tax as they were covered under the heading of vocational
training but after receipt of clarification from department, paid ST on personality development
training and educational training. Held - issue in hand is squarely covered by the decision of
Tribunal in the case of NIS Sparta Ltd. where it is held that the assessee is not required to pay
service tax under the category of commercial coaching and training service – therefore,
assessee appeals are allowed and Revenue appeal is dismissed: CESTAT - Assessee appeals
allowed/Revenue appeal dismissed : DELHI CESTAT
Indian School Of Business Vs CC, CE & ST
Service Tax - Taxable service - Charges collected toward utilization of library/learning research
centre facilities - Not liable to tax as club or association service.
Service Tax - Manpower supply - Expense incurred on staff deputed - Issue is debatable and
contentious and requires examination of the nature of activity undertaken, the agreement and
the nature of expenses incurred - Pre-deposit waived. - Stay ordered : BANGALORE CESTAT
Fortune Network Pvt. Ltd Vs CCE, C & ST
ST – Penalty - Once the correct duty amount is shown in the returns there cannot be any
intention to evade payment of service tax which is also paid by the appellant before the issue of
SCN alongwith interest - there was reasonable cause for the appellant for not paying the entire
service tax which was truly reflected in the periodical returns filed - Under the FA, 1994, there
are provisions for late payment of service tax alongwith interest which was done by the
appellant before the issue of SCN - the case is covered by Section 73(3) of the FA, 1994 and
there was no need to issue SCN - Appellant is also eligible for the benefit of Section 80 of the
Finance Act 1994 – penalties imposed u/ss 76, 78 set aside & appeal allowed: CESTAT Appeal allowed : AHMEDABAD CESTAT
Professional Coaching Classes Centre Vs CST
ST - Issue involved is imposition of late fees penalty upon assessee under Section 77 of FA,
1994 - Delay in filing of ST-3 returns for period October, 2011 to March, 2012 and April, 2012 to
June, 2012 - ST for period October, 2011 to March, 2012 was already paid by assessee - For
the period April, 2012 to June, 2012 as no services were provided, therefore, for latter period tax
liability was NIL - As per Amrapali Barter Pvt. Ltd. late fee for a late filing of ST-3 returns, for
period April, 2012 to June, 2012 when service tax payment was NIL, is required to be set aside Assessee was required to pay late fees under Section 17 of FA, 1994 - However, late fee
imposed upon assessee is required to be reduced to Rs. 500/- as amount of penalty has to be
appropriate to ST liability which was also paid by assessee in time: CESTAT - Appeal partly
allowed : AHMEDABAD CESTAT
T C Terrytex Ltd Vs CCE
ST - Refund - Notification 17/2009-ST - Commissioner(A) while concurring with the adjudicating
authority recorded the finding that in the absence of evidence of nexus between the appellant
and the provider of services which were claimed to have been utilized for export, no refund
could be granted; that Appellant failed to submit proof to establish any nexus between the inputs
and the fact of the goods exported and that essential conditions for availment of refund under
the Notification were not fulfilled - in the light of the concurrent findings, there is no merit in the
appeal, hence rejected: CESTAT - Appeal rejected : DELHI CESTAT
Transpek Silox Industries Ltd Vs CCE & ST
ST - Commissioner (A) proceeded on basis that assessee had not produced agreement
stipulating specific terms and conditions for transfer of intellectual property - Customer had
certified that payment was made for purpose of technical know-how - Revenue has not disputed
authenticity of certificate at any point of time - No enquiry was conducted by Revenue in respect
of this certificate - Hence, no reason to dis-believe certificate - As per Indo Nippon Chemicals
Co. Ltd. demand based on assumptions and presumptions under category of Consulting
Engineer service cannot be sustained - No material available that assessee rendered
Consulting Engineer Service - Appeal allowed: CESTAT - Appeal allowed : AHMEDABAD
CESTAT
Zenotech Laboratories Ltd Vs CC, CE & ST
Service Tax - Taxability of service - Offshore client conducting tests and sharing test results with
the appellant, cannot prima facie be covered by the definition of service provider - Further more,
the activity undertaken also cannot be considered as consultancy or advice - Therefore demand
of service tax on services received from outside India is unsustainable.
Service Tax - Taxable service - Approved Drug products development - Appellant engaged in
clinical testing of formulations and validation - Activity prima-facie fall within the ambit of
Technical Testing Analysis as rightly contented by the Revenue - Since the issue involved is
complicated and requires detailed consideration, appellant is directed to deposit Rs.40 Lakhs as
against entire amount of demand - Pre-deposit of balance dues is waived - Stay ordered :
HYDERABAD CESTAT
CST Vs Applied Materials India Pvt. Ltd
Service Tax - Refund claim - Power of Commissioner to remand - Sanction of refund and its
payment ultimately has to be made by the Original adjudicating authority - Duty cast on such
Original authority to verify the documents other details vis-à-vis claim to determine sanction
correctly - Several developments with regard to admissibility of refund available - More so, in
appellant's own case, refund claim has been allowed by the Tribunal - On facts, Order of
Commissioner set aside and matter remanded to Original authority to consider refund claim
afresh considering all precedents and submissions - Appeal allowed by way of remand. Remanded : BANGALORE CESTAT
CENTRAL EXCISE
CCE Vs Tenneco Rc India Pvt. Ltd
Central Excise - Valuation of goods cleared to sister unit - Revenue's appeal against the order
of Tribunal limiting the demand to normal period on the ground of revenue neutrality.
In view of the statement made by both sides that the ratio laid down by the Supreme Court in
Nirlon Ltd. is applicable to the case on hand, the substantial question of law is answered in
favour of the assessee/respondent and against the Revenue/appellant - Appeal dismissed :
MADRAS HIGH COURT
Garden Silk Mills Ltd Vs CCE & ST
CX - Interest - Assessee has already paid entire CENVAT Credit demand on GTA services
availed from place of removal - Assessee fairly agreed that interest on irregularly taken credit
may be payable - As per Market Systems Ltd. interest on in-admissible CENVAT Credit taken is
payable by assessee: CESTAT
CX - Penalty - In case of ABB Ltd. it was held that GTA services from the place of removal is
admissible even after date of amendment to CCR - This order passed by Larger Bench was set
aside by Karnataka High Court only in year 2011 - Therefore, assessee had a bonafide belief
that such CENVAT Credit taken is admissible - It is not a fit case for imposition of penalty under
Rule 15(4) of CCR, 2004 - Penalty set aside: CESTAT - Appeal partly allowed : AHMEDABAD
CESTAT
Bayer India Ltd Vs CCE & ST
CX - Assessee were engaged in manufacture of Pesticides/Insecticides classifiable under subheading 380510 of Schedule to CETA, 1985 - Assessee cleared the inputs as such and
reversed credit availed on the inputs - In case of Tata Motors Ltd . after considering explanation
of Rule 57AB (b) of CCR, 2004, it is held that reversal of credit availed at the time of receipt of
inputs is sufficient at time of clearance as such from factory of production - Impugned order is
set aside and appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
Jindal Stainless Ltd Vs CCE & ST
CX - CENVAT - Power grid to whom electricity is sent for synchronization is to be treated as a
job worker - since electricity was returned back to the Appellants factory there is a substantial
compliance with the provisions of Rule 4(5)(a) of CCR, 2004 - CENVAT credit availed on fuel
(furnace oil) used in generation of electricity cleared to Electricity Board is admissible - Appeal
allowed: CESTAT - Appeal allowed : DELHI CESTAT
Dynamic Motors Vs CCE & ST
CX - It is alleged that assessee has suppressed the fact that they are authorized dealer of
General Motors - Said fact has been recorded by Tribunal in assessee's own case vide order
dated 4.11.11 reported in which has been arisen out of O-I-O dated 28.12.10 which means that
before 2010, it was in knowledge of department that assessee is an authorized dealer of M/s.
General Motors for selling vehicle - Therefore, allegation against assessee that they have
suppressed the fact is not correct - SCN cannot be issued to assessee by invoking extended
period of limitation - Therefore, demand in impugned order is not sustainable - Consequently,
impugned order is set aside and appeal allowed: CESTAT - Appeal allowed : DELHI CESTAT
Food And Health Care Specialties Vs CCE
CX - Valuation - s.4 of CEA, 1944 - Expression "interest directly or indirectly" used in clause (iv)
of s. 4(3)(b) of CEA, 1944 would refer to the financial interest only - The real test of a related
person transaction tainted by "interest directly or indirectly in the business of each other" is that
the purpose of the transaction is not the sale of goods/services by the seller to the buyer at fully
commercially providing price but something else, like seller wanting to reduce his tax liability etc.
- AV determined in accordance with decision in Ujagar Prints is legal and proper - Demand of
Rs.9.35 crores set aside and appeals allowed: CESTAT - Appeals allowed : DELHI CESTAT
Keva Flavours Pvt. Ltd Vs CCE
CX - Appellants had to vacate the factory premises due to a family dispute - since the new
factory was not ready and fearing that they would be forcibly removed they shifted entire unit to
an adjoining premises and informed the department & took registration later - CE duty
demanded on finished goods, work-in-process, CENVATted inputs, ordering confiscation and
imposing redemption fine and penalties - technically there are some procedural irregularities
committed by the appellants but there is no need to demand duty - Finished goods were cleared
on payment of duty from new premises - Work-in-progress goods were converted into finished
goods and cleared on payment of duty - Duty demand set aside along with interest & penalty,
RF reduced & penalty reduced on Director, penalties on other appellants set aside: CESTAT Appeal partly allowed : MUMBAI CESTAT
Praful Overseas Pvt. Ltd Vs CCE, C & ST
CX - Application for Modification of Stay Order was filed by assessee to waive pre-deposit
entirely - They submits that Stay Order was passed on the basis of decision of Gujarat High
Court in case of Cadila Healthcare Ltd and appeal against the decision of Cadila Healthcare Ltd
was admitted by Supreme Court and therefore, such decision cannot be a precedent - They
relied upon decision of Supreme Court in case of West Coast Paper Mills Ltd - It is well settled
that precedents are binding only in context of facts of each case - Decision of High Court in
Cadila Healthcare Ltd is against the assessee and Supreme Court had not granted any stay and
the said decision is in force and binding on this Bench - Co-ordinate Bench of Tribunal in case
of Sushil Agarwal , made the observation without going into facts in case of West Coast Paper
Mills Ltd - A judgement has to be read in context of its facts and it is not permissible to pick and
choose certain words from judgement and it cannot be a precedent - No merit in application filed
by assessee, accordingly, application for Modification of Stay Order is dismissed - Period of
compliance extended for further two weeks: CESTAT - Application dismissed : AHMEDABAD
CESTAT
Indo Count Industries Ltd Vs CCE
CENVAT - Rule 9 of CCR, 2004 - Credit of SAD availed on strength of supplementary invoices
denied on the ground that duty was paid by supplier after detection of short levy - Tribunal has
held that non-reversal of SAD by M/s MIRC Electronics - cannot be with intention to evade duty
on such components, as the appellant had discharged appropriate duty liability of CVD/CE Credit admissible - Appeal allowed with consequential relief: CESTAT - Appeal allowed :
MUMBAI CESTAT
Steel Mongers India Pvt. Ltd Vs CCE
CX - Penalty - No statement of assessee has been recorded neither any summons to record
statement have been issued to assessee - Statement of manufacturing supplier shows that they
were issuing invoices to M/s. Rupesh Bansal - Assessee contends that they have received
goods under cover of invoices issued by M/s. Khemka Ispat Limited - This statement of
assessee was never tried to test level of investigation nor any other corroborative evidence
have been produced in investigation that assessee has received invoices, not the goods Statement of second stage dealer to whom assessee has issued invoices in his statement
admitted that they have received goods from assessee against duty paid which were sold to
manufacturing buyer who already admitted that he has received goods - Therefore, statement of
second stage dealer and manufacturing buyer supported the case of assessee and in absence
of any statement of assessee, now question arises why statement of assessee was not
recorded during course of investigation - Therefore, it is concluded that investigation against
assessee is incomplete - Penalty under Rule 26 of CER, 2002 is not imposable: CESTAT Appeal allowed : DELHI CESTAT
Rama Vision Ltd Vs CCE
CX - Notfn 50/2003-CE - Expansion of production capacity - Assessee rely upon certificate
given by M/s B.K. Arora and Associates which certifies that assessee have expanded their
installed capacity and this has been achieved by installing additional equipment as per details
given and by modification of certain existing machinery - Revenue, however, relies upon report
of Professor Arun Kumar of Department of Electronics and Computer Engineering in IIT,
Roorkee who has doubted correctness of certificate of Chartered Engineer - Commissioner has
chosen to rely upon opinion of Professor Arun Kumar on ground that -"he is an independent
authority and his report is a later report and only a Chartered Engineer's certificate cannot wish
away expert's report" - Said conclusion is wrong, as a Chartered Engineer is as much an expert
as a Professor of IIT - Merit in assessee's plea that a Professor of Department of Electronics
and Computer Science is not competent to give opinion on question whether substantial
expansion of installed capacity of production had been undertaken, which is a discipline of
Mechanical Engineering - Since Commissioner's conclusion is based on expert opinion of
Professor Arun Kumar, his cross examination by assessee should have been permitted as
report of Professor Arun Kumar is only an opinion whose correctness has to be tested by his
cross examination - Matter remanded: CESTAT - Case remanded : DELHI CESTAT
Nikhil Refineries Pvt. Ltd Vs CCE, ST & C
Central Excise -Disputed Classification - Extended period of limitation - Sustainability Classification of Palm Stearin oil under chapter 50 as held by Tribunal in favor of assessee was
reversed by Supreme Court holding that it is classifiable under chapter 38 instead -During the
relevant period in question, appellant had filed all the returns claiming the classification under
Chapter 50 based on Tribunal's decision - In the circumstances, no malafide intention can be
attributed to the assessee to invoke longer period of limitation -Appellant has a strong prima
facie case on limitation -Impugned order set aside - Matter remanded to Commissioner (A) to
decide the appeal without insisting on any pre-deposit. - Appeal allowed by remand :
BANGALORE CESTAT
CCE Vs Advance Detergents Ltd
Central Excise - Reversal of MODVAT/CENVAT Credit under Rule 57C of Central Excise Rules,
1944 on inputs used in manufacture of spent sulphuric acid cleared under exemption - Revenue
in appeal against the order of Tribunal in favour of the assessee.
Held: The issue whether the Spent Sulphuric Acid is a by-product or not has been put to rest by
the Allahabad High Court in the case of Varuna Sulphonators Pvt. Ltd. V. Union of India (1993
(68) ELT 42 (All) and also by the Supreme Court in the case of Union of India v. Hindustan Zinc
Ltd.
Invocation of Rule 57C by the Department is not justified and the Commissioner (Appeals) and
the Tribunal were correct in holding in favour of the assessee
The very language of Rule 57D makes it clear that credit of duty shall not be denied or varied on
the ground that part of the inputs contained in any waste, refuse or by-product arising during the
manufacture of the final product, or that the inputs have become waste during the course of
manufacture of the final product. It also states that it is of no consequence whether the byproduct such as waste, refuse or by-product is exempt from the whole of the duty of excise
leviable thereon or chargeable to nil rate of duty or is specified as a final product.
Question of law answered in favour of the assessee. - Appeal dismissed : MADRAS HIGH
COURT
Mag Engineering Pvt. Ltd Vs CCE
Central Excise - Refund of interest on differential duty - Entitlement - Appellant failed to include
value / cost of components supplied free of cost - Differential duty demand set aside as
unsustainable by Tribunal was upheld by the Supreme Court - Appellant held is entitled to
interest on such differential duty paid during the course of judicial proceedings notwithstanding
absent enabling provision in the statute - Matter is remanded to the original adjudicating
authority to consider the refund claim afresh only as to whether unjust enrichment is attracted or
not - Appeal allowed by way of remand - Remanded : BANGALORE CESTAT
Linkwell Telesystems Pvt. Ltd Vs CCE, C & ST
Central Excise - Suo motu credit of CENVAT reversed earlier held does not require filing of any
refund claim - No dispute about the recredit of the said entry - Denial of the same by the
department on technical ground of non-filing of refund application is neither proper nor justified
more so when such recredit was made upon intimation to the Revenue - It is nothing but
correction of entries in the accounts maintained by the assessee which does not involve any 'lis'
and any legal issue requiring the department to interfere - Impugned order set aside - Appeal
allowed with consequential relief - Appeal allowed : BANGALORE CESTAT
Indian Oil Corporation Ltd Vs CCE & ST
CX - LABFS and LARO manufactured by the appellant are classifiable under CETH 2710.29 but
are not entitled for the benefit of Notification 75/84-CE as the same is available only in respect
of ‘Kerosene' which is ordinarily used as illuminant in oil burning lamps - Kerosene has to be
understood with respect to interpretation/understanding attributed by those who deal in
'Kerosene' - product LABFS and LARO are not cleared as Kerosene at all and only used for the
purpose other than for illuminant oil for burning lamps or other domestic use – Appeal partly
allowed: CESTAT - Appeal partly allowed : AHMEDABAD CESTAT
Amrut Bhagini Mandal Vs CCE
CX - Job work - Detaining part of LDPE received from customer and replacing the same by
locally purchased cheaper LLDPE - difference in the value is nothing but additional
consideration and is required to be added in AV of final product Polyfilm - Appeal dismissed:
CESTAT - Appeal dismissed : MUMBAI CESTAT
Mahanagar Gas Ltd Vs CCE
CENVAT - Rule 2(l) of CCR, 2004 - definition of "input service" does not restrict that the said
services have to be rendered in the factory premises of the manufacturer - Services of
inspecting vehicles at RTO is an Input service - Credit admissible - Appeals allowed: CESTAT Appeals allowed : MUMBAI CESTAT
Philips Carbon Black Ltd Vs CCE
CX - CENVAT credit denied on the ground that supporting documents disclosing the details of
services received from service providers had not been enclosed with respective input service
invoices issued by assessee's registered office as input service distributor - Assessee submits
that because of voluminous nature of supporting documents, only consolidated statements were
furnished whereas they are in a position to submit invoices issued by respective service
providers in favour of registered office - Impugned order is set aside and appeal allowed by way
of remand: CESTAT - Case remanded : KOLKATA CESTAT
Super Label MFG Co Vs UoI
CX - Tribunal has no power to dismiss the petitioner's appeal without adjudication on merits While condoning the delay and restoring the appeal, the Tribunal could have imposed some
reasonable conditions but even that has not been done - Costs imposed of Rs.15,000/- on
petitioner as they have not taken care to appear before the Tribunal on two occasions & even
restoration application was filed after nearly three years - Petition allowed: High Court - Petition
allowed : BOMBAY HIGH COURT
R K Machine Tools Ltd Vs CCE & ST
CX - As per Indsur Global Ltd., condition contained in Rule 8(3A) regarding payment of duty
without utilizing the cenvat credit during the period of default beyond period of one month from
the due date is unconstitutional - Requirement of pre-deposit of duty demand, interest and
penalty is waived - Stay granted: CESTAT - Stay granted : DELHI CESTAT
Havells India Ltd Vs CCE
CX - CENVAT credit is admissible of Additional Customs Duty paid through DEPB scrips in
respect of the imports made under notification no.34/97-Cus - There is no such condition in the
indicated notifications that the debits made, in DEPB, the licenses issued under the Foreign
Trade Policy only would be eligible for credit and the debits made in DEPB issued under the
previous policy will not be eligible for credit - Appeals allowed: CESTAT - Appeals allowed :
DELHI CESTAT
JCB Ltd Vs CCE & ST
CX - Appellant received chassis from manufacturers on which they built the bodies on job work
basis and they returned the complete vehicles from where the same are cleared on payment of
CE duty - Department by invoking Chapter Note 5 of Chapter 87 of the CETA, 1985 took a view
that since the appellant have ‘manufactured' the motor vehicles, they also would be required to
pay automobile cess under Industries (Development and Regulation) Act, 1951, notwithstanding
the fact that the chassis manufacturers had also paid automobile cess at the time of clearance
of the chassis from their factory - Appeal to CESTAT.
Held: Circular no.41/88 dated 31.08.88 clarified that the matter had been referred to the
Administrative Ministry, who have intimated that the intention is to realize such levy (automobile
cess) from the vehicle manufacturers and not from the body builders - This Circular is still in
force and has not been withdrawn - Prima facie view is that notwithstanding introduction of
chapter note 5 in Ch.87 w.e.f 2005, as the Board Circular 41/88 is still valid, the order of the
lower authorities is not correct - Pre-deposit waived and stay granted - Stay applications
allowed: CESTAT - Stay granted : DELHI CESTAT
Wisdom Steel Tech Pvt. Ltd Vs CCE, C & ST
Central Excise - Non-manufacturing activity - Cenvat Credit availed on inputs in the process Held, credit cannot be disallowed when assessee used the same for payment of duty on its final
product, when there was no requirement of payment of duty on the final product - Question of
reversal of Cenvat does not arise - Impugned order requiring reverse of Cenvat set aside Appeal allowed with consequential relief - Assessee Appeal allowed : BANGALORE CESTAT
CUSTOMS
Sarda Agro Oils Ltd Vs UoI
Cus - When there is Court's order and which directs the Authority to decide the case within a
particular time frame, then, it is his bounden duty to adhere to it - not complying with the Court's
order and in time will result in visit with personal costs and consequences such as entering
displeasure of this Court in their service record – because of the explanation given on affidavit,
contempt proceedings dropped but Dy. Commr. cautioned & warned – no costs imposed: High
Court - Petition disposed : BOMBAY HIGH COURT
Raj Shipping Agencies Ltd Vs CC
Cus - Merely having a winch does not lead to conclusion that the vessel is a tug - Supply and
passenger ships can also have a winch - Certificate of Indian Registry and the clarification given
by the Ministry of Shipping can by no means be discarded – 'Offshore Hunter' is correctly
classifiable under CTH 8901 & exempted under Not 21/2002-Cus r/w 20/2006-Cus – Appeals
allowed: CESTAT - Applications disposed of. : MUMBAI CESTAT
K2 Machine Tools Pvt Ltd Vs CC
Customs - Amendment to appeal memorandum - Impugned imports seized on reasonable belief
that the appellant imported full injection moulding machine in the guise of parts with intent to
avoid payment of Anti Dumping Duty (ADD) in terms of Notification No.47/2009 dated
12.05.2009 - Demand of ADD with penalty on the firm and Director under Sections 114A and
112(a) of the Customs Act 1962 adjudicated - Commissioner (Appeals) set aside the demands
which was agitated by Revenue whereupon Tribunal remanded the matter to the original
authority for de novo consideration; affirmed by Chennai HC in the first round of litigation Original authority reconfirmed the demands for ADD and penalties in the second round; demand
for ADD upheld by taking into consideration of amended Notification No. 39/2010 dated
20.03.2010; penalty/fine set aside by Commissioner (Appeals); and agitated in the present
appeal both by Appellant and Revenue on corresponding portions - MA moved for amendment
to allow re-export of the impugned goods and examined herein.
Held: Appellant has not made plea for re-export either before the adjudicating authority or
before the appellate authority - since the period of five years were lapsed from the date of first
import under the Bill of Entry, there is merit in the appellant's plea as very purpose for which
they have imported the goods has not been served and hence they sought to amend their
prayer to allow them to re-export the imported goods - Delhi High Court ruling in the case of
ZTE Corporation and Tribunal's order in the case of Wrigley India not directly related to ADD
whereas High Court has allowed to re-export in the above cases where the original importer has
abandoned the goods and the supplier came forward to re-export - application for amendment is
allowed; it is clarified that this amendment is subject to final outcome of their main appeal.
As regards the stay applications filed by the Revenue, since the goods are already under the
custody of the customs and appellant undertakes that they will not clear the goods, there is no
question of stay of operation of the impugned order - Applications disposed of. : CHENNAI
CESTAT
Sinosteel India Pvt. Ltd Vs CC & ST
Customs - Exporter of iron ore - Finalization of provisional assessment based on total FOB
value - Bank realization certificate in error reflected the CFR value as FOB value - Addendum
issued by the bank reflecting duty to be paid based on FOB was rejected by Commissioner for
being undated - Held on facts that since the issue relates to verification of the documentary
evidence, matter is remanded to the original adjudicating authority to examine the evidence
placed by the appellant - Appeal allowed. - Assessee appeal allowed : BANGALORE CESTAT
CCE & ST Vs W G Impex
Customs - Classification - Respondent imported "pop pop party snappers" , and claimed
classification under CTH 9505 which covers festive, carnival or other entertainment articles,
conjuring articles and novelty jokes - Revenue viewed the same classifiable under CTH
36041000 as fire crackers restricted for import as per F.T.P. 2009-14 and prohibited under Rule
7 & Rule 8 of the Explosive Rules 2008 and hence requiring for the import thereof
permission/authorization from the DGFT and the Explosives Department - demands
adjudicated, set aside by Commissioner (Appeals) and agitated by Revenue herein.
Held : Neither the CRCL nor the Controller of Explosives has given an opinion whether the
impugned goods would fall in the category of explosives subject to various restrictions relating
to explosives - original adjudicating authority has clearly erred in stating that his basis of
classification of the impugned goods under CTH 36041000 is the CRCL report and the finding of
Jt. Chief Controller of the explosives Faridabad - Commissioner (Appeals) concluded that the
impugned goods would not fall under the category of fireworks without any test report to that
effect and merely on the ground that the impugned goods contain very small quantity of silver
fulminates and therefore would not be covered under the scope of explosives - This cannot be
held to be a sustainable basis to so conclude specially in respect of goods which contain
material covered under the Explosive Act, 1884 and in the absence of any yard stick referred to
by Commissioner (Appeals) as to how small a quantity of fulminates of silver is adequately small
to take the impugned goods outside the purview of explosives - whether the impugned goods
would be covered in the category explosives or not can only be determined on the basis of
(chemical) test by a competent authority - matter remitted to original authority with time bound
directions to seek re-test by Explosives Department, share the result with the respondent and
pass de novo order after hearing the respondent; customs authority to consider request for destuffing container - Matter remanded : DELHI CESTAT
Thameema Trading Corporation Vs CC
Customs - Misdeclaration - maps, clocks and photo frames were imported under the guise of
toys; confiscation and penalty adjudicated and agitated herein.
Held: Material fact established the goods to be smuggled goods under section 2 (39) of the
Customs Act, 1962; confiscation upheld - appellant lost its entire right to ask Customs to adopt
the value suggested by it when it smuggled the goods into India; Reasonable value adopted by
Customs, not rebutted with evidence by appellant - considering reasonable margin in the trade
of plastic toys, the redemption fine is reduced to Rs.1,00,000/- Misdeclaration being patent upon
concealment and deliberate misdeclaration of description and value of the goods, the amount of
penalty imposed by Authority below is justified since interest of Revenue is prejudiced; same left
untouched by this order - Appeal partly allowed : CHENNAI CESTAT
M Rajamani Vs CC
Customs – Confiscation – Customs officers searched the appellant's premises and recovered
unaccounted Indian currency, stated to be proceeds from the sale of smuggled gold - By the
impugned order, the adjudicating authority absolutely confiscated the Indian currency under
Section 121 of the Customs Act, 1962 holding that they represent the sale proceeds of
contraband gold; and imposed penalty on the appellant amongst others; agitated herein. Appeal allowed : CHENNAI CESTAT
CC Vs Akbar Knitting Company
Cus - Interest - respondent, a regular exporter of cotton garments had imported Polyurethane
Spandex Yarn/Lycra Spandex Yarn under 2 DEEC Advance licences and claimed duty free
exemption under Notification No.204/92 dt. 19.5.92 - duty demand with interest and penalty
adjudicated on the ground that there is short fall in the export obligation - Issue reached
Tribunal, who remanded to the original authority for re-computation of duty and penalty adjudicating authority in the de novo proceedings re-worked out the shortage quantity; redetermined the duty and also demanded interest along with penalty - Commissioner (Appeals)
set aside the interest, agitated by Revenue herein.
Held: When the adjudicating authority had discussed the issue of non-fulfilment of obligation in
detail in the OIO, whereas LAA has not brought out any clear findings but merely said that in the
absence of any provision in the said notification, interest is not demandable - no dispute on the
facts that the respondent imported goods and cleared duty free and violated the conditions of
DEEC Advance licence and the conditions of Notification No.204/92 - In the case of Pratibha
Syntext Ltd. Vs UOI, High Court of Bombay held that customs authorities are entitled to recover
customs duty and interest for the breach of Notification No.204/92 - Supreme Court in the case
of Rexnord Electronics and Controls Ltd. clearly held that interest payable under bond is not
interest payable under the Act - the demand of interest for non-fulfilment of condition under
Notfn. No.204/92 has attained finality with these rulings - demand for interest confirmed by
original authority restored - Appeal allowed : CHENNAI CESTAT
Shri K Natarajan Vs CC
Customs - Stay / dispensation of pre deposit - Penalty under Sec 117 of the Customs Act 1962
on CHA contested on the ground that separate action initiated under CHALR and adjudicating
authority cannot invoke Sec 117 which is residuary provision.
Held: In the case of valuation of export goods, role of CHA is not involved under the provisions
of CHALR - this is the case where Section 114 of the Customs Act has not being invoked
against the appellants for imposition of penalty for fraudulent exports or any provision under
Section 113 of the Customs Act - Both in the show cause notice and in order-in-original, the
adjudicating authority has not invoked Section 114 of the Customs Act but imposed penalty
under Section 117 of the Act - Prima facie, the appellants have made out a case for waiver of
pre-deposit of penalty; Accordingly, in both the appeals pre-deposit of penalty is waived and its
recovery stayed till the disposal of the appeals - Stay granted : CHENNAI CESTAT
CC Vs N T Rama Rao
Customs CHA Licence - Appeal by revenue against the order of Tribunal rejecting revenue's
appeal on the ground that the issue pertains to renewal of CHA licence which is an
administrative action.
Held : The Revenue has rightly raised the questions of law in this appeal - A perusal of the order
of the Tribunal reveals that the Tribunal on the wrong premise passed an order that an appeal is
not maintainable in a case of renewal of CHA licence, which is not a case on hand. The issue
on hand is with regard to the cancellation of licence issued to the first respondent, whereas the
Tribunal held that the order of the Adjudicating Authority is with regard to renewal of licence,
which is administrative in nature. Hence, the Tribunal on the wrong premise dismissed the
appeal filed by the Revenue - Order of Tribunal is set aside and the matter is remanded to the
Tribunal for fresh consideration. - Appeal allowed by way of remand : MADRAS HIGH COURT
Threestar Solutions & Services Pvt. Ltd Vs CC
Cus - Rejection of application for grant of Customs Broker's licence - only Customs broker can
file appeal u/s 129A of the CA, 1962 before CESTAT against order of suspension or revocation
of licence - Applicants are not Customs brokers - prima facie appeal against rejection of
application for grant of Customs Broker's Licence does not lie before Tribunal: CESTAT - Matter
listed for hearing : MUMBAI CESTAT
OTA Falloons Forwarders Pvt. Ltd Vs CC
Cus - Penalty on CHA - s.112 of the Customs Act, 1962 - There is no evidence on record to
show that the Appellants were aware of the fact that the Licence was tampered and the status
of the importer was changed to manufacturer/exporter - The goods were cleared and after
clearance of the goods, the same were handed over to the transporter as per instructions of the
importer - In the absence of any evidence having knowledge of tampering of the Licence or the
role of the Appellants in diversion of the goods in the local market, imposition of penalty is not
substantiated - Appeal allowed: CESTAT - Appeal allowed : KOLKATA CESTAT